THE Scottish Secretary has been accused of profiting from his government’s austerity cuts after accepting thousands of pounds in donations derived from a pawn shop.

Tory MP David Mundell took £10,000 earlier this year from Glasgow-based landlord Stridewell Estates Ltd, some of which helped bankroll his general election campaign.

Stridewell owns a single “investment property”, on Cowdenbeath High Street, which for the last four years has been leased to the Look@Me Pawn Shop.

According to its accounts, Stridewell’s entire turnover is derived from renting out the unit, which public records show is leased at £6000 a year.

Situated next to bookmakers, charity shops and bargain food stores, Look@Me currently charges 25 per cent interest on a one-month loan.

Labour said Mundell’s donations amounted to “making money out of the poor”.

Pawnbroker loans, secured against jewellery and other goods for quick cash, are classed as a form of “high-cost credit” along with payday loans and home collection credit.

In 2013, the Tory-LibDem Coalition government published a report on “Credit, Debt and Financial Difficulty in Britain” warning they were used by “more vulnerable consumers”.

Households with pawnbroker loans were more likely to have an adult who had lost their job in the past year: 30 per cent compared with 19-23 percent for other users of high-cost credit.

The same year, the Parliamentary Commissioner on Banking Standards said the surge in payday lenders and pawnbrokers showed access to affordable credit “remains a problem for many”, concluding: “We believe that this problem is greater in deprived communities.”

Despite the origin of Stridewell’s income, Mundell accepted £2500 from the firm in January, then another £2500 in March and a further £5000 in May.

The payments are recorded in his parliamentary register of interests.

Electoral Commission records also show Stridewell Estates Ltd gave £10,000 to the UK Conservative Party ahead of the general election.

Stridewell is owned by Singapore-based developer Brian Gillies, who has been a regular donor to Mundell and the Conservatives.

Since 2010, another Gillies firm, Alchemist Estates Ltd, has given the UK Tories £63,000, plus £16,000 to Mundell’s Dumfriesshire, Clydesdale and Tweeddale constituency party.

Alchemist Estates also gave £12,500 to Ruth Davidson when she ran for the leadership of the Scottish Tories in 2011 - she was later fined £200 for failing to declare the cash on time.

Glasgow-born Gillies was a chartered surveyor in London before being made redundant in the 1990s - he started a property firm with his £40,000 pay-off and is now a millionaire.

He bought the Cowdenbeath property for £65,000 in 2006.

In 2013, Gillies relocated to Singapore where he is now a “private wealth manager”.

Although he lives overseas, he is still able to donate via his companies, as they are registered and do business in the UK.

Cowdenbeath MSP and deputy leader of Scottish Labour Alex Rowley, whose constituency office is near the pawn shop, said: “David Mundell is supporting policies that are driving more and more people in my constituency into hardship.

“At the same time, Fife Council is trying hard to support these people and keep them away from money lenders and having to pawn their goods out of desperation. So while others are looking to support people in need, the Tories are making money out of the poor.”

An SNP spokesman said: "It is for Mr Mundell to judge which companies he deems it appropriate to receive donations from – but many people will be surprised to learn that his cash flow is partly dependent on a pawnshop and its trade."

Gillies did not respond to a request for comment.

Andrew Stevenson, who rents the Cowdenbeath shop from Stridewell, said he had no idea that the money from the company went to Mundell.

“I just pay them the rent every quarter. That’s a sickener. I’m not a fan of the Tories.”

He defended pawnbroking, saying his interest rate was a maximum of 300 per cent a year, compared to 2000 per cent for some payday lenders. He also said he was giving up the lease and closing next year because the business was “failing”.

The Scottish Conservatives declined to comment.