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.



Tip offs: 0709 284 0531
team@Order-order.com

Quote of the Day

Shadow Education Secretary Angela Rayner:

“We have no plans to write off existing student debt.”

Sponsors

Guidogram: Sign up

Subscribe to the most succinct 7 days a week daily email read by thousands of Westminster insiders.
Watch: Best Maiden Speech of 2017 Intake Watch: Best Maiden Speech of 2017 Intake
Child Protection Investigation ‘Stalled to Help Labour’ Child Protection Investigation ‘Stalled to Help Labour’
Davis Accepts Donations from Top Blairite and TV Remainer Davis Accepts Donations from Top Blairite and TV Remainer
BBC #NotOnTheList Stars Paid Via Production Companies BBC #NotOnTheList Stars Paid Via Production Companies
Pants-Wearing Councillor Boasted He Had “Vaz in My Right Pocket” Pants-Wearing Councillor Boasted He Had “Vaz in My Right Pocket”
Champion: ‘Not Possible’ to Keep Student Debt Promise Champion: ‘Not Possible’ to Keep Student Debt Promise
BBC Rich List Revealed: Salaries In Full BBC Rich List Revealed: Salaries In Full
Torbynista Greening Loses Fight for New Money Torbynista Greening Loses Fight for New Money
New Labour Spinner Boasted of Bullying Angela Eagle New Labour Spinner Boasted of Bullying Angela Eagle
Remainers Behind Smears and Negative Briefings Remainers Behind Smears and Negative Briefings
Sunday Shows Sunday Shows
Byline Fined For Defamation in First Impress Ruling Byline Fined For Defamation in First Impress Ruling
Freedom From Abuse Not Abuse of Freedom Freedom From Abuse Not Abuse of Freedom
Milne & Blonde Pictured in Restaurant Milne & Blonde Pictured in Restaurant
Corbyn Spends Evening With Assad Loving Genocide Denier Corbyn Spends Evening With Assad Loving Genocide Denier
Osborne Defends Blackrock’s Investment on Front Page Osborne Defends Blackrock’s Investment on Front Page
Taylor Review Hijacked by Union Sock Puppets Taylor Review Hijacked by Union Sock Puppets
Assange Lawyer Named as Milne’s Mystery Blonde Assange Lawyer Named as Milne’s Mystery Blonde
The Great Fairtrade Scandal The Great Fairtrade Scandal