BRITAIN: The Conservatives and Labour are under renewed pressure over secret loans following a warning that Britain's election watchdog is prepared to use its powers to obtain the information necessary to decide if parties have complied with the law.
Labour MP Rosemary McKenna acted yesterday to force Scotland Yard to extend its current inquiry into Labour's alleged "loans for peerages" scandal to include allegations that the Conservatives may have broken rules designed to prevent abuse of the honours system and foreign donations.
At the same time, a sense of crisis continued to cling to the Labour government as Scottish National Party leader Alex Salmond claimed the prime minister, Tony Blair was, "mired in scandal" and should quit.
Downing Street was unlikely to have been particularly troubled by the attack of Mr Salmond, who suggested the loans affair, coupled with anti-war demonstrations facing the prime minister on a visit to New Zealand, showed Mr Blair to be unfit for office as he was "mired in scandal at home and detested abroad".
However, Labour's embarrassment over the disclosure of secret loans raised to fund last year's election campaign, and the subsequent blocking of four donors nominated for peerages, continued as the Scotland Yard detective heading the inquiry warned it could be extended into claims of corruption.
In a letter asking the Commons public administration committee to delay its investigations into suggestions that peerages had been "sold" for political donations, deputy assistant commissioner John Yates said his concern was that the committee's scrutiny "could be viewed as an abuse of process in terms of fairness in any future potential criminal trial".
Mr Yates quoted a 1999 report by a joint committee on parliamentary privilege that had concluded that "corruption, a serious and insidious offence, could only be dealt with effectively by using the police and the courts" and that "prosecution through the courts is the only credible remedy and the only credible deterrent for any briber".
Mr Yates said that "whilst it may be too early for us to widen our investigation into the arena of corruption", he had "not ruled this out". For this reason, he argued, it was right for the committee to have regard to the principle articulated in 1999.
Mr Blair, ministers, the Labour Party and its financial backers have all emphatically denied that loans or donations were given in return for promised honours. Unlike the Conservatives, who insist past loans were raised on the promise of confidentiality which should not now be breached, Labour has also disclosed details of the businessmen who helped the party raise £14 million (€20.2 million) in loans in the run-up to last year's election.
However, the electoral commission last night told the political parties it was still not satisfied that the secret loans really were raised on "commercial terms" and has now asked for more information to justify the parties' original decision that, unlike donations, the loans did not have to be declared.
In a statement, it said: "In our view, questions remain about whether these previous loans were made on commercial terms, and therefore whether parties are right to maintain that no element of them should have been reported as a donation."