Labour in the grip of huge debt

Labour in the grip of huge debt

	Published : Wed, 29 Nov 2006 10:00 By : James Rowe Print this Story

LONDON - The Labour in Britain is in throes of acute "cash flow problems" even as the Electoral Commission revealed that outstanding loans owed by major political parties has hit £60 million.

Labour currently owes £23.4 million, while the Tories owe £35.3 million. Following these top parties are the Lib Dems with outstanding loans of £1.1 million, Scottish National Party with £525,393 and the Plaid Cymru with £352,000.

The figures reveal that the Tories owe more, but it is the Labour, which is facing cash flow problems, as it has to repay £1.5 million immediately with another £17 million due by the end of next year. The Daily Telegraph reports that Labour owes £2 million to Unity Trust Bank, which is due on December 13, while another £4.7 million has to be repaid to the Co-operative bank by January 20.

Officials at the Labour Party headquarters are looking for funds as the donations have virtually dried up following the investigation into the cash for honors scandal. Lady Prosser former Labour Party treasurer told BBC Radio 4's PM programme that the cash crunch was acute, "It's hard to see where the money's going to come from. But someone has to pay something to enable democracy to flourish - political parties cost money to run," she added.

The Labour Party released a statement saying it was looking to extend many loans due to its "extremely challenging financial position". Sir Christopher Evans, who loaned £1 million and Gordon Crawford, who loaned £545,000 are said to be looking for immediate repayment and the Labour officials are working overtime to extend these loans.

However a statement by Sir Christopher said, "Sir Christopher's loan to the Labour Party was made on commercial terms and that remains the case. Repayment is expected to commence within the next few weeks and conclude within a matter of months."