According to figures released yesterday by Sir Phil Harris, the deputy chairman of the party's board of treasurers, the overdraft is now down to pounds 9.8m, compared to pounds 11.4m when the party published its annual accounts in August. He also said that donations were up by 20 per cent in the six months between March and September. If that rate continues, the overdraft could be reduced to pounds 6m by next year. If the next election is not until 1997 the deficit could be lower still.
Sir Phil, who has built up a near pounds 100m fortune from his carpet business, Carpetright and has been a leading figure in Tory fund-raising said: "People talk about companies stopping donations or switching to Labour but our level of corporate donations is exactly the same as they were five years ago." He added that several new corporate donors had joined the Tory ranks though he declined to name them.
A pounds 22m battle fund would be a similar figure to that spent by the Conservatives on the last election, in 1992. However Labour still has a considerable financial advantage. In August it reported a pounds 4m cash surplus when the Tories were then pounds 15m in debt if loans outstanding to local associations are taken into account.
Several large companies have cut donations to the Conservatives, fuelling talk of a cash crisis. Last week it emerged that two more blue chip companies, engineering group Lucas Industries and the car distributor Inchcape, had both cancelled their donations. Other corporations that have pulled the plug on Tory donations include Whitbread, drugs group Glaxo Wellcome and United Biscuits.
Graham Kirkham, who heads the DFS Furniture group and who last year made a pounds 4m interest-free loan to the Conservatives, yesterday sold pounds 60m of shares in the company. However, he declined to say whether he would be making a donation.
Although some companies have been warming to Labour, employers yesterday warned that industry is still sceptical about its prospects under a Labour government because Tony Blair could have difficulty delivering his promises.Reuse content