Labour worried by Clegg's plan to cap party donations

 

Nick Clegg is to try to break the deadlock between the Conservatives and Labour over how Britain's political parties are funded.

The Deputy Prime Minister, who is responsible for reforming the political system, is considering ideas including a £50,000 cap on individual donations to parties so they do not rely on rich backers. In return, parties could qualify for tax relief on small donations in the same way as charities.

Although the Liberal Democrats have traditionally supported handing more taxpayers' money to parties, Mr Clegg is wary of proposing a huge rise in state funding while the Government is imposing big spending cuts.

Labour is nervous about his planned reforms. It suspects Mr Clegg is in cahoots with the Tories to produce reforms that harm Labour by including its trade-union donations in any cap. "That could bankrupt us," one Labour source said. Allies of Mr Clegg insist he wants to reach an all-party consensus. However, they do not rule out legislation if no deal can be reached. "This is not a stitch-up, it is a serious attempt at reform. But Labour cannot have a veto," one said.

Mr Clegg said it is unhealthy for Labour to rely largely on trade-union donations and taxpayers' grants to opposition parties. The Liberal Democrats lost their opposition money when they entered the Coalition last year and their officials are keen to see a new settlement on funding.

The Government's proposals will be finalised after an independent inquiry into political funding reports in October. The Committee on Standards in Public Life, chaired by Sir Christopher Kelly, will draw up its report next month. It is considering a cap on donations, with parties compensated by tax relief or matching state funds for small donations.

In evidence to the committee, the Tories and Liberal Democrats backed a £50,000 ceiling on donations, while Labour floated the idea of a much lower £500 cap.

Recent attempts to reform funding stalled after failing to resolve the big question of Labour's union links. The Tories want their donations included in any cap, but Labour argues it should be exempt because union-affiliation fees represent small gifts by three million members who pay the political levy.

Official figures published yesterday by the Electoral Commission highlighted Labour's dependence on its union founders. Between April and June, unions contributed about £2.7m of the £3.2m received by Labour. The biggest payments were from Unite, Unison, the GMB, the shopworkers' union Usdaw and the CWU communication workers' union.

Labour received £178,234 from individuals and £124,026 from companies. Labour also benefited from opposition party grants of £1.6m.

Between April and June, the Tories received donations that totalled about £4.2m, including £2.4m from individuals and £1m from companies.

The Liberal Democrats attracted £972,954 in donations, including £261,903 from individuals and £569,329 from companies, including two venture-capital firms – Brompton Capital Ltd and C&C Alpha Group.

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

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Ashdown Group: Senior Marketing Executive- City of London, Old Street

£40000 - £43000 per annum + benefits: Ashdown Group: Senior Marketing Executiv...

Ashdown Group: Marketing Manager

£40000 - £43000 per annum + benefits: Ashdown Group: An international organisa...

Ashdown Group: Internal Recruiter -Rugby, Warwickshire

£25000 - £30000 per annum: Ashdown Group: Internal Recruiter -Rugby, Warwicksh...

Day In a Page

Aren’t you glad you didn’t say that? The worst wince-and-look-away quotes of the year

Aren’t you glad you didn’t say that?

The worst wince-and-look-away quotes of the year
Hollande's vanity project is on a high-speed track to the middle of nowhere

Vanity project on a high-speed track to nowhere

France’s TGV network has become mired in controversy
Sports Quiz of the Year

Sports Quiz of the Year

So, how closely were you paying attention during 2014?
Alexander Armstrong on insulting Mary Berry, his love of 'Bargain Hunt', and life as a llama farmer

Alexander Armstrong on insulting Mary Berry and his love of 'Bargain Hunt'

From Armstrong and Miller to Pointless
Sanchez helps Gunners hold on after Giroud's moment of madness

Sanchez helps Gunners hold on

Olivier Giroud's moment of madness nearly costs them
A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect