Party Funding

Matthew Oliver (London, Unlock Democracy): The results of Unlock Democracy’s recent survey should act as a wake-up call to those members of the Labour movement who believe that the issue of party funding can be kicked into the long grass. 

The survey, commissioned by The Joseph Rowntree Reform Trust, finds that the Labour party risks a future Conservative government, possibly supported by Liberal Democrats and other parties, destroying the existing Labour-Union link if it fails to introduce meaningful reforms to the party funding system in this session of Parliament.  

Sir Hayden Phillips wrote in 2007 that party finance reform was “within our reach but not in our immediate grasp". If Labour does not take action soon on these issues, these results show that they well find that the Conservative Party has snatched the opportunity from them and done with it what they will.

James Graham (Quaequam Blog!): Has David Hencke, Slayer of Tory Dragons, Sleazesmeller Persuviant Extraordinaire, gone soft? I ask this because his coverage in today's Guardian of Jack Straw's proposed party funding reforms can only be described as naïve.

Hencke asserts that "The Conservatives have been blocked from targeting Labour marginals with spending that can run to tens of thousands of pounds a year by legislation which will limit all parties' candidates to spending a maximum of £12,000 from October until the general election." Straw's proposals do nothing of the sort. What they do is return us to the pre-2000 situation whereby party spending limits are only "triggered" when a candidate is formally adopted by their party or declares themselves (inadvertently or otherwise).

The reason this law was scrapped will be familiar to anyone who was actively involved in party campaigning during the last century and indeed anyone else who thinks about it. To get around that rule, all a candidate need do is, well, not call themselves a candidate. As a hangover of those days, people from across the political spectrum still call selected candidates "prospective parliamentary candidates," or "PPCs." According to party constitutions, candidates would have to be formally adopted a month before the election itself, hence the formal adoption meeting (a tradition that has continued as it is a useful opportunity to squeeze more money out of members). Candidates would always be referred to as "local campaigners", "local champions", "Parliamentary spokespeople" - once again this tradition has often continued on the quite reasonable basis that the public can be quite cynical about political campaigning yet value candidates who "work all year round, not just at election time.

Alexandra Runswick (Unlock Democracy): Today Jack Straw has overseen the publication of the White Paper on Party finance and expenditure in the United Kingdom. As someone who has spent the last four years working on party funding reform I’m more interested than most in these proposals. Recent media reports had suggested a certain degree of back tracking but these proposals underwhelmed even my limited sense of expectation.

This white paper is a whitewash. It’s policy-lite and neatly sidesteps all of the difficult decisions that the government has supposedly been thinking about making. Fear not dear reader, you can read the white paper without any danger of being assaulted by anything that so much as resembles a controversial or radical decision. This is a wasted opportunity that will haunt future governments, inflict yet more avoidable funding scandals on the public and in so doing alienate them still further.

The history of party funding reform is littered with weighty tomes on how to clean up politics: from the Houghton Committee in 1976 to the Neil Committee report in 1998, the Electoral Commission report in 2005, the Constitutional Affairs Select Committee investigation into party funding in 2006 and finally after the cash for peerages allegations in 2007, the Sir Hayden Phillips inquiry into the funding of political parties. If any of these passed you by, they all get name checked and reviewed in the white paper. So much so that most of it is a history of how we got to where we are; there is remarkably little on where we go from here. While the long-overdue proposals to beef up the Electoral Commission's role, are to be welcomed, this is in itself a minor reform. The rest of the paper is a muddled mix of excuses for not taking action and even proposals to go backwards.

Jack Straw spoke of the need for consensus, both among the political parties. Well the public has supported caps on donations for some time, polls have repeatedly this, suggesting that two-thirds of the public would support limits to donations. And while I would like there to be agreement between the parties on party funding reform, I find it fascinating that the government is happy to legislate for 42 day detention in the face of opposition from across the political spectrum, but won’t introduce a measly cap on donations. Clearly it’s one rule for abolishing civil liberties and another for proposals that affect party finances.

Independent (and even semi-independent) investigations into party funding invariably recommend change. Sometimes the prescription differs but more recently there has been a degree of consensus about caps on donations and incentivised support of small donations such as tax relief, with matched funding for non-tax payers. The Neill Committee recommended tax relief for small donations and this was the one recommendation that was not implemented in 2000. The Electoral Commission repeated this call in 2005 (in a report that the government didn't even deign to respond to), as did the Constitutional Affairs Select Committee in 2006. At each stage party interests intervene.

Peter Facey on Paying for the Party: Myths and Realities in British Political Finance by Dr Michael Pinto-Duschinsky, Policy Exchange.

(Policy Exchange, April 2008, 64pp)

This Policy Exchage pamphlet offers few solutions to party funding deadlock.

Jon Bright (London, OK): Nick Clegg will call for around 150 parliamentary seats to be dissolved this evening in a speech in Sheffield. I'll be interested to hear his exact reasoning - so far, it seems to revolve around cutting the price of politics significantl. He will apparently also call for a £3 voluntary donation option to be added to each ballot paper at the general election, with people giving the money to the party of their choice (or not at all) - which I think is very similar to a proposal made by the Power Inquiry. Getting any party funding reform will be hard - and getting MPs to vote for a drastic thinning of their own ranks should be next to impossible. Nevertheless, it's interesting and relatively radical stuff.

Jon Bright (London, OK): From this week's backbencher:

Sometimes you need to set up a thinktank in a hurry - perhaps to provide a convenient repository for some cash when a bank account seems inadequate. Feeling a bit incompetent? Don't worry! The Backbencher can help you create a plausible centre-left organisation in minutes. Don't believe her? Try it!

Jon Bright (London, OK): Iain Dale has had a sneak preview of the next tranche of the Conservative's Democracy Task Force reporting, unless it is the final thing. A few of the proposals he picks out:

Peter Facey (London, Unlock Democracy): 2008 is set to be an important and busy year for democratic reformers, but it will also be a mixed one with some real opportunities, but also great dangers.This contrast is at its clearest in relation to our rights and freedoms: we have the real possibility of making progress on a proper Bill of Rights (which may come in January / February - though this, like all other dates given here, is merely guesswork); but at the same time we have the continued dangers of ID cards, the database state and government plans to extend detention without trial from an already too long 28 days to 42.

Anthony Barnett (London, OK): I am trying to assess the implications of Labour's cash crisis. Yesterday I wrote about parts I - IV and that what matters most was the effort to hide David Abraham's huge donations at a time when everyone knew transparency matters. Jon Mendelsohn will have to go. Now I want to look to what it means in terms of the nature of New Labour and Gordon Brown. I asked before, is he like the Laocoon struggling to free himself of the deadly serpents of Blairism? Is this the picture of our Prime Minister for those of you who do not know the famous work?

Anthony Barnett (London, OK): One of the most pathetic things about the current decomposition of Gordon Brown's government is that he was warned about the need to clean up the political system, he listened, he said he understood, he made some of the right noises in his speeches, but he didn't take decisive action. The Power Inquiry, chaired by Helena Kennedy, run by Pam Giddy, saw it coming, spelt out the problem, and made 30 all too reasonable reasonable proposals for reform. This is what it suggested on party funding  - a disaster which it was not alone in seeing coming but about which it made some clear and original suggestions:

Jon Bright (London, OK): Professors John Mearsheimer and Stephen Walt are touring the UK at the moment to promote their new book: "The Israel Lobby and US Foreign Policy". They played the House of Commons on Wednesday to a hall of MPs and Lords (including Norman Lamont, apparently) - I managed to catch them yesterday at SOAS.

Peter Facey (London, Unlock Democracy): If the parties cannot now reach agreement, there will be terrible long term consequences for the reputation and state of British politics.We should be clear: the collapse of these talks will not mean an end to increases in public funding of political parties. Since Sir Hayden began work on this project, MPs voted themselves an additional £10,000 annual Communications Allowance. What this will mean is that grassroots politics will continue to decline and national politics will continue to be dominated by relatively few 'sugar daddies'.