A 20-page dossier which seems to have been widely circulated, including to all Labour constituency party secretaries, is calling on Labour’s national executive to “determine the organisational nature of Progress, and whether or not this form of organisation is acceptable inside the Labour Party.” The extremely high level of funding of Progress, combined with periodic waves of attacks by many of its leading members and its increasing resemblance to a party-within-a-party have caused widespread and growing concern amongst party members and affiliates. This dossier is bound to increase the pressure on Labour’s executive to take some action. The anonymous report dated February 2012 is called simply A Report into the constitution, structure, activities and funding of Progress. It documents several aspects of the structure and organisation of Progress:
- It was first established as a company limited by guarantee in 1994, and its first named Director was Derek Draper, then employed as a Researcher by Peter Mandelson.
- Although Progress does appear to have a membership structure (although it publishes no details of its membership or affiliates) and holds an annual conference, it is in fact controlled by the members and directors of this company.
- It has never released its register of guarantor members, nor its memorandum and articles of association, nor details of its corporate structure.
- As a ‘members association’, it is required to submit a report of all donations over £7,500 to the Electoral Commission, but it has no obligation to report its annual accounts and total income or expenditure.
- The report notes that “its status as a membership organisation is curious” because, although the Electoral Commission might recognise the wider membership, in company law and Progress practice, membership is defined very narrowly.
- Progress announced in January that former Blairite Advisor and Minister, Lord Adonis (also a former Lib Dem councillor and PPC) was replacing Stephen Twigg as Progress Chair. It never explained who made this decision. The only known member of the Advisory Board is former Minister and anti-Brownite plotter Alan Milburn – coincidentally also a member of the advisory board to Pepsi-Co and Bridgepoint Capital, a provider of venture capital to a number of private healthcare providers. He has come a long way since being the Trotskyist employee of Newcastle’s Radical bookshop, Days of Hope (aka Haze of Dope).
The dossier goes on to document the transition Progress has made in its political activities: in its first ten years, it was totally loyal to Labour’s then leader, Tony Blair, and engaged in political education in support of Blairite policies. Under Gordon Brown’s period of leadership, the report says:
Progress underwent a transition from loyalty to the leader to providing a platform for supporters of ‘New Labour‘ against the new leader.
It began pursuing both a policy agenda, including on PR and constitutional reform, and a party organisation agenda. Significantly, it also started “openly supporting candidates in parliamentary selections“. Since the 2010 general election, it has, says the dossier, “conducted itself as a factional organisation inside the Labour Party“. This has included:
- Endorsing David Miliband for the party leadership and Oona King for London May, and running a slate of candidates for internal elections to the executive and national policy forum.
- Engaged in the training of parliamentary candidates.
- Pursuing changes in party structure including to party conference and the relationship with the trade unions, and for primaries in parliamentary selections.
- Arguing for the continuity of New Labour, including in editorials such as “New Labour is Right for Labour” and the Purple Book.
Although the report accepts that such organisations operate “at the fringes of our party“, it suggests that Progress is different because (i) it lacks any democratic mandate for the change of its role, and (ii) others do not have access to the very large level of funding that Progress has. The dossier’s section on Progress funding — a total of £2,917,613.16 to date in donations over £7,500 — covers similar ground to previous reports on Left Futures and it is now widely understood that two-thirds of this has come from Limehouse declaration signatory, Lord David Sainsbury, who, even when he did fund the Labour Party, only funded specific projects not day-to-day operations according to the dossier. However, interesting information is revealed about some of the other larger donors:
- Donations from the second largest donor, Lord Michael Montague, totalling £875,500, were made at least two years after his death and through a trust whose objectives and trustees are unknown. It is therefore unclear who actually decided to provide this funding.
- Pharmacia and Pfizer, were merging at the time of the donation of £52,287, and were also at that time engaging in criminal activity which led to the largest criminal fine in US history ($1.3bn).
- Progress has raised more money than the Green Party, Scottish Labour or Plaid Cymru. It has raised significantly more than any members’ association in the Tory or Lib Dem parties and 122 times more than the next highest in Labour!
In conclusion the reports says:
The financial reporting requirements upon Progress as a company are limited and, as such, it is impossible to assess its funding streams. Nonetheless, there is an organisation with the funding and staffing of a minor political party operating inside the Labour Party…. What is the reason for any organisation operating within the Labour Party conduscting its own external fundraising operations out of view of the Party. The logical response must be that it is in the interests of the Labour Party to ensure that all members’ associations operating within the Labour Party meet the highest standards of probity. The Party needs to recognise the existence of members associations within it, and place constitutional requirements upon them in matters of fundraising and governance. Further, given the current financial circumstances of the party, what is the justification for an internal organisation raising such significant funds for itself?
Finally, the report makes a number of recommendations in addition to the holding of an inquiry to “determine the organisational nature of Progress, and whether or not this form of organisation is acceptable inside the Labour Party.” These include requiring Progress to:
- provide Labour’s national executive with its founding documents, and full details of its structure, activities and fundraising;
- explain the “apparent synchronisation of its activities with dissenting parliamentarians in 2008 & 2009“;
- provide the democratic mandate for its factional activities in promoting candidates, candidates and policies.
It further recommends that Labour’s national executive amend party rules to “place constitutional requirements upon Members’ associations in matters of fundraising, governance and discipline” and limit the extent of fundraising by such organisations, with excess sums to be donated to the central party.
The report can be downloaded from here (Zip file, 3.5MB).