UK Liberty

Party funding

Posted in party funding by ukliberty on May 27, 2007

The Independent:

Several key lenders at the centre of the cash for honours affair have been asked by Labour to roll over their loans to save the party from being forced into receivership. Sir David Garrard, who was due to be repaid £2.3m last month, and Dr Chai Patel who was owed £1.5m in August, have decided not to call in the loans. Both men are understood to have given the party more time to repay. In 2008 the party will have to make millions of pounds more in loan repayments, including £1m to Barry Townsley, who was proposed for a peerage by Tony Blair.

Opposition politicians said the party would have been told to stop trading if it were a company. Lord Oakeshott of Seagrove Bay, a Liberal Democrat treasury spokesman, said: “If this was a commercial company the auditors would be warning the directors they should call in the receivers.”

Senior Labour figures fear that the party’s auditors, who are now examining the accounts, will not be able to sign the party off as a going concern because Labour does not have enough money to pay back its debts. The party was due to pay back almost £10m in loans this year.

Members of the party’s governing body, the National Executive Committee, will become personally liable for the party’s debt if the auditors refuse to say that the party is a going concern.

One member of the NEC said: “The only way our accounts will be signed off is if the lenders give us more time to pay or turn the loans into donations.”

Or of course if they raid the public purse, to the tune of £25m pa.

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