lucia's: Party funding shakeup rejection leaves committee urging promises kept

Monday, November 21, 2011

Party funding shakeup rejection leaves committee urging promises kept

Committee on standards in public life to challenge three main parties, reminding they supported reform in 2010 manifestos

The main political parties are to be urged to stand by a promise to reform party funding, as all three prepare to reject proposals from an independent commission for �100m of state funding as a means of breaking the stranglehold of big money in UK politics.

The committee on standards in public life was encouraged last year to examine party funding by the deputy prime minister, Nick Clegg, after talks during the last parliament ended up deadlocked.

But, in advance of publication of the committee's report on Tuesday, each of the main parties has made it clear it is unwilling to compromise on key issues.

Oliver Heald, the Conservative party MP on the committee, has issued a dissenting note explaining that the Tories oppose its plan to curb individual donations at �10,000 a year.

Similarly, Labour's member, Margaret Beckett, has written her own dissenting note opposing a recommendation that union political levy payers be required to opt in to paying an affiliation fee to the Labour party, rather than being required to opt out, as at present. Labour says the change would prompt a collapse in Labour funding.

The Liberal Democrats have ruled out increased state funding in this parliament, arguing taxpayers in austere times could not be asked to pay more for politics.

But the committee, chaired by the former civil servant Sir Christopher Kelly, will robustly challenge the parties by pointing out that all three supported reform of party funding in their 2010 general election manifestos, but repeatedly refuse to shift from their entrenched self-interested positions.

The committee will publish a poll showing the public is more willing to accept greater state funding of political parties if the choices are properly explained.

The committee will also point out that polling shows the public want big money removed from politics and 42% of voters believe donations of more than �100,000 are designed "to gain access and influence over the party".

In its report, the committee will recommend that the state provides �3 funding for each vote cast for a party, plus some tax relief. This would broadly cost the state �100m over five years, the lifetime of a parliament.

The state funding would be needed to fill the hole created by the donation cap, but the committee has been unable to model the precise impact of a cap on each party's funding.

The committee will also propose a �10,000-a-year cap on individual and company donations, with only a husband and wife from the same family allowed to donate separately.

A total of �250m of the �432m donated to political parties between the start of 2001 and the middle of 2010 came from single donations of more than �100,000, made by individuals, companies or unions. As a result, a cap of �10,000 would make a massive inroad into the finances of the main parties.

In one of the most controversial proposals, each union would only be allowed to donate �10,000 to Labour per year, and the party would only receive income from an individual political levy payer if he or she had agreed in writing to the union paying the �3-a-year affiliation fee to the party on their behalf.

At present, the levy payer has to contract out of paying the affiliation fee.

The unions claim the switch from contracting out to contracting in will lead to a collapse in funding for Labour as unions are the predominant source of party income.

The report also proposes that the affiliation fee should be frozen at �3 per head for a fixed period.

In her dissenting note, Beckett complains: "Fixing the level of subscription that an organisation may charge its members is an unacceptable intrusion into the internal workings of a political party, which the committee had sought to avoid."

The report will show different parties account for their local constituency income in entirely different ways, an anomaly the committee suggests must be ended before a fair picture of overall party finances can be established.

The report will also propose a lower cap on permitted levels of expenditure at the time of general elections and a clearer cap on spending in the year running up to the launch of an election campaign.

The Liberal Democrats proposed an election campaign cap per party of �10m, a reduction from the current limit of �20m.

The report will also point out that parties receive a "patchwork quilt" of direct government grants and indirect subsidies built up over time.

Patrick Wintour