How to fund the political parties

The Labour Party has adopted with enthusiasm the proposition that if it can't any longer finance its activities by getting 'loans' from wealthy donors without needing to declare them, it can make up the deficit by getting itself (and the other parties) a compulsory subsidy from the taxpayer.  The idea is substantially to increase the (currently fairly modest) contribution to political parties from public funds.   At present a party in office gets very little state funding, since it can draw on many of the resources of government not available to opposition parties;  Labour seems bent on dispensing with this pesky distinction by adding a large public subvention to the advantages it already enjoys through being in office.

 This seems to me a thoroughly bad idea.  Polls suggest that most voters (and especially taxpayers) would object to their taxes being used to prop up political parties most of which they don't support and which have become so out of touch and tune with their own supporters that they can't raise the money they need from subscriptions and genuine donations.  As the Sunday Times editorial today comments, sensibly for once:

After this newspaper exposed the scandal over loans for peerages, which is still the subject of a police investigation reaching into the very heart of Downing Street, a little humility, even contrition, might have been expected from the Labour party. Far from it. Instead it sees the furore as an opportunity to make the taxpayer fork out for political parties. … Polling for this newspaper has shown that two-thirds are opposed outright to any extension of state funding for political parties, and that fewer than a fifth are in favour. … Voters do not want more state funding because they do not trust political parties. They also believe that political parties should in part be judged on how successful they are at raising their own funds. We need an end to cash for peerages and dodgy deals with the unions. But we need most of all honesty and transparency, not state handouts for parties that do not deserve them.

The Sunday Times also seems to advocate preventing the Labour Party from receiving funding from trade unions affiliated to it, which would be extremely prejudicial if the Conservatives remained free to accept donations from companies and rich individuals in the private sector.  But that's a different issue. 

Meanwhile the Labour Party has launched a 'consultation' with its members and  supporters about what advice the party should submit to the Hayden Phillips Review set up by the government in the wake of the 'cash for peerages' scandal to consider future arrangements for funding political parties.   The 'consultation document ' (pdf) on which comments are invited seems to me a pretty rum kind of consultation, since it appears to take it for granted that there is to be a significant increase in the funding of political parties from public funds, and confines itself to asking for comments on the various issues that this raises. 

Instead of running to Aunty State for money that it can't raise from its members (because it can't attract enough people to join the party and pay subscriptions, nor motivate enough individuals to make even modest contributions), the Labour Party surely ought to advocate —

• Limiting the amount of expenditure allowed for election campaigning, nationally as well as by constituencies, and permanently, not just during an election campaign;
• Limiting the amount of any individual donation (whether a gift or a loan) by any individual or institution, such as a trade union or company — not 100 per cent enforceable, but exploitation of loopholes could be publicised;
• Banning extremely expensive forms of national campaigning, such as posters and perhaps party political television broadcasts;
• Giving company shareholders the opportunity to vote on any proposal by their company to make a donation of any size to any party, to match as near as possible the opt-out available to trade unionists from the political levy to the Labour Party;
• Making all donations and subscriptions much more transparent, with the information to be made public at the time, not months later in annual accounts;
• Concentrating the minds of all political party machines on the need to attract many more members by being seen both to engage them in genuine consultations on policies and issues, and also, even more importantly, to listen to what their activists, grass roots members, and other supporters say to them, thus encouraging a large number of people to make modest contributions instead of a very small number of people making huge ones (and thereby expecting to buy a definitive voice in policy-making).

Taken together these measures ought to minimise the inevitable injustice arising from the ability of the Tories to raise much more money than the Labour Party (or the LibDems) simply because the Tories have many more ultra-rich members and supporters.  To allow the bulk of the funding to come from public funds rather than from members and supporters would tend to encourage even greater neglect of the relationship between the party leaders and their parties' grass roots supporters, causing further homogenisation of the main parties in their competition for the centre ground at the expense of their commitment to their natural core support, to the point where they become indistinguishable and thus deprive the eleectorate of any real choice.  (It's argued that parties can win elections by slanting their appeal towards their own core supporters rather than towards the centre ground, at any rate in situations where elections are won or lost as much by turn-out as by the distribution of such votes as are actually cast.  But experience suggests that in practice the temptation to try to capture the centre ground and to ignore one's own supporters is irresistible — one's own supporters have nowhere else to go and can thus be taken for granted, unless there's a financial incentive to cultivate and listen to them.)

Anyway, I have posted a comment in the consultation forum which, unsurprisingly, seems not to have been selected for publication there (or not yet, anyway).  So in case the party censors suppress it, I reproduce it here:

There is absolutely no case for increasing the subsidy already paid to political parties out of public funds.  Any increase will be seen by the majority of the electorate as a lazy (indeed, sleazy) device by the party machines to avoid the need for building a constructive relationship with individual party members and supporters (including the trade unions in the case of Labour), whose commitment to the party's principles and policies will motivate them to pay subscriptions and make donations sufficient to pay for the party's needs.  The current "New" (!) Labour leadership has alienated, apparently deliberately, a high proportion of the party's membership, including numerous activists: if it needs more money, it should seek to re-establish a relationship with them by listening to them and taking some notice of what they are telling you, not by raiding the Exchequer for more money from the taxpayer. 

Any increase in public funding, quite apart from enraging most of the population and further increasing people's disillusionment with politics, will raise a host of insoluble questions about the criteria for payments, the basis on which the new money should be distributed, the safeguards to ensure that it is properly spent, the arrangements for excluding 'extremist' parties without introducing an element of suppression of free political activity and outright political discrimination, the timing of payments, and ways to avoid giving whichever party is in government an even bigger advantage than it already has over opposition parties by the mere fact of being in office.  There can be no satisfactory answer to any one of these questions because the measure proposed is itself inherently unsatisfactory, misconceived, unsaleable, discriminatory, lazy, greedy, unprincipled, and supported by a lot of waffly high-minded rhetoric which stinks of hypocrisy. 

I first joined the Labour Party in 1955 and have supported it all my adult life.  It saddens me to see my own party stooping to this sort of thing.  Tell Sir H Phillips that we won't touch additional public funding with a barge-pole.

In fact, I reluctantly acknowledge that there is a case for some public funding as a way of avoiding the purchase of influence on policy with party leaders by rich donors.  But I suggest that there are better and more generally acceptable ways of minimising that risk than using taxpayers' money in the teeth of the strong objections of the majority of those who provide the money through their taxes.  Including me! 

Brian