Labour will get secret cash help

Peers set up company to help party win election

Labour peers have set up a company to gather donations from individuals and businesses who do not want to give to the Labour Party direct.

Documents at Companies House reveal Labour life peers Lord Haskel and Lord Clinton-Davis are two of the three directors of the company, Common Campaign Limited, which is run from an office in Tony Blair's Islington constituency in north London.

The objects of the company, set up in August last year, are: "To support the electoral campaign of the Labour Party of Great Britain at the next General Election ... by means of advertisements to be published in the national daily and Sunday newspapers

Lord Haskel said the aim of the company was "to target people who are not traditional Labour supporters, like doctors disillusioned with the NHS and business people disillusioned with government policies on trade and industry." Common Campaign, he said, would "work in association with Walworth Road", the Labour Party headquarters.

As Common Campaign is not a Labour Party organisation and is designed to operate independently from it, any company giving cash would not have to declare a political donation, and could keep the payment secret. Under Labour Party rules, donations of more than £5,000 have to be disclosed.

The disclosure comes as Lord Nolan, chairman of the committee on standards in public life, is under intense pressure to mount an inquiry into the sources of funding of political parties.

David Hill, Labour's senior spokesman, said the sole purpose of Common Campaign was "to encourage significant figures within the professions to pay about £100 for their names to appear on an advertisement at the time of the election urging people to vote Labour. It has no other purpose."

Lord Haskel, 60, who chairs the Labour Finance & Industry Group, was quoted by party officials in the Independent on Sunday as being one of the organisers of the Industrial Research Trust, which the register of MPs' interests shows helps fund the offices of Mr Blair, Gordon Brown, the shadow Chancellor, and Robin Cook, shadow Foreign Secretary.

Commenting on the trust on GMTV yesterday, Jack Straw, shadow Home Secretary said his three colleagues had made declarations "precisely in accordance with the current rules". If new rules required further detailed disclosure "they will ensure that that's the case".

Lord Nolan yesterday appeared to backtrack from earlier indications that he might be prepared to confront the Prime Minister, who does not want party funding to be explored, warning that it could undermine the committee's all-party united front. But the judge faced calls for such an investigation from both the opposition parties and members of his own committee.

The committee meets tomorrow to plan its future work. Number 10 and Stephen Dorrell, Secretary of State for National Heritage, yesterday insisted that party funding did not fall within the committee's remit.

Lord Nolan agreed in radio and television interviews that the terms of reference as presently drawn were too narrow, while emphasising the committee's lack of powers to demand evidence. The committee's all-party united front could be ruined by a split on party political lines which would "gravely weaken" the committee, he said.

But signalling potential divisions between committee members tomorrow, two members, Labour's Peter Shore and the Liberal Democrat peer Lord Thomson of Monifieth, both firmly challenged the view that the terms of reference did not cover an inquiry into party political funding.

"If ever there was an area which came within the terms of reference I would think that was it," Lord Thomson said.

Parties' paymasters, page 2