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MPs urge political donation cap MPs urge political donation cap
(about 1 hour later)
Political donations - and the amount parties are allowed to spend - should be limited, a committee of MPs says.Political donations - and the amount parties are allowed to spend - should be limited, a committee of MPs says.
The Constitutional Affairs Committee says limits should be placed on donations, whether from individuals, companies or trade unions. The Constitutional Affairs Committee say the current system was "unstable" and had a "negative impact" on voters.
If parties agreed to such measures to reform the current "unstable" system, then they would receive "substantially increased state funding", the MPs said. If parties agreed to such voluntary measures then state funding should be "substantially increased," it said.
And only loans from UK financial bodies at commercial rates should be allowed. Meanwhile Sir Hayden Phillips said his review into party funding would publish its recommendations in January - a month later than expected.
The committee said the current party funding system damaged public confidence in politics. The committee of MPs said the current party funding system damaged public confidence in politics.
If the parties did not agree to the voluntary limits but still expected more state funding "voters will conclude that the parties are voting to give themselves more money without removing dependence on other paymasters", it said.If the parties did not agree to the voluntary limits but still expected more state funding "voters will conclude that the parties are voting to give themselves more money without removing dependence on other paymasters", it said.
I have felt for years that the current free-for-all, in which a small number of trade unions and big donors are the parties' paymasters, should not be allowed to continue Andrew Tyrie, MPI have felt for years that the current free-for-all, in which a small number of trade unions and big donors are the parties' paymasters, should not be allowed to continue Andrew Tyrie, MP
The committee report outlined a two-stage approach as it "recognises that such radical changes cannot be achieved overnight".The committee report outlined a two-stage approach as it "recognises that such radical changes cannot be achieved overnight".
Ahead of the "substantial" state funding increase, a "modest" increase would accompany a lower national cap on spending and a "voluntarily agreed binding framework for limited donations".Ahead of the "substantial" state funding increase, a "modest" increase would accompany a lower national cap on spending and a "voluntarily agreed binding framework for limited donations".
There should also be tax relief and matched funding "to encourage small donations".There should also be tax relief and matched funding "to encourage small donations".
And only loans from UK financial bodies at commercial rates should be allowed.
It called for reform of the Electoral Commission, such as appointing a minority of board members with experience in politics.It called for reform of the Electoral Commission, such as appointing a minority of board members with experience in politics.
Committee chairman Alan Beith said change would be difficult but was vital.Committee chairman Alan Beith said change would be difficult but was vital.
"Parties are an essential part of democracy, and their activities inevitably cost money.
"If the taxpayer is to provide more of the money, it will need to be clear that state funding is used to achieve cleaner and healthier politics, without the fear that influence can be bought by big donations.""If the taxpayer is to provide more of the money, it will need to be clear that state funding is used to achieve cleaner and healthier politics, without the fear that influence can be bought by big donations."
As police investigate allegations of party donations made in exchange for honours, Labour committee member Alan Whitehead, said the recommendations provided "early moves towards greater transparency". There was an angry reaction last week within the Labour Party to a draft proposal by Sir Hayden Phillips that there be a £50,000 cap on all donations as it would endanger their funding - and historic links with - trade unions.
The Labour Party has already been angered by the idea of limiting donations as it would endanger their funding - and historic links with - trade unions.
Public confidencePublic confidence
"The committee's enquiry clearly establishes just how important political parties are to our system of democracy and yet how the present unstable methods of funding them has the potential to undermine public confidence in their role in the process," Mr Whitehead said. Labour wants a small increase in state funding, stringent caps on spending and voluntary caps to be placed on donations by each party, which can reflect historic links.
"An agreed reduction of donation levels and the enhancement of fair state funding will move a resolution forward.
"At present there is a big question mark hanging over the future of Britain's political parties - the committee's report provides, I hope, some of the answers."
Labour wants a small increase in state funding, stringent caps on spending and voluntary caps to be placed on donations by each party.
The Tories have called for a large increase in state funding for all parties with more than two Commons seats, a cap of £50,000 on all donations, the phasing out of corporate donations - including from trade unions, and tax relief for donations.The Tories have called for a large increase in state funding for all parties with more than two Commons seats, a cap of £50,000 on all donations, the phasing out of corporate donations - including from trade unions, and tax relief for donations.
'Fresh air'
Conservative MP Andrew Tyrie, a committee member, called the report a "breath of fresh air".Conservative MP Andrew Tyrie, a committee member, called the report a "breath of fresh air".
Reaching a consensus has not been and will not be easy Sir Hayden PhillipsParty funding reviewReaching a consensus has not been and will not be easy Sir Hayden PhillipsParty funding review
"I have felt for years that the current free-for-all, in which a small number of trade unions and big donors are the parties' paymasters, should not be allowed to continue. "The electorate believe that the big donors buy influence, access and honours - no wonder, as I have argued, they have concluded that party funding stinks." "I have felt for years that the current free-for-all, in which a small number of trade unions and big donors are the parties' paymasters, should not be allowed to continue." The Lib Dems want limited state funding for parties, national caps on annual donations and a lower cap on general election spending.
The Lib Dems want limited state funding for parties, national caps on annual donations and a lower cap on general election spending. Sir Hayden's review was prompted by the cash-for-honours row, which followed revelations that the three main parties had received large loans ahead of the 2005 General Election.
The committee report comes before the end of a government review of party funding, headed by Sir Hayden Phillips. Sir Hayden said that after consulting with various groups, including the Electoral Commission, he had delayed his report until late January "in the interest of reaching an agreement".
The review was prompted by the cash-for-honours row, which followed revelations that the three main parties had received large loans ahead of the 2005 General Election. Francis Maude accused Labour infighting of delaying the report
Sir Hayden, had been due to report in December, but has now said that after consulting with various groups, including the Electoral Commission, he had delayed his report until late January "in the interest of reaching an agreement". He said of the parties he had consulted, all but the UK Independence Party favoured a cap on donations, with the majority favouring a cap on organisations and individuals at a level which has yet to be negotiated.
"Reaching a consensus has not been and will not be easy. Yet I do believe that one is possible if there is a willingness on all sides to achieve it." Labour chairman Hazel Blears welcomed the committee's report suggesting "an all-party consensus is now emerging around voluntary donation limits and continuous spending caps".
She said it was "right that Sir Hayden should have more time to debate the issues" including "Labour's suggestion for a voluntary scheme that would respect diversity of party structure".
The Conservatives said feuding in the Labour Party had led to Sir Hayden's failure to reach agreement so far.
The Green party's principal speaker Sian Berry, said: "What's really important is to break the link between big business and potential influence over government policy. It's only fair that state funding should be based on vote share - as it is in Canada, where it has finally given the Greens the voice the public believes they deserve."