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Cap political party donations at £10,000, says inquiry Cap political party donations at £10,000, says inquiry
(40 minutes later)
A £10,000 cap on donations to political parties and more restrictions on trade union funding are among key proposals from an independent inquiry.  
The Committee on Standards in Public Life is also recommending a cut in caps on pre-election spending - and an extra £23m a year taxpayer support. An annual £10,000 cap on donations to political parties and more restrictions on trade union funding are among key proposals from an independent inquiry.
The Committee on Standards in Public Life is also recommending a 15% cut in caps on pre-election spending - and an extra £23m a year of taxpayer support.
Chairman Sir Christopher Kelly said allowing the status quo to continue "cannot be healthy for democracy".Chairman Sir Christopher Kelly said allowing the status quo to continue "cannot be healthy for democracy".
All parties will have to agree proposals if they were to go forward.All parties will have to agree proposals if they were to go forward.
Sir Christopher admitted the proposals would make "uncomfortable reading" for some and parties would have to "show courage in implementing them".Sir Christopher admitted the proposals would make "uncomfortable reading" for some and parties would have to "show courage in implementing them".
'Big money'
Leaders must "work together to clean up this part of politics" - but said the proposals "provided the blueprint" for them to do so.Leaders must "work together to clean up this part of politics" - but said the proposals "provided the blueprint" for them to do so.
The first proposal is for a cap of £10,000-a-year on donations from any individual or organisation - including trade unions - to any political party with at least two MPs or two representatives at the Scottish Parliament, the Welsh and Northern Ireland Assemblies.
He said the Conservatives' preferred annual cap - of £50,000 rather than £10,000 - was not suitable as it amounted to twice the average salary - and over a five-year Parliament added up to £250,000.He said the Conservatives' preferred annual cap - of £50,000 rather than £10,000 - was not suitable as it amounted to twice the average salary - and over a five-year Parliament added up to £250,000.
"Can that seriously be regarded as not being 'big money'?" he said. "Can that seriously be regarded as not being 'big money'?" Sir Christopher said.
But he said the Labour Party should accept changes to union funding if they wanted it to be treated as a large number of individual donations - perhaps by allowing union members to "opt in" to affiliated fees, rather than opting in as at present. But he said trade union affiliation fees could be counted as a collection of small individual payments - but only if members were required to "opt in" to the fees, rather than opting out as at present and if "certain other conditions" were met to "ensure that undue influence cannot be exerted".
Deputy PM Nick Clegg has said he does not want taxpayers to be asked to pay more to fund political parties.
'Immensely important'
The £10,000 cap on individual donations and member approval for union donations would be likely to lead to a fall in income for the Conservatives and Labour.The £10,000 cap on individual donations and member approval for union donations would be likely to lead to a fall in income for the Conservatives and Labour.
So the committee is recommending increased state funding - worth £3 for every vote received for parties who have at least two representatives at Westminster or the devolved assemblies - ruling out UKIP, the BNP, and others. 50p per voter
Under the 2010 general election results, it would mean about £32.2m for the Conservatives, who got 10.7m votes, about £25.8m for Labour, who got 8.6m votes and £20.5m for the Lib Dems, who got 6.8m votes. So the committee is recommending increased state funding - worth £3 for every Westminster election vote received for parties who have at least two MPs or representatives in the devolved assemblies - ruling out UKIP, the BNP, and others. There would also be funding worth £1.50 a vote in the devolved and European elections.
But any final agreement depends on agreement from all the main political parties. Under the 2010 general election results, the £3-a-vote rule would mean about £32.2m for the Conservatives, who got 10.7m votes, about £25.8m for Labour, who got 8.6m votes and £20.5m for the Lib Dems, who got 6.8m votes.
The deputy prime minister's comments in the House of Commons earlier this month may limit the chances of success. Sir Christopher said it amounted to 50p, per voter, per year and said people would understand that that was necessary to take "big money" out of politics.
He said while it was "immensely important" to clear up party funding "it would not be right to ask our hard-pressed taxpayers to pay more to political parties at a time when they are having to deal with so many cuts and savings elsewhere". Separately, current limits on campaign spending in the run-up to elections should be cut by 15% the committee says.
Deputy PM Nick Clegg has said he does not want taxpayers to be asked to pay more to fund political parties and, in a statement from his office on Tuesday, said: "The government believes that the case cannot be made for greater state funding of political parties at a time when budgets are being squeezed and economic recovery remains the highest priority."
Sir Christopher responded that he was not suggesting changes be made immediately - but at the start of the next Parliament in 2015 - and accepted it would be difficult at a time of cuts.
However he said he hoped that "knee-jerk reactions of that kind" from politicians would be lessened by close reading of the proposals in their entirety and "careful thought about how the parties are going to deliver their manifesto commitment".
Cross party funding
The report says it expects the financial impact of the recommendations to "be reasonably even-handed between the largest two parties" although it cannot be sure - and recommended further work before it was brought in.
The report is the latest in a series of attempts to reform party funding, which grew in urgency in the wake of the cash-for-honours affair.The report is the latest in a series of attempts to reform party funding, which grew in urgency in the wake of the cash-for-honours affair.
The coalition agreement between the Conservatives and Lib Dems pledged to "pursue a detailed agreement on limiting donations and reforming party funding in order to remove big money from politics".The coalition agreement between the Conservatives and Lib Dems pledged to "pursue a detailed agreement on limiting donations and reforming party funding in order to remove big money from politics".
No agreement
But finding a solution that has cross-party agreement has previously proved difficult.But finding a solution that has cross-party agreement has previously proved difficult.
Labour, with its heavy dependence on the trade unions for funding, resists curbs on unions donating on behalf of individual members.Labour, with its heavy dependence on the trade unions for funding, resists curbs on unions donating on behalf of individual members.
The Conservatives, who rely more on large individual donors, are against further restrictions on what they can give.The Conservatives, who rely more on large individual donors, are against further restrictions on what they can give.
The committee's chairman, Sir Christopher Kelly, has said he hopes his body's independence from any political party will make the report's findings more acceptable to voters.
At present there are no limits on donations, but the name of anyone who gives more than £7,500 to a party is made public.At present there are no limits on donations, but the name of anyone who gives more than £7,500 to a party is made public.
The last major attempt to reform party funding began in 2006, at the time of the cash-for-honours affairs.The last major attempt to reform party funding began in 2006, at the time of the cash-for-honours affairs.
Former Permanent Secretary Sir Hayden Phillips was asked to find as much of a consensus as possible on a future system for funding.Former Permanent Secretary Sir Hayden Phillips was asked to find as much of a consensus as possible on a future system for funding.
He recommended a £50,000 limit on cash donations to parties, but after five sessions of talks with Labour, the Conservatives and the Liberal Democrats, the process broke down without agreement.He recommended a £50,000 limit on cash donations to parties, but after five sessions of talks with Labour, the Conservatives and the Liberal Democrats, the process broke down without agreement.
The Cabinet Office - which would introduce any change - has set a deadline of December 2014 for legislation.The Cabinet Office - which would introduce any change - has set a deadline of December 2014 for legislation.