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'Yachtgate' in the papers

Text by Caroline CLARKSON

Latest update : 2008-10-29

The British press has been full of ‘Yachtgate’ – a scandal involving George Osborne, the shadow chancellor, Peter Mandelson (photo), the new business secretary, Oleg Deripaska, a Russian aluminium oligarch, and the latter's luxury yacht.

Over the summer, the protagonists of the so-called "Yachtgate" met on board Deripaska’s yacht off the coast of Corfu, Greece. Mandelson, still European trade commissioner, said some very unpleasant things to Osborne about Prime Minister Gordon Brown, soon to become his boss.


After Mandelson's surprise return to the cabinet, Osborne unwisely betrayed his confidence by leaking some of their conversations to the press, who then began to probe Mandelson’s ties with Deripaska. Journalists wondered whether their association affected European policy on aluminium tariffs when Mandelson was EU trade commissioner. He denied the claims.


A coup de théâtre soon followed: financier Nathaniel Rothschild, a friend of Mandelson’s whose villa Osborne had visited in Corfu, made explosive revelations in a letter to The Times newspaper. He alleged that Osborne attempted to solicit an illegal £50,000 donation to the Conservative party from Deripaska during their sojourn on the yacht.


Osborne later admitted that such discussions had taken place (although no money ever changed hands) and has apologised, saying he made a “mistake”, though all the while denying he actually solicited the donation.

So what are the papers saying?

The Herald

Osborne admits mistake in bid to end Russian row

The Glasgow Herald aptly sums up the reasons for Osborne’s fall from grace: “He [Osborne] broke a cardinal rule of privileged hospitality and, more fatally, he crossed the "Prince of Darkness" (i.e. Mandelson). Indeed, The Herald hints that Mandelson, also a friend of Rothschild, was behind the financier's letter to The Times containing the allegations over the donation.

The Economist

The king of Corfu

In its editorial, The Economist, which takes the affair very seriously, sees it as a coup for Mandelson and proof that he “is still dangerous (including to himself)”. The magazine thus hints that Mandelson was behind the letter from Rothschild. Osborne comes out worse: he is already under fire for his performance as shadow chancellor during the financial crisis and “this is an especially bad time to be conjoined in the headlines with billionaires and yachts”. The Economist concludes that “the battle of Corfu has left Lord Mandelson stronger”.

The Scotsman

Osborne loses fundraising job as he owns up to 'mistake'

The Scotsman also takes the view that the scandal has hit Osborne worse and mentions the possibility of the latter losing his job. It also cites a poll showing that Osborne's approval rating has “dropped from -11 to -20, making him the most unpopular high-profile Conservative.”

The Times
Small political hurricane in Corfu leaves little real damage

The Times takes a more balanced view in an editorial, stating that although neither Osborne nor Mandelson really risked losing their jobs over the matter, reputations have been damaged on both sides. But it sees this as being due more to the politicians being exposed as mixing with the rich and powerful, rather than the solicited donation that never materialised. Interestingly, considering the newspaper's own role in the scandal, it refuses to accord too much importance to the affair itself, saying it leaves “damage to the image of politics, but no fatalities”.

The Guardian
The Corfu saga teaches that this is truly an age of cant

The left-leaning Guardian takes the issue more seriously in an editorial, for the opposite reason from The Times. It focuses on the illegal nature of the discussed donation rather than on the politicians' presence on Deripaska’s yacht. It then takes an original view of the wider political fundraising issue, comparing it to the US system. There, this sort of scandal does not arise so easily since there is public funding for political parties. The editorialist wonders why the British won’t contemplate a similar system.

Date created : 2008-10-29