Senior officials in the Labour party, including Gordon Brown, could become personally liable for millions of pounds in debt unless new donors can be found within weeks, the Guardian has learned.
The party has five weeks to find £7.45m to pay off loans to banks and wealthy donors recruited by Lord Levy, Tony Blair's former chief fundraiser, or become insolvent. A further £6.2m will have to be repaid by Christmas - making £13.65m in all. The sum amounts to two-thirds of the party's annual income from donations.
The figures are a conservative estimate as they do not include interest that will also have to be paid. A Labour source said that although the total debt was listed as £17.8m on the Electoral Commission website, the true level, with interest, was nearer to £24m.
The possibility that party officials and members of its national executive committee could become liable is being taken seriously by union leaders, and has been underlined by the decision of equity fund chairman David Pitt-Watson not to accept the post as Labour's general secretary.
Though he was Brown's candidate for the post, he declined the offer after receiving independent legal advice that he would be personally liable for repaying the loans and could be bankrupted if Labour's finances collapsed.
The advice from City solicitors Slaughter and May said unequivocally that leading party officials and members of the NEC would be " jointly and severally" responsible for the party's debt.
There are currently thirty-three members of the Labour Party NEC, which means an average possible liability of nearly £730,000 per person. Now, I know that there will probably be a bail-out—the lenders will extend the loan terms, there will be a donation drive or the party will negotiate some bank loan or somesuch—but wouldn't it be fucking amazing to see these arrogant, evil bastards slapped with a debt of nearly a million quid each? It would certainly release some much needed housing into the market, I would imagine.
Now, if the Labour Party goes bankrupt, I don't believe that it has any effect on the government. But let us contemplate, for a moment, the effect on the personal fortunes of people such as Gordon Brown, Economic GeniusTM; could the Gobblin' King stump up £730,000 at short notice, I wonder?
What if the Gobblin' King was forced to declare himself bankrupt? Does anyone know if an undischarged bankrupt is allowed to hold public office?
And—should any of this actually happen—if anyone has any experience of stitching sides back together, could they get over to my place as soon as they hear...?