Hain quits as police investigate secret gifts

Peter Hain knew his position was untenable and phoned Gordon Brown to offer his resignation
12 April 2012

Pete Hain quit the Cabinet today as police were called in over donorgate.

Scotland Yard is set to launch a criminal investigation into whether he deliberately concealed donations totalling £103,000.

Although he vowed to clear his name, the extraordinary prospect of a senior minister being treated as a suspect made his position as Work and Pensions Secretary, and Welsh Secretary, untenable.

After finding out the police were being called, Mr Hain rang the Prime Minister at 11.30am. His resignation was accepted without hesitation.

His fate threw a harsh spotlight on the futures of others implicated in controversies over undeclared gifts - including Harriet Harman, a string of Labour officials and Gordon Brown's chief fundraiser John Mendelsohn.

The resignation of a Cabinet minister only seven months into his premiership is Mr Brown's biggest crisis yet, coming on top of Northern Rock, the lost data discs and the cancellation of the autumn election. Mr Hain had been battling for weeks to avoid resigning as more and more sleaze allegations were made about the way his Labour deputy leadership campaign was run last year.

The most damning revelation was that some gifts were funnelled through a think tank that had done no reports or research, and appeared to exist only as a conduit for cash to the Hain camp.

Mr Hain also admitted to donations from businessmen whose companies he had championed as Welsh Secretary.

The end was triggered by the Electoral Commission - set up by Labour to enforce transparency of party funding - deciding to ask the Metropolitan police to consider an investigation.

Mr Hain owned up to the cash on 29 November, blaming "administrative errors" for his late action.

The commission said in a statement: "Mr Hain has since met with [us] and provided additional information about donations he received. The Electoral Commission has undertaken a thorough review. Following discussions with the Metropolitan Police Service and the Crown Prosecution Service, the Electoral Commission has now referred matters to the Metropolitan Police for them to consider whether an investigation should commence."

Downing Street said in a statement: "Peter Hain has made his statement. The Prime Minister has accepted Peter Hain's resignation. There will be an exchange of letters in due course."

The speed of Mr Hain's departure showed Mr Brown seeking to strike a contrast with the drawn-out departures of ministers in Tony Blair's day. Today's events entail the third police investigation into Labour's tangled finances in three years, following the "cash for peerages" probe, and the concealment of more than £600,000 of gifts from North East property tycoon David Abrahams.

Mr Hain's Tory shadow, Chris Grayling, said: "Peter Hain's resignation was inevitable and the right thing to do." Plaid Cymru leader Elfyn Llwyd said: "The scale was enormous. There were 17 donations amounting to £103,000."

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