Labour-Backing Tycoons Demand their Cash Back as Peerage Promises Foiled by Police Intervention
Gordon Brown has been snubbed by millionaires embroiled in Labour's €˜cash for honours' scandal who are now demanding the return of their controversial loans.
All but two of the dozen tycoons who secretly gave Labour almost £14million in the run-up to the General Election three years ago have refused to turn their loans into donations, despite a concerted bid by senior party chiefs to persuade them.
Only former Labour Science Minister and supermarket boss Lord Sainsbury, who donated £2million, and Indian food company boss Sir Gulam Noon, who gave £250,000, have told Labour it can keep their money.
Labour officials had tried to persuade all of the donors to convert their loans into outright gifts to help the party reduce its £18.9million of debt.
But a senior source has disclosed the party is due to announce within the next fortnight that nine of the millionaires among the original 12 want their money repaid - a total of £12.65million.
In the months before the 2005 General Election, the millionaires were approached to help bankroll Labour's campaign.
Individual written deals were made with each of the donors, who agreed the cash would be repaid at 2 per cent above the bank base rate.
They were asked to make loans rather than donations, because these would not have to be declared to the Electoral Commission.
But after the Election, Labour officials were keen for the loans to be turned into gifts and tried to persuade the donors to write them off.
The snub leaves Labour increasingly reliant on the unions for financial support.
Two donors, software boss Gordon Crawford, who gave £500,000, and property millionaire Andrew Rosenfeld, £1million, have told party officials they want their money back by next year with, it is understood, interest added.
Seven others have agreed to extend their loans up to 2015. But, again, the interest on their loans will continue to be paid over the next seven years.
The donors offering extended loans are property developer Sir David Garrard (£2.3million); Richard Caring, owner of The Ivy and other prestigious London restaurants (£2million); Dr Chai Patel, former chief executive of the Priory private hospitals and rehabilitation clinics group (£1.5million); Rod Aldridge, founder of Capita, the congestion charge firm (£1million); Nigel Morris, entrepreneur and banker (£1million); and stockbrokers Barry Townsley (£1million) and Derek Tullett (£400,000).
The 12th donor, Sir Christopher Evans, a bioscience entrepreneur, had his £1million loan repaid last year.
Sir Christopher was one of several people, including Tony Blair's former fund-raiser Lord Levy, who were arrested by Scotland Yard officers investigating complaints that Labour and other political parties had broken laws dating back to 1925 about selling honours.
In his memoirs, A Question Of Honour, serialised by The Mail on Sunday earlier this year, Lord Levy claimed Gordon Brown was €˜absolutely aware that loans were being taken'.
He wrote: €˜It simply defies belief, with money so critical an issue in the cash-strapped campaign, that a Chancellor as interested in detail as Gordon would not have known where the money was coming from.'
In April, during Prime Minister's Questions, Mr Brown said he knew €˜nothing' of the loans secured by Lord Levy.