Counting the cost

The latest scandal over obscured donations to the Labour Party has now spread to Scotland where the Electoral Commission is also investigating donations given to Wendy Alexander's leadership campaign. The Scottish Labour Party leader's team has admitted asking for funding from a millionaire tax exile which, although not in breach of the letter of the law, is an illustration of its limits: for example, that donations of less than £1000 do not have to be made public. Ms Alexander's campaign received £17,000 in donations, each one below that ceiling (in the end there was no contest for the position).

This lack of transparency follows revelations of potentially illegal donations to the Labour Party nationally and the failure of the deputy leader, Harriet Harman, to make sufficiently rigorous inquiries into the source of the gifts to her campaign for that post, all of which have made new rules for funding political parties a matter of urgency.

Gordon Brown's attempts to dispel the perception of corruption in British politics left by the cash-for-peerages affair by instigating a review of political funding by Sir Hayden Phillips have so far amounted to little. When Sir Hayden reported in March, it looked as if the murkiness exposed by the cash-for- honours scandal might result in a new, transparent system. Instead, the parties, cash-strapped as they are, cannot agree on a set of rules. Labour wanted to retain large donations from trade unions, which would have breached the £50,000 ceiling on individual donations, while the Tories, who have put considerable money from one donor, Lord Ashcroft, into fighting funds for marginal constituencies, did not want limits on spending between General Elections. No party should be allowed to exploit financial advantage to secure unfair electoral success. Is public funding, likely to be favoured by the smaller parties, the answer, then? The Greens, for instance, are at present excluded from funding for UK General Elections because, despite having two MSPs and local councillors in England, they have no representation at Westminster. That seems anomalous in the UK's devolved political landscape, but there are drawbacks in publicly funding parties, not the least of which is the likelihood of the BNP and other extremist parties with odious policies being beneficiaries.

Parties have less income because memberships have plummeted in the past 25 years. They require funds to fight elections and put their policies across. Such activity enlivens elections and can engage voters, but it comes at a cost. If there is no stomach for public funding in the present climate, when politicians are held in ever-lowering levels of esteem (in no small part because of the current system of funding and the way it has been exploited or abused for the benefit of donor or party), yet there is an acceptance that parties require money not only to survive but to further aims and goals, there seems no alternative to raising the cash themselves.

Every day brings headlines that blacken the current system's name. If the system of parties being responsible for securing their own funds is to survive, it must be cleaned up. Secrecy can have no place it in. Nor can an ever-deepening and ever-corrosive public perception that its purpose is to buy a favour for the donor, delivered by the recipient through implementing a favourable policy, securing access when otherwise it would have been denied or providing an honour.