Former Deputy Leader John (Lord) Prescott's imprudent proclamation about the Labour Party's 'near bankruptcy' grabbed the headlines last week, presumably in the hope of boosting his vote in the election campaign to be the next Party Treasurer. For Labour Party members awaiting a sheaf of ballot papers in the post next week, it ought to give pause for thought.
When have the Labour Party's finances ever been anything other than precarious? So what's the news in Prescott's claim? The only worthy story line to my mind is: 'Labour Party Treasurer's job made near impossible'. The irony which appears to being lost on the 4th estate is that the closest the Labour Party has been to bankruptcy in the recent past was when Prescott himself was Deputy Leader, and a senior member of the National Executive Committee. It really was a bit rich of him to have a poke at outgoing Treasurer, Jack Dromey's ignorance, when Prescott himself appears to have been no better informed. Or was he? I think the General Secretary at the time Peter Watt should tell us. Though that's unlikely as he is now backing Prezza4Treasurer.
Prescott acknowledges that the current National Executive Committee has taken the Labour Party back from the brink, but lashes out in his Guardian article on 19 August, 2010 at the electoral consequences claiming:
".....under the NEC's deficit reduction plan in 2008, we will clear our debts by 2016, but at the expense of campaigning for next year's Scottish, Welsh and local elections and the 2015 general election."
What's worrying about his approach is that Prescott apparently still thinks elections are won by throwing money at them. That's what Conservative Party financier, Lord Ashcroft thought. Now, at least some of us know the limits of that strategy.. Mercifully, the British electorate also appears reluctant to be bought. Prescott makes a gesture towards increased membership. But that alone is unlikely to put the Labour Party's finances on a sound-footing in the foreseeable future. More likely it will take at least a generation to build a new financial settlement inside the Labour Party's federal and regional structures to guarantee solvency from one electoral cycle to another.
To succeed, the new Leader, Treasurer and National Executive Committee need to come clean with members asap. As far as the Party's finances are concerned we are all in this together, rich and poor. Each of us, individually and severally (as the lawyers say) is liable for the Labour Party's debts. For those Labour Party members of modest means, there is nothing to worry about in practice - creditors want their money back in the event of bankrputcy. So, they only chase those with money from whom there is a chance of recovery. Of course, Prescott, is one of those NEC members, like former Leader Tony Blair, who could have been prime targets in any recovery proceedings back in 2006/07. (I should add, as a member of the NEC for the last two years, I have been careful to establish an audit trail to demonstrate that I have taken all reasonable steps to ensure that the Party's finances are being managed properly.)
Looking to the future, the new Leadership needs to put an immediate stop to the pretence that there is something unique about they way the national Labour Party can account for its finances. In organisational terms, the Labour Party is an unincorporated voluntary association. Hence, members fce unlimited liabilities in the eyes of the law.
If local parties have to hold annual general meetings, elect officers and receive audited accounts, why doesn't the Labour Party do the same, instead of pretending a general session at its Annual Conference covers the requirement? These requirements are the means of providing accountability, building and sustaining trust.
The siren calls of more state-funding, or greater reliance on rich people/the trade unions are old politics. They definitely will not help endear Labour to the electorate again.
What better way to underwrite solvency and going concern than for the new Treasurer to come forward with a financial model embracing grassroots collective responsibility? Party funding should be linked through the electoral cycle to the need for active local membership, campaigning and fundraising for local, regional, national and European elections. It should not be the sum of battlebus itineraries and costly billboard proclamations.
A fresh approach requires a fresh candidate, even though her nomination is mired by old trade union customs and practice (a subject for another day). Sorry John, you have shown some contrition through the Go4th campaign, but I shall be voting Diana4Treasurer.