Thursday, December 14, 2006

The State Funding of Political Parties

I am not sure why Sir Hayden Phillips is any more qualified to judge how political political parties should be funded any more than the next man. Is is coz he is a Sir? I remain profoundly unconvinced by the stitch up which is no doubt going to be presented to us in January after Sir Hayden publishes his final report. Judging from yesterday's leak it will be a typical civil service mish mash compromise. Labour MP Tom Watson calls it right on his BLOG...

Political parties should be free to constitute themselves in whatever
way they want to. Voters should be free to express their views on the way
political parties go about their business at the ballot box.

Quite right. What we are facing is an attempt by all three political parties to obtain massive subsidies from the taxpayer - translated, they want more State funding of political parties. David Cameron's view is that if he offers to restrict donations to a maximum of £50,000 then the State should meet its part of the bargain and make up part of the shortfall. I do not agree either with the £50,000 limit on donations or using it as a bargaining chip. Why £50,000? It seems to be a totally arbitrary figure - why not £20,000, or even £10,000? If you are concerned about the perception of political donations buying influence then you would follow the American example and restrict donations to $1000 per person per year. Or you would abolish donations altogether and want 100% state funding. There is a new campaign against any extension to the state funding of political parties HERE. It will be interesting to see if it gathers any momentum.

The Labour Party is already have a collective nervous breakdown over Sir Hayden Phillip's leaked report in which he seeks to reduce trade union donations to Labour to £50,000 over a transitional period of four years. It's not the money side they seem to be concerned with - it is the fact that it will seal the final break of the links between the trade unions and the Labour Party. If indeed there is such a transitional period for the Labour Party I wonder if there will be such an equivalent period for the Conservatives to plan for the future too. Or will David Cameron want to signal something by voluntarily accepting donations of no more than £50,000 from day one of the new regime? He may well do so, but if he does, I hope he has a very capable Party treasurer who will be able to find ways of making up the shortfall.

All this begs the question: are political parties any longer necessary? Could we see a day soon when one or more of the major political parties ceases to exit? Probably not, but if we don't get the funding question sorted, it is a possibility.


Anonymous said...

A £50,000 limit is easily avoided by making each Association a separate registered party and forming a coialition with shared facilities. The Electoral Commission may have many powers, but I doubt they have the power to force parties to merge.

Anonymous said...

Maybe they ought to come up with policies that benefit the voters.

Anonymous said...

I wonder why some of your most interesting psts seem to get less attention. It is of course vital that Political Parties whio already have deeply entrenched positions are not further insulated from new groupings .
Without the fear of leak to the right David Cameron`s approach would be quite different .It is a proces and system in tension not a state and this will badly upset what little equilibrium is left.

You put it very well

Gavin said...

I am absolutely opposed to our taxes being used to fund political parties - the idea is outrageous! What makes any of them think they have a divine right to exist?
If their income is not sufficient to meet their running costs, then even before they look at the funding question, why don't they try and get the SPENDING question sorted first of all?

Anonymous said...

The solution to this party funding business is one of those things which, while obvious to most people, nevertheless repeatedly flummoxes those from the Westminster village. As I understand it, there is a cap on local spending for an election campaign. This sensible measure prevents some local millionaire from essentially buying his way into the Commons. (Of course he may still buy his way into the Lords should he wish.)

So why does such a cap not apply to the national election campaign, which seems to be where all the big money is sunk? And to what end? Anyone who has been following the news will surely have made up his mind before the electoral starting gun is fired. The last minute desperate attempt to garner a tiny handful of swing votes is a pretty demeaning spectacle in my view.

Let's drastically shorten the election campaign period – a fortnight is more than adequate – and let's drastically cap national spending. Party funds should be there merely to keep the machine ticking over, not to buy votes in respect of which the only legitimate currency should be conversation and persuasion.

Anonymous said...

Democracy needs money to work.

So there are two alternatives. Parties can funded by individuals, companies and organisations – which has the advantage that they are not completely inward looking and given that these people are likely to be influential anyway, they might as well pay for the pleasure. The problem is that there will always be cases where corruption is perceived, whether true or not.

Alternatively parties can be funded by the taxpayer, which avoids any conflict of interest and accepts that everyone has a responsibility, through the tax system, to protect the democratic system.

Personally, I prefer the latter but understand those that want the current system to continue. Cameron’s cap on donations just leaves a half-way house that doesn’t have the benefits of non-state funding, but where democracy is put under threat by under-funded parties.

Without the party system there would be chaos, with no certainty about the direction of government and no strategic leadership which can take tough decisions.

The public need to accept parties need funding and the consequences of how that is achieved. Talking about arbitrary caps doesn’t do anything to help people face that fact.

Anonymous said...

The globalized economy dramatically alters the kind of democracy needed and, eventually, that people will want to have. Globalization is rapid, accelerating, and irreversible. It is complexly integrated with every level of economy (first, second, third or fourth world) and every geographically delineated area ; and by region, by nation state, by economic block, by any other political grouping.

Those in any and all of these categories (that is every last one of us) are profoundly affected by globalization; those who do not create wealth in the globalized economy, for whatever reason - age, youth, variously determined incompetences, are condemned to be the administrators or the recipients of welfare provided by the globalized sectors of wealth production.

So 19th century-style universal suffrage, choosing generalised politicians who act as party vote-gatherers (with occasional technical advice on the economy and other specialist material) to maintain their party in power and with the wellbeing of the whole as at best a secondary consideration , is now wholly inappropriate.
So is parity of voting strength for all. It is only too apparent, already, that the current Chancellor has been trimming optimal economic behaviour encouragement and deterral (he can do no more than encourage or deter, control is institutionally and really beyond him) to meet the democratically expressed requirements of the globally excluded, thus producing permanent damage to the wealth-producing capacities of the globalized sectors of the UK economy.

If the state is to fund political parties, then there must be a fundamental rethink of what is funded: what should be under democratic control ? And in what manner should that democratic control be expressed ?

Anonymous said...

In Yes Prime Minister when Sir Humprey explains to Jim Hacker about having an Enquiry, he says that the outcome you want should always be covered in the Terms of Reference.

The terms of reference for the Review of Funding of Political Parties reads:

'To examine the case FOR state funding of political parties....'

And given that Sir Hayden Phillips is a career civil servant with previous posts in the Lord Chancellor's Office, Treasury and Cabinet Office, do I think we are going to have state funding of political parties?

Yes Prime Minister!

Average guy on the street said...

I support the cap on donations and believe that the vast majority of funding should come from membership fees and not the taxpayer. I'm a Conservative and do not want to fund Labour/Lib Dems/anyone else.

David Lindsay said...

If a political party cannot persuade anyone to give it any money, then it does not deserve to exist. But such is politicians’ and party hacks’ self-importance that they refuse to accept this self-evident fact. Their nationalisation of political parties would only make a baleful situation even worse. State funding of anything means state control. It has to, and in many cases it needs to.

Already, the only designation other than “Independent” permitted on a ballot paper is the name of a political party approved by the Electoral Commission. That Commission must approve the party’s constitution (including its aims and objectives), and must approve the Party Leader.

Some commission or committee would have to decide which parties or candidates deserved to be held up to the public teat. We can imagine only too easily who those commissioners or committee members would be, and therefore on what basis they would make their judgements.

All this merely to end the dying Labour Party’s dependence on the thriving trade unions, the only clean money left in British politics. Trade unions’ millions of members live, work and pay taxes the length and breadth of Britain. Unions have to ballot their members about maintaining a political fund, and even then individuals have to opt into it.

But that is precisely the problem so far as the political class is concerned: the combination of popularity, ordinariness, provincialism, democracy, liberty, and the vulgar practice of working for a living. That class wants to destroy the influence of the popular, the ordinary, the provincial, the democratic, the free and the hard-working. Indeed, it wants to destroy these social-democratic, socially conservative, patriotic things themselves, in order to destroy social democracy, social conservatism, and patriotism.

State funding of political parties is a key weapon in that destruction. Just say no.

Anonymous said...

Political parties require money. You can either cap donations and let the state fund them or you can simply let the free market take its course.

Anonymous said...

To Iain's question - 'Could we see a day soon when one or more of the major political parties ceases to exist?'

Yes easily, the Conservative party could easily cease to exist very soon. The vast majority of it's membership will be dead in 10 years anyway and they are making no effective efforts to draw in new younger people.

This state funding issue is a disaster for democracy ..

If it happens it is the effective end of democracy..

and the mere fact that it is being seriously considered sends an ever more clear message that the major political parties are completely morally bankrupt - which in itself just drives ever more people away from mainstream politics.

Its a lose / lose.

Why do parties need money anyway - most people don't vote anyway. The last election was decided by less than 5,000 people. Add up the swings needed in all the marginals for a different govt. and you will see what I mean.

Anonymous said...

All of us were able to contribute to this enquiry. There was an excellent website and forum for discussion. Shame many of you did not contribute to the enquiry and are now critical of the outcome.

Anonymous said...

'All 3' parties support state funding?

1. There are more than 3 parties Iain!

2. UKIP opposes the extension to state funding of political parties.

3. If you really oppose the plan, you can sign the e-petition here: