23/04/2012 05:44 BST | Updated 20/06/2012 06:12 BST

Funding Political Parties is an Excellent Investment for Taxpayers

Politicians are completely out of touch with ordinary citizens regarding taxpayer funding of political parties. People are disgusted with the influence exercised by an unscrupulous rich elite, that is able to bend politicians and policies to its will using its wealth.

Powerful corporations and lobbying groups reinforce the stranglehold on political life, freezing out the ordinary voter, and adding to the sense of disenchantment with politicians and politics generally.

The Prime Minister and the leader of the Labour party suggested a cap on private donations of £50,000, and £5,000 respectively, and all the major parties take the view that the electorate will not support state funding. Something tells me that this view is based more on self-interest and wishful thinking than on reality. Let the debate begin in earnest and we will see.

A cap on private donations of even £5,000 is still far too high, with those able to afford such a donation having more influence on parties and their policies, than those who can afford substantially lower sums.

The Committee for Standards in Public Life has recommended state funding of political parties, and estimates the cost at £23m, peanuts compared to the hundreds of billions of pounds used to rescue the banks. However, whereas the committee suggests a cap on private donations of £10,000, I suggest £100.

This will energize smaller parties as large numbers of people will feel their donations could make a difference. Currently the money raised by the major parties through rich donors and trade unions totally dwarfs what smaller parties can raise. For the sake of true democracy let us put a stop to that.

Politicians will have to work harder to earn the trust of the people to secure additional private funding. It will also open up the debate by bringing fresh ideas into the public domain, beyond the sterile, self-defeating debate of cuts and austerity imposed by the elite and the "moneymen".

We need only look across the pond to the US to see the corrosive immoral use of money in politics. Congressmen, with some notable exceptions, are so beholden to those who provide funds for their election campaigns that they have become no more than servants for the corrupted elite, faithfully following their masters' instructions when they exercise their votes and in the policies they enact.

It has reached the point where the American political system can hardly be described as democracy. Plutocracy the dictionary defines as: "government by the wealthy - an elite or ruling class whose power derives from their wealth" seems to be a more accurate description of their political system.

I am not naïve enough to believe that it is possible to have a society where everyone will have exactly the same influence on politicians and policies. The wealthy and well-connected will always have more influence. It is, however, a matter of degree, and the distortions reached in the US are extreme enough to render the term democracy inapplicable.

If British politics is not reformed, and money is allowed to exercise its power uncontrolled, then the American system will be our destiny to the detriment of the lives of the vast majority of the population.

One of the best investment taxpayers can make is to minimize this influence through state funding of political parties. Such a system, if designed fairly, would also open up politics beyond the iron grip of the three main parties.

My suggestion to Ed Miliband, leader of the Labour Party is: Be bold, abandon this cautious approach and go for a radical solution. Accept the principle of state funding and put the cap at £100, and accept that union members need to opt-in to pay the levy to your party. People, whether members of trade unions or not, will support a party that champions the interests of ordinary people and puts fairness and justice above the interests of the plutocrats. You have a chance to transform politics in Britain; grab it with both hands, and with it win the next election.