"There should be not a penny more state funding without a single, comprehensive cap on donations – including companies, the unions and individuals.  The public will be highly cynical if political parties award themselves lump-sum handouts without fundamental reform.  Any additional state funding should be there to assist and encourage parties to re-engage with the electorate, for example, through tax relief on small donations and a matched funding scheme for those who do not pay tax.  State funding must not reduce the dependence of parties upon their own activists for fundraising.  Nor must it be allowed to increase the distance between the parties and the electorate."

That is what Francis Maude will say about state funding of political parties in a speech to Politeia later today.  The "there should not be a penny more state funding…" line implies that the Tories would walk away from a deal that didn’t include a cap on union funding.  That would be news that would be welcomed by the vast majority of Tory members and the right-leaning press.  Let’s hope the Chairman really means what the says.  He goes on to explain the unacceptability of the current Labour-union link:

"Both the Liberal Democrats and the Conservatives have proposed a cap of £50,000 a year.  We think this is a level at which no one will seriously fear that a party is subject to undue influence.  This would cause us some financial pain, but we are willing to undergo that in order to win back the public’s trust in the political process.  Labour by contrast have entered a resounding veto on any such cap.  They maintain that the trade unions are a special case.  Well, in one sense they are.  The proportion of Labour’s funding provided by a handful of trade union leaders is around 70%.  And there is nothing remotely covert about what is given in return.  It is all there to be seen.  To pay for the 2005 election campaign, Labour reached a deal with the unions called the Warwick Agreement.  The unions stumped up £12 million to fund Labour’s election campaign.  And in return, there was £10 million of taxpayers’ money for the Union Modernisation Fund, extra rights for strikers, and a deal which means civil servants still get to retire earlier than those in the private sector.  This has all the hallmarks of a straightforward commercial transaction.  It is precisely this kind of trade – cash for policy, or in the case of the Union Modernisation Fund union cash in return for taxpayers’ cash – that has eroded public confidence in the integrity of the political process.  Reform of party funding that failed to remedy this would be shockingly cynical and a terrible wasted opportunity."’s ad against state funding of political parties can be watched below.