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Last Updated: Saturday, 1 December 2007, 18:38 GMT
PM vows wholesale funding reform
Gordon Brown
Mr Brown has warned opposition parties not to block reforms
Gordon Brown has vowed to make urgent reforms of political party funding in the wake of the Labour donations row.

He raised the prospect of more public funding and caps on campaign spending and donations, hinting at a review of the funding Labour gets from unions.

He appealed for consensus but said he would fight any "one-party deadlock".

The Tories said the prime minister was trying to deflect attention from the row over money which a businessman gave to Labour using proxy donors.

Shadow work and pensions secretary Chris Grayling said Labour had "a cavalier disregard for the laws that it put in place".

"You'd have thought after the last two years when they have been through a police investigation, that senior figures in the Labour Party would have been aware firstly of what the law actually said and secondly about their duty to uphold it," he told BBC News 24.

Donations cap

"Neither of those appear to have happened and they've ended up with a second police investigation in two years which is a lamentable situation for a governing party."

We have learned just how easily trust in our politics can be eroded
Gordon Brown

The PM's pledge to drive through wholesale funding reforms came during a speech in London to Labour's national policy forum.

He was seeking to regain the political initiative after a week of damaging revelations that gifts of more than 650,000 were given to Labour by businessman David Abrahams using proxy donors.

Police are investigating the matter.

"The last week has shown the need for immediate changes in our own party.

"But I would also argue it has seen the need for broader change within our system of political funding," he told party supporters.

"We have learned just how easily trust in our politics can be eroded. We must now complete the work of change, address the problems that still remain to be resolved, not hesitate to make the changes necessary and seek to build greater confidence in the integrity of our political system".

Recent cross-party talks stalled when Tories walked out amid failure to agree on a raft recommendations in a review by Sir Hayden Philips.

Union welcome

Mr Brown said Sir Hayden's proposals, which include a 50,000 cap on individual donations, provided a comprehensive framework for reform.

He stressed everything was up for negotiation, including a possible extension of public funding - although he acknowledged that was likely to be controversial with voters.

It is clear to everyone that if we are to have a fair and transparent party funding system then reform is needed urgently.
Vince Cable

Mr Brown appeared alongside deputy Labour leader Harriet Harman who was drawn into the donations row when it emerged she had accepted a 5,000 donation from one of Mr Abraham's proxies.

Unions welcomed Mr Brown's speech and said they would play a "full and active" part in the forthcoming discussions.

Political advantage

Sir Hayden said he remained hopeful that cross-party consensus was possible.

Liberal Democrat acting leader Vince Cable warned: "It is clear to everyone that if we are to have a fair and transparent party funding system then reform is needed urgently.

"Gordon Brown must now ensure that he does not lose sight of this fact in a desperate attempt to secure crude political advantage."

Mr Abrahams insists he did not knowingly break the rules when he made the proxy donations, claiming he kept them secret to avoid publicity.

But he reopened a row with Labour's chief election fundraiser Jon Mendelsohn by saying Mr Mendelsohn had been aware of his donation arrangements since April.

Later he told the Independent on Sunday that Mr Mendelsohn had told him that giving money to Labour through intermediaries "sounded like a good idea".

Mr Mendelsohn has said the claim that he knew of the donation arrangements in April is "completely untrue". He says he became aware of the practice in September and was set to end to it.

Gordon Brown arguing for the need to change party funding

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