Conservatives accused of another cynical attempt to do deep and lasting damage to the Labour party
Labour would be left bankrupt under plans being advanced by the Conservatives and Liberal Democrats to impose a �50,000 cap on political donations, the party's general secretary has warned.
The grim assessment by Ray Collins, during a cross-party inquiry into the future of party funding, has come to light as investigations by the Observer show how Labour's income would be slashed to a fraction of its present level by the proposed limit.
An analysis of funding conducted since David Cameron became Tory leader shows Labour would have been deprived of 85% of its income since 2005 if the limit had been in place. This is because the vast majority of its funds have come from hefty union donations well above the �50,000 level.
The Conservatives, on the other hand, would have forfeited just 50% of their income, as the party receives a higher proportion of its income from wealthy individuals who tend to give sums below the proposed �50,000 cap.
A inquiry into the future of party funding being conducted by the independent Committee on Standards in Public Life ? on which the main parties are represented ? is due to report in the next few months.
The Tories and Lib Dems claim they are making a legitimate attempt to take big money out of politics, whether from wealthy businessmen or unions. The Conservatives had said they would only proceed on the basis of cross-party consensus, but there are now signs that the gulf is wider than ever and that the Tories and Lib Dems might seek to push ahead without full Labour backing.
Ed Miliband's Labour is already under severe financial pressure, with debts of between �16m and �20m. But Collins has made clear to the committee that if the party was deprived of money from unionaffiliation fees ? breaking a historic link ? it would be unable to sustain itself.
Lord Feldman, the Conservative co-chairman, has told the committee that if his party's plan for the cap was brought in the Conservatives would also suffer "a substantial reduction in our income for an interim period ? It would have a short- to medium-term impact on our ability to run the party."
Since 2005, the Tory party has received donations totalling more than �107m. A �50,000 cap over that period would have deprived it of �53.5m. Over the same period, Labour received �76m in donations, most of it from the unions. If the cap had been in place, Labour would have been deprived of �64.5m ? almost 85% of its income.
A spokesman for the Labour party said last night: "We have already seen the Conservatives and Lib Dems team up to force through gerrymandering plans for constituency boundaries which were designed to damage the Labour party.
"The proposals to implement a �50,000 cap and include trades unions within it is another cynical attempt by the Tories to do deep and lasting damage to the Labour party."
Source: http://www.guardian.co.uk/politics/2011/may/29/tories-want-to-cripple-labour
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