The Hayden Phillips Report recommendations on capping donations to political parties should be accepted and enforced.

The problems of funding political parties are a symptom of the problems which parties have in modern society. The great majority of people do not want to give money to a political party. They may support it at an election but they are not even prepared to give it annually the cash equivalent of the cost of a DVD (for instance the Conservative Party annual subscription is normally £15). If political parties cannot get money from a wide proportion of the population then they are forced to go to specific funders.

Party political funding is a major concern of voters. There is a huge suspicion that those donating large sums are able to influence party policies. This thesis has credibility given the concentration of power in the party oligarchies with few checks or balances. The lack of any independence among MPs and any proper independent scrutiny by either Select Committees or Departments leads to the suspicion that party leaders can have their view of an issue changed by a donor and that it will then become law.

The Electoral Commission’s quarterly spending report for July to September 2008 shows that the Labour Party received major (more than £5,000) donations of £7.5 million from only 77 organisations and people and the Conservatives £4 million from only 260 organisations and people. This total number of major donors of 337 is less than one in 100,000 of the electorate of 45 million people. The Liberal Democrats raised £0.6 million. Labour’s debts now stand at £15,762,280, compared with £12,113,165 owed by the Tories.

Party funding reform has been considered many times from the Houghton Committee in 1976 to the Home Affairs Select Committee in 1994, the Neill Committee in 1998, the Electoral Commission report in 2005 and the Constitutional Affairs Select Committee investigations in 2006.

As a result of the furore surrounding the “Cash for Peerages” scandal, in March 2006 Tony Blair, announced that there would be a review of the funding of political parties to be conducted by Sir Hayden Phillips, a retired civil servant. Sir Hayden produced an initial report in March 2007 “Strengthening Democracy: Fair and Sustainable Funding of Political Parties”, and this was then discussed between the three major parties.

Resulting from public consultation on that report, in August 2007 a draft agreement was put to the Conservative, Labour and Liberal Democrat parties by the Hayden Phillips Secretariat The purpose of that document was stated to be: “This new approach aims to restore public trust in the probity of party finances by setting a limit on the amount which any individual or organisation can donate to a political party.”

It is clear that political funding is a major issue both for political parties and for the electorate. The Jury Team therefore proposes that the recommendations of the Hayden Phillips Report in relation to political donations should be accepted and made law in order to help to clean up this aspect of British politics.

Key Recommendations of the Hayden Phillips Report

The key provision of the Hayden Phillips Report in relation to donations was that donations to political parties from any individual or organisation should be capped at £50,000 by 2012. Any amount donated over that limit would have to be returned to the donor, or forfeited to the Electoral Commission if this was not possible.

The Hayden Phillips Report also addressed the issue of trade union donations. It saw it as legitimate for unions to make donations on behalf of their members as long as those members were aware of this and had the right not to pay. The Hayden Phillips report therefore recommended that for the 3.5 million union members who currently pay into a political fund, the Affiliation Fees paid by trade unions will be treated for the purposes of the cap as individual donations of the members.

The Hayden Phillips Report also noted that with this increased transparency and choice for trade union members the ten-year review ballot on the existence of the political fund, which trade unions currently have to conduct, would no longer be necessary and should be removed.

These provisions on donations seem eminently sensible and the three major political parties, if motivated by the national rather than partisan interest, would have accepted them. However as they failed to do so the Jury Team has decided to take up the position, and to fight to clean up political donations.