Party funding

HOW MUCH should Leviathan fund political parties? Not to the tune of £100m, it seems, as it emerges that the three major parties are about to reject the proposals of the committee on standards in public life, which had been investigating the matter. Your blogger (who has toiled longer than is good for her in the undergrowth of party funding), would make two points.

The first is that it was inevitable that the committee would recommend a strong element of state funding as a way of guaranteeing cashflow to parties with fewer strings attached than personal or company donations. Second, it was just as likely that the parties would demur. This is the worst kind of Westminster pro forma exercise, in which parties sign up to inquiries whose findings they know they are unlikely to approve, come the day of action.

Sir Christopher Kelly is entitled to be annoyed that the parties have continued to defend positions which are purely self-interested. In easier economic times, he could have lightened his claim on the public wallet by offering tax exemptions for those who donate to parties, and tightening the cap on individual gifts. This is the sort of plan that would expand the number of donors and has been embraced with a reasonable degree of success in Canada. Or his state funding plan could have mirrored Germany, by allowing politically interested individuals to pursue their objectives by setting up foundations—often allied to parties, but not subject to the same tight funding rules and not so open to the charge of influence-mongering with ministers.

None of the parties, however, is showing much interest in models from outside Britain. Recession encourages parochial feelings in this area, as in many others. One aspect of funding that the report does flag up is that 42% of voters consider that donations of over £10,000 are intended to gain influence for the donors. This is not an unreasonable assumption. At the same time, the committee proposes a far greater emphasis on “opt-in” payments from the unions to Labour, rather than the present opt-out scheme that makes donating to the party through union membership a default position. Naturally, the Labour party finds this as objectionable as the Tory Party finds a cap on big donors.

State funding might well be a rational way out of this impasse, but it is hardly one that politicians are in a position to adopt when family budgets are constrained and voters have such a low opinion of politicians. Paying for the parties is thus a task deferred, yet again. The only certain outcome is that the next election campaign is going to be very, very cheap.