Labour made a huge error by rejecting the chance to obtain state funding for the party – leaving it at a “catastrophic disadvantage” in the coming general election – its former general secretary has written.
Party officials have dismissed the claims by Peter Watt, who left the Labour party under a cloud after the cash-for-honours affair*, suggesting he is now embittered and vengeful. The book, Inside Out, should indeed be read through that prism** – as Rod Liddle explains.
Yet Mr Watt, as general secretary, occupied a central position within the party hierarchy from which he had unique access to its machinations. That’s why it’s fascinating to see him blame Labour for the failure of cross-party talks to address party funding in late 2007.
At the time, the Tories shouldered most of the opprobium for the breakdown of negotiations after 18 months. The Lib Dems accused the Conservatives of “walking away”.
Yet Watt writes: “My primary emotion during the process was intense frustration, because my own party was the biggest block to reform.”
Tony Blair had launched the review as an attempt to “regain the initiative as the ‘cash for honours’ scandal raged,” Watt recalls. But Blair failed to tell anyone in the Labour machine about it before he published the press release.
It made sense to reduce the dependence of parties on rich donors, Watt rightly says.
“The problem was that the system could not be overhauled without some loosening of the ties between Labour and the trade unions, which together contributed around £11m a year to our coffers. Unfortunately, that was unthinkable to large swathes of the party.”
He says the Tories were ready to make radical reforms, eg a £50k cap on donations from individuals: “Labour’s failure to give ground on anything like this scale must have looked pathetic by comparison.”
Watt goes on to say that Labour should have embraced reform to prevent the Tories having a “catastrophic” financial advantage at the coming general election.
Labour dismiss this as a load of nonsense given that Watt is on a mission for revenge. Then again, they would say that wouldn’t they – as Mandy Rice-Davies (pictured, gratuitously) once said.
* David Triesman, Matthew Carter and Peter Watt, all Labour officials, received £600,000 for the party from David Abrahams via third parties. But the Crown Prosecution Service said there was ”insufficient evidence” to charge them with breaches of electoral law.
** It was also published with the backing of Iain Dale, the Tory blogger.
Jim Pickard
Kiran Stacey