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Why we need to reform party financing


by Sunny Hundal    
November 28, 2007 at 9:14 am

New Labour’s latest funding scandal is part of a bigger problem, and one that goes to the heart of why a strong liberal-left movement is needed now more than ever.

Since 1997 New Labour top brass have actively pursued a policy of occupying the centre ground and gradually discarding any notion of what the party stood for. Rather than specific ideals, marketing and positioning (aka spin) would be the way to ensure the Tories stayed out of power. It was no longer interested in or even needed the grass-roots, actively aiming to financially wean itself off trade-union support and money by courting rich businessmen. The unsurprising fall in membership has exacerbated this need to find alternatives.

Gordon Brown has pursued this aim of occupying the centre-ground on policies by enroaching on traditional Tory territory. He wants to build a “party of all talents” not only to imply the Tories were vacuous but because he has no alternative. The days of a leftist government supported and funded by grass-roots movements, standing up for its ideals and convincing the electorate of the viability of those ideas seems to be over. Following New Labour’s lead, they are all interested only in marketing and positioning themselves as the least worst option.

This raises several questions:
1) Is Labour still the vehicle for liberal-left ideals?
2) Or is that only because it is in power?
3) What should be the future for party financing?
4) How can any grass-roots liberal-left movement have impact?

Is the American example relevant here? The McCain-Feingold Bipartisan Campaign Reform Act of 2002 had a huge impact there, especially for the Democrats. The party, if you watch elections there closely, has since been forced to reach out to the grass-roots more than ever before and solicit small donations from people and spell out policies that their traditional base would support. [The Act also had other impact too but I won't go into it here].

My point is this. Surely the best liberal-left position here is a campaign for a party financing reform that forces them to rely on small donations from individuals for their income. They would once again be forced to build and appeal to grass-roots organisations and people, and have to spell out their policies more strongly. It may not make our politics wonderful but I think it will go a long way in connecting the parties with their rightful constituencies again. I don’t want a party of all talents. I want a party that will stand up for my ideals and be able to vote for them. What say fellow Conspirators?
Update: Dave Cole also weighs in.


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About the author
Sunny Hundal is editor of LC. Also: on Twitter, at Pickled Politics and Guardian CIF.
· Other posts by Sunny Hundal

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15 responses in total   ||  



Reader comments
1. Margin4 Error

I’d like a stab at answering the four questions Sunny.

1) Is Labour still the vehicle for liberal-left ideals?

Perhaps not ‘the’ vehicle but certainly ‘a’ vehicle. Even under a pro-market blair Labour created a minimum wage, right to join a union, workplace training reps, creation of the UK’s first ever human rights, and the Freedom of Information Act. And lets not forget, ten years ago secret donations were legal and the norm.

2) Or is that only because it is in power?

Being in power makes it a more valuable vehicle than any others, and of course that makes Labour a less useful tool when Cameron becomes PM in a couple of years.

3) What should be the future for party financing?

A ban on all donations over £1,000 would ensure no individuals carry too much weight by donating large sums. But unions must have a role in a Labour party they created and are a part of so that needs some finessing.

4) How can any grass-roots liberal-left movement have impact?

By highlighting and reporting the influence that specific individuals have within parties and the donations that may have played a part in that.

-

They would once again be forced to build and appeal to grass-roots organisations and people, and have to spell out their policies more strongly. It may not make our politics wonderful but I think it will go a long way in connecting the parties with their rightful constituencies again.

Yep, in the old days we used to call this ‘democracy’…

Niall Ferguson’s Cash Nexus has a good chapter on this topic.

He makes the link between parties seeking new avenues of funding and the massive decline in party membership since 1945.

Laziness/apathy (perhaps justified, I admit) on the part of the electorate and laziness on the part of the politicians (never justified). The idiots always win when that happens…

P.S. excuse me if the html doesn’t work, for I am n00b on such things.

4. Carl Gardner

I like the idea of forcing parties to rely on small individual donations – but I think any plan for reform of funding misses the point of this David Abrahams story. The key to this scandal is a culture within the parties – within Labour at least, I’m sorry to say – a culture of avoidance of whatever rules there are. That must be broken first: otherwise, the parties would simply try to hide major donations so as to get round the “small donations only” rule.

I’m not accusing anyone of an offence here, but PPERA does provide for offences, and I think the only thing that will shock the parties into cultural change will be if one day someone is convicted.

5. Margin4 Error

Carl

I agree that parties will try to find ways around the rules. Lets face it, the recent funding scandals are only recent because new rules were created a few years ago to make big secret donations illegal.

But there is an inherrant risk of getting caught when doing so. Hence the scandal right now. And that scandal is an insentive to stick to the rules, whatever they might be.

Far and away the greatest funding scandals have been in Europe where state funding is the norm.
Kohl has been disgraced and Chirac is now being investigated.
Let’s not mention Italy.
Private funding – properly policed – is probably cleaner.
Agree with a cap on individual donations but if rich businessmen and companies are to be taken out of the equation then so must the unions.

7. Margin4 Error

chrisc

trouble is – unions are not donors to the labour party – they are the party. many labour councillors are put forward by unions, and what of co-op MPs? They stand and sit (as it were) as labour but are actually part of the co-operative movement. Would they have to severe ties?

Likewise surely exceptions would be needed for independents and minor parties. If donations were severely restricted how would an independent candidate raise funds for a campaign and a deposit? (conventionally they tend to stump up the cash themselves).

And of course without a number of wealthy benefactors early on how would the Green Party and Ukip have gained even their limited presence?

I oppose state funding too, and not only because it tends to benefit corruption. Private funding alows for greater diversity. But that being the case, fighting corruption mustn’t be used to force through uniformity of politics.

8. Matt Wardman

I’d support the grassroots driven reform wholeheartedly, and I wonder whether the future for both left and right liberal politics needs to consider the role of Independent locally based candidates.

This is what I posted yesterday:

>Perhaps there needs to be a new politics within Labour based on grassroots co-operative movements – as opposed to the activist driven agendas we see in the Trades Unions.

I see Unions as they are now as centrally driven and reactionary, and I am delighted by Nick Clegg putting the idea of Union members being able to choose which party their political levy goes to on the table. That would be a real step forward for representation of TU members.

My post was firmly in the “what can be recovered from the pile of rubble” mode.

Matt

9. Margin4 Error

Matt
trouble with very local politics is it becomes very cheap to buy a fiefdom. Hence David Cameron’s troubles convincing small numbers of hardline biggots in some areas to toe a more inclusive line. They pay their money (a grand here or there), get their council seat and status position in the local party, and they have ‘earned’ their say.

1) Is Labour still the vehicle for liberal-left ideals?
No, Labour never was THE vehicle – only A vehicle, and not a particularly reliable one at that.

2) Or is that only because it is in power?
Primarily because it was likely to get into power, and particularly because it has got into power (locally and nationally).

3) What should be the future for party financing?
Funding (not financing) should be related to votes gained and must go hand-in-hand with reform of the upper chamber.

4) How can any grass-roots liberal-left movement have impact?
By deciding whether it is liberal or left. While the two are not exclusive, it doesn’t help any movement to wobble in two different directions. Coalitions are built after elections when no majority is apparent, as the voting public can spot stitch-ups from a distance. Pre-election pacts only favour the strong.

11. Roger Thornhill

There should be no state funding. Donations to be transparent all the way back to the individual, including unions. I am against caps, but if there is to be a cap, let it be on the amount permissible to spend at a general election. This reduces the demand for excessive funds.

State funding is a road to entrench existing parties and infest the country with even more of the parasitical Political Classes. Too much money available to fund “careers” of “professional” party lickspittles.

The House of Lords has been screwed up by Labour, but no surprise as it is a typical tactic of them – bugger something up, declare it “broken” then replace it to suit an agenda that would not have otherwise been acceptable.

12. Margin4 Error

Roger

are you saying that a hereditary house of lords that held up all labour legislation and passed without scrutiny even legislation as bad as the poll tax if it was a tory policy was not “broken”?

Agree about state funding (though the state already gives some money to opposition parties to overcome the inherrant advantage of government. And caps are unworkable. Is selling ad boards to one part cheaper than another a donation subject to a cap?

Not sure labour or the tories would want totally transparent funding though. They both like their secret donations.

13. Roger Thornhill

M4E,

Some things were far from perfect, but the aim should be to openly reform, not intentionally undermine and then break something to justify changes.

I do not think the poll tax was as bad as what was before – people voting in high spending councils knowing they did not have to pay for it and councillors knowing they would not get voted out by the minority who were footing the bills – very undemocratic. Many so-called “hikes” were synthesized by the Loony Left councils on purpose to create an outrage. The rioters, bless, were scared they might have to pay for something for once. Result — the pigs ear called Council Tax.

14. Margin4 Error

Roger

I’m guessing you are a tory on a wind up.

you defend a flat tax that cost the country billions and saw war hero pensioners arrested for ‘rioting’

you attack rioters (including those wearing their medals) as poor people who might finally have to pay for something

and you pretend the hereditary house of lords that didn’t even function as a second chamber any more was not already broken.

Thats shockingly blinkered.


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