New funding rules could bar Ashcroft

MICHAEL ASHCROFT could be barred from donating to the Conservative Party under a change in the voting rules, the Home Secretary Jack Straw suggested last night, as he announced sweeping changes to political funding in Britain.

The move could bar thousands of other wealthy British tax exiles from voting in this country after five years living abroad instead of the current 20 years. Once stopped from voting, they would also be banned from giving money to political parties in Britain.

Mr Straw gave his strongest indication yet that he will listen to demands for a rule change which would prevent payments by the Florida-based Tory treasurer. The change would not just affect the Conservatives, though. It would also stop the payments of pounds 40,000-a-year from the actor Sean Connery to the Scottish National Party, and would prevent further gifts from Robert Earl, a Florida-based restaurateur who has given large sums to Labour.

Even though Labour approved the "20 year rule" when the Tories introduced it in 1989, it was time to look at it again Mr Straw said as he published a draft Bill on party donations and spending. "That doesn't mean that 10 years on it should not be open to review."

Lord Neill of Bladen's Committee on Standards in Public Life, which drew up details of the reforms, said people eligible to vote in Britain should be able to make political donations. Mr Straw has already decided that expatriates should be on the register if they want to donate, but some Labour MPswant to go further by excluding many "Brits abroad" altogether. David Winnick, MP for Walsall North, said he was sure such amendments would be proposed and supported by Labour's backbenchers. "The Tory party is almost exclusively dependent on a tax exile. If this is not in the Bill, some of us are hoping to press for an amendment," he told MPs.

The review of the rules on overseas voters will follow demands for reform from the House of Commons Home Affairs Committee, which said recently that the 20 year rule should be reduced to five years. The plan for a review of the rules on overseas voters was revealed as Mr Straw announced a major overhaul of political funding in Britain.

The Neill proposals, accepted almost in full by ministers, will introduce a pounds 20m limit on general election spending for the main parties, and will lead to the disclosure of all donations over pounds 5,000. There will also be spending limits of pounds 5m each for the campaign groups in future referendums, and of pounds 500,000 for other groups and individuals who want to take part.

The Bill, expected this Autumn, will ban blind trusts such as the ones which funded Labour's front bench before the 1997 general election.

It will also set up a new election commission. The commission will oversee party donations and spending and will also take over the remits of the Boundary Commission and the Local Government Commission. The Home Secretary said it would also have a crucial role to play in "voter education", would be politically impartial and would answer directly to the House of Commons.

However, Mr Straw rejected a call from Lord Neill for tax relief on political donations of less than pounds 500. His committee said such a move would increase the number of small donors and lessen parties' reliance on a few wealthy donors, but Mr Straw said it would prove too expensive.

The Shadow Home Secretary Ann Widdecombe questioned why plans to abolish blind trusts were not in the draft Bill. Mr Straw said the Parliamentary draughtsmen had run out of time and added that the ban was clearly laid out in the White Paper.

Other Tories also attacked the proposals more roundly. Gerald Howarth, the MP for Aldershot, dismissed them as "an act of reprisal" and said greater disclosure would put off potential benefactors. "Many people will be deterred from giving fairly modest sums because they know the member for Hartlepool [Peter Mandelson] will set investigative journalists to dig as much dirt as they can on them. That will not improve the democratic process in this country." he said.

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