Electoral reform will hit Tories' overseas funding

THE TORIES accused Jack Straw of bias and partisanship yesterday as he published new electoral rules that could hinder their overseas funding and their chances in a referendum on joining the euro.

The Home Secretary made two important changes while finalising plans for reform of political funding, released in the Political Parties, Elections and Referendums Bill.

Mr Straw responded to the storm over Michael Ashcroft, the Florida-based Tory treasurer, by cutting the number of years Britons living abroad can continue to vote here from 20 to 10. Although Mr Ashcroft plans to move back to Britain after 15 years away, the Tories' funding from retired people living abroad could be badly hit by the new rule.

Another amendment to a draft bill published last July also failed to find favour with the Tories. It set limits for political parties' spending in referendums on a sliding scale according to their portion of the vote at the most recent general election. The Conservatives said this would help Labour to win a vote on joining the euro.

The Opposition had earlier complained about plans for each party to be allowed to spend pounds 5m, saying that, as several small parties would back the euro, this would put their "No" campaign at a disadvantage.

The Bill, which will be debated by MPs in their first week back after Christmas, will set up an Electoral Commission to oversee political donations and election spending.

The Bill is likely to receive Royal Assent in the summer of 2000 and ministers hope to see the commission running before the next general election. However, that means that, unless the Government waits until autumn 2001 before going to the polls, it will not be able to monitor the parties for a full 12 months before the vote.

The Bill will limit the spending of the three main parties at the next general election to pounds 20m, and the commission will set limits in future elections.

Another addition to the Bill yesterday extended a planned ban on foreign and anonymous donations to candidates for mayoral posts. The ban will also cover politicians campaigning for their own parties' nominations, and will mean all donations must be declared.

Other changes, which had been expected, included a ban on blind trusts such as those used by Labour before the last election, rules requiring companies to get shareholders' approval before making political donations and new controls on election spending by "third parties" such as trade unions.

Publishing the Bill, Mr Straw said that if the Tories could find a sensible alternative to his proposals for referendums he would consider it. Labour had been committed to reform for several years, he added.

"The previous administration would have saved themselves a huge amount of trouble if they had embraced the case for change rather than resisting any idea of establishing proper controls," he said.

Andrew Lansley, shadow minister for the Cabinet Office, said Mr Straw had failed to implement the recommendations of the Neill Committee on Standards in Public Life. The committee, which ran an inquiry into political funding, decided setting limits on referendum spending was not practical.