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April 23, 2006

New Labour’s Going Bust!

Oh, marvelous, simply quite wonderful. It appears that the Labour Party might actually go bust in the next few months:

TWO businessmen have demanded immediate repayment of their secret loans to Labour, threatening financial crisis for the party.

The formal demands, for a sum totalling at least £1.5m, will necessitate a fire sale of the party’s London headquarters to pay the debts.
Labour is now preparing to sell its Westminster headquarters, valued at £6m, to plug the black hole in its finances. However, the party is understood to have an outstanding mortgage of £5.5m from the Co-operative Bank so the sale will raise only £500,000. It is thought not to have any other saleable assets.

Glorious, don’t you think? They appear to have forgotten that loans need to be repaid:

The repayment demands have shocked Labour, which initially assumed that most of the money would be written off. One Labour source told The Sunday Times last month: “The clear intention with the loans was that they should not be paid back — at least not until Blair was no longer leader.”

But surely they can get donations from other wannabe Nobles?

Since the start of the year, the party has struggled to attract donations from wealthy individuals. It is thought to have landed only one six-figure donation, of £250,000 in January. The Tories, by contrast, raised £6.2m from backers between January and March.

No wonder Blair is agitating for the state funding of political parties. Yet another bailout by the taxpayer’s money of a failing organisation.

One slightly subversive thought. If it does go bust then of course there has to be an auction of assets to pay off the creditors. Appallingly silly as this may seem there are parts of the country where you could even run me as a "Labour Party" candidate and win without breaking into a sweat. So as and when the bankruptcy comes how about getting together a group of properly rich righties to bid for the brand name? We’d be able to get 50-100 people elected, no probs, in those backwoods seats and finally kill the prospect of socialism in this country stone dead.

Mssrs. Saatchi, you listening?

April 23, 2006 in Scams and Frauds | Permalink


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Wasn't there some change of law recently (2000 onwards) which made political parties officially recognised organisations (I think for the purposes of the Euro elections PR requirements). I don't know whether this would frustrate your plans?

Posted by: Matthew | Apr 23, 2006 9:30:26 AM

Names are not inherently property. The name "New Labour" will not be for sale. If it were a business that had gone bust, you could just adopt the name after it was dead. However, the use of political party names on ballot sheets is regulated by, as I recall, the Electoral Commission, and they may have something to say about using the name of a very recently defunct party. or they may not, of course.

Posted by: Marcin Tustin | Apr 23, 2006 9:35:31 AM


I guess it depends how many Electoral Commision officials you promise peerages.

I mean, if it was a bunch of nasty property investing capitalists pulling off the coup, you couldn't expect them to act with the same probity of, say, the Labour Party. Could you?


Posted by: The Remittance Man | Apr 23, 2006 10:27:01 AM

They appear to have forgotten that loans need to be repaid:

Or at least assumed they wouldn't need to be repaid after services had been rendered, your Lordship.

Posted by: Mark Holland | Apr 23, 2006 11:26:23 AM

Another distinctive, international achievement of Tony Blair:

"The world's leading anti-corruption watchdog, Transparency International (TI), has sent a detailed dossier to John Yates, Scotland Yard's Deputy Assistant Commissioner, who is heading the inquiry into the funding of the Labour and Conservative parties.

"The eight-page document, compiled by the British branch of TI, signals that the police investigation could be wider and have far more serious consequences than has so far been suggested. . . "

Posted by: Bob B | Apr 23, 2006 12:10:30 PM

Don't worry chaps. This is why we'll soon get state funding of political parties. Then the taxpayer will be paying for Cherie's hairdos. You know it makes sense.

Posted by: David Farrer | Apr 23, 2006 10:38:34 PM

All this talk of state funding for political parties puzzles me. Can anyone provide me with any proof that by having these leeches pillfer my pockets yet again we will get more honest politics (obligatory oxymoron alert).

Aren't the political parties in German funded by money extorted from the taxpayer? And didn't former Chancellor Kohl get caught presiding over CDP slush funds secretly donated by "supporters" seeking CDP favours?

Aren't the parties in France state supported? Most of the country seems to be on taxpayer funded life support after all. And wasn't L'escroc accused of accepting brown paper bags stuffed with used francs supposedly destined for party coffers when he was mayor of Paris?

It seems to me that no matter how much of our hard earned cash we are forced to give to these crooks they will always want more. If they can't get it out of the ordinary taxpayer legally, they will find other ways to extort it.

And if the lying toerags are going to be dishonest regardless of how much cash we are forced to give them; why the phuque are we even contemplating doing it in the first place? At least if the b'stards are kissing arses and scuttling around darkened carparks waiting for bagmen they are doing some sort of work for their loot.

In the words of the ever prescient PJ O'Rourke: "Giving money and power to politicians is like giving whisky and the keys to the car to a teenager"


Posted by: The Remittance Man | Apr 24, 2006 7:40:11 AM

I think the - probably naive - belief is that if political parties are funded out of taxes then political leaders won't find it as necessary to lie so often or engage in fraud and corruption to fund their political parties . . with practices such as Kohlgate in Germany.

Posted by: Bob B | Apr 24, 2006 9:27:04 AM

So, these muppets who cannot even run their own party finances are the same ones who're in charge of the county's finances? No bloomin' wonder the economy's on its arse!

On a lighter note, why do we even need funded political parties? A political party is supposed to be a group of like-minded people who club together because they are of one mind; they do not need to be funded.

Posted by: Dr Dan H. | Apr 24, 2006 11:19:33 AM

Bob B,

That may be the idealistic view (it's certainly the cynical bullshit spouted by the crooks...erm, sorry, politicians). The hard reality is that they will feel even less need to consult with or listen to the people they perport to represent.

And the buggers will still accept bribes and "loans" from those who think that a large enough bit of bung will get them what they want. of course those with the biggest bung are a very small part of the population.

Quite frankly I can't imagine a scenario less likely to be democratic and yet have all the appearances of democracy.


Posted by: The Remittance Man | Apr 24, 2006 2:27:53 PM

RM - I entirely agree. In the FDR (West Germany), the political parties have received state funding since 1959:

But that evidently didn't prevent Kohlgate:

Hence, you are completely correct in saying that on the compelling evidence of Germany, state funding for parties definitely won't deter political fraud and corruption.

Btw, here's thought, according to this report on the BBC website: "In Germany in 2003 state funding of parties amounted to approximately 300m euros (£208m)."

Funding political parties in Germany by taxpayers to the equivalent of £203m in a year makes the amounts raised through loans by the political parties here seem like small beer.

Posted by: Bob B | Apr 24, 2006 5:23:59 PM