Miliband urges £5,000 donors' cap

 

Ed Miliband: "We've got to have big change... it's going to be uncomfortable"

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Labour leader Ed Miliband has called for a £5,000 cap on donations to political parties, including those from trade unions.

He told the BBC this would remove the influence of "big money" on politics.

But Mr Miliband also said he wanted to keep the system under which union members are asked whether they want to keep paying £3 a year to Labour - around three million currently do so.

The Conservatives called Mr Miliband's proposal "virtually meaningless".

The three largest political parties began talks last week on the way parties are funded, in an effort to resolve an ongoing row over the subject.

'Much tougher'

Labour argues that large businesses are providing too much of the Tories' funding, while the Conservatives say Labour is itself too reliant on lump sums given by affiliated unions, such as Unite and Unison, particularly in the run-up to general elections.

Speaking on the BBC's Andrew Marr Show, Mr Miliband suggested a cap of £5,000 on individual donations to parties.

Analysis

At face value, Ed Miliband's comments appeared to be groundbreaking. Was he really proposing severing the major artery of his party's funding?

Not quite. Yes, he proposed a £5,000 cap on donations. But the affiliation fees many trade union members pay to the Labour Party would continue.

Nonetheless, Labour point to last year's report on party funding by Sir Christopher Kelly, which suggested union donations were worth on average £2.5m to the party every year between 2000 and 2010. Add the private donations they would give up with this idea, and they say their "biggest single source of discretionary income" would be shut down.

But a source in Downing Street told me Mr Miliband's idea was "nakedly partisan, and nothing about making genuine progress".

In short, any one measure suggested to shake up party funding is likely to have a greater impact on one party than another - and all the parties at Westminster have to wrestle with trying to come up with a package of measures that overall doesn't advantage one of them over the others.

And that isn't easy.

This is half the £10,000 proposed by Sir Christopher Kelly, chairman of the independent Committee on Standards in Public Life, which carried out its own inquiry into party funding last year. The Conservatives want a cap of £50,000 on individual gifts.

Mr Miliband said: "We've got to change the way we fund politics and take big money out of politics...

"When people don't vote for the mainstream parties, it's because they don't believe that politics can change their lives."

He added: "We've got to have much tougher limits on spending...

"[When] I talk about a £5,000 donations limit it's got to apply to trade unions."

This would be "painful" as it would cost Labour "some millions of pounds", he said.

But Mr Miliband added that he would keep the system where members of unions affiliated to Labour are asked whether they would like to "opt out" of giving the party a levy of £3 a year, rather than changing to an "opt-in".

Mr Miliband said: "It's not just that working people founded the Labour Party, but they keep us rooted in those communities now."

He added that about 40% of Labour's income was from its members, 40% from unions and the rest from individual donors.

CURRENT FUNDING RULES

  • No limit on size of donations
  • But name of anyone who gives £7,500 or more is published

A Conservative Party spokesman said Mr Miliband's proposals on party funding reform would be "virtually meaningless".

He added that Labour received £10m from its affiliation fees, which would not be covered by the change.

Conservative housing minister Grant Shapps told BBC One's Sunday Politics that, in years other than when a general election was held, Mr Miliband's party would lose only 1% of funding.

He added: "We are very, very keen to reform party funding. It's the unions that have been blocking it and, of course, funding the Labour leader."

Labour's planned reforms are a "complete wheeze" says Conservative Grant Shapps.

And Liberal Democrat deputy leader Simon Hughes said: "We're pleased that Labour has finally recognised that big money should be taken out of politics and that this includes trade unions.

"But questions remain over how committed Labour is to real reform. Why does Ed Miliband still disagree with the Kelly proposals that people should have the freedom to opt in to donating to the Labour Party, rather than the complex system of opting out?"

But a spokesman for the Unite union said: "Unite supports Ed Miliband's efforts to restore faith in politics, and is pleased that the vital link between Labour and millions of working people is valued and will be retained.

"The affiliation to the party is the most transparent money in politics. Now, more than ever, it is something to be proud of."

 

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  • rate this
    -1

    Comment number 312.

    Labour - stop being defensive about union funding! It's honest money - it's declared in union accounts; if individuals wish to cease their donations they can do so; and the unions decision to affilliate/fund the Labour Party (or not) is a democratic decision by thier conferences.

  • rate this
    +1

    Comment number 311.

    #303
    The tories had an opportunity to deal with an unreformed inflexible mob of workers who brought this country to it's knees and has since held the country to ransom - they chose not to.
    Ring Fence Dave did however support controversial poorly thought through NHS reforms.

    Trust eh?

  • rate this
    +2

    Comment number 310.

    "It's not just that working people founded the Labour Party, but they keep us rooted in those communities now."

    the pretense that the labour party are for the working class is hilarious. give it a rest.

  • rate this
    +4

    Comment number 309.

    No. Miliband's proposal is completely unacceptable. People should have to make a conscious decison to subscribe to Labour (ie have to opt-in), not do it because they have not read the small print (ie fail to opt-out).
    ----
    Please explain how the employees and shareholders of businesses that bung money to the Tories have opted in or out to this activity?
    At least Union members get a choice.

  • rate this
    0

    Comment number 308.

    303.dan doherty - "...before finally bankrupting the country almost"

    A sense of proportion would help - whilst the debt was high, 80% of it came about purely because of the global banking crisis. That is fact No1.

    Fact No 2 - divide the debt up equally around us all & it comes out at £16,000 oer person. Or put another way a hell of a lot less than the majority of mortgage holders are in...

  • Comment number 307.

    All this user's posts have been removed.Why?

  • rate this
    +2

    Comment number 306.

    If donations were limited to modest amounts, incomes to all parties would drop to sensible levels, not those that produce extravagant advertising campaigns etc. They would have to tighten their belts, as have all had to do, but more importantly the birth of new alternative competing parties is likely as the high cost entry barriers would be removed.

  • rate this
    +2

    Comment number 305.

    The same old game of vested interests. A £5,000 cap is most beneficial to his own party, Conservatives prefer £50,000 as this benefits them.
    Until we rethink our political system (eg: Hse of Lords) we are trapped in a cycle where 'transparency' is a merely a word banded about for the purpose of PR at election time

    http://realpolitikuk.blogspot.co.uk/2012/03/032-corruption-in-british-system.html

  • rate this
    +2

    Comment number 304.

    @298

    OK they want even more expenses (and salaries) if they got into power through the middle classes (or those who think they are)

    It's all a sham.

    Just like Cameron saying I'll do the fighting, You do the talking. Sorry I didn't mean that. Oh dear :)

  • rate this
    -2

    Comment number 303.

    How can anyone seriously trust the Labour party?

    Yes men, yes America we will do that, yes America we will go there, yes E.U we will do that, etc. Sellouts that hold the country to ransom with strikes, state benefits gone mad, health & safety gone mad, Human rights for terrorists, before finally bankrupting the country almost. & Some People still vote for them pffft

    We need realists, not unions!

  • rate this
    0

    Comment number 302.

    Facts are that the "major" parties aren't getting the funds and they are worried. Popular support for them is virtually non-existent. Therefore, they need to apply the market forces they all claim to love and admire so much. This means having policies the people of the country support, not policies invented by PPE graduates who do not understand real life. Then the money will come rolling in.

  • rate this
    +2

    Comment number 301.

    @270.

    Just seen some stats. Feb 2012 public sector debt 63%,excluding financial sector intervention. Including latter it becomes 147.3%. Kinda tells its own story does it not?

    It was the BANKS,& the requirement to rescue them which essentially brought us to this position.

    On the subject of limits to party donations. Good thing,but needs to be discussed more,preferably keeping an open mind.

  • rate this
    0

    Comment number 300.

    so labour runs on funding issues then proposes a plan to limit party funding through donations?
    taking everyone down with the sinking ship maybe...

  • rate this
    0

    Comment number 299.

    Dismantling the House of Lords would be another good idea - save a fortune on tax payer funded advisers to companies

  • rate this
    +1

    Comment number 298.

    @295

    I think you've misinterpreted what Milliband said there.

  • rate this
    +2

    Comment number 297.

    We may as well just go to a two party system like they do in the USA and give each one a fixed amount of state funding each year.

    Mind you, as the two parties are virtually identical, we may as well take the final logical step and endorse a single party state. Think of the money that would save.

    You get the government you deserve in the UK.

  • Comment number 296.

    All this user's posts have been removed.Why?

  • rate this
    +2

    Comment number 295.

    Mr Miliband said: "It's not just that working people founded the Labour Party, but they keep us rooted in those communities now."

    So Eddie wants away from the lower classes??
    And most of their front bench are millionaires funded by their expenses.

  • rate this
    +6

    Comment number 294.

    Further to my comment (no.40): why not also limit parties to receiving donations from signed-up members? No organisations (business, unions) should be allowed to donate or collect mass donations from members. You want influence? Then you *must* join the party as an individual member and pay their standard subscription (no discounts unless student/OAP). Only then can you donate more if you wish.

  • rate this
    +3

    Comment number 293.

    Rather see a proposal to get rid of 50% of UK MP's and the House of Lords together with associated Admin deadwood. With the mega billions saved, limited and regulated party funding would then be under public control & scrutiny. .

 

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