A clear and thorough report

Wednesday 23 November 2011

IN the 2010 General Election campaign Conservatives, Labour and the Liberal Democrats all proposed reform in the way political parties are funded.

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The Coalition Agreement pledged to take that reform forward. Yet even before Sir Christopher Kelly’s clear and thorough report on the issue appeared yesterday, it was being ripped to shreds from all sides.

This is a pity. Everyone agrees that the present funding arrangements are a mess. Ten years ago legislation obliged parties to identify all those donating more than £7,500 but this merely demonstrated the extent to which all the major parties depend on a small number of extremely wealthy donors.

Publicity-shy donors could avoid the regulations altogether by merely lending the money, then neglecting to ask for it back. This creates the impression that a tiny elite are effectively able to buy influence or honours, an impression that damages democracy.At the same time, for most parties, small donations have dwindled along with membership. The only alternative is state party funding. This exists to a minor extent already, through policy development grants, the funding of opposition parties and the like. However, the MPs’ expenses scandal effectively undermined support for this option. So it is not a propitious climate in which to propose it. And, as Nick Clegg observed yesterday, using £23m of Treasury funds annually to fund political parties when voters are struggling to make ends meet, looks like a political own goal.For all that, Sir Christopher’s recommendations deserve a hearing. The £10,000 proposed cap on individual donations and the obligation on trade union members to opt into the political levy, are an attempt to balance Labour’s interests with those of the Tories. As funding would be restricted to parties with at least two representatives at Westminster or the devolved administrations, UKIP and the BNP would be excluded, while the SNP and the Greens would qualify. At 50p per voter per year, barely more than one first-class stamp, it seems a small price to pay to rid politics of the unsavoury whiff of “big money”.The cap on election expenditure would mean less spent on glitzy brochures and billboard adverts and more effort poured into engaging with individual voters. Of course, sceptics will argue that big donors will find a way of getting around the regulations by giving through third parties. And it would mean the SNP would have to quickly spend the two £1m donations received from the former makar Edwin Morgan and lottery winners Chris and Colin Weir towards the independence referendum campaign.In the event, there appears to be little appetite for state funding from either the public or the main political parties, so early action is unlikely. And yet democratic politics need political parties and parties need funding, so this issue will not go away. The system is broken but neither voters nor politicians appear to have the courage required to grasp this nettle.

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