Labour and the Haringey Development Vehicle. What happens next?

by Dave Hill

This week’s unusual decision by Labour’s governing National Executive Committee to intervene in Labour-run Haringey Council’s plan to form a joint venture company with commercial property developer Lendlease has further underlined the rancour surrounding this affair and cemented more solidly its position as an issue of far more than local interest.

The NEC’s move followed a written request from a large minority of the borough’s 49 Labour councillors – 21 of them, to be exact – to prevent the joint venture company – the Haringey Development Vehicle (HDV) – being set up before the start of the “purdah” period preceding 3 May’s borough elections. The NEC resolved that its local government representatives and “appropriate shadow cabinet members” – in practice, shadow housing, communities and local government minister Andrew Gwynne – should try to broker an amicable compromise between the two halves of the bitterly divided Labour group, and that if that didn’t work then it should “strongly” advise that progress towards doing the deal be “paused” and nothing signed before the election. Purdah begins on 27 March.

Meanwhile, the council’s eight-strong Liberal Democrat opposition group has exercised its constitutional power to have an extraordinary full council meeting called, at which two Lib Dem councillors will propose a motion to, among other things, “stop the current plans to dispose of any council assets through the HDV”. That meeting is scheduled for 7 February.

Possibly still more imminent is the outcome of the judicial review of whether Haringey has the legal power to set up the HDV in the way it intends (as a Limited Liability Partnership) and other aspects of its approach to the policy.

What on Earth is going to happen next?

If the judicial review finds against the council, then that “pause” the NEC has called for might well have to happen anyway. If not, what might be the implications of the extraordinary full council meeting due in less than a fortnight’s time?

For the Lib Dem motion to be carried, 21 Labour councillors would have to vote in favour of it to guarantee the majority of 29 required for it to be passed – exactly the same number as signed the letter to the NEC. Is that likely to happen? It would be a very big step for Labour councillors to take, even though some of them – those less implacably opposed to the HDV in principle – broadly share the Lib Dem view, which calls for “further assessments” and “new options” but stops short of directly calling for the HDV to be scrapped right away.

The letter to the NEC addresses this point. It derides the Lib Dem councillors’ actions as “driven by political opportunism” and says they have been taken “in the full knowledge that sitting councillors are prevented from breaking the [party] whip due to the threat of disciplinary action that could prevent them contesting their seats this May”.

This seems to suggest that lining up with the Lib Dems is not an option for those 21 councillors (though not all of them are standing again in May and perhaps abstaining will appeal to some). What, though, if enough Labour councillors do support the Lib Dem motion to see it passed?

The council thinks decisions about the HDV would continue to be taken by the council’s cabinet, where it and leader Claire Kober continue to enjoy majority support. If so, pushing through such a hotly contested measure before 27 March when most council members, including getting on for half the current Labour group, don’t want you to and the next (almost certainly) Labour administration will (almost certainly) be flatly opposed to it, would nonetheless require a bit of nerve.

Might anti-HDV Labour councillors calculate that, despite what the letter to the NEC says, backing the Lib Dem motion actually represents their best chance of pressuring Kober and her allies into abandoning the HDV plan? Would enough of them be ready to risk it? It would be extraordinary. But in Labour Haringey, almost anything seems possible just now. There’s also a regular full council meeting scheduled for 26 February, by the way.

As for the NEC’s move, it has attracted mixed reviews in Labour circles. Fervent Corbynites have applauded it, especially in the wake of the collapse of Carillion, which they contend confirms the risks involved in public-private partnership arrangements. Other Labour members, notably some London councillors, have expressed disquiet, perceiving the party’s national body as seeking to pressure a Labour council into changing policies it disapproves of.

This is a sensitive issue, as Islington councillor Alice Perry, an NEC member, recognised on Twitter. “The NEC understands that its not its place to try to run Councils by proxy,” she wrote.

It is reported that Jeremy Corbyn himself, a former Haringey councillor, suggested Gwynne be deployed to “heal internal party conflict”. However, nothing short of Kober dumping the HDV or agreeing a “pause” long enough to enable them to dump it after 3 May looks likely to satisfy the HDV’s Labour opponents. Should the proposed healing process fail – and time is not abundant – then the NEC has effectively resolved to condemn the HDV and the Labour councillors who favour it.

It’s hard to see how peace is going to break out. Quite apart from the interesting question of whether the NEC has any business trying to influence what a specific Labour local authority does in the first place – and according to one source, committee members devoted around two hours to discussing the matter – such a move would do nothing to lessen increasing, and largely negative, media coverage of the nation’s first “Corbyn Council” – one that hasn’t even been elected yet.

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