Labour 'on track to be debt free by 2015'

The Labour Party is on a "sound financial footing" despite an increase in staff pension fund liabilities to £6 million, treasurer Jack Dromey said today.

Presenting last year's books to the party's conference, Mr Dromey said Labour's debts, racked up during a spending "arms race" with the Tories, would be cleared by 2015.

He told delegates in Manchester: "We have fundamentally transformed both our financial management and the finances of the Labour Party."

Mr Dromey said: "For 10 years, until five years ago, politics was gripped by a crazy arms race. Election expenditure tripled while membership of political parties halved. The Labour Party racked up debt."

But, as a result of the changes to the way the party's money was managed, Mr Dromey said: "We are on a sound financial footing. If five and six years ago we were £28 million in the red, we are now, as a consequence of that financial discipline and our new financial strategy, on track to be debt-free by 2015."

Mr Dromey, who is standing down as treasurer, said the pension deficit was "a problem" but insisted that "not for one moment" had the party considered ending its final salary scheme.

"A sacred principle for us is that our staff give outstanding service to this party and they are entitled to dignity and security in retirement," he said.

The party had a "robust plan" approved by regulators to deal with the £6 million deficit over a period of 12 years, he said.