Alan Watkins: The Prime Minister is being distinctly coy about how the cheques were cashed

For a long time the Lib Dems have done well out of peerages

A feature of the cinema of my youth was the Scotland Yard public-relations film, though the term was not in general use at that time. It would be shown before the main production of the evening and introduced by the barrister-turned-journalist Edgar Lustgarten, whose props were a smart suit, a large coffee pot and a tiny cup, then an indication of the utmost social refinement.

The police wore double-breasted mackintoshes and trilby hats. They all spoke in standard English. Even the uniformed constable gave the impression that he had just been auditioning for Hamlet at the Old Vic; while the chief inspector might have been the owner of thousands of ancestral acres. That was the way actors were required to talk in those days.

The women also wore tightly belted macs accompanied by berets, the uniform (though I was too innocent to realise it at the time) of what were called "good-time girls" or, sometimes, "party girls". They spoke in clipped, giggly tones, as if on the verge of a fit of hysterics, as they might well have been.

After a piece of villainy had been shown, Lustgarten would perform some business with the coffee pot, look straight ahead and announce:

"And then, he made his fatal error." Sometimes he would add: "which was to lead to the gallows" or "Court No 1 at the Old Bailey".

I have been thinking, off and on, of these words all the week, principally because Deputy Assistant Commissioner John Yates has been called in to investigate whether Mr Tony Blair, Mr David Cameron and presumably Sir Menzies Campbell as well have breached the Honours (Prevention of Abuses) Act 1925.

Certainly Yates of the Yard, as he is not, I think, known - to go with a real swing, the detective's name must contain two syllables - should not neglect the Liberal Democrats. For a long time they have seemed to me to do well out of peerages. One reason was that Roy Jenkins was both assiduous and skilful in securing the elevation of supporters to the upper House. Michael Heseltine, by contrast, was famous for never doing anything for his friends.

This is not to say that money passed improperly to the Lib Dems. What it is to say is that they have had their fair share - perhaps more than their fair share - of titles, honours and awards. They clearly merit investigation. The fatal error of all three parties has been either to forget that the 1925 Act exists or to assume that it is a dead letter.

"If any person accepts, obtains or agrees to accept or obtain any gift, money or valuable consideration as an inducement or reward for procuring ... the grant of a dignity or title of honour to any person ... he shall be guilty of a misdemeanour."

That seems to be clear enough, though proving it is a different matter. The Act was brought in by a Conservative government whose Prime Minister, Stanley Baldwin, had made a conscious decision to clean up politics after the era of David Lloyd George. Indeed, Baldwin had more than anyone else been responsible for bringing Lloyd George down at the Carlton Club meeting of 1922.

In his six years at the head of the Coalition government, Lloyd George had, from the newspaper industry alone, created five Viscounts, five Barons, 11 Baronets, one Privy Councillor, one CH and six Knights. This was more a matter of the Prime Minister doing the buying; in this case, of support. It was why Lord Northcliffe had said when he was Alfred Harmsworth: "When I want a peerage I shall buy one, like an honest man."

Paradoxically - or, as journalists now tend to write - "ironically" - Mr Blair finds himself in additional trouble because he too tried to do a Baldwin. In what was, I think, a wholly honourable attempt to ameliorate that Tory "sleaze" which Mr Alastair Campbell had denounced so effectively, his first administration set up two bodies, the Lords Appointments Commission and the Electoral Commission.

Like two old spaniels whose equable nature has been taken for granted for too long, they have now both turned round to menace their master. The Appointments Commission has held up four of Mr Blair's nominations, much to his irritation. Mr Sam Younger, the head of the Electoral Commission has, if anything, been even more threatening. He wants further and better particulars of the loans from both main parties, and promises legal action unless his requirements are met. He is specially interested in whether the loans were made on commercial terms: otherwise, it seems, they become a gift.

I am not sure that I wholly agree with Mr Younger about this. For instance, loans are often made between members of a family - parents or parents-in-law and children, brothers and sisters - usually in connection with house-purchases. Sometimes large sums of money are involved by the standards of most people, whether as deposit or as bridging loan.

All the parties are clear in their minds that it is a loan and not a gift. Many families regard interest in much the same way as the medieval Church looked upon usury. Similarly, security is rarely demanded in these circumstances. In any case, political parties own ample assets, rather as Private Eye does. But why should a party not accept a loan on familial terms?

Having said this, I should still like to know to whom the cheques were made out and where they were cashed: a subject on which Mr Blair has been distinctly coy.

My scoop of the week concerns a partially successful attempt at censorship by No 10 and the Department for Culture shortly before the last election. Or, rather, it is Mr Martin Bailey's scoop, in the April issue of The Art Newspaper. It is about the projected export of William Blake's watercolour illustrations for a poem known as "Blair's Grave". The Blair in question was an 18th-century Scottish poet.

First No 10 managed to get the press notice out well before the announcement of the election. Then its headline was changed from Arts Minister Defers Export of "Blair's Grave" to Arts Minister Defers Export of 19 Rediscovered Watercolours. An official at Culture also insisted that the poet Blair's dates (1699-1746) should be included, to distinguish him from the Prime Minister.

Have they all gone mad?