News
30 October 2007
Funding of Political Parties
Inter-Party Talks suspended without agreement
Talks between the three main political parties on measures to reform political party funding have been suspended, Sir Hayden Phillips, the Chairman of the Talks, announced today.
In announcing the suspension of the talks Sir Hayden said:
"The issue of how political parties are funded is one of considerable public importance, not just in terms of probity and propriety, but also in terms of helping to restore trust and confidence in the wider political system.
"In my report on party funding published in late March I set out the principles upon which I believed an agreement on future reform could be reached.
"On this basis, the three main parties agreed to enter into direct discussions with each other. These inter-party talks began in May under my chairmanship and there were four meetings held through the summer. In my view good progress was made.
"I said at the outset of these talks that I believed that a consensus between the parties on future reform was both desirable and possible. Yet despite progress on a number of issues, it became clear at the fifth session of talks held today that the parties would not be able to arrive at an agreement on an overall package of reform at present.
"I am now publishing the draft agreement that I put to the parties in late August. I hope that this will inform the current public debate.
"I wish to place on record my thanks to all of those who have assisted me in my work on party funding.
"I remain convinced that an agreement to reform party funding would be in the general public interest, and I hope that all possible efforts will be made to achieve some consensus on a comprehensive package of reform."
Proposals for the funding of political parties
A draft agreement containing proposals for the funding of political parties was put to the parties represented in the talks in late August 2007.
The draft agreement contains five sections. These are: donations; spending controls; public funding; compliance; and transitional arrangements and review.
The section on donations proposes that there should be a cap on donations set after a transitional period at a final level of £50,000, applying to parties with two or more elected representatives in Parliament, the devolved administrations, or the European Parliament. The cap would apply to donations from all permissible donors.
Donations from trade unions, which would continue to come from unions' political funds, would be subject to the £50,000 cap. Affiliation fees would not be subject to the cap, as they would be treated for the purposes of the cap as the individual donations of trade union members, provided certain conditions set out in the draft agreement were met.
The second section is spending controls. The proposal is for a spending cap to apply over the course of a Parliament, and to cover all expenditure by a political party, with certain exceptions specified in the draft agreement. This would be a change from the current system, under which only party expenditure directly used on campaigning in the year before a general election is regulated.
For a full term of the next Parliament the proposed limit on regulated spending would be £150m.
The third section is public funding. There are two proposals: first, for a matched funding scheme whereby a donation from an individual of £10 or more attracts £10 of public funding; second, for a scheme based on public support whereby parties would receive money based on the number of votes they receive at relevant elections. Only parties subject to a cap on donations would be eligible for this public funding.
The fourth section is on compliance, and sets out the principles by which the new system of party funding would be regulated by the Electoral Commission.
The fifth and final section provides for transitional arrangements to allow parties to adjust to the gradual imposition of a cap on donations and new controls on spending, and to phase in the proposed additional public funding. In addition, it proposes a mechanism whereby these arrangements can be reviewed on a regular basis.
24 July 2007
Inter-Party talks to continue to reach agreement
15 May 2007
Inter-Party Talks on Party Funding begin
15 March 2007
The Review of the Funding of Political Parties report published
19 December 2006
The Review of the Funding of Political Parties - Statement by Sir Hayden Phillips
27 October 2006
Sir Hayden Phillips invites public to online Q&A webchat
19 October 2006
Sir Hayden Phillips announces the publication of the Review's Interim Assessment
31 July 2006
Sir Hayden Phillips invites public to participate in the Review's online forum
16 May 2006
Sir Hayden Phillips announces formal launch of the Review
Page last updated: 30 October 2007