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The Cash-for-Honours scandal (also known as Cash for Peerages, Loans for Lordships, Loans for Honours or Loans for Peerages) was a political scandal in the United Kingdom in 2006 and 2007 concerning the connection between
political donations and the award of
life peerage
In the United Kingdom, life peers are appointed members of the peerage whose titles cannot be inherited, in contrast to hereditary peers. In modern times, life peerages, always created at the rank of baron, are created under the Life Peerages A ...
s. A loophole in electoral law in the United Kingdom means that although anyone donating even small sums of money to a
political party
A political party is an organization that coordinates candidates to compete in a particular country's elections. It is common for the members of a party to hold similar ideas about politics, and parties may promote specific ideological or p ...
has to declare this as a matter of public record, those loaning money at commercial rates of interest did not have to make a public declaration.
In March 2006, several men nominated for life peerages by then Prime Minister
Tony Blair
Sir Anthony Charles Lynton Blair (born 6 May 1953) is a British former politician who served as Prime Minister of the United Kingdom from 1997 to 2007 and Leader of the Labour Party from 1994 to 2007. He previously served as Leader of th ...
were rejected by the
House of Lords Appointments Commission
The House of Lords Appointments Commission is an independent advisory non-departmental public body in the United Kingdom. It has two roles:
*to recommend at least two people a year for appointment as non-party-political life peers who sit on the ...
. It was later revealed they had loaned large amounts of money to the governing
Labour Party, at the suggestion of Labour fundraiser
Lord Levy
Michael Abraham Levy, Baron Levy, (born 11 July 1944) is a Labour Party peer. He is a former chartered accountant and was chairman and CEO of a large independent group of music companies. He now acts as a consultant for a number of companies a ...
. Suspicion was aroused by some that the peerages were a ''
quid pro quo'' for the loans. This resulted in three complaints to the
Metropolitan Police by
Scottish National Party MP Angus MacNeil
Angus Brendan MacNeil ( gd, Aonghas Brianan MacNèill; born 21 July 1970) is the Scottish National Party (SNP) Member of Parliament (MP) for covering the Outer Hebrides.
Background
MacNeil was educated at Castlebay Secondary School on the isla ...
,
Plaid Cymru
Plaid Cymru ( ; ; officially Plaid Cymru – the Party of Wales, often referred to simply as Plaid) is a centre-left to left-wing, Welsh nationalist political party in Wales, committed to Welsh independence from the United Kingdom.
Plaid wa ...
parliamentary leader
Elfyn Llwyd
Elfyn Llwyd (born 26 September 1951) is a Welsh barrister and politician. He was a Member of Parliament, representing Meirionnydd Nant Conwy in the House of Commons from 1992 to 2010 and Dwyfor Meirionnydd from 2010 to 2015. Llwyd was Plaid Cy ...
, and a third individual who continues to remain unidentified, as a breach of the law against selling
honours
Honour (British English) or honor (American English; see spelling differences) is the idea of a bond between an individual and a society as a quality of a person that is both of social teaching and of personal ethos, that manifests itself as a ...
. The investigation was headed by Assistant Commissioner
John Yates who later resigned over the
News of the World phone hacking scandal
News is information about current events. This may be provided through many different media: word of mouth, printing, postal systems, broadcasting, electronic communication, or through the testimony of observers and witnesses to events. New ...
. During the investigation various members of the Labour Party (including Blair), the
Conservatives
Conservatism is a cultural, social, and political philosophy that seeks to promote and to preserve traditional institutions, practices, and values. The central tenets of conservatism may vary in relation to the culture and civilization in ...
and the
Liberal Democrats were questioned, and Labour's Lord Levy was arrested and later released on bail. The investigation continued to have political impact throughout, as a range of stories continued to leak from the police investigation and damaged the government and Labour Party.
Following the unveiling of the scandal the Labour Party had to repay the loans and was said to be in financial difficulty. The police investigation was long and involved. It expanded to encompass potential charges of perverting the course of justice, apparently relating to suspected attempts to present evidence to the police in a particular way. At one point the
Attorney General,
Lord Goldsmith, obtained an injunction against the
BBC #REDIRECT BBC #REDIRECT BBC
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, preventing them from reporting a story they claimed was in the public interest while he argued that the story was
sub judice
In law, ''sub judice'', Latin for "under a judge", means that a particular case or matter is under trial or being considered by a judge or court. The term may be used synonymously with "the present case" or "the case at bar" by some lawyers.
...
. This raised the possibility of a conflict of interest, the Attorney General being a political appointee. Tony Blair was interviewed three times as Prime Minister, though only as a witness and not
under caution.
After a long review of the police file, it was reported on 20 July 2007 that the
Crown Prosecution Service
The Crown Prosecution Service (CPS) is the principal public agency for conducting criminal prosecutions in England and Wales. It is headed by the Director of Public Prosecutions.
The main responsibilities of the CPS are to provide legal advi ...
would not bring any charges against any of the individuals involved. Their decision stated that while peerages may have been given in exchange for loans, it could not find direct evidence that that had been agreed in advance; this would have been required for a successful prosecution. Notwithstanding the lack of any charges, some considered that the investigation had severely undermined Tony Blair's position, and possibly hastened his resignation as Prime Minister.
Background
Historically, hereditary peerages were awarded to members of the landowning
aristocracy and royal favourites. In the late 19th century, peerages began to be awarded to industrialists with increasing frequency. Well-substantiated allegations that titles were sold during
David Lloyd George
David Lloyd George, 1st Earl Lloyd-George of Dwyfor, (17 January 1863 – 26 March 1945) was Prime Minister of the United Kingdom from 1916 to 1922. He was a Liberal Party politician from Wales, known for leading the United Kingdom during ...
's
premiership led to the passing of the
Honours (Prevention of Abuses) Act 1925
The Honours (Prevention of Abuses) Act 1925 is an Act of the Parliament of the United Kingdom, that makes the sale of peerages or any other honours illegal. The act was passed by the Parliament in the wake of David Lloyd George's 1922 cash-for-h ...
. In the second half of the 20th century the granting of hereditary
peerages
A peerage is a legal system historically comprising various hereditary titles (and sometimes non-hereditary titles) in a number of countries, and composed of assorted noble ranks.
Peerages include:
Australia
* Australian peers
Belgium
* Bel ...
, other than to members of the
Royal Family, virtually ceased, giving way to
life peerages, which have been granted since the passing of the
Life Peerages Act 1958
The Life Peerages Act 1958 established the modern standards for the creation of life peers by the Sovereign of the United Kingdom.
Background
This Act was made during the Conservative governments of 1957–1964, when Harold Macmillan was Prime M ...
. They are given to a wide range of individuals on the recommendation of the leaders of the major British political parties, including opposition parties.
In May 1998, the then Chairman of the Political Honours Scrutiny Committee, former
Conservative
Conservatism is a cultural, social, and political philosophy that seeks to promote and to preserve traditional institutions, practices, and values. The central tenets of conservatism may vary in relation to the culture and civilization in ...
Cabinet Minister
Lord Pym, told a House of Commons Select Committee that the committee considered a political donation a point in a nominee's favour as it indicated involvement in public life, and that the nominee had "put their money where his mouth is". The
House of Lords Appointments Commission
The House of Lords Appointments Commission is an independent advisory non-departmental public body in the United Kingdom. It has two roles:
*to recommend at least two people a year for appointment as non-party-political life peers who sit on the ...
was established in 2000 to check the suitability of those nominated for an honour.
In the summer of 2005, a list of 28 people nominated for
working peerages was prepared. The list contained 11
Labour nominees, eight
Conservatives
Conservatism is a cultural, social, and political philosophy that seeks to promote and to preserve traditional institutions, practices, and values. The central tenets of conservatism may vary in relation to the culture and civilization in ...
, five
Liberal Democrats, three members of the
Democratic Unionist Party and one member of the
Ulster Unionist Party
The Ulster Unionist Party (UUP) is a unionist political party in Northern Ireland. The party was founded in 1905, emerging from the Irish Unionist Alliance in Ulster. Under Edward Carson, it led unionist opposition to the Irish Home Rule m ...
. The list was referred to the Appointments Commission in the usual way. Publication of the list was delayed and stories began to appear in the press stating that the Commission had concerns about some of those nominated on grounds of their large donations to political parties. Some of the Labour peers appointed became known as
Tony's Cronies
"Tony's Cronies" was a term in British politics and media given to people who were viewed as being given positions of power because of their personal friendships with Prime Minister Tony Blair, during his premiership between 1997 and 2007. Thes ...
. In February 2006, stockbroker
Barry Townsley, who had donated £6,000 (and loaned £1 million on commercial terms) to the Labour Party and contributed £1.5 m to a City Academy under a government scheme, withdrew his acceptance on the grounds of press intrusion into his private life.
Townsley, who was the subject of an investigation by the
Serious Fraud Office, was followed by property millionaire
Sir David Garrard, who withdrew his name in March 2006.
Sir Gulam Noon, the British-Indian food company millionaire, was also nominated by the Labour Party after having made donations and loaned money (he also had his nomination rejected by the Appointments Commission). Sir Gulam told ''
The Times
''The Times'' is a British daily national newspaper based in London. It began in 1785 under the title ''The Daily Universal Register'', adopting its current name on 1 January 1788. ''The Times'' and its sister paper '' The Sunday Times'' (f ...
'' newspaper a "senior party man" told him "there was no reason why I should declare this loan because it was refundable". "I was told by this same person that because there was interest on the loan it was a commercial matter and would not come under the same party funding rules as a donation."
The list of working peers, minus the withdrawn and queried names, was published on 10 April 2006.
Chai Patel
On 8 March 2006,
Chai Patel
Chaitanya Patel (born 14 September 1954) is a British doctor, businessman and philanthropist. Born in Uganda to Indian parents, he obtained medical qualifications at the University of Southampton in 1979 and previously worked in the National He ...
, director of the Priory healthcare group, who had donated £100,000 to the Labour Party complained that he was being rejected by the Commission. He said "It is a fact that I have donated, but what is being implicated is that I would be rewarded with a peerage. I have never asked for any favour for the money that I have donated. My children suggested that if I had not given this money, I would not be seen in this light. But I happen to support this Government. I gave money to the party because I happen to believe in what it stands for. I can't change what has happened." Patel stated that he had asked a
Queen's Counsel
In the United Kingdom and in some Commonwealth countries, a King's Counsel (post-nominal initials KC) during the reign of a king, or Queen's Counsel (post-nominal initials QC) during the reign of a queen, is a lawyer (usually a barrister o ...
for advice on whether his human rights were being abused by the Commission.
On 29 March 2006, Patel withdrew his name from the list of nominees for a peerage. He said that at no time did he have any expectation of a reward nor had he been offered anything in return, yet on a
BBC #REDIRECT BBC #REDIRECT BBC
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''Today'' programme he expressed the view that he wanted to serve in the Upper House (the Lords) as he felt that his life experience ensured that he could make a valuable contribution there. He has also stated in a letter to the House of Lords Appointments Commission that "I feel that, given my accumulated experience and deep sense of public service, as well as being able to devote the time to undertake the responsibility effectively, I would be able to make a contribution to the parliamentary process."