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The BBC's Shaun Ley
"Foreign donations to the main parties ... are banned from today"
 real 56k

Friday, 16 February, 2001, 06:10 GMT
Political funding law in force
Cash
A limit has been set on general election campaign budgets
Political parties will have to disclose publicly donations of more than 5,000 under regulations coming into force on Friday.

The rules, which will be enforced by a newly established Electoral Commission, also ban foreign donations and limit the amount each party can spend on a general election.

The Political Parties, Elections and Referendum Act implements recommendations made by the Neill Committee to combat "sleaze".

F1 boss Bernie Ecclestone
Bernie Ecclestone's 1m gift caused trouble for Labour
It also aims to make the issue of whether sizeable gifts affect party policy more transparent.

In recent months, the Labour Party has come under pressure to reveal the identity of major donors while the Conservatives were criticised for receiving money from Belize-based Lord Ashcroft.

Some MPs have called for a cap on political donations but that measure is not being proposed as yet.

Pressure on Labour

Nor does the reform go as far as in the US where anyone donating as little as five dollars in the presidential election campaign had their details declared on candidates' websites.

From Friday, donations of 200 or more will have to be disclosed to the commission while the identity of those giving 5,000 or more will be available for public inspection.

For several years Labour has listed its donors but not the size of their donations.

However public pressure has forced the issue on occasion.

Early this year, publisher Lord Hamlyn eventually revealed that he was the benefactor who had given a 2m sum to Labour's coffers.

Formula 1 boss Bernie Ecclestone's 1m donation to Labour in January 1997 proved controversial for the party.

Transparency

When Labour won the election in May that year, the then health secretary Frank Dobson announced that all sports sponsorship by tobacco companies would be banned.

However six months later, the government announced that F1 would be exempt from the ban, prompting allegations that Mr Ecclestone's donation had influenced ministers - although this was strongly denied by the government.

Sir Sean Connery - a supporter of the Scottish Nationalist Party
Sir Sean Connery has criticised the ban on foreign donations
The BBC's political correspondent Shaun Ley said the changes would make it easier for voters to weigh up whether a large gift had affected policy.

"This is the area that it's not been possible to measure in the past.

"And it's been the most controversial area for the political parties because of that," he said.

The Tories have also had their share of controversy over the source of their funds.

Election limits

The British-born tycoon Lord Ashcroft has given large sums to the party despite being a tax exile, resident in Belize.

Foreign donations to UK parties are banned from Friday but for the next three months, that money can still be given directly to individual candidates.

The ban on overseas money has angered Sir Sean Connery who has donated large amounts to the Scottish Nationalist Party while living in the Bahamas.

Labour and the Conservatives will not be allowed to spend as much on the forthcoming election as they did in 1997.

At the last election the two parties each spent more than 25m. This time they will be allowed a budget of just 15m.

Spending limits for referendum campaigns mean only parties which receive more than 30% of the vote are allowed to spend the maximum 5m on their campaigns.

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See also:

02 Jan 01 | UK Politics
Labour's mystery 2m donor named
07 Jan 01 | UK Politics
Blair 'proud' of Labour donors
03 Jan 01 | UK Politics
Labour MP calls for funding re-think
17 Dec 00 | Scotland
Connery in party funding row
22 Sep 00 | UK Politics
How the Ecclestone affair unfolded
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