Labour party chair received £165,000 from union, watchdog finds

20 Oct

The chair of the Labour party received just over £165,000 from a trade union he ran that had only 10 members, an official report says.

Ian Lavery, Jeremy Corbyn’s campaign chief and close ally, ran the National Union of Mineworkers (Northumberland area) until he entered parliament in 2010. The official union watchdog launched an investigation into payments to Lavery after media inquiries.

Its report shows Lavery received a loan of £72,500, which was later written off, from a union fund to purchase a property; with his wife kept £18,000 from an endowment policy taken out on the property; and received a series of termination payments from the union worth nearly £90,000.

He later paid back £15,000, which means he received a total of £165,387, the report from the Certification Office for Trade Unions and Employers Associations says.

The certification officer, Gerard Walker, has concluded that no further action is to be taken.

Asked to respond to the report, Lavery said: “Under my stewardship, the union always complied with the rules and the certification officer signed off every year’s transactions. As the certification officer’s report makes clear, no member of the union, past or present, has made a complaint about the financial affairs of the union. I am pleased that the certification officer has decided to not appoint an inspector or take further action.

“This report should draw a line under almost two years of allegations and innuendo directed at me and my former colleagues.”

Lavery succeeded Arthur Scargill as president of the NUM in 2002 and was general secretary of the Northumberland branch for 18 years before he became MP for Wansbeck in 2010.

Lavery was president of the union when in 2008 it won a high court battle for compensation for miners who lost their jobs after the closure of Northumberland’s last deep mine. The court awarded 350 former staff at Ellington colliery each about £6,000.

The certification officer launched an inquiry into Lavery after inquiries from the Sunday Times followed by the BBC.

The regulator found that the Northumberland provident and benevolent fund loaned Lavery £72,500 to buy a house in 1994. Thirteen years on, the union Lavery was then running wrote off the loan.

Lavery paid into an endowment fund to pay back the capital cost of the house. It under-performed but still paid out £18,000. The regulator found Lavery kept the money.

The report also says Lavery received a number of termination payments from the union totalling £89,887.83.

The report says neither Lavery nor the union could provide documentary evidence of the process or the decision by which Lavery was made redundant as he left his full-time job to take another as an MP.

“The allegations further stated that the union’s then general secretary Mr Ian Lavery ceased to be general secretary when he was elected as the MP for Wansbeck on 7 May 2010 and questioned in what way this was redundancy and, if not a redundancy, asked on what basis the payments were made,” the report says.

“The union and Mr Lavery stated that the post of general secretary and therefore Mr Lavery were made redundant in May 2010. Both the union and Mr Lavery were given the opportunity to provide documentary evidence to show a process or decision by which Mr Lavery was made redundant. Neither was able to do so and stated that no such documentary evidence existed.

“In light of the absence of documentary evidence to support the union and Mr Lavery’s assertions that Mr Lavery was in fact made redundant, I do not consider that the appointment of an inspector would help to resolve the key issue as to whether Mr Lavery was made redundant within the terms of his contract of employment.”

It was accepted that the union overpaid Lavery £30,600 in redundancy money, according to the report. Lavery disputed £10,600 of it, and he volunteered to repay £15,000, the report says.

Labour’s Barry Gardiner, the shadow international trade secretary, told BBC’s Newsnight: “Unions are regulated by the certification officer. Now, your own report says the certification officer has said that there is no reason to make any further investigation, and that no complaint from a member has been made. The industry regulator has said that there is not a case to pursue.

“I know Ian Lavery as a really good man, and as a friend.”

Asked whether Labour should investigate the matter, Gardiner said: “The Labour party will obviously want to satisfy itself that no member – we always satisfy ourselves that no member of the Labour party brings the party into disrepute.”

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