Political party funding: transparency alone isn’t enough

If we really want to reform party funding, we need politicians or trade unions to be brave.

Transparency has failed. That is the lesson from the last decade of political party funding reform.

Encapsulated by the Political Parties, Elections and Referendums Act of 2000, the emphasis – with general cross-party support – has been on making it clear where funding for parties comes from. There has been some tinkering with who is allowed to give money and with how much parties can spend. However, the curbs on foreign donations has not ended the succession of questionable and controversial politician donors, and the generous expenditure limits means how much cash and lines of credit you have is still the main limiting factor.

As for transparency – it too has had little effect. The belief was that making the main sources of political funding public would fix significant problems with our political system. It has not.

In part, this is due to the ingenuity of some in always seeking to side-step the rules. Loans were but one example. Less controversial and less talked about, but arguably even more important, has been the switch of some donors from funding parties (obliged to declare) to funding think tanks (nothing to declare). Think tanks influence the political process and can support political parties, so funding them achieves much the same as funding parties – save for it being unregulated.

In part, transparency has also failed because it has turned out to be (perhaps not surprisingly) not simply where the money comes from that causes concerns. It is also how much money there is and whether it can be used to buy elections. Yet attempts to extend election expense limits have been deeply flawed, even counter-productive.

As a result, when the coalition agreement was drawn up in 2010, it was back to attempting to reform political party funding. Despite an independent, respected committee carrying out the review – the Committee on Standards in Public Life – its proposals died almost as soon as they were published this month. This is because the package of restricting large donations and putting trade union donations on the same footing as other donations required a balancing item: making up for the cuts in funding those would produce with increased state funding for parties. None of the main parties are willing to publicly speak up for such funding at the moment, so killing the package.

There are two faint possibilities of resurrection. The sums involved (c.£100m) are significant but not unthinkable put against the overall level of government spending. Introducing the committee’s plans would cost about the equivalent of introducing directly elected police commissioners, for example. It is the sort of money that can be found if there is a political will, and if something of a similar size – which is not popular with the public – can be found to be cut, just possibly the proposals can be resurrected from within the coalition.

The other possible source of resurrection lies in an unlikely quarter: the trade unions. The strong historical links between trade unions and the Labour Party means that any proposals which would curb the amount unions can give to Labour are fiercely opposed.

But Labour is not the permanent party of government.

Requiring union members to opt in explicitly to make donations and choose which party they wish their funds to go to would certainly hurt Labour relative to other parties. However, becoming the conduit of mass funding to all the main political parties (remember just how many trade unionists vote for parties other than Labour) would make other parties pay more attention to the concerns of trade union members. It may weaken support for Labour and reduce the role of trade union bosses, but it would strengthen the political influence of trade union members. Were it not for the weight of history, this move would make sense. As it is, it is very unlikely.

This is a great shame. The Committee on Standards in Public Life has done its job and done it well, independently and promptly coming up with a well thought out package of reforms to deliver what politicians have said they want. What it needs now is for politicians or trade unionists to be brave.

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