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Last Updated: Sunday, 9 April 2006, 11:35 GMT 12:35 UK
Loan for loan
On Sunday 02 April 2006, Andrew Marr interviewed Shadow Leader of the Commons, Theresa May MP

Please note "BBC Sunday AM" must be credited if any part of this transcript is used.

Shadow Leader of the Commons, Theresa May MP
'We have repaid some 5m of loans for those people who asked for the loans to be, to be repaid'

ANDREW MARR: Now, the bungs for coronets - all right, the alleged bungs for alleged honours story - it's hard to say which of the bigger parties comes off worse this morning but the Conservative clean-up certainly hasn't gone entirely as straightforwardly as we'd imagined perhaps. Theresa Jay - May - shadow leader of the Commons -

THERESA MAY: Jay is with the other party.

ANDREW MARR: Jay - do you know what, you just did the usual thing - you confuse all interviewers with the splendour of your shoes and I was just so staggered by them -

THERESA MAY: ... the light will reflect.

ANDREW MARR: It works, it works. Let's come straight on to the latest loans story. It does look a little odd. What seems to have happened is that a Swedish sportswear tycoon has loaned the party 2.6m, or thereabouts, so that you can then pay off other people from overseas, or wherever, who don't want their names to come out. This is hardly the kind of squeaky clean new Tory Party that we were led to expect, is it?

THERESA MAY: Well let's get some of the facts straight Andrew. Johan Eliasch, who is the individual you are talking about, has been a deputy treasurer and involved in fundraising for the party for some time. But yes we have repaid some 5m of loans for those people who asked for the loans to be, to be repaid.

What we've done is we have declared all those who are our current lenders, we've been absolutely clear in saying that we'll be open with the Electoral Commission if they want to come in and look at the terms of the loans that we've had as a party - and loans are actually nothing new, I mean loans have been around political parties for some time -

ANDREW MARR: What's perhaps new, if I may say so, is the use of loans to get round the declarations of straightforward gifts that was brought in.

THERESA MAY: Well of course that implies, you see, that somehow loans have been invented because of this definition in the PPER, the Political Parties Election & Referendums Act which said that we couldn't take, parties couldn't take overseas donations and had to declare the donations from certain sizes. But as I say, loans have actually been being made to political parties since long before the PPER Act came into place. They haven't suddenly been invented simply in order to get round some wrinkle in the, in the legislation.

ANDREW MARR: I can well understand that if you have made an agreement with somebody to keep their name private it's difficult simply to break it. Can you at least tell me whether or not some of these anonymous figures are from overseas?

THERESA MAY: I understand that there has been one foreign, one foreign national who has lent a small sum to the party. That of course is entirely legal because there is nothing which prevents a party from taking a loan from a foreign national.

ANDREW MARR: And the other, some of the others come from off-shore trusts. Is that also true?

THERESA MAY: I am not aware of that but what I do know is that there's one foreign national who has made a small sum available but we've been entirely open. If I can just look at what we've done throughout this issue, in fact before the loan scandal with the Labour Party broke, and of course what has brought this into sharp focus is the fact that from the Labour Party's point of view, they appeared to be hiding these loans and nominating people for peerages without making it known that loans had been made to the Labour Party. But before that though -

ANDREW MARR: These things ... come out -

THERESA MAY: Well before that broke, we'd actually asked lawyers in to look and check that the loans that we had were actually in accordance with the Act, that they were in accordance with the legislation that had been put through. We said that we would, from the point when this happens, that we would declare all those who were giving future loans and we then took, as you yourself have said, if somebody has taken out a commercial agreement with the party on the basis of confidentiality it wouldn't be right just to go bandying their names, so we asked them, so we asked them if we could do that.

ANDREW MARR: ... as I say, we can understand that but in terms of the kind of, the preparation for all of this long in the past, it was only on Thursday last week you were kind of raising more money to pay these things off. It is very last minute this and it smells a bit panicky.

THERESA MAY: Well it's not - I mean we went back to those people, we did what I think was entirely reasonable. We went back to people who had lent money on the basis of confidentiality, asked if they were willing to have their names revealed and some people asked for their loans to be repaid.

That has happened. We have made it absolutely clear that we will be open with the Electoral Commission about the terms of these loans, so they can come in and they can look at the books, and they can -

ANDREW MARR: And will they be able to see all the names themselves, all of the names?

THERESA MAY: As I understand it, the Electoral Commission will be able to see all of the names. Obviously there may be those who still wish their names to be confidential in a public sense but the Electoral Commission will be able to come in and look at the terms of those loans and the names.

As I say, one of the things that is important is that whenever, if there has been somebody in the past, and I understand that none of those whose loans have been repaid have been nominated for honours, but if there had been somebody in the past who has ... nominated ... the party, that was made known to the Lord's Appointment Commission - which of course is what the Labour Party did not do.

ANDREW MARR: Did not do. This whole affair has enormously damaged politics for both parties. It cannot go one like this. There is a perception out there that people have effectively bought their way into the legislature. Lord Strathclyde, the ... is now talking about his support for an 80 per cent elected second chamber. Would you go along with that - speaking as the voice of the Commons in this respect?

THERESA MAY: Well I, I voted when the vote came, in the House of Commons, what two, three, three years ago or so. I voted for an 80/20 - 80 per cent elected House of Lords, 20 per cent appointed House of Lords - and I think this obviously has thrown into sharp relief that whole question of, both of party political funding but also reform of the House of Lords.

ANDREW MARR: And if you had a largely elected second chamber, how would you stop that effectively challenging the Commons as the premier chamber?

THERESA MAY: Well that's the crucial - that of course is what House of Lords reform, the block -

ANDREW MARR: That it's founded on ...

THERESA MAY: - yes - it's how you balance the powers between the two chambers. What I think is bizarre about the current position is that we have the Prime Minister, who has always up till now refused to say that he'd support elected members of the House of Lords, suddenly appearing to change his mind on this but at the same time saying that well he's willing to give them greater legitimacy, he also wants to reduce their powers. I mean ... absolutely bizarre.

ANDREW MARR: ... sense of timing - Theresa May thank you very much indeed for joining us.


NB: this transcript was typed from a recording and not copied from an original script.

Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for its accuracy

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