Liberal Democrat Leader urges loans openness

5.00.00pm UTC (GMT +0000) Mon 20th Mar 2006

Liberal Democrat Leader, Sir Menzies Campbell, wants a £50,000 limit on donations from individuals. Political parties should be forced to reveal details of past loans under new funding laws, Sir Menzies said the new laws should be made retrospective, saying there appeared to be a link between large donors and peerages.

He also thinks there was a case for limited state funding. The Liberal Democrats have long argued for limits on donations. They also want to reduce the limit on general election spending for each party from £20m to £15m.

Sir Menzies said "transparency, transparency, transparency" should be the watchwords. "There should be no secret loans of any kind, and if the lord chancellor is proposing that in legislation currently before Parliament, that's something we will most certainly support," he told BBC Radio 4's Today programme. "But I think it should be retrospective. I think we should know precisely who lent money to the Conservative Party and how much; and who lent money to the Labour Party and how much." He said.

Sir Menzies said peerages had not been sold in the way ex-Liberal Prime Minister David Lloyd George had sold them. "But I think there has been a link between generosity and preferment, and whenever a link of that kind is established then that is bound to raise suspicions in the minds of the general public and, more particularly, in the minds of MPs and members of the House of Lords," he argued.

Sir Menzies said his party had not nominated anyone for a peerage who had lent it large sums. The Liberal Democrats had received loans from three people in the period before the general election and had declared their names and the sums lent, he said.