Senior officials in the Labour party, including Gordon Brown, could become personally liable for millions of pounds in debt unless new donors can be found within weeks, the Guardian has learned.
The party has five weeks to find £7.45m to pay off loans to banks and wealthy donors recruited by Lord Levy, Tony Blair\’s former chief fundraiser, or become insolvent. A further £6.2m will have to be repaid by Christmas – making £13.65m in all. The sum amounts to two-thirds of the party\’s annual income from donations.
The figures are a conservative estimate as they do not include interest that will also have to be paid. A Labour source said that although the total debt was listed as £17.8m on the Electoral Commission website, the true level, with interest, was nearer to £24m.
The possibility that party officials and members of its national executive committee could become liable is being taken seriously by union leaders, and has been underlined by the decision of equity fund chairman David Pitt-Watson not to accept the post as Labour\’s general secretary.
Though he was Brown\’s candidate for the post, he declined the offer after receiving independent legal advice that he would be personally liable for repaying the loans and could be bankrupted if Labour\’s finances collapsed.
The advice from City solicitors Slaughter and May said unequivocally that leading party officials and members of the NEC would be " jointly and severally" responsible for the party\’s debt.
Couldn\’t happen to a nicer group of people now, could it?
Of course, this is simply going to increase the pressure for State funding of political parties but there\’s a logical, if robust, response to that.
Why should we have to pay for a bunch of bankrupts?