Political

Labour gets a financial breathing space

As The Times reports:

Labour has pulled itself back from the brink of bankruptcy by restructuring its loans and persuading the bulk of its backers to give the party until 2015 to repay the money.

Party officials have been locked in frantic negotiations with more than a dozen businessmen who lent Labour £15 million in the run-up to its 2005 election campaign. The loans, which were due to be repaid next year, threatened to sink the party.

Officials are due to announce the new loan agreements next week…

A Labour spokesperson said: “We are grateful to all our lenders fotheir continuing support as we address the financial challenges the party faces. Of course we keep our finances under ongoing review and work to ensure the party’s finances remain on a stable long-term footing, but are unable to comment further at this stage.”

Some were sceptical that the restructuring would make any difference at all. Lord Oakeshott, the Liberal Democrat’s Treasury spokesman, said: “They are clearly not in the same league as the Tories now. The Tories have pots of money to fight an election campaign while Labour is still struggling with the legacy of the last one.”

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