`Honours for loans' to be investigated

AN influential House of Commons committee is to investigate the process of awarding peerages following the weekend allegations that honours were being given out in exchange for large cash donations to political parties, especially Labour Party.

By Graham Dines

AN influential House of Commons committee is to investigate the process of awarding peerages following the weekend allegations that honours were being given out in exchange for large cash donations to political parties, especially Labour Party.

The cross-party Public Administration Select Committee said today it is to extend an ongoing inquiry into ethics and standards in political life to cover the question of how peerages are awarded,.

The latest row over honours was sparked by Labour donor Chai Patel, who said he was offered a peerage shortly after agreeing a £1.5 million loan to the party.

The Priory Clinics founder is said to be one of three of Prime Minister Tony Blair's House of Lords nominees blocked by an independent watchdog set up by the Government. Dr Patel has insisted that he was not offered a peerage in return for the loan, and would have refused to complete the deal if he had.

The Electoral Commission is looking at whether undeclared loans to political parties should now be registered in the same way that cash donations have to be published every quarter.

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