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Party funding options report due Party funding options published
(about 2 hours later)
Options for changes to the way political parties are funded are set to be published in an interim report. A range of options for changes to the way political parties are funded has been published in an interim report.
Sir Hayden Phillips, who was asked to look at party funding in the wake of "cash for honours" allegations, will put forward suggestions for the future. Sir Hayden Phillips, who is running a government-backed inquiry, has put forward suggestions including more state funding and caps on donations.
One idea is to take more money from the taxpayer, but no recommendations will be made until December, when the full report is published. He said there was "widespread disenchantment with politics".
Sir Hayden will warn: "We cannot have a healthy democracy for nothing." Sir Hayden was asked to look at party funding following "cash for honours" allegations. He will publish a final report, with proposals, in December.
Allegations deniedAllegations denied
The former senior civil servant is trying to find a consensus between the political parties on how they are funded. The former senior civil servant is trying to find a consensus between the political parties on funding.
Police are investigating whether peerages have been offered in exchange for cash, after it was revealed that all three main parties were given secret loans ahead of the last election. His report examines calls for the £20m limit on the amount each party can spend at elections to be reduced.
All concerned in the inquiry deny wrongdoing. For many people party politics is a turn-off Sir Hayden Phillips
Sir Hayden's report will examine calls for the £20m limit on the amount each party can spend at elections to be reduced. It sets out four scenarios for the future of public funding: minimal change, increased transparency, a cap on donations and greater levels of state funding.
Party politics costs Sir Hayden Phillips Sir Hayden is not recommending any of the options, although he said more money from the state "should not be dismissed out of hand".
The interim report will set out four scenarios for the future of public funding: minimal change, increased transparency, a cap on donations and greater levels of public funding. He added: "For many people party politics is a turn-off. Party membership has substantially declined. There is widespread disenchantment with politicians.
However, Sir Hayden is not recommending any of the options. "Yet everyone knows that parties are essential to democracy and there is no mature democracy anywhere in the world in which political parties do not play a vital role.
Sir Hayden said the way parties were funded could "diminish cynicism and restore confidence if it can play a part in encouraging better engagement between parties and voters over time". "People also know that party politics, and the abilities of those who choose to enter it, are of central importance to the quality of leadership, and the prosperity and the reputation of our country."
But he stressed, in a press release mistakenly released a day early, that "party politics costs". Sir Hayden stressed that "party politics costs".
"While parties can reduce the amount they spend, they will still need to get some money from somewhere, whether from donations or public funds, or a mixture (as now) of both," he said."While parties can reduce the amount they spend, they will still need to get some money from somewhere, whether from donations or public funds, or a mixture (as now) of both," he said.
Labour has revealed it had been secretly loaned nearly £14m ahead of the last election, the Conservatives borrowed £16m from 13 wealthy backers while the Liberal Democrats say they owe £850,000 to three backers.
TransparencyTransparency
Conservative Party chairman Francis Maude said his party supported a cap on donations.Conservative Party chairman Francis Maude said his party supported a cap on donations.
He added: "It's clear that if public funding for political parties is to increase, political parties must tackle the perception that donations can buy influence or favours."He added: "It's clear that if public funding for political parties is to increase, political parties must tackle the perception that donations can buy influence or favours."
Labour chairman Hazel Blears said the party was "absolutely committed to increased transparency and accountability in political party funding".Labour chairman Hazel Blears said the party was "absolutely committed to increased transparency and accountability in political party funding".
For the Lib Dems, Norman Lamb added: "Transparency is the only way we will allay the public's mistrust and suspicion about how parties are funded."For the Lib Dems, Norman Lamb added: "Transparency is the only way we will allay the public's mistrust and suspicion about how parties are funded."
Electoral Commission chairman Sam Younger, said he hoped Sir Hayden's report would "provoke more debate on this important issue".
The review was ordered at the height of the "cash for honours" probe, initially prompted by the discovery that a number of people nominated for peerages had secretly loaned money to the Labour Party.
It then emerged that ahead of the last election Labour was secretly loaned nearly £14m and the Conservatives £16m. The Liberal Democrats said they borrowed £850,000 from three backers.
Until these revelations prompted a rule change, large loans on a commercial basis to political parties did not have to be publicly disclosed. Large donations already had to be declared.
Police are continuing to investigate whether peerages have been offered in exchange for cash. All concerned in the inquiry deny wrongdoing.