Skipper

I'm not sure if I agree with the sentiment expressed to the left but something needs to be done to break the deadlock over party funding. Two decades ago Labour held the high ground on this when the Tories sucked up huge donations from business 'front organisations' and dodgy foreign billionaires while Labour relied on the unions which at least had some tenuous connection with democracy. But since then we have seen Labour break their own rules over loans and arguably break the law over the cash for peerages scandal. Now it is the Tories who can sound high and mighty and they have not missed the chance.

Sir Hayden Phillips has tried for over six months to negotiate a deal between the parties but has now given up in despair.

His report called for a £50,000 cap on donations, reduced spending at general elections, restrictions on spending between elections, and an increase in state funding for all parties. This received general support in principle from all parties but no agreement on the fine detail. Last night both parties blamed each other for the breakdown.

The sticking points of course related to: the one half of Labour's funding which comes from the unions in large sums breaking the proposed cap; and the in between elections funding of marginal constituencies by the Tory 'sugar daddy', Michael Ashcroft. Labour can now seek to do a deal with the Lib Dems to push through a measure aimed against the Conservatives or they can continue to seek common ground. I would have thought if Labour dropped its assault on Ashcroft's funding, the Tories would drop their demands over union funding.

But Labour are in power and see the fate of the marginals as their future. However, forcing through a measure might show them in a bad light and open the risk that once in power the Conservatives might run amok to destroy the sources of Labour finance. The other alternative - favoured by purists like Simon Jenkins - is to engineer the revival of political parties so that they can raise money through their own memberships: at the moment an unlikely road to salvation. This line of thinking also rejects totally the idea of state funding of parties, though, as the situation stands, this might prove to be the least politically damaging course for Labour to follow.