Cut party spending, not donations

The repeated funding scandals must be tackled at their roots, says Matt Ross

By Matt.Ross

28 Mar 2012

Apologising for his “bluster”, Peter Cruddas has quit as Tory co-treasurer; he was, he now says, wrong to say that £250,000 would buy access to the PM. But readers may raise an eyebrow at the idea that Cruddas, who’s made £750m in the City, is such an inept businessman that he’d make impossible promises to a big, first-time donor.
Given Cameron’s condemnation of “money buying power, power fishing for money, and a cosy club at the top making decisions in their own interest”, it looks bad to blunder into a donations scandal after 22 months in office. But in 1997, Tony Blair’s new government lasted just six months before it had to hand back £1m to Formula One boss Bernie Ecclestone, who had secured not only a meeting with the PM but also a crucial exemption to Labour’s policy of banning tobacco advertising.
Nine years later, Labour had the cash for honours scandal; and today’s government faces a similar future of repeated embarassments – toxic both to political parties and for public perceptions of all politicians – until the dynamics of party finance are altered. Those dynamics are shaped by two underlying problems: party machines and activities have become more expensive; and party memberships and activism have shrivelled. The parties’ efforts to get around these problems by bending the rules on donations create a vicious circle, further weakening grassroots support: even many Tory members must be disheartened by the idea that Middle Eastern business interests could reach over from Lichtenstein to exert greater influence on the PM than constituency parties.
There is no perfect solution here. Caps on donations would encourage more creative accounting. Public funding for parties would represent a reward for corruption. Both may yet play a role – but the best responses will weaken the underlying dynamics, not block ways of bending the rules.
If one of those dynamics is growth in party expenditure, one solution is to limit spending. Compared to the auditing of party donations, the auditing of expenditure is relatively robust – and reducing party spending would help tackle the second problematic dynamic, by forcing parties to concentrate on motivating the grassroots rather than milking a few key donors. With expenditure by all the parties falling, there would be a weakening in the arms race that has seen campaigning expand into the spaces between elections, and electoral strategists and pollsters becoming ever more expensive. Parties would have to make the arguments on the – real and virtual – doorstep rather than on billboards and in newspaper ads; party members would grow in strength, and central HQs would weaken.
Some of these results would not please party leaderships, but they’d strengthen democracy – and with all three parties tainted by ugly funding scandals, there’s plenty of motivation to find the best available solution. A sensible compromise would probably involve a mix of techniques; but when public servants and service users are experiencing the pain of declining resources, it is only fair that our politicians too should have to acclimatise to a future of tighter budgets, organisational reform, and a new and less costly way of doing business. If politicians can adjust to an age of austerity, then perhaps we really will all be in it together. ?

Read the most recent articles written by Matt.Ross - Kerslake sets out ‘unfinished business’ in civil service reform


Analysis Legal
Share this page