16 Jun 2008 05:47 PM
Funding reforms will tackle spending 'arms race' says Straw

MINISTRY OF JUSTICE News Release (057/08) issued by The Government News Network on 16 June 2008

Reforms aimed at ending the spending "arms race" in political funding have been proposed in a White Paper launched today by Justice Secretary Jack Straw.

The measures would tighten controls on spending by parties and candidates.

Mr Straw plans to bring forward legislation immediately to tackle these issues and substantially to strengthen the powers of the Electoral Commission, the watchdog set up in 2000 to oversee party finance regulations.

The White Paper also sets out the Government's broad support for long term, fundamental reform of party finance and expenditure based on the framework put forward by Sir Hayden Phillips' independent review in 2007.

Sir Hayden's recommendations included limits on donations to political parties in return for increased state funding. Noting the need to build public confidence and to move forward only on the basis of consensus between all political parties, Mr Straw called on all political parties to come together to consider these issues and to debate them with the public.

The Justice Secretary said:

"Political parties are integral to our democratic system. So when political parties are brought into disrepute, the reputation of the entire political process is tarnished.

"The Government is determined to help build higher standards of public confidence in our politics and believes that long term, fundamental reform of party finance is necessary. I hope we can move towards this with the support of all political parties and build a deep and enduring cross party consensus.

"We intend to take action where there is a consensus through legislation to curb the spending 'arms race' which drives demand for large donations to parties and which so contributes to public disquiet over our system of party funding.

"The package I am proposing today represents a significant step forward towards a system of party funding which is more transparent, better regulated and, most importantly, better able to win the confidence of the public."

The White Paper - Party finance and expenditure in the United Kingdom - proposes immediate legislation to:

* bring in more effective controls on candidates' spending through the re-introduction of the "trigger" on candidate spending;
* strengthen the Electoral Commission so that it is better equipped to regulate party spending and political donations - both giving it greater powers and reforming its governance so that it can benefit from Commissioners with recent experience of politics;
* increase the transparency of donations to ensure that the ultimate source is revealed, including by closer regulation of unincorporated associations.

Government will also re-examine the system governing which expenses qualify for each of the legal candidate and campaign spending limits.

Mr Straw said:

"Strengthening the Electoral Commission will send a clear signal that politics and politicians are effectively scrutinised: never above the law.

"The Electoral Commission will have robust civil sanctions to deploy, with criminal proceedings as an alternative. The Commission will have more effective investigatory powers, enabling it to access information from anybody where it suspects a breach of the rules. Its governance arrangements will be overhauled better to ensure that there is greater practical experience available to the Commission."

Sir Hayden's report also proposed new donation caps linked to an increase in state funding, as well as continuous, all-encompassing expenditure limits to further curtail the spending "arms race".

Mr Straw said:

"We share Sir Hayden's objective of securing a more equitable and democratic system of party funding which is - and is perceived by the public to be - fair, transparent and free from abuse.

"In the interests of democracy we need finally to achieve what all parties have sought to do through previous legislation and stop this damaging arms race.

"On Sir Hayden's recommendation for donation caps in return for enhanced state funding we would need not only have to have all the main parties with us, but also the public, the taxpayer. That is not the case at present. We are ready to have that debate: indeed, to discuss donation caps at a lower level than Sir Hayden recommended, but that will require all parties to come together to have that debate, most crucially with the public."

Notes to editors
1. Party finance and expenditure in the United Kingdom can be seen at http://www.justice.gov.uk/publications/party-funding.htm.