News

Political Lives: David Abrahams 

By Alex Hunt17 February 2014
Politics editor, BBC News website

ED MILIBAND: THE UK IS STRONGER TOGETHER THAN APART 

By David Abrahams

18 June 2012

Revisiting the Arab Peace Initiative 

David Martin Abrahams
January 31, 2011

Finding positives in the 'Palestinian Papers' 

David Martin Abrahams

January 25, 2011

Search

Party political funding

By David Abrahams

24 November 2011


The Committee on Standards in Public Life has finally focused the debate on how Britain’s political parties should be funded. Whether the proposals survive the consultation process is a moot point, but I hope they do.
 
Sir Christopher Kelly’s recommendations, good as they are, still do not ensure the long term funding of our political party democracy.
He recommends an annual £10,000 cap on donations to political parties and restrictions on trade union funding as well as a 15% cut in caps on pre-election spending - and an extra £23m a year of taxpayer support.
 
The first proposal is for a cap of £10,000-a-year on donations from any individual or organisation - including trade unions - to any political party with at least two MPs or two representatives at the Scottish Parliament, the Welsh and Northern Ireland Assemblies.
Nick Clegg, the deputy prime minister is quoted as saying: “The government believes that the case cannot be made for greater state funding of political parties at a time when budgets are being squeezed and economic recovery remains the highest priority.”
The Conservatives' preferred annual cap - of £50,000 per annum rather than £10,000 - was rejected by Sir Christopher as not being a suitable annual amount as it amounted to twice the average salary. Given over a five year Parliament this could amount to £250,000.
 
Under such proposals the £10,000 cap on individual donations and member approval for union donations will almost certainly lead to a fall in income for Conservatives and Labour.
 
The BBC reports that he said trade union affiliation fees could be counted as a collection of small individual payments - but only if members were required to "opt in" to the fees, rather than opting out as at present and if "certain other conditions" were met to "ensure that undue influence cannot be exerted."
 
The Committee’s recommendations are ingenious, but not clever.

The Committee has recommended increasing state funding – at a cost of £3 for every Palace of Westminster vote received for parties who have at least two MPs or representatives in the devolved assemblies - ruling out UKIP, the Greens, English Democrats and others. There will also be funding worth £1.50 a vote in the devolved and European elections.
 
According to the BBC under the 2010 general election results, the £3-a-vote rule would mean about £32.2m for the Conservatives, who got 10.7m votes, about £25.8m for Labour, who got 8.6m votes and £20.5m for the Lib Dems, who got 6.8m votes.
 
Sir Christopher said it amounted to 50p, per voter, per year and said people would understand that that was necessary to take big money out of politics. I can’t help feeling that none of the main parties, and even less the minor parties, will accept this. Judging from the bulletin boards neither will the British taxpayer take this on the chin when budget cuts are being advocated everywhere else.
Why didn’t the Committee look upon political parties as the Treasury looks upon other non-governmental organisations, religions, trade unions and charities? Successful NGOs and religious groups invariably rely on legacy and investment income from property and ethical equity investments.
 
Surely it would take the political heat out of party funding issues if a line was drawn in the sand, from today, which said political parties must live off ethically invested funds and adopt a lifestyle more akin to the prudent think tank, co-operative society or religious group?
 
Such organisations co-exist in society, making a valuable contribution to the society, and whilst all of them would ideally like more funds the debate about the burden on the tax payer or short term interests is never heard.
Political parties could be funded through a bond system, independently managed by professional investment managers whose investment decisions take on longer term horizons.
 
An independent body of trustees - appointed by the state  - to oversee such investments would engender confidence from both the political left and right. I for one would certainly make a contribution into an independently invested political party portfolio, as would many of those with the ability and motivation to ensure Britain’s democracy sets an example for all.
The current system doesn’t work.
 
Today’s recommendations have started the debate which must be resolved by the start of the next Parliament. They’re brave, but not bold enough.