How Lord Alli became Labour’s money man

It's never a good idea to judge a book by its cover, but especially so at Waheed Alli's £18 million Covent Garden penthouse .

An attendee at one of the plush events hosted by the Labour peer noticed that the volumes on the shelves appeared to have been arranged by colour.

On closer inspection he realised that the books had been recovered in the colour of the owner's choice: "I remember thinking that's a nice flourish you can only pull off if you have serious amounts of cash."

Lord Alli, 59, used to run a company that owned the rights to Agatha Christie's literary estate and his favourite book is the 4:50 From Paddington. But there's no Cluedo-esque mystery as to why the normally discreet entrepreneur and political fixer has recently found himself thrust into the public eye: it was the very rich man, in the Labour party headquarters, with the large cheque book.

The many political donations made by Lord Alli, who is thought to be worth in the region of £200 million, to the Labour Party and a variety of individual politicians in recent years have raised question marks about the judgement of all involved.

The most noteworthy was Sir Keir Starmer and his wife accepting £16,200 and £5,000 worth of clothing respectively, which was initially not properly declared.

As well as the Prime Minister, six other members of the Cabinet have also accepted donations from the peer: Angela Rayner, the Deputy Prime Minister; David Lammy, the Foreign Secretary; Wes Streeting, the Health Secretary; Ed Miliband, the Energy Secretary; Bridget Phillipson , the Education Secretary and Liz Kendall, the Work and Pensions Secretary.

Among the odder donations from Lord Alli have been the £2,485 Starmer received for multiple pairs of glasses in April this year; £1,250 for Rayner's use of a New York apartment on a personal holiday last New Year; and the £4,000 that Phillipson accepted to pay for a number of work events, including one party to celebrate her birthday. Starmer also declared £20,000 of accommodation from Lord Alli during the recent general election.

The scandal has shone a light on the extent of Lord Alli's influence at the very heart of the Labour party machine over many years – and now at the heart of government. He was first persuaded to join the Labour Party by his then neighbour Emily Thornberry in the early 1990s, although he'd been politically active since the 1980s.

As a young entrepreneur working in the TV and entertainment sector, he befriended Tony Blair and became the youngest member of the House of Lords when he was ennobled at just 33. He is reported to have donated £500,000 to the party since 2020.

He has backed several Labour horses down the years, donating money to eight leadership candidates from the more centrist faction of the party, including David Miliband in 2010, Andy Burnham and Liz Kendall in 2015, Owen Smith and Angela Eagle in 2016, Jess Phillips in 2019 and both Starmer and Thornberry in 2020.

In 2022, Lord Alli was tasked with being the main fundraiser for the party ahead of the looming general election. He hosted potential donors at lavish dinners at his various homes (as well as Covent Garden he has addresses in Kent, New York and Guyana) and is said to have an extraordinary Rolodex of business and political contacts.

It is extremely rare to find someone with even a loose connection to the Labour Party who hasn't met Lord Alli at some point. Interestingly, though, few admit to knowing him well. "He's pretty self-effacing and quiet," says one Labour insider. "He's not a showman or particularly gregarious or given to making speeches and is much more comfortable in the background. I suspect that he'll have found the attention he's received over the last few weeks very unpleasant."

In a 2011 interview with the Financial Times, which took place soon after riots in a number of cities across the country, Lord Alli expressed some sympathy for the looters who likely felt betrayed by the political class in the wake of the expenses scandal. "When you look up and see everybody on the take – everybody – and you can get a free pair of trainers, tell me what the difference is between a free pair of trainers and a banker's bonus, or a TV set in a second home that isn't in your constituency?"

As leader of the opposition, Starmer filmed promotional videos from another of Alli's homes in Islington.The peer is said to have developed a close working relationship with Sue Gray, when she was Starmer's chief of staff, and donated £10,000 to the constituency party of Gray's son, Liam Conlon , ahead of his election as the Labour MP for Beckenham and Penge in July.

Gray is understood to have consulted Lord Alli on various potential appointments to government and issued him with a temporary pass to Number 10 Downing Street following the election so that he could help with "transition work".

Alli has since returned the pass but held a garden reception at Number 10 during the time he held it. The peer has been spotted at a number of meetings held in Downing Street in recent weeks.

Labour insiders have expressed frustration with the way the situation has been handled. One pointed out that Alli could have donated more money to the Labour Party and that this could then have been used to fund a clothing allowance. One Conservative Party insider rather wryly notes that Lord Alli's largesse is a pretty good example of the importance of wealthy taxpayers to the nation's finances.

Another insider pointed out that any whiff of impropriety about the access Alli appears to have enjoyed could have been snuffed out by formalising his role in Number 10. It was partly Gray's inability to spot and sidestep these rather obvious political landmines that contributed to her being replaced as Starmer's chief-of-staff by Morgan McSweeney.

Questions have understandably been raised about what agenda Alli might be seeking to advance . Proximity to power can be its own reward but Labour insiders claim that throughout the years that Alli has given money to the Labour party, offered advice and acted as a general fixer, he has never asked for anything in return.

One of the few openly gay Muslims in public life, the millionaire entrepreneur's maiden speech in the House of Lords in 1999 made the case for lowering the age of consent in gay relationships from 18 to 16 and spearheaded the campaign to repeal Section 28. The former TV executive is also a staunch supporter of the BBC and is said to have helped influence the draft Communications Bill in 2003.

However, Labour insiders say Alli's main motivation has simply been a desire to help make the party electable. Those who have seen him operate up close say he takes little interest in the minutiae of policy and has even been known to cut donors off when they start drilling into specifics at fundraisers.

"People have causes; sometimes it's giving to the National Portrait Gallery or the World Wildlife Fund," says Jonathan Ashworth, the former Labour MP and close Starmer ally who was one of the biggest names to lose his seat at the last election. "His cause was helping to get Labour elected after 14 years. I think that's a pretty noble cause myself. And it's as straightforward as that."

Another Labour insider says: "I have never seen any evidence that he has a policy agenda or a political axe to grind." A lobbyist who is close to the party points out that Alli already has a fortune, status and a peerage. "He's not asking for anything in return, because he doesn't need anything in return," says Ashworth.

A number of Labour insiders suggests the best indication of Alli's political worldview, other than the types of politician he has consistently backed to become leader of the Labour Party, was his close friendship with the Labour peer Margaret McDonagh, who died in June last year aged 61.

McDonagh was diagnosed with glioblastoma, a form of brain tumour, in 2021. In March 2023 her sister Siobhain accepted a £1.2m loan from Alli to buy a house in London with downstairs bedroom and bathroom to help with the care of her terminally ill sister. "It was impossible not to be moved by his love and friendship with Margaret, which clearly ran very deep," says one person who knew them both.

Labour insiders say the friends shared very similar political philosophies and were both firmly embedded in the pragmatic, Blairite wing of the party. McDonagh was the first female general secretary and described as the "linchpin" of New Labour. Her organisational skills were widely credited with helping deliver the two general election landslide victories in 1997 and 2001.

"Margaret had no time for all that ideological nonsense about class struggle and Marxist notions of overthrowing capitalism," says one Labour insider. "She thought Labour should just focus on improving the lives of working people. That sort of pragmatism was not very sexy and deeply unfashionable within the Labour party for a long time."

Alli has similar spent much political capital fighting Labour's militant wing and his donations to the party dried up when Jeremy Corbyn was leader.

Baron Alli of Norbury in the London Borough of Croydon, to give him his full title, was born in November 1964 in south London to a Trinadadian mother and a Guyanese father. He left school at 16 after his parents split up to support his mother and two younger brothers, getting his first job via a job centre doing research for a magazine called Planned Savings. He then moved to a more lucrative job as the research executive at financial services group Save & Prosper.

His big break came when he and his then partner Charlie Parsons founded the television production company Planet24 with Bob Geldof in the 1990s. It specialised in edgy shows like The Word and The Big Breakfast and was an early pioneer in reality shows like Survivor, which unkind critics called "television for morons presented by morons".

Parsons was the creative brains behind the enterprise, resulting in him being called "the father of reality television", while Lord Alli ran the business side. It was a potent combination and the pair became fixtures of the party-loving media set at the time.

The pair threw a well-attended and fondly-remembered annual bash in Kent often featuring Ferris wheels, dodgems and the like. Alli and Parsons are believed to have broken up about a decade ago but remain close. They both remain trustees of the Charlie Parsons Foundation, a charity to support creative projects in England and Wales, which they set up in 2011.

Blair seemingly saw Alli as an embodiment of Cool Britannia in the late 1990s, often seeking his advice on"yoof appeal" while Peter Mandelson plotted campaigns from his Kent pile. Blair asked Alli to join Panel 2000, which advised the New Labour government on the UK's soft power around the world and was dubbed the "committee for cool".

Planet24 was eventually bought by Carlton Communications, the ITV franchisee, in 1999 for £15m (although Parsons and Alli retained the rights to Survivor). During his short stint at Carlton, Alli got to know David Cameron, the future Conservative Prime Minister, then director of corporate affairs at the company.

He left Carlton in 2000 and became a director of Olga Television, Paul O'Grady's production company, and backed Shine, Elisabeth Murdoch's media production company, which was later sold to 21st Century Fox (owned by her father). Alli also branched out from TV production, becoming chairman of Asos, the online fashion retailer, in 2001 and Chorion, the entertainment rights company, in 2003.

Ask around in the City and you will detect a certain level of sniffiness about Alli's endeavours. In 2011, Alli was forced to quit Chorion after failing to persuade lenders to refinance the company's debt. The private equity bankers then sold Chorion off for parts with Alli buying back the Octonauts franchise and the estate of Beatrix Potter, which he financed by selling a big chunk of his shares in Asos. He was also part of a failed bid backed by private equity firm 3i to buy Virgin Radio from Scottish Media Group (SMG) in 2005.

Certainly not all of his business ventures have worked out but his hit rate is still pretty enviable. Similarly, his bet on the unfashionable centrist wing of the Labour party regaining the ascendancy and then power – which until just over two years ago seemed like a massive long shot – also came good eventually.

However, we don't need Miss Marple to figure out how the saga of donor-gate is likely to end. Ashworth says: "It's clear that Westminster as a whole needs a new set of rules around donations and the reporting of gifts. The government is looking at that now."

The only remaining mystery is why Labour didn't realise Lord Alli and the like was something that needed looking at before now.