Comment: The need for reform to party funding is palpable

British politics' periodic scandals are the result of a system that's open to corruption.

By Chandu Krishnan

In a report published by Transparency International UK earlier this year, respondents were asked to rank several scenarios as a possible example of corruption. Eighty-six per cent of respondents thought that 'a seat in the House of Lords for a businessman who has made large donations to a political party' was potentially corrupt, the highest score for any of the scenarios.

Sir Christopher Kelly's report on political party finance launched today, which recommends that all political party donations should be capped at £10,000, echoes what we have been urging for several years. The system is highly vulnerable to corruption – this is why UK politics has suffered periodic scandals, such as the 'cash for peerage' controversy in 2006.

Although the Political Parties Elections and Referendums Act 2000, the Electoral Administration Act 2006 and the Political Parties and Elections Act 2009 have lead to greater transparency in political party funding, the UK is one of the few industrial democracies that does not have a ceiling on donations to political parties. The so-called 'arms-race' approach to election spending, combined with decreasing party and trade union membership, puts financial pressure on politicians and parties. A high dependence on very large individual donations has resulted, increasing the risk of corruption and exacerbating public unease about donors' influence over politicians.

The 2006 'Power' inquiry into the state of Britain's democracy found that "there is a widespread perception that donations to parties can buy influence or position". It continued: "It is clear that a system of party funding that relies increasingly on very sizeable donations from a handful of wealthy individuals or organisations creates an environment in which the perception spreads that democracy can be bought." The inquiry's conclusions further confirm that the current state of play impacts negatively on public trust in government.

In order to reduce the vulnerability of political party funding to corrupt practice, two changes must be made without further delay. Firstly, the introduction of a cap of £10,000 on donations per donor per year to political parties – as recommended by Christopher Kelly. Secondly, placing a lower ceiling (compared to the current one of £19 million) on overall election spending by parties at the national level.

The need for urgent changes is palpable. Will the three main parties honour their manifesto commitments to reform party funding? Or must we wait for yet another scandal to convince politicians that reforms are necessary?

Chandu Krishnan is the executive director of Transparency International UK.

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