Sleaze watchdog recommends public funding of political parties


An extra £23 million a year of taxpayers' money should be used to fund political parties as part of an effort to clean up the system, a sleaze watchdog has recommended.

Extra state cash - the equivalent of 50p per voter - would make up for a £10,000 cap imposed on individual donations and restrictions on trade union funds.

A 15-month inquiry by the Committee on Standards in Public Life concluded there was no credible alternative way to remove the influence of "big money" on politics.

But the latest effort to reform the scandal-hit Westminster system looks set to become mired in the same party disputes that have scuppered previous attempts.

In dissenting notes included in the report, senior Tory and Labour members renewed objections to fundamental elements of the proposed package.

Labour former Cabinet minister Margaret Beckett said she had "grave concerns" over moves to force individual trade union members to "opt in" to the payment of fees to the party.

And Tory Oliver Heald criticised the rejection of his party's call to set the cap much higher, at £50,000. The moves could lead to significant reductions in each party's income.

In a letter to Prime Minister David Cameron setting out the proposed changes, committee chair Christopher Kelly said it had "come to the conclusion that the only safe way to remove big money from party funding is to put a cap on donations, set at £10,000".

He conceded that it was "hard to imagine a more difficult climate" in which to suggest the public should pay more towards political parties.

"We would not have made it if we thought there was a credible alternative. We do not believe there is.

"If the public want to take big money out of politics, as our research demonstrates they do, they also have to face up to the reality that some additional state funding will be necessary."

The sum required should be "kept in perspective", he said, as it was "little more than the current cost of a first class stamp" for each voter per year.

Deputy Prime Minister Nick Clegg, whose Liberal Democrat Party has never been able to attract the huge sums given to the two main parties, pushed hard for the review but has been forced by the economic situation to temper his support.

His spokesman said that the Government believed "the case cannot be made" for extra state funding at this stage - meaning a £10,000 cap would be too low.

"The Government believes that the case cannot be made for greater state funding of political parties at a time when budgets are being squeezed and economic recovery remains the highest priority," he said.

"But there is a case for looking carefully at whether existing levels of support could be used more effectively."

The Government "remained committed" to reforming the system and accepted the principle of a cap, the spokesman said.

"But the level of a cap will need to be considered with reference to other elements of a reform package, in particular the impact on the ability of parties to continue to raise sufficient funds and the absence of any additional support from the state.

"Reform remains a priority and is best achieved as far as possible by consensus. To that end we plan to continue cross-party discussions based on the principles identified by the Committee and the Government's reform commitments."

Mr Kelly acknowledged that his committee's findings would not make "comfortable reading" for the political parties, but added: "We think they are nonetheless justified."

Launching the report, he said: "The issue of party funding cannot be shelved until the next scandal brings it to the fore.

"All three main parties now depend on large donations from a very small number of rich individuals or organisations for the funds necessary for their survival.

"This cannot be healthy for democracy."

Mr Kelly called on party leaders to show the "political courage" to adopt his proposals to clean up party funding.

He warned: "For as long as the system remains as open to corruption as the present arrangements, the possibility of another scandal will remain.

"Trust is very hard-won and easily lost."

A recent series of attempts to reform the system date back to the so-called "cash-for-honours" scandal in 2006 when parties were accused of awarding life peerages in return for "soft" loans on favourable terms, which, unlike donations, did not have to be publicly declared.

Both main parties have also faced accusations of relying too heavily on a small number of donors giving large sums - mostly wealthy businessmen for the Tories and the trade unions for Labour.

The cap would prevent any individual or organisation from giving a party more than £10,000 in any one year.

That would apply to trade unions - which hand over affiliation fees as a single donation - unless individual members were asked if they wanted their money to go to Labour.

Unions would also be subject to "certain other conditions to ensure that undue influence cannot be exerted", the report said.

State funding should be increased by giving parties an extra £3 per vote secured in general elections and £1.50 for each vote in devolved and European elections.

That would only go to parties with at least two MPs or members of devolved assemblies.

Other recommendations were for a 15% cut in general election campaign spending limits and an income tax break for people making small donations up to £1,000.


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