The think tank said ‘clean money’ was needed to restore the public’s faith in politics.
The IPPR ended a six month research project with a report, which also called for a reducing cap on General Election spending, recommending that it be brought down to £2m and kept under review by the Electoral Commission.
The report called for a form of state funding it claimed would be in proportion to political activity. This would give a supplement to political parties, which would have to be heavily tapered to encourage small donations.
IPPR researcher Matt Cain said: ‘The parties already get money for policy development and aid in kind through party political broadcasts, freepost at election times and the free hire of public buildings.
‘State funding should be extended through a system of “Tax Relief Plus”. This would act as an incentive to encourage parties to recruit and retain members and small donors.
‘For example, maximum donation of £50 might attract £50 from the state while a £100 donation might gain a £80 top-up. This would reward small donations.’
There would also be a £5,000 cap on individual donations and tax rules would prevent ‘bundling’ – relatives and friends of a rich donor getting together to each give up to the limit, he said.
Does Darwin's theory apply to taxation? Colin ponders...
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