BRITAIN: British prime minister Tony Blair was rocked by a surprise development in the "cash-for-peerages" controversy last night, as Conservative and DUP votes helped his controversial education bill clear its first Commons hurdle.
Labour treasurer Jack Dromey revealed he and other elected officials knew nothing about secret loans made to the party in the run-up to last year's general election, and confirmed he had initiated an inquiry with the party's general secretary which would report by next Tuesday.
And Mr Dromey pointed an accusing finger at 10 Downing Street, which he said had not "sufficiently respected" the Labour Party, as he vowed to "get to the bottom of what happened and . . . ensure that it never happens again." As Mr Blair and education secretary Ruth Kelly breathed a sigh of relief at winning two crucial Commons votes on their plans for independent "trust" schools in England, Mr Dromey told Channel 4 News: "I don't believe there has been illegality, what there has been is impropriety."
Mr Dromey also called on the Electoral Commission to investigate the issue of parties taking out loans which, unlike donations, do not have to be declared. He said Labour needed to "put its house in order to restore public and party members' confidence". The intervention by the deputy general secretary of the TGWU union marked a dramatic twist in the row which followed reports that the appointments commission had blocked the peerage nominations of three businessmen who had lent Labour an estimated £3.5 million (€5.1 million).
It also came at a delicate moment for Mr Blair as 52 Labour rebels refused to back his education Bill, leaving the prime minister dependent on Conservative votes to carry his "flagship" legislation, and reviving questions about his authority in his final term in office.
As expected, the government won handsomely, by 458 votes to 115, with a majority of 343, when MPs voted to approve on second reading a bill that Labour opponents fear will lead to a "two-tier" state education system which will disadvantage the poorest and least socially mobile pupils and parents.
To Mr Blair's relief, the government also carried its timetable motion, limiting the time available for later scrutiny of the Bill, by 300 to 290 votes, despite the Conservatives voting with some Labour rebels.
However, the relief was short-lived, as Mr Blair and other senior ministers caught up with the surprise statement by Mr Dromey, which is now likely to dominate the prime minister's scheduled monthly press conference in Downing Street this morning.
Chai Patel last week confirmed details of his loan to Labour of £1.5 million, which he insists was not tied to an offer of a peerage. The controversy deepened further yesterday when property millionaire David Garrard confirmed he too had loaned an unspecified amount to Labour "on commercial terms" before last year's election and five months before he was subsequently offered a peerage.
The operation of Labour's accounts was under scrutiny again last night, after Mr Dromey confirmed neither he nor any other elected Labour officials were informed about the loans. "I strongly believe in high standards in public life," he said. "It was the Labour Party that campaigned in opposition for action to ensure there was the necessary transparency as part of the clean-up of politics. I have, therefore, commenced an inquiry into the securing of loans in secret by the Labour Party in 2005."