Letter to the Chairman from Mr Barry Townsley
I am writing to the Committee, in the context
of its inquiry into political honours, to record the facts in
relation to my own case that has become the subject of considerable
public scrutiny.
Shortly before the May 2005 General Election
I was informed by the Labour Party that it urgently needed to
raise money in order to mount its campaign. After having discussed
this with Lord Levy who I knew not only as a leading Labour fund
raiser but also in other charitable contexts, I agreed to make
a loan of £1 million.
Thereafter, I signed a loan agreement which
took the form of a letter dated 13 April from Matt Carter, then
General Secretary on behalf of the Labour Party. The loan was
on commercial terms. The payment was effected by transfer from
my bank to the Labour Party current account on 25 April 2005.
I believe the loan was not a reportable donation
for the purposes of the Political Parties, Elections and Referendums
Act 2000. The letter of agreement makes this point.
I was approached because I was known to the
party as a supporter and had made considerable donations on previous
occasions totalling some £500,000 prior to the Electoral
Commission's current arrangements having been put in place.
There was no agreement or discussion of any
kind whatsoever that I would or might be "rewarded"
with any honour. I was willing to make the loan because I was
and continue to be a Labour supporter.
It was obvious to me that running an election
campaign costs money—a fact that appears to be conveniently
overlooked by much of the media and some politicians—and
that I was in a position to help the party that I supported. On
this occasion I felt that a loan was a suitable arrangement.
To date I have not asked for repayment of the
loan which continues to bear interest.
To complete the picture in relation to the loan,
on 8 February 2006 I was written to by the Labour Party as the
initial one year loan period was coming to term. On receipt of
that letter I agreed to extend the loan for a further two years
on the same terms.
In late October 2005 my name along with a number
of others appeared in the press in connection with the appointment
of working peers. Much of the ensuing media coverage, so far as
it concerned my family and me, has been grossly offensive, inaccurate
and unfair.
In early February 2006 I decided to withdraw
my name from any consideration. A letter to this effect was delivered
to the Prime Minister on 10 February 2006.
In conclusion I should say that I am proud to
continue to be involved with the Academies Programme, the Department
for Education and Skills and to have supported the Prime Minister
who I hold in high regard.
I intend to make this letter public and then
to make no further comment on this matter.
21 March 2006
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