Party Funding: Back to Square One (and a Half), or Every Cloud Has a Silver Lining?

On 30 th October 2007, Sir Hayden Phillips announced that the inter-party talks on party funding, which had been established following his report in March of the same year, had been suspended. At the time, it appeared that barring another party funding ‘episode’, the attempt to broker consensus on broad reform in party funding had failed. In effect, it meant that we were effectively back to the position that had existed prior to the ‘loans for peerages’ episode in 2006 on the vexed question of party funding reform. True, there had been some change (initiated by the government in the immediate wake of the ‘loans for peerages’ stories) and in the Queen’s speech at the commencement of the current session, there was an indication that legislation in this field may be pursued. But the shape of proposals was unclear, and any reforms were unlikely to be as comprehensive as those proposed by the Phillips report. However, in late November 2007, it emerged that Labour had been receipt of over £600,000 in donations via intermediaries. If this were proven, it would be a clear breach of the Political Parties, Elections & Referendums Act 2000 (PPERA). The initial consequence was the swift resignation of Labour’s General Secretary and within days, the Electoral Commission had passed the matter over to the Police. At the time of writing (early December 2007), the outcome of that investigation is not known, but in the light of this episode, the Prime Minister has indicated that further reforms in party funding will take place. If reforms do go through, the unfortunate cloud of November 2007 may have a silver lining for those seeking reform. If the government fails to introduce reform, we will effectively be back to square one.