UP TO THEIR NECKS IN DEBT! – Labour and Tories have £58.7m in loans to pay

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The Labour Party yesterday admitted it faces ‘acute cash flow problems’.

It was responding to the publication of Electoral Commission figures showing that the main capitalist political parties owe a total of almost £60m in loans.

The loan figures show the Tories owe £35.3m, Labour £23.4m and the Liberal Democrats £1.1m.

It is the first time parties have had to declare all loans above £5,000.

The Commission also revealed that during the third quarter of this year, the Tories received donations worth £4m, Labour received £3.2m and the Liberal Democrats £1.1m.

In a statement issued after the Commission’s figures were published, Labour said that despite rescheduling most debt, it is still struggling to repay loans to two of its donors.

The statement admitted the Labour Party is experiencing a ‘difficult financial year’ and is restructuring to cut costs and to extend the repayment date of most of its loans.

However, it added: ‘two of our commercial loans from individual supporters had not been rescheduled and repayment is due’.

The party is in discussions with those two individuals as ‘any organisation that is seeking to manage its cash flow in difficult circumstances’ would be doing.

As police continue to investigate the cash-for-honours allegations, Electoral Commission chief executive Peter Wardle expressed concern that some parties ‘are still struggling to report donations on time’.

The Labour Party declared £207,155 of donations late, the Tories £168,259 and the Liberal Democrats £23,181.

Wardle added: ‘It is unacceptable that the Labour Party has failed to report a significant amount of donations to the national party on time.

‘Labour have taken steps to improve their reporting procedures as a matter of urgency and we’re working closely with them to ensure this happens.’

In response, a Labour spokesman said the party ‘takes the issue of late donation reporting seriously’, adding that it is ‘determined to remedy’ the situation.

In response to the latest round of accusations, the Labour Party said it would be asking the Electoral Commission to examine whether loans from individuals to the Tories had been fairly described as being on commercial terms, if the interest charged for them was lower than that charged by banks.