December 3, 2007 / 10:13 AM / 13 years ago

Labour party funding scandal flares up again

LONDON (Reuters) - A financing scandal engulfing Prime Minister Gordon Brown’s Labour Party flared up again on Monday when a cabinet minister disclosed he had failed to declare donations to the elections watchdog.

Prime Minister Gordon Brown arrives for breakfast at the Munyonyo Resort during the Commonwealth Heads of Government Meeting (CHOGM) in Kampala November 24, 2007. REUTERS/Dylan Martinez

The disclosure was a setback to Brown, who has been struggling to regain control of the political agenda after his party was blown off course by a storm over illegal donations.

The row has damaged Brown’s standing and Labour trails the opposition Conservatives by up to 11 points in opinion polls.

Work and Pensions Secretary Peter Hain admitted last week he had failed to register a 5,000-pound donation to his unsuccessful campaign this year to become the Labour Party’s deputy leader because of an administrative error.

He announced on Monday that further donations had not been registered with the Electoral Commission, parliament’s elections and funding watchdog, as required by law.

He said he had been to see the Electoral Commission and was preparing a full declaration for the watchdog.

“This is extremely regrettable and I apologise,” he said in a statement.

The funding storm erupted last week when it emerged that property developer David Abrahams had given more than 600,000 pounds to Labour through go-betweens.

Abrahams denied wrongdoing, saying he made the donations anonymously because he did not want to draw attention to his wealth.

The law requires people donating on behalf of others to disclose the source of the money, but Abrahams said he had relied on Labour to make sure the donations were legal.


Labour’s general secretary resigned over the scandal and the police were called in to investigate — just months after detectives ended a party funding probe that clouded the final months in office of Tony Blair.

Brown has acknowledged Labour accepted illegal donations and has ordered them returned. He has said he knew nothing about them until a week ago.

An opposition Liberal Democrat legislator has asked police to investigate a planning decision favouring Abrahams’ company to check he received no unfair advantage.

Brown took over from Blair pledging to restore trust in government. But recently the government has admitted to losing half the population’s personal data and has had to deal with Britain’s first bank run in more than a century, sending Brown’s popularity plunging.

Wendy Alexander, leader of the Labour Party in Scotland and a close ally of Brown, has come under pressure to resign after she acknowledged receiving a donation from a businessman based on the island of Jersey.

The businessmen is not registered to vote in Britain and therefore barred from making political donations.

Labour ministers have called for a drive to reform political party funding following the revelations.

Editing by Stephen Weeks

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