Labour lists £14m secret backers of election fund

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A string of business backers and City entrepreneurs, including Rod Aldridge, head of one of the biggest public service contractors, secretly loaned Labour £14m to fight last year’s election, the party has disclosed.

Mr Aldridge, executive chairman of Capita, was among a list of a dozen lenders published by Labour on Monday in an attempt to end the row over the loans.

The biggest loans were £2.3m from Sir David Garrard, the property developer, £2m from Lord Sainsbury, the science minister, and £2m from Richard Caring, textiles tycoon and owner of London’s Ivy restaurant.

John Prescott, deputy prime minister, immediately called on David Cameron’s Conservatives to publish details of more than £20m of private loans suspected to have been made to the party in the past. The Tories last said they would not be doing so. Mr Cameron said: “That would be retrospective and wouldn’t be fair. I don’t want to be bounced into some announcement.”

The Labour list was released after more than a week of intense pressure on Tony Blair and internal strife over the transactions, which were known to only a handful of party officials as well as the prime minister.

Mr Blair will face tough questioning on Tuesday from members of Labour’s ruling national executive over the affair. Senior party officials are to ask the prime minister why he supported taking loans rather than donations and why they were secret. New reporting obligations on the Labour leadership are expected to be put in place.

“This sort of decision should have been shared. This has done as much harm to the standing of the Labour party as anything, with the possible exception of the Iraq war,” said one insider who complained that a “perception of sleaze” had engulfed the party.

Although none of the newly identified lenders was being considered for a peerage, their contributions to Labour’s election campaign are controversial.

Capita has a wide range of government contracts and handles more than a third of all public sector outsourcing. Mr Aldridge, like some of the other lenders, is also a sponsor of Labour’s city academies scheme.

In a statement on Monday night, he said that the party approached him last year for financial support after the costs incurred at the general election: “As a member of the party, I was pleased to help. This was a personal decision on my part.”

He added that his one-year loan for £1m was made at a commercial interest rate, thought to be 2 percentage points over the Bank of England base rate, and that he expected it to be repaid along with the interest due at the end of the term.

Also among the names on the list was Sir Christopher Evans, the biotechnology entrepreneur who founded the venture capital company Merlin Biosciences.

A past donor to the party, he made a £1m loan. Merlin has been subject to a Serious Fraud Office inquiry into allegations by a former director of financial irregularities. Sir Christopher has denied any wrongdoing.

Other previous donors on the list included Gordon Crawford, founder of the London Bridge software group, who lent £500,000. Nigel Morris, who co-founded the Capital One credit card group, lent £1m.

Andrew Rosenfeld, another multi-millionaire businessman who sponsored a city academy, lent £1m.

Sir Gulam Noon, whose Noon Products supplies curries to supermarkets, lent £250,000. He is one of four lenders on the list whose nominations for a peerage have reportedly been blocked by a Lords commission. The others are Chai Patel, chief executive of Priory Healthcare, Barry Townsley, a financier, and Sir David Garrard.

The government confirmed that it planned to use the electoral administration bill to ensure all future loans will have to be declared.

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