What is it about Labour and expenses? As Wendy Alexander departs tearfully into history after the latest donations scandal, the question has to be asked: how could a nominally socialist party get into such difficulty with money? Wendy is the second Scottish Labour leader to have resigned over a funding scandal in less than seven years. In 2001 the former Labour First Minister, Henry McLeish, resigned over his failure to register earnings from the subletting of his Fife constituency office. Like Wendy’s misdemeanor, it was “a muddle not a fiddle” but somehow McLeish ended up falling on his sword nevertheless.
More recently we had the former Labour cabinet minister Peter Hain resigning in January over late declaration of his own leadership campaign funds. He is still nominally “clearing his name” while the police investigate his bookkeeping. The deputy leader of the UK Labour Party, Harriet Harman, was lucky to escape Wendy’s fate when she admitted recently to accepting a donation of £5,000 from a property developer under an assumed name. Proxy donations are illegal under Labour’s own law on party funding.
Expenses will no doubt figure again in the forthcoming Glasgow East by-election following press allegations about the former Labour MP David Marshall’s employment of relatives on his parliamentary allowances. The practice of Labour ministers using their expenses to furnish their second homes – the infamous “Lewis’s list” – provoked public fury, not least because of the ludicrous attempts by the Speaker, Michael Martin, to prevent public disclosure of the purchases. A cover up when there was no actual crime.
These episodes occurred in the backwash from the cash for honours scandal, which plagued the final year of Tony Blair’s premiership. Week after week through 2007Number Ten aides like Ruth Turner and sleek fund-raisers like Lord “Cashpoint” Levy were arrested and questioned about Labour’s dealings with businessmen. The scandal arose because a number of millionaires, like the Curry King Sir Gulam Noon, had been nominated for peerages for no apparent reason other than the fact that they had made secret loans to the Labour Party. The businessmen had been asked to give loans rather than straight donations to the party because this meant they would not have to be declared publicly. So secret were the loans that even the treasurer of the Labour Party, Jack Dromey, didn’t know about them.
Clearly, it is the non-disclosure element which is the common thread in recent Labour financial scandals. Labour is just not happy admitting where it gets its money from – or rather where it USED to get its money since few businessmen are now willing to risk the opprobrium of donating money to Labour. Wendy Alexander’s problems arose when the Sunday Herald revealed last November that she had accepted an illegal campaign donation from a tax exile. The donation, from the Jersey based property developer Paul Green was for £950 – just under the threshold for disclosure – or what Labour believed was the threshold for disclosure.
Many of the sums raised for Wendy’s leadership campaign-that-never-was were set at just under the magic figure £1000. You wonder why they should go to such lengths to keep donations out of the public eye? Did they feel uncomfortable admitting the sources of their funds? Were they concerned about accusations of conflicts of interest in being seen to accept money from businessmen who had dealings with Labour councils in places like Glasgow? As politicians are wont to say: you would have to ask them that.
But the amounts of cash were so small it beggars belief that they should have taken the risk. Labour’s Political Parties, Elections and Referendums Act, 2000, was designed to stamp out sleaze once and for all by requiring that politicians disclose every penny they receive from outside sources. It is a zero-tolerance statute intended to make the whole area of campaign funding open and transparent. Similarly, the independent Commissioner for Standards in the Scottish Parliament, Dr Jim Dyer – who fingered Wendy Alexander – is required by law to investigate fund-raising irregularities and to recommend action when there are breaches of the code. He is not an SNP stooge as has been suggested.
Labour’s problems arise, not from press harassment or vexatious nationalist complaints, but from its repeated attempts to circumvent its own rules. The scandal earlier this year over the secret donations made by the north of England property developer, David Abrahams, is a classic case. Labour’s former general secretary, Peter Watt, agreed that Mr Abrahams should be allowed to donate £600,000 to prominent Labour politicians through intermediaries – some of whom didn’t even know the donations were being made in their name. Mr Watt said he didn’t realise that giving donations under an assumed name was illegal. But surely, given the publicity surrounding party funding he should had realised instinctively that there was something dodgy in the arrangement. Again, why take the risk? Mr Watt had to resign over this flagrant breach of the law.
Now, Labour say with cause, that this is not just their problem, and I would have to agree. The Tories have been matching Labour scandal for scandal, but somehow David Cameron doesn’t seem to be getting the same heat for it. The Tory chairman, Caroline Spelman, is under pressure to resign over accusations that she paid her nanny out of parliamentary allowances. The leader of the UK Conservatives in the European Parliament, Giles Chichester, resigned earlier this month over misuse of his parliamentary expenses. Another Tory MEP, Den Dover, denied breaking any rules in paying his wife and daughter a reported £750,000 for work over nine years. He has been replaced as party whip.
Back in Westminster, the husband and wife team of Tory MPs, Sir Nicholas and Ann Winterton, have been no slouches when it comes to harvesting expenses. They were widely criticised recently for claiming up to £66,000 in housing allowances since 2006 on a home they already owned. The sleaze of the year prize must go to the Tory MP Derek Conway who lost the party whip after it emerged that he had employed three members of his family, including two sons who didn’t appear to do any work.
So, why have these scandals not been dominating the media Why do we see no headlines claiming: “New Sleaze Scandal Rocks Cameron”. Perhaps we can’t cope with too many sleaze scandals at any one time. Labour have commanded most of the attention through their self-destructive addiction to breaking their own rules; and they are also the government, which makes it even more important for them to abide by the letter of the law.
Yes, politics is a tough old game, as Wendy Alexander has found out. Maybe Labour’s rules were too strict. I know its a cliche, but the politicians really have only themselves to blame.