Tories and Labour record £15m debts
The Conservative and Labour parties are in debt to the tune of almost £15 million each, new figures from the Electoral Commission show.
The Tories recorded a deficit of £14.999 million as of December 31st, despite securing donations worth a total of £13.5 million and membership fees of £843,000 in the previous year.
Labour’s deficits were slightly less, at £14.5 million, despite £13.9 million of donations, £3 million in membership fees and £8 million from affiliated trade unions.
David Cameron’s party is bullish about its financial situation – the Tories claim to have received about £8 million in donations in the first quarter of this year.
However, many in the Labour party fear the cash for honours scandal has scared off potential supporters and analysts predict the party may have to sell off assets.
A general election year always takes its toll on the finances of political parties, and both Labour and the Conservatives were forced to rely on loans to fund their campaigns.
But this is the first time that commercial loans made to parties have had to be declared to the Electoral Commission – previously, only donations over £5,000 and interest-free loans were made public.
Following allegations that parties were asking wealthy backers to make loans rather than donations, to avoid having to make their names public, the commission called for full disclosure in this year’s accounts.
Today’s figures show the Tories were loaned £27.6 million last year, of which £3.93 million were interest-free loans from Conservative constituency associations.
About £8.4 million was due to be repaid by the end of last year and £13.5 million due after a year. The figures show £8 million was repaid by December 31st and £4.7 million was “waived” – or effectively turned into donations.
Labour recorded loans of £12.4 million which were due to be repaid in January this year, including £2 million from Lord Sainsbury, £2.3 million from David Garrard, and £1.5 million Chai Patel. Another loan of £2 million was made by Richard Caring this March.
Tony Blair’s nomination of Sir David and Mr Patel for a seat in the House of Lords last year was blocked by an independent commission after it found out about the loans, sparking the cash for honours scandal.
Labour’s accounts state it has secured an overdraft of £13.5 million to cover any loans that need to be repaid imminently, while it also notes that some loans have been “rescheduled” to allow Labour to pay them back at a later date.
“The statements of accounts provide more details, particularly on the issue of loans, than has been the case in the past,” said Electoral Commission chief executive Peter Wardle.
“We called for parties to declare full details of all loans and were pleased that the government acted quickly in response by changing the law to ensure that loans will be reported to the commission on the same basis as donations in the future.”
Meanwhile, the Liberal Democrats recorded a deficit of £207,000, half of what it was in the previous year. They received donations worth £5.4 million last year, and recorded an income of £768,000 from membership fees.
