Friday, November 24, 2006

Michael Ashcroft Speaks Out on Party Funding

Michael Ashcroft created a bit of stir yesterday when he made a SPEECH in the House of Lords on party funding. His three messages were that political parties should be made to fund themselves (and that they should not be able to dip their fingers into the taxpayers' pocket for State funding), they should be able to accept donations from wider sources and that there should be no cap on political donations. In this he disagrees with David Cameron who is proposing a £50,000 cap on donations. The BBC reports HERE that CCHQ immediately went into panic mode and distanced themselves from Ashcroft's remarks.

I don't normally quote long chunks of speeches on this blog, but having read the entire speech it is the most corruscating attack on our system of political funding I have read - and you don't often get a major party donor making these sort of points. You can read the whole speech HERE, but here are some thought-provoking excerpts...

I am not a professional politician and perhaps that is why I find the whole debate about the funding of parties depressing. I cannot discern any enthusiasm for the rebuilding of political involvement and engagement in Britain. I observe no passion to encourage the young to take an interest in politics. Instead, there appears to be a wish merely to “tighten” the existing rule on donations and then burden the taxpayer...

...My opposition to substantial state funding does not mean, however, that I take the view that political parties should forever be funded largely by a handful of donors, whether they be individuals or trade unions—I do not. Political parties should strive to broaden their donor base and a sign of failure is a dependence on a few big donors. Political parties must then bear the consequent but inevitable criticisms. It seems to me that those arguing in favour of state funding have been driven to this position by a combination of defeatism about the difficulties of funding a modern political party and dismay at the attitude of the media to anyone who has had the courage to make a major political donation. But the dead hand of the state is no answer; it is entirely unsuited to act as the paymaster of politics. State funding will ossify our parties. The need constantly to refresh support through the financial and membership base is the best possible stimulus to the vitality of any party. How else can one hope for efficiency in one’s operations and accountability to one’s supporters?

Once the requirement to raise funds disappears, so will the need to nurture the membership base and to embrace new ideas and new people. That base will inevitably decline, perhaps terminally, leaving behind it a self-perpetuating oligarchy of career politicians, answerable only to themselves and the National Audit Office. Heaven help us all.

The Conservatives themselves are not without blame. We should have had the courage to resist many of the barmy restrictions on political giving that were introduced following the Neill report. As a party, we were afraid to be seen as standing out against legislation which was presented to the public as part of the battle against sleaze. That was an error. Although the new legislation brought a welcome approach to transparency, it also introduced a ragbag of anomalies and contradictions which are patently absurd, yet which no politician felt able to challenge and which Sir Hayden Phillips does not address.

As is well known, the main prerequisite for permissible giving to a political party is, in the case of an individual, that he or she is registered or entitled to register to vote in the UK and in the case of a company, that it is incorporated in the EU and does business in the UK—whatever that means, and I suspect it will be tested soon at taxpayers’ expense. This means that Canadians who live in Britain are able to donate by virtue of their Commonwealth citizenship. US citizens, however, cannot. As EU citizens living in the UK, Swedes can but Norwegians cannot. Greeks can but Turks cannot. Slovenians can, but Croatians cannot. Even the Swiss, surrounded on all sides by the EU, cannot. A businessman from Mozambique, however, as a member of the Commonwealth if residing in Britain can, yet a Briton posted abroad for over 15 years by his UK employer, even if he intends to retire to the UK, cannot unless he is a diplomat for whom, not surprisingly, an exception is made.

There are more anomalies. Citizens of Gibraltar, whatever their ethnic or cultural background, all get lumped, willy-nilly, into the UK’s south-west region for the purposes of European elections. A special exemption for these people makes them permissible donors to UK political parties for the four months preceding a European election. But there are no restrictions on those parties as to the use of, or the timing of the use of, funds received from Gibraltarians, whoever they might be. Yet British citizens from the Channel Islands never have such a window of opportunity. Northern Ireland’s political parties are exempted entirely, meaning that Sinn Fein, for example, is free to continue to receive moneys raised by NORAID in the United States without restriction.

At the corporate level, a British public company has to have shareholder approval to be able to donate, but a company from elsewhere in the EU which—to use that euphemistic phrase—does business in the UK does not. And what about the 100 per cent foreign-owned but UK-incorporated holding company which has only foreign directors, none of whom has ever been to Britain, let alone speaks English and because it is a holding company is therefore deemed to be doing business in the UK? What about those guys? No problem—it is perfectly permissible.

It is even possible to be British, tax resident and domiciled in the UK, yet unable to donate to a political party as under certain, but unusual, conditions, it is not possible to get on to the electoral register if someone lives in Britain for fewer than six months of the year. On the other hand, a Member of Parliament may have a consultancy with any foreign person, company or Government, yet their party cannot receive donations from the same source. Clearly they have confidence in their own judgment but doubt that of their party bosses. That is an interesting thought.

In our desire to draw a line between Brits and foreigners, in the misguided belief that foreign money is bad and UK money is good, we have devised a scheme which is patently absurd and achieves no logical purpose. We should dump restrictive regulations and replace them with requirements only of openness and transparency. We should instead allow political parties to accept financial support, cash benefits in kind and credit from whomever they chose and without a cap. We should require them only to make public the identity of the donor and full details of the donation. We should also, unlike the current reporting timetable, require prompt notification, especially of bigger donations, of within, say, seven days.

Political parties would then have to make decisions based not on the legal definition of permissibility but on the common sense interpretation of what would be considered acceptable to those whom they expect to vote them into office as Members of Parliament currently have to do with regard to their sources of income. Columbian drugs barons, triads, porn kings and the mob would, I hope, be considered unacceptable donors or benefactors, but if party treasurers and Members of Parliament decided otherwise let us allow the media, their own supporters and the public to judge. They would be speedier, more effective and much more telling arbiters than the courts.

In future, therefore, we should allow parties to take money from any quarter, the only requirement being that they should be entirely open about all support above a certain level. That would place the onus on parties to act reasonably and to exercise sound judgment. It would place an equal duty on the media to report donations responsibly; but in the end it would be down to Mr and Mrs Joe Public to judge. We should trust them—they usually get it right."

And this is me (as Mike Yarwood used to say). Many of us believe that the two big parties are about to cook up a cosy little deal on State funding. I have written elsewhere on this blog that I think that's the inevitable direction we are heading in. I don't like it, but I see the writing on the wall. The only thing which will stop it is a concerted campaign to do two things: to explain why we should emulate the United States and widen the base of political parties' financial support, and secondly to build a cross-party vocal coalition against State funding.

Declaration of interest: My campaign in North Norfolk received financial support from Lord Ashcroft and I have advised him on his books.


Anonymous said...

But one of the problems with political funding in the USA is that politicians, who should have better things to do, spend a disproportionate amount of their time fund raising. This includes the President.

The Hitch said...
This comment has been removed by a blog administrator.
Anonymous said...

A good test, for any action or policy, is to ask the question "Will it stand the test of public scrutiny?", because sooner or later those actions and policies will get that scrutiny. Experience suggests that there a few, if any, secrets in this world. Mr Ashcroft is spot on with his exposure of the existing anomalies concerning political donations and proposals for the future.

Anonymous said...

I agree with the Noble Lord in every particular. It's a great shame the Party felt moved to distance themselves from him with such unseemly haste.

Dr.Doom said...

Iain, can you give the absolute assurance that you, or someone else, will not take a 'dodgy' 50K and bung it into the Tory Party on someone's behalf?

That somebody whom has already donated their own legitimate 50K.

Is it fair to cap the TGWU with 50K?


Anonymous said...

Iain There was a peice in the Daily Mail today that I covered on shout out Liverpool The Labour party are currently taking upto three percent of payments made to their local councilors and paying it into central coffers. This equates to funding Labour at the tax payers expense.

neil craig said...

I don't like state funding but I equally don't like really large donations & foreign ones. Personaaly I think corporate donations, as opposed to private donations from rich people, should already be illegal. A corporation's board'd duty id profit maximising for shareholders - if they get nothing for the donation they are defrauding the shareholders, if they get something that is worse. One problem with transparenct is that while the mob & CIA might be excluded the Italian Opera Trust & British/America Fund would be less obvious.

I'm not entirely sure that we need the sort of money available anyway. Party political broadcasts aren't charged & the net may allow an extension of this, neither are election addresses. So what does funding pay for - HQs & poster campaigns.

I'm not sure that this is a problem with a solution, all we can do is occasionally beat up the worst abuses.

Were I handing out a million I think I would give £16K to each constituency rather than all to the centre. Part of the problem with UK politics is that ordinary people, of all views, no longer join parties & that is fixable only at a grassroots level.

Praguetory said...

All good stuff. Well done Mr Ashcroft.

James Higham said...

...they should be able to accept donations from wider sources and that there should be no cap on political donations...

Completely agree. Why have a cap on donations? For what? For whom? Whose conscience does it salve? Disclosure - ah, that's another matter.

Anonymous said...

Love the Mike Yarwood reference!

Anonymous said...

Excellent. Well done Ashcroft. CCHQ "distancing" themselves from this speech is one thing - addressing his points and putting forward their own argument is another, and presumably too much to hope for.

Anonymous said...

He's right. It's the secrecy which is wrong. Otherwise anything should go.

State funding is the first stage in the elimination of free thought. The EU likes that kind of thing. That's why it will happen.

People are not angry enough to fight to stop state funding unfortunately. Ten years of labour have resigned the population to accept falling standards of everything, being completely ignored, and continually lied to to. People don't believe they are living in a democracy in Britain any more.

And they're right. We aren't.

The Hitch said...

I did mean that , the fact that you (Iain) allowed me to post it convinces me that I was wrong to think so.

Anonymous said...

Lord Ashcroft is right - as usual.

Sir Pointon said...

Kudos to Ashcroft for his powerful dismissal of the argument for state funding which, now, I have to think about again. But Trumpeter lanfried has a point. We can learn from the USA. Here's what happened to me in the USA in 2004: I went to our local Philadelphia to help campaign against Bush. I offered them money but they refused it. They already had more money than they could use! It was of course George Soros's money. He really is that rich. But only Relatively Rich. And then in a nice way.

Anonymous said...

you should have added that baroness scotland labour home minister in her summing up said "lord ashcroft was the only person to speak on that issue, i think he probably made up for the contributions of at least 50 members of the house, such was the power of his comments"

David Lindsay said...

There cannot be, nor should there be, state funding of anything without some sort of state control over the how the money is spent, or at least accountability therefor, which amounts to the same thing in practice.

And in practice, state funding of political parties would mean some ghastly committee of chi-chi Londion dinner guests, deciding which parties or candidates may, and which may not, receive public money.

Such is the eventual intended role of the Creepy Electoral Commission. Hence it's persecution of Constituency Campaigning Services and of the frightfully provincial Midlands Industrial Council.

But that is just the warm-up act. The real target is the political research and campiagning work done by the trade unions, the principal (indeed, almost the only) remaining obstacle to the nationalisation of political parties.

Resist! Resist! Resist!

Anonymous said...

Here in Austria we have state funding of political parties and it is not a system that I would recommend. Apart from the distribution of the monies and the individual allocations, it provides the government of the day with an open cheque book. It partially works here because Austria “enjoys” proportional representation which I cannot imagine being accepted in the UK. The other, and worse, knock-on effect is the overall power that PR gives to the main parties to the detriment of Independents and smaller political groups. Then there are the main political party groups who choose all their own candidates! (they have to, if they are the recipients of the funding). This has the effect of wiping out locally inspired candidates completely. The consequence of all of this is that there is no local representation for a ward, but an open vat of faceless party candidates (party clones) waiting for a possible seat in the house. There is nobody responsible for the area where you live and no one has any idea who you contact on matters of local importance. The system also breeds nepotism of the worst kind!

Dr.Doom said...

Iain, may I take it that your failure to reply to my questions is because:

A: You are too busy to do so.

B: You would never do such. No need to reply.

C:Nobody else would either.

D: It does and will happen. No need to reply.Ashcroft is misleading us for Tory benefit.


Iain Dale said...

Doom, perhaps because it is such a ludicrous question. Although A would be an accurate summary, as would B or C. As you well know. If there is to be a limit then the unions can abide by it too, methinks.

Anonymous said...


I agree with you and Lord Ashcroft completely on the market being a more effective regulator of party donations than a Government quango.

More importantly, however, I have a grammatical point: there are two ways of quoting text over one paragraph long. Method one: don't use quote marks and use indented text instead. Method two: use quote marks and the beginning and end of the quote AND at the beginning of each paragraph.

Dr.Doom said...

Iain, so it is fair for Lord Ashcroft to donate a mere 50K and it is fair for Iain Dale to give 50K

And it is also fair for 1M+ membership of the TGWU to give a sum total of 50K?