The story as played by The Observer today: http://observer.guardian.co.uk/politics/story/0,,2126716,00.htmlThe £4,800 cheque that tripped Cameron's manLess than a month after dashing Asian businessman Tony Lit attended a glittering Labour event and his firm made a donation to the party, he is campaigning as a Tory in a key by-election. Jo Revill and Nicholas WattSunday July 15, 2007The Observer For Tony Blair's farewell dinner with the Asian community, no expense was spared. The guests at the Plaza Riverbank Hotel in London were treated to the best of Indian cuisine, with traditional Asian dancers on stage, followed by music from the Drifters, a tribute band singing the Sixties melodies of the original group.In this celebration of diversity, the guests hailed from many different ethnic backgrounds. Cherie Blair worked the room, shaking hands with old friends, talking about how much her husband had done in the previous decade to encourage a more multicultural Britain.But underneath the gloss, this was also a serious fundraising event for the Labour party. Sitting at one of the tables was Tony Lit, accompanied by his wife Mandy and his father Avtar, pillars of the Sikh community and the wealthy owners of Sunrise Radio, the largest Asian station in Britain. The seats had cost their company £4,800 with the cheque going into party coffers. After the dinner there was a fund-raising auction, and Avtar Lit successfully bid another £4,000 for a weekend trip to Atlanta, the highlight of which was two seats at a dinner with Hillary Clinton.All of this would seem perfectly normal were it not for the fact that seven days later, Tony Lit, a handsome young businessman, was selected to be the Tory candidate for the Ealing Southall by-election this Thursday. The news came as a very unpleasant shock last night to David Cameron, who has pinned a lot of hope on the prospect that his star candidate will deliver a blow to Gordon Brown by winning the contest.Last night a photo taken at the dinner on 20 June was released by Labour to inflict maximum damage on the Conservatives just four days before polling day. It shows a beaming, dinner-jacketed Lit with his wife and a smartly attired Blair. A picture of the incriminating cheque was also released.It is not thought that anyone in the Tory high command was aware of the Lits' presence at the dinner, or the company's generous donation to Labour.But what is even more surprising is that the pledge of £4,000 which Avtar Lit made for the trip to Atlanta has not yet been paid. A Labour source said: 'Once a company donates more than £5,000 and once Labour receives a donation of more than £5,000, both sides have to declare it. Has it not yet been paid because the Lits wanted to avoid all this coming out in the run-up to the election?'Suddenly, the by-election for a safe Labour seat in west London has been galvanised by the revelation which follows a series of local council defections, allegations of muck-raking and conflicting opinion polls.But for Cameron, far more is at stake in this fight than one constituency seat. 'It is about the direction in which he is taking the party, and, indeed, his own reputation', said one insider. 'He's got to do well in Ealing, to show that we can make inroads into Labour's heartlands.'The new revelations about the candidate, whom Cameron was praising to the skies just two days ago, is the latest in a string of troubles that have beset the Tory leader. Last Wednesday, he publicly backed a report by a policy group led by the former leader Iain Duncan Smith which called for married couples to have tax breaks. Cameron said: 'Britain is almost the only country in Europe that doesn't recognise marriage in the tax system, and the benefits system actively discourages parents from living together.'However, at the shadow Cabinet meeting the day before, shadow Chancellor George Osborne made it clear that there had been no decision to endorse such a policy, leaving everyone there wondering what was going on. A similar thing occurred over grammar schools the previous month, when the Tory leader backed his education spokesman David Willetts when he said the party would not build more grammars - against the advice of the shadow cabinet which felt the issue should not even be raised. The damaging school row shook the party.The new test for the Tories is now Ealing Southall, a constituency of huge diversity, both in its ethnic mix and social class. To the east lies Ealing, with its smart avenues of £2m homes and beautifully manicured parks. Further west along the Uxbridge Road, which splits the borough in two, is Southall, with its high number of Asian first-, second- and third-generation immigrants where fortunes are more mixed. The older generation are now plagued with new problems - drug taking among the younger Asians, and problems with crime.The constituency has always been a Labour stronghold. It has one of the largest party memberships of any constituency, with some 3,000 activists. For years, its MP, Piara Khabra, tenaciously held the seat, and worked well with the Sikh, Hindu and Muslim communities despite local differences. He died in May at the age of 82, triggering the by-election. Virendra Sharma, 72, a councillor in Ealing for 25 years was selected as Labour candidate.But Sharma's candidacy has not been all plain sailing. The person many hoped would be selected as the candidate is the leader of the Labour group on the council, Sonika Nirwal. Initially, it had been said that there would be an all-women shortlist but instead, just two men, including Sharma, were considered. Nirwal was rung up by Gordon Brown on the day that the local party selected Sharma, and he commiserated with her.As for the Lib Dems, their campaign has not been inspirational. Their candidate, Nigel Bakhai, stood last time against Khabra and was defeated, but doubled the party's vote. Bakhai lives in the heart of the constituency, and has campaigned solidly for years. Lord Rennard, the Lib Dem's campaign co-ordinator, said: 'We are the main challengers in this seat. Labour are running scared.'But it is the megawatt smile of Tony Lit that beams out from the posters plastered on to the side of the Himalayan Palace cinema, looking down on a busy street in Southall. He appeared to be a new type of Tory: young, successful, metropolitan. The unmissably upbeat image amid the Bollywood posters is one reason the Conservatives have started to believe that for the first time in 25 years, they could actually win a seat from Labour in a by-election now.Grant Shapps, the Tory's housing spokesman and by-election supremo, was in an upbeat mood last week at the headquarters in Ealing, poring over a wall map looking at the roads they had to get around. 'We've learned a lot from recent by-elections. We've learned you have to have the right candidate, and if you do, that completely changes the story of the campaign.'But there has also been a huge amount of anger over the defections. Last week, five local councillors, four of them from Labour, joined the Tories to back Lit's campaign. There was due to be a sixth, say the Tories - Zahida Noori - but she pulled out. Unfounded rumours were passed to journalists that Labour had threatened to reveal details of her personal life if she defected. But Noori herself has denied that she ever intended to defect, or that any such threat was made, and has accused the Tories of lying. It is symptomatic of the whole campaign that it has descended into such bitterness. It has also emerged that two ex-Labour councillors who joined the party, described by senior Tories as 'defectors', had in fact been expelled by Labour.Lit, a father of three, is well known in the area as managing director of Sunrise, a station listened to by a huge number of British Asians. Yesterday, he was out shaking hands at the Norwood Green village fete, a quintessentially English occasion for which the sun shone. As he walked around he had absolutely no idea of the row that was about to explode.A Tory spokesman denied their candidate had done anything wrong by attending the dinner, pointing out that he was then in his radio job, before he gave it up a week later to stand in the by-election. 'It's normal for businessmen to do this kind of thing,' he said. 'He'd been at a Conservative party event two weeks before which was also held for the Asian community. Given the importance of Sunrise Radio, it would be odd if he hadn't gone to the dinner.' The spokesman said that they had not yet received an invoice for the £4,000 pledge, which he said would be paid for by Sunrise. He added the Lits had been told the fund-raising event was organised by Labour MP Keith Vaz, and that the money would be going to his charity, Starline, which helps disadvantaged children.But Joan Ryan, vice-chairwoman of the Labour party, described the affair as 'breathtaking and naked Tory opportunism' which she said would not fool the people of Ealing and Southall: 'David Cameron's personal intervention to overrule local Tories and appoint a candidate has totally backfired.'The pamphlets being pushed through letterboxes this weekend by the Tory team campaigning for him may draw smiles now. One glossy leaflet quotes Lit saying: 'Most people are glad Blair has gone. I was completely against the war in Iraq and to be honest it's because of Tony Blair I decided to stand. He's lost touch with what matters to local people.'On Friday, as Cameron walked the streets of Southall with Lit by his side, he said: 'There is something quite seismic happening here in Ealing and among the British Asian community.' He was right, but possibly not in the sense it meant it. Quite how seismic that shift will be on Thursday's election remains to be seen.----And:http://observer.guardian.co.uk/politics/story/0,,2126699,00.htmlTory candidate made £4,800 gift to LabourNicholas Watt and Jo RevillSunday July 15, 2007ObserverDavid Cameron was facing embarrassment last night after the disclosure that the Tory candidate in this week's high-profile Ealing Southall by-election was involved in donating nearly £5,000 to Labour.A massive Conservative push ahead of Thursday's vote - to show that Cameron is now appealing in urban areas - will be undermined by the news that a company controlled by Tony Lit donated £4,800 to the governing party just days before his adoption as the Tory candidate.A beaming Lit posed for a picture alongside Tony Blair at the event, which was held at the Riverbank Plaza on London's Embankment on 20 June - a week before the former Prime Minister left Downing Street.Lit was then managing director of Sunrise Radio, which paid for a 10-seat table at the event. Eight days later Lit was selected as the Tory candidate for the by-election after he had been a member of the party for only a handful of days. He resigned his position at Sunrise in order to fight the seat.The cheque, which was made out on 15 June, came from Sunrise Radio Limited. A further £4,000 was pledged by the Lit family at the event to attend a Hillary Clinton fund- raising event in Atlanta.The Labour party has not yet received the second payment which would have taken Sunrise through the crucial £5,000 donations barrier. All political donations over £5,000 have to be disclosed. Labour yesterday released the picture of Lit and Blair and a copy of his company's cheque to secure maximum impact days before the by-election. Joan Ryan, the party's vice-chairwoman, said: 'This breathtaking and naked Tory opportunism will not fool the people of Ealing and Southall. David Cameron may lack judgment with his choice of candidate, but the voters of Ealing and Southall will see through his charade on Thursday.'Lit last night played down the donation. 'As a businessman, I did indeed attend this event for the Asian business community, but like many British Asians I feel the Labour government does not have the answers to the challenges that currently face the country.'Increasingly the Asian community is leaving the Labour party and joining David Cameron's modern and inclusive Conservative party.'A Conservative spokesman said Francis Maude, who was the Tory chairman when Lit was selected, had been informed by Lit that he had met the Prime Minister when he was selected on 28 June.'We are very relaxed about this,' he said. The spokesman added that the second payment for £4,000 had not yet been sent out because they had not received the invoice for it from the dinner.'The disclosure of the donation will privately infuriate Cameron, who suffers another setback today when a new set of opinion polls confirm that Gordon Brown is enjoying a bounce.Labour has surged to a seven point lead over the Tories in an ICM poll for the Sunday Telegraph. Labour is on 40 per cent to 33 per cent for the Tories - the party's biggest lead with ICM since September 2005. The Liberal Democrats are on 19 per cent.Another ICM poll, for the News of the World, found that 53 per cent felt Brown was best equipped to lead Britain compared with 27 per cent for Cameron. the same pollsters gave the Tory leader a five-point lead over Brown earlier this year.Cameron had hoped to disprove the polls by knocking the Liberal Democrats into third place on Thursday, a result that would show the Tories are now appealing once again in urban areas. The Tories will now be forced onto the defensivein Ealing Southall.Cameron has made a series of visits to the constituency after enjoying what he believes have been a strong two weeks. The Tory leadership was delighted when the Daily Mail welcomed Cameron's suggestion last week that he would offer tax breaks for married couples.But George Osborne, the shadow Chancellor, told the shadow cabinet on Tuesday that there would be no rush to sign up to a tax-cutting pledge which could cost - according to Labour estimates - up to £3.2bn. 'George made clear he would look at the fiscal effects of the recommendation,' one source said. 'We were reassured that this was not designed to be a lurch to the right,' one shadow minister told The Observer. 'But we're still wondering whether it was a stealth lurch to the right.'
Duncan Walker ● 6530d