Why Britain lags behind the world on party-funding

Party funding reform unlikely despite the cash-for-access scandal
Party funding reform unlikely despite the cash-for-access scandal

Party funding is always going to generate cynicism from politicians and voters alike. Whether we reform or not, there is no easy answer.

By Alex Stevenson

The question then becomes: how much of a drain on public confidence is it to be? Can the current system be improved?

The options are on the table for all to see. Last November the committee on standards in public life put forward a proposal to cap individual donations at £10,000 and increase the amount of funding of political parties paid for by the state.

Its ideas were rejected wholeheartedly by all three parties, who are completely uninterested in real change.

The cash-for-access scandal is shining a light on an aspect of Britain's bust politics which politicians would rather is left well alone. Politicians want this issue to go away, for in their heart of hearts they know bringing it up again can only damage trust in their trade.

The Tories are protecting their wealthy donor model. Labour are standing by the trade unions. The Lib Dems, scared of the voters, are turning their back on asking taxpayers to cough up more in the current mood of austerity. It is not in the interests of any of Britain's leading politicians to change the current system.

If the parties get their way, progress will take place at an agonisingly slow rate. Small-scale shifts on areas where the parties do agree, like accounting standards, could lay the groundwork for more meaningful change within the next few years. Don't hold your breath.

The forces opposing state funding are very strong. They're fundamentally rooted in the interests of the Conservative party, which would be hardest hit by the caps on individual donations which would accompany its introduction. Add in Labour's trade union headache - the key question being whether they would be treated as individual donors or not - and the result is a very messy, very unpleasant impasse.

The result, as a brief look overseas shows, is that Britain is very much behind the curve.

For donation caps are very common. They apply in USA, Canada, Japan, France, Spain, Portugal, Iceland, Ireland and Poland. Trade unions are not permitted in Canada or France, but in the USA they are effectively allowed to wriggle round this.

The state funding burden varies. In New York, the taxpayer provides $6 for every $1 of the first $175 donated by each resident. In Germany £2 is spent for every registered voter in the country; that rises to £10 per registered voter in Norway. The UK equivalent is currently 36p.

Under the proposals knocked back by the parties last year, that would increase to just 50p. This is peanuts compared to the levels of funding adopted abroad. Yet even this very limited shift is opposed.

Even if the committee's findings are adopted the new system would not provide a panacea to the problems. Here's what the committee on standards in public life has to say about its lessons learned from overseas models: "The importance of the prize – political office – is such that the temptation for avoidance or, in some cases, evasion is considerable."


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