Labour’s leader at Holyrood was last night facing controversy over allegations that his leadership campaign may have been indirectly funded by the taxpayer.
Iain Gray, who became Labour leader north of the Border 15 months ago, became embroiled in claims that local taxpayers unknowingly subsidised party fundraising events in Prestonpans, East Lothian.
The Prestonpans Labour branch used a marquee and other equipment owned by East Lothian Council, when it was Labour-run, to stage an annual fundraising barbecue, some of the profits of which, political opponents claim, may have helped fund Mr Gray’s successful leadership election campaign.
After Mr Gray, the MSP for East Lothian, launched his leadership bid — ironically at Prestonpans Labour Club — the local Labour party gave him a donation of £800 and the Labour club gave £1,500. Another £2,000 was contributed by the East Lothian Labour Party, to which the Prestonpans branch is affiliated.
The deal to allow the local party to use the council equipment without payment was part of a long-standing agreement which stretched back at least to the mid-1990s and apparently came to light when members of the council, now run by the SNP and Liberal Democrats, conducted a review of council-backed community events.
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The row was being compared by his opponents to the illegal donation made to the leadership campaign of Wendy Alexander, his predecessor as Labour’s Scottish leader — an affair which led to her resignation. However, in Ms Alexander’s case, the donation in question was a direct one to her campaign.
Last night a spokesman for the Labour Party said that East Lothian council officials had not raised any concerns with Prestonpans Labour Party. He added that the marquee in question had been gifted over 20 years ago to the council by Prestonpans Community Council and was meant for the free use of community groups.
Other parties, however, were determined to keep up the pressure on Mr Gray and his local party. Christine Grahame, an SNP backbench MSP, said: “We need an independent audit immediately to establish exactly how much Labour have profited from public money in East Lothian. They must refund local people without delay.
“Iain Gray must make it clear exactly what he knew about these events and when. Did he attend them? Did he realise that council resources were being used inappropriately?”
The Scottish Tories said the value of the donations to Labour must be repaid immediately. Derek Brownlee, the Tory spokesman on finance at Holyrood, described it as “an abuse of taxpayers’ money which should be used to fund vital local services”.
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He also called for an independent audit, adding: “This is a sad commentary on a Labour Party which treats public money as if it was its own. Given that East Lothian Council happily supported the Labour Party with this partisan backing, few people will trust any internal probe.”