Peter Facey: Five Arguments Against Party Funding - And Five Rebuttals

Peter Facey is the Director of the New Politics Network.  The Network is holding a fringe meeting titled "Party Funding - Saving the Grassroots" at the Conservative Party Conference in Bournemouth on Tuesday 3rd October 1-2pm at the Hardy Suite, Hermitage Hotel.  Andrew Tyrie and Francis Maude will be speaking.

There is a growing backlash in Conservative circles against public funding of political parties.   ConservativeHome has recently announced an intention to campaign against it, and has been joined by fellow Conservative-aligned organisations The Taxpayer's Alliance and Direct Democracy.

While we welcome the debate, we are disappointed at the unwillingness to engage in what we regard as the main issues.  The main criticisms are aimed not at party funding in general, but at David Cameron’s policy of block grants to political parties.

These criticisms are understandable as block grants would do nothing solve any of the underlying problems we face with British politics and indeed would shore up the status quo which is much of the problem.

Indeed, political parties already get a block grant from the state in the form of policy development grants.  This scheme, coming to £2 million, is doled out to all opposition parties with at least 2 MPs in the Commons on the basis of their share of the popular vote.  The grants are intended to promote policy development and blue skies thinking within parties, yet the amount of policy coming out of these parties has not noticeably increased since their introduction.  Instead, they appear to be primarily spent on subsidising party conferences and other policy development initiatives that parties were doing anyway.  Since this frees up cash to spend on other initiatives, it can be said with some justification that these grants are simply being laundered for a different purpose for which they were set up.

Yet block grants should not be allowed to cloud the issue of party funding. They are far from the only system being considered.  In a recent adjournment debate in the Commons on the issue of state funding, block grants were only mentioned in passing, while MPs preferred to discuss more elective systems such as tax relief, voter vouchers and matched funding.

To illustrate how over-simplified this argument has become, here are the "five arguments against party funding" as listed by the Taxpayer's Alliance, followed by five rebuttals:

1. The public should not have to pay for cynical, professional campaigning.

Agreed, but it depends on what kind of system is introduced.  Any system of state funding ought to be elective - i.e. individuals should opt into the system.  If they don't like the style of campaigning they won't opt-in, meaning they would have a more direct say in how politics is conducted than without any form of state funding.

2. It ignores the obvious short-term answer: transparency.

The reforms introduced in 2000 may not have been perfect, but one thing they certainly have been is massively more transparent than anything we had before.

Transparency may well be a long-term answer in that over time we can expect it to engender more trust in the system.  In the short-term however, the public does not like what it sees and is turning away from politics as a result.

By all means let's have more transparency.  The loophole concerning loans is should soon be plugged, and we can go much further by sorting out anomalies such as the way the rules on unincorporated associations are being abused to protect the anonymity of rich donors.  But let's not kid ourselves that these measures will, by themselves, suddenly transform the poor public image of political parties.

3. It takes us further away from the real solution: more local power and more local participation in politics.

We certainly agree that greater local power and participation should be a key objective and it is certainly true to say that block grants, would do nothing to achieve it.

But elective systems are designed precisely to encourage participation: parties would only get the money if they could persuade the public to sign up.

Dependence on large donors is a significant factor driving the centralisation we have seen in recent years; local power will be reduced far more drastically by leaving the funding system as it is than it ever could be by introducing public funding.

4. Countries with taxpayer-funded parties still suffer from corruption.

We must be realistic here: there will always be temptation, and there will always be weak people who succumb to such temptation.  Whatever system is introduced, we will need to be vigilant and introduce safeguards.  That isn’t an argument against public funding, especially given the current political climate where "sleaze" stories are filling newspaper column inches: it is an argument for getting our reforms right.

The one thing we can be sure of is that if we do nothing then "sleaze" stories will continue.  Indeed, as party politics continues to decline at a local level, they are likely to intensify.

Again, it should be pointed out that most abuses of public funds are found in countries that operate some kind of block grant system.  Tying public funding to individual taxpayers makes the system harder to defraud.

5. There would be less incentive for the parties to listen to the public and less incentive to improve their campaigning.

Not if we specifically introduce those incentives into the system.

Under a matched funding system, where parties would be entitled to a pound of public money for each pound donated to them (up to a limit of, say, £100) for example, political parties would have a massive incentive to recruit more members - especially if this system were introduced at the same time as a cap on individual donations. Recruitment would, once again, become a major focus of political parties and persuading people to join would necessarily involve listening to them.

It is certainly true that a block grant system would have no such incentives, and we can all agree that such a system should not be introduced.  But to pretend that all proposals are equally at fault is simply absurd.

***

It is not beyond the wit of man to devise a funding system that won't pay for the Prime Minster's wife's haircuts.  While we accept that the case for party funding has yet to be accepted by the majority of the public, indulging in simple sloganeering rather exposes the hollowness of the anti's case.