Police to investigate ‘loans for peerages'

Labour last night issued the names of a dozen millionaires who bankrolled its election campaign last year, in an attempt to prevent allegations of sleaze from destroying Tony Blair's premiership.
After two weeks of damaging disclosures about secret loans and allegations of "peerages for cash", the Government rushed forward legislation requiring parties to declare all future loans - and possibly past ones as well. Labour's rich list of businessmen lent £13,950,000 towards its election campaign, which cost £17.5 million, when the party was facing a serious cash shortage. The most controversial name on the list was Rod Aldridge, the head of the IT support firm Capita, which has benefited from multi-million pound public sector contracts, including managing the London congestion charge. Mr Aldridge, who lent Labour £1 million, said the borrowing was at commercial rates and was a "personal decision on my part". The loan was for a year and he fully expected it to be repaid "along with the interest due after that period of time". Sir David Garrard, whose nomination by Mr Blair for a peerage was blocked by the Lords Appointments Commission, topped the list with a loan of £2.3 million. Richard Caring, a clothing tycoon and the owner of the fashionable London restaurant The Ivy, and Lord Sainsbury of Turville, the science minister, each lent £2 million. Seven names had already emerged by yesterday. Labour decided to release the five others to end media attempts to "out" the party's secret backers and turn the spotlight on to the Tories, who have so far refused to name those who lent them at least £20 million in the run-up to the election. Prof Sir Christopher Evans, the founder and chairman of Merlin Biosciences Ltd, lent £1 million, as did Nigel Morris, the co-founder and former president of Capital One Financial Corporation and a governor of the London Business School. Labour said the loans would have been registered in its annual accounts. It called on the Tories to declare at least those loans made for the last election campaign. But Mr Cameron, the Tory leader, refused. He has announced proposals to clean up politics, including a £50,000 cap on donations to parties, and said he would not be "bounced" into making an announcement about loans which had been negotiated before he became leader. But Oliver Letwin, the Tory policy director, conceded that many former donors to the party had received peerages. Lord Falconer, the Lord Chancellor, announced that the Government intended to amend legislation currently before Parliament to require parties to declare all future loans. He wrote to all the party leaders and to the Electoral Commission to seek their views on a reporting regime, "including whether it should be retrospective". Lord Falconer joked about his own peerage. Opening a parliamentary photographic exhibition, he said: "I would like to make it absolutely clear that I did not pay for my peerage. Sharing a flat with Tony Blair [when they were young lawyers] was perfectly adequate." Today Mr Blair, Gordon Brown, the Chancellor, and John Prescott, the Deputy Prime Minister, will attend what is expected to be a heated meeting of the party's ruling National Executive Committee where the "peerages for loans" controversy will top the agenda. Jack Dromey, the party's elected treasurer, who made the shock disclosure last week that he had not been told about the loans, will table a report he has drawn up in the past five days into the origin of the loans and how to avoid a repetition of the row. Lady Helena Kennedy, the Labour peer who chaired a recent inquiry into public disengagement with politics, told the BBC it was now time for Mr Blair to leave office. Daily Telegraph 21/03/2006