If I give £100,000 to Amnesty International, or the Church, or my local cats home, no-one need ever know. The charity concerned may need to check that I’m not sending them the proceeds of crime, but they don’t need to publicize my donation if I don’t want it publicized. And rightly so, for in many cases it is of the essence of charitable giving that it should be in secret. Indeed, the Bible teaches us as follows:
“When you give to the needy, do not announce it with trumpets, as the hypocrites do in the synagogues and on the streets, to be honoured by men. I tell you the truth, they have received their reward in full. But when you give to the needy, do not let your left hand know what your right hand is doing, so that your giving may be in secret. Then your Father, who sees what is done in secret, will reward you.”
(Matthew 6:2-4, NIV)
In contrast, if I donate money to a political party, everyone must be told; I shall be subject to extensive press scrutiny of my private life, any connection I have to public affairs, and any business I do for the public sector; my motives will be questioned — it will be assumed, inferred and alleged that I am corrupt and wicked for wanting to assist a political party; if anyone — including many thousands of people beyond my control — should use my money improperly or react to my donation by acting favourably towards me, I may be questioned by police, arrested, and have my public reputation and personal career destroyed. Does this seem right?
The following is, if practicable, a highly desirable situation: anyone should be able to give any money they want to, without any publicity, to any political party. Why? For at least three sorts of reasons:
- First, it is an issue of personal freedom. Unless there is good reason to prevent me from doing so, I should be able to dispose of my money as I like without answering to others.
- Second, it is a matter of democratic involvement. If I want to participate in the democratic process, assisting ideas that I want to see put forward, aiming to have the views I myself prefer advanced in a coherent and well-argued way, I should be able to do so insofar as is feasible and reasonable.
- Third, it is a matter of competition and dynamism in the political process. If we limit the donations of the wealthy — either by placing a cap on them or by deterring them from making donations in other ways (such as excessive and negative publicity) then we shall defend vested political interests and make it extremely difficult for new parties to break in.
Let me explain this last point in a little more detail, as I don’t think it gets nearly the airtime that it should. Think of new political movements in recent years: James Goldsmith’s Referendum Party, George Harrison’s Natural Law Party, Ross Perot’s Reform Party, Silvio Berlusconi’s Forza Italia. Each of these parties would have got nowhere at all without multi-million pound donations from wealthy men who wanted to offer a particular political case. I hear people say that political parties should raise their funds from mass membership small donations. But a small political party, just beginning, cannot have a mass membership. Restrictions on donations vest the power of established parties. The consequence will be complacency, stagnation, and poor politics.
Well, perhaps the answer is to restrict how much parties can spend at the national level — “ending the arms race”, as Sarah Teather likes to put it? In business, one occasionally hears calls from big businesses to “end the arms race” of advertising. “If only we didn’t have to spend all this money on advertising,” so they say, “we would be able to sell our products cheaper and at higher quality.” So they call for regulations restricting advertising in their industries. Such requests are almost never granted. Why not? Because their effect would be to vest the power of established brands, and make it almost impossible for new brands and new innovative products to break in. Advertising bans are the tool of monopoly power. Exactly the same principle — in fact, more so — applies in politics. Restricting the power of political marketing will have the effect of vesting the power of the established parties and making it hard for anyone else to break through. Do we think the prospect of new political competitors so terrible? Would we prefer a world without Goldsmith’s Referendum Party, for instance, in which we might well have joined the euro in the first wave? What about a world without the SDP?
Now despite the three strengths I have offered of a system of freedom and privacy in political donations, I am sure there will be many readers who think something along the following lines: Any principle can be defeated by sufficiently strong pragmatic objections. Let’s grant this for now, and see what it means here. Suppose, for example, that political donations were used as a conduit of money laundering. Gangsters might buy a perfectly legitimate political advertising company and/or conference organising company, and then give the proceeds of crime as large secret donations to political parties — then money would then be returned to the gangsters in perfectly legitimate advertising and conference spending. If such practices were sufficiently common, and we found that in practice the internal procedures of political parties were not sufficiently robust to identify money-laundering donations, we could imagine requiring the reporting of large donations to some regulatory body.
So if we observed or suspected criminal practices of this or related sorts, there might be a judgement to make, between the in-principle case for freedom and privacy, and the pragmatic case for restrictions and transparency. Have we observed anything like this?
Answer: No. None. Never. What we have had, instead, were a series of smears from the Labour Party in the 1990s, which Tony Blair now likens to a footballer diving in the penalty area. A dive, of course, is an untruth — an attempt to persuade the referee that one’s opponents have committed a foul when one knows that they have not. But on the basis of these knowing smears — these lies and misleading half-truths — Blair and New Labour attempted to blacken the reputation of John Major’s perfectly honourable (albeit often misguided) government. What is particularly shocking to discover now is that not only did Labour never believe in the specific smears they spread (which was obvious at the time), but that they never even believed in the principles behind the notions of impropriety they offered. When Blair came to power, he promised to be “whiter than white”. He introduced various restrictions on donations, but his party did not, collectively, believe that there was anything wrong in secret donations or any of the other things they banned. Since they didn’t believe there was anything wrong with them, and conceived of their new laws as purely political acts, intended to smear the Conservative Party rather than to “clean up” a politics they knew had never been dirty, they saw not the slightest reason to abide by their own laws, either in spirit or in letter. They had created a series of stupid and unnecessary criminal offences, which they were so convicted were stupid and unnecessary that they did not need to avoid committing them.
Subsequently there have been a series of allegations that Labour did not abide by the rules they set up. Each time they have responded by introducing yet more rules — as if the problem were the lack of restrictions, rather than the lack of will to abide by the restrictions already in place! And this reaction should not surprise us, for the laws they have put in place have only ever been intended to serve a political purpose — that of smearing the Conservative Party — rather than of restricting donations per se.
“Ah, yes!” I hear you cry, “but what about the Unions”? I heard an interview on The World Tonight the other day, in which the interviewer was trying to suggest that there was something “almost corrupt” about Unions giving money to the Labour Party and having favourable policies in return. I simply don’t get this. What on earth is supposed to be wrong with that? That’s what the Labour Party is — it is in the political wing of organised labour, and in particular of the Union movement. Of course the Unions should be able to influence the policies the Labour Party has! I am a member of the Conservative Party. One of the reasons is that I hope to be able to influence the policies the Conservative Party has. I am perhaps a little more persuasive and articulate than some people, and use that as my main tool of influence. But others, less eloquent than I, are perfectly entitled to have their position and beliefs advanced. They organise themselves collectively, and fund people to argue their case for them. Why not? It is perfectly legitimate for them to do so.
And of course is it equally perfectly legitimate for other large donors to fund people to argue for their political views. I see not the slightest problem with this, provided only that the policies thereby purchased are of a general nature. We live in a democracy, and it is ultimately up to the voters to decide. What should matter is people’s attitude to the policies offered and to the reasoning offered for those policies. We have become obsessed with the motives of those arguing in politics. Such an obsession is the luxury of decadence. It is because we don’t think it much matters what policies are enacted that we have come to care less about whether the policy will make the world a better place than we care about precisely why the person arguing for it is doing so.
The only exception I see to this (and even this is highly questionable as an exception) is when a policy relates to the individual who purchases it. For example, there could perhaps be a problem if someone’s donations to a political party purchased him a planning consent on a specific site, or meant that a ban that would apply to all other companies did not apply to his own. I’m not convinced that even this is nearly so much of a problem as is often suggested, but more importantly than that, despite many allegations, I have never seen any evidence that this has actually happened at the national level. Show me the evidence, and I shall consider the case for a restriction.
Thus, I agree that party funding needs reform. The reform it needs is to sweep away the many foolish restrictions that currently exist, which were introduced on the basis of lies for purely political purposes, and which the Labour Party has never seen the slightest reason to obey. All these laws do is to create a sinister impression of impropriety in political funding, and a series of restrictions it is impractical to obey with the consequence that scandal after scandal follows. Reform must equal less regulation here, not more.
A thought-provoking article, Andrew, but sadly I think no politician would have the guts to support you.
Posted by: sjm | December 04, 2007 at 08:35 AM
Charities are regulated by the Charities Commission who check that money is not being mispent.
Political parties have a relatively free remit on policy, much more so than a charity. On the other hand a lot of public sector work now is done through charities. I don't think the General Public would appreciate direct funding of political parties.
Donations to a charity or the cats home may affect policy in that one organisation.
Donations to a political party could affect who forms the government and in the case of a major party could influence legislation and awarding of government contracts.
Trade Union funding of political parties and corporate funding of political parties needs to be stopped. I don't think they need more state funding, it might not be a bad idea though if donations over a certain amount to charities are published though - it might both sort out people claiming to have given large amounts who haven't and to those considering giving donations might help give an indication of what sort of organisation it was they were donating to and possible influences of major benefactors.
Posted by: Yet Another Anon | December 04, 2007 at 09:43 AM
Can anyone thrown any light on a 'Regulated Donee' called Progress Ltd. which has received £ 957,173.16 since 2001 from the likes of Jon Mendelsohn, Lord Sainsbury, Pfizer, Network Rail Infrastructure Ltd, Pharmacia Ltd and Sir Frank Lowe? What is its relationship to Labour and why should Network Rail be donating to it?
Posted by: The Huntsman | December 04, 2007 at 09:47 AM
From what I can see, I either agree with a policy put forward by a government, or I don't. That doesn't change if I find out that the policy has been adopted in response to a donation. Just allow a free for all.
Posted by: David | December 04, 2007 at 09:48 AM
I agree completely with the spirit and the essence of the article . AS for money laundering any political organization which receive funds should have a compliance procedure , similar to any FSA registered company which ensures that the funds received have a legal provenance and can be accessed by the authorities should the need arise. Of course any infringement would be sanctioned heavily in the same way that any FSA registered company would , if found to be used funds deriving from money laundering activities , but that does not mean that donations and the names of the donors should made public.
IMHO this issue arises for the reason that increasingly the progressive consensus in the media has painted donations to Political Parties as sort of bribes resulting from murky deals with the Conservative Party as main recipient . It was as also propagated like you rightly say to prevent donations to the Conservatives while keeping the status quo on Union funding and give a competitive advantage to Labour .This view has progressively been accepted by the general public and it will be very difficult to argue your point, though essentially correct , in the current cimate without having your motives tarnished .
In the meantime I have to say I am rather enjoying watching the Labour party being hoisted by its own petard .
Posted by: Michele Imperi | December 04, 2007 at 10:05 AM
Focussing on your biblical quotation, if donations were genuinely anonymous then that would sever the public perception of correlation between donor and peerage. It would also eliminate the aspect that one can purchase action in a certain policy direction that a party might not otherwise have adopted.
I favour measures that reduce the overall cost of the political process, with all placed on as near a level playing field as practicable. If parties cannot attract sufficient public support, then there is no God-given right to expect taxpayers to step in with subsidies.
Posted by: Ken Stevens | December 04, 2007 at 10:25 AM
I'm from a modest background, so I perhaps look at subjects from a different angle.
The Conservative Party, and perhaps others, have the £1,000 club (or something like that) and other clubs and so on and so on, all donating money to the cause, but in a slightly different way. Fine by me, I couldn't afford it, but I don't immediately see any wrong with this approach other than this might not address every level of income or willingness to assist.
How about trying to encourage a £12 club, with subscribers paying £1 a month by direct debit straight to CCHQ. Little and often might be a better way of stabilising your income, than sitting on edge, with bills to pay, waiting for big donors to come along.
Millions of people are supporters, but would never wish to join the party, but they might be persuaded to donate a small amount to help oil the machinery.
I'm not sure how you would promote such a scheme, but it's just a thought.
Posted by: Jim Tague | December 04, 2007 at 10:37 AM
Ken,
So, you seem to be saying that we might have a system in which you can choose:
a) Your donation is known to the Party, in which case it must disclose it to everyone.
b) Your donation is not known to the Party, and need not be disclosed.
Now that *is* an interesting thought, and might even be attractive if it could be made to work. I see two problems, though:
1) How could we counter the money-laundering case I mentioned?
2) How could we prevent it "becoming known" who the donor was?
Perhaps these could be got around in the following way: The Parties could appoint an official whose job it was to establish the propriety of otherwise-anonymous donations - he would be the only person that would know where they had come from, and would report any suspicions to the police/FSA/etc.. He would not even inform that Party that major donations had been made. If senior officials come into knowledge that large donations have been made, we could charge them with a duty to register their suspicions or knowledge with some donations ombudsman, who would use his judgement to determine whether and when he should release the information he was given (e.g. it would be normal to release such information if it came to be known that there were professional dealings between the senior officials and the suspected donor). But normally privacy would be respected.
I think a system of this sort might be acceptable to me. I'd have to think about it. What do others reckon?
Posted by: Andrew Lilico | December 04, 2007 at 10:45 AM
How about trying to encourage a £12 club, with subscribers paying £1 a month by direct debit straight to CCHQ. Little and often might be a better way of stabilising your income, than sitting on edge, with bills to pay, waiting for big donors to come along.
There are admin costs with managing accounts, is as little as £1 a month really practical?
If you are trying to help people from a poor background donate, most won't have Direct Debits anyway, many people still don't have cheque books or even access to an ATM.
Posted by: Yet Another Anon | December 04, 2007 at 10:45 AM
Andrew,
Democratic politics costs £1.3 billion a year (paper published by Andrew Tyrie MP).
During the course of a Parliament an MP receives over £1 million in salary and expenses. (many of the expenses used to be paid by the Parties e.g. research, communication with electors etc.)
The Conservative Party has received over £40 million in direct State funding in the last ten years.
It is time we recognised that State Funding is here to stay. We should concentrate on trying to get it reduced and accountability for the way the money is spent.
John Strafford
Posted by: John Strafford | December 04, 2007 at 10:47 AM
"What do others reckon?"
This is all a complete waste of energy, when all three parties have already decided to support the extension to state funding.
Posted by: Chad Noble | December 04, 2007 at 10:59 AM
I believe in the strictest possible limits on donations whilst recognising that parties have to fund themselves. The £50,000 cap seems a reasonable place to start but I hope it will become much, much lower as parties become serious retail fundraisers.
Democracies are at their best when power is distributed broadly. One vote per adult citizen. Parties accountable to their members in, for example, leadership ballots. Candidates selected by local people - not imposed. A decentralised state. No party too dependent on the generosity of a few rich people.
I hope, Andrew, the internet will ensure that start-up, break-down-the-barriers parties can flourish in the future. I have no time for Ron Paul but he is largely a grassroots phenomenon. So was Howard Dean before him. Having the deep personal pockets of a Perot, Berlusconi or even Bloomberg may no longer be so necessary.
Posted by: Editor | December 04, 2007 at 11:00 AM
Sadly I don't think the 'smears' of the 1990's were all smears. Cash for Questions was an absolute disgrace and it is to the shame of the Conservative Party that the MPs concerned did not lose the whip nor where they deselected.
Equally this government is up to it's neck in corruption the events of the last few weeks being only the latest example.
We are certainly not in any position to lecture anyone about financial propity because propity does not exist in modern politics it seems.
Consequently disillusion with party politics is rife which is why more people don't vote than vote for any one political party.
State funding, will in my view make this much worse, as would your proposals Andrew. Transparency is absolutely key.
Posted by: MD | December 04, 2007 at 11:06 AM
A good vision Tim, but it will take a new party with decent initial financial backing to achieve it.
Posted by: Chad Noble | December 04, 2007 at 11:08 AM
May I ask what is the reasoning in a democratic society behind a cap of 50.000 in party funding . I think it could even be dangerous in the future . Take Italy as an example . After the scandals of the late 80ies the centre-right parties were discredited and in tatters , and only someone with the funds and organization of Berlusconi could have set up and given the initial push to the project of a new party to represent the interest of the Centre-Right . Obviously he had spotted a "gap in the market" and pretty quickly Forza Italia has becomem indipendent of Berlusconi's funding. Had there been a cap on spending Italy would have become almost certainly a one party state .
Posted by: Michele Imperi | December 04, 2007 at 11:18 AM
correction , I meant to say : Had there been a cap on funding Italy would have become almost certainly a one party state .
Posted by: Michele Imperi | December 04, 2007 at 11:22 AM
Editor … “I believe in the strictest possible limits on donations … £50,000 … ”
Editor you are WRONG … Limits on individual and corporate donations are an infringement on personal liberty and won’t work.
If I had £100k and wanted to support ‘green issues’ I could give it to one of several [front] campaigning organisations - Greenpeace, Friends of the Earth, Soil Association, New Economics Foundation, and so on – but you would prevent me from giving it to the Green Party. Where's the logic?
No Andy,
WE MUST HAVE COMPLETE TRANSPARENCY ON WHO IS GIVING WHAT TO WHOM.
Posted by: Bill Brinsmead | December 04, 2007 at 11:36 AM
Editor,
You say "No party too dependent on the generosity of a few rich people." But "dependent" for what? No Party can flourish under our system unless it secures millions upon millions of votes. Thus every Party is "dependent" for its success upon the support of millions of people. Why does it matter if those millions are not, also, keen to part with their money?
I see political parties as sets of alternative potential rulers. They ask the voters to choose between them, and we do. Now even if you disagree with me that this is the ideal structure for a political party (and I do think that - I believe that concepts such as one-member-one-vote are deeply misconceived) I hope you do not consider my concept of a party *illegitimate* - in the sense that Parties should be *forbidden* from organizing themselves like this?
If I want to set up a political party that doesn't have open membership, but instead just consists of me and 600-odd mates who put ourselves forward for election, and if each of us wants to front up £60,000 to make it work, why should that be forbidden? Democracy is about voting - it is a technique by which we secure an orderly exchange of rulers. It is *not* a requirement of democracy that political parties have mass membership.
Posted by: Andrew Lilico | December 04, 2007 at 11:49 AM
An infringement on personal liberty eh Bill?
What about the liberty of ordinary voters who don't have money to spare and don't want their democracy distorted by the monied special interests (declared or not)?
Posted by: £21,000-a-year | December 04, 2007 at 11:51 AM
No political party can be described as "the needy". They are more properly decribed as the "want-y". The point the Bible makes is that the final recipient as well as intermediaries should not know the source of the funding. Is this what you propose? From the remainder of your article, I think not. To levy a tax specifically designed to support the satus quo would lead to an ossification of politics and further increase the divide between the Nomenklatura at Westminster and their life support system known as the media, polling companies, "think tanks" the lobby et al. I do not wish to fund those policies I believe to be inimical to my country and see no need as to why I should.
Posted by: sniper | December 04, 2007 at 12:00 PM
There are several approaches to this problem.
We could have a free for all as Dave wants and voters can vote on the results of government policy, however it is arrived at. There is a certain libertarian logic to this but it accepts that our politicians can/will be corrupt in areas that don't affect the voters and I don't think many people would be comfortable with that.
We could shift all patronage away from the Prime Minister into a department of the Royal Household, restoring honours to the "fount of honour". HM is rich and grand enough not to be bought by grubby arrivistes. However, the Prime Minister might find life impossible without patronage and i can't see any PM attempting the experiment.
We could continue with the current stupid rules which are postively designed for the employment prospects of little journalists. Someone is going to trip up somewhere and we can then all express disgust and astonishment, adding to the gaiety of the nation.
We could force parties to disclose donations/loans to an official, the standards commissioner, but not to the general public and it would be his job to police cash for honours or cash for policies, making public only those donations which had bought honours or influence. Such an official declaration that a donation was corrupt would have a very salutary effect on ministers. A great idea in theory but without giving the commissioner his own team of detectives how is he going to know that the parties have made full disclosure? I suppose we could up the penalty for corruption so that Ministers would be afraid of whistleblowers in their own departments and offices.
I think we need to separate our easy indignation at failures of process - not reporting a donation from our strange acceptance of corruption - that it is Ok for a PM to sell a policy for a £1m bung to party funds. I never understood why Neil Hamilton got done for taking used fivers to ask questions but Fayed never got done for offering him the fivers.
We have become very tolerant of corruption in the last 15 years having had the cleanest public life in the world. This situation will deteriorate until we have a police force or a government determined to stamp on it or a nation less mired in ennui and cynicism.
Posted by: Opinicus | December 04, 2007 at 12:38 PM
You will never find direct evidence of a developer or land owner, unless they are inept, donating money for a favourable planning decision; that would be strictly illegal.
There are however many planning decisions that are difficult to fathom.
We need more openness and transparency
Posted by: Anon | December 04, 2007 at 01:09 PM
Andrew Lilico 10:45 AM
Andrew,
Shouldn't be any problem in principle with a "Chinese-walled" official responsible for anonymity compliance, as the concept is established in the financial world. As to the donor possibly becoming known by other means, how about automatic disbarment for consideration for any sort of honours, unless spotlessly demonstrable as a public benefactor in non-political areas.
-- Or of course what I'd prefer: that the honours system administration went out of political hands to become a department of the Royal Household.
Posted by: Ken Stevens | December 04, 2007 at 01:20 PM
Editor
Andrew Lillico is right
You and the leader are wrong on this one
If I win £10,000,000 on the lottery tomorrow and want to give it to the Conservatives why the hell shouldn't I???
And yes, we should have a broader base... and we would if CCHQ was not so determined to centralise, group and draw to itself every vestige of support, funding and talent... and then waste it.
Posted by: Treacle | December 04, 2007 at 01:23 PM
It is naive to think that policy cannot be bought with money, enough money, given to the right people, can buy anything. The important thing here is the integrity of those accepting the money. A person with enough money can make most people do anything, that is the power of money. Most humans are by nature greedy and self-serving, they can be bought.
Posted by: Tony Makara | December 04, 2007 at 01:53 PM