Page last updated at 17:06 GMT, Sunday, 17 January 2010

Tory MP demands answers over 'secret' Brown fund

Peter Watt
Peter Watt says he feels 'badly treated' by the Labour Party

A Conservative MP has threatened to report Gordon Brown to a sleaze watchdog over claims he had a "secret" fund to pay for private polling.

Greg Hands wants claims by Labour's former general secretary that £50,000 a year in party donations were kept in a "fund with no name" investigated.

Peter Watts said he suspected it had been used by Mr Brown in his campaign to oust Tony Blair as prime minister.

But Labour sources said the fund paid for work for party purposes only.

A Labour spokesman said: "All donations received by the Labour Party are declared in accordance with the relevant rules and guidelines."

'Serious allegations'

Mr Watt makes the allegation in his memoirs, which are being serialised in the Mail on Sunday.

He said he did not believe there was anything improper about the party donations being channelled into a separate fund, the only record of which was in an exercise book handed to him when he took over as Labour's finance director in 2005.

I have tried very hard to avoid being bitter, but I am a human being
Peter Watt, former Labour general secretary

But Mr Hands says the arrangement should have been included on the Commons register of financial interests as a "personal benefit".

In a letter to Mr Brown, he said: "In light of Mr Watt's serious allegations, I would like to know on what basis you judged it unnecessary to declare the fund.

"As a matter of public interest, I believe it is important that you clarify these issues urgently as I believe there may be grounds for investigation by the Parliamentary Commissioner for Standards."

Mr Watt resigned as Labour's general secretary in November 2007 after admitting he knew that businessman David Abrahams had donated to the Labour Party via third parties.

The arrangement did not comply with the reporting obligations for political parties.

'Strange'

He was eventually cleared by the Crown Prosecution Service and now accuses Mr Brown of "hanging him out to dry".

Mr Watt said the "secret" pot of money was known as the "fund with no name" and was kept topped up with donations secured by Mr Brown's close friend Lord Murray Elder from the then chancellor's supporters.

"Technically, there was nothing improper about it but it always seemed strange that he should have his own stash of cash," he said in the book.

Mr Watt suggested the private polling could have been used to ask the public questions about Mr Blair, as part of Mr Brown's long-running campaign to take over from him as prime minister, although he has no evidence of this.

In an interview with BBC One's Andrew Marr show, Mr Watt said he felt "badly treated" by the Labour Party but insisted his book was not just motivated by "bitterness".

"I have tried very hard to avoid being bitter, but I am a human being. I am sure there is some bitterness in there," he told BBC One's Andrew Marr show.

He conceded that he should have "dug a little deeper" into Mr Abrahams' donations, but added: "There was a culture in political parties - including when I was there - that you play the rules right to the edge.

"Now, I don't think that's a good thing, in hindsight, but that's the reality of it."

In his memoirs, he said Downing Street was a "shambles" after Mr Brown took over and said that the prime minister had spent £1.2m on the "election that never was" in 2007.

He also accuses Mr Brown and Mr Blair of "behaving like children" during the handover of power earlier that year, saying that the two rival camps were not speaking to each other.



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