NEC Meeting, 21 March 2006

The meeting was dominated by the loans controversy, though much bridge-building had clearly gone on behind the scenes and the atmosphere was more comradely than reported. Jeremy Beecham, the Chair of the NEC, asserted our collective responsibility for the reputation of the party, and presented the recommendations listed at the end of this report. He stressed that no laws were broken, and the loans would always have appeared in the 2005 accounts. The lenders had now given their consent to revealing names and amounts, and Labour was calling on other parties to do the same.

Tony Blair said that he understood members’ concerns, and took full responsibility for everything done in the name of the party. The context was very different a year ago, when the over-riding need was money to match the millions that the Tories were pouring into marginal seats. Even in 1997 they outspent us. Anyone giving to Labour was trashed in the media and so potential donors preferred the confidentiality of a loan, though he did not explain why some donors claimed that the party proposed the arrangement, nor acknowledge that the lenders suffered far more through the facts emerging in this way. Hayden Phillips’ review of party funding would need a thoughtful response, as state support would get little backing from the press, and a cap on donations could entrench the Tories’ advantage, as they have larger numbers of moderately well-heeled supporters.

Jack Dromey then gave his account, stressing that neither he nor any elected member of the NEC had been informed. Some people had parts of the picture, but few knew the individuals and the amounts, and even fewer were also involved in nominations for peerages. By comparison trade union contributions, made up of small sums from thousands of members, were open and transparent. What had gone on was wrong and must not happen again, and the affair also raised wider issues about the governance of the party. Ian McCartney added that when he was appointed party Chair he found the kitty empty, but was faced with unprecedented demands for the national communications centre, direct mail, DVDs, the Mosaic database, and paid organisers in key seats. Further, the party did not want to lose staff skills by rapid downsizing after the election. Trade unions had less money these days, and individual membership contributed less than 25% of total income even at its peak.


Pete Willsman questioned the judgment of those in charge. Sooner or later these things always leaked out, damage was magnified, and in the long run the £14 million would lose more votes than it gained. Christine Shawcroft favoured parting rich people from their cash, but agreed that we should concentrate on getting policy right and bringing back our core voters. Other members said they had needed every penny for campaigning, and were simply grateful. Policies could not be conveyed by osmosis, nor by the media, with the right-wing press hostile, the left unreliable, and both driving the broadcast agenda. Some still felt that we did nothing wrong, but Charlie Falconer’s speedy proposals to bring loans into line with gifts show that this is not a defensible position. Jack Dromey repeated that it does matter where our money comes from and how we get it; in 1997 Labour had attacked the sleazy Tories and promised a different kind of politics. Concerns extended beyond party funding to rewarding wealthy backers of city academies, though at least Tessa Jowell is off the hook for the moment. Dennis Skinner suggested that abolishing the Lords would get rid of some of the problems.

Most did not consider state funding to be the answer. The unions saw it as a ploy to detach them from Labour and break longstanding cultural links, already strained when warm words were not matched by government action. Gary Titley warned that European parties with state support still had problems with the media, and in the United States funds were channelled into arm’s-length proxy organisations. No-one wanted their taxes to go towards the BNP. And we were talking about massive amounts, with Tony Blair estimating that the next election would cost more than five times as much, and Tory millionaires already bankrolling candidates in target seats for the next general election. Ways of controlling the arms race, not only immediately before the election but throughout the cycle, were essential to avoid mutually-assured destruction, though no-one had a mechanism for doing this.

Understandably there were concerns about what would happen if the loans were recalled. We were assured that general secretary Peter Watt was taking steps to safeguard party finances, including scheduling necessary repayments, and the NEC officers and the business board would have oversight. While I would like the whole NEC to have more information, when figures came to meetings in the past they invariably turned up in the next day’s papers, so I understand that circulation must be limited. However I asked that we should all be involved in important decisions. We approved the sale of Old Queen Street for £6 million, but questioned the wisdom of buying it in the first place.

Above all the NEC was saddened by the effects of failings at the top on local foot-soldiers fighting the May elections, after three years of damage from Iraq. Rifts between party and government drove us into opposition in the 1980s, and must not do so again. There was a strong desire to deal properly with the issue, and then to move on. Mohammed Azam called for unity between Jack Dromey, Tony Blair and Gordon Brown and silencing the spin-doctors, and John Prescott agreed. The NEC expressed unanimous confidence in its officers and thanked the party staff who had to deal with the media firestorm.  Finally we agreed that only Jeremy Beecham would speak to the press, though no-one told Charles Clarke who regrettably prolonged the negative coverage with further insults.

It’s the Politics, Stupid

All this left little time for politics. We had no chance to discuss Tony Blair’s Sedgefield speech, in which he proposed returning to the Clause IV debate in a more concrete form, involving “those who support our programme and those who don’t: Progress and the Fabians, but also Compass and Tribune”, with nationwide consultation within and beyond the party. And a discussion of energy policy with Malcolm Wicks, rescheduled from last time, was also dropped. Dave Ward of the CWU regretted this, having come from a meeting of postal workers where no-one mentioned party funding, but everyone was worried about privatisation of the Royal Mail and rising bills.

Ian McCartney gave an update on implementing the manifesto, including another increase in the minimum wage to £5.35, employment up by 178,000, £680 million for extended school hours, and ending smoking in public places. On smoking, some complained about going beyond the manifesto and upsetting Labour Clubs, but Ian launched a passionate defence. He was sick of our poorest working-class members dying from heart and lung disease, disproportionately and before their time. John Prescott was annoyed that some MPs did not feel bound by the manifesto, though he accepted that words could be interpreted in different ways. I objected to Charles Clarke requiring all passport applicants to register on a central database, getting round the manifesto commitment that ID cards would initially be voluntary by claiming that no-one has to have a passport. Diana Holland was concerned that the Women and Work commission had given the CBI a veto by requiring consensus on all recommendations, weakening the Warwick accords. And Keith Sonnet warned that members of the local government pension scheme were set to strike on 28 March, upset because all other public service workers had their pensions protected. John Prescott said that he couldn’t instruct providers of private schemes, but indicated that Phil Woolas MP stood ready to facilitate negotiations.

Election Update

The loss of Dunfermline & West Fife prompted a review of how we fight by-elections, and the need to hit the ground running. Turnout was high at 49%, with the LibDems the main beneficiaries. Some felt that local knowledge was over-ridden by national management, but Ian McCartney countered that accurate data on voting intentions was often lacking. The organisation committee deferred decisions on which seats should select from all-women shortlists until 9 May, and agreed guidelines for regional directors which include reaching consensus where possible, and taking local political realities into account. Blaenau Gwent will be able to select soon after the Welsh conference, and this time (more lessons learned) from an open list. There will be no distinction between early and late retirements, as last time the proportion of women remained unchanged throughout while generating much resentment.

Making a Difference?

Ian gave an update on Partnership in Power, and I wondered whether members noticed any difference on the ground. Policy commission workplans had just gone out, telephone conferences involved only 30 or 40 members, and with the next National Policy Forum meeting on 1 July, constituencies would not get the first-year document before the summer break. However the web-site is coming along well.

I reported from the party development taskgroup. The Let’s Talk toolkit makes clear that, contrary to Stephen Byers’ musings, people will still have to be party members to vote in electing the leader and choosing candidates. Models for possible local organisation are just sketches, not worked-out constitutions, and I have raised concerns about one constituency’s proposals which would replace general committees with member/supporter forums, run by an apparently unelected executive. Local parties were promised lists of signed-up supporters in time for the May elections, and Ian McCartney assured us that he has no plans for rule changes at the 2006 conference, And yet … when our leaflets offer supporters early notice of party events, up-to-the-minute news and views, access to specialist discussion networks, the chance to have a say on Labour’s policies, and “opportunities for us to make change together”, all for free, why would anyone pay £36 to become a member?

Centenary Conferences

The spring conference in Blackpool was fairly well-attended, but in future constituencies will be notified earlier. I am told that next year will be 16/18 February 2007, in Glasgow. Mainstreaming Europe into the women’s and local government programme was successful, though community involvement in policy seminars backfired in education, where the head of a city academy spoke for half an hour and limited delegates’ opportunity to question Ruth Kelly. Room temperatures varied wildly, and frozen NEC members were upset by stewards demanding that they remove their coats.

The centenary theme will continue through annual conference. Margaret Wheeler, chair of the conference arrangements committee, reported on improvements to stewarding, and delegates will no longer have to remove items from bags. Some seminars will be held at 4 p.m. rather than 9:15 a.m. to encourage attendance. Ian McCartney would look into problems with accommodation, and Margaret would ensure that there were facilities to observe Ramadan, which falls during conference. A report on the Walter Wolfgang incident was presented, and as Walter and Steve Forrest have accepted the party’s apologies, the issue is now closed. National Policy Forum members will have a more prominent status, and after eight years I have managed to waive the £98 fee for NPF constituency representatives. Though given the state of party finances, please feel free to send it as a donation, or indeed a loan. On the same theme, I am still chasing up Labour councillors who have not paid their ALC subscriptions, in the hope that constituencies need not lose any of their membership income.

View from Abroad

Gary Titley’s report came, as usual, at the end of the five-hour meeting. He hoped that the services directive would open up markets while protecting workers, and reported that eleven European leaders, including Angela Merkel and Silvio Berlusconi, would not work with David Cameron if, as pledged, he withdraws his Tory MEPs from the centre-right coalition. The European parliament has voted for better conditions for broiler chickens, with the maximum number per square metre reduced from 25 to 16, and Glyn Ford MEP has called for an end to the illegal trade in tiger and leopard skins.

Questions and comments are welcome, and I am happy for this to be circulated to members – and supporters – as a personal account, not an official record. Past reports are at


Ann Black, 88 Howard Street, Oxford OX4 3BE, 01865-722230,


NEC RECOMMENDATIONS – Agreed 21 March 2006


  1. That the NEC resume its rightful responsibility for oversight of all matters of party funding and financing.


  1. That the NEC authorise the NEC Officers, in conjunction with the Business Board, to undertake a review of events and present a report covering lessons to be learned for the future and a series of revised processes and protocols to be put in place. These will ensure that the appropriate structures are respected and preserved NEC accountability and the Labour Party’s internal democracy.


  1. That the NEC welcome the recommendations of the Electoral Commission and agree that all future commercial loans agreed by the party be declared publicly, including their sources.


  1. The NEC will fully co-operate with the Hayden Phillips inquiry.  The NEC, in consultation with the Business Board, National Policy Forum and the wider party, will draft the Labour Party’s submission to the Phillips inquiry. The recommendations will take forward Labour’s manifesto commitments, the government’s legislative changes and the discussions on party funding from the January National Policy Forum in Nottingham. The final NEC recommendations will be brought to Annual Conference.


  1. In the interim, the NEC officers will take responsibility for overseeing all matters concerning donations and commercial loans.