Quango - Should the Guy Who Runs the Ministry of Sound Be Running the Country Instead?

“They're the underdogs,” says James Palumbo, the biggest private donor to the Liberal Democrats this year. “I suppose, were you so inclined, you could say that my motives are as psychological as anything – I identify with them on that level. Year after year, people predict obliteration for them. But year after year, they keep coming back. And now they're in government: a position they never thought they'd be in, that they hadn't prepared for. So there was a very immediate, very real need for organisational skills and funding to help them make that transition.”

The sum of £30,000 is the one that people have been slotting after his name in recent days. But he's rubbishing that: “Oh, I've given them much more.” When your net worth is somewhere around £130 million depending on which way the FTSE is swinging that day, most sums are chump change. The entire donated budget of the Lib Dems last year was only £4million. He could buy them and make them all dance like monkey-boys for his tycoon pleasure thirty times over.

So in terms of proximity to power – what has his investment bought him? “Nothing… Zero…” He shrugs. “Look, what are they going to do for me? Am I going to go 'Oh please don't do a mansion tax'? There's nothing they could possibly offer me.”

It came about “Through my friendship with Simon [Hughes – the Lib Dems' leftie attack dog and one-time leadership contender]. I'd known him for nearly 20 years, because he's the MP for Southwark, where the Ministry Of Sound is. And, a need presented itself. Simon is an extremely decent man: honest, passionate, considered… a good Christian… He's always late for meetings because he's helping out some constituent or other…”

James Palumbo likes his dogs

As a study in political donation, Palumbo is probably pretty atypical, and the softly spoken tycoon is a pretty atypical guy overall. He already runs his own Ministry – the Ministry Of Sound. A venture he started when he was 28, in a disused warehouse in Elephant & Castle, with no liquor license, and no particular interest in house music. He saw off death threats from drug gangs, shotgun-toting robbers who made off with an entire weekend's takings, and turned the place from the brink of bankruptcy into a global marquee. This year, he claims while filling a goblet with Chateauneuf Du Pape, they've bucked every trend in the book, and had their best set of financial results ever.

“Because we are disciplined. And the rest of the music industry is ridiculous. Did you know that even as profits have dwindled, executive pay has gone up? It's madness. Literal madness. If you come to the Ministry of Sound offices, people are all at their desks by 9AM. It's totally open-plan, and the CEO has a desk right in the middle of the room. We have our ear to the ground, and we work hard.”

Famously, when private equity supremo Guy Hands tried to buy EMI, Palumbo sent him a letter detailing at length why it was a stupid idea that would cost him billions. Guy Hands didn't listen. That cost Guy Hands billions. The EMI layoffs continue.

“The traditional industry model is that you sign ten acts, and nine lose you money, and the tenth makes up for the nine that you lose money on. Well we don't work like that: we do our homework.

The traditional model says that the A&R man can't be disturbed because he's doing his important creative work… and so naturally people get away with murder. We have much better controls.”

He launches into a protracted swipe at Simon Cowell's Syco label. He peddles disposable shit. And ruins lives (here Palumbo talks about the ongoing death-spirals of Leona Lewis). And the once-mighty Sony Music now depends almost exclusively on his slurry for its profits.

This one is called Bonnie

It is this type of new millennium transactional blankness that Palumbo has chosen as his chief target in his new satirical novel, Tancredi. People await their certain death while munching on free pizza. They gawp at game shows involving the loss of an arm. They mouth banal platitudes as though they are holy writ. It's the ITV Saturday night schedule in distended microcosm.

Tancredi is angry at the modern world all right, though not quite as gorily angry as the first 50-odd pages of his debut, 2009's TOMAS: one long guts-splattered psychotic revenge-fantasy against the idle, parasitic super-rich. Short and sharp, the book is a Candide-like sci-fi allegory, in which the titular character visits a series of individual worlds that each express an idea about the perils of short-term thinking: a planet full of Coke-guzzling fatsos, a planet full of people miserably being kept alive by unending layers of medical intervention, a planet wibbling its way through layers of gormless political correctness. The short-term fix is fucking us, it argues: and hard.

Later in the conversation, Palumbo suggests there may be a flaw in human nature which combines with a flaw in democracy itself to leave us open to being manipulated in just such short-termist ways. The system just isn't working any more. Democracy, he infers, may not be fit for purpose. So are we to assume he is in favour of a new fascist Britain? “Well,” He smiles, flickeringly.  “Maybe a Britain run by [Singapore's founder strongman] Lee Kuan Yeu…”

And this one is called Mr Bounce

Despite placing his chips on orange, he still casts himself as non-aligned: “Cameron, Miliband, Clegg – I think they are all, at heart, moral people. I mean, I was listening to Ed Miliband talk the other day, and I thought he was fantastic – real depth, real integrity.” It's an agnosticism that may be something to do with having had close-quarters experience of all sides. Palumbo, after all, was head boy at Eton when Cameron and Johnson were both a few years below him. A figure beloved by some, and be-hated by twice as many, he was notoriously strict: deliberately having boys expelled for drug-taking, giving no quarter in his views on the rules being the rules.

His experience of New Labour was even more up close and personal, chiefly on account of his long-standing friendship with Peter Mandelson. He's used to mounting a personal defence of his chum. “But Peter is steeped in the Labour Party. And he had to fight very hard to make his way up… Peter has extraordinary powers of self-expression. He really thinks very hard about things, and comes to a view. So often, I see him wandering around with a set of clippings of articles he's read…”

Yet Blair he despises: 'The Middle Way' is the not-so-coded satirical conceit Tancredi uses to gunsight the airbrushed and focus-grouped fudge that was New Labour policy, something he describes as 'an utter disaster'. “I met Blair on many occasions, and he was utterly hollow. He had this way of looking through you. Like: 'What can I get out of this person?'”

Likewise, it seems unlikely his pal Simon Hughes would build a shrine to the two models of charismatic authoritarianism he sets up as true latter-day leaders: Thatcher and Reagan. And in the mould of Thatcher and Reagan, he believes that strength has its own clarity, boldness its own genius. He loves a good underdog, true, but seems to enjoy a benign overlord almost as much.

Palumbo is a politically-agnostic political-donor, a fiercely-loyal self-proclaimed outsider, a literary man with a business mind, the anti-drugs, dance-indifferent boss of the world's biggest independent dance music label, who seems to revel in these paradoxes he spins for himself. A Britain run by Lee Kwan Yeu would be interesting, yo. But one ruled over by James Palumbo might be more so.

Previously: Quango - Politicians Can Be Berks