Labour pledged to ban tobacco advertising in its manifesto ahead of its 1997 General Election victory, supporting a proposed European Union Directive banning tobacco advertising and sponsorship. At this time all leading Formula One Teams carried significant branding from tobacco brands such as Rothmans, Benson and Hedges, West, Marlboro and Mild Seven.
The Labour Party's stance on banning tobacco advertising was reinforced following the election by forceful statements from the Health Secretary Frank Dobson and Minister for Public Health Tessa Jowell. Ecclestone’s legal adviser, David Mills, was in fact Jowell’s husband.
Ecclestone appealed 'over Jowell's head' to Jonathan Powell, Tony Blair's chief of staff, who arranged a meeting with Blair. Ecclestone and Mosley, both Labour Party donors, met Blair on 16 October 1997, where Mosley argued:
"Motor racing was a world class industry which put Britain at the hi-tech edge. Deprived of tobacco money, Formula One would move abroad at the loss of 50,000 jobs, 150,000 part-time jobs and £900 million of exports."
On 4 November the "fiercely anti-tobacco Jowell" argued in Brussels for an exemption for Formula One. Media attention initially focused on Labour bending its principles for a "glamour sport" and on the "false trail" of Jowell's husband's links to Benetton.
On 6 November correspondents from three newspapers inquired whether Labour had received any donations from Ecclestone; he had donated £1 million in January 1997. On 11 November Labour promised to return the money on the advice of Sir Patrick Neill.
On 17 November Blair apologised for his government's mishandling of the affair and stated "the decision to exempt Formula One from tobacco sponsorship was taken two weeks later. It was in response to fears that Britain might lose the industry overseas to Asian countries who were bidding for it."
In 2008, one year after Blair stepped down as Prime Minister, internal Downing Street memos revealed that in fact the decision had been made at the time of the meeting, and not two weeks later as Blair stated in Parliament.