Reform of political funding mustn’t result in taxpayers carrying the bill for parties

Matthew Elliott
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ALLEGATIONS that “the rich” can buy access to our politicians is massively damaging to our democracy. It is therefore critical that the government takes action after yet another money-driven political scandal this weekend, which resulted in the resignation of Peter Cruddas, co-treasurer of the Conservative party.

Labour’s cash for honours scandal is fresh in many people’s minds and, once again, millionaires and party funding are in the political spotlight, except this time it’s the Conservatives.

The fact is that the future of party funding is a matter that they all must carefully consider. There are those who would like political parties to be entirely funded by the taxpayer, but this is the worst of all possible worlds.

The argument in favour of only using taxpayers’ money to fund political parties is that it removes any chance of impropriety or scandal, but this can be achieved without going cap in hand to the public.

The reason that the Conservatives are so reliant on small number of a millionaire donors, and Labour are so reliant on big, rich trade unions, is that they have let their connections to their voter base atrophy. They need to reverse this atrophy and move away from a small number of people giving large amounts to a larger number of people giving smaller amounts.

Those who favour state funding point out that it would cost only something like 50p per voter, per year, to clean up politics. But you can bet that this would increase over time. With all three political parties depending solely on taxpayers’ money, there would be a huge incentive and opportunity for them to come after more of our money.

When local authorities used taxpayers’ money to run council newspapers, stuffed with propaganda about how great your local council is, Eric Pickles called it “lobbying on the rates.” Campaigns cost money and telling political parties that they could bill taxpayers for everything would make them super-lobbyists, certain to come after more of our money. The medicine would be worse than the sickness.

When he was in opposition, David Cameron said that he wanted a cap on donations. He should now consider this again. The level this cap should be set at can be decided with a sensible discussion about a reasonable level at which to limit donations.

To the extent that it would reduce big-money politics, a cap is a good idea. But there is a serious danger that some might use it as a justification for taxpayers to make up the shortfall as party coffers suffer. The cap would also have to apply to the trade unions, not just individuals, if it is to be completely fair. Without some serious leg-work and effort to reconnect with their grassroots, all three parties would suffer under a cap (unless it was set unduly high).

It is right that people can talk to their politicians, but they shouldn’t have to pay for it. Equally, it is unlikely that donors have that much influence over policy. Various figures might boast that they can get rich businessmen the Prime Minister’s ear, but this shouldn’t be taken as fact.

For example, it seems more likely that it was the Treasury’s figures and George Osborne’s number crunching – alongside a range of representations from groups such as ourselves – that saw the 50p tax rate slashed to 45p. It seems highly unlikely that it was one rich donor or one Conservative party treasurer.

Top donors might have greater access than ordinary members of the public, but there is no proof that a single policy has changed because of this access.

We already provide money for opposition parties to ensure that they can have adequate staff to hold the government to account. All parties also benefit indirectly from taxpayers’ money through free party political broadcasts and free delivery of leaflets at election time.

Taxpayers already give enough to political parties. Moreover, why should Labour voters pay for the whole of the Conservative party and vice versa? What is needed is greater transparency in donations, not politics paid for by the state.

Political parties of all colours need to get back in touch with their grassroots. As democratic institutions they should raise money from grassroots donations and events, and not look for a taxpayer bailout. State funding of political parties is not the answer. Steps to stop potential conflict of interest require greater transparency, not more taxpayers’ money.

Matthew Elliott is chief executive and co-founder of the TaxPayers’ Alliance.