Philip Webster, Times Political Editor, says the latest figures on political party funding show both Labour and the Conservatives are in trouble - and no deal is in sight on how they will be funded in future:
These figures show what a right old mess they’re all in, but they will find a way out of it because they have to and because they always have done.
Labour picked up £3 million in this last quarter so even when they’re down on their uppers they’re still able to raise money, despite the bad publicity surrounding cash-for-peerages. And the defiant line coming from the party hierachy is, ‘Yes, our position is bad but not as bad as the Tories - they own £35 million.’ They’re saying that with some satisfaction.
But the figures also show that Labour’s money is coming in from the unions - the bad publicy surrounding the cash-for-peerages investigation has clearly put off a lot of the big donors that Labour has relied on. The fact that Conservatives are nearer power than over the past two parliaments has helped them, simply because people like to back winners. But if people feel that Labour can win again, their situation could quickly improve. A lot will depend on Gordon Brown when he takes over.
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Labour has been putting quite a bit of store by this review into political party funding by Sir Hayden Phillips. The deal they want is to limit the amount that can be spent by parties throughout a Parliament, not just during an election campaign. What is happening at the moment is that the Conservatives are raising money now and spending it now, and that is not covered.
Downing Street’s view today is that clearly there’s no obvious sign of consensus, but they’ve not given up on it. All the indications we’re getting, however, is that this is heading for deadlock and there will be no deal, so we’ll be back to the drawing board.
What Downing Street is saying is that reports that they will press ahead with legislation to limit donations if they can’t get agreement are wrong. They deny that. The Prime Minister believes that if they can’t get a deal they won’t just be able to press ahead with new rules - they would not be able to get them through the House of Lords.
The other point about legislation sent to the Lords is that it would be amended to restrict money that Labour receives from the trades unions - the Tories and Liberal Democrats would work together. So that’s another reason why they can’t go ahead.
Another thing that Labour is saying today is that this report vindicates them by proving that their loans were taken out as proper commercial loans. And they say it shows that it’s a nonsense to say that they ever preferred loans to donations, because you don’t have to pay donations back.
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As for the Tories, they have always tended to find it easier to get money from very rich people and obviously they are heavily backed at the moment by Lord Ashcroft and other very senior figures. So money has always been a smaller problem for the Tories, as long as they have some hope of governing - they went through a very bad patch during Tony Blair’s first two terms. Now that they’ve got more hope of being elected in 2009 under David Cameron, they have found that the donations have come back. But they are due to pay back £20 million in loans by next July, so they’ll have to raise a lot of donations to pay that back. It’s big money.