Labour five weeks away from insolvency
Thursday, 29 May 2008 12:00 AM
The Labour party is five weeks away from becoming insolvent, according to figures released by the Electoral Commission.
Senior figures in the party, including prime minister Gordon Brown, could become personally liable for its debts unless it finds a way to pay off £7.45 million in loans.
Other figures on the National Executive Committee (NEC) could also be liable, including Harriet Harman, deputy leader; her husband, Jack Dromey, the party treasurer; Dawn Primarolo, public health minister; and former minister Keith Vaz.
The loans stem mainly from the controversial reign of Lord Levy as party fundraiser. The man who was later embroiled in the cash-for-honours scandal secured loans from banks and wealthy donors who are now demanding to be paid back.
Labour has five weeks to pay off £7.45 million of the loans, and until Christmas to pay off a further £6.2 million. Once interest is taken into account the total figure would be around £24 million.
The loans set for repayment on June 30th and July 1st include £2.61 million from the Co-operative bank, £1.54 million from Unity Trust bank and £2.3 million from Sir David Gerrard, a property developer. The Co-operative asked unions to offer loans to Labour so it could repay the debt, but some are understood to have refused.
Indeed, three of the UK's biggest unions - Unison, the Communication Workers Union and the GMB - are tabling motions for their annual general conference in the autumn calling on members to disaffiliate from Labour.
The possibility of personal financial liability is being sounded as the reason David Pitt-Watson rejected the offer of general secretary recently.
Labour's hopes now seem to lie in trying to extend the loan period.
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