« Michael Howard to stand down | Main | Cameron the Alcopop »


I'm glad we didn't make much of this because it was perfectly obvious and has been known for some time that we take loans from extremely wealthy men.

However we should rightly talk in broad terms about public appointment reform.

I commented on the frontpage how clever Blair had been to change this from a peerages for loans scandal to a party loans issue.

I agree with the editor's comments about not curbing elections expenditure - though it might have benefit in pushing us more to invest between elections in more effective constituency & council ampaigning.

But more important is to find a way of putting the emphasis back on the original scandal - say we will be transparent in our nominations for political for example - use it to support an elected/mostly HoL (I know Ken Clarke is due to report but carpe diem) - perhaps putting hard proposals on size, electoral method, powers into discussion. We have a chance here to make the agenda, not hide in fear.

Agreed Ted we should lead the agenda and commit ourselves to stragihtforward radical House of Lords reform and do it now.

Surely we need a public enquiry into the funding by all parties of the 2005 General Election?

Let's get it all out into the open so we can learn all the lessons necessary to ensure the next general election is clean and transparent.

It is unlikely any politicans will call for an enquiry as they are all implicated, but for the sake of obligation to the public to prevent any further public "turn off" from politics, a public enquiry could finally let us know th who, what and why's of how money infiltrated the 2005 election.

The reason the current agreement to declare "future" loans is unsatisfactory is that it leaves question marks over the last election which could still have an impact now.

We need an enquiry now, but it will take the people to demand it, as the MP's are all sitting on their grubby hands.

Why is accepting loans to support party expenditure & campaigning grubby ? its taking cash in return for political favours that's grubby.

Wheeler was tremendous on Newsnight in being open - I've given £6m or so, in stating he had made it clear he'd refuse any honours and in pointing the focus back onto political favours. Now, he has also made it clear that he wouldn't donate if the party policies aren't one's he supports - and if we then changed policies that would reflect badly on us - but thats' his decision: he supports us because he doesn't favour LD or Labour policies.

the issue is has David Cameron put forward any donors for peerages because they gave us £ms? Did Michael Howard? It's not that we mortgaged Smith Street or that we took out commercial loans - and of those how many were individuals and how many banks?

We can see with countries that have imposed campaign limits and/or state funding that corruption comes in. Germany, France, USA, Italy etc have vaying controls but the desire to win drives often good men towards backdoor bungs.

This is about how Blair has in return for cash to party funds (from IFAW and idividuals) seemingly adjusted his legislation, has put them into the legislature. He has been less than Daz White - rather a dingy grey - in this.

Hi Ted,

Why is accepting loans to support party expenditure & campaigning grubby ? its taking cash in return for political favours that's grubby.

The reason is simple; they are not realloans. It is a grubby deception to avoid the transparency of donation declaration.

If the Conservative Party is prepared to make a statement to confirm that all these "loans" from the 2005 election will actually be repaid properly and in full by the Conservative Party, ie not "renewed" or converted into donations then I will completely accept that they are loans, but that is not the case.

The parties "borrowed" off donors because banks would not lend to them, because they had no means of repaying them.

Political parties are not companies, their cashflow comes from donations.

These "loans" are structured like a real loan to avoid the legal requirement to delcare them, but the "loaner" keeps renewing them, so they are in effect donations.

Now call me thick, but a loan that does not requirement repayment is not a loan.

If it is, then I am sure many of us would love to have such a loan for our mortgages!

A loan requires repayment; a donation does not.

A donation requirement declaration, a loan does not.

It can't be both. It is either a loan and will be fully repaid to the commercial lender, or it is a donation.

Labour has placed itself in the same tight spot. It is insisting that these are "loans", so that must mean they will be repaid. Will they? Of course not. They will be renewed or converted in donations.

My point is simple; if there is no intention or obligation to repay, the cash is a donation, not a loan, no matter how it is structured to look like.

imho, this is the simple reason why none of the big parties are prepared to declare their current loans, as if they were, we would have a record of the outstanding, and would be able to scrutinize that they are actually repaid.

This is a simple corruption. If there is nothing to hide, then the Tories would have been all over LAbour on this sleaze issue. Instead, they have avoided the media, and not passed a single comment on their site. Is that the action of a transparent opposition with nothing to hide?

That is why we need an enquiry. We need to know the details of all the loans to all the parties from the 2005 election, so we may scrutinize them, and keep an eye on how they are repaid, to confirm that they really are loans, and not a deliberate corruption of the transparency of party funding rules.

Chad All the enquiries, public or otherwise, that have been held over the last few years, have got nowhere but been extremely expensive. Do you really think this would be any different? If T. Blair could not be sure beforehand that he would be able to turn the result to his own advantage, he won't agree to it anyway!

Its typical that Blair - with the help of his expensive minions of course, is wriggling out from under, but Mr. Cameron needs to pursue the original charge and not be phased. After all, running an election must be increasingly expensive and voters would have to be very dim not to realise that; the money has to come from somewhere and I shouldn't think many people would be prepared for us the taxpayers to pay towards the cost of an election, anyway it would be scope for even more devious accounting.

Hi Patsy, without an enquiry, there will be a wall of corruption separating politics from the people.

This is an accusation of potential corruption levelled at all three parties at the same time.

The charge is that they accepted donations (ie sums of money not expected to be repaid) in a structure that enabled them to avoid declaration.

What would be the aim of this enquiry? Simply to obtain a list of all the loans to all the parties over the 2005 Election period.

Perfectly and easily achievable in a few days.

From that, we will have on public record a list of these loans so we may scrutinize them and ensure they are repaid properly as commerical loans.

This will also enable us to watch is any party tries to "do the dirty" and get these "loans" renewed or converted, confirming the suspicion that they are donations all along.

So it is really simple in this case. We need an enquiry to simply get the details of these loans on public record to enable us to watch over the next few years, before the next election, to see that they are real loans, and that the parties have been axting properly.

Chai Patel has already confirmed that Labour did not really expect to repay his "loan", so the Tories (if they have nothing to hide) could lead this enquiry, details their loans, and watch Labour sink.

Labour is basically insolvent. If their loans are fully declared, they will be either forced to repay them and be at a financial disadvantage next election, or they will expose their own corruption.

This seems like a win-win for the opposition, well, as long as they have not behaved in the same way.

It's not often I disagree with the Editor but on this issue I do.

The suggestion being floated of reducing the amount of funds that parties can spend from £20m to £15m is absolutely correct as part of a wider package of measures that might include campaign caps (though I think these would be circumvented) and should certainly include tax relief on small donations.

Cutting total election spend is definitely in tune with the thinking of the general public. They not only do not support the sleazy current arrangements, they do not support state funding of parties.

The problem is the huge amount of money that the parties spend at General Election times, most of it completely wasted. If a graph was plotted of money spent versus voter turnout, I'm sure it would show that the relationship was inversely proportional.

Let's stop "shouting louder and louder" to an increasingly "deaf" electorate with these huge campaign spends and start to campaign on a more human and cheaper level.

Sorry, last one from me on this.

With all the loans in the open, the enquiry would draw a line under "dodgy" party financing otherwise trust will be destroyed.

I am even coming round to Tim's suggestion of a cap on donation size now. By combining with simple donation-matching from the state, perhaps £2 from the state for every £1 raised froma donor, it would ensure transparency, and ensure the popular parties get their fair share of funds rather than propping up a failing party; no private donations = no state donations. Simple.

Sure, there will be lots of rich people seeking to help a party win, but then their money would have to be directed at think-tanks etc.

This would require media rules to ensure airtime includes both official party broadcasts and those deemed independent but supporting the cause combined, to stop millionaires filling tv time over election period with "general information" ads.

Hopefully, it will even help my fledgling party too! ;-)

I don't see anything wrong in principle with a lender becoming a donor - after all Lord X may have leant us £5m four years ago then realise that re-payment would damage the party's ability to campaign so change it to a gift. The Guardian & Independent have published articles for years over Tory donors & lenders, we haven't kept it secret.

As for the Times's "sectret loans" - our accounts show in full the amount of borrowings (though not the source) and the data supplied to the electoral commission fulfils all legal requirements. Lord MacAlpine in discussing funding made clear the chinese wall between Party & government that operated in his time - the Treasurer's job was to find the funds without compromising the PM. I doubt John Major got directly involved in Conservative Party finances as PM.

It's because these were honourable people - they didn't get their tennis partner to scour the rich for potential donors, invite them round for tea/drinks etc. Tony Blair has never moved out of campaign mode, he has sidelined the party organisation that supported the division of party/government so that the Labour Party was unaware of what was being done in its name. At least Gordon Brown has apparently kept out of it ( though in his post Ecclestone interview he seemed very ill at ease and not enjoying laying his reputation down next to Mr Straight Kinda Guy)

We now need to put in place more checks, more restrictions because we can't trust our Prime Minister - the man we have to trust in matters of war & peace. The last PM in his position only lasted months after being found out for selling honours, lets hope this one goes faster.

We may not be so far apart, Adrian.

I would be open to supporting a cap on total spending IF there was a cap on individual donations. The worst scenario would be a cap on total spending of c£15m and the possibility that two or three Stuart Wheelers could then fund the party. I have no objection to the likes of Stuart wheeler as individual people but I think the party will change for the better in the processing of seeking tens of thousands of small donors. As David Cameron himself told today's Telegraph: "It's better to have a spread."

Hi Ted,

I don't see anything wrong in principle with a lender becoming a donor

Do you have any problem with a lender becoming a donor but that never having to be declared so the public are never aware of that person's direct bankrolling of the party?

If the "lender" keeps renewing his loans, then he can remain in the shadows forever, whilst clearly acting as a major donor.

If all the parties are forced to declare the source and strucutre of all their 2005 Election loans, and suddenly all these are converted to donations, then we will have transparency but also be able to judge for ourselves if the original loan was just an attempt to avoid declaration.

I don't see why a call for full transparency is so offensive.

fulfils all legal requirements
That is a New Labour misdirection. Of course they are legal, but they deliberately corrupt the process, spirit and aim of transparency of political funding, by using a vehicle that enables a major donor to remain in the shadows.

If there is nothing to hide, then there is no need to hide.

I think many of you, despite the warnings early is this scandal, are still not realises how big this is going to become, and it will engulf the whole of politics.

The media smell blood, and it would seem with good reason. There is more to come on this issue, I am sure.

I agree with transparency and also fear the media circus. The point I'm making is that in the media circus, guided by spin / Murdochs press, the reason its an issue becomes lost. The purpose becomes the need to "clean" politics - that the LDs & Tories who have followed guidelines & the law - are tarnished along with Mr Blair.

I go along with transparency, possibly, though not convincingly, with maximums on donors (does/should this apply to companies, charities, unions etc?) I think we should be upfront and show we haven't anything we are ashamed of - so find a good advocate, well prepared, to go on Newsnight, go on Today and present the case.

But keep the focus on a dishonourable administration - we can't trust Blair on peerages, we can't trust him on Iraq, we can't trust them on pensions, what can we trust them on?

Hi Ted,

We are 100% agreed that Blair and Labour have acted the worst over this affair, and that he cannot be trusted in any way.

However, in what should have been an open goal, the opposition really holding the government to account, the Tories and LibDems have remained stony silent.

The implication surely can only that they also have something to hide over funding the 2005 election? I hope it is that and not simply that they are too incompetent to hold the government to account.

So, yes, as I noted above,I am completely focussed on exposing Labour. Let's have a simple public enquiry, declare all funding sources and methods for the 2005 general election and watch Labour either go broke or expose their corruption.

Unfortunately, the Tories and LibDems don't seem to be calling for such inspection of the election funding and that rings alarm bells.

If compulsory funding became law either through a tax or some other way, I could see a number of people being prepared to go to prison rather than pay it! As with increased council taxes.

I think some way has to be found to associate the fact that a large number of people who have lost interest in politics and voting, feel this way just because they feel so helpless to have any effect in any way, on how the country is run. It affects each party, and the whole thing is made worse when the Trade Unions decide to strike as they are about to do now, which is a form of blackmail, which even when they get some of what they want doesn't benefit them or anybody else. Think the railways in the '70's, money for salaries and none for the rolling stock or trains, and still the Unions were not satisfied with what they got, and we having been paying the price ever since!

The ordinary person in the street needs to be engaged, and not through the local association which seems to end up as a cul-de-sac quite often. I should have thought that if the leader was inspiring enough, people -Jo public would be prepared to give small amounts, from pounds upwards which from enough people would add up.

Maybe Chad to that end the kind of enquiry you are suggesting mught be a good idea, anything to stop Murdoch's papers playing irresponsible silly b.....s for a few headlines. After all the more openness the less there is to ferret out.

Hi Patsy,

If compulsory funding became law either through a tax or some other way, I could see a number of people being prepared to go to prison rather than pay it!

I agree totally if a notional figure is just created without any democratic input, and thus props up a failing party, however donation matching, whether 1-1 or 2-1 etc would show that the plans are supporting popular parties.

For example, as a hypothetical suggestion plan:

1. All loans must be fully commercial loans and must be repaid in full. Loans should not be permissable to be renewed, rolled-over or converted into a donation, and the source and structure of all loans should be declared.

Declaration is not enough, as a rate-of-interest, though above base, but below normal unsecured borrowing rates, is effectively a donation.

We must seperate commercial transactions from donations.

2. Cap maximum donation p.a. at £100k.

3. For all donations, where the total amount donated per individual (person or company) per annum is < £1,000, the state will donate an amount equal to twice the donation size.

This would then encourage lots of small donations, rather than a few big ones as the state would not offer 2-1 on big donations.

Suddenly the parties would have to attract back small donors.

Suddenly a small party with 10,000 members all donating £50 would be better off than a party taking £1 million from one donor, because the small party would receive 10,000 x 50 = £500,000 but the state would add 2 x 500,000 in donation-matching, to give £1.5 million in total.

The power of the state to reward parties with a wide, small donor base!

4. A financial limit should be set on loans, based on the average income of the party, set at a reasonable borrowing level, to prevent a party over-committing itself with loans. In short, responsible borrowing.

But first of all, we need to clear the decks with an enquiry. This is not old news, and the loans are still outstanding, and these loan-donors, the ones who bankrolled the election are still in the dark. I am not suggesting the loaners have anyhting to hide, but whilst their identity is unknown, there will remain suspicion.

I do not agree with party funding because I want none of my tax to support the BNP, Respect, Sinn Fein or other similiar parties. It's bad enough giving parties Short money.

Political parties are and should remain self funded voluntary organisations and the only controls should be to ensure transparency, to prevent electoral or administrative fraud, to ban foreign donations, to prevent purchase of political advantage.

It's politicians who want tax-payers cash, the tax payers prefer to keep it and decide if they should contribute.

sorry first sentence should read "don't agree with tax-payer party funding"

the tax payers prefer to keep it and decide if they should contribute.

Which is exactly what donation matching achieves with the benefit of diluting the impact of the small group of millionaire donors.

Only parties with a genuine support base receive anything, and the influence of a small group of millionaire donors is heavily diluted.

Would the taxpayer really object to reducing the influence of millionaires in british politics and rewarding parties with a broad small-donor base?

I don't think so at all. I am sure people would welcome the chance to stop the "fat cats" wielding too much influence.

This can easily be presented to the public, showing that the only parties who would oppose it are those who are too reliant on a tiny group of mega-rich donors.

The government already taxes us too much and then wastes what it spends. If that wasn't bad enough, when they are not wasting our money they are finding new ways to destroy our liberties. No wonder people feel cynical and disengaged about politics. But no, now it appears it's not the polticians' fault at all but the electorate's for not giving them even more money to fund their political parties! Even before it happened I knew state funding of parties would be wheeled out as both a diversion for the current embarassment and a supposed panacea for parties' funding problems. No way! If our political parties' finances are in such a dire state that they need state handouts then they should look to themselves and not the taxpayer. With all their policy initiatives why don't they learn a few lessons from the voluntary sector on how ro raise and spend money.

The behaviour of our party this week and the revelation in the Times today has hugely saddened me.I thought we had learned our lesson and were now a better party.It has been known for sometime how corrupt Blairs Labour party has become but are we any better?I very much hope that we will disclose the names of those who gave us loans and reveal whether we also sold peerages or other honours.If we have I would hope those responsible will resign their positions and leave politics enabling the party to make a fresh start.
Moving forward I would hope that Cameron is successful in lowering the amount of money spent on campaigning.After all what does the bulk of this money pay for?A load of useless advertisements which the majority don't believe,ignore or just laugh at.
Secondly perhaps we should look at a wholly elected House Of Lords so that we can never have the situation where a corrupt PM controls who does or doesn't have a seat there.

It sounds quite persuasive, Chad, perhaps it could form part of the discussion, if the Tory party decided to really make changes to the way that party money is collected. No one can speak for the other parties!

The thought of Johnny Taxpayer having to fork out more dosh to support political parties turns me cold.

I cannot see such a move doing anything but increasing the antipathy which the British public feels towards politicians and political parties in this country, thereby undermining democracy even further.

I mentioned this the last time this topic came up, but parties should be innovative in finding ways to fill their coffers and engage with the public, and I feel that one way of achieving both these things simultaneously would be to hold open primaries in candidate selection and leadership elections with non-members being charged a small sum for participation.

I am against State funding for political parties. In fact, the more I see of political parties the more I am against them per se. As 40% of the electorate do not vote, why should these people give money to political parties they neither know, or care about.

If would-be politicians want to get into the lucrative job of parliamentarian, with it's wonderful pension scheme, perks and expenses, I suggest they fund their own campaigns. It would concentrate the mind and perhaps the electorate would get to know who they were voting for, instead of some anonymous person with a red/blue/yellow rosette.

I would like to see a HoC full of independent minded people who will vote for what they believe in, not what the party whip tells them to vote for. We might then find that the public take more interest in politics.

The thought of Johnny Taxpayer having to fork out more dosh to support political parties turns me cold.

Hi Daniel, well I'm not talking bout increasing tax payers' contributions, just changing the distribution method.

As part of the change, you could reduce the actual amount spent by the taxpayer, making the method more efficient, more democratic and forcing the big parties to cut their bloated costs.

I don't think I've ever really disagreed with the editor of CH but today I do. Public funding for political parties - pace the short fund or whatever the commons funding is called - never. It feels almost as "gut" to me as the visceral "no" 2ID, beyond even discussion, or rather any comments I make would simply be a post-hoc rationalisation of what my stomach is telling me.

There is a simple, radical bold and popular way that Mr Cameron can do good for the country, the party and, incidentally, turn the spotlight up on how slimy New Labour are: announce on Monday that the Cameron goverment will prioritise legislation to elect the upper house, by STV, on the same cycle as the local elections.

Elect the lords and we show that we're dismantling an ANCIENT piece of patronage (which has just reached its head under Mr Straight Kinda Blair) - ie dramatic visible demonstration to chatterers that we're New Tories. It would also be the correct thing to do.

It would also, hopefully, shut down this appalling socialist notion that taxpayers should fund parties. Let's look at countries where they do this, like, umm, Germany, or France, umm what a success it's been there. Why don't we campaign for the party list system as well for elections?

I did have a preferred system of Lords "election" which would also remove any party whipping (if you're into that sort of thing, which I'm not to be honest) - select 500 voters at random and require a session in the Lords as part of their civic duty, a la jury service.

No, there should not be any political fuinding by the taxpayer. Why should a unionists taxes go towards Sinn Fein? Why should a Socialists taxes go towards the Conservative Party? Why should a free market neo-liberal's taxes go to the Labour Party? There is no reason why the state should fund a group of people's ambitions for power.

"If would-be politicians want to get into the lucrative job of parliamentarian, with it's wonderful pension scheme, perks and expenses, I suggest they fund their own campaigns."

So anyone who cant afford to fund themselves, cannot become an MP? Political Parties provide many vital functions to a fully working representative democracy.

appalling socialist notion that taxpayers should fund parties

Graeme and Rob, would you be in favour of removing all taxpayers money that is currently used to fund the opposition parties?

How much exactly are the Conservatives currently receiving pa from the taxpayers to help fund their costs?

Short money to the Tories currently amounts to c£4m pa.

See here for more details

Exactly Tim, over £20 million quid to the Tories in five years. Surely such a "socialist" system should be rejected by the Tories and returned to the Treasury without haste.

All I have suggested is fairer distribution based on small-donor base but if it appals you that much, then I am sure the taxpayers will be grateful for their 20 million quid back!

"How much exactly are the Conservatives currently receiving pa from the taxpayers to help fund their costs?"

So what are you saying Chad? We shouldn't oppose something that is inherently wrong because we benefit from it?

No Daniel, everyone it using "shoulds" and "shouldn't" as if state funding of political parties is something that does not currently exist, when in fact it has done for a long time and those here who are appalled at such a thought, are members of the party that actually receives the most state funding.

If fair distribution based on small-member base was introduced, the biggest losers would be the parties who oppose such a scheme which is not surprising.

We should encourage parties who stimulate real growth in members, and small-donors, and by redistributing the current funding which richly pays the Tories and LibDems. We could call it "sharing the proceeds of growth" ;-)

In fact, by distributing the funds on a linear proportional basis in terms of funds (<1k pa) received, you would actually encourage more donors across all political parties as it would create competition.

The more your donors give, the less the opposition will receive.

Now that really would stimulate people to give if they knew it meant now just more for their party, but less for their rivals.

A zero-sum game, stimulating growth and healthy competition. That doesn't sound very socialist to me.

Come on guys, you voted for a war to spend countless millions "spreading democracy" in the Middle East, it would be hypocritical not to support a plan to spend a much smaller amount that is already currently given to selected opposition parties on promoting healthy democracy at home.

The approach would encourage a healthy, competitive approach to opposition whilst also seriously diluting the impact of millionaire donors.

The Tories might even gain financially as the LibDems seem to be receiving too much based on their relative membership size.

Another benefit would be that parties would need to declare the official current membership size to the Electoral Commission, ending all the horseplay over those numbers and again, increasing transparency.

Support healthy democracy at home, not maintain the unfair polarised current distribution.

Firstly, I was astonished that the Labour Party has a Treasurer who can't read a balance sheet. In essence if there is not a balance between income and expenditure then this has to be covered, otherwise you are insolvent.

This could only be covered by loans of some kind or an ex gracia donation. The Labour Party could have borrowed from a bank and paid commercial interest. According to what was being said earlier in the week the special lenders were charging commercial rates. This is unlikely. Why bother ? Less oprobium from borrowing from a bank.

On the face of it there is nothing wrong with any party having money borrowed to continue trading. Normally a solvent institution would borrow from a bank at commercial rates.

Probably in reality the lenders were offering better deals than the banks.

So, now to my first main point. The loan is not registerable under law, say £1m for an example. At commercial rates if I want to borrow £1m I can expect to pay £50k pa.


If not then the loans are not real and the notional interest is given back as a benefit in kind. This is a donation in kind and under law should have been registered.

SECONDLY, a different point.

Those who would cap election expenditure need to live in the real world.

I had course to question the return of expenses for a Lib Dem candidate in the 2001 General Election. I believe there was prima facie evidence that there was a case to answer.

Neither the Crown Prosecution Service nor the Police took the complaint seriously and they endeavoured to ensure that it ran out of time so they could avoid any action.

We already have national and local limits. The LDs and to be fair no doubt the rest of us make sure their national expenditure finds its way down to targetted seats.

But there was no way in 2001 how we could prove how many leaflets had been printed, distributed, malicious phone calls made or how much they had spent on the usual vicious LD shitspreading.

So, unless you make it an offence to spend any money on any election without the receipts going through the returning officer then it is carte blanche for the most cynical and most corrupt, ie the Lib Dems.

THIRDLY, another point.

In state funding how is the balance of payments to be made ? Will it be in proportion to General Election vote, in which case UKIP are penalised or will it depend on some basket of election performance ? In that case as a Tory election co-ordinator at local level I will be putting up candidates for parish and town elections in order to increase the take. We all will.

What has happened to all the comments after March 19 that were listed yesterday?

The comments to this entry are closed.



ConHome on Twitter

    follow me on Twitter

    Conservative blogs

    Today's public spending saving

    New on other blogs

    • Receive our daily email
      Enter your details below:

    • Tracker 2
    • Extreme Tracker