Party funding ‘unsustainable’
The present system of party funding is unsustainable, a major review has warned.
Sir Hayden Phillips, who was commissioned by the prime minister to examine party funding, warns the major political parties need to make “tough decisions” if they are to restore public confidence.
His report Strengthening Democracy: Fair and Sustainable Funding of Political Parties recommends a comprehensive set of reforms, including capping both donations and spending and increasing public funding for political parties.
There is an “overriding public interest in acting now to reform party funding”, Sir Hayden claimed, and called on the government to invite the three main parties to work together to solve the areas of dispute.
A £50,000 limit on donations from individuals or organisations would be “reasonable and attainable”, Sir Hayden concluded, supporting a proposal put forward by the Conservatives. Labour are likely to resist such a move as it would restrict their funding from trade unions.
To compensate for the drop in income, Sir Hayden proposes state funding be increased by £25 million a year. This would be linked to public support, mooted at 50 pence a year per vote in the last general election and 25 pence for votes in other elections.
Sir Hayden also recommends parties cut spending between elections by £20 million each.
Tony Blair welcomed the report, saying it identified the “basis” for a new agreement. He hopes Labour, the Conservatives and Liberal Democrats will reach a consensus before the summer recess, allowing the government to introduce legislation in the next parliamentary session.
Francis Maude, chairman of the Conservative Party, said the party accepted the review’s main recommendations and now hope all the main parties will work together.
Liberal Democrat parliamentary spokesman David Heath said the focus should be on how to restore public confidence in the political system.
“There are undoubtedly difficult areas for all of us to consider,” he added.
Mr Blair commissioned the review last March after it emerged Labour had secretly borrowed £14 million and the Conservatives £16 million during the 2005 general election. The Liberal Democrats also borrowed £850,000.
