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.