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Row over Blair's secret loans
The extent of Tony Blair's secret loans from shadowy backers was revealed yesterday an astonishing £14 million (Dh93.1 million).
- Evening Standard
- Published: 00:00 March 19, 2006
London: The extent of Tony Blair's secret loans from shadowy backers was revealed yesterday an astonishing £14 million (Dh93.1 million).
Under mounting pressure to come clean, Labour admitted it banked £13,950,000, mostly in a brief period around last year's general election.
The disclosure amazed and angered MPs, coming after party treasurer Jack Dromey complained he had been kept in the dark about the money.
Labour's former deputy leader Lord Hattersley said he was "horrified" while a former adviser to Blair called it "dodgy". Far from clearing the air, the admission raised new controversies:
Although Labour said every penny was borrowed at "commercial rates" meaning the loans did not legally need to be disclosed city experts said the interest rate charged was lower than the market rate, saving the party hundreds of thousands of pounds a year.
Despite saying it would publish all future lenders' names, the identities of most of those who lent the £14 million may not be made public, leaving open the question of whether any were nominated for honours such as knighthoods and peerages.
A senior Labour insider confirmed to Evening Standard that it was always planned to ask some of the lenders to convert their loans into gifts at a later date. That opened the party to accusations that it used a loans system to conceal temporarily the generosity of benefactors during the politically sensitive election period or while the lenders were being considered for honours.
Two years ago Labour officials were worried that high-value donors were being put off by the threat of controversy, and a desire to protect donors may explain the rush to loans.
The £14 million was borrowed from wealthy individuals rather than banks. The disclosure pre-empted a report to the party's national executive on Tuesday, which would have inevitably been leaked. Former Labour peer Lord Haskins said the loans looked like a way of "getting round" the rules covering disclosure.
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