Party funding - the future is out there (no thanks to me) - RSA

Party funding - the future is out there (no thanks to me)


It is an aspect of stoical wisdom slowly acquired in politics that often our aims will only be achieved on a timescale and in a way which means our own efforts seem irrelevant. That the goal has been reached and that we did our bit - however ineffectual our efforts proved to be - has to be sufficient reward. This is how I try to feel about party funding.

Eventually, I am sure, we will end up with a system which has the two characteristics advocated by almost all independent authoritative inquiries into the subject and which features in most other developed democracies: first, a relatively low ceiling on individual or corporate donations; second, a modest increase in funding from taxpayers.  There are other difficult issues, such as the basis for state funding and what it is allowed to be used for, but the cap and the state funding are the foundation stones of a new system.

It is difficult not to let a conviction that this will ultimately be what emerges increase frustration at the energies wasted and damage caused on the winding rocky road to this outcome.

Back in 2006, working for Tony Blair and having previously written a think tank pamphlet on party funding, I was asked to explore a new funding settlement. The precipitating factor was the cash of honours allegations which led to several Labour advisors being arrested and placed on police bail.

Although the negotiations were behind the scenes, agreeing a basic package with the Conservatives (newly led by David Cameron who was keen to show his statesman-like credentials) proved relatively straightforward. Although historically the Tories have relied much more than Labour on high value donations, Cameron knew how toxic this issue had been for his own Party and how dangerous it could one day become again.

But it was always clear to Downing Street that the corollary of the Conservatives accepting a low cap on donations (a step which many in their ranks thought was wrong tactically, philosophically or both) was that the system of union donations to Labour would also have to be reformed. For, as the GMB's decision to slash Labour's funding underlines, these payments are not simply the bundling up of individual trade unionists' donations but rather lie in the gift of union bosses. If millionaires and company directors were going to be stopped from handing over more than a few thousand pounds to their party of choice, how could it be fair for trade union general secretaries to be uniquely exempted?

This is precisely the argument that Labour will now mobilise as the Party decides voluntarily to deliver its side of the bargain. No doubt Labour is talking to the Liberal Democrats (who benefit little from any form of big donation) about working together to force a new funding framework through Parliament. The irony is that the Conservatives have now little incentive to support the cap which David Cameron agreed in principle seven years ago.

The problem back then was not the blue corner. The deal we had careful put together was sabotaged by anti-Blair elements in Labour's ranks. There is little doubt that they did so on the instruction of those around Gordon Brown - who was at the time keen to grasp any stick with which to beat the Prime Minister.

These past events create awkward questions for both Miliband and Cameron. For the former, what was your stance when there was the chance of trading the reform you are now advocating on union funding for the big prize of an overall cap on donations and more state funding? For the latter, given that in opposition you were willing to trade a donations cap for a reform of trade union funding, are you still ready today to put aside party self interest and create a fairer system?

I watch with interest the crab like crawl of the political establishment to a system which is not perfect but fairer, not fool-proof but less likely to lead to money buying undue political influence. I watch and hope and accept with good grace that when the change does finally come, it will be absolutely nothing to do with all my well intentioned efforts.


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