The Labour Party is on the verge of bankruptcy with £20 million of debts and remains solvent only because of the goodwill of the Co-operative Bank, Lord Prescott of Kingston-upon-Hull has said.
The Labour peer, who is running for the position of Treasurer, said that the situation was now a crisis, with membership in long-term decline, and trade unions would play an even bigger role in funding the party in future.
“The Labour Party stands on the verge of bankruptcy,” he said, writing in The Guardian. “We are only kept alive by the Herculean work of party staff and volunteers, trade union contributions, high-value donations and the goodwill of the Co-op Bank.”
Although the party ended the general election campaign in surplus and plans to eliminate its deficit by 2016, this will come at the expense of campaigning for next year’s Scottish, Welsh and local elections and the 2015 general election. Lord Prescott said that changes to the rules on party funding proposed by the Tories, to stop union members automatically giving to Labour, would cripple the party.