The situation for New Labour is even worse in Scotland. The party’s new leader Wendy Alexander has broken laws introduced by the Labour government banning the receipt of proxy donations and donations by non-British residents.
Jersey based tycoon and tax exile Paul Green donated £950 to Alexander’s leadership campaign. It has since emerged that Alexander knew that Green had made a proxy donation through “Continental Property Services”.
Charlie Gordon, the party’s transport spokesperson, resigned last week after admitting he had arranged the illegal donation.
Gordon was leader of Glasgow City Council from 1999 to 2005 during which time he dealt with Green over business developments in Glasgow, including the £450 million Silverbank shopping centre. Green gave the council £1 million for social development.
Green denied his gift was a political payback to Labour, saying, “I hardly think so – my goodness, what does £950 buy you these days?”
Alexander, who is Gordon Brown’s key ally in Scotland, was anointed as Labour leader in the Scottish parliament in August without a contest. Nevertheless she accumulated a campaign war chest of £16,000 with which she toured constituencies to promote her “values” and “vision”.
The identities of donors who give £1,000 are made public. A number of donors gave donations of £995, avoiding the need for the party to reveal who the backers are.
The main support for Alexander over the last week has come from Brown, so her departure would leave him with an enormous set of problems.
First, if she goes, there is virtually no one who could replace her with any credibility – this was one of the reasons the leadership position was uncontested in the first place.
Second, Scottish Labour is still deep in denial after losing the May elections to the Scottish National Party. The shock of losing its perceived divine right to rule Scotland probably held the internal bloodletting in check, but after this catastrophe any restraints are likely to be removed.
The eruption of divisions in a leaderless situation would weaken Brown’s hitherto vice-like control over the Scottish party.
Finally, her departure would threaten to begin a “domino effect”, with the next to fall being Harriet Harman. This would reach into the heart of the Brown leadership.
As in England though, the real issue for socialists, the real scandal, is not just who knew what when and what was covered up. It is the fact that the Labour party is going to millionaire tax exiles for funding in the first place.