Labour's NEC to review political funding

The Labour Party's National Executive Committee has today launched its review of the Party's position on party funding. They will be consulting Labour members and affiliates for two months and then putting together some proposals for their Autumn Conference.

This comes after a government review into party funding was launched two weeks ago headed by Sir Hayden Phillips (who also submitted a report on cleaning up the honours system for the Cabinet Office in 2004).

The main issues the review will look at are:

1. How to invest in democracy - Increasing funding of policy development, managing state funding of political parties and helping them engage with the electorate, possibly reforming "short money" (it mostly benefits the Conservatives).
2. Caps on party expenditure - Goes further than the Conservative Party's proposals by looking at caps at a local level, and capping annual spending rather than election-period spending. Mentions Lord Ashcroft's personal funding of some election campaigns as something this would curtail.
3. Individual donations - Whether to limit them, and how to close the "loop-hole" of non-party organisations such as America's 527 groups "bypassing" the system. Unclear as to how they would manage such control-freakery.
4. Affiliated organisations - The review seeks to make a distinction between "affiliated organisations" donating because of shared values, i.e. Trade Unions to Labour, and non-integral organisations donating because of finances, i.e. businesses to the Conservatives. Francis Maude has already attacked this position for "justifying the unjustifiable".
5. Compulsory financial system - How to enforce a mandatory transparent system onto political party's funding practices without excessive bureaucracy and restrictions on volunteers at a local level.
6. Foundation for Democracy - Advocates establishing a domestic equivalent of the Westminster Foundation for Democracy to independently adminster support for domestic, democratic institutions.
7. Tax relief on donations - Like ConservativeHome's initial proposals, the review recognises the public-spiritedness of donating to a political party, but hasn't ruled out giving it Gift Aid or charitable status rather than simple tax relief.
8. Devolved institutions - Leaves a question-mark on how the above proposals would affect European and local government, as well as independent candidates and single-issue campaigns.

There are some thoughtful suggestions here but too much of it has the potential to enshrine a big Labour party in the UK political process. It is positive about the role active citizens and political parties have to play, but at the same time could clip the wings of localised and grassroots political movements.

Deputy Editor

Comments

[Annabel Herriott]

It would be totally undemocratic for Nulab to hang on to its trade union millions, For one thing, not all trade union members are nulab, are they? Shouldnt we be looking for a level playing field here? They have already gerrymandered the constituencies to give themselves the voting advantage, havnt they?

[Patsy Sergeant]

Reading through the points itemised in the review - above, at least three of them seem devised to insure that Labour get adequate funding, while at the same time preventing conservatives from receiving the same amount of funding. If this is the case (and I am sure labour would deny it), then I have to say - here we go again! We have had constituency boundary changes, we have had the Legislative and Regulatory Reform Bill, they really are doing their best to become an eternal one-party state (there is another word for it!)

[YorkshireLad]

I agree with the comments from the two ladies above.

I can see the advantage of capping annual spending, but there's precious little else in there which would do (us) any good.

[Yet Another Anon]

I don't really see why Trade Unions or Companies are allowed to make political donations - it should be absolutely forbidden in both cases, if someone wants to pay out of their own pocket for political funding that is one thing, but using shareholder's or Union member's money for such things is not acceptable.

I don't think that the state should get involved in party funding though - loans have to be regulated to set minimum rates of interest and minimum repayment periods otherwise they should be classified as donations and regulated accordingly whether or not they actually a loan.

[william]

Taken in the context of the European Directive on Political Prties which makes it illegal for parties to receive private donations, thereby making them dependent on state funding - and therefore bringing them into control - the moves being taken by Labour make more sense.

The EU claims that their Directive only applies at 'EU'level, but how can the funds of a party operating at both national and EU level be easily separated? They cannot.

Parties which stand to withdraw from the EU will not be funded from state funds.

The momentum is all behind bringing political parties under state (EU) control through controlling their funding.

[malcolm]

Oh my God!Yet another thread hijacked for an irrelevant debate about the EU.Please please nobody rise to the this bait.The EU has no influence whatsoever into the funding of political parties in the UK. Long may it remain so.

[william]

Malcolm,

Question 1.

How will a party that operates at both EU and National level such as the Conservatives, manage to be eurosceptic at national level, and europhile at European level?

Question 2.

How will a party that receives private donations at national level, if national fund-raising rules permit that, be able to prove to the EU that none of that donated money has benefited its EU-level operations?

Question 3.

With these complications in mind, what other practical approach is there for a party such as the Conservatives to take, other than to comply with the EU Directive on Political Parties at national level as well as European level?

.......................................

Since Maastricht, it has been apparent that the EU has a particular way of viewing the role of political parties - their role being primarily to promote the EU to its citizens (rather than to represent the views of the citizens to government as we are used to in Britain).

This projected role can clearly not include promoting withdrawal from the EU. As EU laws grow in scope, they will inevitably circumscribe the ability of political parties to offer EU withdrawal.

Funding of political parties is one of their weak points, and the EU makes no bones about the fact that this is an area that will be used to control political parties.

Interestingly confidential private donations were made illegal in the UK in 2000. The loans fiasco was the result. Now Cameron and Blair have both intimated that they are willing to change to a State funded system.

I'm delighted that Malcolm suffers from the total certainty that the EU has no influence at all over Blair and Cameron's decisions in these matters. I wish I could agree with him.

[malcolm]

I am happy to discuss the EU on relevant threads.I have as you have now noticed started to resent your continual hijacking of so many threads on so many subjects so that you can rant about the EU.

[william]

Where the EU has significance it should be discussed. The relevance of the EU to many areas such as Party Funding is not simple to get across, but it clearly exists.

Malcolm I'll leave the rants to you. You're clearly the Master of the art. I prefer reasoned argument, but there are enough other commentors similarly minded to provide what is good for the threads.

You're quite a highly charged, fire a quick blast and be gone merchant. There's room for you too!