What Happened to the Communist Party of Great Britain's Millions?

The collapse of the Soviet Union in the early 1990s also brought the iron curtain down on The Communist Party of Great Britain. But more than 20 years after the far left party was wound up controversy lingers over what happened to its assets.

To lunchtime shoppers in London's Covent Garden it is just another branch of the HSBC bank.

But to what remains of Britain's communists, 16 King Street has a special resonance. This was the party's headquarters during its glory years.

In the immediate aftermath of the Second World War, when "Uncle Joe" Stalin was seen as a valued ally against the Nazis rather than a murderous tyrant, 60,000 British citizens were card carrying communists.

And the party, which campaigned for Parliamentary democracy to be replaced by a socialist state, had two members of Parliament.

By the time King Street, which was reportedly bought with money secretly sent by Lenin, was sold, in 1976, the CPGB was already in terminal decline.

Torn apart by warring factions and plummeting membership, it limped on until 1991 when, with communism collapsing across Eastern Europe, its leaders decided to call it a day.

But that was not the end of the story for Britain's communists - or the complex network of businesses they presided over, which included, at various times, a travel agent, a T-shirt company, a book publisher and a sandwich shop in Slough.

What happened to these assets and the profits from the sale of 16 King Street, which totalled between £2.5m and £4m depending on which account you believe, remains the subject of much controversy among former CPGB members.

These old resentments bubbled to the surface last week, at the launch of a new book, After the Party, a memoir chronicling the fate of leading CPGB figures in a post-communist world, when former party members took to the floor to ask where all the money raised by "comrades" like them over the years had gone.

Speaking to BBC News afterwards, Stuart Hill - one of the "Euro communist" reformers who voted to wind up the party in 1991 - said: "The money from the headquarters of the old Communist Party, that was sold to a bullion dealer, ironically. If you wanted to make it up, you couldn't."

That money was "and still is" held in a company called Rodell Properties Ltd, of which he is a director, he explained, but it is used to fund a very different kind of politics to that which was once espoused from King Street.

In fact, far from fomenting revolution it had helped fund the unsuccessful campaign to change Britain's electoral system to the Alternative Vote.

The story goes like this. When the CPGB was wound up, the party's assets were sunk into a new organisation, The Democratic Left, set up to promote the progressive brand of politics adopted by the party leadership in its dying days, which probably owed more to New Labour than to Lenin.

When the Democratic Left failed to capture the public's imagination another think tank, the New Politics Network, was set up which, in 2004, stepped in to save pro-democracy campaign Charter 88 from bankruptcy.

The two organisations subsequently merged to become Unlock Democracy, which played a leading role in last year's ill-fated Yes to AV campaign.

It was this chain of events that last year led The Sunday Times to claim Yes to AV was being funded by "Moscow gold". Unlock Democracy is used to such accusations.

In November 1991, shortly before the CPGB was wound up, its members were shocked by revelations that between 1956 and the late 1970s, it had been secretly funded by the Soviet Union. The money came in the form of bundles of cash handed to the party's then deputy general secretary Reuben Falber by a Soviet embassy official.

But, according to Stuart Hill, the money from Moscow had long since been spent by the time the party was wound up.

"The fact there was so much money wasn't a reflection of 'Moscow gold', because whatever money came in was spent as it came in, in reality," says Stuart Hill, who was elected a Labour councillor on Tyneside in 2010.

It was "capitalist property values" in London that had swollen the party's coffers, not bungs from the Kremlin, he insists.

"If it hadn't been for the grotesque inflation of the value of those properties, there wouldn't have been anything.

"They were purchased so long ago that the amount of money they were purchased for was nothing really and subsequently they are worth millions."

Among the small band of left wingers who have kept faith with the Communist Party's vision of a socialist Britain, there is much anger about what has happened to the CPGB money.

"It makes me quite sick when I think about it," says Richard Bagley, editor of the Morning Star, the socialist daily newspaper linked to the Communist Party of Britain, which broke away from the CPGB in 1988, in protest at what they saw as its effective abandonment of communism.

But Unlock Democracy director Peter Facey rejects accusations that the money was simply spirited away by the reformist wing of the party.

"At each stage decisions were taken democratically. It wasn't the case that Democratic Left came along and stole these assets. The Communist Party made the decision democratically," he says.

Mr Facey, who says he has no personal connection to the Communist Party, insists Unlock Democracy has always been open about the fact that it is the legal successor of the CPGB and the source of its funding.

Given its campaigns for greater openness in party funding and lobbying it could hardly do any other.

Communist Party-linked businesses often had "deliberately opaque" ownership structures to prevent them from being seized by the government, which considered the party an enemy of the state and kept it under constant surveillance (when King Street was sold an MI5 listening device was found embedded in a wall).

But, says Mr Facey, Unlock Democracy was doing its best to open up Rodell Properties to public scrutiny and is currently holding the first elections for members of the firm's management committee.

He does concede, however, that to those not familiar with the arcane world of far left politics in Britain the Unlock Democracy story is a strange one.

"The Communist Party of the 1950s was broadly Stalinist. Today its asset base is, the part of which is still around, used for the leading organisation to promote democracy and human rights.

"It is a strange story when you look at it like that. In other ways, it is not so strange."

Rodell Properties, now a wholly owned subsidiary of Unlock Democracy, has assets worth about £1.9m according to its most recent accounts.

Its income is derived from two office blocks in north London. The more exotic firms linked to the CPGB such as Progressive Tours, which organised trips behind the Iron Curtain, a youth camp in Essex and the Slough sandwich shop, have either ceased trading, returned to their individual owners or been folded into Rodell.

Most were small concerns linked to the holiday plans or reading habits of party members, although one business, a T-shirt maker called Sputnik Enterprises did show commercial promise, according to Peter Facey, even though it missed out on the subsequent boom in "retro-chic" Soviet era fashion.

"That was the one company I wish we had hung on to. Former communists were not very good business people in that sense."

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