The Labour Party in Waltham Forest and the financing of local elections: a scandal in the making? (1)

Over the years, a number of correspondents have approached this blog to express anxieties about how the local Labour Party (LP) is being run and financed. Some of their claims are plausible, others less so. But in general, it is often difficult for the bystander, given the prevalence of internecine strife, to separate out truth from factional point scoring.

However, a whistleblower with impeccable credentials now has stepped forward to put meat on the bone, and what emerges is alarming, to say the least.

LP rules require that the costs of local government elections – which are often substantial – should be borne by the relevant Constituency Labour Parties (CLPs).

But in the last two contests, it is alleged, this has not happened, and instead the Labour Group (LG), composed of the councillors in the Town Hall, has ignored the CLPs and financed all the campaigning itself.

At first sight, this might appear to be a matter of arcane detail, something for LP anoraks alone.

Supplying some context rapidly demonstrates otherwise.

To begin with, it is important to stress that under the Political Parties, Elections and Referendums Act 2000, while CLPs are recognised as accounting units that must rigorously report their finances to head office and thence the Electoral Commission, LGs are (a) classified as members associations which are freestanding, that is completely outside of the LP structure, and (b) subject to different, and less stringent, rules for accounting (and also of course third-party donations).

And what makes this situation all the more salient, according to the whistleblower, is that in Waltham Forest at least, the LG has been extremely cagey about explaining itself, declining to produce budgets, and when directly questioned remaining resolutely obdurate.

The bottom line, then, is that no one beyond the LG can be absolutely sure where campaign finances are originating from, and how they are being spent.

A further aspect adds to the mystery. The LP Rule Book stipulates that each councillor must pay a locally agreed percentage of their council allowances to LG funds, the recommended minimum being 5 per cent.

That solves the problem of how the LG comes to have its own income.

But whether this income is large enough to cope with the scale of election expenditure that seems to have occurred is questionable, especially since some councillors are rumoured not to be fulfilling their obligations.

As to exactly why the LG is acting in this singular way, there is currently no conclusive answer. Perhaps the LG has its own donors, and wants to keep their identity private. Perhaps it is useful for those who lead the LG to retain the ability to favour some candidates at election times, and punish others for their disloyalty. Perhaps the whole subject of election finance has become just another casualty in what is apparently a long running feud between the (broadly speaking) right-leaning councillors and the left-leaning CLPs. Who knows?

However, leaving the question of intention on one side, there is enough information presently in the public domain to come to some disturbing conclusions. It must be vexing for ordinary Labour members to be kept so much in the dark, particularly as they spend a good deal of time involved in fundraising. But lack of transparency about finance also fundamentally undermines the democratic process, because voters have a right to know how parties are funding themselves, and who in the end is paying for the leaflets that drop through their doors.

Accordingly, it is right that the whistleblower’s allegations swiftly be put before the Electoral Commission to determine whether or not what has gone on is consistent with the law.