Cabinet ministers targeted in 'cash-for-honours' inquiry

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Indy Politics

Scotland Yard has widened its investigation in the cash for honours affair by asking cabinet ministers whether they knew about Labour's secret loans.

Tony Blair is believed to be the only member of the Cabinet at the time of last year's general election who has not yet been approached by the Metropolitan Police about the £6m loans from four businessmen who were nominated for peerages but blocked by the Lords Appointments Commission.

As the police step up the pace of their inquiry in the hope of concluding it by Christmas, four or five ministers have been invited to be interviewed by detectives through the Labour Party. Although Downing Street said the Prime Minister had still not been approached, the letters to his ministers make it inevitable that he will be interviewed shortly.

Alan Milburn, the former cabinet minister who headed Labour's election campaign, has been questioned by the Metropolitan Police as a witness but not as a suspect. In April, Mr Milburn said in a BBC interview: "I was told in the middle of the campaign that the party had taken a lot [of loans] out. I didn't know where they were from ... My concern was more about spending money, frankly, than raising it."

Mr Milburn said yesterday: "Following a request from the police, I have been interviewed as a witness. The police stressed I was not a suspect, and the interview did not take place under caution."

Gordon Brown, the Chancellor, who also played a key role in the campaign, will tell the police that he did not know about the loans. He has always made clear he had no involvement in raising funds for Labour after the party came to power in 1997 to avoid any potential conflict of interest with his Treasury role.

It appears that the police investigation is focusing on the possible link between honours and Mr Blair's flagship city academy programme.

David Miliband, who was Schools minister between 2002 and 2004 but not a member of the Cabinet at the election, has received a letter from the police. So has Ruth Kelly, who was education secretary at the time of the election. Two of the four lenders - the stockbroker Barry Townsley and property developer Sir David Garrard - also sponsored city academies.

Patricia Hewitt, the Health Secretary, has been invited to an interview. Another lender, Sir Gulam Noon, donated money to her campaign in Leicester West at the election.

Angus MacNeil, the Scottish National Party MP whose complaint initiated the inquiry, said: "I have no doubt in my mind where this is going - to Downing Street."

John Yates, the deputy assistant commissioner leading the inquiry, has made it clear he wants the investigation to be completed by Christmas. "He wants it finished, over and done," said one senior Westminster source. "He wants to get the whole thing over by the end of the year."

The Commons Public Administration Select Committee, which has suspended its own inquiry into honours because of the police investigation, has written to Mr Yates asking him to update them soon. He is expected to brief the MPs privately later this month.

However, those with links to the inquiry believe that Mr Yates will send the papers to the Crown Prosecution Service by Christmas for a decision on whether anyone should be prosecuted. The investigation has switched from the anti-corruption legislation passed in 1925, after the prime minister, David Lloyd George, sold honours, to the 2000 legislation requiring full and accurate disclosure of donations.

Questioned

13 April Des Smith, a headteacher involved in the Government's city academies programme, is arrested and bailed by police.

12 July Lord Levy, Labour's chief fundraiser, is arrested and bailed by police. He says the arrest powers were used "totally unnecessarily".

14 July

It emerges that two ministers, Labour donor Lord Sainsbury and former party chairman Ian McCartney, have been questioned.

20 September Lord Levy questioned again.

21 September Sir Christopher Evans, a leading biotechnology entrepreneur, who lent Labour £1m, becomes third person to be arrested.

29 September Ruth Turner, director of government relations at Downing Street, is questioned.

1 October It is revealed that John McTernan, director of political operations, has been questioned.

2 October The Tories confirm that four of their donors - Robert Edmiston, Lord Laidlaw, Lord Ashcroft and Johan Eliasch - have been interviewed.

23 October Michael Howard, the former Tory leader, is interviewed.

25 October It is reported that Jonathan Powell, Mr Blair's chief of staff, has been interviewed.

29 October It disclosed that Richard Roscoe, head of Downing Street's honours unit, has been questioned.

Yesterday It emerges that cabinet ministers at the time of last year's election have been sent letters by police.

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