Hain failed to declare £103,000 in donations

Hain stopped declaring donations after early May

Friday, 11, Jan 2008 12:00

Peter Hain admitted last night he did not declare £103,000 in donations.

The Neath MP has now submitted full details of donations to fund his bid for the Labour deputy leadership to the Electoral Commission.

Mr Hain told the media in November he was conducting an audit of his campaign accounts after remembering he had failed to register a £5,000 donation from Gordon Brown's chief fundraiser Jon Mendelsohn.

Last night Mr Hain revealed full details of the 17 undeclared donations, in an announcement described as "quite extraordinary" by the Conservatives.

Plaid Cymru have called for Mr Hain, who is also secretary of state for Wales, to resign over the failing.

But the prime minister still has "full confidence" in Mr Hain, his Downing Street spokesman said this afternoon.

Regardless of his position in the government, the Cabinet member now faces suspension from parliament after a complaint was lodged with the parliamentary watchdog by Conservative MP David Davies.

John Lyons, the parliamentary standards commissioner, has been asked to investigate whether Mr Hain broke the rules on MPs' conduct over gifts.

He will prepare a report for the parliamentary standards committee, which has the power to suspend Mr Hain from the House of Commons if he is found negligent.

Mr Hain has accepted responsibility for the failure, but insists the mistake was made "inadvertently and not wilfully".

Full details of the £103,156.75 have now been reported to the Electoral Commission, which will decide what, if any, action to take.

Under the commission's rules, all "registered donees" have 30 days to decide whether to accept a donation and a further 30 days in which to register it.

Last night Mr Hain explained donations had been reported correctly until early May but then "unaccountably" stopped.

In an interview with the Guardian, Mr Hain said: "Frankly no one, including me, has been able to explain why it suddenly stopped."

Labour's former deputy leader John Prescott officially resigned on May 10th last year, prompting the deputy leadership contest.

The forgotten 17 donations now bring Mr Hain's total expenditure during the campaign to more than £185,000. He finished fifth out of six candidates, losing to Harriet Harman who spent £46,000 on her campaign.

After the result was declared on June 24th, Mr Hain told the newspaper he had been preoccupied with paying bills and debts rather than reporting donations.

Mr Hain, who holds a second government position as work and pensions secretary, said he was focused on his new government jobs.

In a statement he said: "The fact is that during this period, I gave my campaign for office within the Labour party second priority to my government responsibilities.

"I should have given higher personal priority to the day-to-day administration and organisation of my campaign."

Battersea MP Martin Linton, who worked on Mr Hain's deputy leadership campaign, told the BBC the error was an "honest, innocent oversight".

Mr Hain is legally responsible for registering donations but did not act as his campaign's accountant.

He admitted to the Guardian he had not considered why no donations were being reported until Mr Mendelsohn reminded him of his own donation in late November.

At this time the Labour party was dealing with the damaging revelation it had failed to register David Abrahams as the true source of more than £600,000 in donations, channelled through intermediaries.

Shadow work and pensions secretary Chris Grayling said Mr Hain's latest announcement was "quite extraordinary" and demonstrated "breathtaking incompetence".

Mr Grayling continued: "Gordon Brown now has some serious explaining to do about all of this.

"After the events of the past two months, it looks as if he and his senior colleagues have a complete disregard for the rules."