Straw defends ‘honourable’ party donors
Jack Straw yesterday defended the big donors who propped up the Labour party, saying they were “not dodgy but honourable”.
The leader of the House of Commons told the party conference in Manchester that members should be “profoundly grateful” to those people who had “put something back, to fulfil their sense of their civil duty”.
However, his comments were undermined moments later when Labour treasurer Jack Dromey admitted it had been “wrong” to accept millions of pounds through secret loans.
Presenting Labour’s submission to Hayden Phillips’ review of party funding, Mr Straw said: “We should be profoundly grateful to the scores in each constituency party who give according to their means.
“And grateful to the so-called ‘high value’ donors – people who have made some money but instead of spending it all on themselves give some of it, often in large amounts, to our party.”
But giving his account of the past year to delegates, Mr Dromey warned that 2006 had been a “dramatic year” in which both Labour and the Conservatives realised that the “arms race” of campaign spending must stop.
“It was a shock to our system that finally faced us to the simple reality that parties have spent more, engaged less and lost confidence with the public,” he said.
“The arms race was unsustainable – it led to parties raising millions by secret loans. That was wrong.”
In a stark assessment of Labour’s finances, Mr Dromey noted the party was now £27 million in debt, had a pension deficit of £6.3 million and had to lay off 20 staff on voluntary redundancies.
The party was not in “crisis”, he said – insisting the sale of the Old Queen Street offices was not a “panic move” – but admitting the situation was “serious none the less”.
“We racked up debts over five years, financial controls were not as strong as they should have been, and accountability was weak. But the Labour party is the first to face up to its responsibilities,” Mr Dromey said.
The treasurer said “stronger financial controls” had been introduced to improve the party’s accounting under new general secretary Peter Watts, and there were “new governance arrangements” to allow “proper accountability” to the wider party.
Mr Dromey landed the Labour leadership in hot water earlier this year when he admitted ignorance about millions of pounds of secret loans given to the party by wealthy backers.
But yesterday he insisted he was personally happy with the changes Labour had made, saying: “If I thought for a moment that our party was not learning the lessons of history and didn’t face up to its responsibilities, I would say something. But we have and we are.”
