Lords `took cash to ask questions'

Eminent lawyer tells how client paid 'substantial sums' to four peers a nd several MPs for acting on his behalf

The parliamentary "cash-for-questions" scandal spread wider yesterday after the disclosure by an eminent lawyer that a client had paid four peers as well as several MPs "substantial sums" for acting on his behalf.

In the first evidence that the practice extends to the House of Lords, Lord Lester of Herne Hill told a select committee in a confidential memorandum that none of the parliamentarians involved declared his interest in either House.

Lord Lester, a QC, Recorder and Liberal Democrat peer, says that he does not believe the long-standing custom of the House that "Lords speak always on their personal honour: means that there is no mischief ... which needs to be addressed".

He adds: "For example, one of my commercial clients at the Bar has informed me that he has paid substantial sums and given indirect financial benefits to some four peers as well as to several Members of the House of Commons, to ask questions and take other action on behalf of him and his company. None of them declared this interest to either House.

"My client strongly suspects that his commercial competitors have similarly paid substantial sums and given indirect financial benefits to peers, as well to MPs, to perform parliamentary activities on their behalf."

The memorandum names neither the peers nor the client involved. But Lord Lester acts as counsel to Mohamed al-Fayed, the chairman of Harrods and the man who ended the ministerial career of Tim Smith by revealing that he had asked parliamentary questions on his behalf for cash. Neil Hamilton, the former corporate affairs minister, also resigned after accepting a hotel stay at the Ritz in Paris at Mr Fayed's expense.

The disclosure was written for a Lords Procedure Committee inquiry into whether a register of peers' financial interests should be introduced along the lines of that in the Commons.

But the evidence has thrown what one senior peer called a "bombshell" into the deliberations of the peers' committee, which has been charged with drawing up evidence on the question to Lord Nolan's inquiry into standards in public life. Tory peers are said to be largely opposed to a register while at least one of the two Labour members on the committee is strongly in favour.

In his memorandum, Lord Lester takes issue with the recent paper from the Nolan committee saying the matter of peers' outside interests must be approached "from a quite different starting point" to that in the Commons because peers do not draw a salary "and it is therefore implicit that a peer has other sources of income".

Lord Lester says he believes it is as essential "in the interests of our system of parliamentary government for peers as it is for the Members of the House of Commons to perform their public functions free from improper outside influences".

He told ITN yesterday that he did not know the names of the peers involved and that his client had declined to reveal them to him. When he had asked his client whether it made any difference that peers were not paid salaries, the reply had been: "Well I fear some of them are more greedy than members of the House of Commons."