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A battle is underway for Labour’s heart and soul and there are serious questions about its finances, says Peter Kenyon

I’ve been gagged. It’s official. I have a letter from Cath Speight, the chair of Labour’s ruling National Executive Committee, dated July 21, stating: “I want to clarify the instruction the NEC agreed to ask you to comply with today. It was not an instruction not to blog; it was an instruction not to use your blog to make comments that undermine the NEC, and the NEC’s governance structures and procedures, particularly in relation to the finances of the party.”

I had walked out of the NEC bi-monthly meeting that day, before the chair had a chance to clarify precisely what instruction the NEC was issuing. Some NEC officers had apparently decided ahead of the meeting to turn it into a kangaroo court with me in the dock. There was no item on the agenda concerning my blog. As with former Norwich North MP Ian Gibson, there were no written charges. There was no supporting evidence. There was no proper procedure. When it became evident what they were doing, I decided I was not going to dignify the proceedings with my presence and left.

There is a power struggle taking place in Labour’s ranks. At one level it is about the

role of NEC members and our rights to management and financial information to allow us to undertake our duties. But the real battle is between the current powerbrokers, known to me as “the powers that be”, and the membership.

It wasn’t as though other NEC members were unaware of the agenda I was elected to pursue. I am the chair of Save the Labour Party, an ethical, democratically-run, solvent, grassroots organisation – and have been for the past six years. My NEC election statement, which won the support of 16,464 votes in the 2008 one-member, one-vote ballot, set out a specific challenge. “Our work in local communities is the best way to stay in power nationally, keep our opponents at bay and achieve a fairer society. Our small donations are needed to fund elections. In return, we want a say in policy and how the party is run.”

Access to more detailed information about the management of the Labour Party is vital if we are to turn round the 11-year haemorrhage of members – now down 60 per cent

from 1997 – the loss of councillors in local government and the increasing hostility of the electorate.

The full NEC doesn’t meet very often. It assembles on a bi-monthly basis between annual conferences. It has 33 members. The largest bloc consists of the union representatives, 12 elected by their affiliated organisations, plus the treasurer (traditionally a trade unionist) making 13. Much of the business has been settled in advance by “the powers that be” – the representatives of the party leadership, the general secretary and union powerbrokers – who are not necessarily members of the NEC.

When I was first elected a year ago, I was encouraged by some of these people to “feel my way”. So I did. My understanding of the role of an NEC member is as a trustee. “The powers that be” cling desperately to the notion that only they are entitled to know what’s going on.

The issue is fairly straightforward. Who gets sued in the event of the Labour Party failing to pay its bills? As an NEC member, I’m in the line of fire. So, with the aim of helping to protect my personal interests, immediately after I was elected, I asked for a copy of the latest management accounts and the budget. This request was refused.

Alarm bells started to ring. But I recalled the injunction to feel my way. The NEC’s terms of reference were due to be reviewed at the first business meeting of the NEC I attended in mid-November – four months after I was elected.

I then raised questions about which I had given prior notice. All was to no avail. I moved a proposal to delay a decision on a particular section of the new internal rules, pending a legal opinion. This was defeated. The revised terms of reference giving privileged access information to the newly-created Business Board and Audit, Risk and Compliance Committee had been agreed in advance by the self-selecting “powers that be”.

I dropped a hint on my blog that all was not well. I reported: “I remain to be convinced that the NEC’s terms of reference are fit for purpose.” Again, the sagacious advice to feel my way reverberated. So I persisted. In a bid to move the debate on, I had a private meeting with general secretary Ray Collins before Christmas last year. I urged him to consult greater authorities than myself about the issue of “trusteeship and financial governance”. There are Labour members who have knowledge in that area that they are willing to put at the party’s disposal. I gave him the name of one expert he could start with. It was all in vain.

The general secretary is a shrewd trade union operator. He knows my questions raise a number of issues, not just about how the NEC operates. They are poised like the sword of Damocles over those who run the party. The powers that be are under threat. There was a glimpse of the true nature of the situation just over a year ago with the appointment through an equal opportunities recruitment process of City fund manager David Pitt-Watson, a former Labour Party finance director, as general secretary. He never took up the job. According to The Guardian: “Although he was Gordon Brown’s candidate for the post, he declined the offer after receiving independent legal advice that he would be personally liable for repaying the loans and could be bankrupted if Labour’s finances collapsed. The advice, from City solicitors Slaughter and May, said unequivocally that leading party officials and members of the NEC would be ‘jointly and severally’ responsible for the party’s debt.”

I was not unaware of this advice when I was elected to the NEC. But I have chosen to adopt a different tack. My questions relate to the duties of NEC members and the information to which we are entitled in order to fulfil them.

Openness and accountability are demanded of every other section of society by Labour in government, but denied in the Labour Party. Every other member of the NEC, including the party leader and deputy leader, is implicated in this bungled attempt to gag me. There is a breathtaking lack of irony among those who make up “the powers that be”. At last month’s NEC meeting, they accused me, verbally, of publishing confidential information on my blog. How could I have? I haven’t been supplied with any. That’s what I’m complaining about – not because I want to publish it, but because I’m entitled to it.

“The powers that be” have set themselves apart as a superior breed of NEC member. They think they are entitled to determine who sees what information and under what circumstances.

Why this has been tolerated or condoned for so long was a mystery to me before I joined the NEC. Now things have become clearer. For a body that meets so infrequently, it has been convenient for the unions, albeit with increasing signs of frustration, that a self-selecting clique runs the party – providing Labour continues to retain power.

Can or should that convenient arrangement hold through the summer? Or is it time for members to combine to overturn it? Every NEC decision should be subject to a recorded named vote. Affiliated union and socialist societies, as well as constituency members, are entitled to know what is being decided in their names. That should apply to all sub-committees, as well as the NEC itself.

A particular responsibility rests on NEC members in the trade union section to decouple themselves from “the powers that be”. They have 12 out of the NEC’s 33. The prospect of securing gains for union members from the leadership while Labour was in power was always going to outweigh the niceties of openness and accountability, let alone democratic socialist ideals. That’s even though states on every membership card that: “The Labour Party is a democratic socialist party”. The affiliated unions face a stark choice. Do nothing or act now.

Time is short – Labour is facing electoral annihilation in 2010.

Some members are worried about the next manifesto. Party insiders know that will not be written until the general election is actually called. Members will not have any serious chance to debate or question it. More importantly, Labour is not going to be judged by the electorate on what it plans to do in a fourth term. The fate of this Labour Government will be decided on its performance over the past 13 years.

But there is a job for the NEC now. The willingness of members and supporters to campaign for Labour has been sapped. We have to focus on what will win them back. How are we going to rebuild their confidence to go out and campaign? Should we play to fears of what a Tory government would do or stress democratically-agreed policy commitments that reflect Labour values?

The trade unions founded the Labour Party. Now they can help to save it. All it would take is for the union general secretaries’ contact group to agree that the NEC should be in frequent session between now and the party conference. They owe it to their members to help to ensure that Labour wins the next election. They cannot seriously believe that will be achieved by the NEC burying its head in the sand until September 22, when it is next due to meet. I hope they can be persuaded to join me and other constituency representatives on the NEC in shaping a programme that will help to persuade people that Labour deserves another term.

Peter Kenyon is a member of Labour’s National Executive Committee and chair of Save the Labour Party