Labour ‘remains opposed’ to party funding cap
Labour’s governing body insisted last night that it would not accept a cap on individual donations when Hayden Phillips publishes his review of party funding.
The national executive committee (NEC) said it stood by its original submission to the review and rejected anything that could compromise the historic links between Labour and the trade unions – particularly over finances.
In a statement, NEC chairman Mike Griffiths also said Tony Blair backed this position, refuting claims that he had already endorsed Hayden Phillips’ reported recommendations for a £50,000 cap on individual donations and an annual limit on campaign spending.
Labour backs the latter proposal, arguing that concerns about the use of loans to fund political parties arose out of an “arms race” in campaign spending between the main players. Currently, parties can spend up to £18 million in the run-up to a general election.
However, the party argues that a cap on individual contributions – something proposed by the Conservatives – would threaten its links with unions. Currently, the vast majority of Labour funding comes from union contributions.
Many MPs were furious at reports that Sir Hayden will be proposing a £50,000 cap on donations, and particularly at claims that the prime minister fully endorsed the plans. The NEC held an emergency meeting on the issue last night.
In a statement issued afterwards, Mr Griffiths said Mr Blair had assured MPs on Wednesday that “nothing should break the historic link between the Labour party and the trade unions” and said the party’s position remained “at all levels” in opposition to a cap.
“This form of donation cap would quickly become unworkable logistically and diminish the political voice of hundreds of thousands of trade unionists at a time when all parties are concerned with widening political engagement,” the NEC chairman said.
“It would also undermine the Labour party federal structure and seek to amend a system of trade union contributions that is already highly transparent and heavily regulated.”
He said Labour party officials would continue to “vigorously pursue” their position – which was endorsed at this year’s autumn conference, in all discussions with Sir Hayden.
