Cash for access: shocking, but all parties are funded by selling influence

There is solid justification for about 50% of the indignation aroused by the exposure of the attempt by the then Treasurer of the Conservative party to sell access to David Cameron (and, more seductively, his wife) and influence on Tory party policy for a quarter of a million pounds.  Unfortunately for the hapless Mr Peter Cruddas (presumably no relation to Labour’s blameless Jon), the offer was made to a pair of Sunday Times journalists, wreaking Murdoch’s revenge on the Tories, not, as Mr Cruddas had been led to believe, two businessmen claiming to represent a rich firm in the Gulf.  Not surprisingly, the the airwaves, newspapers and blogs have been alive with charges of corruption and sleaze. The damage done to the Tories has been exacerbated by the timing of the Sunday Times sting, coming only a few days after George Osborne’s extraordinarily cackhanded budget, not unreasonably represented even in the Tory press as a handout to the rich at the expense of the poor.

David Cameron has made no serious attempt to defend Mr Cruddas’s performance, calling it “completely unacceptable”. And clearly there were aspects of the Tory treasurer’s offer that were indefensible: the expressed willingness to use underhand devices to circumvent the legal ban on donations to UK political parties by foreign companies or persons, and the sheer crudity of the suggested deal. But a good deal of the hoo-ha has been synthetic, ignoring or misrepresenting at least two aspects of the affair.

First, the British – or at any rate the English – are absurdly squeamish about the realities of politics. It is in the nature of political activity both to seek to influence the policies of political parties and the government, and to give various kinds of support, including money, to the party which comes nearest to reflecting the interests, aims and values of the individual citizen or his company, union or other group. The key word here, apart from ‘money’, is ‘interests’. The essence of politics is the attempt to promote the interests of the numerous groups that make up society, and especially those of the main social and economic classes. Sometimes this effort is a zero-sum game, in which the aim is to promote the interests of one class at the expense of another. In its more palatable form, politics is about trying to reconcile partially conflicting interests so that there are no outright winners and no outright losers. For some reason English political commentators tend to be mealy-mouthed about the reality that in this battle of class interests, and occasional attempts to mediate it, the moneyed classes – property owners, employers, managers, the City – are mainly represented by the Conservative party, while the poor and the less well-off, the employed and unemployed, the ethnic minorities and the most vulnerable in society, are generally speaking represented by the Labour Party. Of course there are numerous exceptions to this generalisation: well-off middle class liberal intellectuals supporting Labour, and working-class men and women afraid of change, naturally deferential, or just reactionary or xenophobic, supporting either the Conservative party or other parties even further to the right of it. But it is impossible to understand the working of the British political system without recognising that the two major political parties exist primarily to promote the interests of the two fundamental social classes in society, the haves and the have-nots, or however you choose to define them.

It follows from this that the Conservative party will basically be funded by donations from the relatively or absolutely rich, both individuals and institutions; and the Labour Party by contributions from ordinary working people, liberal intellectuals, and the organisations to which such people belong, predominantly of course the trade unions. Everyone knows that this is so. Not everyone seems to realise that it is also inevitable, and in many ways quite healthy. Both the main parties are forced by the sheer need for funding to cultivate their natural supporters, to identify their interests and aspirations as well as their problems and grievances, and to formulate their policies in ways which will maintain that support, both on the doorsteps and at the ballot box — and by donations of money. It is this, more than any other factor, which drives the parties and keeps their feet broadly on the ground.

The second aspect of the Cruddas affair which is widely misrepresented or ignored is the nature of the relationship between the Labour Party and the trade unions affiliated to it. That relationship differs crucially from that between the Conservative party and the big financial interests which support and fund it. The affiliated trade unions are an intrinsic part of the Labour Party and of the wider labour movement. It was principally the trade unions that founded the Labour Party to represent their interests in Parliament. They have a significant voice – some mistakenly say too loud a voice – in the election of the party’s leader, and in the development of party policy; they often sponsor its MPs. The connection is not just one of convenience: it is institutional and organic. To demand that the unions should be banned from providing the bulk of the Labour Party’s funding, or to express outrage at the extent of trade union influence on Labour party policies, is to misunderstand the nature of the party itself: a form of party point-scoring that merely exposes the ignorance of the critics. It is also, of course, in effect to demand the demise of the Labour Party, which could not operate effectively as the principal representative of the have-nots in society without trade union financial support.  The fracturing of the structure of the present political parties which would result would be deeply damaging to our democracy, substituting horse-trading among numerous party leaders for the will of the electorate in determining who governs us and how we are governed.  The outcome of the 2010 election should serve as a terrible warning.

The Cruddas scandal has predictably prompted another round of interparty talks designed to ‘reform’ the way our political parties are funded. The Lib Dems, who no longer represent any recognisable class or other sectional interest, naturally favour a system that would guarantee their financial future – which can only mean public funding out of general taxation, although their leader (Nick Clegg) is reported to have ruled this out.  There are many obvious objections of principle and practice to public funding of political parties. However small the contribution from each individual taxpayer to the political parties support fund might be, I for one would have the strongest objection of principle to a single penny of my taxes going to the Conservative party, and an even stronger objection to other pennies going to UKIP or the British National Party. No doubt most hedge fund managers and industrialists would object equally to any funding for the Labour party out of  their taxes, if they have failed to find a way to avoid paying them.

But there is an even stronger objection. The need to raise money and other forms of support from their natural constituencies imposes an indispensable discipline on the parties. A guaranteed handout from the taxpayers, however modest, would encourage them to be even more indolent, complacent and out of touch than they are already. We should not forget that there is already some support for the parties from public funds in various forms; there is no case for increasing it.

There is however a strong case for imposing much lower limits on the amounts of money that the parties are allowed to spend both at election time and between elections. Much of the electioneering undertaken by all the parties prompts more general contempt and irritation than loyal support. It is probably largely counter-productive; we could do without it. If the parties were forbidden by law to spend as much as some of them do at present, it would tend to free them in part at least from the tedious necessity of constant fundraising, and enable them to spend more time maintaining contact with the electorate and developing and refining their policies. It would also reduce the unfairness implicit in the much greater wealth of the supporters of the Conservative party than that of the supporters of any other parties, including Labour. We don’t want to get into the situation in the United States where only the mega-rich can afford to run for national office and where in effect elections can be bought.

So poor boastful doomed Peter Cruddas was essentially doing what the treasurers of all political parties in the UK have to do: they offer influence on party policy in return for money. All political activists seek to influence the policies of the parties they support. Some of us do it by blogging and writing to the newspapers, badgering our constituency MPs, devising and voting for resolutions in dusty committee rooms, marching in demonstrations and delivering leaflets. Others do it by giving money, thereby enabling their chosen party to function. There is nothing inherently sleazy or corrupt about it. It is when it happens in secret that it becomes morally and politically unacceptable. As so often, the key to reform, to the extent that reform is needed, is transparency. We probably don’t need to know which company directors and bankers have been sharing roast pheasant and vintage claret with Mr Cameron: nor which trade union leaders have been having a pint and a packet of crisps (or a bottle of champagne with caviar nibbles) with the Milibands or with Yvette and the other Ed. Politicians naturally socialise with their supporters and those with similar class tastes and interests, and are influenced by them on policy issues. But we need complete openness about who gives how much money to which political party, and as far as possible what policies the bigger donors, whether billionaires, chairmen of FTSE 100 companies or trade union bosses, are pressing on their politician friends.  Daylight is a great cleanser.


4 Responses

  1. john miles says:

    If I’m charged 25, or 250 or whatever, grand for dinner with Mr Cameron, do I have to pay VAT?

    If not, why not? 

    Brian writes: Only if the dinner is hotter than the ambient temperature outside, obviously.

  2. john miles says:

    Like you, I’m a bit allergic to the idea of funding the parties out of taxes for them to spend on lying to us every election time.
    But I stumbled somewhere on a novel and interesting suggestion: that with our tax return we vote for the party we’d like our contribution to go to.
    This wouldn’t necessarily be the way we actually vote, which is, as often as not, determined by tactical reasons, or by the horrible personalities of the candidates. 

  3. Brian says:

    Brian writes: Thank you for this, John.  The idea of giving voters a choice of party to which their tax contribution would be sent (I think the idea was to register choice of party recipient when voting rather than with one’s tax return — not everyone has to fill in a tax return or indeed pay income tax) originated, I believe, with Helena Kennedy’s Power to the People report.  It was mentioned with approval by Polly Toynbee in a recent Guardian article advocating party funding from general taxation.  Personally I don’t think it makes a fundamentally objectionable idea acceptable.  Whenever the choice was exercised, it would tend to reflect ephemeral crises (jerry-cans and pasties and a freak by-election result) rather than real long-term issues,  disadvantage both independent candidates and new parties trying to break into the system, thereby tending to set the relative positions of the existing parties in concrete;  it would not solve the problem of an appreciable amount of public money going to support fascist or quasi-fascist and racist parties; and it would remove a desirable, even necessary discipline from the parties.  If they are to keep in touch with people’s real concerns and needs, and to give a lead when necessary rather than tamely following the lead of the opinion polls and focus groups, they need to go out and listen as well as talk to ordinary people, not just pocket their share of compulsorily levied money from the public purse.  Let the parties work hard to recruit members and collect their subscriptions, persuade individual and institutional donors to give modest amounts of money, and spend much less on the fripperies accompanying election campaigns.

  4. john miles says:

    “Whenever the choice was exercised, it would tend to reflect ephemeral crises (jerry-cans and pasties and a freak by-election result) rather than real long-term issues.”
    This is a stock argument of anti-democrats ever since democracy was invented.

    Democracy may not be perfect, but many of us think it’s the least worst solution. 

    And I would have thought that many people – certainly I myself – would currently vote for my money to go more or less anywhere but Conservative, New Labour or even Lib Dem. 

    Might that make them pull their socks up? 

    Brian writes: My comment is certainly not anti-democratic. Of course I agree that democracy, with all its defects, is infinitely preferable to any other form of government. I merely point out that forcing all voters to pay money to prop up political parties is likely to arouse strong objections, since many people, including me, would not regard it as a legitimate purpose for taxes; it would remove a useful discipline from the parties; and the effects of giving people the option to identify which party their tax contribution should go to are liable to be a largely capricious distribution of the relevant tax money, not necessarily representing the distribution of genuine long-term party support in the electorate but quite likely a knee-jerk wish to punish this party or that for some momentary perceived offence by allocating one’s money to a frivolous, far-left or more likely far-right party as a gesture of protest against having to fund a party at all — “a plague on all your houses”. One sees this tendency in some by-elections, where the result won’t affect which party gets to govern the country (no, I’m not thinking of Bradford West). If it happened in relation to the distribution of taxpayers’ money so that fringe or anti-democratic parties ended up getting the lion’s shares of the tax-funding available, the consequences for our democracy would be profoundly negative. There are also dangers in allocating tax money to parties in proportion to the votes each won at the most recent election, although that would be preferable. The solution is to limit parties’ spending and to leave it to the parties to raise their own funds — or to go under if they can’t.