The Guardian reports that the government is watering down reforms of the funding of political parties. I know a thing or two about party funding from my time leading the ippr’s research with Matthew Taylor.
There are three essential components for a party funding system to command the respect of citizens:
- Transparency
- Caps on spending so that parties act prudently
- Caps on donations so that no individual can be thought to have undue influence over a politician
Transparency is now a well established principle in British public life. Even if it isn’t always applied that’s still tremendous progress on where we were in 1997 when no one knew how parties were financed.
Caps on spending were well established locally. However, national spending increased considerably through the 1980s and 1990s, partly due to changes in the way that party’s campaigned but also (I suspect) because of the restrictions on local spending. National spending caps were introduced in the 1998 Political Parties, Elections and Referendums Act. However, the last election saw the return of unregulated local spending on a significant level with Michael Ashcroft’s help to Tory candidates in marginal seats. I’ve never understood why there isn’t an annual cap on all spending: far easier to enforce, for the public to understand and the party machines to plan for. Obviously that cap would rise in an election year but it would remove some of the loopholes that exist currently.
There’s little point capping spending if donations aren’t capped. Effectively, a single person or organisation can give a political party all the money it needs to exist. That’s a disaster for democracy and public trust. It isn’t a competitive issue at the ballot box (as some try to claim), rather it erodes wider trust in all politicians.
I understand concerns from Labour MPs about how a donations cap would change Labour’s relationships with its affiliated trade unions. But it needn’t lead to breaking the link. Instead, if individual union members choose to donate money to the party, it could strengthen the link considerably.
A system of party funding which provides incentives to parties to raise large numbers of small donations would reinvigorate local parties and ensure that campaigning and fundraising were indivisible. Now, too much fundraising takes part in posh hotels amongst rich businessmen and lobbyists.
If Labour falters on party funding the price it will pay is:
- being outspent by the Tories at the next election
- not being able to compete in fundraising after the next election
- being solely reliant on trade union general secretaries, (with the accompanying hopes that anti-Labour candidates don’t prosper in those internal elections)
- being part of decreasing trust in politicians and increasing questioning of the motivations of politicians
Related posts:
- Cameron mistaken on party funding reform
- The Christian Party: lying or misleading?
- Voting Labour with a heavy heart
- Can political parties ever be relevant again?
- Labour is also Ann Black
Tags: party funding