The prompt resignation of the Labour party General Secretary implies this is a big problem for Labour.
Much of the money passed to the Labour party after Gordon Brown had taken over. There are many questions to answer:
1. Harriet Harman received money for her deputy leadership campaign from similar sources. Was this properly reported? Did she know of the connections?
2. David Abrahams was given a good seat at Tony Blair’s farewell. Who organised this? Did they know he was a big donor?
3. Mr Abrahams passed money onto staff and business associates. How did they account for this money? Was any of it taxable?
4. Hilary Benn did not take money from Mrs Kidd but did accept a donation from Mr Abrahams. Were his team told of the links by Baroness Jay? If so, who else did she tell? If Hilary Benn did not know via her, how did they know?
5. What checks did the Labour party carry out before filling in its return for these donations?
All of this is very depressing for politics. It reminds us of the dangers of big money politics, and shows how Labour thought the rules they had invented did not really apply to them.
I just hope this is not used as another excuse to demand more money from taxpayers for political parties. The best answer is for the main parties to spend less on national campaigns, and to accept less from individual donors. Gordon Brown should do a deal with the other party leaders, accepting a cap of ??50,000 on all donations including donations from Trade Unions. If individual Tade Union members wish to give to the Labour party they are free to do so, so Unions and companies should be treated similarly for these purposes.
I do not take pleasure from this latest funding scandal, even though it is a Labour one. All the time we have big money politics, all parties are vulnerable to temptation or to misunderstanding about donors and donations. We need to get to the bottom of this latest funding crisis as quickly as possible, so we know who if anyone apart from the General Secretary made a misjudgement. We also need to know if Labour’s own law on financing political parties has been broken. To restore faith in politics we need the three main parties to agree to spend less and raise less from individual donors and Unions.