Political gifts over pounds 50 must be listed

POLITICAL PARTIES will have to record all donations of more than pounds 50 under sweeping reforms to be announced today by Jack Straw, the Home Secretary.

The move will catch thousands of small donations which come mostly through local party branches under new rules designed to clean up political funding in Britain. The changes, published amid controversy over the role of the Tory chairman, Michael Ashcroft, will form part of a new ban on anonymous donations.

Although supporters' names will not be published unless they give more than pounds 5,000, a new body set up to oversee political funding will be able to see them on demand. Today's draft Bill will bring a new transparency to politics, with a ban on foreign donations, new election spending limits and an end to blind trusts like those used by Labour before the 1997 election.

Parties will have to report on donations and spending to a new election commission, and they may face heavy fines if they fail to tell the whole truth. Donations of more than pounds 5,000 will be disclosed to the commission, and both the name of the donor and the exact amount will then be published. In the past two years, all the main parties have published the names of donors giving more than pounds 5,000 but not the amounts.

Under new rules each political party will have to appoint an official to oversee donations and election spending. He or she will have to report to the election commission four times a year. The ban on anonymous donations will cover all gifts of pounds 50 or over. Political parties' reporting officers will be responsible for collecting the names of all donors giving more than that amount, and for letting the election commission know the results. They must also give the commission whatever details are available about anonymous donations which have been refused. If a party consistently reports it has been offered no anonymous donations it is bound to face further questioning.

The election commission may also choose to demand to see the names of donors who have given more than pounds 50 but less than pounds 5,000 so it can verify that the party's accounts add up. The pounds 50 baseline is designed to allow parties to continue to pass round a collecting tin or bucket at party functions, but to prevent future scandals. The move will place a double lock on foreign donations and those linked to the proceeds of crime. All such payments will be banned and no party will later be able to plead ignorance of its funding sources.

The Neill Committee, whose report on political funding last year first recommended the change, saw anonymous gifts as a possible loophole through which foreigners and crooks could continue to fund British politics. Before the 1992 general election the Conservatives reportedly received pounds 440,000 from Asil Nadir, the former Polly Peck chairman who later fled to Northern Cyprus after being accused of stealing pounds 30m from his company's shareholders.

More than 20 foreign donors each gave more than pounds 5,000 to the Conservatives between 1992 and 1997, but only a few of their names were ever published. They include the Greek shipping millionaire John Latsis, who gave pounds 1.5m.