How serious a financial mess is the party in?

While everybody is focussing on the row over Labour ordering its councillors to pay a proportion of their allowances to help it wipe out its massive debts are we missing the bigger picture – that following the loans for peerages crisis that the party is in danger of going broke?

This latest move, backed by threats of disciplinary action against those councillors not obeying, follows the decision by the party to levy a 15% “tax” on all contributions that are made to the the campaigns of the candidates in the coming leadership and deputy leadership elections.

Labour, surely, would not have brought in draconian measures like this unless it was going through a massive financial crisis.

Clearly conventional fundraising must be extraordinarily difficult at the moment and recent filings at the Electoral Commission have shown how challenging it is for the party to attract money in the wake of the loans for peerages affair.

Just who would want to become a big donor to the Labour party when those who have gone before have had their motives questioned and have found themselves being part of the Yates of Scotland Yard investigation?

So with donors drying up, Tony Blair’s General Election loans having to be paid back and the cost of servicing the accumulated debt rising by the day how serious is the party’s position? It doesn’t look good.

There is the move towards state funding of parties but this is hardly the right climate to have that debate. And why should the Conservative party be supportive of the idea when it, as far as it appears, is finding it much easier to attract gifts?

Forcing through legislation that would provide tax-payers’ money for parties could be highly dangerous for Labour. Why should the public bail them out of the mess they got themselves into?

This is a job that will test Gordon’s political skills.

Mike Smithson