PM still backing him, but will Hain face police inquiry into £103,000 donations?

Published on Monday 14 January 2008 21:35

PETER Hain is to face a full parliamentary "sleaze" inquiry over his failure to declare £103,000 in donations to his Labour deputy leadership campaign, it was announced yesterday.

John Lyon, the Parliamentary Commissioner for Standards, has ruled that the Work and Pensions Secretary does have a case to answer.

It was also reported last night that frustrated officials might yet call for a police inquiry because the commission can only give Mr Hain a "slap on the wrist" for breaking electoral rules. If convicted, Mr Hain would face a potential fine of up to 5,000.

Mr Lyon's decision followed the lodging of a complaint last week by David Davies, a Conservative MP, that Mr Hain had broken Commons rules by failing to declare the payments in the Register of Members' Interests.

A spokeswoman for Mr Lyon said: "An inquiry is in hand. He is investigating the complaint."

Mr Hain was already under investigation by the Electoral Commission – the official elections watchdog – for failing to inform it of the donations under party-funding laws.

However, Downing Street continues to insist that Mr Hain is "a great minister" who is doing "a good job pushing forward welfare reform".

Gordon Brown's spokesman said: "The Prime Minister's views about Peter Hain are quite clear: of course he has full confidence in Peter Hain."

Earlier, in a newspaper article, Mr Brown said: "It would be my expectation that he will carry on in government."

Mr Hain has been clinging to his political career amid continued demands for him to answer questions about the funding of his failed campaign for Labour's deputy leadership.

Until last week, he had failed to report the 103,000 in donations to his campaign, some of which was channelled through the Public Policies Forum think-tank – an organisation that appears to have no staff and has published no policy papers.

Mr Hain issued a weekend statement, defying calls for his resignation and dismissing as "absurd" suggestions that he tried to cover up donations.

He said: "The notion that there was some attempt by me to hide anything is absurd."

He added that his permanent secretary had told him there was no conflict of interest between the donations and his ministerial jobs, which also include Secretary of State for Wales.

But last night a spokesman refused to comment on suggestions he could face a criminal inquiry.

David Cameron, the Tory party leader, returned to the attack over the affair yesterday, having accused Mr Brown of "dithering" over whether to sack Mr Hain.

But the Conservatives have been labelled hypocrites after it emerged that George Osborne, the shadow chancellor, had not fully declared 487,000 of donations to his office.

Mr Cameron said of Mr Hain: "He has a choice. He can get out there and explain himself, or I think he will have to leave the Cabinet.

"It is quite a contrast: George Osborne on the Today programme this morning answering all the questions about the funding of his office; Peter Hain nowhere to be seen, and I do not think that is acceptable."

Mr Hain was backed yesterday by one of the biggest trade unions, which described him as an "excellent" minister.

The Communication Workers Union, where Mr Hain used to work as head of research, said he remained a "trusted and admired friend".

Billy Hayes, the general-secretary, said: "CWU members are less interested in administrative errors than the big picture. The big picture here is that Peter Hain is an excellent minister who has helped to deliver important policy changes which positively improve the lives of working people. He remains a trustworthy ally of working people in Britain."

EMERGENCY MEETING SET TO SUPPORT MINISTER

PETER Hain's constituency party is to hold an emergency meeting to discuss the donations furore.

Clive Phillips, the president of Neath Labour Party, said he hoped the meeting of senior officials tomorrow would produce a statement of support for the embattled Cabinet minister. He praised Mr Hain as an "excellent" MP and said he believed he was "as honest as the day is long".

He went on: "This business that he has found himself in now, anybody could have fallen into.

"At that moment in time, he was doing three jobs, as an MP, Secretary of State for Wales and for Work and Pensions. Then he was doing hustings for the deputy leadership contest. He picked a team to look after (the donations] and he was let down by that team.

"The only thing he has done wrong, as far as I am concerned, was that he trusted his team."

Mr Phillips said he expected about a dozen senior officials to attend the meeting and he insisted there was general support for the MP among rank-and-file members.

He added: "Peter would not be involved in any dodgy dealings whatsoever."