Peter Hain quits cabinet to 'clear name'

Jan 24 2008 icWales

Peter Hain resigned from the Cabinet today after police launched a probe into his deputy leadership campaign finances – saying he has “no alternative” but to fight to clear his name.

He became the first casualty of Prime Minister Gordon Brown’s term of office, stepping down as Work and Pensions Secretary and Secretary of State for Wales.

His dramatic departure was announced minutes after the Electoral Commission said it is referring the row over his late declaration of £103,000 in funding to Scotland Yard.

The Metropolitan Police then confirmed an investigation had begun by detectives from its Economic and Specialist Crimes Command.

Mr Hain was given advance warning of the commission’s decision and telephoned the premier in Downing Street at 11.30am.

“It was not a protracted conversation,” said Mr Brown’s spokesman, who confirmed that Mr Hain instantly offered his resignation.

Rising Cabinet star James Purnell was later promoted from Culture Secretary to Work and Pensions Secretary to replace Mr Hain, although he will not also serve as Welsh Secretary.

Mr Hain told reporters as he left his department for the last time: “In view of the decision of the Electoral Commission today, I have come to the conclusion that I have no alternative but to resign as Secretary of State for Work and Pensions and Secretary of State for Wales, and I have now done so.

“Immediately I realised that the problem had arisen I issued a statement on November 29, and I severely and seriously regret the mistake in declaring donations late, and I have co-operated as soon as I was able to with the Electoral Commission, providing all the details they have asked for.

“And I will of course co-operate in the future with the police and with any other authorities that wish to ask questions about this.”

Mr Hain added in his resignation letter to Mr Brown: “I made a mistake but it was an innocent mistake.”

Earlier he told the Press Association: “I will be resigning to clear my name.”

Mr Brown wrote to Mr Hain: “I recognise that, given the circumstances and your desire to clear your name, this is the right and honourable thing to do. I also recognise that in making this decision you have, as ever, put the country’s interests before your own.”

Downing Street was keen to stress that the premier carried on with business as usual today, including a regular video conferencing call with US President George Bush.

There was little hint that Mr Hain would be welcomed back to Government, with Mr Brown writing simply: “I know that you will continue to make a contribution to public life in the future. I would like to place on the record my thanks for your years of public service.”

Tory leader David Cameron said: “It’s the right decision, but it shouldn’t have happened in this way.

“I said some time ago the Prime Minister should have said to Peter Hain you’ve got to give a convincing explanation of your situation or you can’t stay in the Cabinet.

“Instead, we’ve had a long delay where one of the most important departments in Government hasn’t been led properly, and I think that was wrong.

“The Prime Minister should not have allowed this to go on for so long.”

Liberal Democrat work and pensions spokesman Danny Alexander said: “The transition from Blair to Brown feels increasingly like the transition from Thatcher to Major.

“We have had the return of Government incompetence, economic turmoil and political sleaze.

“We all remember John Major clinging on to ministerial colleagues, only to lose them in the end, and now Gordon Brown is doing the same.

“His colleagues are being caught out by allegations of self-interest and complacency. The difference is that it took Major almost two years to lose his first Cabinet colleague.

“Gordon Brown has lost Peter Hain after just six months.”

The Electoral Commission announced just after noon today: “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 Mr 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 Watt.

Mr Brown 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 Prime Minister and Cabinet colleagues appeared to ebb away.

Confirmation of the police probe was the final straw which made his Cabinet resignation inevitable.

Mr Brown is tonight putting the final touches to the rest of his ministerial reshuffle, with a replacement also needed as Secretary of State for Wales and for Mr Purnell as Culture Secretary.

Splitting Mr Hain’s job need not cause a bureaucratic headache for No 10, increasing Cabinet numbers and salaries by one, because Northern Ireland Secretary Shaun Woodward does not take a ministerial salary.

PM accepts Peter Hain's resignation
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