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The parliamentary inquiry into the cash-for-honours affair will resume in the autumn to consider how to make party funding more transparent and avoid similar police investigations, The Times was told last night.
Amid bitter recriminations between the police and the Crown Prosecution Service (CPS) over the decision to bring no charges against any of the suspects, it emerged that John Yates, the Assistant Commissioner of the Metropolitan Police, is to be called before MPs to explain himself.
He will be asked why he took so seriously the complaint that was originally levelled by the Scottish National Party, which many politicians have denounced as a stunt.
Tony Wright, chairman of the Public Administration Committee, said: “I don’t know the process by which they took it on. That is something that is going to be asked. Was it simply a Scottish Nationalist MP looking for a bit of mischief who walked in with an envelope of press cuttings?”
Asked if part of the inquiry would be to try to prevent a similar police investigation, he said: “I think we should try and sort these problems out. On any test, this has been profoundly damaging for the body politic and for individuals.” Mr Wright suggested that the police had been naive and inferred that they could not blame the CPS for setting a high barrier for prosecution.
Tony Blair, whose last year in office was dominated by the affair and conceivably advanced his departure date, welcomed the outcome of the inquiry, saying that those involved had been through a traumatic time.
Lord Levy, Mr Blair’s chief fundraiser, and Ruth Turner, No 10’s former director of communications, both refrained from criticising the police in responses that nevertheless showed their relief. Only Peter Mandelson and Sir Christopher Evans, the biotech tycoon and Labour donor, who was also arrested, allowed their emotions to show. Sir Christopher said there were times that he wanted to punch someone. He added that business people had become “extremely reluctant” to donate money to Labour. Mr Mandelson criticised the police and said they had used media leaks during the inquiry to “create a false impression of Mr Blair and undermine the public trust in the government.”
The Times has learnt that senior police officers have accused the CPS of abandoning the police investigation. Officers said that as a result Mr Yates had been left to defend the 16-month inquiry — despite consulting prosecution officials for more than a year. Some were concerned that he had been “hung out to dry” and was vulnerable to calls for his resignation from MPs who were angered at the way in which political institutions appeared to have been devalued by the investigation.
In a statement yesterday Mr Yates failed to endorse the decision not to prosecute. “From the beginning, the investigative team and I have liaised closely with the Crown Prosecution Service, Queen’s Counsel and the Electoral Commission, seeking their advice and views throughout,” he said. “Our job is to follow the evidence and obtain the best possible evidence. Some aspects of criminal enquiries can be undertaken on a voluntary basis, but not all.”
Mr Blair said: “Those involved have been through a terrible, even traumatic, time. Much of what has been written and said about them has been deeply unfair, and I am very pleased for all of them that it is now over.” He added: “I want to make it clear that I level no criticism at the police. They were put in an invidious position by the SNP complaint and had a very difficult task to perform.”
Lord Levy spoke of his great relief. While not commenting on the investigation, he had been “disappointed by the constant leaks to the media which have been misleading, factually inaccurate and personally damaging to me”.
Ms Turner said that the decision was “an enormous relief” after a “very stressful time for me and my family”.
Carmen Dowd, head of the CPS special crime division, said that there had been “insufficient evidence to provide a realistic prospect of conviction against any individual for any offence in relation to this matter”.
Gordon Brown said that the police were right to investigate “very serious allegations” but he hoped speculation would now end. The decision is a relief for the Prime Minister, who wants to keep open the option of an election next year and would not have wanted to call it against the background of a trial involving Labour figures.

Carmen Dowd
The head of the Special Crime Division at the CPS, 41, worked closely with Scotland Yard during the investigation. Over the past year, she has been in constant contact with Assistant Commander John Yates.
Those close to the inquiry said that she was one of the few outside Scotland Yard whom the police believed that they could trust.Her career began as a legal trainee with the CPS in 1990. She joined its central casework division in London in 1997. Her division prosecutes cases of significant public interest, including high-level corruption cases, election offences and deaths involving the police.
Miss Dowd, a barrister, has worked on many high-profile cases, but this one has proved to be the biggest challenge, her friends said.

David Perry
If people want a scapegoat over the decision not to prosecute over “cash for honours” then David Perry, QC, is an obvious target. When the CPS hired Mr Perry to advise them on whether charges should be brought, they brought in a man widely regarded to be at the top of his game. Solicitors and barristers alike praise him highly. From 2001 to 2006 he was Senior Treasury Counsel, prosecuting all the top cases in the fields of crime, extradition, fraud, judicial review – and with some commercial and civil cases thrown in. He has been in every big criminal appeal in the past five years – including 56 hearings in the House of Lords. As is traditiona, he then took silk on leaving that post in 2006. He is a deputy High Court judge.

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So,it's all the fault of the SNP?Utter drivel ! Martin Bell mp claims he asked for an investigation years ago,the Independent newspaper claims it asked for an investigation.
I do wonder where people get their knowledge of the character of Mr Salmond.He and his party are doing very well for the Scots and have 'picked no fights 'with Westminster,as far as I can see.
Perhaps those of you south of the border should have a wee look at the Herald website to improve your knowledge of Scottish affairs.
Don't believe everything you read in the press either English or Scottish or ,undeed Welsh or Irish. Some of them have a particular agenda.
And don't believe everything you hear on BBC TV either.Newsnight has issued an apology to the SNP for 'mis-representing 'a poll of top businesses saying that they were against independence .Indeed, they had made the whole thing up.This was broadcast to influence voters. Their apology is on the BBC website for Scotland only,even though it was UK wide.
Disgusted Dorothy, Glasgow, Scotland
How could political institutions possibly be "devalued" by a police investigation that brought home to the public the reality that "money is the mother's milk of politics". And at the level money is being lavished on politicians, it is clearly money tainted with self-interest for both the giver and the recipients.
John Yates and his team have done a great service to the people of the nation.
Bob Evans, Anaheim, California
Ok so no charges but please will the politicians of all the main parties explain why they took loans instead of donations - it was to hide the money!!
Gwilym Ashworth, Pulborough, West Sussex
No charges eh?
Fancy that.
Rob Green, Braintree, England
Dont ever expect the police to exercise common sense, they have it removed at initial training
mike gee, bournmeouth, uk
âinsufficient evidence to provide a realistic prospect of conviction against any individual for any offence in relation to this matterâ. How very carefully worded that statement is, avoiding as it does, the fact that the inquiry was never about individuals but about a conspiracy/a group of individuals acting in consort. And it does appear that Mr Perry, "CPS hired Mr Perry to advise them on whether charges should be brought," was perfectly played as the scapegoat, adding insult to injury, because to believe that cash for peerages is not a Westminster game, is just too inconceivable to be true, is it not, whenever one considers the advantage such an honour can bestow. And the monumental arrogance of those in political office who would think that the Law is a pawn to be sacrificed in their games, in their quest to curry favour and wealth and influence, at public expense, is indeed scandalous and worthy of every investigation...... for its name is treachery, is it not?
amanfromMars, Seventh Heaven , Global Communications HQ
"Political parties are necessary and they are not evils to be avoided at all costs." But when they become arrogant and monopolistic - when they believe they are above the laws they create - they are no longer blessings in disguise ! Does the Conservative Party have a monopoly on conservatism ? Or the Lib Dems a monopoly on liberalism ? Or New Labour a right to claim exclusive democratic socialism ? These so called 'democratic' parties behave as if they have some divine right to raise and spend money in order to hold on to power ! For the sake of the people ? For the sake of liberty and freedom ? Not at all ! For the sake of the party ! And the trappings that go with it ! Like any business facing bankruptcy these parties should face market forces. If the membership can not sustain them - let them dissolve. Our democracy is mature enough to change and grow - without dinosaurs trying to stave off exstinction with taxpayer's money !
D Latham, Marlborough, Wiltsthire
A few years ago Mike Bennett , the then chairman of the Metropolitan Police Federation termed the CPS, the Criminal Protection Society.Of course Levy and his cronies are laughing and posing in front of the cameras. Some people might say that they have been dealt a 'Get out of Jail ' card.
Lets hope that John Yates and his investigators will get their day in court.
Now that will be interesting.
Keith Taylor, Launceston, Cornwall
Who could possibly be interested on Mandelson's opinion on this subject? Who would even think of asking him?
When the topic is corruption in politics, Mandelson should make a note for himself to stay firmly quiet.
Edwin Thornber, Bucharest,
Not enough evidence to successfully prosecute - that's what is said about most burglaries. It doesn't mean that criminals aren't involved.
jj, Cambridgeshire, UK
So it is all pure coincidence that major donors to the main political parties get peerages.. How silly of anyone to even suspect otherwise.. Or is this yet another whitewash ??
David Kenrick , Stockport , Cheshire
The BBC stuck its neck out over the WMDs and the David Kelly saga - and got nobbled at the Hutton enquiry.... now the police will get hung out to dry for daring to ask questions of our political elite !!
Tut ! tut ! Scotland Yard ! Surely you know the establishment looks after its own ?
Was this investigation a waste of money ? There are many investigations that end up this way ! Why should politicians be let off free from the burden of scutiny ?
Our country faces many threats. Floods, crime, extremism, inflation, poverty and worse of all - that House of Cards !!
DaveL, Swindon, Wiltsthire
Well said M Fishman London. "There are many areas in our society that could well be improved were the funds available'
All this money and police resources made available to this 'Cash for Honours' investigation while investigation in many other area of crime are so ineffectual!
Take the reported crime of child abuse. How many of these cases are in reality investigated in any depth or with any expertise?
How much public money is being spent by child protection units, up and down the country, on serious case reviews where children have been failed by frontline child protection ability?
The public must be forgiven for being angry that so much precious public money and police time and resources have been wasted on the Cash for Honours Investigation.
The public has a right to be angry by the amount of money being spent on inquiries which come up with the repeated mantra that 'Lessons Will Be Learned'
Learn the Lessons. No more money to be wasted on The Cash for Honours Fiasco!
Darnthesafetynet, London, W11 1NR
Political parties are necessary and they are not evils to be avoided at all costs. In fact the freedom which we all enjoy in our respective democracies owes a great deal to the pubic spiritedness of committed men and women who offer themselves to the uncertainties of the grease pits of politics.
Yet societies both developed and developing fail to act upon the need for state funding of political parties. Enter the wealthy and other donors, who in their own way contribute significantly to the survival of the political parties and indirectly to our democratic way of life.
As a politician and someone who has practised on the criminal side of the Bar, I can understand the trauma which Lord Levy, Ruth Turner and Sir Christopher Evans, in particular, experienced, and I share the enormous relief which they must now feel at the conclusion of a nightmare, in which too many people appeared to parachute to conclusions, and in which the political process was unnecessarily smeared.
Ezra Alleyne, Bridgetown, Barbados
The CPS is affective as the child support agency.
With Teflon Tony's and Cheries friends at thge top it cannot be impartial. More honours now for the CPS
Mike, Paphos, Cyprus
Once again we have MPs crying over bein g caught out over dubious behaviour.There is an old saying THERE's NO SMOKE WITHOUT FIRE.No one can point the finger at Mr Yates for carrying out an investigation which was instigated by an MP albeit a Scottish one if any one should be hauled over the Coals it is the Scottish Nationalist Party for wasting Police Time and Public money.As for Peter Mandelsons comments they are to be treated with contempt he is one of the worst culprits for devious behaviour and lies.
AMAC , St.Helens, England
Something here does not add up.
Concerning the four gentlemen put forward for honours by Blair in 2005, but rejected by the House of Lords appointment committee . On what grounds were they rejected?
According to the document issued by the CPS (para 29),
"'. There is furthermore substantial and reliable evidence that there were proper reasons for the inclusion of all those whose names appeared on the 2005 working peers list, or drafts of that list: that each was a credible candidate for a peerage,"
There must have been a concern that -- if brought to trial, a jury would have concluded that honours were being sold in return for donations, irrespective of whether formal documentary evidence could be produced of a formal agreement.
TMJ Black, southampton, U.K.
The big danger here is that it may open the gates to political corruption in future- we know there have been serious doubts about MP's expenses, paying relatives public money for dubious services, and how they have made big money on the property markets at taxpayers expense. There is no way the police will dare to investigate any future allegations of sleaze. That door will now be firmly closed. Pity- there is no way MP's will ever police themselves effectively, and the police have been taught a lesson in their attempts to investigate this one - don't mess with the powerful.
Doug, Glasgow,
Ok - they have been ill done by - those poor politians and their hangers on - Now let us see them ask for a Public Inquiry or better sue someone. Bet they don't - else all the evidence might finish up in the public domain and then we all can judge whose guilty.
Last time it happened, the Kelly affair, we found out judges hadn't a clue what sexing up something meant, even when it was admitted that it was changed for presentation purposes. Which is what any girl or chap does any saturday night
Henry GB, Brampton, Cumbria
""He will be asked why he took so seriously the complaint that was originally levelled by the Scottish National Party""
Er perhaps the committee could look at the National Crime Recording Standard - which the Government introduced to ensure the "ethical" recording and investigation all reports of crime.
They would then realise that the discretion of the Police to only investigate what THEY regard as a crime has been removed. This is why children are arrested for chalking on pavements. The monster they created has bitten them on the rear !!
Is there any reason why a "Scottish National MP's" complaint should not be treated as seriously as any other MP's or is this Public Administration Committee racist against Scots.
I think the vast majority of this country who have monitored developments in this case support Mr Yates in his difficult job and realise why charges were not brought by the CPS!
Richard Garland, Manchester, Greater Manchester
FACT - 80% of Labour's election funding came from the
covert Loans for Lordship program.
FACT - Every donor who has given the party more than £1
million has been given a knighthood or a peerage.
FACT - Three quarters of those individuals who have
given more than £50,000 to the Labour Party since
2001 have received an honour.
Draw your own conclusions from THAT!
Jeremy Poynton, Fromeville, 51st State
The 1925 Act made it an offence if an offer was made or was sought (of cash for honours). It would have been up to a jury to decide on the evidence whether any such offers were made, either on a single occasion or as a pattern of behaviour in which such offers were implicit.
The CPS said they dismissed any prosecution because they could find no 'unequivocal' offer or an 'agreement between two people'.
Those tests go way beyond what was set out in the 1925 Act. But this failure to allow due process and let juries decide is what has caused so much undermining of the judicial process in the UK at all levels.
The evidence should have been tested in court.
Scrap the CPS.
Mrs Trellis, North Wales,
Yes the SNP have learned how to play dirty. It was a costly set up. A total waste of public money. Actually it let Blair of the hook for a while on Iraq. Maybe the real originators of the compliant should be investigated. Perhaps Levi is working on this. The police have no blame. They did not start this nonsence. We have a real terror threat in this country. The police resources would be better used towards this end.
Graham, Glasgow,
If this had been an investigation carried out quietly, out of the public eye, then perhaps the current debate would not be taking place. As usual the press has had a major impact with spurious and inacurate reporting. This country needs the fourth estate but as long as it is in the dire straits which it demonstrates daily it fails us all. The BBC is constantly lambasted for dumbing down but compared to our press they are paragons of truth and focus. Hysteria in print just hinders us all, police and public, in our search for truth
mike gee, bournmeouth, uk
Questioning the police is just a political diversion. The question remains why did Labour hide "loans"?. How did they intend to repay these loans and the accrued interest.? Why don't the police publish all of the evidence and statements from both sides. Then the public can decide if the CPS have done their job properly. Otherwise I'm afraid the word white wash will always around. I would suggest a public enquiry but guess who would pick the Chair.
Richard, Newcastle,
In my opinion having the Public Administration or Constitutional Affairs Committees investigate the "cash for honours" scandal is little better than having Robert Mugabe investigate electoral propriety in Zimbabwe.
All the members of these committees are the appointees of the main political parties who were the subject of the allegations.
Not only would their involvement be a blatent conflict of interest, but the outcome -ie lots more public funding from the tax payer to pay for their own election campaigns is a continuation of the "snouts in the trough" agenda.
What is now required is an independent Royal Commission sitting in public without any further political interference.
It should be charged with investigating the background to the cash for honours scandal and comming up with modern proposals for the fair and equitable treatment of all candidates in elections - ie removing the present bias in favour of the main political parties.
This does not happen at present.
Peter Hooper, Windsor., Berkshire.
It should be up to the public, i.e. a jury, to decide not a CPS that has been warned off. This stinks. It stinks even more than the Hutton whitewash.
al, london,
We are not told that this was 'spurious evidence.' We are told that in the opinion of the Crown Prosecution Service, which is headed by a Blair appointee and reports to the Government's Attorney-General, there was 'INSUFFICIENT evidence.' I don't think that's 'phoney.'
David Jones, Esher, UK
As long as the CPS are allowed to deny a prosecution on the presumption that there exists "no realistic prospect of conviction" , then justice in the UK will continue to be denied to the public and victims alike. In other Common Law jurisdictions, including Hong Kong, if the police can prove a Case to Answer, then a prosecution will proceed and the victimscan have their day in court '. They may still lose their cases, but at least they do not feel let down by the system.
Guy Shirra, Sai Kung, Hong Kong
Well, well, well. Mandelson complaining about leaks to the press. The words pots and kettles spring to mind.
Ross, London,
Allegations of corruption always require investigation. If the Police are informed by a member of Parliament that the law is being flouted, circumvented and consequently denigrated by the office of the Prime Minister, what are they supposed to do? Tony Wright seeks a basis for conducting the investigation, implying that it was a mischievous allegation, that the cost was ridiculous and by inference, that it could all have been avoided. Duty and the honor of upholding the implicit trust that comes with duty, sets this Country apart from many others. It can become onerous, especially when people open their mouths without thinking, people like Mr Wright, who is wrong.
Douglas Miller, London,
Politicians express concern over the cynicism of the public and attempt to blame the media. Well, here we have an event which demonstrates how wilfully they ignore the evidence. To paraphrase the saying of one great politician of the past, "If you tell a lie often enough, the people will beleve you"
I agree entirely with the comments of Alan Lewis.
Bill Quirke, Derby,
Much will be said ,there is one one point more than others that disturbs me,the arrest for the second time of Lord Levy in the early hours of the morning,in the presence of a warned media.There was absolutely no need or justification for the police to behave in such an indecent manner, I do not know Lord Levy ,I do know he is not a dangerous criminal,nor a potential terrorist I do know he is Jewish,and that apologies are in order,particularly from the S.N.P,and Mr Alex Salmond whose self agrandissement knows no bounds
james hazan, huddersfield, uk
This is all a bit phoney. When the police arrest (and in many cases imprison) and publicise this fact about citizens on what ends up being spurious evidence, the politicians are strangely silent. However when this happens to some of their own - they start screaming about the accountability of the police.
Jonathan Mils, Brighton,
There are many areas of our society that could well be improved were there "funds available", and yet when it comes to setting up public inquiries there appears to be a budget with a limitless purse. One questions why an all too high profile inquiry, at times appearing more like a witch hunt, should have lasted 16 months, when surely after 16 weeks, it would have been seen to leading nowhere?
Of course "cash for honours" exists, how many poor men are made Knights of the Realm? Since we are scapping the House of Lords, at the same time, let us take the opportunity to scrap the antiquated honours system If a wealthy donor wishes to donate to a political party, make a sizeable charitable donation, set up one one the new Academies in their name, let them do so. The reward should be that it was by choice and not because of a false title to give the recipient the authenticity or alleged superiority over ones fellow peers, that was not deserved or in some cases, sort in the first place
M.Fishman, London,
Anyone with common sense knows that honours have been given in return for political support going back to Charles II and probably beyond. It was like asking Bill Clinton did he have sex with that woman. What really gets to me with the comments that have been posted here is the idea that former prime ministers never did this sort of thing. Well Major and Thatcher both gave honours in return for large donations or support to the Conservative party but of course they wrapped it with some other excuse. Do you remember Larry Lamb the editor of the Sun being awarded a knighthood for services to journalism now really, that is like someone saying they are art critic for the Exchange and Mart. This whole thing was a waste of public money and the only way to stop it is to make sure that no politician is involved in the award process.
Alan Lewis, Bangkok, Thailand