Hain fights to save cabinet job as pressure mounts over donations

(PETER MUHLY/AFP/Getty Images)

Peter Hain is fighting to save his position in the Cabinet after admitting that he failed to disclose donations totalling £103,000 to his campaign to become Labour's deputy leader.

The Work and Pensions Secretary shocked fellow Labour MPs by revealing that he had not registered 17 donations with the Electoral Commission –six of them channelled through a left-of-centre think-tank.

The undisclosed gifts came on top of the £82,000 Mr Hain registered after coming fifth out of six candidates in last summer's election. The figures mean he spent about twice as much as the winner, Harriet Harman.

Some Labour insiders believe that the affair could force Mr Hain's resignation. But there was no sign last night that Gordon Brown was withdrawing his support from the minister.

Critics say the administrative chaos in Mr Hain's campaign has raised questions about his fitness to run one of the biggest Whitehall departments with a budget of £130bn a year. Even if he survives now, there is speculation at Westminster that he could be moved or dropped when Mr Brown reshuffles his team.

Mr Hain blamed the failings on his decision to give priority to his government job as Northern Ireland Secretary over his campaign for the deputy leadership. "I very much regret that these reports were not made on time. I should have given higher personal priority to the day-to-day administration and organisation of my campaign," he said.

He said it became necessary to raise more cash after the contest finished last June because "unpaid invoices" emerged during the summer and autumn. However, he learnt on 29 November that these donations had not been declared within the required time scale, and "immediately" informed the Electoral Commission.

Mr Hain met the commission yesterday to discuss his belated list of donors. A spokeswoman for the commission said: "We will be undertaking initial permissibility checks on the information as part of our usual processes before publishing it on our website."

Mr Hain's list of the 17 undeclared gifts include £10,000 from Mike Cuddy, who runs the Cuddy Group building firm in his Neath constituency, and £10,000 from the GMB trade union. Some £26,600 in donations and a £25,000 interest-free loan were made by individuals through the Progressive Policies Forum think-tank.

A spokesman for the forum said: "We were supportive of Peter Hain's deputy leadership campaign, and we believe that had Peter been elected deputy leader he would have advanced progressive policies. Funds provided to PPF were properly paid to Hain4Labour and were reportable donations when they were paid to Hain4Labour. PPF understands that these reports have now been made."

Mr Hain was "very satisfied" with his meeting with the commission, which is thought to believe the donations made through the forum do not breach the rules on gifts by third parties because the original donors were revealed.

Chris Grayling, the shadow Work and Pensions Secretary, said the revelations were "quite extraordinary" and Mr Hain had shown "breathtaking incompetence." He asked: "How on earth did he manage to get this so dramatically wrong? 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."

The Liberal Democrat frontbencher Norman Baker said: "This is a lot of money not to notice and not to report on time, even if you are busy working as a cabinet minister. It looks simply like an oversight, but obviously the Electoral Commission will have to satisfy itself on that."