Kiran Stacey The “grown-up” politicians sling insults over party funding

Today’s hearing by the public standards committee (see Jim’s earlier post) on party financing began well

Jack Straw, Labour negotiator at the last negotiations on party funding

Jack Straw, Labour negotiator at the last negotiations on party funding

enough. Sir Hayden Phillips started on an optimistic note, saying, as he did earlier this morning on the BBC that he had been only inches away from a binding agreement.

He was followed by Francis Maude, Jack Straw (right) and David Heath, who all – to a certain extent – personified reason and moderation. They agreed that state funding would help bring resolution, but that it would be politically unpalatable. Maude and Straw promised major concessions, Maude on the issue of state funding and Straw on the issue of donation limits.

But all this was known, and none of this is why the agreement collapsed in 2007. Then, as now, the sticking point is union donations to Labour, which the Tories want to limit, but Labour insists are a key part of the party’s genetic make up. The Tories want union members to have an active choice over whether part of their affiliation fee goes to Labour, and would prefer them to opt in to such a scheme rather than opting out if they would prefer that money to go elsewhere.

Labour says they already have a choice and that as the party was founded by the unions, those unions should not now be prevented from ensuring its continued survival with their funds, wherever they come from.

It was on this point, after both Straw and Maude had promised grown-up debate, that the anger quickly bubbled up.

Maude called the idea that union members have a choice over where their affiliation money goes a “sham” and said the status quo was “indefensible”. Straw hit back later, terming the Tories’ insistence that union members should be offered the chance for their money to go to other parties “an outrage” and a “constitutional monstrosity”.

So where does the committee go from here? It could set up a longer-term review into the issue (and all theree politicians said they thought that would be useful). More importantly, Maude, Straw, Heath and Sir Hayden Phillips (who led the failed negotiations in 2007) all agreed that a cap on donations could work if there was additional state support.

The problem, all four said, was defending such a measure to the electorate. The solution to that problem, however, could be to put the issue on ice until the end of the parliament. If the government has succeeded by then in eliminating the structural deficit, the political conditions might be in place to agree a stringent donations cap (perhaps the Lib Dems’ preferred £10,000, perhaps even lower) and ask the taxpayer to fund the political process much more than he or she already does.

The question then would be how to do so – if all parties get equal amounts, how many parties are included? Should they instead receive funding proportionally according to votes won (Labour’s preferred option), or should the government match political donations that fall under the agreed cap (the Tories’ preference)? One thing is clear, even if the union issue is resolved (which it won’t be for a while), a whole new set of hurdles awaits the negotiators.