David Simpson: Fund political parties through a flat rate levy per elector with the recipient chosen via a tickbox on the tax return

David Simpson runs his own computer services company.

> Policy summary

Each year every adult is asked to indicate on their tax return or to their employer where they wish their ‘contribution’ to be sent – this contribution would be about £1 or less per adult, paid by the Treasury to the party, organisation or individual of the voter’s choice. If they do not specify, no contribution is made to anyone. The recipient can be any UK based organisation or individual, whether involved in politics or not.

> Policy explanation

The advantages of public funding through a flat rate levy per elector:

Voters are fed up with politicians generally. Party funding for both Labour and Tory is a focus for that unhappiness. Public response to proposals for the state to fund the parties has been largely negative. But the existing methods are clearly unacceptable, whether it be union money, cash for peerages or large donations from anonymous millionaires. In addition the totals spent by the major parties are grotesque and it's debatable whether they actually contribute to the democratic process. Adequate funding through membership & local fundraising appears to be impossible. It is arguable whether local fund raising is of any real benefit (yes it gets the activists and members involved, but it doesn't raise much and takes a great deal of energy away from what are arguably the more important activities of canvassing, creating and developing policy and bringing pressure to bear on MPs and parties).

This would provide 100% transparency for the parties’ sources of funding.

It would impose an absolute limit on the total spend of each party (the national gross, not just the existing individual member limit) – parties could only spend what they receive through the levy and are not allowed any other sources of funding.

There would be no undue or hidden influence by private individuals, corporations or pressure groups because of their contributions to part coffers. The electorate as a whole will dictate each year how much is given to politics and to the individual parties.

There would be a clear separation between party spending and government spending with a watchdog to check that the government is not abusing its position to promote its own political agenda. Political advisors, 'spin doctors' etc and spurious government PR campaigns would have to be funded from the levy. There would be no Short Money or any other special funding for parties.

This will create a direct link between the individual and what he/she chooses to fund.

There will be a direct link between the success or popularity of a party and its share of the cake, reassessed annually (because decided by the choice on the tax return), regardless of the relative economic strength of its supporters.

Potential disadvantages:

In effect, politicians can decide how much to fund themselves – but all Parliament can set is the amount given per adult – not where it goes, or even if it goes to a political party. If the electorate objects to the global total, they can choose not to give it to anyone, or to send it to their own pet causes and not to politicians at all.

This may promote an even greater separation of the electorate from the political process (because they will have no need to join, participate in or actively support political parties)

A further encroachment of the state into what has been hitherto in the private sphere

There would be no need for a mass party membership (but this might encourage other forms of participation e.g. open caucuses for candidate selection)

A box on our tax returns where we indicate where we want our slice of the funding to go - which can be anywhere, including back to the Treasury (which would be the default if nothing is selected). Anywhere means anywhere that's not actually illegal, and any size - e.g. not just "CofE" but my Parish Church, not the Tories but my MP or prospective candidate - political parties, charities, pressure groups or my Great Aunt Joan. The recipient must be a UK citizen or a UK incorporated body (so no donations to Osama).

Absolute limit - no other donations of any kind to parties (cash or kind) are allowed apart from what is raised through the levy.

A new party/group can decide not to take the levy money, and rely on donations. They must declare everything (gifts, loans and sources - no anonymity). Once established, they can then choose to be funded by the state system. There would be an upper limit on private funding through donations or loans so we don't have some billionaire taking over the country.

Parties would not be allowed to borrow more than say, 20%, of their annual funding. Any borrowing would have to be from a conventional, independent third party i.e. banks or other mainstream financial institutions.

> Political Risks and Opportunities

All parties would be forced to have ‘clean hands’.

The party apparatus would lose control over funding (other than how to spend their allocation); party machines may be weakened.

Parties would need to keep close to their supporters throughout the electoral cycle.

A blip in the polls at end of the tax year could lose a party a disproportionate share of the levy.

Parties may become more cautious, over-sensitive to public opinion – but at least it won’t be sensitivity to opinion polls or focus groups, but to where voters actually send their money, that influences the parties.

Special interest pressure groups could become more grassroots based and richer and therefore more influential (if voters choose to fund special interest groups rather than parties).

Contributions to 'extremist' parties such as the BNP, Islamic or Christian fundamentalists etc may increase.

> Questions for ConservativeHome readers

• Do you think it's a bad idea if the party machines are weakened?
• This would give more power, potentially, to the grassroots - is that bad?
• Do you think current levels of spend by political parties are too low, about right, too high?
• Would this reduce the attention the parties pay to the key marginals?
• Would that be a bad thing? (i.e. the 'safe' seats might find that their electors’ money is going to special interests, or not to politics at all in the conventional sense)
• Should there be a tick list on tax return?

> Costs

Say a total per year of £30 million – the cost per adult would be less than £1 p.a.

The cost of capturing choices, especially idiosyncratic ones (e.g. Aunt Ethel) from tax returns etc Show the details on each adult’s P60.

 

Comments

[John Coles]

Just another tax, paid as willingly as the BBC Licence Fee. It seems that Mr Simpson cannot conceive that some find the present political establishment utterly repellent and have no desire to fund them. I'm sure he is a very successful businessman and I wish him well in that. But the political world already has its own "political businessman" in Steve Norris and that's quite enough.

[aristeides]

If one were going to fund political parties differently, it would probably be along these lines.

A few deficiencies with this particular idea are firstly that a very small minority fill in a tax return and, if they don't, might be a little reluctant (to say the least) to tell their employers about which polictical party they want to pay money to. Secondly, one pound is far too small to administer - the amount would have to be worthwhile which would increase the cost of the proposal by some degrees. Finally, I suspect most donations would go to number one if they could go to absolutely anyone at all.

[Phil Taylor]

I am afraid that this idea is another turkey. The state spends enough without adding another handout. If political parties are waning that is their problem, not the state's.

If parties could only raise money from individuals who are prepared to be identified that would be a policy I would support. This would make them recruit and listen to individuals. This would be a natural brake on their spending patterns as they would only be able to spend on flashy billboards to the extent that their financial supporters would stand.

If ideas have real currency they will pull in resources from well wishers. Let parties and other interest groups do this in the open market.

This proposal will just ensure that a lot of cash goes to loonies like the Animal Liberation Front or Hizb'ut Tahir.

[aristeides]

"I am afraid that this idea is another turkey."

On current form, I am not sure that will stop it getting approved, Phil!

[TomTom]

where they wish their ‘contribution’ to be sent – this contribution would be about £1 or less per adult, paid by the Treasury to the party, organisation or individual of the voter’s choice

It would be very useful for Her Majesty's Revenue and Customs to have more detail for personal profiles of its "customers" and it would save time matching the numbers on ballot papers with voter registration lists...........

[Angelo Basu]

As a businessman, the proposer shows himself to be out of touch with the majority of the population who don't have to fill out tax returns. The suggestion would actually discriminate against a large proportion of people who will have equally valid views on the funding of political parties as those who fill out returns.

Perhaps there is a case to be made to regulate further the way in which parties raise funds and clean up the perception of political funding but this doesn't seem to be it. Anyone interested enough to do an optional part of a tax return will be interested enough to contact the party or body of their choice to make whatever donation they feel fit.

[James Maskell]

Reading this policy I had a flashback to the new internal funding system for the Tories. A fiver per member is taken from each Association, irrelevant of how much each member paid in subs...Cameron killing Associations.

I dont really like the sound of this. The last poster is right about filing tax returns. Not everyone does that so unless another form is made for the purposes of electoral funding (one more form...) then its hard to make it work. Theres too many potential problems with it.

[a-tracy]

Mr Simpson I cannot believe that you are proposing that your fellow business owners call every member of their staff to ask them to indicate their political preference one per year, don't you think we've enough free administration to perform for the government?

How would you discover if the member of staff's vote had been recorded properly and processed correctly - or would this be another threat of imprisonment/fine. Plus I don't want to be Big Sister thank you. I don't wish to know my colleagues political preference.

[Mark Fulford]

If political parties are waning that is their problem, not the state's.

Wrong. Strong political parties are essential to democracy.

As a businessman, the proposer shows himself to be out of touch with the majority of the population who don't have to fill out tax returns.

Compared to the concept, the detail of how each voter's intention is collected is a minor one and easy to solve. For example, it would be a simple matter to include a single-use security number for each voter on Council Tax bills. That number can be used to register funding wishes online, over the phone, by post, e-mail, etc. It is also possible to do it efficiently at the £1 figure, otherwise TV shows wouldn’t make money out of premium rate calls.

However, I don’t think the proposal would succeed in its primary aim: to clean-up political funding.

The proposal requires a very tight definition of who is governed by the rules; what it a political party. Aunty May is not a political party. Nor is the C of E. Less flippantly, nor is a pressure group.

Pressure groups (I guess including CH) are an essential and growing part of democracy, extending individual involvement and allowing people to campaign on single, often local, issues. Pressure groups can’t be limited in their budget to whatever they can raise at a pound a person on an annual exercise.

So on the basis that pressure groups are outside the rules, political parties will simply set up pressure groups as vehicles to fund particular campaigns. When a wealthy person wants to buy influence, their money will be channelled to the pressure group. Job done. Influence bought.

[aristeides]

"For example, it would be a simple matter to include a single-use security number for each voter on Council Tax bills. That number can be used to register funding wishes online, over the phone, by post, e-mail, etc. It is also possible to do it efficiently at the £1 figure, otherwise TV shows wouldn’t make money out of premium rate calls."

If you think you can collect that £1 securely and then give it securely to anyone the "donor" specifies for less than £1, you are a better man than I am, Gunga Din. Who's going to read all the letters and emails saying I would like to give my pound to Terry Jones, Lib Dem council candidate for Orkney?

[Mark Wadsworth]

Yes, with ONE main caveat.

The "tick box" should be on the ballot slip. You vote once for a candidate, and you then can choose whether or not his or her party should also receive the £1. This will encourage people to vote, and encourage them to vote for the party they really believe in. Some of the smaller parties are really only pressure groups (just as important in a democracy) but they could do with the extra funding; it will help them cover the cost of their lost deposits if nothing else.

Also worth mentioning ...

If David Simpson can come up with a way of keeping political party's "hands clean" then I take my hat off to him; there are always loopholes... but in principle I agree.

In "Freakonomics", there is a chapter showing that the amount of money spent on election campaigns bears little relation to the outcome. I believe this to be true - Ken Livingstone managed to get elected as London Mayor in 2000 on a budget of £200,000 or so. Thus if the total budget of the main parties were significantly reduced, this would not harm the democratic process.

[Mark Fulford]

If you think you can collect that £1 securely and then give it securely to anyone the "donor" specifies for less than £1, you are a better man than I am, Gunga Din.

LOL, so I am ;-)

In truth, I had discounted the idea of anyone being the recipient. David Simpson looks like a very decent gentleman, but the rest of us are tight enough to take the quid for ourselves.

[Andrew Kennedy]

It's taken my local tax office 3 years and 9 letters to send me a £700 refund due to the fact they still think I am living at an address I left in 2002! How on earth will they collect and process 35 million x £1 contributions.

I have posted my views on state funding. if anyone is interested, here are the links:

http://andrew-kennedy.blogspot.com/2006/07/get-your-sticky-fingers-out-of-my.html

and

http://andrew-kennedy.blogspot.com/2006/07/further-thoughts-on-state-funding.html

[Wat Tyler]

We're all agreed something needs to be done, including more transparency and perhaps limits on individual donations. But I certainly wouldn't support more grants from taxpayers.

I wonder why David doesn't like the more conventional idea of tax relief on individual donations up to say £1,000 pa? That still means some tax-funded support, but the emphasis remains very firmly on voluntary donations from a mass membership.

[DavidTBreaker]

Hugely bureaucratic; would require Treasury to write millions of tiny cheques to obscure organisations, parties, people and campaigns such as your suggestion of a particular parish church instead of the CofE.

Another tax; we pay taxes for our public services, not for politicians or for people to donate £1 to the obscure organisation or campaign of their choice, they can donate their own money.

Few would do it; it's such a small amount and explaining what to do would take a lot of time, effort and money.

Self-funding; can you give the donation to yourself?

Volatile; parties would be in constant peril of boom and bust funding.

State involvement; politicians would have a blank cheque and could increase the per elector amount indefinately, whilst it is yet more state involvement in people's affairs.

[EML]

No way, get the State out of it.

We just need 100% transparancy and a cap on donations ... surely?

[Graeme Archer]

I must be missing something obvious? Because like EML above I can't see why we need to have state interference in this at all so long as there is complete transparency around who has given how much to whom and quite possibly a cap on donations and party spending. Ticking my tax form to indicate which party should get my quid ... ugh.

[Graeme Archer]

PS But Mr Simpson has at least thought of an alternative which should be commended, and looks like an extremely nice bloke! - sorry to be negative!

[Londoner]

Aristeides quoted: "I am afraid that this idea is another turkey." and wrote:

"On current form, I am not sure that will stop it getting approved, Phil!"

Would it be possible to offer a facility whereby we can register a standing vote against all these policies unless we indicate otherwise? That might counteract whoever it is who seems to be automatically voting in favour of everything, however daft.

Quite apart from the practical objections cited above, the idea that one would ban anyone from giving money to a political party if it also took money through this scheme, stripping all the parties of their members along the way, is totally Statist (even Stalinist).

The one grain one could take from this would be to allow basic rate tax relief on political donations/subscriptions of up to, say, £100 a year, which the party could claim back if the donator/member ticked a box (like GiftAid). This would incentivise parties to get smaller donations and provide a little more money to the parties.

[Denis Cooper]

"Absolute limit - no other donations of any kind to parties (cash or kind) are allowed apart from what is raised through the levy."

Apart from being a gross infringement on the right of the individual to spend his own money as he chooses, unworkable unless ordinary people are going to be totally excluded from political activity and it is all put on a commercial basis.

Eg parties could use some of their funds to pay for companies to deliver their leaflets, but if an activist did it he would have to claim for the value of his time, and if he drove to an area to do it then he should also claim for his mileage. Maybe the wear and tear on his shoes, as well.

All that is really needed is that parties publicise the significant contributions they are receiving as they receive them, and certainly long before any election takes place rather than six months or a year later.

[Opinicus]

Why not make it £1 per vote for each Party with a threshold of £50000 to stop the loony parties receiving any. No bureaucracy involved.
As a refinement, people could withhold the levy by ticking a box on their ballot paper.

[Gildas]

Is it really so difficult to grasp the idea that political parties should only raise their money from willing individual donors? With total transparency. (I'm against donation limits, but of all the restrictions thats the one I'm willing to accept).

If the political parties are skint, that is their problem. Not mine.

[aristeides]

"Would it be possible to offer a facility whereby we can register a standing vote against all these policies unless we indicate otherwise?"

Yes, londoner, it's getting a little out of hand. I am afraid, despite having agreed with the Editor initially that it was not necessary to know the number of votes, it is now becoming imperative to publish them.

David Simpson's suggestion is - as I said - along the right lines in that there is a vague basic principle that statefunding should be related to the number of votes. Because of this Mark Wadsworth is voting yes, although he gives a caveat that is actually a rather different policy. The problem is that even if I did approve of that principle, I couldn't possible vote yes to this idea beause it carries so many other totally unworkable facets and premises with it.

Having said that, I think that the 100 policies is a valid and valuable exercise... I wonder whether they'll print mine!

[malcolm]

Not sure why you have to be so rude John Coles.In theory I think this is a good idea as it is infinitely preferable to State Funding which is what I fear will be forced upon us.However the practicalities don't stack up.Most people do not have to fill in a tax return.

[Frankland Macdonald Wood]

Surely enough said to make this a complete non starter? Telling the authorities who you wish to support with cash does not seem sensible but the real 'killer' is the fact so many do not fill in the forms. We could try the other end of the spectrum and levy a pound to register on the roll each year as 'our contribution to the costs of an active democracy'. To preserve anonymity and to encourage voting, the cash could be shared in proportion to the last election result for the constituency one registers in. A good name for this might be The Poll Tax.