4 April 2009

"A £50,000 cap on donations would kill the Conservative Party"

Interesting prediction over at ConHome claiming that the Conservative Party would cease to exist if proposals to cap political donations ever become a reality.

The suggestions would limit each individual to an annual political donation of £50,000. I had alway assumed that the proposals obvious target would be trade unions - who, at one point last year, made up 90% of all donations to the Labour Party.
It was in March 2006 that David Cameron announced that the Conservative Party would seek to introduce a legal £50,000 cap on donations to political by individuals, trade unions, corporations and institutions.

That pledge was made in healthier economic times, and when donating money to political parties was - in the eyes of an increasingly sceptical and cynical public - marginally less tainted an act than it is today.

Yet three years later, the stark fact is that if such a curb on donations were in force, the Conservative Party would not have enough cash to function as an entity.

Apart from people being more nervous than ever about making political donations in the wake of all the "cash for honours" stories, they clearly have less money to spare for such causes in a recession.

And it is my understanding that the Party is very much feeling this as it seeks to keep the cogs turning at CCHQ, with generous individuals regularly being called upon to avert a financial crisis.

If the £50,000 cap were in place now, it is hard to see how the Conservative Party would be financially viable.

One measure which the party has proposed, with the aim of encouraging a wider donor base, is tax relief for donations up to £3,000 - and that is to be welcomed.

Yet there is also an invidious proposal to introduce state funding of parties on a per vote basis, which is the last way that taxpayers should be expecting their money to be spent right now.

As such, I remain of the view that political parties should expect to have to raise the vast majority of their funds through private donations - and that as long as there is transparency about the origin of considerable gifts, there should not be a limit on such donations.

And right now, that is necessary for the Conservative Party to survive.
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