Scottish Labour facing questions over second printing firm

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The Labour party in Scotland is facing questions after it emerged that a printing firm, set up by a party researcher, was struck off by Companies House after receiving over £11,000 in public cash from two Labour MSPs.

Labour MSPs John Park and Claire Baker claimed a total of £11,283.33 for printing work carried out by ME2 Communications Ltd months after the firm was set up by Labour party researcher Sarah Metcalfe.  The firm was subsequently struck off by Companies House having submitted no financial accounts and given no indication of having employed any staff, save for Ms Metcalfe herself and director James Metcalfe who is described as a PR Consultant.

The firm, set up in October 2007, received notification from Companies House on May 1st 2009 warning that it faced being struck off the register and the company dissolved, the firm was subsequently dissolved on 21st Aug 2009.

In March 2008 Labour MSP John Park claimed £4,720.38 for newsletters and £2,533.92 for printing and photocopying work carried out by the company.  In the same month Labour colleague Claire Baker claimed £4,029.03 for newsletters.

Documents obtained by Newsnet Scotland show that the firm was established on 4th October 2007 by James and Sarah Metcalfe.  Sarah Metcalfe is Labour’s Director of Research and Strategy in the Scottish Parliament.  The documents also show that the firm’s office address is the same residential address given for the Metcalfes; a sandstone cottage in Kirkaldy.

The new revelations come one week after it emerged that Labour councillor Margaret Brisley was a director of Alloa based printing firm Armstrong Printing, the firm alleged to have supplied disgraced Scottish Labour MP Jim Devine with bogus invoices.  Mr Devine is currently awaiting sentence after being convicted of fraudulently pocketing thousands of pounds in public cash using bogus invoices.

On 3rd October 2007, with Wendy Alexander leader of the Holyrood Labour group, Sarah Metcalfe called for more money to be given to the Labour opposition for research purposes.  At the time the Labour researcher claimed the funding provided to the Holyrood opposition party leader was insufficient and should be raised.

Ms Metcalfe said: “The Scottish Leader’s Allowance of £22,466 is insufficient to meet even the full cost to an employer of a private secretary – never mind the public expectations of a leader’s office.”  Ms Metcalfe warned that the Labour party was being “forced to look at external” sources of funding.

The revelations that one day later the same Labour party researcher set up a printing company that obtained over £11,000 in public cash will cause eyebrows to be raised and questions to be asked.

A financial expert told Newsnet Scotland that it was unusual for a company to be wound up so quickly having not even submitted an initial set of accounts.  The expert expressed surprise that the company appeared not even to have made the most basic attempts at advertising its services.

The expert said:

“New companies are required to file accounts within 21 months of incorporation.  Where companies have not been trading they are still required to file a dormant company accounts (DCA) form.  However in this case the company was dissolved shortly before this deadline and therefore the directors never submitted details of their financial activities to Companies House.

“It appears unusual that a company which is trading would be dissolved so quickly and would not prepare even an initial set of accounts – particularly as (trading) companies must submit accounts to HMRC for their tax bill to be calculated.  Moreover the company does not appear to have been listed on any local or national business directories which are often used by new companies as a cheap means of advertising the company.”

Newsnet Scotland contacted both John Park MSP and Claire Baker MSP on Saturday morning with the following questions:

“Given that this work was paid for by public cash we would be grateful if you could inform us of the type of printing work and totals involved and if you received all of the work in full.

We can find no trace of any adverts for ME2 Communications nor signs of any industrial premises and would be interested to know how you became aware of them, how you contacted them and if you ever visited the printing premises.”

As of today (Sunday) we have received no reply.