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PM vows to change funding rules PM vows wholesale funding reform
(1 day later)
Gordon Brown has pledged to speed up new rules on party funding. Gordon Brown has vowed to make urgent reforms of political party funding in the wake of the Labour donations row.
His vow follows revelations that gifts of more than £650,000 were given to Labour by businessman David Abrahams using proxy donors. He raised the prospect of more public funding and caps on campaign spending and donations, hinting at a review of the funding Labour gets from unions.
Mr Brown emphasised the need for consensus between the main parties on the way ahead. He appealed for consensus but said he would fight any "one-party deadlock".
Liberal Democrat acting leader Vince Cable said the donations row was stopping the government from governing the country properly. The Tories said the prime minister was trying to deflect attention from the row over money which a businessman gave to Labour using proxy donors.
The prime minister told a meeting of Labour's National Executive Committee that the funding issue needed to be tackled immediately. Shadow work and pensions secretary Chris Grayling said Labour had "a cavalier disregard for the laws that it put in place".
Cross-party talks on funding chaired by Sir Hayden Phillips have stalled because agreement could not be reached between the main parties. "You'd have thought after the last two years when they have been through a police investigation, that senior figures in the Labour Party would have been aware firstly of what the law actually said and secondly about their duty to uphold it," he told BBC News 24.
Contradictory claims Donations cap
On Friday, there were contradictory claims about what was known and when by two key figures in the affair. "Neither of those appear to have happened and they've ended up with a second police investigation in two years which is a lamentable situation for a governing party."
Mr Abrahams said he discussed his donation arrangement with Jon Mendelsohn, now the party's chief fundraiser, in April. We have learned just how easily trust in our politics can be eroded Gordon Brown class="" href="/1/hi/uk_politics/7123236.stm">Abrahams's new donor claim
href="http://news.bbc.co.uk/1/shared/spl/hi/pop_ups/07/uk_enl_1196360739/html/1.stm" onClick="window.open('http://news.bbc.co.uk/1/shared/spl/hi/pop_ups/07/uk_enl_1196360739/html/1.stm', '1196360783', 'toolbar=0,scrollbars=0,location=0,statusbar=0,menubar=0,resizable=1,width=629,height=418,left=312,top=100'); return false;">See how David Abrahams made donations to the Labour Party href="http://news.bbc.co.uk/1/shared/spl/hi/pop_ups/07/uk_enl_1196360739/html/1.stm" onClick="window.open('http://news.bbc.co.uk/1/shared/spl/hi/pop_ups/07/uk_enl_1196360739/html/1.stm', '1196360783', 'toolbar=0,scrollbars=0,location=0,statusbar=0,menubar=0,resizable=1,width=629,height=418,left=312,top=100'); return false;" >In graphics The PM's pledge to drive through wholesale funding reforms came during a speech in London to Labour's national policy forum.
He also said that he received thank you letters from the Labour party following his donations. He was seeking to regain the political initiative after a week of damaging revelations that gifts of more than £650,000 were given to Labour by businessman David Abrahams using proxy donors.
But that was denied by Mr Mendelsohn who said Mr Abrahams' claims were completely untrue. Police are investigating the matter.
Mr Mendelsohn said earlier in the week that he only found out about the arrangement in September. "The last week has shown the need for immediate changes in our own party.
Speaking on BBC Radio 4's Today Programme, Vince Cable, acting leader of the Liberal Democrats, said the row was now preventing the Government from properly focusing on running the country. "But I would also argue it has seen the need for broader change within our system of political funding," he told party supporters.
He said: "One of the big culture questions is that the Government is in paralysis. We've got ministers briefing against each other...it's a very challenging time." "We have learned just how easily trust in our politics can be eroded. We must now complete the work of change, address the problems that still remain to be resolved, not hesitate to make the changes necessary and seek to build greater confidence in the integrity of our political system".
But he acknowledged that Gordon Brown had "been unlucky inheriting a system from his predecessor. Tony Blair skated around thin ice...this prime minister is falling through it". Recent cross-party talks stalled when Tories walked out amid failure to agree on a raft recommendations in a review by Sir Hayden Philips.
Also speaking on the programme, James Parnell, secretary of state for culture, media and sport, conceded there was a problem that had to be dealt with. Union welcome
The idea there was only one or two people in the party who knew about it simply does not add up Ben Wright, BBC political correspondent Mr Brown said Sir Hayden's proposals, which include a £50,000 cap on individual donations, provided a comprehensive framework for reform.
He said: "I do think we need to look at the issue of party funding and this has been a depressing week for the Labour party. He stressed everything was up for negotiation, including a possible extension of public funding - although he acknowledged that was likely to be controversial with voters.
"People of course are infuriated by it, the public are infuriated by it and so are we." It is clear to everyone that if we are to have a fair and transparent party funding system then reform is needed urgently. Vince Cable
But he emphasised that "the key is not how you stop crises from happening, it is how you deal with them". Mr Brown appeared alongside deputy Labour leader Harriet Harman who was drawn into the donations row when it emerged she had accepted a £5,000 donation from one of Mr Abraham's proxies.
Lottery winners Unions welcomed Mr Brown's speech and said they would play a "full and active" part in the forthcoming discussions.
Mr Abrahams has said he did not know he was breaking any rules when he made the donations by proxy, claiming that he kept them secret to avoid publicity. Political advantage
In an interview with the Guardian he said the concealed payments were "cock-up, not conspiracy". Sir Hayden said he remained hopeful that cross-party consensus was possible.
"Like sensible Lottery winners, I do not want my wealth to change the way I, as a working class boy, lead my life, or get in the way of my many friendships with people with a similar background to myself," he added. Liberal Democrat acting leader Vince Cable warned: "It is clear to everyone that if we are to have a fair and transparent party funding system then reform is needed urgently.
On Friday the prime minister vowed to give his backing to the "fullest possible investigation" into Labour funding. "Gordon Brown must now ensure that he does not lose sight of this fact in a desperate attempt to secure crude political advantage."
In a letter to the Met Police, Gordon Brown said he was "ready to assist" the police probe and had asked Labour MPs, staff and peers to "co-operate fully". Mr Abrahams insists he did not knowingly break the rules when he made the proxy donations, claiming he kept them secret to avoid publicity.
Number 10 has played down reports of a rift between the PM and Labour's deputy leader Harriet Harman over the affair. But he reopened a row with Labour's chief election fundraiser Jon Mendelsohn by saying Mr Mendelsohn had been aware of his donation arrangements since April.
Mr Brown has insisted that he knew nothing about the funding arrangement with Mr Abrahams. Later he told the Independent on Sunday that Mr Mendelsohn had told him that giving money to Labour through intermediaries "sounded like a good idea".
The prime minister has said all the money paid out by Mr Abrahams will be returned. Mr Mendelsohn has said the claim that he knew of the donation arrangements in April is "completely untrue". He says he became aware of the practice in September and was set to end to it.