LABOUR and the Conservatives drove themselves deeper into debt by spending £1 million on foreign advisers to try to win the general election, it was disclosed yesterday.

As both parties were seeking loans from wealthy backers to avoid being outspent, Labour paid £530,372 to Mark Penn, a Washington-based adviser to Hillary Clinton, and the Tories handed £441,146 to Lynton Crosby, their Australian guru.

The parties’ spending on the most expensive election in modern times — the Tories spent £17.85 million and Labour £17.94 million — was rewarded with the second-lowest turnout of 61.3 per cent. MPs said yesterday that ministers had to act to stop an “arms race” in the cost of expensive consultants by imposing much stricter limits on spending between elections.

Mr Penn was hired to run secret polling of British voters from his company’s call centre in Denver while he stayed at the Waldorf Hotel in London and advised Tony Blair, The Times has learnt. He was brought in on Bill Clinton’s recommendation to counter Mr Crosby’s Tory campaign.

Electoral Commission documents released yesterday also show that other key members of Labour’s inner circle charged handsomely for their services. Philip Gould, now Lord Gould of Brookwood, billed the party for £143,011 for consultancy in the months before the election. Alastair Campbell, Mr Blair’s former communications chief, billed it for £10,000 a month for his advice, charging £47,000 from January to April.

The figures show that the Tories also spent a further £308,143 on tracker polls and £43,475 on focus groups.

Among hundreds of invoices is a £4,800 bill for Charles Kennedy’s six election suits and one of £3,638 for Michael Howard’s make-up. The documents were made public after The Times disclosed last week the £7,700 election hairdressing bill for Cherie Blair.

The expense of consultants was blamed for some the financial woes of the Labour Party, which pleaded with supporters to make emergency loans during the election. Police are investigating whether any proposals of peerages were linked to the offer of donations and loans. Several lenders have demanded their money back with interest, adding to the pressure on Labour officials to squeeze donors for even more.

Peter Kilfoyle, Labour MP for Liverpool Walton and a former Labour minister, led calls to reduce the amount of cash that parties could spend before elections. He said: “The Labour Party is a voluntary organisation with a handful of paid volunteers. Most people who are putting in their time, their energies and their money will be appalled at the number of people in the inner circle who are taking out such sums.

“People will judge this on the basis of value for money. This guy Penn has had more than half a million pounds and if the bottom line is payment by results, I have to ask if he was worth it. We lost a lot of votes and we lost a lot of seats and you do wonder how effective all this expenditure is.”

Mr Penn, 51, who was revealed by The Times this year to be the brains behind Labour’s election slogan “Forward Not Back”, is credited with masterminding Bill Clinton’s re-election in 1996. He is retained by Labour for an unknown sum and recently visited London to advise senior figures on tactics for next month’s local elections. His company, Penn Schoen & Berland, recently opened an office in London and recruited Matt Carter, the former Labour general-secretary, to run it.

Mr Penn is considered an expert in the use of “message polling” — calling sample voters in target areas to find out and test the exact campaigning message that will secure their vote. After the election, Mr Blair sent him a signed photograph declaring: “Mark, you were brilliant. Thank you.”

Lynton Crosby has returned to Australia after working in Conservative Central Office for five months before the election. He does not currently advise the party.

COST OF CONSULTATION

LABOUR
Mark Penn £530,372
Philip Gould £143,011
Alastair Campbell £47,000

CONSERVATIVES
Lynton Crosby £441,146
Tracker polls £308,143

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