Analysis: An idea out of step with the public mood

The report on political party funding can probably be best summed up as 'right idea, wrong time'.

By Dr Matthew Ashton

There is no doubting that how our political parties are funded is a serious issue that requires proper analysis. Parties are central to our democratic process in the UK. They are the primary means by which the gap between the state and civil society is bridged and citizens can articulate and aggregate their interests. Schattschneider in 1942 claimed modern democracy was, "unthinkable save in terms of parties", a view echoed fifty years later by Alan Ware who argued that parties remain central to our understanding of politics.

However democracy is an expensive business and this has only increased over the last few decades as campaigning techniques have become increasingly sophisticated. As a result our major parties have to raise millions of pounds to remain operational. Where they get this money from is therefore of deep concern with constant newspaper stories about millionaire donors buying influence.

This Committee report seeks to solve that problem by capping donations at £10,000 per individual. In order to offset the losses each party would suffer as a result it also proposes making up this difference with the state funding of political parties. Now there are many arguments in favour of this. Parties would be less reliant on a few rich donors and would have to work harder to increase their flagging memberships (massively in decline since the 1950s). It would also make the process more transparent and less open to abuse, at least in theory.

However in the current age of austerity we now find ourselves in, I doubt any party will be willing to go to the public, begging bowl in hand, and demand taxpayers’ money. It would be a sort of stand-off where any party that tried this would immediately be ripped apart by the others. It would only be possible if a cross-party consensus could be reached and with politics being as partisan as it is at the moment this seems doubtful. The Conservatives will chafe at the idea of donations being limited to £10,000 while the Labour party will most likely be outraged at the idea of trade union members having to opt in to make donations (in the past you always had to opt out).

Any proposals like this would have to be rigorously enforced to stop people exploiting loopholes. America has both donation limits and the state funding of political parties, but their system is more awash with money than ever before. This is largely due to the rise of 'soft money' where donors spend it on the behalf of the candidates and parties rather than giving it directly to them. The federal electoral campaign has been largely toothless in recent years to stop these abuses, primarily citing the first amendment as their justification for not interfering. Germany has had the state funding of parties since the 1950s yet they've had some huge corruption scandals over the past few years.

Many other parts of the reports are both feasible and necessary, for instance making accounting standards between the parties more open and transparent and lowering the cost of elections. However I strongly suspect that without strong political leadership these good ideas will be swallowed up in the arguments over donation caps and state funding.
To sum up, donation caps and the state funding of political parties are good ideas in theory and I applaud the committee for being brave enough to suggest them. But if they were badly implemented they could cause more problems than they solve. What renders this largely moot is the fact that that, whatever its merits, this is an idea out of step with the current public mood.

Dr Matthew Ashton is a politics lecturer and expert in political party funding from Nottingham Trent University. Visit his blog.