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Last Updated: Monday, 20 March 2006, 18:23 GMT
Tories demand ban on party loans
David Cameron
Labour wants Mr Cameron to reveal names of past lenders
There should be a 50,000 limit on donations to political parties and a ban on loans, says David Cameron.

The Tory leader is also pushing for new state funding of political parties in the wake of Labour's loans controversy.

Parties with MPs would get 1.20 from the taxpayer for every vote they won at the last general election - plus an annual payment of 60p per vote won.

That would mean Labour and the Tories getting more than 30m and the Lib Dems about 20m over a four year term.

The Tories are considering cutting the number of MPs to fund the plans.

Ban on all loans unless from financial institutions on fully commercial terms
50,000 cap on donations
Tax relief on donations up to 3,000
State funding of 1.20p per vote won at general elections for parties with MPs, plus annual payment equal to 60p per vote
New commission to handle honours

They say the number of MPs could be reduced from 646 to less than 600. The costs of government special advisers and regional government would also be cut to pay for the changes.

Mr Cameron says he also wants the limit on each party's spending at elections to be cut from 20m to 15m.

And he said a donations limit would create a "level playing field" between the main parties.

"We've got to stop this perception that parties can somehow be bought by big donations either from very rich people, or trade unions, or businesses," Mr Cameron told BBC News.

"So the idea of a cap that applies equally to everyone I think is fair."

Targeting small donors

His proposals follow Labour's admission it received 14m in undeclared loans.

The Tories are demanding a total ban on loans unless they are from "financial institutions on fully commercial terms".

There would be tax relief on donations of up to 3,000 under the plans.

There is nothing wrong in accepting donations so long as it is completely transparent
Mike, Brighton

Mr Cameron said: "It is to encourage parties to get off their back sides and actually get out and raise money in terms of small donations."

The Tories have also received large donations and loans but party officials say they do not know whether any of the Conservative nominees for peerages have lent money to the party.

Mr Cameron said he had not yet nominated anybody for a peerage and wanted to focus on proposals for the future rather than defending the past.

'No bouncing'

Deputy Prime Minister John Prescott is demanding the Tories follow Labour in revealing details of past lenders.

"The Conservative Party has referred queries about loans it has received to its annual accounts for 2004," said Mr Prescott.

"However the Tories have not revealed the total amount of all the loans received by the party since the Political Parties, Elections and Referendums Act came into force, including the figures for 2005 - neither has it so far revealed the names of those who gave loans."

Mr Cameron said he would look at such calls but would not be "bounced" into revealing the names.

"It is very difficult to retrospectively name all the people in the past who may have loaned money to the party," he said.

Mr Cameron also suggested there should be a new commission, separate from the prime minister, for the honours system and appointments to the House of Lords.

Tony Blair has already said he will leave decisions on knighthoods and other honours to the Cabinet secretary but continue to appoint Labour working peers.

The current House of Lords Appointments Commission vets party nominees for peerages but can only raise concerns - Mr Blair has the final say.

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