Wednesday, December 13, 2006


Political Party Funding in Crisis

Funding political parties-already deeply in debt- seems likely to reach an even more acute crisis in the wake of Sir Hayden Phillips' report, covered today.Parties are in decline with money from member subscriptions paying for only a fraction of the £20 mill or so it costs to run a big party each year. As this affects both parties both have sought to persuade big donors to cough up big donations but this has been perceived by voters as government policy made hostage to the highest bidder. Donations were made transparent by New Labour but both parties circumvented that one by taking loans-which do not have to be declared rather than donations which have to be; hence the loans for peerages scandal.

Now Sir Hayden suggests a cap of £50,000 for all donations which will please neither the Tories with their rich business backers or Labour, kept afloat from its very beginning by union contributions which now equal several million a year. In addition he suggests that the 3.5 million union members who pay £3 a year levy to the party should be officially registered. Maybe it shouldn't, but everyone in politics knows that a funding system relying on people 'contracting in' will attract less support than a 'contracting out' one from an ongoing arrangement. We just tend to be lazy either way. Labour argues that union contributions are qualitatively different from business donations as they come from sources representing groups of people. I wish I could be more impressed by this argument as it is obvious that businesses also represent groups of employees who have an interest in their collective prosperity just as union members do.

So why not introduce more state aid for parties as is so widely practiced on the continent? There are clear objections to this: Why should taxpayers subsidize those whom they seem not especially to respect? Should not parties be voluntary movements based on common support for shared ideas? Would it not involve the state with choosing who controls it? Won't any system of governemt regulated funding in any case be got round by inventive party treasurers as in USA and European countries?

Stand by for some furiously bad arguments from both parties as they seek to stymy the ideas which would damage them while talking up those which would damage their opponents. Sir Hayden, perhaps bravely, seems to have lots of both for both main parties.

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