Lib Dems question use of offshore donations

DONATIONS from an offshore account such as the one used by Asil Nadir to pay Polly Peck money to the Tory party should have prompted questions at Conservative Central Office, the Home Affairs Select Committee inquiry into the financing of political parties was told yesterday, writes Patricia Wynn Davies.

Tim Razzall, treasurer of the Liberal Democrats, which raises pounds 1.7m a year from subscriptions and voluntary contributions, told the cross-party committee: 'If that donation had come from an offshore account, considering that company had large assets in this country, I would have asked why that company was making such a donation through an offshore account.'

Mr Razzall and Graham Elson, the party's general secretary, called for an increase in state funding for political parties, but subject to two limitations. State funds should be matched to voluntary contributions, while general election expenditure should be capped, they said. The second limitation should be brought in even in the absence of state aid.