Gordon Can’t Afford a Snap Election

We all know the Labour party is £27 million in the red. Labour’s membership is at the lowest it has been for over half a century at a mere 178,889.* This means the Labour party has fewer members than the Women’s Institute.

Effectively the Labour party needs to raise £150 from each and every member to pay off the debts. If the Labour party was a company on the stockmarket it would be a short sell because it is in what traders call a “death spiral”. Rising debt, falling revenues and an unpopular brand have already forced drastic redundancies. This means less employees to generate revenue and improve the brand through campaigning. The party cannot even cover its outgoings as things stand never mind repay the “loans” which are now coming due under great scrutiny from the media and the police.

This all means that the unions will be called upon to bail out the Labour party, a new source of dodgy loans is being utilised in the form of the Unity Trust Bank. UTB is owned by the Co-Op and the unions. The unions are getting millions in bungs from government grants (see How the Labour Party Washes Money from the Taxpayer Via the Unions“) which is then recycled into donations from the unions themselves or through politically motivated loans from the UTB. The Co-Op bank’s £3 billion of reserves are being eyed enviously by the Labour party. If Labour manages to get it hands on the Co-Op’s money, however it is laundered, the government will be no better than a corrupt African kleptocracy. The likely public outcry that would follow any blatant looting of the Co-Op’s reserves directly is the only explanation Guido can fathom for Labour inducing the smallish UTB to lend such a large amount of its capital base to replenish the party coffers – loans ultimately guaranteed by the Co-Op. So large were the loans relative to the size of the UTB that the FSA required the bank to make monthly returns detailing the risky loan’s status.
It gets worse. Guido has been passed a report prepared by John Ralfe, the respected former head of corporate finance at Boots and a consultant to the UK Accounting Standards Board. In the report he dissects the Labour Party Superannuation Society (“LPSS”) for the party’s 300 employees. With £43m of liabilities and a £6.3m deficit, LPSS is only 85% funded. The pension deficit is an unsecured loan, making LPSS is the Labour Party’s largest unsecured creditor – shades of Robert Maxwell. The pensions regulator wants this deficit plugged over ten years, and put LPSS in a high risk category because the party has £27m negative reserves, an estimated £6m in off-balance sheet operating leases and has mortgaged its property assets. To plug the deficit the party will need to find £1 to £2m extra a year at a time when it is operating at loss. The report states “Although total member and employer contributions have already been increased from 16% to 19% in January 2004, the employer’s £1m annual contribution does not meet even the cost of new pension promises, let alone reduce the underlying deficit.”

In the past in this situation the pensions regulator has “suggested” to pension funds that freehold property such as the headquarters be pledged to the pension scheme. Labour however has already mortgaged its property to the Co-Op to raise “commercial loans”. Guido would describe those loans as political – no commercial bank would lend to such a financially depleted organisation bordering on insolvency.

If, as expected, Gordon becomes PM next year without a single vote from non-members of the Labour party or union blocs being cast for him, he will have no mandate to govern. The country and the opposition will expect and demand of him a snap general election. An election which the Labour party cannot afford to fight…

*This figure is derived from the number of ballot papers sent out in the 2006 NEC for the Constituency ballot. This reveals another sharp fall in membership since the end of 2005 when the official membership figure reported to the Electoral Commission was 198,026 and way down from the 407,000 in 1997.

Launching Soon:

How to do Negative Political Advertising

The Austrian elections are on Sunday, vote ÖVP if you want to keep the girl.

Hat-tip : Peter Ould

Turner Prize Special – Friday Caption Competition

Closer and Closer…

Here is a copy of Guido’s email to Ruth Turner from the week before last sending her a copy of the Sleazy Sweepstakes game :

From: Guy Fawkes
Date: Sep 19, 2006 10:19 AM

Subject: Are you a player?

To: Ruth Turner

A game for everyone in your office.


Guido Fawkes Esq.

The Ruth Turner story archive.

Email Guido for a PDF file to print out, then cut out and play Sleazy Sweepstakes in your office (Peerages not included.)

A-listers Scramble for Seats

Tomorrow notice of the second tranche of seats is due to be e-mailed to Tory A-listers. Expect numerous mess ups and people left off the list by CCHQ, just like the previous times. No doubt ConservativeHome.com will publish the list of seats immediately. The deadline for the A-listers to apply for these seats is expected to be mid-October. As the polls improve competition is becoming ever more fierce.

No Live Blog of Prezza’s Speech

There are limits.

At the end when Tony, Cherie, Pauline and Prezza clasped hands and literally took a last bow, the camera cut to Gordon looking on. He would never make a poker player, his face transparently said “Mine, mine, soon the precioussss will be all mines…”

Punish MPs

UKIP Set to Target Battersea Marginal

Europhile Jane Ellison’s selection for Battersea in the Open Primary has dismayed many mainstream Conservatives and has been greeted as an opportunity by UKIP. Which they plan to seize…

[…]

+ READ MORE +

Crick Wins in Battersea

Jane Ellison won the Conservative Open Primary in Battersea on the third recount. It was obviously close and it has to be said that effectively the most left-wing candidate was selected to represent the Conservatives by a small margin of

[…]

+ READ MORE +

Deborah Summers is New Guardian Online Politics Editor

Ros Taylor didn’t want the job – she wants “to focus on her writing” – and she is currently ghosting Chris Bryant’s diary very well. Think she has it down perfectly, all though it is difficult to capture the arsiness

[…]

+ READ MORE +

Blair Nostalgia : How Things Have Changed

Blair yesterday reminisced about the bad old 80s, how crap Labour used to be and how things have changed now. Guido dug out his old election leaflet from 1983. Check out that grin!

1. Prescription charges are up 21% since

[…]

+ READ MORE +



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Quote of the Day

Liz Kendall is asked by Tom Newton Dunn if she would ever ban the Sun from one of her press conferences:

“If you stripped naked and ran in front of me, Tom, I might have second thoughts about it, but apart from that, no.”

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