...unless you're a Labour Party leader, or someone else who supports the New
Labour agenda of taking us towards the sort of authoritarian capitalist society
predicted by George Orwell in his book "Nineteen Eighty-Four" in which
revolutionary change is impossible!
There is also an item of audio that is well worth listening too as well; you
can click to listen to it and/or read the text of the article at
http://www.guardian.co.uk/politics/2008/may/29/labour.
Labour cash crisis could bankrupt party leaders
* David Hencke, Westminster correspondent
* The Guardian,
* Thursday May 29 2008
* Article history
David Hencke on the 'absolutely serious financial problem facing Labour'
Senior officials in the Labour party, including Gordon Brown, could become
personally liable for millions of pounds in debt unless new donors can be found
within weeks, the Guardian has learned.
The party has five weeks to find £7.45m to pay off loans to banks and wealthy
donors recruited by Lord Levy, Tony Blair's former chief fundraiser, or become
insolvent. A further £6.2m will have to be repaid by Christmas - making
£13.65m in all. The sum amounts to two-thirds of the party's annual income from
donations.
The figures are a conservative estimate as they do not include interest that
will also have to be paid. A Labour source said that although the total debt was
listed as £17.8m on the Electoral Commission website, the true level, with
interest, was nearer to £24m.
The possibility that party officials and members of its national executive
committee could become liable is being taken seriously by union leaders, and has
been underlined by the decision of equity fund chairman David Pitt-Watson not to
accept the post as Labour's general secretary.
Though he was Brown's candidate for the post, he declined the offer after
receiving independent legal advice that he would be personally liable for
repaying the loans and could be bankrupted if Labour's finances collapsed.
The advice from City solicitors Slaughter and May said unequivocally that
leading party officials and members of the NEC would be " jointly and severally"
responsible for the party's debt.
The reason is that the Labour party constitution is framed like a local club or
society, and has no provision for limiting the liability of its officials or
managers.
A Labour source said: "The party's constitution is like a five-a-side football
club, or the local cricket club. The big difference is that the most club
officials and managers could expect to have to fork out is an unpaid bill for
hiring the pitch. In Labour's case, it's tens of millions of pounds."
The advice was the sole reason why Pitt-Watson, a committed Labour supporter and
former Westminster City councillor, turned down the job this month.
But the reverberations inside the party have been enormous. Earlier this month
the GMB union's executive decided to indemnify its two members on the NEC -
Debbie Coulter, the union's deputy general secretary and a former Labour party
conference chairwoman, and Mary Turner, GMB's president - to protect their homes
and savings. A GMB spokesman told the Guardian: "They told the executive they
would not continue to sit on the NEC unless they were indemnified. It's too much
a risk for them."
As leader of the party and a member of the NEC, Brown is also potentially
vulnerable. Other prominent members of the committee are Harriet Harman, the
deputy leader; her husband, Jack Dromey, the party treasurer; Pat McFadden,
minister of state at the department for business; Angela Eagle, exchequer
secretary at the Treasury; Dawn Primarolo, public health minister; and former
ministers Keith Vaz and Janet Anderson.
Anderson said last night: "I am very concerned and we should look into the
situation immediately. If this is the case, I can't see how anyone, unless they
are very wealthy or are indemnified, like in the case of the GMB, can serve on
the NEC. I can't see who would want to be general secretary following this
advice."
The party's financial plight can be shown by the current negotiations taking
place with banks and donors.
The Co-operative bank, whose £2.61m loan is due to be repaid on June 30, has
told the party it wants its money back, even though it is getting 7% interest.
The bank has asked the unions to offer loans to Labour so the party can pay its
debt, but some are refusing to do this. Paul Kenny, the GMB's general secretary,
has told the Co-operative bank it will refuse to help unless the bank withdraws
its de-recognition of the union, which represents staff at Co-operative Funeral
Services.
Three other loans are due to be repaid on June 30 and July 1. They are a £1.54m
loan from Unity Trust bank, also at 7%; a £1m loan at 6.75% from Nigel Morris,
founder of the Capital One financial group, and £2.3m from Sir David Garrard, a
property developer. He had already extended the loan by 15 months from April
2007.
Labour is hoping that the donors can be persuaded to extend the loan period. Sir
Richard Caring, owner of the Ivy and Caprice restaurants, has agreed an
indefinite extension of his £2m loan, due to be repaid last March. He has
agreed to give 180 days notice if he wants it repaid.
The party's financial crisis could be compounded this autumn. Three of the
biggest unions, Unison, the Communications Workers Union and the GMB have tabled
motions at their annual conferences next month calling for members to
disaffiliate from Labour. If this goes ahead, Labour would lose £4m of its
£19m a year in donations.
The Labour party is said to be investigating whether it can change its status to
a limited liability company to protect its officials and NEC members - but such
a move could be open to legal challenge until it clears its debts.
 
--
Steve Wallis (Glasgow, Scotland)
For important/urgent communications, please email:
warcrysteve@...
Blogs: http://groups.yahoo.com/group/steve-wallis-socialist-blog,
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My socialist website: http://www.socialiststeve.me.uk
My socialist musical poetry: http://www.socialiststeve.me.uk/poetry.htm
(and at my MySpace and Multiply pages)
My pages at MySpace: http://www.myspace.com/galaxiasteve, Facebook:
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Founder, Good Intentions Network: http://www.goodintentionsnetwork.org 
Founder, Ethical Capitalism Network: http://www.ethicalcapitalism.net
Founder, Foundation for PR-based Socialism: http://www.PRsocialism.org
Founder, Revolutionary Platform Network: http://www.revolutionaryplatform.net
My socialist band, Red Day: http://www.red-day.net
Author, "Revolution Destroyed? Have I ensured that a world socialist
revolution will never happen?": http://www.revolutiondestroyed.net
For discussion of the credit crunch, go to
http://www.revolutionaryplatform.net/forum/index.php?board=156

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