Wednesday, June 2, 1999 Published at 11:40 GMT 12:40 UK
When cash means controversy
The chief executive of Formula One has been among Labour's donors
Donations from companies and individuals have always been a controversial issue for the UK's political parties.
There are no definitive rules on political donations but in recent years parties from across the political spectrum have attempted to bring more transparency to their accounts.
Upon succeeding John Major to lead the Conservative Party, William Hague pledged to publish the names of everyone who donated more than £5,000 to his party.
The Labour Party, in its annual report, already provides a list of individuals and companies who have donated over £5,000 to it.
The row about the £50,000 apparently donated by television executive Greg Dyke, who is a front runner to become the BBC's director-general, to Labour over five years is not the first to hit the party since it came to power.
Within months of being elected in 1997, the party was tarred with the admission by Formula One Chief Executive Bernie Ecclestone admitting he had made a pre-election donation to Labour of £1m.
Handing it back
The admission came days after Formula One motor racing was exempt from a ban ending tobacco sponsorship of sport.
Labour returned the £1m and a second donation to avoid accusations that Mr Ecclestone's donation had prompted a change in policy.
During their administration, the Tories, who were always seen to benefit most from donations, attempted to shift away from suspicions about some of their foreign benefactors.
The party received £440,000 from fugitive Polly Peck tycoon Asil Nadir whose secret donations were disclosed after the collapse of Polly Peck in 1990. Nadir fled to northern Cyprus in 1993 after he was charged with fraud.
The Tories received around £527,000 by benefactors. By contrast, Labour was given £268,425 - although it did transfer funds from London which do not show on the figures - mostly from trade unions.
The Scottish National Party received £137,791 -including a monthly donation from its most famous backer Sean Connery - and the Liberal Democrats £118,100.
Home Secretary Jack Straw in October 1997 promised a bill to reform funding of political parties.
No such legislation has appeared since, but Labour commissioned the Committee on Standards in Public Life to look in to the question of political funding.
The committee, chaired by Lord Neill, set out clear rules on the full disclosure of donations to allow more openness about the sources and use of party funds.
The report was also aimed at improving public confidence that individuals and organisations were not buying influence through donations.
Its recommendations included:
The latter recommendation has been included in a consultation document issued by Trade Secretary Stephen Byers.
It proposes that company directors who give money or other gifts to political parties without consulting shareholders could face criminal penalties.
The proposals are expected to hit the Tories hardest, since they have traditionally been able to rely more than other parties on the generosity of big business.
However, research suggests donations from companies is falling and parties such as the Conservatives are depending more on individual donations anyway.
A survey by Labour Research, which is not affiliated to the party, showed the Tories received 120 company donations worth £2,883,904 in the year to the 1997 general election compared with 351 companies giving £4,859,769 in the year before the 1992 election.
That compared with Labour's 12 company donations totalling £1,248,942 prior to the election.
That could mean the future of political donations and sponsorship could well be in the hands of individuals such as Mr Dyke.
And as both Labour and Mr Dyke have been made aware, that would by no means end the controversy associated with political donations.
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