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Blair "misled'' Labour on honours scandal

Hasan Suroor

LONDON: In a twist to Britain's long-running "cash for honours'' scandal, Prime Minister Tony Blair has been accused of "misleading'' the Labour Party about the reason behind taking secret loans, rather than straightforward donations, from a number of rich businessmen to fund the party's 2005 general election campaign.

The Sunday Times claimed that it had obtained a written record of Mr. Blair's justification for the "secret loans scheme'' at a meeting of the party's national executive earlier this year.

According to the newspaper, the Prime Minister defended the "secrecy'' over the loans saying potential donors were reluctant to give donations for fear of negative media publicity. He reportedly told the executive that anyone giving money to Labour Party ahead of elections would be "trashed in the media and so potential donors preferred the confidentiality of a loan.''

However, at least two leading businessmen — Ghulam Noon and Chai Patel — who gave loans to the party have said they were happy to give donations but were asked by Labour fundraisers to give loans instead. Both were later nominated for peerage but their nominations were blocked after their financial links with the party emerged.

Circumventing law

The allegation against Mr. Blair and some of his key allies is that they preferred loans to circumvent the law which requires parties to declare any donation above a certain amount. Loans need not be declared — a loophole which both Labour and the Conservative Party allegedly exploited to collect unlimited funds. Labour raised nearly £14 million in loans and within months four businessmen who had loaned the money were nominated for seats in the House of Lords.

The Sunday Times' claim came amid reports that police planned to question Mr. Blair in connection with their investigations into the case. A number of his close aides have already been questioned.

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