22/03/2006

NEC chair attacks Clarke over loans criticism

The Labour Party's loans woes have taken several twists since treasurer Jack Dromey declared he had no knowledge of millions of pounds worth of loans made to the party last week.

National Executive Council chair Sir Jeremy Beecham has attacked Home Secretary Charles Clarke who had criticised Mr Dromey in his capacity as party treasurer. Sir Jeremy said Mr Dromey had acted "perfectly properly."

The Prime Minister faced a 90-minute grilling by furious members of the Labour Party's NEC, but any hope Mr Blair may have had that the issue would go away when the NEC wrested back control of fundraising activities from Downing Street were soon to be dashed.

The NEC, which for a decade been sidelined by the Blairite's presidential style, said it had "unanimously" agreed to resume its "rightful responsibility" for overseeing "appropriate structures" for the parties funding and financing arrangements.

NEC members are concerned that the party could be faced with financial difficulties as the secret loans are called in.

Labour backbenchers are calling for Mr Blair's head over the disastrous "Peerage-gate" debacle.

It also emerged that following complaints, Scotland Yard have become involved, investigating allegations that peerages were offered for substantial loans.

The Metropolitan Police confirmed they were investigating complaints made by three parties under Section 1 of the Honours Act 1925.

The Labour Party has claimed that no parliamentary rules were broken, as loans are not covered by the current regulations governing the disclosure of party funding.

(SP/GB)

Related UK National News Stories
Click here for the latest headlines.

21 March 2006
Labour to change party funding system
Labour's National Executive Committee is to take responsibility for party funding, following the recent row over 'loans-for-peerages'. Following a meeting at 10 Downing Street, the NEC issued a statement saying that it would resume its "rightful responsibility" for overseeing all matters of party funding.
19 January 2007
PM's Aide arrested in cash for honours probe
One of the Prime Minister's senior aides has been arrested by police as part of the probe into alleged cash for honours. Director of Government Relations Ruth Turner was arrested on suspicion of perverting the course of justice. Arrested at her London home, she was later released on bail without being charged.
03 December 2007
More Questions Than Answers On Labour Party Donations
The Government is to have no respite from the growing chorus of questions on party funding activities. Opposition parties have continued to maintain pressure on the Labour party funding issue, demanding to be told who knew about donations to the party.
28 November 2006
Details of party loans published
The main political parties have outstanding loans totaling around £60 million, the Electoral Commission has revealed. According to the Commission, at the end of September the Conservatives owed more than £35 million, while Labour had debts of more than £23 million. The Liberal Democrats owed £1.1 million.
20 March 2006
Plans to ban 'secret' party loans
Secret loans to political parties could be outlawed under new legislation proposed by the Lord Chancellor as the row over the 'cash-for-peerages' scandal continues. Lord Falconer has suggested that a ban should be introduced to the Electoral Administration Bill which is currently going through Parliament.