The Sunday Times,  Marie Woolfand and Jon Ungoed-Thomas, 10/8/2008

The foreign secretary faces calls for an inquiry over his constituency boss’s role in a £200m power station venture

DAVID MILIBAND was embroiled in a lobbying controversy this weekend after an energy company that had donated to his constituency party was granted planning permission for a £200m power station.

Helius Energy gave £4,000 to Miliband’s South Shields party when he was a minister in John Prescott’s department, which was responsible for planning policy. Helius subsequently hired a lobbying firm, run by Alan Donnelly, Miliband’s constituency chairman, to help win government backing for its biomass power station.

Miliband, the foreign secretary, now faces questions over the implications of Donnelly’s dual roles.

The Tories and Liberal Democrats are calling for full disclosure of any links between Miliband and Donnelly’s clients which range from power companies, including Helius Energy, and Formula One racing.

Seven weeks ago Helius Energy was given government backing to construct a biomass power station on the Humber estuary. The deal has helped to launch the renewable energy company on the international stage.

It has now emerged that Helius, which is based in Middlesbrough, donated £4,000 to Miliband’s South Shields constituency in April 2006. The money funded a party dinner, which was attended by Miliband, party officials and two senior Helius executives.

Helius subsequently hired Sovereign Strategy, Donnelly’s lobbying company, for help with its bid to win approval for the power station.

The company announced its plans for a green power station three months after the constituency dinner. Its application was submitted to the trade department (now the Department for Business, Enterprise and Regulatory Reform).

The environment department - where Miliband became secretary of state in May 2006 - was consulted by the trade department about whether planning permission should be granted. It recommended the project be approved.

The Environment Agency was also consulted on the plan. It initially objected because the plant would be built on a flood plain, but later dropped its opposition.

In June this year Malcolm Wicks, the energy minister, gave permission for the biomass power station to be built.

There is no suggestion that Helius Energy behaved improperly. The company said it had funded a function at South Shields because it was keen to raise its profile and had been offered the chance by a Labour party official.

It said the two executives who had attended the event had not since met Miliband or had any communication with him. Sovereign Strategy had been hired to provide “advice and support” during the planning process for the plant.

While Sovereign was lobbying for Helius it donated £1,500 to Miliband’s local party in South Shields. The firm and its directors gave a further £34,000 to the Labour party.

Sovereign Strategy’s website boasts that it can offer “pathways to decision makers in national governments” and provide “solutions to public policy problems”.

It lists among its clients Bernie Ecclestone, the boss of Formula One, whose £1m donation to Labour was returned after the cash was linked by critics to a decision to exempt the sport temporarily from a ban on tobacco advertising.

Ecclestone enthusiastically endorses the firm, claiming: “Our experience shows that while many professional advisers make claims - Sovereign delivers.” Another client of Sovereign is the FIA, the governing body of F1, whose president Max Mosley was recently exposed for taking part in an orgy with five prostitutes. He endorses Sovereign on its website.

Greg Hands, Conservative MP for Hammersmith & Fulham, said: “It is time for David Miliband to come clean on his links to this curious lobbying firm and Alan Donnelly.”

Steve Webb, the Liberal Democrat environment spokesman, said: “Any minister has to be incredibly careful about who their constituencies take money from. Most people would be shocked to know that these payments are being made at all.”

The ministerial code advises ministers “to take particular care in cases relating to planning applications” and to inform the permanent secretary of any possible conflict of interest.

This weekend a spokeswoman for Miliband said he had played no role in the planning decision and had no recollection of meeting any Helius executives. She said the foreign secretary was not required to list the donation on the MPs’ register of interests and it had been correctly disclosed to the Electoral Commission, the political donation watchdog.

“David Miliband has always been scrupulous in his decision making in government. There is no question of David Miliband being improperly involved in any planning decisions,” she said.

“The funding by South Shields Labour party, their annual dinner and other events is separate from the election fundraising of David Miliband.”

Sovereign Strategy confirmed it had worked for Helius but declined to comment. Donnelly was unavailable for comment yesterday.