Jack Straw, the Home Secretary, revealed yesterday that the Cabinet was discussing proposals which could result in a financial cap on the sums parties can spend on national and local campaigns.
It follows growing concerns that Britain is heading towards an American system in which vast sums of money are lavished on advertising and politics takes a back seat to image.
In a second development, it emerged that the Government is examining proposals to extend the blasphemy laws to include religions other than the Church of England.
Giving evidence to the Commons Home Affairs Select Committee, Mr Straw acknow-ledged that the current law on party funding was outdated. "We need to modernise our approach to election spending," he told MPs. Current election law imposes strict limits on the amounts individual candidates can spend in their constituencies but no controls on what is paid out at a national level.
Asked if he thought there was a case for imposing a limit on spending by national party HQs, he replied: "There is obviously a case." He added that spending by national parties is out of control. His comments go beyond Labour's manifesto commitments to oblige parties to declare donations above pounds 5,000 and to outlaw foreign donations.
Chris Mullin, chairman of the Home Affairs Select Committee, said: "My concern is that we return to issue-driven rather than money-driven elections."
He also highlighted what he described as the "racket" in which the tobacco and drink industry bought up advertising poster hoardings before the election and made them available to the Tory party.
The Tory leader William Hague has recently ended his party's long-standing opposition to a ban on foreign donations and accepted the case for some reform of the current system.
None of the main parties has been willing to disclose their to- tal campaign expenditure, although Labour has acknowledg-ed spending pounds 13m in the 12 months to the last election. The Tories have steadfastly refused to comment on claims that they spent pounds 20m in the same period.
It was also revealed that the Government is looking at the possibility of creating new blasphemy laws. They are examining proposals by the Com- mission for Racial Equality to introduce extra protection against religious discrimination. Mr Straw said ministers were considering measures which protect faiths and religions other than just the Church of England from blasphemy.Reuse content