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Labour’s debt soars to £16m despite record donations

Labour’s debts rose during the General Election despite the party raking in more than £10 million from donors in just three months, according to new figures.

 

Just days after a senior Labour figure warned the party was on the verge of bankruptcy, the statistics show that Labour’s debts of nearly £10m far outstrip the Tories, Liberal Democrats and the SNP.

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The rising debts come amid record levels of donations to political parties.

Opponents said that they raised questions about Labour’s campaigning ability in the run up to next year’s Holyrood elections.

Last week John Prescott, the former Labour deputy prime minister, warned that the party faced bankruptcy unless it cut back on its spending.

Lord Prescott, who claimed that Labour was in around £20m of debt, said that the party needed a strong figure who could refuse calls for extra cash, and say: “We haven’t got it.”

Last night the SNP claimed that the increased debt showed that Gordon Brown had managed to bankrupt “the Labour party, not just Britain”.

Despite record overall donation levels, Labour’s debts increased from £9.76m to £9.83m in the three months to the end of June.

In contrast, the Conservative party reduced its debt, from £3.08m to £2.81m, while the LibDems saw an increase from £388,000 to £478,000 and the SNP remained stable at £484,500.

Adding in the parties’ overdraft limits brings Labour’s debt to £16.6m, the Tories to £13m, the LibDems to £1.6m and the SNP to £791,000.

The Electoral Commission figures show donations totalling more than £26m over the last quarter, £6m more than in the period around the 2005 General Election.

They also reveal that former prime minister Tony Blair contributed more than £75,000 in staff and travel costs to Labour’s ill-fated election campaign.

David Rowland, the millionaire forced to stand down as Tory party treasurer before he even took up the job, donated £117,000.

The official figures also reveal a number of MPs who contributed to their local parties as they fought to save their seats.

These include a successful bid by Lynne Featherstone, the Lib-Dem MP and now a Home Office minister, who gave £4000.

Mohammad Sarwar, the former Glasgow MP who was succeeded by his son, Anas, also gave the party more than £24,000 in two separate donations.

Lakshmi Mittal, the steel tycoon, gave Labour more than £1m, while the trade unions Unite and Unison donated £2.6m between them.

In total, the main beneficiaries of donations were the Tories, who received £12.3m, Labour, with £10.9m and the LibDems, with £2m, while the SNP received £277,000.

All gifts over £7000 to the central parties must be registered as well as those over £1500 given to constituency parties.

Last night the SNP accused Labour of failing to record donations collected from a high-profile pre-election fundraiser in Glasgow attended by Gordon Brown, in which prizes including a Peter Howson artwork were auctioned.

James Dornan, the SNP leader on Glasgow City Council, said that Mr Brown had “managed to bankrupt the Labour party, not just Britain”.

He added: “The Glasgow gala fundraiser is looking like the least successful fundraising event ever.”

Pete Wishart, the SNP MP for Perth and North Perthshire, said Labour’s debt levels would affect next year’s elections in Scotland and Wales.

He said: “Labour clearly run their party finances as disastrously as they ran the economy, and both these factors will haunt them in the run up to the Holyrood elections next year.

“With increasing debt levels, it looks like Labour are struggling to make the minimum payments on their spending at the last election, never mind the next one.”

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