Political party funding reform


by Hazel Lewry

Just emerging from the committee-enquiry stage after a 17 month deliberation is a proposal for political party funding reform.  The working committee, which had representatives of the Lib-Dem, Tory and Labour parties as well as six independents, was chaired by Sir Christopher Kelly.

Reform is long overdue as the ability of single large donors to influence party policy has been a fundamental flaw in the Westminster political system almost since its inception.

Democracy has many costs, the financial one must be borne from the public purse to ensure we limit as much as possible the destruction or subversion of democracy by vested interests or greed.

The proposal currently being mooted is worth about £100 million to the parties from the public purse and is being proposed as a method to make up a shortfall created by the donation cap system.  £100 million over 5 years is less than £2 a person, or less than 1p per week – cheap democracy.

The initial draft proposals had individual contributions limited to £10,000 until the Tories tabled an amendment to increase that fivefold, claiming discrimination.

Discrimination is a valid claim, but not in the way the Conservatives would have us believe by way of Lord Feldman of Elstree the Tory co-chairman.  £50,000 donations will still command substantial allegiance, especially as there is no organisational or familial cap apparent in the recommendations.

Without a familial or organisational cap there is nothing to prevent an individual such as Rupert Murdoch donating £50,000, then giving the same again to a dozen or more friends, family or colleagues to do likewise.

There also must be a proof of source of funds, this would ensure that there would be no re-occurrence of incidents like that when the Liberal Democrats received some £2.4 million from a rogue trader who then fled to the Dominican Republic during his trial. The Lib Dems have stubbornly refused to return the funds to the individuals defrauded.

The proposed original £10,000, or even a lesser cap, could therefore be viewed as more appropriate with parties raising additional funds through individual party membership and allocated vote share.

The proposals call for the funding to be shared out on a per-vote basis with a suggested value of £3 a tick.

It would be better and fairer to allocate the funding to all registered political parties.  Minor parties must also obtain a share if they are to have an opportunity to establish and flourish. There should be perhaps some 20% of the pot set aside for equitable distribution between all registered political parties with the remainder going on vote share.  Safeguards require to be built in to ensure funds are only spent on a limited range of political activities.  Penalties must be severe.

The current recommendations are certainly drafted towards maintenance of the status quo.

One of the most substantial arguments for the per vote funding is it will encourage parties to get their voters out to the polls with parties now having a strong fiscal incentive.

The driving force behind these changes is the Liberal Democrats who, basing figures on the 2010 GE would have reason to believe they stand to gain most from the proposals, however all parties are acknowledging the need for reform.  That the Lib Dems are in dire need of ongoing cash infusions is testified to by the layoffs at party HQ and the sale of their party headquarters.  If current polls are an indication Nick Clegg’s party might end up worse off than before.

Interestingly the Conservatives are pushing for an opt-in system for Labour’s union donations rather than the present opt-out.  Anticipate this to be just one area of acrimony as when this system was adopted in N. Ireland it saw the Labour party union contributions drop by over 60%.  Any donation system should always be opt-in.

There are also proposed modifications to the electoral spending caps at all levels.

The proposals don’t contain an obvious clear methodology for dealing with devolved parliaments, and highlighting the adequacies or inadequacies of those systems.

Electoral funding reform has been tried before at Westminster, each time it’s failed, primarily because privileged and vested interests have wished to retain a status quo that works for them rather than the electorate at large.  Most recently Gordon Brown’s attempt sank without trace after accusations of bias and bad faith.

Speaking about the present commission’s findings Cabinet Office minister Francis Maude was of the opinion there was little public appetite for this type of reform at present, mainly due to the recriminations and perceptions lingering in the public consciousness from the expenses scandal.

Mr Maude is entitled to his opinions, but nothing endangers true democracy more than purchased political privilege.  The system as suggested for comment is an improvement on what presently exists but is woefully inadequate when compared to the simplest of public electoral funding systems.

A system is needed where each party raises its own membership donations with an indexed linked individual donation cap.  That cap would perhaps be 5% of the median wage.  It would apply annually.  The only other donation source permitted should be public funding on an even basis for a set percentage of the total and a proportional basis for the remainder.  Funded lobbying would be illegal.

If Westminster or Holyrood enacted such legislation it would truly be setting its feet on the path to real democracy, a democracy far less impacted by vested interest than we have today.