Labour isn't fit for its purpose

Sir Jeremy Beecham, Chair of Labour's NEC, admitted quietly on Friday that donations to Labour had "disappeared" since the cash for peerages scandal was uncovered. He said he was considering requesting the Phillips inquiry to ask for more government money to cover Tony Blair's security at all Party events.

The Telegraph's front page features a starker story today:

• Labour may not pay September's wage bill for its 230 employees
• Labour MPs will be asked to cough up £1000 out of their salary
• Unions such as Unison were being leaned onto provide more money
• The Party's accounts are described as "woefully insolvent" by a senior accountant
• Lord Levy's fund-raising department is being disbanded, making several of its key employees redundant
• Voluntary redundancies are being sought amongst staff at its northern office in Newcastle

Labour deny the first three points, but it would be politically significant if Labour really is courting the Trade Unions for more money. Like government grants, their funding would not come without strings so we would expect more of a "true Labour" manifesto at the next election rather than a New Labour one.

Considering that the number of Labour Party members has more than halved whilst they have been in power, and the number of its Councillors dramatically reduced at local elections, its ability to put up a decent fight at the next election has got to be seriously questioned.

Conservative Associations were recently urged to raise annual membership subscriptions to at least £25 by January, although this would just bring them closer to the current membership rates of the other parties. Pointing out that the Conservative and LibDem accounts were hardly ship-shape, the Telegraph's leader warned of renewed calls for full state-funding of political parties:

"This is an idea that must be shouted down at once: rather than imposing an ethic of good housekeeping on the parties, it would merely encourage them to waste more of our money instead of their own. A better and far more popular approach would be for the leaders to agree that the whole edifice of British party politics must be scaled down for the general good."

Political parties do of course have a vested interest in funding themselves the easy way, but Conservatives should resist this. It would not only be staying true to our principles, but - assuming we can keep the faith of our own activists - it would stop a dying Labour Party being bailed out by the taxpayers.

Deputy Editor

Comments

[i4mp]

State-funding would truly be the last nail in the coffin for robust and democratic party politics.

[malcolm]

Unfortunately I'd heard from a fairly senior party worker recently that our funding had collapsed too.I very much fear now that State Funding will be passed and greedily accepted by all parties.
The same party worker also told me that Associations raise less than 10% of the money needed by CCHQ.Can anyone confirm that?

[Tom]

The Tories have to get in right now and make sure there's no possibility of Labour getting state funding to weasel its way out of this one. The obvious line to take would be how can they be trusted with the country's finances(which they can't), when they can't manage their own?
This story is such a gift to the Tories if they play it right, as the themes are exactly the same as the key themes they should be hammering home from now until the next election: Labours financial incompetence coming home to roost, and Labours total inability to take responsibility for their own actions.

[Ted]

malcolm
http://www.electoralcommission.org.uk/templates/search/document.cfm/16891

Gives you the Party accounts - only £843,000 in membership income to the central party out of £24,000.000 income so about £3 per member.

Excluding campaign expenditure the Party spent just under £24 million so to be fully funded from membership it would need to raise about £100 per member. Commercial activities don't seem very commercial as costs are just below revenues.

We'd need lots of major donors with proposed maximum £50,000 donation (200 or so) to cover campaign expenditure (working at average £10m per year so as to even out across GE, EU & Scots/Welsh elections).

So wthou tax payer funding the Party is looking at membership fees of about £100 per member plus hundreds of donors willing to contribute £50,000 a year. Possible yes, achievable?

Labour is in worse case as it has no assets as such - and as its in Govenment I expect it will look to taxpayer as financial lifeline (the Conference Security costs shows the first attempt).

[David Belchamber]

If the reports are true, Nulab won't be able to afford a GE in the near future.

[NigelC]

If any party cannot raise funds from its membership because of a paucity of ideas and enthusiasm I see no reason for the state to fund it.

[malcolm]

Thanks Ted.Your post highlights what a difficult situation we face.FWIW I would favour increasing the maximum donations allowed (as long as it is fully transparent)rather than acceding to state funding which would be a disaster for democracy and though they may not be able to see it now probably a disaster for our politicians.

[John G]

If the current state of the local Conservative Association of which I was once an officer is in any way typical of OUR party, I wouldn't be inclined to shout too loudly about this.

They had to downsize their HQ because of lack of funds and are now in rented property. Even the local Conservative Club is now disaffiliated.

I have since moved and now belong to an asociation which is in better shape, but nevertheless struggling.

[Donal Blaney]

NigelC is bang on. If parties cannot enthuse even their supporters to back them financially then why on earth should the public as a whole be expected to pay for them?

[Patsy Sergeant]

I quite agree Donal @ 10.10. This government has wasted so much money - taxpayers money - on things like spin-men (I dislike calling them spin-doctors, as that implies that they are doing some good!, yes I know it could also mean 'doctors the true figures'!) and unnecessary quangoes, and yet more advisors, that if they got rid of only half of those overpaid time-wasters, they could save themselves a lot of money.

Its pitiful that we should be expected to dig the labour party out of penury, WHEN THEY HAVE BROUGHT IT ON THEMSELVES!!!!!

[tapestry]

If we charge every voter aged over 21 in the Open Primaries £5 to vote, and we attract millions of voters as with the London Mayor election, our problems might be over.

[Gildas]

"We'd need lots of major donors with proposed maximum £50,000 donation (200 or so) to cover campaign expenditure (working at average £10m per year so as to even out across GE, EU & Scots/Welsh elections)."

No. Wrong way round. We need lots and lots of minor donors (not just membership income).

Take a look at the US:

The Democrats have a smaller number of big donors.

The Republicans have a vast number of individual small donors.

The Republicans consistently clean the Democrats' clock at fund raising - even this year where all the media are telling us the GOP is doomed, the RNC is way ahead of the DNC in the money race.

And the GOP advantage in individuals pays off in other ways too - witness the 72 hour plan they closed the 2004 election campaign with. Donors and other registered supporters manned phones to registered Republican voters in their areas and key states to get the vote out.

[James Maskell]

tapestry, charging voters a fiver to do their right as a member of the party is out of order.

Lets not forget membership subs are going up to 25 quid.

[Ted]

Gildas

Agree it's better to have many small donors - was giving an example of just what sums we are talking about. The membership has to find in £35m a year to run the central party plus the costs of local organisations. So we are probably talking of average of £150 plus per member. If you take account of lower membership fees for students and older members that rises significantly for the remainder.

Re-the US which does show campaigns can be financed on smallish private contributions. In the US Presidential election individual contributions (limited to $2000 per donor) came out at $617m - around 50% of total but individuals and organisations also contributed through action committees etc. However taxpayers contributed about 20% to the campaigns (the US brought this in to reduce corruption much as is being discussed in UK).

[James Maskell]

Its been confirmed, the membership fee is going to 25 pounds a year. Well done Cameron, you may well have halved our membership. Our membership has a large proportion of elderly and financially struggling members. I wont be able to get 25 quid together by November when my sub is due.

Round of applause for Middleton and Cameron, youve just priced out a vast swathe of people from being Tories. We have an election next year and we need the support. Cameron is harming our chances of winning next year.

[James Maskell]

Its been confirmed, the membership fee is going to 25 pounds a year. Well done Cameron, you may well have halved our membership. Our membership has a large proportion of elderly and financially struggling members. I wont be able to get 25 quid together by November when my sub is due.

Round of applause for Middleton and Cameron, youve just priced out a vast swathe of people from being Tories. We have an election next year and we need the support. Cameron is harming our chances of winning next year.

[Andrew Woodman]

If we're not careful, the very same article could be written about the Conservative party sooner than you may think.

[malcolm]

Sorry to hear that James.But I think increasing the membership fee is infinitely preferable to bring in state funding. It's still only the price of a pint of (cheap)beer a month.

[David Belchamber]

I think that a limit should be applied to how much any party can spend on electioneering for a GE, which in itself might lead to a welcome reduction in expensive spin.
Secondly, there should be a watchdog to check that the governing party does not pass off election expenses as government business.
Thirdly, there should be a limit of, say, £50,000 for any donor, individual or corporate.
The balance therefore would have to come from subscriptions and smaller donations.
With luck, all that would lead to shorter but more honest campaigning, because parties would have to concentrate more on what they have to offer than telling the voters how rotten the opposition is.

[Laughing Cavalier]

If the parties really were as strapped for cash at the next General Election as this article suggests they would be forced to drop expensive TV and Poster campaigns. Candidates would then be obliged to get out their soap boxes and go out on the stump speaking to the electorate and engaging in debate. Having to meet and engage with real people would be a salutory lesson for them and we might get better government because of it.

[Matt Wright]

Further state funding of political parties would be wrong and bad for political parties as well as taxpayers. As has been said, if a party cannot enthuse the public it doesn't deserve to exist.

Parties also need to look at whether they are using money wisely. It is debatable what expensive spin artists achieve as against putting money into better local resources to support candidates to win back marginals,

Matt

[Ted]

Matt

I agree entirely that state funding is wrong and that poitical parties need to think about the values of what they spend - good training for Government!

Fact is though that this will mean every party member having to cough up more cash. James Maskell makes a good point about affordability for many student, low paid and pensioner members and we need those people to stay involved. So the conundrum is how can we keep our existing cash strapped members, increase donations from the richer ones and stave off the state subsidy?

The benefits to members of being the cash provider is it strengthens our hand in democratic oversight - the heirachy needs to convince us before it tries to convince the country. State subsidy reduces the members to bit players.

But in the end it comes down to the hard figures - we members have happily gone along with letting a few pay the big bills while demanding a bigger say in how the party is run. There are important elections next year in Scotland & Wales - will the members cough up so we can really take the battle to Labour & the LibDems or do will still look to Lord Ashcroft & others to do it for us?

[George Hinton]

Labour having been caught with their fingers in the till tried to spread the blame and implicate all the parties. Typical reaction from the school klepto.
Now we know, they are up to their eyes in hock to all and cannot pay the bills as no further mugs have been found.
State funding of parties will not clean up politics, if anything it makes it all the more murkier. You only have to look at the EU nations to see just how rotten it all is, embedded and endemic, top down. Indeed, comments that can be applied to the EU itself.
Please refer freely to Daniel Hannan's excellent article in today's Daily Telegraph.
NuLab have got themselves into a dilemma, only by cleaning up their act can they attract new money and sponsors. Cleaning the Augean Stables though may result in self-destruction, as the story filters out, as to just how dirty they have been.
Time to capitalise and demand the removal of all the guilty parties starting at the top with Tony and Gordon.
Ahh schadenfreunde