£60m in the red: political parties' debts revealed

Click to follow
Indy Politics

Labour had debts of more than £23 million at the end of September and the Conservative Party had loans amounting to more than £35 million, the Electoral Commission revealed today in the first mandatory publication of loans to political parties.

The Liberal Democrats had just over £1.1 million worth of loans outstanding. In all, eight political parties recorded loans which totalled more than £60.5 million, the Electoral Commission said.

Chief executive Peter Wardle said the parties had complied well with new legislation - brought in amid cash-for-honours allegations earlier this year - requiring the declaration of loans for the first time.

But he criticised Labour for failing to declare "a significant amount" of donations on time - a statutory requirement for the last five years.

Labour's total borrowing amounted to £23,390,992 on September 30, the Electoral Commission's figures showed.

The Tories' loans came to £35,315,060 and the Lib Dems' added up to £1,131,277.

The Labour Party has told the Electoral Commission it has repaid loans worth £6,013,929 since it made a voluntary declaration in August.

The Tories paid back £274,721 during the same period.

Meanwhile, the quarterly update of the register of donations showed that 16 parties had received £9 million between July and September.

This included £207,155 to Labour, £168,259 to the Tories and £23,181 to the Lib Dems.

Of those declared, £406,535 worth of donations should have been disclosed to the Electoral Commission during a previous quarter.

Mr Wardle singled out Labour for criticism, describing its late reporting of donations as "unacceptable".

He said: "This is the first time that political parties have been required by law to report full details of the loans they have taken out.

"It's a significant step forward which gives voters access to far fuller information about how parties are funded and who is funding them.

"This transparency is a vital part of ensuring openness in our democracy.

"The parties have made good progress in ensuring they comply with the new legislation requiring the reporting of loans.

"But I am concerned that some are still struggling to report donations on time - a statutory requirement for the last five years.

"The fact remains that over £400,000 of donations were reported late this quarter - that is, they were received, and should have been reported, in previous quarters.

"While we acknowledge that local branches of parties, staffed largely by volunteers, may struggle to keep up with the administration of their finances, it is unacceptable that the Labour Party has failed to report a significant amount of donations to the national party on time.

"Labour have taken steps to improve their reporting procedures as a matter of urgency and we're working closely with them to ensure this happens. "

Today's publication shows that Labour was due to pay back more than £5 million of debts by the end of the year and a further £11 million by next November.

Some £6 million of Labour's loans - from the Co-operative Bank and the Unity Trust - were due to be repaid on August 21.

They would appear to be covered by the more than £6 million Labour said it had already paid back.

But the Unity Trust is owed another £2 million by December 13 and the Co-op a further £3.5 million by December 31.

A string of loans which have been surrounded by controversy this year are then due back during 2007.

Sir David Garrard is owed £2.3 million by April 28, Chai Patel £1.5 million by August 7, Lord Sainsbury £2 million by September 13, Derek Tullett £4 million and Nigel Morris £1 million by September 25 and Sir Gulam Noon £250,000 by October 31.

In 2008, Richard Caring is owed back £2 million by February 28 and Barry Townsley £1 million by April 25.

The Tories owed AIB Group £2.8 million by the end of December and £15,650,000 by March 28 next year.

Lanners Services were owed £3.6 million by the end of January.

Other loans included £2.6 million from Big Ben Films, £3.5 million from Lord Laidlaw of Rothiemay, £1,014,000 from Ironmade, £2.5 million from Morain Investments, £950,000 from Medlina Foundation and £500,000 from Wyler Investments.

The Conservative Party said it had already declared total debts of about £35 million in March.

A spokesman added that almost £16 million of that was spent on buying the freehold of its former headquarters in Smith Square, which the party is now looking to sell.

The requirement for parties to disclose loans in the same way as donations came into force under the Electoral Administration Act on September 11.

The figures do not include donations or loans worth less than £5,000 to party headquarters or those worth less than £1,000 made to local accounting units.

The Labour Party said it was determined to remedy its late reporting of donations

A spokesman said: "The Labour Party takes the issue of late donation reporting seriously.

"All the instances outlined in the report have been investigated and the specific reasons for their late reporting identified.

"We entirely agree with the Electoral Commission that late reporting of donations is unacceptable and something that all the main political parties have been guilty of recently.

"This is something we are determined to remedy.

"Following an immediate and comprehensive audit, where changes to internal procedures have been identified, these have been, or are in the process of, being made."

Tory chairman Francis Maude said 90% of Labour's donations came from the unions.

"Today's figures show how Labour's dependence on the unions continues to grow," he said.

"The unions are clearly salivating at the prospect of Labour's leadership election. We know that previous donations have yielded an array of pet policies and bungs with taxpayers' money.

"Who knows what is being promised behind closed doors for the latest slew of cash revealed today? Labour has to deal with this cronyism in order to properly clean up politics."

The Lib Dems' debts include £250,000 to Lord Alliance, £100,000 to Lord Razzall, £125,000 to Paul Marshall and £20,000 to Joan Kirk.

The Lib Dems must repay £20,805 by the end of December, according to the figures. A further £31,720 is due next year.

In a possible sign of the difficulty Labour is experiencing in attracting donations from wealthy supporters following the cash-for-honours row, there was none of the six- and seven-figure gifts from individuals which have featured in past returns.

The party's largest individual donor was businessman Anthony Bailey, who gave £50,600, while there were two bequests of £25,000 each as well as £10,000 gifts from advertising guru Trevor Beattie, Star Trek actor Patrick Stewart and publisher Sonny Leong.

The lion's share of Labour's donations came from trade unions, which gave cash and non-financial support worth a total of £2,819,984 - more than 87% of the £3,227,340 total.