Liberal Democrats under fire for accepting donation of £2.4m

The Liberal Democrats were accused of "hypocrisy" last night after accepting a £2.4m donation from a millionaire based in Majorca - despite arguing that no party should take gifts of more than £50,000.

Labour MPs seized on the fact that the Liberal Democrats had accepted the cash even though they had publicly warned of the danger of accepting large donations from millionaires.

The Liberal Democrats accepted the money from Michael Brown, a derivatives trader, the biggest cash gift in their history, to fund their election campaign.

The party, which gained 11 seats, had the best-funded election campaign for many years, largely thanks to being bankrolled by Mr Brown. But the acceptance of the trader's cash has raised eyebrows within the party, which has tried to change the law to stop any political party taking large donations.

It has argued that state funding of political parties "is a better way of financing aspects of our democracy than for some political parties to be heavily dependent on a few big donations from a few very rich millionaires."

They have also argued that current safeguards were inadequate to stop big donors buying influence over a party.

Lord Rennard, the campaigns chief whose strategy of decapitation was funded by Michael Brown's cash, said last year: "There should be a cap on very large donations to all parties, to avoid the suspicion that money is buying influence or favours."

He has told the Lords: "requirements to declare donations will not be sufficient to ensure that someone is not able to buy considerable influence over the party and potentially, therefore, over policy direction".

There is no suggestion that Mr Brown has sought to buy influence with the Liberal Democrats and sources say his motivation was to "level the playing field" with the other two main parties.

But before accepting his money, senior Liberal Democrats argued that it was right for people to suspect there were strings attached if donations are given to political parties.

Lord McNally, the Liberal Democrat leader in the House of Lords, said it was "natural that people will suspect that anyone who gives a political party a donation of £1m may be doing so for reasons other than love of a party".

Speaking in favour of caps on donations during a House of Lords debate, he went on to say: "We believe that this would have the beneficial side-effect of prompting parties to seek thousands of small donors, rather than one big one, helping British political parties to re-engage with the people they serve."

Yesterday, senior Labour MPs accused the Liberal Democrats of double standards. Martin Salter, Labour's deputy chairman of campaigns, said: "The Liberal Democrats have always been long on rhetoric and short on principle and, faced with a grotesque pile of money, they have conveniently forgotten their previous objections to large political donations."

When the Political Parties, Elections and Referendums Bill was going through Parliament five years ago, the Liberal Democrats said there was a public perception of too much "big money" in British politics. They argued reform was "long overdue".

They argued that "the only way to prevent large donations buying influence, or appearing to buy influence, was to prevent those large donations. It simply cannot be right that millions of pounds can achieve more than millions of votes, as is sometimes the case at the moment."

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