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Britain moves toward a ban on secret loans

The government of Prime Minister Tony Blair on Monday proposed banning secret loans to political parties to try to end a financing scandal blamed for sending Blair's popularity ratings to record lows.
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The government of Prime Minister Tony Blair on Monday proposed banning secret loans to political parties to try to end a financing scandal blamed for sending Blair's popularity ratings to record lows.

Charles Falconer, the cabinet minister in charge of the judiciary, said he would immediately seek to amend campaign finance laws to force political parties to disclose who lends them money. "The system has not been cleaned up enough and we need to change it," he said.

Blair's Labor Party said Friday that it had accepted loans worth more than $24 million from unidentified donors. Under British law, political parties must disclose the source of donations, but they do not have to declare the source of loans.

Blair has been badly hurt by recent disclosures that several wealthy businessmen who privately lent money to his campaign were then recommended for seats in the House of Lords, the upper house of Parliament.

The appearance that seats in the House of Lords were up for sale -- an allegation Blair has denied -- has caused critics to call his government as sleazy as the Conservative government of former prime minister John Major, which Blair ousted in 1997.

Back then, Blair promised to run a government "purer than pure," a statement that increasing numbers of critics are throwing back at him.

Conservatives quiet on debate
Noticeably quiet in the debate has been the opposition Conservative Party, which also appears to have benefited from secret loans from wealthy supporters. Some analysts here said Blair sanctioned the lending simply to keep pace with money the Conservatives were receiving.

Challenged by Labor officials, Conservatives have not yet announced how much money in undisclosed loans the party received last year, nor have they listed the donors.

Thomas Strathclyde, the Conservative leader in the House of Lords, said Monday that the government's move to change the funding rules now was like a burglar "caught in a back garden with a bag of swag, saying he only wanted to polish the silver."

"I have no sympathy at all for the prime minister and his coterie of cronies who are at the heart of this affair," Strathclyde said. "They have dragged politics, their party and sadly this house into disrepute."

Other conservatives joined Labor in seeking new transparent campaign financing rules.

The Labor Party on Monday decided to make public a list of wealthy donors who lent money to its campaign. The list included a $4 million loan from property developer David Garrard, and $3.5 million loans from retail magnate Richard Caring and from Trade and Industry Minister David Sainsbury. Sainsbury is a member of one of the country's wealthiest families, which owns a supermarket chain.

The loans were ostensibly to be paid back, but critics contended that they would quietly be turned into donations.

Two polls published Sunday offered more bad news for Blair.

A YouGov poll for the Sunday Times put Blair's personal approval rating at 36 percent -- its lowest point in his tenure. A separate poll commissioned by the Sunday Telegraph indicated that 73 percent of voters believe Blair's government is "as sleazy or sleazier" than Major's.

Stepping down?
The scandal has added fuel to the public debate about when Blair, now in his ninth year in office, should step down.

The prime minister has declared that he will not seek a fourth term and indicated that he wants Gordon Brown, his chancellor of the exchequer, or finance minister, to succeed him. In recent months, there has been growing speculation that Blair will resign to turn the office over to Brown well before 2010, the latest year in which the next election could be held.

A poll for the BBC, released Monday, showed that 50 percent of British voters want Blair to quit either right away or within the next 12 months.

An editorial in the Guardian newspaper, a longtime supporter of Blair's party, said Monday that the prime minister "should go this year."

"Undercover loans from uncertain sources degrade him both personally and politically," adding to his other missteps, including the Iraq war, which is extremely unpopular among the British public, the editorial said.

Rodney Barker, a political scientist at the London School of Economics, said Blair's current problems "make it more likely he will go sooner than later."

Drawing a comparison to lame-duck presidents in the United States, Barker said he saw Blair as a "molting prime minister who is losing a few more feathers every day."

Barker said the loan scandal has hurt Blair, but the Iraq war hurt him more.

"I wouldn't be surprised if he went this summer," Barker said. But he added that history has shown that leaders worldwide tend to want to "hang on and on and on."