One of the main topics of conversation in Brighton among Labour Party bigwigs is the financial state of the party. Donations are drying up as few people want to throw money at what they perceive as a lost cause. There's a real fear that the party won't be able to raise enough money to fight a proper and full general election campaign. There is complete and total reliance on the trade unions, especially UNITE, for funding at the moment.
One party source told me: "If UNITE's leadership changed and decided to pull the plug on donations, the consequences could be fatal."
I understand that even at this stage Labour is struggling to meet its annual loan interest payments of £2 million. They cannot pay back their existing loans and in any normal meaning of the term, they are technically insolvent.
Another source hinted that there was more than a possibility that the Party could cease to exist after the election because of its parlous financial state. I raised a quizzical eyebrow at that suggestion, but she was adamant that no one realises just how serious their situation is.
The LibDems will be rubbing their hands with glee.
62 comments:
Wishful thinking - the unions would just start a new one called "Union Labour" or some such. True though that Unite now calls the shots.
In more and more ways, British politics seems to be reverting to the 20s and 30s, with the next couple of elections featuring an Old Etonian Tory mafia fighting a small radical party of union labour people. And the far-right barking viciously on the sidelines.
Must dash, off to watch a Riefenstahl film set in Nuremburg!
Ian, Your information could be right as labour are now borrowing policy from the BNP again. The idea of hostels for single mothers has been exposed as such by Guido.
It may be the easiest way out for all concerned.
The loss of a major party isn't often regarded as good for Democracy, in this case, lets hope it happens.
This party has been the worst thing to happen to the UK since the second world war.
Sadly though, one of their rich backers is bound to come through eventually.
PS, Unions: I refuse to join you until you stop funding these pondlife.
brown speech herendous as it was,a political disaster for middle england,it spoke to the unions.i cant see them letting their only political voice die.
if they did let it die,they could set up their own political party,or labour could use their own legislation and go for prepack administration,stuff their creditors and move on?
even more bizzarely,brown said yesterday he does not like taking on personal debt??,but is happy to bankrupt britain.
Iain, did you catch any of Brown's interviews this morning, for example the Boulton one where he completely lost it and, among other things, accused Boulton of being "completely wrong" and a "political propagandist"?
A few weeks of that sort of behaviour in the immediate run-up to the GE should prove, er, entertaining...
I have an idea.
If the Labour Government donated some a few million to the Union Modernisation Fund it could free up a few million pounds worth of Union money to be donated to the Labour Party.
Simples.
I'm surprised Gordon hadn't already thought of it!
sell a few peerages -- oops
Completely the wrong conclusion, Iain.
The CLPs are quite financially secure and the NEC owns that money. That funding alone could fight a winning election.
Trade Union fundings will always be there despite the veiled threats of withdrawal.
Of course, Cameron's plans to 'reform party funding' (i.e cut off Labour's air supply) aren't designed to achieve this outcome at all, are they?
Along with the boundary changes and a refusal to contemplate proper electoral reform this will put us firmly on course for perpetual Tory government.
I agree that they'd come back in some form, New name etc
I don't know what the implications would be of this (financial , parliamentary rights??). Maybe an idea of a good follow up post.
So its not just the country they have sold into debt then.
If Labour are unable to pay their way, who will be liable? Labour party members ? That would be poetic justice given what they have done to the rest of us.
Running their party just like the country.
Where are the rest of the press. The Sun has led the way again.
Why have the media given Labour such an easy ride.
It'll be fine. Once Osborne gets his hands on the Treasury and the truth comes out Labour will get loads of money coming back.
The financial nightmare in the Labour Party is the main reason why they will have to go for May 6th 2010, because they simply cannot afford to fight two separate election battles.
Shame :-)
If the £50k cap per union comes in and the Conservative Govt ends the "union modernisation" tax payer money.
But would you do this Iain if chosen as an MP?
No problemo!! You didn't think that T Blair Esq. had gone on the lecture circuit just to satisfy his lust for personal glory and lots of big houses did you? Of course not. He'll bail out the comrades, just you wait and see........
Always said Labour couldn't run a whelk stall. Now everyone knows.
Labour ran their party finances like they ran the country's. They financed it with debt they assumed they would never have to repay, spent on lavish new property they thought would always increase in value.
And now they, like we, are bust!
If they fell into a bucket of tits they'd come out sucking their thumbs.
Utterly useless - screwed up the country, screwed up a noble institution.
Watch out for post-election rumpus when UNITE BECOME the Party...
I suspect that there will be some more "well meaning" laundering of money from the government, to the Unions to invest back into Labour.
One party source told me: "If UNITE's leadership changed and decided to pull the plug on donations, the consequences could be fatal."
While Labour are, have, and could again yet, give tens of millions to the unions, they will still fund them. The unions are growing poorer too as they now rely on Labour handouts by proxy, so watch out for a shift in many millions over the next few months.
Maybe they will shift to the Tories too in the hope of more Government handouts, or are the leadership too thick to think that far ahead?
If the Labour Party are trading insolvent then surely under wrongful trading legislation if the Labour Party continues to trade then the directors of the Labour Party may become personally liable to contribute to the Labour Party's assets and help meet the deficit to unsecured creditors if the Labour Party's financial position is made worse by the directors continuing to trade instead of putting the Labour Party immediately into liquidation.
@ Anon 9.18
"Along with the boundary changes and a refusal to contemplate proper electoral reform this will put us firmly on course for perpetual Tory government"
So you think it's fair that a 30,000 voter constituency currently returns a single MP but a 120,000 voter constituency also only returns a single MP? You support our votes not being worth the same so long as that's in Labour's favour, as it is currently?
No, urgent boundary changes are needed to establish an electoral quota of around 82,000 - giving around 550 seats. But then this is the sort of fairness that Labour don't support, isn't it?
And I suppose 'proper electoral reform' means a system that will, er, advantage Labour.
Labour's political corruption is now coming home to roost.
By co-incidence, I blogged on this two weeks ago. The trade union Unite assumes its members want to support Labour and gives millions to the party.
I have asked them for an explanation, but none has yet been forthcoming.
Interesting, but it seems to prove that many only support a political party when that party is likely to be in power and to have goodie bags to throw around.
Quelle surprise!
I blame the treasurer. Why didn't Jack ask Gord for a few tips on how to balance the books?
On second thought, he must have done...
Being balance sheet insolvency isn't necessarily a problem - many (if not most) companies, including UK plc, are probably insolvent on a balance sheet basis. The issue is rather cash flow and whether the directors can satisfy themselves that there is sufficient ready cash to continue the business without any risk of wrongful trading. Labour is probably well away from being in that position.
Unions will continue to throw money at Labour for as long as their fat-cat bosses enjoy the ego-boost of chummying up to senior politicians. I've never understood why union members can't see that it's this ego-massaging that their contributions are paying for.
Money?
We are all broke- life savings down the pan. Bust banks , quality of life severely ruptured.
It will be worse under the Tories ,I do remember the seventies and eighties and nineties with distaste!
I also know that although Cameron is fairminded, the Tories of old are generally homophobic and elitist and uncaring.
Politics has a worse whiff than ever.
Brown makes things up as he goes along and Cameron spittles and whitters so boringly.
They have made a career out of fibbing- wise up, people.
The Pinochhio syndrome lives on!
POD and Deripaska would find some surreptitious vehicle, legally supported by an anti terror law (?!) or some such, to ensure fluid liquidity. It wouldn't surprise me this leak is part of a wider scheme to lull opposition into false sense of security. New Labour/Adidas - "impossible is nothing".
Perhaps the BNP and Labour should merge? They keep borrowing policies off each other and they have the same core vote.
Ha, we should be so lucky. It is possible to run something like a decent mainstream party on bits of string and empty squeezie plastic bottles, because the Lib Dems do it. Still, as you say, be interesting to see Labour cut down to our size...
@ True Belle
A few sweeping generalisations there, eh?
Raedwald:
Cameron's plans for boundary changes - in the absence of electoral reform - are intended to look fair but actually give a massive advantage to the Tory party.
What is urgently needed is a move to proportional representation, coupled with boundary changes that create multi-member constituencies that have equal numbers of voters per MP. And the point isn't to give Labour an advantage but to ensure that everyone's vote actually counts.
I live in a constituency so rock-solidly Labour that it doesn't matter who I vote for, Labour will win. I am, effectively, disenfranchised. Does that sound fair to you?
The current mass disengagement from politics is the result of long-term corruption in our electoral system (seats for life for most MPs) coming home to roost.
They are pretty well finished in the South but may survive in a few small pockets up north.
Meanwhile in Dublin the debate rages on.....
http://www.youtube.com/watch?v=P7u3brFiuy0
Personally I was rather disappointed that Gordon Brown didn't get really tough in his speech. I had hopped that he'd step up to the plate and make the 2010 elections interesting but the Labour Party Conference I think has totally failed to make it big in my minds eye.
More of my thoughts here: http://wp.me/pyq3l-3W
DespairingLiberal and Gary Elsby stoke are both right; the Labour Party will continue regardless.
I can only use Newham as an example and here the local "Labour Party" is as far removed from anything anyone would expect a democratic socialist organisation should be. For years it has been a fiefdom for the local elected mayor and his cabal of cronies.
Unsworth -
I am soooh angry, more than ever I thought I could be.
Yep , sweeping generalisations, whats happened to your memory then?
true the Labour Party is technically bankrupt but so also is the Conservative Party .
Y/E 31/12/2006 £ 9.0m net debts
Y/E 31/12/2007 £ 7.75m net debts
Y/E 31/12/2008 £ 7.46m net debts .
Their major financial asset Smith Square has been sold .
The major parties all see politics in a way that few of the public see it.
The old revolving door of labour's turn, then conservatives turn then labours turn... etc is no longer an acceptable option for most ordinary folks who see promises being made to gain votes only to see tese promises discarded once the new team get the keys to the safe. Simply unacceptable and in most other areas of life would be breech of contract and perhaps criminal.
The old and false paradigms of left and right simply do not apply any longer, but the big 3 seem top be stuck in this obsolete model.
I personally would like to see the entire old crew from the 3 major parties thrown out of office altogether. The public are who counts in this country, it is the public that pays and it is the public who HAVE NOT been represented for many years, the pols seem to think that it is their game and their ball - Wrong.
A full set of brand new MPs preferably all Independents or from small or even new parties are what is needed, a total remake of this poxy system is required.
The system has been hi-jacked over the years and currently ONLY serves the 600-odd MPs and few to none of the 60-odd million voters.
The public have been deceived, abused, robbed blind and insulted by Labour for 13 years, and it looks like Labour will continue this abuse until they are finally despatched to the skip, hopefully, very soon.
The paying PUBLIC want to be fairly represented and they need a process to kick out non-performing MPs. Perhaps then the public will resume an interest in the government and politics in general.
The old game of cronies, privilege, self gratification and yes, corruption has to stop and power returned to those who these clowns are meant to be representing.
Reminder to our glorious MPs :
You are meant to SERVE the public.
You are supposed to REPRESENT the public.
The public is YOUR BOSS.
I think that the population is, perhaps for the first time in history, more aware of the goings on in Westminster and are simply refusing to accept the old way of doing political business and are pushing back against the incessant shafting and abuse of power being dealt out by these current team of clowns - of ALL parties.
If they are going to make promises then they need to deliver, or face the sack.
Fresh faces and fresh ideas that actually give back some benefits to everyone and not a few otherwise unemployable career and parasitical politicians and their sycophantic followers - is what we need - soon not in 10 years.
Oh and while I'm on the soapbox - we the public would like to see these people subjected to the SAME LAWS as everyone else. The days of not applying law to the 600 has simply got to end.
Someone has to be the first to take them to the bankruptcy courts by withdrawing their loans, but will that happen when Labourites are in positions of power within our zombiefied banks?
We need a wealthy Tory to buy up the interlectual property of the Labour party from the liquidator. So any successor left wing party can't use the red flag or rose logo or name "The Labour Party"
"""I understand that even at this stage Labour is struggling to meet its annual loan interest payments of £2 million. They cannot pay back their existing loans and in any normal meaning of the term, they are technically insolvent. """
Well, that's really and truly great Karma, is it not? They've done it to the country and now they've done exactly the same thing to themselves too. Do you think that, finally, this will get it home to them exactly how fiscally irresponsible their number one core principle and belief is?
If it does (and I'm not holding my breath) will they finally understand that the Labour Party is bankrupt in more than one way? If they don't really actually have a guiding principle, what is the point in their existence anyhow?
RIP
Hi Iain, this is old news! The only reason the party hasn't folded is that the Co-operative Bank are allowing them to trade, by footing the bill of a multi million pound overdraft the Party has no hope of repaying.
Political parties are not companies (although they may establish parties) and so do not have "directors" and limited company law does not apply.
In reality much of Labour's "debt" comes in the form of loans from the Co-Op bank and similar, so is most unlikely to be "called in".
I think the reality of this coming election will be more spending than ever by all three parties. Shame really, as the ongoing americanisation only serves to obscure issues and reduce intelligent debate. Result? Ever increasing levels of voter abstention. Expect record lows this time around.
"The idea of hostels for single mothers has been exposed as such by Guido."
Well he'd know wouldn't he?
could always nationaise them - ?
So what is the difference between the way they have run the country and the way they have run their own party!!! It may have been 1979 but Maggies 'housewives economics'are as relevant today as they were then. The pain of the 80's will be as nothing to our next 5 years. And then the bxxxxy labour will get back in again and cock it all up again.
Raedwald said...
"So you think it's fair that a 30,000 voter constituency currently returns a single MP but a 120,000 voter constituency also only returns a single MP? You support our votes not being worth the same so long as that's in Labour's favour, as it is currently?"
It is not really a party political issue. The figures you mentioned are for boundaries defined under the last Conservative government.
There will always be anomalies due to geographical, administrative and social other constraints. For instance it makes sense for the Isle of Wight to form an electoral area. On the basis of its population it merits slightly under 1.5 MPs. i.e. it should return either 1 or 2 MPs. The Boundary Commission, in consultation with the locals decided that it should be 1 MP representing an electorate of 108,000 (as at 2006).
That is the only real anomaly in England. The electorates for the other 530 constituencies range between 55,000 and 86,000. Not much variation there.
In Scotland there are one or two constituencies with a very small electorate but they cover a vast geographical area.
People on the left were saying much the same thing about the Conservatives after both 1997 and 2002. And now look, the Tories are in full flow and look like election winners. This kind of talk is just wishful thinking on the part of political opponents of whichever party it is being targeted.
Neither the Unions nor the champagne socialists will allow Labour to collapse, they may restructure it, but there will always be a left wing major party largely bankrolled by the unions, that isn't going to change sadly.
Perhaps Mr Brown should do more fund raising for the party.
I think a touring coconut shy, with Mr Brown as the star attraction, could bring in a river of cash :)
"Labour Party Files For Bankruptcy"
It's the sort of headline which makes you want to pop open a champagne bottle, isn't it?
@Mr Angry:
there will always be a left wing major party largely bankrolled by the unions, that isn't going to change sadly.
Why sadly? Do you think we should all be conservatives and that no other opinion has the right to be represented?
It's stuff like this (seen in so many of the comments on this and other blogs) that makes me wonder about the right's commitment to democracy.
@ True Belle
Memory?
I can't recall.
Things can only get better, eh?
Now, if the Sainted Tone were to give just 3 speeches (including the £180 photo ops with the gullible), then the deficit would be ooh all of 76p less.
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Labour has enough big donors who are willing to bail out the party if needs be. They're not going to worry if they lose union support. Heck, there is even an opinion inside Labour that they don't want anything to do with the union's and would rather be rid of anything other than 'blank cheques.'
I would be rather doubtful if Unite ever did withdraw it's funding, the same goes for Unison, GMB and some of the other affiliates with the exception of CWU. Billy Hayes never has been passionate about the Labour leadership. As my grandfather (a former CWU member and postal worker) said today: "Billy's a bit of a Bolshi."
To understand where Labour went wrong in the public sector, and to experience the biggest challenge to your thinking in your lifetime attend the fringe session at the Conservative conference
http://conservativerealreform.eventbrite.com/
The unions will continue to slavishly support Labour while their leaderships want to do so. Meanwhile the members are slowly giving support to upcoming leaders who want change. Many union members are sick of a party so committed to mass immigration, the destruction of British jobs, and the handing over of many of those remaining to foreigners.
Past performance is not necessarily a guide to the future.
Absolute nonsense. No - Labour will not fold. The same sort of rubbish was said about the Tories in '97. I think that there is something very off-putting and un-democratic about wishing this were true, and quite a bit of political naivety to think that it could be. You've just lost my backing in Bracknell because of this.
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