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Labour protest innocence over loan row

ITV | March 21 2006

The Labour Party has been left battling to persuade voters it had not "sold" peerages.

Commons leader Geoff Hoon conceded people thought the party had handed out peerages for cash.

Deputy Prime Minister John Prescott insisted there was no evidence that seats in the Lords were offered for loans, despite earlier refusing to give a cast iron guarantee that they were not.

They were speaking after polls indicated Tony Blair's standing has plummeted to an all-time low following the row. Voters now think his Government is at least as sleazy as John Major's scandal-hit administration. And most believe the PM did give honours for cash.

Tory leader David Cameron will tomorrow set out plans to "clean up British politics". He will propose cutting the number of MPs to pay towards the cost of slashing donations to political parties.

Mr Hoon accepted people thought there was a link between loans and peerages.

"I accept that that is the perception that sadly today many people have," he told ITV. But he insisted Mr Blair had acted entirely properly.

He said he did not believe Mr Blair wanted loans rather than donations so he could keep the cash secret.

Mr Prescott was earlier asked to give a "categorical assurance" that honours were not sold.

Work and Pensions Secretary John Hutton also defended Mr Blair. But he said it was important to overcome people's impression that British public life was "corrupt".

A YouGov poll for The Sunday Times revealed that 56 per cent of voters think that the Prime Minister has given peerages in return for party donations and loans. Just 14 per cent think he has not.

Mr Blair's personal approval rating has now slumped to just 36 per cent, its lowest ever according to the pollsters.

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