Time for Ed and Cam to grow up on funding

by Peter Watt

The cringe inducing video of Peter Cruddas promising supper with Sam and David with comic buffoonery was still leading the news.  The nod and a wink about the promise of policy input into (something called) the number ten policy committee of course took this to another level.  At a stroke it went from being just another “cash for access story” to “cash for policy” – the real daddy of political sleaze.  Having said that, I was actually still quite optimistic on Sunday, maybe this time there would be a political deal; maybe this time our politicians will sort it out; maybe this time there would be legislation fundamentally reforming the funding of political parties?

But by Monday evening the optimism was dashed.  Once again the ugly head of tribal politics intervened.  Ed Miliband and Francis Maude stood at the respective dispatch boxes and shouted at each other.  It was horrifically depressing.  Neither of them in my view did politics any favours, despite the supportive bellowing from their respective benches behind them.  The public, to the extent that they were watching, must have thought, “WTF was that” because it certainly wasn’t edifying.

None of the parties has much to boast about here.  Each has their list of scandals involving party and MP finances.  It is all too easy to get dragged in, as I very well know. Some scandals involve people trying to personally gain while some involve mistakes, or are the result of playing within the rules but not within the spirit of them.  All though, involve a further nail in the coffin of the reputation of politics, as a sceptical public do not draw any distinction as to the motives.  I know that I certainly regret my part in the succession of stories that have damaged politics.

Now if someone decides to feather their own nest and act corruptly there is probably not much that we can do about it, but there is something that we can do to reduce the risk of other funding scandals.  Because the harsh truth is that the current system encourages the parties to push at the boundaries of the legislation passed ostensibly to clean up politics.  Just as people perfectly reasonably employ accountants to help them avoid tax, so political parties employ people to maximise the income that they can receive.  After all, why should they turn a gift horse away?  So loop holes are found and exploited.  Legal?  Yes.  Acceptable?  Certainly not to the public.

But politicians do not generally give a stuff, as long as the money is there when they need it.  They don’t care where it comes from as long as when they want to produce another leaflet or campaign in response to another polling blip the money is there.  And no matter how tight the funds are they always assume that the money is there to employ their favourite advisor irrespective of the absence of relevant skill.  They don’t care because it is not their problem – it is the party fundraisers problem.  The politicians don’t want to get their hands dirty so they get others to do it for them.  Oh they know that they exert pressure for funds to be there, and they know that this means that rules may have to be obeyed in technicality rather than spirit.  But they don’t care.

I remember a prominent politician introducing me to a “friend” who wanted to give the Labour Party money.  I met them and thought it might be a little “grey” as to whether we could accept the money – legally we probably could but it wouldn’t “smell” right.  I went back to the politician and said that it was a non-starter, but they urged me to try and find a way to get the money in, while making it clear that they didn’t want to know any more about it.  I took it no further, but the implication was clear – it was OK for me to take a risk but not them.

I was reminded of this when the CPS finally confirmed that there was no case being pursued against me for “donorgate”.  As I said at the time, a little crossly it must be said:

What is not tolerable is that party officials of all political parties should be put in the firing line of the criminal law while elected politicians dive for cover.”

So there is no incentive for politicians to sort the problem. They only really care when it affects them personally.  And if it doesn’t then they look skyward and “tut tut” at everyone else’s problems and emerging scandals whilst hoping that the money is there when they need it, and complaining when it isn’t.  It is all about self and tribal interest coming first.  It is why for instance, they enter into talks on party funding and aren’t really interested in getting a result if it undermines an advantage for them.  There is no real incentive to sort the problem out.

On Monday I was quoted by Frances Maude in the Commons as he responded to Ed Miliband.  He rightly quoted me as blaming Labour for the collapse of the Hayden Phillips inter-party talks on party finances in 2007.  Not only was the quote accurate it was also right.  Labour did collapse the talks because it was clear that the Trade Unions were not going to allow a deal to be done that involved capping their affiliation fees.  It was pure self-interest.

But to be clear, the Tories were not seriously looking for a deal either.  They proposed a cap of £50,000 as it suited their donor profile; they had a lot of people who could donate at that level, pure self-interest again.

But the result of all this, is that we can be certain that there is still a scandal brewing beyond Dinnergate.  It might not emerge for a few months or even a couple of years, but it will break and once again politics will be the loser. Whichever party it impacts, the public will have their belief that, politics is corrupt, confirmed.

So David Cameron and Ed Miliband should grow up and stop shouting at each other on this issue.  They should accept the Kelly proposals and cap donations; further cap spending (and yes that does include Trade Union donations); reduce the size of their operations; become more efficient; focus on engagement and modestly increase partial state funding.  The extra funds won’t be popular but if they stand together they can share the short term pain.

The results could be transformational for our politics but, sadly I suspect that once the dust settles on this scandal, the appetite to do something will wane.  Nothing will happen because our politicians are too weak and self-interested to do anything.

Peter Watt was general secretary of the Labour party


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11 Responses to “Time for Ed and Cam to grow up on funding”

  1. Nick says:

    Isn’t it time for you to wake up and smell the coffee?

    If you can’t get donations from people without forcing them to donate, then the reality is that people don’t want to fund you.

    e.g. Force people to fund you with short money, and violence if you don’t pay. e.g. Where is my opt out from funding any political party? I don’t have one. If I don’t pay my tax (or the pro rata percentage), I will have the money extracted by force.

    For the unions, again its set up to fund Labour. Why should members be forced to fund anything?

    Then we have the modernisation funds. Tax money to unions, who then launder it back to Labour.

    So its yet another example of corruption in politics in the UK.

  2. Peter Watt says:

    Because I think that healthy political parties are an important part of a healthy democracy.

  3. paul barker says:

    An excellent piece but we cant just sit & moan about it. We must all do our best to pressure our own parties to get on with it, there is a deal on the table, ready to be signed & wwe have a couple of weeks at most before the issue gets forgotten again.

  4. Stephen G. says:

    “The results could be transformational for our politics… ”

    Certainly! Once the link with the unions is broken what’s to stop Labour re-branding itself as Progress – honesty is the best policy.

  5. BenM says:

    Too right the Unions won’t countenance Tory siren calls to cap donations.

    Until the Tories clean out their own stinking stables Labour and the Unions are right to defend the Labour / Union link and the funds that go with it.

    Unions are funded by millions of British workers. There is no scandal in that at all. It is a source of pride that Labour is the voice of workers.

    The Tories can go to hell (which they seem to be doing pretty fast anyway).

  6. madasafish says:

    I’m all for funding political parties and forcing Parliament to control its own spending.

    With comments like BenM and his attitudes it is not going to happen. (if he made those comments about Pakistanis, he would be thrown off the site)

    As MPs cannot be trusted to control their own expenses and appear to have learned nothing over the past 5 years, the public will never support it.

  7. Hi Peter, I thoroughly agreed with your analysis of the Bradford West election on the world tonight interview 30th March with Carolyn Quinn.
    Labour are likely to see more of this hammering, if the homogeneity reamians.
    Try and tell our labour MP’s and leadership and I feel they our deaf to our experience, back in the real world of community contact and grassroots actvivsts.
    Still, we are wrong and they are right(in all senses of the word). welcome to the wilderness due to indistinguishable, bland no alternative, neoliberal political elitism.
    Ho Hum

  8. Dear Peter

    You seem to have a convenient memory concerning state funding and Labour Party policy. Remind us of the resolution passed at Party Conference in 2006. I seem to remember it led to a very rare event, namely an Emergency Meeting of the National Executive Committee to reassert party policy concerning these matters.

    Your account is a travesty. For a different perspective read my coverage in Chartist July 2006 http://bit.ly/H6MnmX, and March 2007 http://bit.ly/H6My1z

    What I didn’t know at the time of writing the second article was that last ditch representations to Haydon Phillips to ignore Labour Party policy were made by none other than the then Leader of the Labour Party, Tony Blair, who met Haydon Phillips on or around 30 November 2006.

  9. Peter Watt says:

    Funny enough Peter, I was directly involved in the talks whereas you weren’t. But don’t let that stop you 😉

  10. Stephen says:

    I see a few problems with this debate:

    (1) many haven’t moved on from the 1950s in understanding that most people in the electorate don’t package their political views into nice convenient packages with Party labels, which can be agreed on by those Party democratic structures if that was ever the case. Most people only get motivated by one or two single issues and the general economic situation. How people interact with each other is much more varied as well – there is a lot of talk about Twitter, but all the other forms of communication still exist and are used by different groups. What all this means is that people are much less prepared to give their time and money to political parties (but they will give to single issue campaigns) yet at the same time you have to communicate with people in a lot more ways than used to be the case. This means parties have to work a lot harder to attract revenue/volunteers at the same time as seeing a large increase in their costs.

    (2) Marketing techniques have come on by leaps and bounds (and yes you do have to market political ideas), but there is a lot more of it around. If you are to be effective in marketing anything nowadays, you have to compete with a lot more other messages than used to be the case and you need increasingly sophisticated (and hence expensive) techniques for reaching your target audience. Once a rival party has got access to those techniques and databases, the reality is that you have to pay to do the same in order to remain competitive. Look at how all the major parties now use call centres for voter identification.

    (2) We are deluding ourselves if we think that the Trade Unions do not use (and abuse) money, which they have collected from individual trade unionists, as a means to try and get their way politically. I have absolutely no problem in Trade Unions get involved in discussions within the Labour Party about policy – my problem is when they try and use money as a lever for influence, or when the Trade Union leaders are out of touch and fail to consult their members and in many cases seem to operate as some self perpetuating oligarchy (I’ve yet to have a chance to vote on the leader of my trade union despite having been a member for over 10 years). When individual trade unionists decide to contribute to the political levy and the Union decides to affiliate to the Party – then the affiliation fees should flow direct to the Party regardless of the current state of politics between the Party and the Union concerned. Any individual Party member who tried to vary/delay the subs he paid based on current political discussions would quite rightly be told that wasn’t the way the Party operates.

    One of the effects of the parties being limited in funds and the ability for them to target themselves more effectively is that they concentrate on what they see as key voters in certain wards/constituencies – is that actually they say very little to those outside the key marginals, who are just victims in the overall air war which is conducted through the general filter of the media. This really just adds to the general political disenchantment and places a lot of political influence in the hands of the media – who have a lot more financial and other resources in their hands that the political parties. The likes of Murdoch et al are far from disinterested players when it comes to trying to cut back the level of funding to and spending by political parties. Ask anyone who lives in a non marginal constituency about a General Election and they will tell you that apart from what they see on the TV and in the newspapers they usually little more than an occaisional leaflet from their local candidate and precious little opportunity for any interaction.

    There has to be a more sensible debate about what this means for the structure of political parties. It is quite easy to see how it can be easier for an individual to attract funds for their own more limited campaigns – rather than parties, who have some unattractive candidates/policies – and this has very clearly been the trend in US politics. But parties do place checks and balances on the behaviour of individual politicians – and they do allow the development of political agendas which might differ from those of the media and commercial interests. And then there has to be some sensible thinking about what should be .

    I’m afraid the reality now is that if you want strong political parties that are able to stand up to the media and commercial interests – and are capable of formulating their own agendas and communicating with the electorate as a while then the reality is that such parties will need state funding. I just don’t think that the sums can be made to add up in the current environment by any other means – and if the sums don’t add up, then I’m afraid something has to give. If anyone else thinks otherwise I’d love to see the numbers they are working on – but if you want a sensible debate about the funding of political parties, there does also have to be something similar debate regarding what is the right level of spending. As someone who has seen what happens when you don’t have a choice of properly functioning political parties in other parts of the world, I don’t think this is a debate that can be taken too lightly.

  11. martin rathfelder says:

    If the donation cap was low -,say 500 – then donations could be made by individual union branches, giving them back a bit of power

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