UK party funding: bite the bullet or remain biased

The UK's disproportionate electoral system has led to the unequal funding of political parties. Unless this changes, our party politics will remain unfairly biased.
Stuart Weir
16 November 2010

America’s TV election advertisements have to be seen to be believed. Like many Hollywood horror movies, they are variously alarming, banal, scary, silly and (in the case of the corporate-inspired ads) very professional and sinister. Former New York Times journalist Leslie Wayne, now a roving prof. with a berth at City University in London, provoked shocked laughter and some alarm at a conference on “Money and Politics” organised by the university’s journalism department when she showed a selection of videoed TV ads from the mid-term US elections in the midst of a speech on US election campaigning. One woman candidate punctuated her pitch with different bursts of her firing a sub-machine gun, pistol and sniper rifle; an unsettling corporate ad ended with Chinese men chortling over a US giving itself into their power.

The US mid-term elections were enormously expensive, costing $4 billion dollars. A Supreme Court ruling has removed the federal spending limit on corporate spending on political advertising and big money has flooded into US electioneering. The court held, on a 5-4 split, that the limit breached the First Amendment to the US Constitution, upholding freedom of speech. President Obama described the verdict as a “major victory for big oil, Wall Street bankers, health insurance companies” and other powerful interests.

Well, there was initially some complacency among the Brits in the audience about ‘the British way of doing things’. After all, we keep our elections relatively cheap by banning paid political advertising on television and have an Election Commission which makes political donations transparent and maintains a rough-and-ready regulation of party campaigning. And our two past-masters in the cause of ‘fairness’, David Cameron and Nick Clegg, are going to reform the system to limit the size of donations. Reassured?

I was on the panel and I was not. First, of course, there are marked inequalities in both donations and state funding between the three bigger parties, and then an immense gap between them and other parties, which essentially stem from our disproportionate electoral system. State subsidies for the parties are largely based not on the relative size of their votes at general elections, but on the level of their representation in Parliament. (A change to the Alternative Vote will not alter this anomaly as AV is as disproportionate as first-past-the-post or even more so.)

The privileging of the Conservatives and Labour in the electoral system also gives them a great advantage in fund-raising from private donors, as evidence from Democratic Audit to the Committee on Standards in Public Life’s inquiry on party political funding points out. For donors are very much more likely to give money to a party which has a real chance of gaining power than to one on the fringes.

Secondly, I do not believe that the template for reform that has emerged from the inter-party negotiations conducted by Sir Hayden Phillips adds up. The central proposal is for a funding limit of £50,000 each year on donations. Sounds fair enough? But how many people do you know who could afford to make donations on this scale? Only the seriously rich will qualify. And how can such a limit be policed by an under-funded Electoral Commission? There are manifold ways in which major donors could contrive to give larger sums.

Moreover, the proposal strikes especially unfairly at the Labour Party. Trade union donations to Labour would be treated the same as private and corporate donations. But they are different in kind. Trade union donations aggregate the small sums of money paid by members into their political funds and are paid in proportion to the union’s affiliation to the party. Members are free to opt out of the political levy, and as long as the process is open and transparent, their combined contributions ought not to be treated in the same way as donations by rich people or corporations.

So what am I arguing? I am against the privileged position that the two larger parties enjoy. I think the Lib Dems, the Greens and other parties are unfairly disadvantaged; that the £50,000 cap is too high; and that is it easily evadable. I am against treating trade union donations as equivalent to private and corporate donations.

Not being party to all the detailed discussions that have clearly taken place, I am advancing two propositions that may not be workable and will most likely be unpopular with the general public. First, any donation cap should be set at a level that anyone on the median wage could afford. As far as I can see, this rule would be comparatively easy to police. Secondly, public funding of the political parties should no longer be a surreptitious and unfair business. All parties that stand a certain number of candidates at general elections should be eligible for state funding in proportion to their vote in the election. I know that conventional wisdom has it that the parties cannot possibly be honest about the state funding that some of them now receive, let along propose that the total sum should be increased. My view is that they have to bite the bullet – or our party politics will remain unfairly biased.

A last sobering thought. Professor Keith Ewing, another panellist at the City University conference, warned that the prohibition on political advertising in the UK might well not survive. Our judiciary understands the public policy imperatives that underpin the ban here and has upheld it. But the trend internationally – as well as in the United States – is for courts to give corporations the ‘human’ right of freedom of speech and to give that freedom priority over democratic equity. Our judges may be independent-minded enough to withstand this trend. But can we rely on the European Court of Human Rights (ECHR) to back British exceptionalism? Ewing says that the ECHR has already stated that the UK contravenes the European Convention on this issue.

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