The PricewaterhouseCoopers building in Luxembourg. Photo: Getty
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Labour's biggest non-union donation is from PwC – a firm accused of "promoting tax avoidance"

The latest party donation figures show the Labour party's biggest donation, aside from the unions, is in staff secondments from the huge accountancy firm slammed by the Public Accounts Committee.

Rather embarrassing news for Labour after a good run at keeping the tax shenanigans of the wealthy in the news. It turns out the largest donation the party received from a non-union donor in October-December last year was from PwC. The accountancy giant gave the party £386,605. This wasn't a cash donation, but a donation of staff secondments who do analysis and research for the party in the absence of access to the civil service. As both Labour and PwC point out, the secondees are impartial.

This is pretty awkward for the party, not only because the firm is known for its tax expertise, but also due to recent accusations from the Public Accounts Committee. The committee chair and Labour MP Margaret Hodge told the BBC at the beginning of this month that Labour shadow cabinet ministers, such as Ed Balls, Chuka Umunna, and Rachel Reeves, receiving assistance from the firm is "inappropriate".

She was speaking on the day that her committee produced a report accusing the firm of "the promotion of tax avoidance on an industrial scale". PwC disagreed with this analysis but did comment that the UK tax system is "too complex".

Here are the donation figures, published by the Electoral Commission:

Click on table to enlarge

A Labour spokesperson commented:

PwC have provided long standing staff support to all three major political parties on a non-party basis, as happened for the Conservatives and Lib Dems before the last election. Given the complexity of government decisions in areas such as tax policy – and that opposition parties do not have significant access to civil servants – the support provided by organisations such as these helps ensure that there is better scrutiny of government policy. Secondees do not influence opposition policy decisions. Where organisations provide staff to support research and analysis for opposition parties it is right that these are declared – as currently happens – in the Register of Members' Interests

Nevertheless, if the tax avoidance row rumbles on, this donation will give the Conservative party a response to Labour's accusations about Tory donors.

Doubly tricky for Labour is that it actually accepted a higher amount than the Tories did in the fourth quarter of 2014. Adding up public funds to donations excluding public funds, Labour accepted £10,888,480 to the Tories' £8,365,141. This somewhat undermines Labour politicians' claims that they will be outspent by the Conservatives this election.

Anoosh Chakelian is deputy web editor at the New Statesman.

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Five things we've learned from Labour conference

The party won't split, Corbynite divisions are growing and MPs have accepted Brexit. 

Labour won't split anytime soon

For months, in anticipation of Jeremy Corbyn’s re-election, the media had speculated about the possibility of a Labour split. But the party’s conference confirmed that MPs have no intention of pursuing this course (as I had long written). They are tribally loyal to Labour and fear that a split would prove electorally ruinous under first-past-the-post. Many still expect Theresa May to hold an early general election and are focused on retaining their seats.

Rather than splitting, Corbyn’s opponents will increase their level of internal organisation in a manner reminiscent of the left’s Socialist Campaign Group. The “shadow shadow cabinet” will assert itself through backbench policy committees and, potentially, a new body (such as the proposed “2020 group”). Their aim is to promote an alternative direction for Labour and to produce the ideas and organisation that future success would depend on.

MPs do not dismiss the possibility of a split if their “hand is forced” through a wave of deselections or if the left achieves permanent control of the party. But they expect Labour to fight the next election as a force at least united in name.

Neither the Corbynites nor the rebels have ultimate control 

Corbyn’s second landslide victory confirmed the left’s dominance among the membership. He increased his winning margin and triumphed in every section. But beyond this, the left’s position is far more tenuous.

The addition of Scottish and Welsh representatives to the National Executive Committee handed Corbyn’s opponents control of Labour’s ruling body. Any hope of radically reshaping the party’s rule book has ended.

For weeks, Corbyn’s allies have spoken of their desire to remove general secretary Iain McNicol and deputy leader Tom Watson. But the former is now safe in his position, while the latter has been strengthened by his rapturously received speech.

Were Corbyn to eventually resign or be defeated, another left candidate (such as John McDonnell) would struggle to make the ballot. Nominations from 15 per cent of MPs are required but just six per cent are committed Corbynites (though selection contests and seat losses could aid their cause). It’s for this reason that allies of the leader are pushing for the threshold to be reduced to five per cent. Unless they succeed, the hard-left’s dominance is from assured. Were an alternative candidate, such as Clive Lewis or Angela Rayner, to succeed it would only be by offering themselves as a softer alternative.

Corbynite divisions are intensifying 

The divide between Corbyn’s supporters and opponents has recently monopolised attention. But the conference showed why divisions among the former should be interrogated.

Shadow defence secretary Clive Lewis, an early Corbyn backer, was enraged when his speech was amended to exclude a line announcing that Labour’s pro-Trident stance would not be reversed. Though Lewis opposes renewal, he regards unilateralism as an obstacle to unifying the party around a left economic programme. The longer Corbyn remains leader, the greater the tension between pragmatism and radicalism will become. Lewis may have alienated CND but he has improved his standing among MPs, some of whom hail him as a bridge between the hard and soft left.

Elsewhere, the briefing against McDonnell by Corbyn allies, who suggested he was an obstacle to recruiting frontbenchers, showed how tensions between their respective teams will remain a story.

Labour has accepted Brexit

Ninety four per cent of Labour MPs backed the Remain campaign during the EU referendum. But by a similar margin, they have accepted the Leave vote. Jeremy Corbyn and John McDonnell, both long-standing eurosceptics, confirmed that they would not seek to prevent Brexit.

Owen Smith called for a referendum on the eventual deal during his leadership campaign. But with some exceptions, such as Angela Eagle, most of his backers have rejected the idea. Though 48 per cent of the electorate voted Remain, MPs emphasise that only 35 per cent of constituencies did. Some still fear an SNP-style surge for Ukip if Labour seeks to overturn the outcome.

The debate has moved to Britain’s future relationship with Europe, most notably the degree of free movement. For Labour, like Theresa May, Brexit means Brexit.

Corbyn will not condemn deselections 

The Labour leader could have won credit from MPs by unambiguously condemning deselection attempts. But repeatedly invited to do so, he refused. Corbyn instead defended local parties’ rights and stated that the “vast majority” of MPs had nothing to fear (a line hardly reassuring to those who do). Angela Eagle, Stella Creasy and Peter Kyle are among the rebels targeted by activists.

Corbyn can reasonably point out that the rules remain the same as under previous leaders. MPs who lose trigger ballots of their local branches face a full and open selection. But Labour’s intensified divisions mean deselection has become a far greater threat. MPs fear that Corbyn relishes the opportunity to remake the parliamentary party in his own images.  And some of the leader’s allies hope to ease the process by reviving mandatory reselection. Unless Corbyn changes his line, the issue will spark continual conflict. 

George Eaton is political editor of the New Statesman.