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Cabinet begins work without Hain Labour not tainted, says Purnell
(about 2 hours later)
Gordon Brown's new cabinet team is beginning work following a reshuffle prompted by the resignation of Work and Pensions Secretary Peter Hain. Labour's reputation has not been tainted by a string of fund-raising scandals, new Work and Pensions Secretary James Purnell has said.
Mr Hain quit after the Electoral Commission referred its investigation into donations to his Labour deputy leadership campaign to the police. Mr Purnell was given the job after Peter Hain quit over a police probe into gifts to his Labour deputy leadership bid.
He is the first cabinet member to resign under Mr Brown's premiership. It is one of several inquiries into the finances of senior Labour figures.
He has been replaced by 37-year-old James Purnell. Mr Hain's other post - Welsh secretary - goes to Paul Murphy. But Mr Purnell said the party was doing "what is right" in order to reform its funding arrangements.
Police inquiry Asked in an interview with BBC Radio 4's Today programme, if the controversies had left a "bit of a taint around the question of Labour's relationship with money , Mr Purnell said: "No. I don't think so."
The Neath MP said he felt he had no choice but to resign to "clear his name". Mr Purnell, who at 37 is the youngest of a group of minister promoted to the cabinet by Gordon Brown, called for progress on party funding reforms.
Mr Hain has returned to his constituency and faces a police inquiry into donations totalling £103,000 which he failed to declare to officials in time. Police probes
He added: "I do think what is right to do is to move forward on Sir Hayden Phillips' recommendations and that's what we are committed to doing to put party funding. David Cameron should do the same thing."
The Conservatives have also said they want to reform party funding - and have called for a cap on donations.
CABINET RESHUFFLE Work and Pensions Secretary: James PurnellCulture Secretary: Andy BurnhamChief Secretary to the Treasury: Yvette CooperHousing Minister: Caroline FlintSecretary of State for Wales: Paul Murphy Profile: James PurnellProfile: Andy BurnhamCABINET RESHUFFLE Work and Pensions Secretary: James PurnellCulture Secretary: Andy BurnhamChief Secretary to the Treasury: Yvette CooperHousing Minister: Caroline FlintSecretary of State for Wales: Paul Murphy Profile: James PurnellProfile: Andy Burnham
He declared 17 of the donations more than four months after the contest ended, placing him in potential breach of electoral law. But they have said the funding scandals to have hit Labour have been caused by ministers failing to follow the existing rules, which were brought in by Labour.
The Electoral Commission passed Mr Hain's late declaration of donations to police after a "thorough review" of the case. Harriet Harman, who beat Mr Hain to the deputy leadership, is being investigated by the Electoral Commission over a £5,000 donation to her campaign from businessman David Abrahams, which was given via a proxy.
Labour MP Geoffrey Robinson, who was forced to resign as paymaster general in 1998, said the Electoral Commission should have more powers over funding. The police are also probing more than £600,000 in donations given by Mr Abrahams to Labour through third parties.
Mr Robinson told BBC One's Question Time: "I don't condone or try to excuse bad administration. And the Electoral Commission is looking into £950 to Scottish Labour leader Wendy Alexander's campaign fund from a Jersey-based businessman.
"But what I think we need is to reinforce the public confidence and the only way we do that is to have a proactive, clearly established commission. 'Proper' funding
"We should give it the teeth to do it and it shouldn't be a question of the police coming in. The commission should ensure it for us." Mr Hain has returned to his constituency and faces a police inquiry into donations totalling £103,000 which he failed to declare to officials in time.
'Honourable thing' The MP for Neath, who is the first cabinet member to quit under Gordon Brown's premiership, has promised to clear his name. His other post - Welsh secretary - goes to Paul Murphy.
I think we need is to reinforce the public confidence and the only way we do that is to have a proactive, clearly established commission Geoffrey Robinson MP Commenting on Mr Hain's resignation, Mr Purnell said: "I do feel sorry for Peter and Peter's clearly said that he intends to clear his name.
In the reshuffle, James Purnell is replaced as culture secretary by Andy Burnham. Yvette Cooper replaces Mr Burnham as chief secretary to the treasury, and Caroline Flint becomes housing minister. "He believed that he didn't have time to do both that and continue with his ministerial position and I think he's taken the right decision in that respect."
Mr Purnell said it was important now to put the funding of political parties on a "proper basis", but claimed the Tories were blocking a cross-party deal.
In the reshuffle, Mr Purnell is replaced as culture secretary by Andy Burnham. Yvette Cooper replaces Mr Burnham as chief secretary to the treasury, and Caroline Flint becomes housing minister.
The prime minister said Mr Hain's resignation was the "right and honourable thing to do", while Conservative leader David Cameron said it was the "right decision".The prime minister said Mr Hain's resignation was the "right and honourable thing to do", while Conservative leader David Cameron said it was the "right decision".
BBC News political correspondent Rajini Vaidyanathan says that by promoting younger ministers such Mr Purnell and Mr Burnham to senior cabinet posts, the prime minister will be hoping he can get on with the business of running government.
But with the prospect of a long police inquiry the issue of party funding could dominate the headlines for many weeks to come, she added.