Low-level party funding 'a myth'

Party funding talks collapsed last October

Political parties have benefited from "huge and ever continuing growth" in hidden state subsidies, says a study.

It says parties already receive about £1.75bn of taxpayers' money every four years, including indirect subsidies like expenses and free TV ads.

Its author, Michael Pinto-Duschinsky, said it was a "myth" that financial aid to political parties was low.

Last year PM Gordon Brown raised the prospect of more public money as he pledged reform of party funding.

Dr Pinto-Duschinsky, a political finance expert at Brunel University, calculated the total cost of political parties to the taxpayer over a four-year electoral cycle, in a report for the Policy Exchange think tank.

'Benefits in kind'

He said his £1.75bn figure was an under-estimate, as costs grew all the time and he had not included benefits like free premises, use of official cars and telephones.

He included both direct financial payments from the state, "subsidies in kind", such as free party political broadcasts and indirect subsidies, like MPs' allowances.

2006-7 COST ESTIMATES Councillors' pay and expenses: £216m MPs' expenses: £87.6m Peers' expenses: £17.7m Special advisers: £5.9m English councils political assistants: £6m

"This study also exposes another myth, that financial aid to political parties by the state is still at a low level," he said.

"Since the late 1960s there has been a huge and ever continuing growth in such indirect state subsidies."

In addition to more than £300m spent on local councillors, MPs and peers' allowances, special advisers and political assistants on English councils, he said "healthy additional sums" were spent on allowances to regional assemblies and MEPs.

And he said there was a "variety of evidence that a chunk of all this money and of other forms of political subsidy found its way into party coffers".

He also said complex rules governing the use of official cars "may not be completely effective" - as ministers attending a political engagement could arrange a short official engagement nearby to get use of the car.

'Franker than most'

He also raised questions about the use of MPs' expenses to benefit their local parties, such as rent paid for party-owned offices.

One MP paid almost £13,000 a year in office rent to their own local party - the average claim was £5,000.

Another "was franker than most when she told me she would use her allowances to the maximum extent possible to secure her re-election".

There is a strong case for a comprehensive cap on donations - covering individuals, companies and trade unions Francis Maude Conservatives

But the report dismissed the "arms race" in spending between parties - saying overall political spending had remained "surprisingly constant" when inflation was taken into account.

Set against the retail price index, the Tories spent 4% less between 2001-5 than between 1966-70, he said, while the combined spend of the two main parties rose by just by 1.1% a year.

Eighteen months of cross-party talks stalled in October, amid failure to agree on a raft of recommendations in a review by Sir Hayden Philips.

The Tories said trade union donations should be included within a limit on donations while Labour wanted an end to the use of Tory Lord Ashcroft's millions being targeted on marginal seats.

To ensure honest politics, parties need to be independent of vested interests Chris Huhne Liberal Democrats

In December Mr Brown pledged to push through reforms, following revelations that gifts of more than £650,000 had been given to Labour by businessman David Abrahams using proxy donors.

Responding to the report, shadow Cabinet Office minister Francis Maude said: "This research demolishes the Labour argument that rigid state controls should be placed on local campaigning.

"Any reform of party funding must clean up politics and end the big donor culture.

"Given the succession of funding scandals under the Labour Government, there is a strong case for a comprehensive cap on donations - covering individuals, companies and trade unions."

Liberal Democrat home affairs spokesman Chris Huhne said the report "misses the key point that parties are now far too reliant on dodgy donors to fund their campaigns".

He said parties needed to be "independent of vested interests" with tough limits on donations and spending.