Friday, March 16, 2007

Hayden Phillips's Party Funding Proposals Wrong-Headed

So let's get this straight. Sir Hayden Phillips, someone who we must respect as part of what people refer to as 'the great and the good', suggests that the taxpayer should fund Labour, Tory and LibDem focus groups. Bet that'll go down well at the Pig & Whistle. Among his proposals are ...

* An annual cap of £50,000 for donations from individuals, unions and companies
* Parties to get 50p per vote at general elections and 25p per vote at European elections, but you have to have 2 MPs to qualify
* Match funding for any donation of £5 or more

There are a few other things too, but these are the headline suggestions. All in all, this will provide £20 million per year of taxpayers money for political parties to fritter away spend as they see fit.

I see no attraction in any of the proposals. Labour is rejecting the cap and is arguing that it's unfair, because of their historical links with the unions, for them to be included. Strangely they don't see that the same argument equally applies to the Tories and business. If Labour don't acceded to the demands from Sir Hayden for unions to come within the remit of the cap then Francis Maude must walk away from the whole thing. To be fair, he has already said that's exactly what he will do.

Match funding is also a step too far. I'd entertain the idea of tax relief on party membership fees, but for the State to match a £50,000 donation seems to me to be crackers. Or have I misinterpreted that?

Hazel Blears' reaction to the proposals says very little, but says so much. She says she is "not convinced" by the proposals. Translated, it means that she actually agrees with them but she can't say so because she is running for the Deputy leadership of the Labour Party and needs to appeal for union votes.


Schoolboy-Error said...

The reason for this is simple.It all comes down to this--

The Socialists' Tragedy:They don't know how to make money and perhaps worse,they don't know how to spend it either.

Newmania said...

I don`t understand what problem the state fuding is supposed to be solving ?Smaller parties often seem to rely on one or two funders in the early stages though ,and this will make the close shop even more closed.

Voyager said...

He is an old sidekick of Woy Jenkins and was transported from Whitehall to Brussels to be Woy's Chef de Cabinet....returning to Whitehall to divirce his wife and marry Laura Grenfell whose father-in-law was a Bonham-Carter.

He is a bon viveur like Woy and needs a good wine cellar...just the man to abhorr lavish living at public expense


Unknown said...

In the US, the right to donate money to a political party (the caps are applied to individual candidates) is regarded as "free speech" and protected as such. This is a slippery slope which ends with the banning of political parties who do not conform to what our master prescribe. I.e. in order to get state funding, a party will need to comply with (anti) discrimination targets or such like, or be pro-European - you can just see it.

peteblogging said...

Iain - a heads up: in IE, your blog seems to be chopping bits off the bottom of your posts.

For example on this post, it's deleted the section where you declare your interest in the party funding debate by

a) being the recipient at the last election of precisely the sort of funding that Hayden Phillips is seeking to crack down on; and

b) being the director of a company that broadcasts biased political material, and in so doing meeting the definition of a 3rd party campaigner in Hayden Phillips' report.

Thought you'd want to know.

Wrinkled Weasel said...

Whatever the formula, whatever putative "safeguards" are built in, within five minutes of the rules being published some party clever clogs will have worked out how to fiddle it.

I am already paying taxes to fund an illegal war. Call me an old politically incorrect git, but I would rather not pay for party leaders to shag their research assistants in private jets or for make-up sessions in order to make them look "more human".

antifrank said...

If people want to contribute to a political party, let them. I, however, should not be required to fund the campaigns of others merely because others vote for them. In the case of Sinn Fein, this is tantamount to state-sponsored organised crime.

A cap on contributions is probably a good thing, to ensure that no one person or organisation can influence party policy too much. £50,000 seems about right, and it should apply to unions as much as any other organisation.

Iain Dale said...

Pete, I have no interest to declare beyond protecting the interests of the tax payer.

And on your point b) you are talking rubbish.

Johnny Norfolk said...

They should limit what a party can spend not be giving them our money.

We are losing our freedom bit by bit all the time.

Steve_Roberts said...

(quotes from Hayden review, reordered)

"Over the last ten years each of the major parties has experienced acute financial difficulties."

> That 'experienced' is a weasel word. Given that the parties' finances are under their own control, it is more accurate to say 'have got themselves into' acute financial difficulties.

"Faced with increasing pressure to spend more and a decline in regular supporter income, it is perfectly rational for parties to seek new or additional funding,"

> Indeed, I feel the same pressure to spend more and to seek new or additional funding. However, that is my problem, and I do not expect to be baled out with taxpayers money.

"Our Parliamentary democracy cannot operate effectively without strong and healthy political parties."

>Ah, the money quote. This does not constitute a logical argument. Indeed it seems to me that per contra, strong political parties weaken democracy, because they lead to the situation where a majority of the majority party ( min 25%) can impose whatever they like on everyone else, and the minority party plus a minority of the majority party (max 75%) can fail to prevail. Oh, and since decisions are taken in secret and imposed through party discipline, there is no need for rational argument before legislation is imposed.

James Graham (Quaequam Blog!) said...

As far as I'm aware, no-one has ever proposed matched funding on £50,000, as I suspect you well know. Unlock Democracy's proposals are for such caps to be limited to £20-£100. Sir Hayden's proposals are limited to £5 (i.e. if you donate £10, the party still only gets £5).

I wrote a short comment piece about the relative merits of matched funding and tax relief in response to your earlier comments here. I'd be interested to know your response.

Love or hate Sir Hayden's proposals on public funding, the one thing he makes clear is that not a penny more of taxpayer's money should be given to parties unless they accept tighter restrictions on donations and spending. He hasn't just written parties a blank cheque; he's given them a list of things they have to do first before they see a penny.

Unknown said...

So what happens instead of donating £50,000, which is not matched, you make 1000 donations of £50 each? Are these then matched? The loopholes are opening before our very eyes....

Glass House said...

You forgot the proposal to limit spending (equally as important to the whole report as the three things you mention) which the Tories oppose because they've got a lot of money at the moment.

Also, wrt the Unions, it could easily be argued that the Union donations are multiple individual donations.

James Graham (Quaequam Blog!) said...

So what happens instead of donating £50,000, which is not matched, you make 1000 donations of £50 each? Are these then matched? The loopholes are opening before our very eyes....

Not really, no, because the donations would be linked to electoral registration, as they are at present. So if you did try doing that, the system would only match one donation.

You would also create a colossal amount of paperwork for the party to have to deal with if you chose to make your donations in that way, which is unlikely to make you very popular.

Ralph said...

'Parties to get 50p per vote at general elections and 25p per vote at European elections, but you have to have 2 MPs to qualify'

So UKIP get no funding but the two nationalist parties, and most of the NI parties do even though they all get less votes.

Let me guess they know that this proposal won't get public support if it gives the BNP funding so they've designed the system to avoid it.

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.

youdontknowme said...

If we are forced to give them funding they should be subject to the freedom of information act.

Anonymous said...

I think Danvers you fail to understand - the United States considers itself a democracy because it has TWO parties and no room for a third..........whereas much of Europe has managed to run affairs with ONE party for much of history

Currently England has 4 parliamentary groups but could probably manage with 2 since only Dr Richard Taylor, MP has a distinctive policy platform........and the others could merge into a Socialist Unity Party (SED) as happened in the German Democratic Republic in 1946 when SPD, CDU and FDP were merged with the KPD

We are entering a period of unanimity in policy when a One Europe Party will come to power and show Americans that you don't need two

Anonymous said...


I think the heart of the union funding issue needs to be addresed by Union reform rather than tinkering with rules. We should focus on democracy - not on the political levy.

The problem is that Unions do not represent all their members (i.e., the ones who do not vote Labour).

Union political funds should go to parties nominated by members - rather than having an opt out.

I'm looking for work done in this area for a series of posts, if anyone is aware of any.

I am aware of the Unlock Democracy, which is good but tame.


James Graham (Quaequam Blog!) said...

'Parties to get 50p per vote at general elections and 25p per vote at European elections, but you have to have 2 MPs to qualify'

So UKIP get no funding but the two nationalist parties, and most of the NI parties do even though they all get less votes.

No. Sir Hayden's recommendation is that any party with at least two seats at the Westminster, Edinburgh, Cardiff or European Parliament would be eligible. So yes, that would include UKIP.

It also states that parties not eligible for funding under this scheme would not be subject to a restriction on donations (although, by implication, they would be subject to the same limits on spending).

Bill Kearns said...

The thing to remember about 'The Great and the Good' is that in many cases they are neither.

Anonymous said...

we should let them keep the union funding if its done in a way that conforms with the rest of the settlement. Ie they can keep the union block vote (they cant compromise on that), but the donation MUST come on an individual basis to the union. I know people who have paid levy for years given it is so hard to opt out in favour of a charity. No economic incentive to opt out for the member so they dont bother.

Everyone must be ballotted with an easy option to not pay, pay to a party of their choice or leave in union control.

How could they not accept that? People give money to who they want but union keeps block vote control. They simply cannot expect to keep a massive outside party with so much influence, it is after all their fault. I dont see them complaining about where the 14m was spent in the last election.

NO MORE PUBLIC MONEY - it would be a travesty if we support a move that fleeces the tax payer.

Anonymous said...

Trumpeter's rule: Any report, on any topic whatsoever, always concludes with a recommendation for additional expenditure.

Sir Francis Walsingham said...

If the only way to donate big money is through a Union, look out for the Amalgamated Union of City Bosses, Hedge Fund Owners and Bond Traders.

Can't see how you'd stop that one

Roger Thornhill said...

It is a stitch up in the making.

The fact that rancid Hazel was bobbing about with glee at the prospect of a deal with the Conservatives over precisely what parts of the roasted corpse of the taxpayer they were to feast on, shows it cannot be a good thing.

If parties cannot raise the money, then so be it. If you want to even things up, police incumbents' expenses and behaviour a little bettter.