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Party Funding is a Serious Issue, Regardless of Which Side You're on

Posted: 11/12/11 16:56

"There can no longer be large donations to political parties" said Lord Levy, Labour's chief fundraiser under Tony Blair, earlier this year. Levy was making his comments to the committee on standards in public life in January; a committee set up to look at possible reform of the party political funding process. Other major Labour donors, such as Lord Sainsbury, echoed Levy's sentiments, suggesting that parties ought to be 85% funded by the state. The committee's review - entitled 'Political Party Finance: Ending the big donor culture' - was published last month and, among its many recommendations, stated firmly that "the only way to remove big money from party funding is to put a cap on donations, set at £10,000".

An acknowledgement was made that this would mean parties "cutting their spending, particularly their spending on campaigning", which would subsequently result in a greater effort to "engage with a larger number of individual supporters". No bad side-effect given the current levels of animosity towards the political elite. Yet, no sooner had the committee made its findings public, politicians from all sides were quick to denounce the conclusions as nothing more than an extra burden on impecunious taxpayers. Conservative party chair, Baroness Warsi, claimed that "the public will simply not accept a plan to hand over taxpayers' money to politicians". Tim Farron, Liberal Democrat president, reiterated the point saying that "now is not the time for more public money to be spent on politicians".

The problem is that all political parties, especially the Conservatives and Labour, rely heavily on hefty donations from wealthy endorsers. Traditionally, Labour has always enjoyed the unconditional support of the unions whilst the Conservatives have happily spent the money of rich City backers. Were the proposed changes to occur, both parties would have to dramatically rethink their strategic alliances by reaching out to new factions. The recommended alterations would also increase accountability, as, when taxpayers are forking out towards campaigns, manifesto pledges would gain all the more importance. If you think public anger over the Liberal Democrats tuition fees U-turn was bad, imagine what it would have been like had the public paid for the campaign in the first place.

Two recent issues have helped highlight the difficulties thrown up over party funding; the public sector strikes and the EU summit in Brussels. Recent Electoral Commission figures showed that 86% of Labour's current funding comes directly from the unions. Whilst there is a credible argument to be made over the fact that these are voluntary donations taken from union political funds, the Tories have incessantly accused Ed Miliband of being in the union's pocket; and with figures like that, it is hardly surprising. Only 13 private donations have been made to Labour since Ed's leadership victory, leaving him wide open to allegations of favouritism towards the union movement's causes. During a recent PMQs session, Cameron used the pun, "They're all shouting in Unison", in reference to Miliband's failure to condemn the public sector's mass walkout on 30th November.

Loyalties towards the union movement even divide opinion within the Labour party itself. Ed Miliband said following the 30th June walkout that "it was a mistake for strikes to happen". Mehdi Hasan revealed in the Guardian how one shadow minister had told him: "It doesn't do Ed any harm with the general public to be heckled at the TUC". This suggests that, behind the scenes, Labour is wary of appearing to side with trade unionists too much for fear of alienating a significant bulk of the electorate. But, what must not be forgotten is that, as Owen Jones points out in Chavs: The Demonization of the Working Class, Labour was founded "with the specific mission of representing working-class interests in Parliament". However, as Labour moved ever closer to the centre ground under Blair, they began distancing themselves from the unions. Since Miliband's reign, Labour has slowly gravitated back towards working-class causes; albeit steadily.

Last weeks decision by David Cameron to veto a treaty change to help save the Eurozone was met with stern criticism from left-leaning pro-Europeans. The Conservatives over reliance on the City was utilised to the full by Labour as they accused Cameron of putting the interests of his party ahead of the interests of Britain. Pandering to his Eurosceptic backbenchers and an unwillingness to impose a Financial Transaction Tax on his City friends have been emphasised as the main factors behind Cameron's verdict. Both theories are hard to disprove, but it is the latter one that strikes the biggest chord in the party funding debate. Recent figures by GMB reveal how 60% of Tory funding comes from rich backers in the City. GMB general secretary, Paul Kenny, said: "They are the same old nasty Tories now in the pockets of the predatory elite". Perhaps this is why Cameron refuses to even consider any scaling back of the City's powers.

There are numerous other debates that ought to be taking place surrounding Britain's relationship with the EU, but, due to a petty desire to point-score, Labour has concentrated on denouncing the decision based on Tory party loyalties; a topic that laughably resonates as much with Labour as with the Conservatives. And that is the main concern over the party funding dilemma; it stifles perfectly credible disputes. Were funding not an issue, these two events would have been based on their merits instead of deep-rooted ideological adherence. As Sir Christopher Kelly, the chairman of the committee on standards in public life, asserts: "The issue [of party funding] is too important to be shelved until the next scandal brings it to the fore".

He continued, "All three parties now depend on very large donations from a small number of rich individuals or organisations. That cannot be healthy for democracy". As these two episodes have proven, party political funding plays a damaging role in both our policies and our democratic system. There should be no more hiding behind the unions or sucking up to the City; Britain's political parties must connect more with a wider audience, and, as a consequence, the public must accept that it is beneficial and progressive for taxpayers' money to be spent funding our main political parties. The committee's report concludes by pointing out the need to safeguard the health of democracy in the UK; surely this is an issue beyond party politics and ideological tendencies. This is genuinely a matter of national importance.