The Labour Party’s National Executive Committee has today launched its review of the Party’s position on party funding. They will be consulting Labour members and affiliates for two months and then putting together some proposals for their Autumn Conference.Sir_hayden_phillips_1

This comes after a government review into party funding was launched two weeks ago headed by Sir Hayden Phillips (who also submitted a report on cleaning up the honours system for the Cabinet Office in 2004).

The main issues the review will look at are:

  1. How to invest in democracy – Increasing funding of policy development, managing state funding of political parties and helping them engage with the electorate, possibly reforming "short money" (it mostly benefits the Conservatives).
  2. Caps on party expenditure – Goes further than the Conservative Party’s proposals by looking at caps at a local level, and capping annual spending rather than election-period spending. Mentions Lord Ashcroft’s personal funding of some election campaigns as something this would curtail.
  3. Individual donations – Whether to limit them, and how to close the "loop-hole" of non-party organisations such as America’s 527 groups "bypassing" the system. Unclear as to how they would manage such control-freakery.
  4. Affiliated organisations – The review seeks to make a distinction between "affiliated organisations" donating because of shared values, i.e. Trade Unions to Labour, and non-integral organisations donating because of finances, i.e. businesses to the Conservatives. Francis Maude has already attacked this position for "justifying the unjustifiable".
  5. Compulsory financial system – How to enforce a mandatory transparent system onto political party’s funding practices without excessive bureaucracy and restrictions on volunteers at a local level.
  6. Foundation for Democracy – Advocates establishing a domestic equivalent of the Westminster Foundation for Democracy to independently adminster support for domestic, democratic institutions.
  7. Tax relief on donations – Like ConservativeHome’s initial proposals, the review recognises the public-spiritedness of donating to a political party, but hasn’t ruled out giving it Gift Aid or charitable status rather than simple tax relief.
  8. Devolved institutions – Leaves a question-mark on how the above proposals would affect European and local government, as well as independent candidates and single-issue campaigns.

There are some thoughtful suggestions here but too much of it has the potential to enshrine a big Labour party in the UK political process. It is positive about the role active citizens and political parties have to play, but at the same time could clip the wings of localised and grassroots political movements.

Deputy Editor