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Labour Cash Crisis

The link is to the story about Labour having to find about £7m in cash. This is a consequence of the large sums of money spent on campaigning. Parties have fewer volunteers in part because there are fewer volunteers in many types of activity, but in part because there is less of a willingness to be involved in party politics.

This is replaced considerably by spending money. A party that looks like it will be in power will attract cash - see Bernie Ecclestone's "loan". I was always surprised that the fact that a payment of £1m occurred followed by an exemption from the smoking advertising ban did not elicit any wider concern.

I don't think this will tip them over the edge, but as they go towards 2010 their financial position will be weaker. Don't be surprised if suddenly taxpayers money becomes available to political parties for political activity (as opposed to the Short monies which are supposed to be for policy).

Reading the article, however, it appears that the GMB have indemnified their NEC members. This effectively means that the GMB have underwritten the whole of the debt. I am not sure that the GMB are aware of this.

If the unions are going to underwrite Labour's debt one presumes they would wish to exact a consideration for this.

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