Monday, September 25, 2006

When is a commercial loan not a commercial loan?

Page 4o of the Labour Party NEC's Annual Report includes this little gem in the Treasurer's Report:

A further commercial loan of £2.0 million was received from Richard Caring in March 2006 on terms similar to those already disclosed, bringing the entire amount of the supporter loans from £11.95 million to £13.95 million (excluding accrued interest). In two cases it has been indicated that the loans are to be repaid when the term comes to an end, and we have made budgetary provision for this repayment. Also, others have already agreed to reschedule their loans to future periods. At all times this position is kept under review to ensure we meet our financial and budgetary targets.

This seems to be a very interesting definition of a 'commercial' loan.

Page 45 sets out that the Labour Party had a deficit of £14,500,000 in 2005, basically funded by the above loans.

The figures also suggest that their ongoing income is barely enough to pay for their ongoing income, let alone have anything left to pay the loans off. If they really are 'commercial' loans then they presumably face an interest bill of around a million too.

It is quite difficult to see how a Party with this level of debts can survive without significantly reducing its running costs.

hat tip: Iain Dale

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