24 October 2008

State Funding Of Political Parties Would Save Taxpayers Billions

The Tories have never been serious about reforming party funding because...
they have always had the most to gain from their large donations from foreign 'businessman' being kept secret. Whether it be donations from Cypriot fraudsters, Russian gangsters or US banking swindlers, the Tories kept their donations anonymous through their 18 long years in power - it served them well.

To their credit when Labour came to power it had a sincere (if half hearted) attempt to stop this (by outlawing foreign individual donations and making all large individual donations public) but ended up getting their fingers burnt by a gleeful Tory press as they reluctantly copied the Tories who were exploiting loopholes in the law. The Tories were always better at hiding dodgy donations than Labour would be and especially with a friendly press to help the Tories out by ignoring Tory trangressions of the spirit of the law.

To keep foreign donations anonymous and just on the side of the new law, the Tories channeled them through foreign owned or specifically set up dubious companies registered in the UK. They also kept wealthy individual donors anonymous by describing what were in effect donations as loans - Labour copied them and only Labour paid the political price for this - thanks to the Tory press's biased coverage.

In these strapped times of recession, the Tory press are highlighting any inefficiency they can find in public services to try to create a consensus that tax cuts are the way to help the poor - fair tax could help the poor - as they pay more proportionately than the rich, but don't expect a Tory government to benefit anyone earning less than £40k (i.e the tax cuts will be just for the top 10% of earners). This Tory strategy of tax cuts for the rich trebled poverty and inequality when they were last in power and they still propose the same - Cameron says redistribution has come to the 'end of the road'.

But while both Labour and Tory government have had similarly limited success in improving public sector productivity, one area where tax savings could be made that really would benefit the less well off are ignored - cleaning up political donations. This is not surprising since those who own the media and large corporations are quite happy to have political parties in their pockets.

While, there are individuals who donate large amounts to political parties purely because they aspire to improve governance through a belief in their political philosophy/ideology, I believe they are in a minority. Most wealthy individuals and organisations who donate millions want much more back in return - and they usually get it at the taxpayers expense. Billions of pounds of business and concessions come their way for the few million they donate - this is not the way to run a true democracy.

Like electoral reform which has been kicked into the long grass by the Labour government, funding reform has never truly got off the ground either. Labour's attempts at reform have been half hearted and the Tories pose as fair but offer little but 'dealbreakers' (wanting to put unions with millions of members in the same category as a wealthy individual - for obvious partizan reasons).

The Power Inquiry offered a simple way forward by suggesting allocating state funding decided by registered voters on the ballot paper. Limit all organisations (unions and companies) to £1000, ditto individuals and ALL donations AND loans have to be declared. This looks highly unlikely to happen under Labour and the Tories will almost certainly scrap even the present inadequate rules to get more anonymous foreign donations in their coffers - the whole thing stinks and the people know it. What they don't relaise is that state funding is the way out of this mess.


  1. Funding of political parties is a matter which is unlikely to be improved much by the parties themselves. Why should they be allowed to make up the rules by which they conduct our public affairs? One way around this problem is to introduce the citizen-initiated referendum CIR. This can be used to tackle issues which the party (or parties) in power cannot or do not want to approach. More about CIR may be found via http://www.iniref.org/steps.html and more detail in Journal of the Association for Accountancy & Business Affairs 2006 http://visar.csustan.edu/aaba/aabajourVol5-No1.html

  2. Switzerland governs largely by referenda - it is very costly and still at the whim of the media narrative of the hour.

    Certainly more referenda in the UK - on constitutional issues would be of benefit - but in the day to day running will still need representative democracy IMHO. Both are flawed when the rich and powerful control so much of the levers of power. Only a mass reinvigoration of the party system - that can only come from a grassroots movement, will change any of this - heres hoping :o)

  3. "Switzerland governs largely by referenda - it is very costly and still at the whim of the media narrative of the hour"

    What contempt you have for democracy.

    "Certainly more referenda in the UK - on constitutional issues would be of benefit "

    What about holding the referendum your party promised at the last election?

    I'll answer my own question: fat chance because they're a bunch of lying trash.

  4. I was sat wondering if politics, and politicians, wee quite as bad as we think and I came across this blog. Mr Harding's ever post shows exactly why we hate politicians so much.

  5. That should be 'were' and 'every'. Silly me.

  6. TT: Democracy is a belief in the 'wisdom of crowds' and this is something I do believe in despite a distorted media - but people do need to be informed to make informed decisions - it is simply not possible to be informed on every subject - which is why we have to elect 'experts'. Granted this can be even more imperfect - especially when we have an electoral system that doesn't even represent the majority view, but referenda on every subject is just not practical and is even more expensive than a billionaire's holiday on a yacht.

  7. "it is simply not possible to be informed on every subject - which is why we have to elect 'experts'"

    Yeah, we tried this. It didn't work too well. They turned out to be control-freak fascists with a God complex, who actually turned out not to be experts at all

    Democracy, individual liberty and limited government is the answer. You will disagree, because you would hate limited government. For you, government must be constantly churning out more and more useless, poisonous legislation, fiddling furiously as Rome burns.