Labour shaves large slice off debt

10:07pm Wednesday 30th July 2008

Labour cut its net debt from almost £25 million to £18.9 million over the course of last year, according to the party's annual accounts published by the Electoral Commission today.

The cash-strapped party recorded an operating surplus of £7.5 million in 2007 thanks to what treasurer Jack Dromey described as "a new discipline of approach" and a determination to "live within its means".

Tony Blair's decision to take on massive loans from wealthy supporters to fund the 2005 general election campaign continues to limit the room for manoeuvre of his successor as Labour leader Gordon Brown, who recently announced that the party would have no spring conference next year in what was widely seen as a cash-saving measure.

Despite paying off an £854,000 loan from biotech tycoon Sir Christopher Evans and partially repaying a loan from software millionaire Gordon Crawford over the course of 2007, Labour still owes more than £15 million to individual lenders.

Interest on the loans reached more than £1.5 million by the end of last year, the accounts reveal.

Meanwhile, Conservative Party accounts showed a reduction in debt from £9 million to £7.75 million over the course of 2007, when the party recorded a surplus of around £1.5 million.