Levy named in Lords nomination row

Lord Levy has been named as the person who told a wealthy businessman that his £250,000 loan to the Labour party need not be declared when applying for a peerage.

The party’s chief fundraiser and close friend of Tony Blair told Gulam Noon that he need not mention the loan in his application papers to the commission that vets the prime minister’s appointments to the House of Lords, the BBC claims.

Sir Gulam’s nomination was blocked by the Lords appointments commission earlier this year after they found out about the loan, sparking the cash-for-peerages affair into which Scotland Yard has since launched an investigation.

According to the BBC, the tycoon who founded Noon Foods, which provides ready-to-eat Indian meals to supermarkets, originally included his £250,000 loan in his application papers to the committee.

But he withdrew these after Lord Levy apparently told him that since the loan had been given on commercial terms, it need not be declared under election law, unlike donations.

As a result, Sir Gulam filled out another set of applications without mentioning the £250,000 loan, which was then passed onto the vetting committee. They did not learn of it until the media furore earlier this year, after which they suspended his nomination.

The head of the Electoral Commission, Sam Younger, last month told MPs that while there was no legal requirement to make commercial loans to parties public, not doing so was against the “spirit” of the law.

Scotland Yard is currently investigating allegations that both Labour and the Conservatives promised wealthy backers peerages in return for donations or loans. Both deny this, but it has sparked calls for changes in the way political parties are funded.

In an interview with BBC Radio Five Live last night, Sir Gulam refused to confirm whether Lord Levy was the official who told him not to declare the loan to the Lords appointments committee.

He also refused to confirm allegations that a Labour official suggested that he make a loan to the party rather than a donation, which would have to be made public. He denied reports that he had haggled over the amount to be given.

“I have done nothing wrong. My conscience is clear. I gave the loan and when I filled in a nomination form I did declare it,” Sir Gulam said last night.

The Labour party has refused to comment while the Scotland Yard investigation is ongoing.