The Electoral Commission has published new details from the loans that all political parties have arranged in the drought of funds from their dwindling individual members. Most of these loans are unsecured, with interest rates below the commercial rate provided by a bank. The Labour party faces the greatest problem as they have to repay 5.5m pounds by the end of the year.
Tony Blair, who swept into power in 1997 determined to break the influence of the trade union movement, will now have to appeal to the brotherhood to rescue the party which has £23 million in outstanding loans. Any increase in funding from the unions would come with strings attached over policy which would not be welcomed by Mr Blair or Gordon Brown, his likely successor...
The yawning gap in the party's finances will give new urgency to plans by the Government to push through caps on the amount the parties can spend on local and national election campaigns as the Tories are poised to outspend the Labour Party heavily in marginal seats.
The Labour Party is in desperate straits: funds need to be secured fast and the advantages of Tory cash require nullification. As the Telegraph has noted, this will provide the source of fresh funds, the trade unions, dominant influence over policy and presages a potential left-wing turn. The alternative is a partisan model of political funding from the state, biased towards Labour, and destructive of relationships with the Loyal Opposition. If Labour gerrymanders, gloves may be taken off. And that is without the current police inquiry....