Sir Hayden Phillips still has one potential winning card. Not only is he an eminent former Permanent Secretary and author of yesterday’s balanced report, but he is also chairman of the National Theatre. Taking up Tony Blair’s offer to chair further talks between the parties, he should break the habit of a lifetime and move from behind the scenes to front of the stage. He should host the talks in the full spotlight of the Lyttelton or the Olivier. That, I am sure, would produce agreement within a few hours.

The three main parties engaged in a classic exercise in obfuscation, stating their agreement in principle with Sir Hayden in order not to have to agree in detail. The Tories and Labour were manoeuvring for advantage, blaming each other.

As Sir Hayden argues, there are not only clear public policy objectives but also wide areas of agreement. We need strong and healthy political parties to make our representative system work. But we also need an open and transparent system of financing to ensure that we know who is providing the finance and where the money is spent. That was only partly achieved by the Political Parties, Elections and Referendums Act of 2000. But there were unintended loopholes over loans, which have already been closed. Disclosure has, perversely, increased public distrust, even though some checks have worked. After all, the nonstatuory appointments commission, chaired by Lord Stevenson of Coddenham, blocked the controversial peerage nominations.

But there are still worries about big donations obtaining access and favours. Hence, as Sir Hayden states, the status quo, with no cap on donations, is unsustainable and there should be limits. The growth in spending on election campaigns should be halted, and reversed. Despite a proposed cut in spending by the two main parties of £20 million each over the course of a parliament, a donations cap of £50,000 a year would still create a gap, which he proposes to fill by a modest extension of taxpayer funding. Note the word extension. There is already substantial state funding of parties, allegedly for their work in Parliament, but, in practice, for campaigning. Sir Hayden proposes a modest extension of £23 million a year. But this would be conditional on a deal on donation and spending limits.

Expert View

Voters don’t feel passionately about the absence of a televised debate. They do feel passionately about the importance of cleaning up party funding

Mary Ann Sieghart

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Plenty of objections can be raised. But these are mainly to do with parties’ interests rather than principles. So a deal is possible and Sir Hayden’s main conclusions are very similar to those in last December’s report from the Constitutional Affairs Committee, chaired by Alan Beith. Labour could retain its trade union link but within tighter limits than now, while high spending in target seats before election campaigns (the Lord Ashcroft strategy) could be capped. This will require some flexibility and boldness.

The chances are low with money now flowing into the Tories, and Labour more dependent than for over a decade on the unions. It will be all too easy for the parties to retreat into a defensive and negative attitude. That is the case for openness. So book your seats at the National Theatre now. Perhaps Simon Russell Beale, now starring in Spamalot, as well as a former Hamlet and Widmerpool, could deputise for Sir Hayden as compere and fixer.

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