Clegg urges revamp of party funding system

Nick Clegg will propose a shake-up today of the way politics is funded, including a controversial extension of taxpayers' support for political parties. But the Liberal Democrats' long-standing backing for greater state funding could cause tension within the Coalition as Tory ministers fear a public backlash. "It would be the worst possible time to do this when we are making big spending cuts and after the MPs' expenses affair," one said.

Mr Clegg may have to plead with David Cameron to throw his weight behind more state funding. The Deputy Prime Minister is keen to show some concrete "gains" from the Coalition for his party – especially if the referendum on the voting system, due next May, results in a No vote.

The Liberal Democrats lost their taxpayers' grants to opposition parties when they joined the Coalition and had to lay off 20 party staff as a result.

Mr Clegg hopes that a new deal on party funding will be part of a "second wave" of constitutional reforms in the second parliamentary year of the Government, after Bills on electoral reform and fixed-term five-year parliaments in the current session. Turning the House of Lords into an elected chamber could also be part of phase two, although it could take years to implement.

Mr Clegg will say that changes to the funding system should include greater transparency and new rules on spending and donations, with parties relying on more small donations rather than on a few rich backers. One option would be for the state to match pound for pound the amounts raised by parties in small donations – of perhaps up to £10 – to encourage them to recruit new members and supporters.

He will be speaking at the launch of a new inquiry into the funding of politics by the independent Committee on Standards in Public Life, the anti-sleaze watchdog. Its report next spring will influence the Government's proposals.

Attempts to broker a cross-party deal on funding failed in 2007 after a row between Labour and the Tories over whether Labour's money from its trade union founders should be subject to a cap on individual donations. The talks were led by Sir Hayden Phillips, a former Whitehall mandarin.

Sir Christopher Kelly, chairman of the standards watchdog, said: "While significant difficulties remain, there is sufficient will to reform the system to give us some hope that it ought to be possible to find a solution which is both firmly based in principle and sufficiently acceptable to the main players to be sustainable."

In recent years Labour has become more dependent on union backing after big donations from individuals dried up in the wake of the "cash for honours" allegations against Tony Blair's government.

During the previous negotiations, a cap of £50,000 on donations was favoured by the Tories, while Labour and the Liberal Democrats preferred a lower ceiling. But the parties would then need more state funding to make up for the income lost from big donors.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Service and Installation Engineer

£22000 - £28000 per annum: Recruitment Genius: A fantastic opportunity has ari...

Recruitment Genius: SEO / Outreach Executive

£20000 - £23000 per annum: Recruitment Genius: Our client is a global marketin...

Recruitment Genius: Junior Estimator

£17000 - £18000 per annum: Recruitment Genius: A fantastic opportunity has ari...

Recruitment Genius: Sales Negotiator - OTE £24,000

£22000 - £24000 per annum: Recruitment Genius: An enthusiastic individual is r...

Day In a Page

A timely reminder of the bloody anniversary we all forgot

A timely reminder of the bloody anniversary we all forgot

Who remembers that this week we enter the 150th anniversary year of the end of the American Civil War, asks Robert Fisk
Homeless Veterans appeal: Former soldiers pay their respects to a friend who also served

Homeless Veterans appeal

Former soldiers pay their respects to a friend who also served
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing

Scarred by the bell

The downfall of the TV star charged with bar stabbing
Why 2014 was a year of technological let-downs

Why 2014 was a year of technological let-downs

Security breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Cuba's golf revolution: But will the revolutionary nation take 'bourgeois' game to its heart?

Will revolutionary Cuba take 'bourgeois' golf to its heart?

Fidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
The Locked Room Mysteries: As a new collection of the genre’s best is published, its editor Otto Penzler explains the rules of engagement

The Locked Room Mysteries

As a new collection of the genre’s best is published, its editor explains the rules of engagement
Amy Adams on playing painter Margaret Keane in Tim Burton's Big Eyes

How I made myself Keane

Amy Adams hadn’t wanted to take the role of artist Margaret Keane, because she’d had enough of playing victims. But then she had a daughter, and saw the painter in a new light
Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

Parting view of Ofcom chief... we hate jokes on the disabled

Bad language once got TV viewers irate, inciting calls to broadcasting switchboards. But now there is a worse offender, says retiring head of the media watchdog, Ed Richards
A look back at fashion in 2014: Wear in review

Wear in review

A look back at fashion in 2014
Ian Herbert: My 10 hopes for sport in 2015. Might just one of them happen?

Ian Herbert: My 10 hopes for sport in 2015

Might just one of them happen?
War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?