Govt delays party funding laws until after election
By Liz Stephens
The government have performed a quiet U-turn on party funding from wealthy tax exiles, dropping the new laws they supported only two weeks ago until after a general election.
In an expose in The Observer yesterday it was revealed that tax exiles will still be able to fund forthcoming election campaigns to the tune of millions of pounds, despite the passing of a law to limit their influence to just £7,500.
The discovery has led to accusations that the government has “nobbled” an act of parliament by failing to ask the electoral commission to enforce the rule.
Only two weeks ago, the government bowed to pressure from backbenchers and supported an amendment to the Political Parties and Elections Act outlawing donations from tax exiles.
The law would put the Conservatives’ most important donor, Lord Ashcroft, in a difficult position. He has refused to declare whether he pays tax in the UK or in Belize.
However “non-dom” Labour donors such as Lakshmi Mittal would also be inconvenienced.
A spokesman from the electoral commission confirmed that the rules would not be enforced until the summer of 2010.
“In the meantime, the rules will stay as before and someone who is non-domiciled abroad can still donate,” he said.
Liberal Democrat treasury spokesman Lord Oakeshott said he suspected Labour committed the volte-face because of concerns that the party will be unable to fight a cut-price general election against the Tories – who have received record sums of late.
“To support an important piece of legislation stopping this underhand practice and not bring it in before a general election is like banning a drug-taking footballer but allowing him to play in the cup final,” he said.
“Labour needs to realise that they will never win an arms race with the Tories on dodgy donations,” he said.
Backbench Labour MPs, who supported the amendment, are furious about the U-turn.
A few weeks earlier, Martin Linton, leader of the ‘Ashcroft group’ of Labour backbenchers fighting for the amendment, told politics.co.uk: “Why should tax exiles be allowed to interfere in our elections anyway? And if they don’t pay our taxes, what right should they have to influence our elections?”
Sir Peter Soulsby, the Labour MP for Leicester South, said: “This really is extraordinary. Everyone who voted for this could not have been more clear. We were expecting it to be implemented quickly, certainly in time for the general election.”
A spokesman for the Ministry of Justice confirmed that the limits on “non-dom” party contributions will not be implemented until after the general election but said that the delay was because the act was difficult to enact.
Ministry officials had previously confirmed the law would come into force earlier.
