Politics: Blair moves to curb election spending

A curb on parties' election spending is expected to come from an inquiry into political funding, it was confirmed yesterday. Anthony Bevins, Political Editor, looks at a significant initiative.

A ban on American funding for Sinn Fein; the identification of pounds 5,000- plus donors to parties; less reliance of Labour on the trade unions; and the elimination of misleading party labels, such as Literal Democrat, could all flow from concerted government action to clean up the "sleaze" that surrounds party funding.

The Independent reported exclusively last month that the Government had decided to curb the millions the parties currently spend - without restriction - during national elections.

Announcing yesterday that Sir Patrick Neill QC would take over from Lord Nolan as chairman of the Committee on Standards in Public Life, and that the committee would now examine the funding of parties, Tony Blair said that the new chairman could "look at all the aspects of the way that political parties are funded, the way their campaigns are run".

He added: "What is tremendously important is not just to clean up the standards in Parliament, to make sure there's proper openness and honesty in the way that Members of Parliament conduct their business, but also that political campaigns and the way that parties are funded have the same openness and transparency."

Asked specifically about a cap on election funding, a senior minister said: "That issue is being looked at."

Sir Patrick, 71, a former Warden of All Souls College, Oxford, is to be made a life peer, said: "One possible aspect we're looking at is overall expenditure by the parties.

"There's a limit on what candidates can spend, but no limit on what the parties can spend at an election time, and that strike most observers as somewhat odd."

Jack Straw, the Home Secretary, also said yesterday that he is to introduce a Bill, as promised in the May manifesto, to require all parties to declare the source of all donations above pounds 5,000, along with a ban on all foreign donations to political parties.

The early legislation will also provide for the registration of political parties, required for the introduction of proportional representation in European elections in June 1999. That proposal will block candidates standing under misleading or deliberately confusing labels, such as New Labour or Literal Democrat.

Although the reference to Sir Patrick's committee does not preclude state funding for parties, it is thought that Mr Blair is against it, over and above the existing system of funding for party work in Parliament.

However, if a cap is to be imposed on election campaign spending, that might allow Labour to fund its political work from individual subscriptions and donations, without the need to rely so heavily on its union "paymasters"

In the run-up to the last election, it is believed the Tories spent pounds 20m, compared with Labour's pounds 13m and the Liberal Democrats' pounds 3m. Ministers believe that a reasonable limit of between pounds 5m and pounds 10m would be more sensible and much more democratic.