Wednesday, November 29, 2006

Debt-crisis New Labour

The Labour Party are in the red and seemingly on their uppers. Oh dear. The Electoral Commission, has revealed that the Labour Party owes more than £23m in loans.

Accounts released yesterday show that Labour, which has sold its headquarters, must repay £5.5m by the end of next month, followed by more than £11m by November next year, unless it can reschedule more of its debts.

Sir Christopher Evans, one rich donor, has decided not to claw back his loan instead has given Labour more time to repay.

Labour has admitted it was facing "acute cash-flow problems" and was appealing to their donors to get them more time. They are also hoping that the loans are converted to donations. But Sir Christopher has maintained that he wants his cash back.....

A Labour spokesperson said: "The Labour Party is currently in discussion with these creditors to development a repayment programme that meets the terms of these commercial loans as seen as possible."

The police are investigating whether the loans are truly commerical. Many of Labour's loans are at an interest rate under 7% and some are for an indefinite period. If they are not judged to be genuinely commerical terms, the loans could be deemed donations, which should have been declared. This is because a low interest loan is effectively a gift of the amount that would otherwise have been paid in interest. On the sorts of figures involved this would be several million pounds over a a number of years. It is this amount that has effectively been concealed from the electoral authorities.

And the fact that the membership of the Labour Party is plummenting very quickly. There isn't that solid activist base, which existed in the past. They can't get that level of support now as they are serving the establishment.

Blair beware of the bailiffs........