PM accepts Peter Hain's resignation

Jan 24 2008 icWales

Peter Hain today resigned as Work and Pensions Secretary and Secretary of State for Wales, saying he wanted to clear his name as police began a probe into donations to his deputy leadership campaign.

Mr Hain telephoned Prime Minister Gordon Brown at 11.30am after being informed by the Electoral Commission that they were referring the case, involving £103,000, to the Metropolitan Police.

It is understood Mr Hain offered his resignation at that point “without hesitation” and it was swiftly accepted by Mr Brown.

Minutes later the commission publicly announced it was referring the case involving his campaign cash to the police and Mr Hain confirmed his resignation in a statement to the Press Association.

He said: “In view of the Electoral Commission decision today, I will be resigning to clear my name and I will be making a statement shortly.”

Downing Street said: “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 Electoral Commission said: “On November 29, 2007, Peter Hain MP informed the Electoral Commission that he had not fully reported to the commission donations he had received for his Labour Party deputy leadership campaign.

“Mr Hain has since met with the commission and provided additional information about donations he received. The Electoral Commission has undertaken a thorough review of this information.

“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.”

The Met then confirmed it had launched an investigation into the donations.

“We can confirm that the Met has today received a formal referral from the Electoral Commission in connection with potential offences under the Political Parties and Referendums Act 2000 regarding donations received,” a spokeswoman said.

“An investigation will now begin by detectives from the Specialist and Economic Crime Command.”

Mr Hain’s resignation, amid news of the latest police investigation involving Labour and donations, will come as a huge blow to Prime Minister Gordon Brown.

Police are already probing proxy donations to Labour of more than £600,000 from north east property developer David Abrahams, which Mr Brown has said were “unlawful” and not properly declared.

That case has already claimed the resignation of Labour’s general secretary, Peter Watts.

Mr Brown had fought to keep Mr Hain, declaring him to be a “great” minister doing a “good job” on welfare reform.

But as the affair dragged on, support from the premier and Cabinet colleagues appeared to ebb away.

Confirmation of the police probe was the final straw which led him to quit the Cabinet.

Shadow work and pensions secretary Chris Grayling said: “Peter Hain’s resignation was inevitable and the right thing to do given the Electoral Commission’s decision.

“What is important now is for Gordon Brown to take rapid action to restore effective leadership to a department that has clearly been distracted by the events of the last few weeks.”

Michael Leahy, general secretary of the Community union, said: "Peter Hain made a major contribution to this Labour Government, not least in his time as Northern Ireland Secretary and as Secretary of State for Work and Pensions.

"His work with Community to bring an end to the misery affecting the 130,000 people who lost their expected occupational pension due to employer insolvency is a legacy of which he can be proud. Today’s news shows that there is an urgent requirement to limit expenditure in all political elections."

Tory leader David Cameron, speaking at the World Economic Forum in Davos, Switzerland, told Sky News: "He's made the decision today. I think it's the right one, but the Prime Minister shouldn't have allowed it to go on so long.''

Health Secretary Alan Johnson, a fellow challenger for Labour's deputy leadership last summer, said he was ``absolutely'' shocked.

He said Mr Hain was an "excellent" Secretary of State and described his resignation as a "big loss" for the Government.

"I can understand why he’s done this, now it’s been referred to the police," he told BBC2.

"I think it shows great credit on Peter that he believes that now it’s got to that stage he feels he can’t carry on in a Cabinet position.

"But I’m really sad, because it’s a big loss for us."

Clive Phillips, president of the constituency Labour Party in Neath, said the resignation had come as a ``shock''.

"I am very saddened. I think he has been hounded out. He came clean as soon as he found out about the undeclared donations."

Mr Phillips said he advised Mr Hain to "stick it out" when he saw him at the weekend, and there had been no hint he was about to resign.

"I saw him on Saturday night and he was so upbeat and enjoying himself. I had not seen him like that for days, and I thought he was back to his old self.

"It has come as a real shock."