Watchdog rebukes PM over party loans

The body which vets nominations for peerages has rebuked Tony Blair over the Labour's attempt to hide the fact that four businessmen had lent money to the party.

The independent House of Lords Appointments Commission will, in future, ask people nominated as peers whether they have lent money to a political party. The move follows the "cash for honours" affair, which is now being investigated by the Metropolitan Police.

The commission blocked four Labour working peers nominated by Downing Street last year and it was later revealed that they were among 12 wealthy supporters who had lent £13.95m to the party. One of them, Sir Gulam Noon, has claimed that he included details of his £250,000 loan on his Lords nomination form but removed it after being advised to do so by a senior Labour figure.

In its annual report, it said: "The commission has always taken the view that [it] expects to be told about all matters that could reasonably be seen to effect a nomination, and this could include loans of a commercial and non-commercial nature ... In the future, the commission will take steps to emphasise it explicitly."

The seven-strong commission added: "A loan cannot be a reason for a peerage, but nor should it necessarily be a bar to one being awarded. In carrying out its vetting task, the commission needs to satisfy itself that a nominee would have been credible if he or she had not made a loan." The same arguments applied to people making donations to parties, it said.

* The number of special advisers employed by ministers has risen from 77 to 83 in the past year, taking their cost from £5.5m to £5.9m.