Chris Burford
London
Ban party funding, says CBI chief
By Michael Harrison, Business Editor
20 May 2002
Political donations from companies should be banned and replaced by a system of state funding of parties, the leader of British industry said yesterday.
Sir John Egan, the new president of the Confederation of British Industry, said it had become too risky for businessmen to make donations and for political parties to accept them because of the ensuing allegations of sleaze.
"It is a very, very dangerous area," Sir John said. "This is a risky thing to be doing. I advised the previous government that the money should be coming from the state. Any money from individuals should be limited to a very small amount £100 or something like that. Many of the issues the newspapers have been raising about payments from various companies for favours don't look very attractive. It doesn't look very nice."
Sir John's call for state funding of parties follows a series of embarrassing disclosures about business donations to Labour.
Senior figures in the Government, including Charles Clarke, the Labour Party chairman, and David Blunkett, the Home Secretary, have expressed support for state funding.
A spokesman for the Labour Party said it welcomed the CBI's contribution to the debate but stressed that the Government's own reforms had made donations more transparent. "The extension of state funding would require a consensus across the parties and that consensus does not exist at present," he said. "We want a real debate."
Mr Blair admitted last week that fund-raising was one of the aspects of his job he "liked least". He is understood privately to back state funding but is wary of public opinion and knows the Conservatives' opposition to the idea in effect rules it out.
Paul Flynn, the Labour MP for Newport West, yesterday supported Sir John's stance on state funding. "It would take away the suspicion of corruption of political parties," he said.
"It should be sold to the public as a long overdue reform but unfortunately it has come out the wrong way with all the stories about sleaze."