According to the Daily Mail, “the GMB trade union has already taken the extraordinary step of discussing at its last executive council meeting whether its two representatives on Labour's ruling National Executive Committee (NEC) should be indemnified against financial loss in the event Labour goes bankrupt”.
David Pitt-Watson, a City financier whom Labour's Executive appointed as the party's new general secretary after immense pressure for the decision was applied by Gordon Brown, has already refused the appointment after looking at Labour's accounts and saying that he is worried that he might be made personally responsible, as general secretary, if there are financial-bankruptcy proceedings.
It is scarcely imaginable that things will get to that point. The political damage for Gordon Brown and his friends would be huge, and just to keep some minimal party machinery ticking over would not cost a vast amount.
Yet Electoral Commission figures show Labour's debt at £17.8 million, more than the Tories, Lib-Dems, and the big nationalist parties put together. Regular expenditure is much more than regular income.
The donations from wealthy individuals on which New Labour thrived in the early years of Blairism have dried up. The rich have not decided that New Labour policies do not suit them; but now the Tories offer very similar policies, and look as if they will win the next general election. The repeated scandals about loans and donations to Labour are enough to put donors off.
Back in 1997, top New Labour figures talked of changing the system so that big political parties would get most of their money from the taxpayer rather than from their own members and supporters. It would have been a huge further step in transforming mainstream politics into a world of its own, carried out by salaried careerists with no need for active involvement by people outside the career-politics world other than an occasional ballot paper.
The idea was congenial to New Labour, but tricky to push through. A Government “white paper” is due soon on the issue of political party funding, but it will be harder than ever for New Labour to push through drastic changes if they appear for all to see as moves to get the taxpayer to clear the huge debts incurred by Labour for its 2005 general election campaign.
In the meantime, New Labour is back to Old Labour in the sense that once again it depends on the unions for the bulk of its money.
Union leaders are indicating that they will use this situation to resist uncongenial changes in the law on political party funding and to twist the Government's arms on some issues. Paul Kenny, general secretary of the GMB, said in April: “There is no way we are going to concede the right to allocate their cash to Gordon Brown and the party headquarters when not all our members support everything that the government is doing. Not all our members support the Labour party and they would not stand for their money being used in this way. They would want us to disaffiliate if the government insists on doing this.”
There has to be a good chance that Kenny and his friends can extract a few concessions, perhaps on issues like rights for agency workers. But the situation is also radically different from the sort of trade-union political leverage that there used to be in Old Labour.
In Old Labour, the Labour leadership was put under pressure not only, and not even mainly, by behind-the-scenes haggling by union leaders using finance as leverage. There was a more or less open process by which trade unions discussed political issues, formulated policies, and had decisive voting power at annual Labour Party conference.
After many years of it being moribund, Gordon Brown has more or less killed off Labour Party conference by pushing through, last year, a ban that unions or local Labour Parties submitting political motions for debate at the “conference”.
Horse-trading behind the scenes is no substitute for even the rather wretched form of working-class political democracy which the old Labour Party conference represented. And the industrial record of the major union leaders leaves no room for confidence that they ever will be much good as horse-traders.
The working class does indeed need a party whose life-force — both as regards activism and as regards finance — comes directly from the working class, and one which is accountable to the working class through a process of democratic discussion.
The creation of such a party, which now can happen only through open war against the New Labour apparatus, would greatly increase the real substance of political democracy in Britain, by greatly increasing the range of real choices open to voters.
And it is the only way by which we can escape the deadly round of one government after another fully committed to the priority of profit, and get ourselves a workers' government, a government accountable to the working-class majority and carrying out policies in the interests of the working class.
