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Tuesday 22 November 2011

Political Parties May Get More Public Cash

A report into the funding of political parties has called for a £10,000 cap on donations as well as more money from the taxpayer.
It also recommends additional state funding of £23m a year - or 50p per voter - to compensate for the loss of income.
A £10,000 cap on donations would be substantially lower than the £50,000 figure used when the parties last held a round of negotiations in 2006 and 2007.
Such a move could significantly affect the Labour Party if union fees - a large portion of the Opposition party's income - are classified as collective donations.
The Committee on Standards in Public Life and Sir Christopher Kelly carried out the research.
Sir Christopher said he understood the conclusions were "uncomfortable" but the parties have been unable to come to an agreement by themselves.
"It is hardly surprising that the public are highly suspicious that with such large amounts of money involved favours will be asked or given in return," he said.
"This cannot be healthy for democracy."
He admitted that due to the economy, "it is difficult to imagine a more difficult climate in which to make this proposal".
The committee want to reform the system by ending the main political parties' reliance on rich donors and the unions.
However, there remain question marks over whether the report's recommendations will be implemented.
The Liberal Democrats have supported changing the rules governing party funding but Deputy Prime Minister Nick Clegg believes it is "not the right time" to ask taxpayers for more cash.
Labour and the Conservatives are expected to have some reservations regarding the document's conclusions.
If the recommendations had been in place between 2001 and 2010, the Tories would lose £5m and Labour £5.8m.
The Lib Dems would have gained £3.2m over the same period, the report found.
Considered as percentages, the Conservatives would have lost 76% worth of donations and Labour 91%. The Lib Dems would have been boosted by 57%.
Reacting to the report, a spokesman for Mr Clegg said the Government remained committed to overhauling the system and would study the document in detail.
He said the Government accepts in principle the call for a donations cap but that the level would need to be thought through.
"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," he said.
He added: "We are also of the view that the Report is right to recognise a new party funding settlement must include genuine reform in respect of trade union donations.
Responding on behalf of Labour, shadow cabinet office minister Michael Dugher said the party was committed to reform.
He said they would study the "important proposals" in detail but added: "It is a matter of great regret that the Conservative Party has refused to even accept a £10,000 cap on donations or proper expenditure controls." 
In 2010, just 19% of donations were of less than £10,000 and a third were more than £250,000.
The Conservatives received 1,634 donations worth £31,783,476 in total; Labour was given 1,296 donations amounting to £19,861,173 and the Lib Dems received £4,889,221 from 782 donors

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