Progress has become a party within a party

The undemocratic Blairite group must be called to account by Labour.

When does a political campaigning body cross the red line of legitimacy and become a party within a party, and then what should be done about it? Detailed recent investigations have raised this question about the role of the Blairite Progress organisation within the Labour Party. But the issue raises much wider matters about corporate involvement in modern politics involving all parties, and as such urgently requires attention.

Progress was first set up as a company limited by guarantee in 1994 and the first director was Derek Draper, then a researcher for Peter Mandelson. It publishes no details of any membership and is controlled by the directors of the company. However it has never released its register of guarantor members, nor its memorandum and articles of association, nor details of its corporate structure. Given this secrecy, should such a private company be operating as a membership organisation inside a political party?

Now this might not matter too much if it was an insignificant body on the outer fringes of politics. But it isn't - it aspires to dominate the Labour Party at the centre - and it has access to huge funding to help it achieve its purpose, out of all proportion to that available to any other such body. It has received just under £3 millions to date in donations over £7,500 (the threshold set by the Electoral Commission). No less than 95 per cent of this has come from a single source - David Sainsbury, who previously funded the Labour Party until Ed Miliband won the leadership, when he promptly pulled out and switched to Progress. Interestingly, donations from the second largest donor to Progress, Michael Montague, totalling £875,000, were made at least two years after his death via a trust whose objectives and trustees are unknown.

Progress has thus raised more money than the Green Party, Scottish Labour or Plaid Cymru. It has raised hugely more than any members' association in the Conservatives and the Liberal Democrats and 122 times more than the next highest in Labour. Clearly Progress is an organisation with the funding and staffing of a minor political party, except that it is operating inside the Labour Party. Yet despite the parlous state of Labour's finances, it has contributed none of the enormous funds it has raised to assist the party it seeks to lead by training parliamentary candidates and running its own candidates for the leadership, London mayoralty and the NEC.

Again, if its objectives were identical to Labour's, this might be easier to understand. Whilst this may have been true for its first decade to 2006 - Tony Blair required the new organisation to be "centred round the leader" - it flipped thereafter into becoming a platform for New Labour supporters against the opposing Brownite faction. After the 2010 election it finally morphed from a political education trust into a fully-fledged factional body self-identifying with New Labour, training its own supporters for parliamentary selections, and complete with its own ideology, policies, candidates and campaigns - a range of key functions taken on by no other organisation within Labour. Moreover this transformation was achieved without any internal democratic mandate. Thus, unlike in its original days when unquestioning loyalty to the leader was the dominant theme, the opposite is now true - that support for the leader is now measured in accordance with how far the leader is supportive of Progress's own distinct ideology.

So what needs to be done? The last time Labour faced an organisation operating as a party within a party was in the struggle against the Militant Tendency in the 1980s. At that time the National Executive Committee resolved to set up a register of groups to be recognised and allowed to operate within the party. Revealingly the terms of eligibility included the requirement that groups had to be open and democratic, and should not be allowed to operate their own internal discipline. Progress is of course an utterly different animal from the Militant Tendency, but the same principles of democratic governance need to apply.

The intrusion of corporate funding into modern politics on a dominant scale, which has long been the case, is now being reinforced by novel operating structures carefully crafted to fulfil the minimum legal requirements necessary, but drawn up also to maximise the opportunities for the exercise of power and influence as a self-standing organisation within an existing political party. Progress is a classic example of this tendency. It has no constitutional structure or apparent membership rights, there are obvious questions about how its decisions on policy and finance are made, it is unclear how the leading appointments were made in the absence of democratic elections or indeed what powers they exercise, and it recruits and trains potential parliamentary candidates that fit its own ideological mould to the exclusion of the broad spectrum that had always previously characterised the Labour Party.

If Progress is to remain within the Labour Party, clearly new rules are urgently needed to bring its fund-raising, governance and political activities wholly in line with Labour's principles. The next NEC meeting is on 20 March.

Michael Meacher is the Labour MP for Oldham West and Royton.

Editor's note: Progress has previously responded to Michael Meacher's allegations here.

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Labour’s renationalisation plans look nothing like the 1970s

The Corbynistas are examining models such as Robin Hood Energy in Nottingham, Oldham credit union and John Lewis. 

A community energy company in Nottingham, a credit union in Oldham and, yes, Britain's most popular purveyor of wine coolers. No, this is not another diatribe about about consumer rip-offs. Quite the opposite – this esoteric range of innovative companies represent just a few of those which have come to the attention of the Labour leadership as they plot how to turn the abstract of one of their most popular ideas into a living, neo-liberal-shattering reality.

I am talking about nationalisation – or, more broadly, public ownership, which was the subject of a special conference this month staged by a Labour Party which has pledged to take back control of energy, water, rail and mail.

The form of nationalisation being talked about today at the top of the Labour Party looks very different to the model of state-owned and state-run services that existed in the 1970s, and the accompanying memories of delayed trains, leaves on the line and British rail fruitcake that was as hard as stone.

In John McDonnell and Jeremy Corbyn’s conference on "alternative models of ownership", the three firms mentioned were Robin Hood Energy in Nottingham, Oldham credit union and, of course, John Lewis. Each represents a different model of public ownership – as, of course, does the straightforward takeover of the East Coast rail line by the Labour government when National Express handed back the franchise in 2009.

Robin Hood is the first not-for-profit energy company set up a by a local authority in 70 years. It was created by Nottingham city council and counts Corbyn himself among its customers. It embodies the "municipal socialism" which innovative local politicians are delivering in an age of austerity and its tariffs delivers annual bills of £1,000 or slightly less for a typical household.

Credit unions share many of the values of community companies, even though they operate in a different manner, and are owned entirely by their customers, who are all members. The credit union model has been championed by Labour MPs for decades. 

Since the financial crisis, credit unions have worked with local authorities, and their supporters see them as ethical alternatives to the scourge of payday loans. The Oldham credit union, highlighted by McDonnell in a speech to councillors in 2016, offers loans from £50 upwards, no set-up costs and typically charges interest of around £75 on a £250 loan repaid over 18 months.

Credit unions have been transformed from what was once seen as a "poor man's bank" to serious and tech-savvy lenders where profits are still returned to customers as dividends.

Then there is John Lewis. The "never-knowingly undersold" department store is owned by its 84,000 staff, or "partners". The Tories have long cooed over its pledge to be a "successful business powered by its people and principles" while Labour approves of its policy of doling out bonuses to ordinary staff, rather than just those at the top. Last year John Lewis awarded a partnership bonus of £89.4m to its staff, which trade website Employee Benefits judged as worth more than three weeks' pay per person (although still less than previous top-ups).

To those of us on the left, it is a painful irony that when John Lewis finally made an entry into politics himself – in the shape of former managing director Andy Street – it was to seize the Birmingham mayoralty ahead of Labour's Sion Simon last year. (John Lewis the company remains apolitical.)

Another model attracting interest is Transport for London, currently controlled by Labour mayor Sadiq Khan. TfL may be a unique structure, but nevertheless trains feature heavily in the thinking of shadow ministers, whether Corbynista or soft left. They know that rail represents their best chance of quick nationalisation with public support, and have begun to spell out how it could be delivered.

Yes, the rhetoric is blunt, promising to take back control of our lines, but the plan is far more gradual. Rather than risk the cost and litigation of passing a law to cancel existing franchises, Labour would ask the Department for Transport to simply bring routes back in-house as each of the private sector deals expires over the next decade.

If Corbyn were to be a single-term prime minister, then a public-owned rail system would be one of the legacies he craves.

His scathing verdict on the health of privatised industries is well known but this month he put the case for the opposite when he addressed the Conference on Alternative Models of Ownership. Profits extracted from public services have been used to "line the pockets of shareholders" he declared. Services are better run when they are controlled by customers and workers, he added. "It is those people not share price speculators who are the real experts."

It is telling, however, that Labour's radical election manifesto did not mention nationalisation once. The phrase "public ownership" is used 10 times though. Perhaps it is a sign that while the leadership may have dumped New Labour "spin", it is not averse to softening its rhetoric when necessary.

So don't look to the past when considering what nationalisation and taking back control of public services might mean if Corbyn made it to Downing Street. The economic models of the 1970s are no more likely to make a comeback then the culinary trends for Blue Nun and creme brûlée.

Instead, if you want to know what public ownership might look like, then cast your gaze to Nottingham, Oldham and dozens more community companies around our country.

Peter Edwards was press secretary to a shadow chancellor, editor of LabourList and a parliamentary candidate in 2015 and 2017.