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Attention: Sir Hayden Phillips GCB, Chairman

Dear Sir Hayden,

We undertook to update you on our views following our meeting on 25th July 2007, which we found very useful.

The Secretary to the Talks, David Rowlands, kindly forwarded your own public funding calculations which show that with equal value for votes in state funding: the Scottish National Party (SNP) would receive Β£646,293 per annum and Plaid Cymru Β£180,376 per annum. This would of course be part of a package including caps on donations and the ending of Policy Development Grants.

We are frankly shocked that the Inter-Party Talks, which exclude governing parties from Scotland, Wales and Northern Ireland are continuing to favour a discriminatory calculation which values votes at UK Parliamentary elections twice as much as those for the Scottish Parliament, Welsh National Assembly and Northern Ireland Assembly.

The net effect of this is that the SNP would lose Β£220,000 and Plaid Cymru Β£96,000, which amounts to a funding cut of one third.

Similar levels of discrimination apply to the Democratic Unionist Party (DUP), Sinn Fein, Social Democratic and Labour Party (SDLP) and Ulster Unionist Party (UUP).

The irony of this discrimination will not be lost on anybody as you discuss continuing the affiliation fees to the Labour Party, which in Scotland and Wales are paid in large part by voters of the SNP and Plaid Cymru.

Please would you take these concerns on board as you discuss these matters tomorrow, exclusively with the UK parties?

Yours sincerely,

Angus Robertson MP

Elfyn Llwyd MP

Joint Leaders-SNP/Plaid Cymru Westminster Group

Cc: Leaders of the Northern Ireland Parties

Quotes from Phillips Report

The Government may wish to consider whether the grant currently available to parties in Northern Ireland should be redistributed on the basis of a measure such as the relative strengths of the parties (possibly as established by the most recent election to the Northern Ireland Assembly) until such time as the reforms described in this report apply to the whole of the United Kingdom.

....a ceiling of Β£50,000 on donations from any one source - whether individual or organisational - seems to me to be a reasonable and attainable target.

Having carefully weighed the advantages of each option, I have been persuaded of the particular merits of two mechanisms, one based on public support, one on public engagement.

There is no better measure of public support for a political party than its performance at the ballot box. As in a number of other countries, and as recommended by the CASC, I propose the introduction of funding to political parties directly linked to the number of votes they receive at elections (CASC 2006, page 49, para 131). My proposal - which is dependent on the final outcome on donation limits - is that eligible parties should receive 50p each year for every vote cast for them in the most recent general election, and 25p for every vote cast for them in the most recent elections for the devolved administrations in Scotland and Wales and for the European Parliament. This formula recognises the primacy of Westminster and it acknowledges that the legislatures in Edinburgh and Cardiff, and the European Parliament, now play a significant part in policy-making. Local elections are a different matter: the costs of participating in them are relatively modest and it would introduce unnecessary complexity to the scheme if all local elections were to come within it.

The level of funding available to each eligible party would therefore fluctuate with their performance at the ballot box, and voters would know that they were directly influencing the allocation of public funds to the party of their choice.

Additionally, I propose the introduction of a matched funding scheme to encourage the parties to recruit paying supporters. Parties have quite different membership schemes, as is their right, and it would be not be appropriate to try to match the subscription payments or donations, large and small, of every different type of party member. Moreover, I would rather that we introduce a scheme which rewards parties for reaching out beyond their existing base of party members, encouraging them to attract new supporters. I share this objective with the CASC, which advocated incentives for parties to increase their activity in seats other than marginals (CASC 2006, page 49, para 131).

The scheme I propose builds on the current trend towards public political engagement and subscription through the internet. Eligible parties would be invited to establish a registered subscriber scheme, primarily using the internet, through which any voter could subscribe a minimum of Β£5 to support the party. Each subscription would be matched with Β£5 of public funding.

The level of funding available to eligible parties through this scheme would therefore be directly related to their ability to attract paying supporters, and the energy they put into doing so. The scheme would not discriminate between those able and willing to pay a lot and those only wishing to subscribe a small amount. Once parties had established a supporter scheme, they would have the opportunity and the means through which to communicate with a wider group of voters. They might choose to seek their views on policy proposals or to encourage them to become full members: either way, the scheme would offer the prospect of widening public engagement in party political activity. And I would argue that the national parties should share their income from the scheme with their constituency parties, which are so critical to democratic engagement.

Parties might choose to encourage existing members to enrol in the supporter scheme in addition to paying their membership subscription. That would be a perfectly reasonable thing to do, but I would hope that they would do more, reaching out beyond their existing party base. Indeed, the scheme is designed to encourage them to do just that.

The annual cost of this scheme is harder to predict, but I would propose that it be capped so that the cost to the taxpayer could be controlled. The level of the cap will depend on the other parts of a comprehensive agreement, but on the basis of the proposals described in this report, a cap of Β£5 million would seem reasonable - enough to match contributions from one million subscribers. The scheme would, of course, be subject to audit by the Electoral Commission.