Labour considers £50m state funding for parties

Activists will be asked for their opinions on citizenship, health, welfare and defence in advance of the next manifesto
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Tony Blair could fight the next general election on a pledge to bring in £50m a year of state funding for Britain's political parties in response to the controversy over donations to Labour by businessmen.

A Labour document published yesterday said the party would consider state funding for parties during a wide-ranging policy review designed to produce ideas for the party's manifesto at the next election.

Mr Blair is wary of changing the law before the election without all-party agreement, and the Tories are expected to oppose state funding. One aide said: "Without any consensus, we would be pilloried for sharing out £50m a year to political parties instead of spending it on public services."

However, Labour could claim public endorsement for the plan if it is included in the manifesto and the party then retains power.

Charles Clarke, the Labour chairman, confirmed that the section on state funding in yesterday's document had been "beefed up" after the rows over Enron, the collapsed American energy giant that sponsored a Labour fund-raising event, and Lakshmi Mittal, who gave the party £125,000 just before Mr Blair backed his bid to buy a Romanian steel plant.

Mr Clarke said: "Democratic politics has to be funded either by state funding or by donations, whether from individual members, big donors or trade unions. That is the choice the country faces; you can't have democratic politics at zero cost.

"There are some people who argue that we should go down the state funding route now. We are not clear that is the best course but we do need to have a proper debate about it."

The decision to consider state funding was announced in a policy document on "democracy, citizenship and political engagement", which admits that politicians may be turning off the voters. "Some of the practices of political life still remain similar to those used by politicians in the 19th century. The style of parliamentary debate is often not seen as effective by MPs or the British public," the report says.

Although only 39 per cent of people aged 18 to 24 voted in last year's election, Mr Clarke said young people were interested in what was going on in the world. "We in politics have not succeeded in making ourselves relevant to them," he said.

Ideas to boost the turn-out to be considered by Labour include compulsory voting; making it compulsory to register to vote; reducing the age at which young people can stand for public office; voting by the internet and telephone; and "all-postal" ballots.

Five documents were issued yesterday as Labour leaders promised a more open system of policy-making to counter criticism that the views of party members have been ignored. Mr Clarke admitted there was some "cynicism" in the party but insisted that Mr Blair now wanted a genuine debate. A report on the health service revealed a U-turn after a rebellion by activists and trade unions. The original draft, leaked to The Independent, suggested that Labour would water down its traditional commitment to a free, universal NHS. The draft said the right way forward for Britain was "an NHS providing largely comprehensive services, overwhelmingly free at the point of use." The final version said: "Now, more than ever, we should say unequivocally that the right way forward for Britain is an NHS provided according to need, not ability to pay."

A document on welfare reveals that Labour will consider an embarrassing about-turn on its policy of directing state help for pensioners towards the poorest. It asks whether the Government should use all the resources to raise the basic state pension.

Another report suggests that Britain's level of defence spending might need to rise to combat the terrorism threat after 11 September. It asks: "Are we prepared to see increases in defence expenditure to achieve security at home and abroad, as well as providing the resources needed for our armed forces to carry out vital tasks?"

The document hints that Labour will support President George Bush's controversial "son of star wars" programme. "Labour shares US concerns about the real threats stemming from the proliferation of missiles and weapons of mass destruction and on the need for a comprehensive strategy, including defensive systems, to counter this threat."

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