The Elephant in the Corner

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Archive for March 2010

Let’s get this party started! – Part 1: The Labour Party

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In my last post “Who Pays the Piper?“, I indicated that political party funding would be where the real story of this election’s aftermath can be found, and said that somebody should take a closer look. Naturally, almost nobody wants to – certainly not my MP Humfrey Malins, who has never breathed a word on the subject in our long exchanges of emails. Not even when explicitly invited to do so.

Naturally, the mainstream media know their master’s voice, and also keep well away from the subject. As far as the general public is concerned, party funding is kept under wraps behind a wall of silence – which is pretty ironic considering that everything everyone needs to know is actually already in the public domain. Yes that’s right, folks, you can Google for it if need be. Even a professional journalist could find it – but of course they know their editors won’t publish anything they find, so that’s that.

Or is it? I think not. Let’s take a closer look at the finances of the Labour Party for starters. You may have heard Labour’s next big idea – that the banks should provide “a basic bank account” for everyone in Britain. Those of you with longer memories may recall that this socialistic holy grail wiped out the profitability of the Post Office back in the 1990’s. Millions were spent on (yet another) government-backed IT system that never saw the light of day.

This time round, the idea may well have some prominent backing. Why do I think so? Well, why else would the Co-Operative Bank plc have provided yet another £2 million credit facility to the Labour Party on 28th September 2009 at Base + 3%, to be repaid (or at least “reviewed”) on 31st October 2010? This facility appears to be entirely separate from the “Long standing” £2,610,000 credit facility at Base rate + 2% which is “reviewed” each June and December. Let’s face it, that sort of money can get one an awful lot of (behind the scenes) access – with or without the help of Stephen (“Taxi!”) Byers.

But the ones that really bother me are the names we hear of rather less. For instance, Unity Bank has a “long standing” credit facility of £1,540,000 available to Labour at “Unity rate + 2%”. Who or what is this bank? What does it (or perhaps more precisely, its directors) get in return for this kind of largesse? I’m guessing that a rocket salad with Alastair Darling doesn’t quite cover it.

And then there are the notable individuals. I have no problem at all with individuals donating their own money to causes they believe in – but I get a little jumpy about them offering large, open-ended loans, especially of the interest-free kind. If party supporters don’t want money in return for their loan, what do they want? If they don’t want anything, why not just make a donation and have done with it? And what about people who might be using proxies to make party donations (as suggested by the repeated £30,000 loans via from former Labour Party apparatchik Margaret McDonagh)?

Take for instance Dr. Chai Patel CBE. On 20th July 2005, Dr. Patel loaned £1.5 million to the Labour Party, interest free until 31st July 2010 and at 6.5% per annum thereafter. The loan is due to be reviewed on 30th September 2015, and let’s not forget that 5 years interest free is not to be sniffed at in any circumstances (especially when interest rates were higher than they are today). What kind of influence might this loan have obtained for Dr. Patel between 2005 and 2010? The short answer is that it very nearly got Dr. Patel into the House of Lords… before landing him in all sorts of hot water. You can read all about it here

You might respond that Dr. Patel’s cause is politically dead in the water. But can the same be said for the directors of Teescraft Engineering Limited? The company lent the Labour Party £20,000 interest free indefinitely on 31st July 2008. Something tells me we haven’t heard the last of either the company or its directors, and I will return to this subject in due course. Next time we’ll be looking at Conservative Party finances, but for now, let me leave you with a follow-on from last time’s closing statement.

When he who holds the gold makes the rules, those with rule-backed guns have two choices. They can either grab the gold and write their own rules, or carry out their orders. Either way, the general public have three choices: submit, resist or leave. You might call that democracy. I couldn’t possibly comment.


Written by salternlight

March 23, 2010 at 6:47 pm

Who Pays the Piper?

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As our mass media begin to fill to overflowing with pre-election puff pieces about the Dear Leaders and their wives, they will naturally begin to ask what most people are taught to think of as the important questions about the next General Election: Which party will win the most seats? Who will become the next Prime Minister? What percentage of the electorate will bother to vote this time? And so on.

In 2010, with the real economy mired in recession, rising unemployment, and rising discontent among public sector workers in particular, most of these questions have hardly mattered less. If we want to identify the real winners of the next General Election, we need detailed answers to two questions the mass media and the politicians usually avoid like the plague:

  1. Who is bankrolling the major political parties?
  2. And what do they expect in return?

It is a criminal offence for politicians to try to bribe voters directly (or vice versa), and all of the main political parties have an ageing, shrinking membership base. As a result, it’s getting harder and harder for the parties to

  • justify taxpayer funding for themselves in lieu of party donations and membership fees
  • “rally the troops” for the next ritual marathon of door-knocking, leaflet delivery and all the rest of the actual grass-roots level donkey work.

But none of this will stop the main parties spending millions of pounds on national level, top-down, multi-media election campaigns. So who’s going to pay for it? And what will they expect in return? In former years, the parties have looked to the occasional rich businessman (such as Geoffrey Robinson or Lord Ashcroft), and a few politically connected big businesses. It looks as if Lord Ashcroft is going to retire from the fray in the next few months because of the controversy surrounding his UK tax status, and Geoffrey Robinson has long since fallen out of favour in “New” Labour circles – but at least each of them could claim they were British voters and British taxpayers.

Big businesses may pay tax here, but they’ve no right to vote because we all know that corporations aren’t persons in the same sense as human beings. It would be revealing to see the value of the public service contracts (and legislative clout) these corporate “sponsors” gain compared to the size of their tax bills and their political donations.

It’s time we were told, and it’s long past time to ban corporate donations to political parties while simultaneously forbidding any taxpayer subsidies for political parties here in the UK – and we must ensure that both measures stand or fall together. If we the electorate don’t force the issue of party funding onto the agenda and get it fixed soon, we will have to make even further allowances for an important political law:

All government is representative government, the only question is whose interests it really represents.

Written by salternlight

March 19, 2010 at 3:34 pm