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Cap political party donations at £10,000, says inquiry Political parties 'should get more taxpayer funding'
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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. Political parties should get an extra £23m of taxpayers' money to reduce reliance on "big money" donations, an independent inquiry has said.
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. The Committee for Standards in Public Life also recommended a £10,000 annual cap on individual donations from 2015.
Chairman Sir Christopher Kelly said allowing the status quo to continue "cannot be healthy for democracy". Union members should have to "opt in" to fees paid to Labour if donations are to be counted individually, it says.
All parties will have to agree proposals if they were to go forward. Chairman Sir Christopher Kelly urged parties to "show courage" and adopt the ideas, but some have expressed concern.
Sir Christopher admitted href="http://www.public-standards.org.uk/OurWork/Party_Political_Finance.html" >the proposals would make "uncomfortable reading" for some and parties would have to "show courage in implementing them". All three main parties will have to agree on the proposals if they are to go forward.
'Big money' Sir Christopher admitted href="http://www.public-standards.org.uk/OurWork/Party_Political_Finance.html" >the proposals would make "uncomfortable reading" for some but said leaders must "work together to clean up this part of politics" and 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.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. 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.
"Can that seriously be regarded as not being 'big money'?" Sir Christopher said. Sir Christopher dismissed the Conservatives' preferred annual cap - of £50,000 rather than £10,000 - as it amounted to twice the average salary and over a five-year Parliament added up to £250,000, which must be considered "big money".
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". 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".
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. "All three main parties now depend on large donations from a very small number of rich individuals or organisations for the funds necessary for their survival," Sir Christopher said.
"This cannot be healthy for democracy."
The report notes that both the Conservatives and Labour would be hit by the proposals - while the Lib Dems, whose income is far lower, would be likely to benefit.
50p per voter50p per voter
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. It recommends 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.
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.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.
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.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.
Separately, current limits on campaign spending in the run-up to elections should be cut by 15% the committee says. And the report says the increased taxpayer support, and proposals to allow Gift Aid-style tax relief on donations of up to £1,000 and party membership fees, will not replace all the money lost by parties through the cap - but is aimed at getting parties to "broaden the basis of their support" and get more people involved in politics.
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." Separately, current limits on campaign spending in the run-up to elections should be cut by 15% the committee says. Currently parties can spend up to £30,000 per seat in the run-up to a general election - or £19.5m overall, if all 650 Westminster seats are contested.
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. Former Labour cabinet minister Margaret Beckett, who is on the committee, said she had "grave concerns" about the proposals relating to the trade union "opt in" while Conservative member Oliver Heald criticised the dismissal of the Tories' call for a £50,000 cap.
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". Deputy PM and Lib Dem leader Nick Clegg 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."
Cross party funding Sir Christopher responded that he was not suggesting changes be made immediately - but at the start of the next Parliament in 2015.
He said he hoped that "knee-jerk reactions of that kind" from politicians would be superceded by close reading of the proposals in their entirety and "careful thought about how the parties are going to deliver their manifesto commitment".
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 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. UK political parties spent £31.1m at the 2010 general election - down on the £41.7m spent by parties five years earlier.
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".
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 - efforts begun amid the cash-for-honours affairs in 2006 broke down without agreement.
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.
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.
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.
The Cabinet Office - which would introduce any change - has set a deadline of December 2014 for legislation.