Britain Leads in Campaign Finance Reform the New Laws Will Clean Up How Political Parties' Activities Are Financed and Run

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Britain's Labour government is poised to pass draconian campaign finance reform laws that will make United States rules appear wimpish by comparison.

Political analysts say the new rules will restore public confidence in political campaigns and clean up how political parties' activities are financed. Moreover, they will make Britain a leading example among European democracies by making the political process more transparent.

But the laws also are likely to create serious problems for the opposition Conservative Party, which in the past has relied heavily on large donations, usually secret, from wealthy individuals.

The new laws will ban all political gifts by foreign donors.

Political parties will break the law if they spend more than 20 million ($32 million) in the year leading up to a general election.

And Labour Prime Minister Tony Blair will require publishing the names of people giving more than 5,000 to any party.

Each party will be required to appoint a supervising officer mandated to track all gifts above 50. Mr. Blair also wants companies to get shareholders' approval for political donations.

WITH a 180-seat majority in the Commons, the government is certain to get its measures through.

Introducing a draft bill Tuesday, Home Secretary Jack Straw said he wanted party funding to be more transparent.

"Public confidence in the political system has been undermined by the absence of clear, fair, and open statutory controls on how political parties are funded," Mr. Straw said. "By providing honesty and openness to our political system, we hope to restore public trust and promote greater confidence in our democracy."

The new laws seem likely to elevate Britain as a European leader on political-party reform.

In Germany, political parties get taxpayers' money to help pay for their activities, with the aim of cutting the financial links between big business and politics. In France and Italy, much cash reaches political parties from large donors who fail to identify themselves.

In Britain, the 20 million limit on spending at general elections means that Conservatives and Labour will have to cut back heavily on what they spent in the 1997 poll. Then the Conservatives spent 28 million and Labour 26 million.

Since 1992, according to figures published by the parties, the Conservatives have received 106 million in donations, compared with 39 million for Labour.

Political analyst Peter Riddell says both parties seem certain to rake in - and therefore spend - less in the future: "They will have to rely much more on the free peak air time on TV and radio political parties are given under existing British electoral laws. …