One of Jeremy Corbyn’s closest allies was today caught in a storm over payments totalling more than £160,000 from union funds.
Labour Party chairman Ian Lavery faced questions over “termination payments” of nearly £90,000 after he left his role as general secretary of the National Union of Mineworkers Northumberland Area to become an MP — and a £72,500 home loan.
Union watchdog the Certification Officer published an examination of payments to Mr Lavery that said:
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While he and the union stated that the post of general secretary was made redundant in May 2010, neither could provide documentary evidence to show a process or decision by which Mr Lavery was made redundant;
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The NUM in effect taking a share in its general secretary’s home was a “novel” case which the Certification Officer had not come across before;
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The membership of the NUM Northumberland area dropped from 240 between 2002 and 2012 to just 10 in 2013 — though the Certification Officer said the explanation was “plausible” given the decline in the coal mining industry and members who had moved being advised to change unions.
Wansbeck MP Mr Lavery, who has risen through the Labour ranks to be one of Mr Corbyn’s key allies and was Labour’s general election co-ordinator, denies any wrongdoing.
The Certification Officer decided ag-ainst launching a formal investigation, saying many claims dated back beyond six years and the union did not have to keep records beyond this period. But he decided to put details of his office’s inquiry into the public domain.
Tory MPs seized on the document and Labour figures expressed concerns. Sutton Tory MP Paul Scully, who has previously raised the case with the parliamentary commissioner for standards, said: “The report raises many questions about the possible misuse of thousands of pounds earmarked for the support of mineworkers.” Colleague Chris Philp added: “Ian Lavery has serious questions to answer. They should be investigated by the Labour Party.”
A senior Labour MP said: “This may not be criminal but it appears unethical.”
Another Labour figure claimed: “The Certification Officer has exposed something which doesn’t pass the smell test.” Mr Lavery rejected the accusations.
He said: “Under my stewardship the union always complied with the rules and the Certification Officer signed off every year’s transactions.
"As the 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 the Certification Officer has decided to not appoint an inspector or take further action. This should draw a line under almost two years of allegations and innuendo.”
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Mr Lavery confirmed to the CO that he received “termination payments” totalling £89,887 paid between May 2010 and June 2013.
The CO had originally come up with a higher figure but stressed that as part of his investigation the union had established that it had overpaid Mr Lavery.
Its report states: “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 were able to do so and stated that no such documentary evidence existed.” The report, however, noted that the payments were fully recorded in the union’s annual returns to the Certification Office or in the statutory statements to members.
The report also examined a loan of £72,500 made to Mr Lavery by the National Union of Mineworkers (Northumberland Area) Provident and Benevolent Fund to buy a home. “The loan was written off by the Fund in 2007 and Mr Lavery appears to have been a beneficiary of this arrangement,” it said. Mr Lavery made regular payments into an endowment policy set up to cover the mortgage’s capital sum.
In April 2007 the union’s executive committee decided the union would accept full liability for the below-expected performance of the endowment policy.
“This was the basis for the union negotiating with the Provident and Benevolent Fund to get the Fund to write off the entirety of the £72,500 loan in return for the union writing off the Fund’s debt to the union, which was recorded in the union’s 2007 annual return as being in the amount of £109,911,” the Certification Officer added.
He also stated that Mr Lavery and his wife received £18,000 from an endowment policy taken out on the property.
The report also detailed how in 2005 the union’s Northumberland Area executive committee agreed to invest in the purchase of 15 per cent of the value of Mr Lavery’s property, with the valuation being £240,000.
The loan was paid back by Mr Lavery at 15 per cent of £190,000 from his redundancy payments in 2013, it added, with the £190,000 figure being a valuation made that year.
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