Party funding: background and developments since November 2011

The Coalition Agreement of 2010 included a commitment to “pursue a detailed agreement on limiting donations and reforming party funding in order to remove big money from politics”.

On 22 November 2011, the Committee on Standards in Public Life (CSPL) published a report on Political party finance. On 15 November 2011, shortly before the report was published, Nick Clegg, the Deputy Prime Minister, told the House that he looked forward to the CSPL report; that it would not be right to ask taxpayers to pay more to political parties; and that the Government was determined to reform party funding. Following the report’s publication he issued a written ministerial statement, which concluded by stating that “Reform remains a priority and is best achieved as far as possible by consensus”; and by confirming plans to continue cross-party discussions on political party funding.

In February 2012, the Deputy Prime Minister invited the three main parties to take part in the cross-party talks. Party leaders nominated teams but after seven meetings in 2012 and 2013, on 4 July 2013, Mr Clegg announced that there was no agreement between the parties and that it was “clear that reforms cannot go forward in this Parliament”.

In May 2013, Andrew Tyrie (Con), Alan Whitehead (Lab) and Lord Tyler (Lib Dem) published a draft bill on party funding.

The question of party funding has been a cause of controversy since the 1990s. Legislation has been introduced to regulate donations and loans to political parties, and to limit spending by political parties. In the previous Parliament, a Review of the Funding of Political Parties, chaired by the former senior civil servant Sir Hayden Phillips, was launched in May 2006. Talks were suspended without agreement in October 2007.

This note briefly draws together Library material on party funding issues; provides a chronology of Sir Hayden Phillips’ review of party funding; notes the information that the CSPL published as its inquiry proceeded; notes press coverage the CSPL inquiry and report generated; and notes developments since the publication of the CSPL report.