The review of funding political parties

Recommendations

The list which follows is not comprehensive, but it sets out my principal proposals. Futher detail can be found in the report.

An agreement on the future of party funding should be built on the broad consensus between the parties, as described below:

(i) The status quo, in which there are no caps on donations, is unsustainable and therefore donations to parties should be limited.

(ii) Restrictions on donations should be buttressed by measures to prevent breaches of the new regulations.

(iii) Expenditure on general election campaigns has progressively grown and should now be reduced.

(iv) Controls on expenditure by all third parties should be strengthened.

(v) The price of a fairer, more stable system of party political financing may be some increase in public funding of political parties.

(vi) Any increase in public funding should be linked to a recognised measure, or measures, of popular support, and should encourage greater democratic engagement.

(vii) The public should have access to better, clearer information on the sources of party income.

(viii) A new funding settlement will present the regulator with fresh challenges. The Electoral Commission must have the powers, the capacity and the practical experience needed to fulfil its new role.

An agreement must be fair and sustainable. To that end, it must tackle the two issues which remain in contention between the parties:

  • the design of a limit on donations; and
  • controls on party spending.

Additionally, there is a need to resolve the detail of the new scheme (or schemes) to provide the parties with additional public funding. I have explained in this report why I think the cost of additional support to the parties, and of a strengthened Electoral Commission, should not exceed £20-25 million a year.

The Government should now invite the three largest parties to come together in direct talks to reach a comprehensive agreement on party funding.

If the parties agree to this approach, I would encourage each of them to adopt these four principles:

  • Nothing should be agreed until everything is agreed. A sustainable system will be interdependent so that modifications to the regulation of expenditure are balanced by modifications to the regulation of income.
  • A fair system need not initially be a uniform system but it should aim for a common result over time. Differences in the histories, structures and support base of the principal parties might require us to craft solutions which are responsive to their particular circumstances.
  • A new settlement should be reached by consensus. The public will expect the parties to work together to reach a comprehensive agreement, fair to all and sustainable into the future.
  • Any solution should serve the long-term interests of our Parliamentary system. It is particularly important that a solution respects the interests of the smaller parties and of parties which have yet to be created.

Page last updated: 15 March 2007