MINISTRY OF JUSTICE
News Release (IPT/003/007) issued by The Government News Network on
30 October 2007
Talks between the
three main political parties to reach agreement 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 Annex
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.
Notes to Editors
1. Sir Hayden Phillips reported on his Review of the Funding of
Political Parties on 15 March 2007. It is published at http://www.partyfundingreview.gov.uk/files/strengthening_democracy.pdf
2. The Prime Minister invited Sir Hayden to chair talks between
the political parties. On 15 March 2007 the Prime Minister said:
I welcome Sir Hayden's report. He has negotiated his report
with skill and dedication, and for this I am very grateful. I am
sure that the other political parties share my gratitude.
The report shows very clearly that there is now the basis for a
new agreement on the funding and expenditure of political parties.
There are a number of detailed questions which need to be taken
forward, through a process of further discussion between the
political parties. I hope that following these negotiations,
consensus can be reached. I have asked Sir Hayden to chair these
further discussions. I believe that they should begin soon and
conclude before the summer recess, in order to build a platform
for legislation in the next Parliamentary session.
The time has come for us to find a new settlement on party
funding and expenditure.
3. This was confirmed by the present Prime Minister when on 23rd
July he said that the issue of party funding was "a matter
for discussion between all the parties in the light of the Hayden
Phillips Review."
4. The party delegations were led by
Conservative Party:
Francis Maude MP
Labour Party: Jack Straw MP
Liberal
Democrat Party: David Heath MP
5. Sir Hayden Phillips is chairman of the National Theatre,
Chairman of HansonWesthouse Ltd and Charities Consultant to TRH
The Prince of Wales and Duchess of Cornwall. He is a director of
St Just Farms Ltd, of GSL, and an adviser to Englefield Capital.
He is chairman of the Salisbury Cathedral Fabric Advisory
Committee, chairman of Marlborough College Council and Deputy
Chairman of the Wiltshire Historic Buildings Trust. He is a Deputy
Lieutenant of Wiltshire. His previous career was in the Civil
Service. He was Permanent Secretary of the Lord Chancellor's
Department and the Department for Constitutional Affairs from 1998
to 2004 and Permanent Secretary of the Department for Culture,
Media and Sport from 1992 to 1998. Before that he held senior
positions in the Treasury, Cabinet Office, Home Office and
European Commission. His report on The Review of the Honours
System was published in July 2004.
ENDS
5th Floor, Steel House, 11 Tothill Street, London SW1H 9LJ http://www.partyfundingreview.gov.uk