Hain under pressure over donation

Last Modified: 11 Jan 2008
By: Cathy Newman

Peter Hain's cabinet future looks uncertain after he admitted he failed to declare donations.

The work and pensions secretary was nowhere to be seen at his constituency office and wasn't at his south Wales home either.

However, Mr Hain has the full confidence of the prime minister, according to a Downing Street statement today. But for how much longer?

Hain admitted yesterday to the Electoral Commission that he did not declare donations of £103,156 during his campaign for the Labour party deputy leadership within the required timescale.

He faces a parliamentary sleaze inquiry after the Conservative MP David Davies made a complaint to the Parliamentary Standards Commissioner about Mr Hain's conduct. He said Hain hadn't declared donations in the register of members' interests and had therefore broken Commons rules by omitting to disclose the cash. If the complaint is upheld Mr Hain could be suspended from the Commons.

The commissioner John Lyon will now have to decide if a full-blown investigation is necessary.

Hain said he knew who the donors were but did not know payments had not been declared. He blamed the pressures of his ministerial job for his failure to register the donations.

Anne Begg, a member of Hain's campaign team said she did not realise recipients of donations only had a month to declare payments. Prior to this she thought they had six months or a year.

The commissioner John Lyon will now have to decide if a full-blown investigation is necessary.

On 29 November last year Hain admitted that he had not declared a £5,000 donation from Jon Mendelsohn, Gordon Brown's chief fundraiser.

On 3 December he told the Electoral Commission he'd discovered other donations that were not declared properly.

On 8 January it was reported that these donations totalled tens of thousands of pounds.

A lawyer from Russell, Jones and Walker, Neill Blundell, said the 30-day period was designed to ensure that donations are recorded and reported to the Electoral Commission. He said it was a criminal offence punishable by up to six months in prison if you fail to make the declaration.

The donors include pharmaceuticals boss Isaac Kaye, who gave almost £15,000. He is allegedly non-domiciled in this country. Diamond broker Willie Nagel also donated £5,000 in this way. He also gave a £25,000 loan.

It is alleged that more than £26,000 of the money was funnelled through the left-wing think tank Progressive Policies Forum.

This was set up in December 2006, after Hain's campaign, by John Underwood, as a vehicle for Hain's views and politics.

Hain's campaign manager, Steve Morgan, gave £5,000 this way. He launched a consultancy called Net Trap, which is registered at the same address as PPF, suggesting he was involved in setting up the think tank too. He has been blamed by some for the blunder.

Companies House documents say the PPF is involved in political research. But strangely, no-one at Westminster can come up with any research it's ever done.

In fact, the only thing the company appears to have done is settle Peter Hain's campaign debts.

At its register office there is no sign on the door but there is a nameplate for McEwen Parkinson solicitors. Now Gregory McEwan is the sole director of the company but he is on holiday and unavailable for comment.

Plaid Cymru parliamentary leader Elfyn Llwyd is calling for Hain to resign.