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Party funding row 'a sorry tale' Party funding row 'a sorry tale'
(about 3 hours later)
The row over hidden donations to Labour is a "sorry tale of lawbreaking at the highest levels", the Tories have said. The row over hidden donations to Labour is a "sorry tale of lawbreaking at the highest levels", the Tories have said during a heated Commons debate.
Shadow Cabinet Office minister Francis Maude called on the government to push for "long-term comprehensive reform". Shadow minister Francis Maude said Labour officials' claims they did not know £650,000 of proxy donations were unlawful were "literally incredible".
The Tories called a Commons debate on the issue after it emerged a property developer donated more than £650,000 to Labour under other people's names. Justice Secretary Jack Straw was also attacked for saying he did not know whether the money had yet been repaid.
Justice Secretary Jack Straw told MPs that a White Paper on funding reform would be brought forward soon. Labour MPs repeatedly queried the tax status of Tory donor Lord Ashcroft.
Mr Maude said that "the longer this saga goes on, the more unanswered questions arise". The Conservatives called the debate after it emerged that property developer David Abrahams had donated more than £650,000 under four other peoples' names.
'Unacceptable' 'Not obscure rule'
He added: "This has been a sorry tale of lawbreaking at the highest levels by one of Britain's biggest parties." Gordon Brown has pledged to pay back the money which he said was not "lawfully declared". By law, anyone donating more than £5,000 must be identified and their details disclosed.
The Tories had been due to use their parliamentary time to debate the civil service but changed topics after the donations were revealed. Mr Maude told MPs: "This has been a sorry tale of lawbreaking at the highest levels by one of Britain's biggest parties."
He said it was "literally incredible" that Labour former general secretary Peter Watt, who quit over the donations, or chief fundraiser Jon Mendelsohn had not known the practice of proxy donations was illegal.
PM 'wants quick reforms'How are parties funded?PM 'wants quick reforms'How are parties funded?
Property developer David Abrahams says he donated the money under other people's names because he wanted to maintain his privacy. The requirement to disclose the identity of donors was the "central feature" of the laws on party funding, he said, not "some obscure rule".
Police are now investigating those donations, which Gordon Brown has said were "completely unacceptable" and pledged to pay back. By law, anyone donating more than £5,000 must be identified and their details disclosed. "The breach of this requirement is a criminal offence and anyone involved in political fundraising knows this," he said.
In the Commons, Mr Maude said it was "literally incredible" that Labour former general secretary Peter Watt, who quit over the donations, or chief fundraiser Jon Mendelsohn had not known the practice of proxy donations was illegal. But Labour MPs hit back with questions about whether Lord Ashcroft was fully domiciled in the UK for tax purposes and about the identities behind the Midlands Industrial Council.
Big donor culture And veteran Labour MP Dennis Skinner asked about donations made to the last Conservative government by fugitive tycoon Asil Nadir, demanding: "Who is on the moral high ground now?"
He said the requirement to disclose the identity of donors was the "central feature" of the laws on party funding. Mr Maude said things must be difficult for Labour when they were referring to "ancient history".
Mr Brown has said he wants to press ahead quickly with party funding reform - previous cross-party talks collapsed over a failure to agree on a raft recommendations in a review by Sir Hayden Philips. 'Utterly astonishing'
Claim and counter claims about different sources of funding continued throughout rowdy Commons exchanges - the Lib Dems were also asked if they would be repaying a £2.4m donations from Michael Brown - who was later jailed for perjury.
But Mr Straw's admission that he did not know whether the £650,000 had yet left the Labour Party's accounts was criticised by the Tories and the Scottish National Party.
Rich donors are nothing but trouble for the parties David HeathLib Dems
SNP MP Angus MacNeil, whose letter sparked the cash-for-honours police inquiry, said it was "utterly astonishing" adding: "How can Labour cooperate with a police inquiry if they don't even know where the money is?"
The prime minister has said he wants to press ahead quickly with party funding reform - previous cross-party talks collapsed over a failure to agree on a raft recommendations in a review by Sir Hayden Philips.
'Big donor' culture
Lib Dem justice spokesman David Heath told the Commons debate that caps on donations and expenditure were needed to "get us away from the culture of big donors".Lib Dem justice spokesman David Heath told the Commons debate that caps on donations and expenditure were needed to "get us away from the culture of big donors".
"Rich donors are nothing but trouble for the parties. That is demonstrably true," he said."Rich donors are nothing but trouble for the parties. That is demonstrably true," he said.
HAVE YOUR SAY However political parties are funded you will pay one way or the other Tom Bombadil, Oxfordshire Send us your commentsHAVE YOUR SAY However political parties are funded you will pay one way or the other Tom Bombadil, Oxfordshire Send us your comments
"It demeans the political process that so much effort is made to woo people with large amounts of money.""It demeans the political process that so much effort is made to woo people with large amounts of money."
MPs from all sides made claim and counter claim about different sources of funding to their rivals during rowdy Commons exchanges.
Labour MPs asked questions about Tory donor Lord Ashcroft's tax status, while the Lib Dems were asked if they would be repaying a £2.4m donations from Michael Brown - who was later jailed for perjury.
'Moral high ground'
Veteran Labour MP Dennis Skinner asked about donations made to the last Conservative government by fugitive tycoon Asil Nadir, demanding : "Who is on the moral high ground now?"
Mr Maude said things must be difficult for Labour when they were referring to "ancient history".
Justice Secretary Jack Straw told MPs a White Paper on funding reform was in preparation and would be published as soon as possible - to be followed by legislation soon after.Justice Secretary Jack Straw told MPs a White Paper on funding reform was in preparation and would be published as soon as possible - to be followed by legislation soon after.
He said the government hoped to achieve consensus for the future "but in any event we need legislation".He said the government hoped to achieve consensus for the future "but in any event we need legislation".
He said "democracy does not come for free" and blamed the Tories for the breakdown of previous talks.He said "democracy does not come for free" and blamed the Tories for the breakdown of previous talks.
Conservative former chancellor Ken Clarke said the parties should reach an agreement along the lines recommended by Sir Hayden, but the key point was how trade union block grants to Labour should be treated.Conservative former chancellor Ken Clarke said the parties should reach an agreement along the lines recommended by Sir Hayden, but the key point was how trade union block grants to Labour should be treated.
Mr Heath said he believed consensus was possible, but said the Lib Dems would "not accept partisan legislation that deals with only one part of the problem, and not the other". The Tory motion which noted "with concern the corrosion of public trust in democracy following the recent succession of scandals" over the funding of the Labour Party was defeated by 341 votes to 160.
The prime minister has said there will have to be changes to the trades unions political levy so it is more "transparent". A government amendment which regretted "that a comprehensive reform package" on funding reform had not been achieved before because the Tories had walked out, was passed by 300 votes to 198.