AGENDA: Debate May Turn Back to Using Public Funds to Finance Parties

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The one silver lining for Labour in the latest revelations about party funding are Scottish politics, with its MSPs and Holyrood parliament, is largely incomprehensible to English voters. The new twist came when it emerged Scottish Labour leader Wendy Alexander had accepted a donation which, it turns out, was not legal.

Charles Gordon, Labour's transport spokesman in the Scottish Parliament, resigned after admitting he had unwittingly misinformed Ms Alexander's campaign team about the source of the money.

None of these figures are household names in England, where elections are won or lost. But the affair adds to the sense there is something rotten about the way Labour is funded.

Labour would perhaps retort the Conservatives are not immune to funding controversy.

Wealthy benefactor Lord Ashcroft has poured money into key marginals, by-passing rules on election spending by spending the cash long before an election.

Peter Bradley, the former Labour MP for the Wrekin, has highlighted the role of the Midlands Industrial Council, a consortium of some of the region's most successful business leaders.

Their money helped the Tories defeat Labour in constituencies such as his, in 2005. But none of this was illegal, even if it could potentially be seen as unfair. Labour does, of course, have its own cash cows in the form of the unions, which sponsor Labour MPs and candidates.

Some Labour MPs in recent days have also resorted to reminding voters about the bad old days under John Major, when Tory MP Neil Hamilton was accused of receiving cash in Brown envelopes in return for tabling Parliamentary questions. He later failed to clear his name after unsuccessfully suing for libel.

But this was 13 years ago, and dredging it up today looks weak. It also risks giving the impression that Labour admits its behaviour today is comparable to that of the sleaze-ridden Tories of the early 1990s, when the "cash for questions" affair was, in fact, incomparably worse.

Finally, Harriet Harman, Labour's Deputy Leader, took the direct approach yesterday and simply insisted: "We acted at all times within both the letter and the spirit of the law. …