Donor-gate shows Labour has lost the plot in Scotland

There has been a strange synchronicity to the dodgy donations affairs north and south of the border. At first it looked like me-tooism, as if Holyrood just had to have a paltry tartan version of the scandal raging in Westminster. But it is becoming clear this weekend that the Scottish situation is the more dangerous one for Labour now that serious questions are being raised about the future of Wendy Alexander.

If Labour’s Scottish leader has to resign, would Harriet Harman, the party chairman who also received an illegal donation, have to consider her position? The Tories will say she should. And where would that leave Gordon Brown?

It seems incredible that Wendy Alexander’s job could be at risk over 950 quid raised for a leadership election which never took place, but stranger things have happened. Henry McLeish had to resign as First Minister over a financial muddle which not only didn’t break the law - it didn’t even break the allowances rules in Westminster under whose jurisdiction the offence occurred. He sublet rooms in his Fife constituency office, you may recall, and failed to declare the revenues raised. But no one suggested Henry was corrupt or had acted illegally.

The dangerous thing for Wendy Alexander is that law breaking is now tacitly accepted in the wake of the resignation of Labour fund-raiser Charlie Gordon, who we now know accepted two illegal donations from the tax exile property developer, Paul Green. Moreover, it is clear that Wendy Alexander was fully involved with the arrangement and even wrote a letter of thanks to Green. This paper’s revelations today that there was another dodgy donation, and that Wendy Alexander almost certainly knew about the questionable provenance of the Green donation a month ago, must surely be the final straw. You can’t claim to be an intellectual “master of detail” and not notice that your own election campaign is systematically breaking the law.

The Scottish press believe they were sold a pack of lies about the donation last week, and are in unforgiving mood.
The atmosphere in Holyrood on Thursday was like a cross between Watergate and the Devil Wears Prada as Wendy Alexander, highly dressed as usual, was quite literally chased through the Garden Lobby by a posse of journalists. I’ve never seen anything like it before in Holyrood. They even camped outside outside the office of the transport minister, and go-between Charlie Gordon, until he emerged to resign.

Not even Henry McLeish’s officegate caused such fevered excitement. This is because the stakes are higher. With an SNP government now in office, the implosion of the main opposition leadership becomes a very serious matter indeed. The Union itself could be at stake, not just one politician’s job.

Alex Salmond has been wearing a smirk the size of the Forth Bridge, and with cause. All the pressure has been taken off his government at the very moment when his honeymoon with the Scottish voters, and the Scottish media, seemed to be wearing off. Only six weeks ago people were talking about how a combination of Gordon Brown in Westminster, and Wendy Alexander in Holyrood, could be enough to halt Scottish nationalism in its tracks. With Blair history, the war in Iraq effectively over, and Wendy’s mentor in Number Ten, how could she possibly fail?

Well, she has. Since she became leader she has lost two spin-doctors in as many months; serious questions have been raised about her temperament and her leadership skills; and she has been on the losing side of parliamentary encounters with Alex Salmond. The SNP is getting away with budgetary murder, scrapping pledges and muddying the spending figures across the board. Her fight back speech, calling for a constitutional commission on more powers for Holyrood, was totally eclipsed by the donation row. It doesn’t get much worse than this.

Though they differ in financial scale, the donations scandals in Westminster and Holyrood are essentially the same, for they centre on the party’s curious relationship with businessmen. The expat property developer Paul Green, who made the illegal donation to Wendy’s fighting fund, was a mate of Charlie Gordon’s from his days as Glasgow council leader. Green had made a mint from shopping developments around Glasgow.The man behind the Westminster proxygate affair, David Abrahams, possibly acting for another shady business interest, was also involved in highly lucrative business park project in the North which needed special government approval to be granted planning permission.

No one is saying that there is anything corrupt in these dealings. However, Labour’s own attempts at a cover up suggest that the party itself felt there was something faintly indecent about these arrangements. Why were the donations for Wendy’s campaign raised anonymously? Why were they kept under £1,000 limit, so that they did not need to be declared? Why was David Abrahams allowed to donate, illegally, through proxies? Why the secrecy?

Since before it came to office, New Labour has shown a combination of naiveté and duplicitousness in its dealings with the private sector, Bernie Ecclestone, cash for access, cash for honours. But everyone thought it had ended with the departure of Tony Blair. Gordon Brown made absolutely clear when he became leader that Labour had to wake up and smell the sleaze - root it out, zero tolerance, get the house in order. This is why Wendy Alexander’s donations scandal is so damaging for the Prime Minister. This has all taken place since Brown came to office, and she is his protégé. This cannot be laid at the door of his predecessor, Tony Blair, in the way the Abrahams proxy donations arguably could be.

What is emerging is a systemic failure in Labour to police its own regulations. Everyone makes mistakes, but not like these. It is truly astonishing that more than a decade after the Nolan inquiry into standards in public life, we are still discovering new dimensions of sleaze, and that it should be Labour who is responsible for them. Labour created a whole raft of new rules against abuse of political donations, and the sale of public honours, and then broke them. The UK party general secretary, Peter Watt, allowed a situation to prevail where Labour was taking donations from businessmen through proxies, some of whom didn’t even know they were involved. Why did Gordon Brown’s top fund-raiser - Jon Mendelsohn - not warn his boss about what was going on? How could one Brown aide reject one of these dodgy donations and then suggest to the party chairman, Harriet Harman, that she should accept it?

The fact that these practices were also taking place in the Scottish party should - I suppose - not surprise us. But given the Holyrood history of expenses scandals you wonder how they could have been so irresponsible as to fail to observe due diligence. And all over a few paltry hundred quid? The tragedy is that two politicians of impeccable integrity - Wendy Alexander and Gordon Brown - may have had their careers destroyed by the very practices they promised to end.

The most perplexing thing about the entire donations affair is its witlessness, its pointlessness. This has been an exercise in wanton self-destruction by a party which has lost the capacity to think and act responsibly. I’m afraid the only conclusion is that north and south of the border, Labour has simply lost the plot.