Cash-for-Honours scandal
political scandal in the United Kingdom
The Cash-for-Honours scandal (also known as Cash for Peerages, Loans for Lordships, Loans for Honours or Loans for Peerages) was a political scandal in the United Kingdom in 2006 and 2007 concerning the connection between political donations and the award of life peerages. A loophole in electoral law in the United Kingdom means that although anyone donating even small sums of money to a political party has to declare this as a matter of public record, those loaning money at commercial rates of interest did not have to make a public declaration.
In March 2006, several men nominated for life peerages by the Prime Minister, Tony Blair, were rejected by the House of Lords Appointments Commission. It was later revealed they had loaned large amounts of money to the governing Labour Party, at the suggestion of Labour fundraiser Lord Levy. Suspicion was aroused by some that the peerages were a quid pro quo for the loans. This resulted in three complaints to the Metropolitan Police by Scottish National Party MP Angus MacNeil, Plaid Cymru parliamentary leader Elfyn Llwyd and a third individual who remains unidentified, as a breach of the law against selling honours. The investigation was led by Assistant Commissioner John Yates who later resigned over the News of the World phone hacking scandal. During the investigation, members of the Labour Party (including Blair) the Conservatives and the Liberal Democrats were questioned and Levy was arrested and later released on bail. The investigation continued to have political impact, as stories leaked from the police investigation and damaged the government and Labour Party.
Following the unveiling of the scandal the Labour Party had to repay the loans and was said to be in financial difficulty.
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