Lord Waheed Alli has always enjoyed picking winners, whether in the worlds of finance, media and fashion where he made his fortune, or in politics.
As a young entrepreneur he befriended Tony Blair, who after becoming prime minister ennobled him at the age of just 33.
More recently he has donated to no fewer than eight Labour leadership candidates and seven current members of the cabinet, according to the MPs’ register of interests.
But now a growing controversy around Alli’s donations to Prime Minister Sir Keir Starmer and his wife Victoria risks tarnishing the new government, while propelling the normally discreet tycoon into the public eye.
Starmer took nearly £16,200 of free clothing, which initially was not properly declared, while his wife Victoria took another £5,000 of clothing, which at first was not declared at all.
As the scandal has ballooned, Alli has nevertheless remained at the beating heart of government, being spotted at meetings in Number 10 as recently as last week.
The continued row threatens to undermine Starmer’s claims — made just two months ago on the steps of Number 10 — to lead a government of public service and transparency.
“I don’t understand why no one saw this coming, it looks like a series of self-made errors and mis-steps,” said one veteran Labour MP.
In his donations over the years Alli has shown an instinct for backing fast-rising Labour politicians.
He has financially supported no fewer than eight centrist leadership candidates: donating to David Miliband in 2010, Andy Burnham and Liz Kendall in 2015, Owen Smith and Angela Eagle in 2016 and Jess Phillips in 2019 — as well as both Starmer and Emily Thornberry in 2020.
Burnham is now mayor of Greater Manchester while Kendall and Phillips are both ministers.
Seven members of the current cabinet have taken donations from Alli: Starmer, deputy prime minister Angela Rayner, foreign secretary David Lammy, health secretary Wes Streeting, energy secretary Ed Miliband and education secretary Bridget Phillipson, as well as Kendall, who is now work and pensions secretary.
Labour has made a virtue of the fact that it has reduced its reliance on trade union funding by raising more donations from entrepreneurs under Starmer’s leadership, a proxy for the party’s shift to the centre ground in recent years.
But the personal nature of some of Alli’s gifts has raised eyebrows in Westminster.
The prime minister justified the clothing donations to him and his wife by saying “wherever there are gifts from anyone, I’m going to comply with rules”.
One Labour figure said: “I don’t know why he couldn’t have just given the money to the party and the party could have given Keir a clothing allowance.” Earlier this week Lammy pointed out that the US president is given a clothing allowance as part of his job.
Starmer has also declared £20,000 of accommodation from Alli during the recent general election campaign.
Allies say the decision was taken to spend less time at the family home in north London on privacy grounds for the Starmers and their neighbours. The family has previously been subject to a protest on their property in a case that went to court.
Meanwhile, Rayner registered the receipt of £1,250 from Alli in the new year in the form of a five-day stay in his New York apartment.
Alli was a longtime friend of former Labour party secretary and peer Margaret McDonagh and her sister, Labour MP Siobhain McDonagh, who he loaned £1.2mn in 2023 to help her purchase a new home to accommodate Margaret during her terminal illness. “He was devoted to Margaret, he was her protégé,” said one friend.
Alli has long been close to Starmer having given him £100,000 for his leadership campaign in early 2020. In 2021 the Labour leader gave a televised address from a private study which — according to sources — was inside Alli’s house in Islington.
A year later, he was given the job of chief fundraiser for the party ahead of the general election, smoothing potential donors with lavish dinners at one of his homes in Covent Garden.
But some people in the Starmer inner circle were surprised by how quickly he “just suddenly became so important in every respect”, in the words of one.
Concerns have been raised that in the run-up to the general election on July 4, he was also informally assisting Sue Gray, Starmer’s chief of staff, in the selection of certain appointments to a potential Labour government.
Allies point out that he has an “unrivalled” contacts book in business and politics.
“He was very chummy with people, he made himself available and Sue was happy to have someone in the party who was on her team helping out,” said a Labour source. “It’s classic Waheed, wanting to try to keep himself relevant, he started off doing fundraising and somehow ended up helping Sue with appointments.”
Another party figure said: “He made himself Sue’s best friend. He has a knack.”
Alli gave a £10,000 donation to the constituency party of Gray’s son, Liam Conlon, who was elected as a Labour MP in July.
Labour said that Alli was not “formally” asked about job recommendations and had no official part in decision making, but has not denied his involvement.
The new government has faced questions over appointments such as that of Ian Corfield, a former financial services executive who has given £20,000 to senior Labour figures and was made a Treasury director this summer. He stepped down from the job in late August to take a temporary, unpaid adviser role instead.
Asked if Alli had any conversations with Gray about the appointment of Corfield, Downing Street refused to comment.
After the election Alli was given a Downing Street pass to help with “transition work”, which he handed back before it expired in August.
Yet a Downing Street spokesperson refused to confirm his recent presence: “We are never going to give a running commentary on who is in and out of the building.”
One Labour donor said he was “frustrated” by the way Downing Street handled the saga, arguing that if they had formalised his role to start with, there would have been no scandal. “Alli should have just been given some kind of title to justify the fact that he’s so influential and important with business audiences,” they said.
Despite his access, it does not appear that Alli has tried to sway the party’s policies: as a Labour peer of almost three decades standing, a long-term campaigner for gay rights and supporter of the BBC his views are well-aligned with the leadership.
One person in Starmer’s inner circle said that the entrepreneur had no particular interest in policy. “Waheed is absolutely neutral on policy, strategy and organisation. He doesn’t have any political axe to grind apart from being there. Keir is therefore happy being around him — he is like a comfort blanket.”
Another colleague said Alli would block donors when they tried to talk about policy during fundraising events.
The media tycoon, interviewed by the FT in 2011, said it was important to create a convincing narrative: “I understood that if I didn’t actually tell people what we were doing, then why would they invest in our stock?” he said.
Now, by contrast, Alli is keeping a resolute silence about his Labour relations, donations and motivations, declining to answer FT questions.
“Keir Starmer promised a government of service and transparency,” said Henry Newman, the director of The Whitehall Project substack — and former Tory special adviser.
“Yet his personal donor, Lord Alli, was given privileged access to Downing Street while working on both fundraising and government appointments. The government needs to come clean on Lord Alli’s exact role otherwise concerns over cronyism will keep growing.”
