It seems Jack Straw has waded into the Lord Levy row and said, as expected is trying to frame the debate around the wide issue of party funding. The problem though is not party funding really. In a liberal democracy people should be able freely make donations to political parties if they choose to.
The problem is the perception that donations can buy you influence or, in the most extreme circumstance, buy you a permanent seat for life in Parliament. Making the second chamber wholly elected would remove that perception.
It's simple. Close the loopholes that allow big sponsors money to be hidden, and make the second chamber's composition a matter for the electorate.