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Funding of Political Parties

Simon Jenkins

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Don't give them an inch. Not one inch. They are a bunch of knaves. They have taken your power, abused it, and now they are after your money. Don't let them. I refer of course to Britain's political parties. They have been caught with their fingers in the till. They have broken the law on the sale of peerages and refuse to admit it or take the consequences. Government ministers have spent two weeks telling lies.

The Honours (Prevention of Abuses) Act 1925 could not be clearer. The penalty for accepting "any gift" for even "assisting or endeavouring to procure the grant of a title" is two years in the slammer. The Political Parties, Elections and Referendums Act 2000 is equally clear. Any gift over £5,000 is declarable, including loans at preferential rates. In addition, any "financial connection" to a party, including a loan, must be declared by a prospective peer.

Nor is that the half of it. The response of the parties to being caught would disgrace a con man in the Old Kent Road. They have said that everyone breaks the law, so who cares? They have said that no one is discussing it in the Dog and Duck. They have said that other countries are worse. They have declared it grossly unfair to deny a peerage to a party donor since he might also be a genuine philanthropist or former flatmate of the prime minister (the Falconer defence).

Not content with this hogwash, they now claim to have a wizzo scheme for curing the problem that they say does not exist. It is for taxpayers to give them the money instead. That way they can stop (not) selling membership of the House of Lords. And if anyone is so cynical as to think they ever did, they have another wizzo scheme to stop them from (not) doing so. It is to let them control peerages in other ways, but the same.

In the good old days, and in better-regulated countries, national constitutions were treated with high seriousness. You had a hog roast at Runnymede or a debate at Putney. You stormed the Bastille or suffocated in Philadelphia's Independence Hall. Constitutions were changed with a sense of ritual and dignity.

In modern Britain a prime minister on a freebie calls up his old friend and tells him to cobble something together for the press. Old-timers such as Ken Clarke and Roy Hattersley are pushed forward to say things like, "Oh God, this is all so disgraceful and embarrassing." The press lobby is squared and everyone writes decorous articles agreeing that the solution to the (nonexistent) problem is to dun the taxpayer and stage fake elections to the House of Lords.

Turn from tough on crime to tough on the causes of crime and note that all this began with an attempt to end the implied corruption of parties taking money from businesses and trade unions. Donations could no longer be doled out covertly by bosses. Parties duly fell on rich individuals, who by their nature had an acute sense of quid pro quo. No problem. Modern government is awash with discretion. There is always a consultancy needed here and a service contract there, not to mention a 50-storey tower, shopping mall or wind farm. As for a peerage, Tony is known for his gratitude.

Blair has created more peerages a year than any national leader, probably since Charles II. But canny donors have realised that they had better cover their backs. A loan was ideal since it could be kept secret and called in if the hinted "gratitude" did not appear. Since the row broke, Labour has dragged all its donors' names through the mud. David Cameron's embarrassment is not so much that his loans were "confidential". Why should lending to the Conservatives "at commercial rates" be a big secret? The embarrassment is that they may not have been commercial and Cameron now has to find the peerages or the loans might be recalled. That is a prima facie admission that the law was broken.

If ever there was a solution staring us in the face it is here. Party money should come from party members. If parties have too few members nowadays, tough luck. Nobody should donate more than £1,000 a year or the motive is bound to be suspect. Here I quote from Tony Blair, who once said that "if the [Labour] party could build up its individual membership it would not need the unions to provide it with cash". To prove his point, in 1992 Blair doubled his Sedgefield party membership to one of the largest in the country, eventually topping 2,000.

When Margaret Thatcher came to power 27 years ago the gross membership of British parties was over two million. Her dismantling of local government and its attendant political activism vaporised over a million of her own party members alone. Blair has since done likewise to Labour. If such levels of participation were restored, British parties would be able to run perfectly reasonable national campaigns, albeit without the extravagances of recent years.

What the Westminster village calls "the only alternative" to corruption - dipping into taxpayers' pockets - is not the only one, merely the only one it can imagine. State-financed political parties, like a state-financed media, are for centralist autocracies. Democratic politics should be voluntary. If a party cannot persuade thousands of people to support it at its grassroots, it is unlikely to persuade millions to vote for it.

The reason why organised politics is declining is that modern parties find it easier to campaign through the national media, financed by rich backers. This produces a vicious circle of declining local empowerment, falling turnouts, plummeting party membership and swelling cynicism. The "death of the local" is all of a piece. Destroy it, as both Conservative and Labour governments have done, and there is a price to pay. That the price should be paid in corruption or by the taxpayer is outrageous.

As for the additional claim that an elected House of Lords will help cure this (nonexistent) problem, that is a joke. The only argument for a second parliamentary chamber is to represent some other "Britain" than the first. That can only be through nomination, indirect representation or truly independent selection. It is a racing certainty that the political parties will tolerate none of these. They will want to keep patronage in house by going for a mix of direct appointment and proportional election from party lists. But these are the same thing. Who decides who gets on the lists? The parties will. Whom will they choose? Themselves. This is merely laundering the old racket.


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