A £100,000 gift and Ed's ride in tycoon's Rolls: The real story behind Labour leader and NHS rally that never was
The tycoon who rolled out the red carpet for Ed Miliband at a football match last week has given the Labour Party £100,000.
Businessman Assem Allam, who wants Labour backing for a multi-million-pound property development, made the donation in a secret meeting with the Labour leader in February.
Only four weeks later, Mr Miliband was guest of honour at Hull City Football Club, owned by Egyptian-born Mr Allam, known as ‘The Pharaoh’.
NHS protest: Labour leader Ed Miliband was supposed to address activists in Hull but cancelled because he was 'ill' - hours later he was at a football match watching Hull City
A spokesman for Mr Miliband yesterday refused to say if Mr Allam had made a £100,000 donation. But The Mail on Sunday has seen a leaked letter from Labour Party general secretary Iain McNicol, thanking Mr Allam for the money. In his gushing missive, Mr McNicol expressed his ‘sincere gratitude’ for the tycoon’s ‘incredible contribution’ to party funds.
Mr Miliband arrived at the match in a Rolls-Royce provided by his host, who has an estimated personal fortune of more than a quarter of a billion pounds, after mysteriously pulling out of an NHS rally. He claimed he was ‘too ill’ to go the rally, even though he arrived at the match in time for the 3pm kick-off – two hours after the rally was due to start.
Hull City Council and the police said they knew nothing about any ‘NHS rally’, prompting claims it was a ruse to provide ‘cover’ for Mr Miliband’s trip to meet Mr Allam. A Mail on Sunday investigation into Mr Miliband’s visit to his new rich Labour friend has also established:
l Mr Allam has been at war with Hull’s Labour-controlled council over two lucrative property schemes, including one at Hull City FC’s KC Stadium.
l Former Deputy Prime Minister Lord Prescott, who is bidding to be Humberside’s first elected police commissioner, tried to help settle Mr Allam’s battle with the council.
l Labour officials kept details of Mr Miliband’s trip to the football club secret.
Labour officials last night refused point blank to say if Mr Miliband had discussed the land deal with Mr Allam, saying: ‘We do not disclose details of private meetings.’
Asked about whether there had been a donation by Mr Allam, an official said: ‘Details of donations are reported to the Electoral Commission in accordance with the rules.’
Political parties can wait three months before they are obliged by law to register donations with the Electoral Commission.
All smiles: A beaming Mr Miliband watched the football match with Hull City chairman Assem Allam (left)
However, Mr Allam last night confirmed to The Mail on Sunday that he had given Labour £100,000.
He said he planned to give a similar sum to the Tories.
A spokesman said: ‘Assem has never discussed the issues of either the KC Stadium or Craven Park [the home of Hull Kingston Rovers rugby league club, for which Mr Allam has redevelopment plans] with Ed Miliband or any of the Hull MPs. He is too experienced to make a donation and then start asking such questions.
‘On the subject of the KC Stadium, Assem accepts he will not get the freehold and made a statement to the media in September last year that the matter was closed.’
It is the latest in a series of Labour funding rows.
In 2007, The Mail on Sunday revealed how Labour donor and property developer David Abrahams broke electoral law by giving the party £600,000 via his solicitor, the wife of an employee and a jobbing builder who had no idea he had given Labour £200,000.
It led to the resignation of Labour General Secretary Peter Watt.
Tony Blair’s final years were dominated by a ‘cash for honours’ row with claims that Labour had promised peerages to wealthy backers in return for loans.
NHS protest: Labour leader Ed Miliband was supposed to address activists in Hull but cancelled because he was 'ill' - hours later he was at a football match with Hull City chairman Assem Allam (left)
Both funding rows led to police investigations, though no charges were brought.
Last night the Conservatives urged Mr Miliband to be fully transparent in his dealings with Mr Allam.
Andrew Percy, Conservative MP for Brigg and Goole, near Hull, said: ‘It would appear that £100,000 is a wonderful cure-all.
‘Given that Mr Allam is involved in high-profile discussions with the council, it is vital that any future negotiations are fully transparent and that there is absolutely no hint of any influence being brought to bear by Labour nationally.’
The Miliband funding furore follows his surprise visit to Hull City FC for its Championship match against Ipswich Town. Party officials had earlier claimed he was travelling to Hull to attend an anti-NHS reforms rally in the city centre.
The official version of events is that the protest was called off because he was ill. But it led to speculation that the rally, which neither the police nor the local council were informed about, was a ‘phantom’ event dreamed up by Labour spin doctors to disguise the true reason for the 200-mile trip – to thank the entrepreneur for his secret donation and boost his image by appearing with him in public.
Mr Allam, 72, who settled in Britain more than 40 years ago, has built his engineering business, Allam Marine, into one of the country’s most successful and profitable companies.
Sales grew by 40 per cent last year, resulting in an operating profit of £22.8 million.
But Mr Allam, who runs the company with his son Ehab, has been involved in a long dispute with Hull City Council over the authority’s refusal to sell him the freehold of the KC Stadium.
The businessman’s plans are reported to have included buying the stadium and surrounding land to develop a £114 million ‘sports village’, including a hotel, tennis, squash and gymnastics facilities, an Olympic-sized swimming pool and an ice rink.
Goal: Robbie Brady, centre, scores Hull City's first goal in their 2-2 draw at home to Ipswich on Saturday which was watched by Ed Miliband
But he has insisted that he will make the investment only if the council is prepared to sell him the stadium and surrounding land.
Town hall chiefs have refused to agree to his terms, saying they have a duty to protect the area’s long-term future.
A similar argument has been taking place between Mr Allam and the council over redevelopment plans for Craven Park.
The tycoon initially pledged to fund a £2 million sports complex on the seven-acre site after being shown round by Lord Prescott, who was the area’s Labour MP and became a peer in 2010.
But negotiations broke down after Mr Allam accused councillors of misrepresenting his views.
Lord Prescott, tried to bring the two sides together but his attempts appear to have failed.
Despite the comments about the KC Stadium by Mr Allam’s spokesman, one councillor, who asked not to be named, said: ‘A lot of people believe Mr Allam is trying to get one over on the council and wants to get the stadium for nothing and then having got it he’ll want to mortgage it to the hilt, which could heap massive pressure on the club.
‘The feeling across the council is that it will never happen under those terms.’
The Mail on Sunday has been told that Mr Allam gave Mr Miliband a cheque for £100,000 when they met in London on or around February 8 this year. A week later, Mr Allam received a letter of thanks from Mr McNicol.
Three weeks later, on Thursday, March 8, Labour’s regional communications chief Bernie Keavy sent out an ‘operational note’ to media organisations, informing them that Mr Miliband would be addressing activists at an NHS rally in the city centre’s Queen Victoria Square at 12.45pm on the coming Saturday.
No mention was made of any plans for the Labour leader to attend the football match.
According to Mr Keavy, the protest was being co-ordinated by Drop The Bill, a Labour Party-sponsored pressure group set up to fight the Coalition’s NHS shake-up.
'Ed wasn't well so he cancelled the event'
On the Friday, Mr Miliband’s office contacted rally organisers to cancel his appearance, saying he was ill and they could not be certain he could attend.
Again, no mention was made of any plan to visit the KC Stadium. Yet the following day Mr Miliband – now fully recovered from his illness – travelled to Yorkshire.
But his apparent desire not to highlight his trip to Hull FC unravelled when local photographers were tipped off about it, allegedly by friends of Mr Allam.
Pictures of the two men together duly appeared in the city’s main newspaper, the highly-respected Hull Daily Mail.
One local journalist said: ‘The “rally” was never a rally. It was just a photo opportunity in Hull city centre with Miliband for the local media. There was no union involvement. We even popped down on Saturday to see if anyone was there but no one was.’
Mr Keavy denied yesterday that the intention had been to provide a smokescreen for the Labour leader’s trip to see Mr Allam. ‘The organisation of the rally was in the hands of three or four people in Hull. It was always going to be a fairly fluid “see how many people come” sort of thing,’ Mr Keavy said.
‘Ed wasn’t well, he didn’t want to let people down so he cancelled the event.
‘He felt better mid-morning on Saturday and headed to Hull but it had been cancelled so there wasn’t an event for him to go to.’
A spokesman for Hull City Council said the event was ‘not something we were aware of’.
Humberside Police also said they had no information about the rally.
Unison, which represents millions of health service workers, has taken a leading role in opposing the NHS Bill, but nothing about the rally was posted on its website, either nationally or regionally.
Mr Allam has had an extraordinary and colourful career.
He was forced to flee Egypt after being imprisoned and tortured by the security police on the orders of President Nasser, who died in 1970.
After reaching Britain, he decided to settle in East Yorkshire because his sister was already there, having married a local doctor.
A qualified accountant, he got a job with Charterhouse, a London merchant bank.
When Charterhouse decided to sell one of its loss-making companies, Tempest Diesel, in 1981, he bought it for £1. In 1992 he renamed it Allam Marine and moved its operations to Hull. He has twice won the Queen’s Award for Industry. Three years ago he donated £1.5 million to the University of Hull to build a biosciences research centre.
In an interview with BBC Radio Humberside last week, he urged the Government to cut its 50p tax rate for top earners.
‘I would like to see this happening as quickly as possible,’ he said. ‘Personally, many of my friends who have some wealth have left the country because of this.’
