20/03/2006

Plans to ban 'secret' party loans

Secret loans to political parties could be outlawed under new legislation proposed by the Lord Chancellor as the row over the 'cash-for-peerages' scandal continues.

Lord Falconer has suggested that a ban should be introduced to the Electoral Administration Bill which is currently going through Parliament.

The Lord Chancellor also said that the law could be retrospective, meaning that parties would also have to declare the details of previous party loans.

The Lord Chancellor's announcement comes in the wake of sleaze allegations against the Labour government, after it emerged that several businessmen who lent the party money had been nominated for peerages.

Last week, Prime Minister Tony Blair had strongly denied any links between the loans and the nominations, saying: "It shouldn't be one in exchange for the other and it wasn't."

Lord Falconer said that he did not think that receiving the loans was deceitful, but said that the system needed to be changed in order to address concerns about the way parties were funded.

He also dismissed claims that the row would hasten Mr Blair's departure from Downing Street, saying: "The problem is not a group of people in No 10 Downing Street. The problem is how you fund political parties."

Former senior civil servant Sir Hayden Phillips is now conducting a review of party political funding.

The Conservatives have proposed introducing a cap on the size of donations parties can receive, limiting donations to £50,000, as well as a reduction in the amount parties can spend during a General Election campaign, from £20 million to £15 million.

Conservative leader David Cameron is also believed to support reducing the number of MPs in Britain by 10% in order to contribute money to support state funding for parties.

Liberal Democrat leader Sir Menzies Campbell said that the "credibility of British politics will remain diminished" unless the details of past loans were declared. He said: "For the Prime Minister to uphold the principles to which he said he subscribed to in 1997, he will have to ban large scale secret loans, provide limited state funding, put caps on annual donations and reduce the General Election expenditure cap."

(KMcA)


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