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Friday, March 16, 2007

State funding

Sir Hayden Phillips' review of party funding is out in the open at last and all the headlines are focussing on the recommendation to limit donations from individuals or organisations to a maximum of £50,000. This will have major implications for Labour, who may find the bulk of their funding from Trade Unions cut off. There are also proposals to limit national election expenditure so as to level the playing field.

Sir Hayden Phillips has not been able to secure all-party support for these proposals, largely because of the implications for the Government. However, he has suggested a way through the mire for Labour, namely that unions should be free to pay affiliation fees to a political party if decisions are transparent and the payments can be “traced back to individual members”. This does of course mean that individual trade union members will in future have to opt into these payments and offers the prospect that some might wish to direct their contribution to other parties.

The price for these changes is an increase in state funding to political parties of up to £23 million, to make up for the short-fall in their revenue. This will work on the basis of matching donations of at least £5 from registered party supporters with £5 in state funding and by giving parties 50p a year state funding per vote in general elections and 25p per vote in European, Scottish and Welsh polls.

I hope that there will be a minimum threshold or a requirement that a party has elected MPs, AMS, MLAs, MSPs or MEPs to qualify for this funding. I would also hope that when funding is allocated on the basis of votes in a devolved election then the money is ring-fenced to be spent within the nation on whose election the calculation has been made.

There is a lot of work still to be done on these proposals, not least in securing a consensus on the way forward. Their importance is in the way that they can prevent the sort of abuse being investigated by the police in the loans for peerages affair, which is undermining what public trust remains in the electoral process. On balance I believe that we are on the right path.
Personally, I really hate the whole idea of state funding - my taxes should be paying for hospitals and schools, not flash party ad campaigns - if I choose to give money to a party, then that's one thing, but having my hard earned cash match funding donations given to parties I'm ideologically opposed to really goes against the grain.
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