The Government ignores 'Garbagegate' at its peril

The attention span of the media-political complex is limited. Which means that the frenzy over Mittalgate will need feeding with some new revelations if it is to last much longer at the present intensity. This is not to say that it hasn't done much longer-lasting harm to the Government. It has. The question for Tony Blair, therefore, is what he can do to start repairing the damage.

There is a powerful case for much fuller disclosure of exactly what correspondence passed between civil servants, ministers and party fundraisers relating to Mr Mittal and his company. That, after all, is what the Government went a long way towards doing in the Enron case. But there are also two concrete steps which Mr Blair could take speedily to begin restoring faith in the political process.

The first is to enact the proposal, repeated yesterday by the MP Tony Wright, chair of the Public Administration Select Committee for a Public Standards Commissioner. It's quite easy to imagine the Blair speech which does this. Even if he chooses to continue defending his conduct of the Mittal case, he can say that it is necessary to start reversing cynicism, however unjustified, in the political process – not to mention declining turn-out. Less high-mindedly he could also point out that it will provide another agency than the press to decide what is or is not acceptable.

The second is for Tony Blair to come out, publicly, in favour of state funding, along with much more stringent caps on expenditure. The Government has now indicated it will talk to the Opposition about this. Good. But there are doubts about whether it has the will to follow it through on any scale, especially if the Tory party sticks to its public line of opposing it. There are some misconceptions here. First, the Conservatives are by no means monolithic about this. Sir Norman Fowler, a former party chairman has come out in favour, and some of the brighter, younger MPs – like Chichester's Andrew Tyrie – strongly support it. Secondly, it isn't beyond the Government's powers to introduce it even if the Tories oppose – as they would have done had Labour stuck to its aim of introducing it in the first place. Yes, the Government would take a short-term hit as it was accused of getting out of a tight spot. But does anyone imagine that the Tories would refuse it, once on offer?

The biggest objection remains that the taxpayers wouldn't put up with it. It's highly questionable whether, given the current discontent about sleaze exposed in the polls, they would not prefer it. Ah, (some of) the party apparatchiks say, the taxpayers wouldn't like to pay for all those tendentious dumbed-down ads in election campaigns.

The answer to that, surely, is to produce better and more truthful ads. But there's something much bigger, which is the extent of state funding the taxpayer is already expected to provide. Last July, Parliament approved an increase of £13,000 – to £70,000 a year – in allowances for MPs. This will almost certainly significantly enhance the "incumbency factor" – the ability of sitting MPs to gain votes over their opponents just by being active locally. Much of the increase, therefore will have a party purpose. And don't forget, this actually helps the Government much more than the Opposition because of its huge majority. It will add £8m to the cost, bringing the total to £46m a year. What are the opponents of state funding saying here – that this doesn't count because there wasn't much publicity about it and so therefore the taxpayer doesn't, in his ignorance, mind? This is not the basis of a credible case against state funding.

The second, and lesser, issue is one of tone, language and management. "Garbagegate" wasn't a wise choice of phrase, any more than it is to imply that everyone who disagrees with you is a "wrecker". There's something more. When Clare Short came out fighting against the charge that her department had put pressure on the European Bank of Reconstruction and Development to approve a loan to LNM, she went out of her way to exonerate her officials as well as herself. She was on strong ground. Unless there is some fresh revelation about influence being brought to bear on the Bank, it looks as if EBRD's involvement is a red herring, given that a majority of a 23-strong international board were required to approve a loan. It's more unfortunate, from the Government's point of view, that Mr Mittal turns out to have backed US tariffs against steel imports (something which is not only against British interests but also – on the issue of free trade – against British policy).

Nevertheless, Ms Short's gallantry towards her officials, I suspect, goes down rather well with the electorate. Mr Blair might have used a little of it himself, not least when his chief of staff Jonathan Powell came under attack on no visibly firm basis other than that his past presence as a diplomat in Washington very briefly co-incided with that of the British Ambassador in Bucharest, who seems to have been a prime mover in getting the letter to Mr Mittal written. This does not a conspiracy make.

But there is a larger point here. Which is that just as the elected – properly – seek to take the credit for the Government's achievements, at least some of the buck has to stop with them too. For a start, they set the framework. It is Mr Blair's own choice, for example, that Lord Levy should be not only a fundraiser (who in this case brought Mr Mittal into contact with the Labour leadership) and a representative of the Government, afforded an office in the Foreign Office but without the normal accountability borne by ministers.

Prime Ministers sign a great many letters. Writing a letter to another Prime Minister about a specific company isn't exceptional. He was entitled to believe that the homework has been done by those – for example in the FCO – putting up the letter. It's easy to believe that the principals spent no more than a few moments on it. But it isn't nothing either. Harsh as it may seem to say so when so much presses upon him, the Prime Minister has a responsibility, as well as those under him, to ask why he's doing it. Conversely, if he really was misled about the extent to which Mr Mittal's bid was really in British interests, then disclosure of the documents would at least tell us who did the misleading.

None of this is to say there is much hard evidence so far of a deep laid plot to subordinate the national interest to the party's. The immediate issue on which it all turns is the Britishness or otherwise of Mr Mittal's company. The answer, it's clear, is not very British at all. It's true that without the Labour-introduced transparency the Mittal donation would never have been known about, as the numerous large donations to the Tories were not known about.

This isn't Westland, or even perhaps, Ecclestone. But cumulatively, it has helped to create a critical mass of deep voter unease, not all of it got up by the press. Last week Professor John Curtice told a seminar on the worst-ever turn-out figures in 2001 that 70 per cent of voters now think that politicians are more interested in helping their party than the country. That may well be unfair. But Mr Blair ignores that statistic at democracy's – and his own – peril.

d.macintyre@independent.co.uk