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Monday 16 April 2012

The lasting impression left by the Peter Cruddas affair, in which the Tory treasurer was secretly recorded soliciting six-figure donations to the party, was that big money bought you big perks – namely, access to the leader.

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When Ed Miliband pointed this out, the Tory riposte was that Labour has the same problem, except that instead of tycoons with millions in the bank, the donors are trade unions with millions of members.

Yesterday, Mr Miliband sought to seize the initiative on the issue with a proposal of a £5000 cap on all donations. It is a measure of the Labour leader's commitment to the idea that such a cap has the potential to inflict significant pain on his own party, although the extent of it is unclear. The proposal would not include the affiliation fees that union members pay, for example, but even so, large donations from the unions would be affected. And besides, as the disastrous Bernie Ecclestone affair demonstrated, it is not just unions who donate to the Labour Party.Mr Miliband insists the £5000 limit would be in the interests of democracy, and he is right to the extent that any impression that the door to a party leader's office – or the door to Number 10 – can be prised open with a wad of cash is bad for the democratic system. However, the key now to the fate of the proposal is the response of David Cameron.The Prime Minister has already suggested a much higher cap on individual gifts of £50,000 but even this would not be enough to remove the stain left by the Cruddas affair. Much more reasonable is the £10,000 cap which Sir Christopher Kelly suggested in his report into political funding last year.However, even this does not go far enough. Sir Christopher also suggested the major parties should get an extra £23 million of taxpayers' money and it is only this kind of measure that will make any kind of difference to the culture that leads to scandals such as the Cruddas affair, or the Ecclestone affair for that matter. Parties chase, woo and flatter rich people largely because they have no alternative in a system that gives parties virtually no state support.Tax-funded support would go some way to sorting out this mess. There would certainly be the tricky issue of suggesting that millions of taxpayers' money should be spent on political parties at a time of deep cuts to public spending, but there are already precedents for it in the system (the opposition party in parliament, for example, gets some funding on the basis that healthy opposition is in everybody's interest in a democracy).There would also be some who would feel uncomfortable about their money being spent on parties they would never vote for, although under Sir Christopher's proposals the BNP would be excluded on size. It is only this kind of radical proposal rather than a how-low-can-you-go competition in which Labour and the Tories propose caps on donations that will fix the system and remove, once and for all, the unpleasant stench of influence for sale.

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