Labour is to receive more than £25 million in state-funding to run its parliamentary opposition machinery. The funding was confirmed in a report from the party’s general secretary Ray Collins to its ruling national executive committee shortly before the ballot closed for the election a new treasurer.
The five-year state provision of state funds is meant to be used for parliamentary purposes only. But it will ease the burden of paying for Shadow Cabinet special advisors, many of whom were paid out of party funds when Labour was in power. None of it can be used to offset the party’s debts, which are estimated to stand at about £20 million.
John Prescott, one of the candidates who stood for election to the treasurer’s post, angered many members who though he was putting the party’s financial recovery at risk by describing it last month as “bankrupt”.
The so-called Short Money – named after former Labour Leader of the House Ted Short – is state-aide paid to Opposition parties on the basis of £14,351 for every seat won at the last election plus £27.99 for every 200 votes gained by the party.
It is the first time Labour has been eligible since 1997. The formula will provide £4,462,554 this year and will also be entitled to £604,493 to fund the office of the Leader of the Opposition and £129,991.79 for travel. The allowances will rise annually by the rate of inflation.
Before the election, the Tories received a total of £4.8 million and the Liberal Democrats £2.2 million but with no allowance for the leader’s office. There was controversy shortly after the election when there was speculation that the Lib Dems wanted to change the rules on the grounds that, though they were in government and therefore technically disqualified, they were the smalerl of the coalition parties and would require funds to maintain their independence.
Leader of the House Sir George Young issued a statement to the Commons effectively ruling out the possibility.
The share out and use of the Short Money, which will start to come on stream after the Commons summer recess, is set to cause some tensions among Shadow Cabinet and MPs’ staff.
A Labour plan to impose an annual £1,400 levy on MPs to fund a central bank of administrative support has caused consternation and opposition among MPs and staff.
Questions are also being asked about how many of those on the leadership contenders’ staff complements are expected to be found jobs and how they will be paid.
Unite’s Diana Holland, the frontrunner for treasurer all the way to the announcement at conference, almost lost out when it was discovered that some of her key supporting unions had failed to vote by the deadline, thinking the vote took place in Manchester
