A £50,000 cap on donations would kill the Conservative Party

It was in March 2006 that David Cameron announced that the Conservative Party would seek to introduce a legal £50,000 cap on donations to political by individuals, trade unions, corporations and institutions.

That pledge was made in healthier economic times, and when donating money to political parties was - in the eyes of an increasingly sceptical and cynical public - marginally less tainted an act than it is today.

Yet three years later, the stark fact is that if such a curb on donations were in force, the Conservative Party would not have enough cash to function as an entity.

Apart from people being more nervous than ever about making political donations in the wake of all the "cash for honours" stories, they clearly have less money to spare for such causes in a recession.

And it is my understanding that the Party is very much feeling this as it seeks to keep the cogs turning at CCHQ, with generous individuals regularly being called upon to avert a financial crisis.

If the £50,000 cap were in place now, it is hard to see how the Conservative Party would be financially viable.

One measure which the party has proposed, with the aim of encouraging a wider donor base, is tax relief for donations up to £3,000 - and that is to be welcomed.

Yet there is also an invidious proposal to introduce state funding of parties on a per vote basis, which is the last way that taxpayers should be expecting their money to be spent right now.

As such, I remain of the view that political parties should expect to have to raise the vast majority of their funds through private donations - and that as long as there is transparency about the origin of considerable gifts, there should not be a limit on such donations.

And right now, that is necessary for the Conservative Party to survive.

Jonathan Isaby

Comments

[Gary]

State money for political parties is a non starter, nobody given present climate would exept it. The cap on donations idea is still a good one but needs to be set higher than £ 50, 000. Any cap on donations would hurt Labour more than Conservatives, due to Labour reliance on trade unions.

[HF]

Nonsense.

If each Union was limited to £50k then the arms race of spending would ratchet back to a much lower level.

Locally fund raising is still mired in inefficiencies and rich Associations pile up the cash which poorer Associations are starved of.

[Malcolm Dunn]

Agreed. Full transparency is vital.Any party advocating an increase in state funding now must be out of their minds. Politicians are unpopular at the moment, they will be even less so when expense claims are published they will be absolutely slaughtered if they go ahead with this .

[LS]

Yes, but no party would be viable - all parties would have to change to survive.

Good.

[Tim Montgomerie]

It may be true that the party needs the big donors now Jonathan but that's because it hasn't invested in a proper retail funding system. Until a cap is in place it's always easier to go to the Lord Ashcrofts and Stuart Wheelers and Bob Edmistons of this world. Canada and America have shown that retail funding of politics is possible. I think we'd get a more responsive, democratic Conservative Party if CCHQ had to go to tens of thousands of people for its money. Of course a cap can't be phased in overnight - a five to seven year transition would be necessary - but it would be very good for democracy if it did.

[HF]

There is a massive opportunity to create a party funded by thousands. But that would require the party to invest in routes that give all members a say in policy and candidate selection.

Seize the day and create a more democratic party!

[ToryBlog.com - Britain: Built by bankers, broken by politicians]

You have to remember that Cameron actually believes that state funding of political parties will clean up politics.

It is beyond satire, but it was the key proposal in his 'cleaning up politics' phase.

[Sally Roberts]

Presumably, Tim, by "retail funding" you are referring to the massive success Obama had in attracting thousands of smaller donations via sites such as Facebook? We could certainly emulate that if we try, but the problem of course is that the US and Canada are massive and we are a tiny island with far fewer people. I tend to agree with Jonathan's opinion that we should keep the status quo.

[Tim Montgomerie]

America is more populated Sally but Canada is half our population. There will be fewer people to give in Britain cf America but we won't need to spend as much either!

[Edward Huxley]

People should be free to do what they like with their own money - give it all to a political party if they want to.

State funding - absolutely not.

[MG]

I think the local level would be better at spending the money and knowing what to spend it on to get best effect. There tends to be too much centralisation of the funds we do have.

[ToryBlog.com - The usual health warning about me to keep the Editor happy :-)]

There are two sides to the equation Sally.

If there are less people willing to donate then political parties have to lower their budgets!

Cameron keeps saying that it is time for Britain to live within its means, but he wants political parties to live within our means.

[DJT]

If this did happen would it not cripple the Dims and Labour (IF Unions are included)?

It would require a complete mindset change to get half the population domating small amounts, I just cant see it ever happening here!

[Cleethorpes Rock]

Why can't our party just say "We will never force taxpayers to fund political parties." ?

If parties can't attract donations, they'll have to scale back accordingly. No political party has a divine right to carry on in its current state.

I don't see what's CONSERVATIVE about taking from the wages of someone on £200 per week in order to fund Steve Hilton's eye-watering salary. If politicians think people are angry about subsidising banks, just wait 'til this idea gets out.

[John Reeks]

The key word is transparency; as long as its all in the open, that's surely fine. People can always use their votes to punish/reward matters like this as they see fit. Let's have more trial by ballot box and less trial by media.

[Hawkeye]

The whole party funding debacle is easily avoided

1. Record EVERY donation or loan regardless of amount
2. Rather than donor giving directly to the parties, give it to the HoC authorities to vet and they can pass it to the relevant party specified by the donor IF it is deemed a legal donation.

These simple changes mean that no one can forget to record a donation and by the time the parties get it, it has been vetted. Any blowback from a bad donation cannot land on the political parties themselves. They get the same money as before but without any problems or dangers.

[TimberWolf]

'A £50,000 cap on donations would kill the Conservative Party.' ??
A good reason for having it then.

[StevenAdams]

Hawkeye - v.sensible suggestions, as long as the HoC authorities cd be trusted not to release donor names bi-daily. Peoples' choices politically should be private I'd they wish. Otherwise, I totally agree.

[Man in a Shed]

Have to agree with HF here.

A £50k/yr limit would be good as it would reduce the number of people employed, and controlled directly, by parties. The money would flow to think tanks and campaign groups instead and also the party would need to pay closer attention to its membership.

The only problem is that I doubt it would work in practice, and the goings on with "The Smith Institute" and "Union modernisation fund" show only too clearly.

[Sally Roberts]

Tim @ 09:59 - thanks for clarifying, I wasn't sure of the numbers!

[Praguetory]

Second Man In A Shed. There is so much that the party can do on a shoestring, that there is no argument for allowing big donations to continue.

[DCMX]

I thought ConHome stood for the power of the internet to transform politics?

This post by Jonathan is a defence of the tired, Fordist status quo of centralized power.

[oldrightie]

A pound to defeat Brown campaign would net millions?
It is having a simple but safe "click to do" to achieve retail funding.

[Jonathan Isaby]

@ DCMX

Of course I believe in harnessing the power of the internet in politics for raising funds etc. and the Conservatives could be doing a lot more on this front. However, I am also highlighting the situation as it is now and, furthermore, standing up for the notion of people being able to do what they see fit with their own money.

[pp]

Anyone care to explain what political parties do that they public would want to give them money ?

Until you can answer that question convincingly its a hiding to nothing.

I am not a member now (spelman and clark were the final straws - but the rise of hannan has also now shown just how abysmal most of the rest of the EU party list actually is), so no membership subs from me - but I am happy to help out the local bods directly.

[Cleethorpes Rock]

oldrightie, I like your "pound to defeat Brown" idea.

This could easily be raised through a text appeal at the end of a party election broadcast:

"If you want to help us get rid of Gordon Brown, join our Pound to oust Brown campaign by texting your postcode to TORIES (867437)"

That way, we get a pound for each text, we get the donor's post-code and their number. We can then contact them to see if they want to help further. It could bring a couple of hundred thousand extra people into our campaign and raise enough to fund 100 campaigns in marginal seats.

Why are CCHQ so poor at using the internet and new ideas to put Labour to the sword? We should have been waving the chequebook at Obama's strategists to gleen what we could. I'm worried we're going to lose ground if someone in the party doesn't get a grip.

[Clive Elliot]

Mentions of the USA and Obama on this thread remind me that on that side of the water they have to pay huge amounts for television advertising, whereas our parties get Party Politicals for free! We don't need so much money.

[Tim Montgomerie]

I very much like the pound to get rid of Brown idea. Let me think about that!!

[Sally Roberts]

I like it too! Cleethorpes Rock that is a BRILLIANT idea.

[DJT]

Gosh I like that!

What's the number to text? LOL

[Ross Warren]

I think a 50,000 pound cap is rather to small. Saying that some sort of cap is a good idea. After all we don't want single individuals buying influence do we?

I agree with those who say public financing of political parties is a no go issue right now.The public simple will not swallow such an openly sleazy idea. Where would we draw the line,is the BNP entitled to a wad of tenners from the tax payer, and what about even smaller parties like the SWP.

The pound to be rid of brown is a good idea, and one which would be democratic in the old fashioned sense of the word. I think an upper limit of £250,000 per year would be OK. After all why shouldn't a rich person give money to a political party if that is what they want to do?

[resident leftie]

There are three reasons why the Tories will never introduce this.

Lord Ashcroft.
Lord Ashcroft.
Lord Ashcroft.

The political levy is OPTIONAL. It is given by millions of individuals. It is not the same as corporate or individual donation.

[Morus]

The Conservative Party wouldn't shrivel and die Jonathan, and nor would the other parties.

What would happen is that the cap would be brought in, with 5 years grace for parties to become debt free - and then they could then only spend what they could raise.

No taxpayer money for parties, a £50k cap per annum for donors, and tax relief up to £3k to encourage mid-sized donations. All good ideas.

By being forced to expand into retail donations, with a broad base of perhaps millions of donors, the parties would be forced to become both more democratic and more relevant to the lower level activists.

Without the ability for broadcast advertising, the idea a General Election campaign *needs* to cost £20m is so 20th century.

I like the idea of more democratic and accountable parties, with a larger and more engaged membership, funding campaigns from smaller donations, and campaigning within their means.

To my mind, that's why ConHome has become one of the best political websites on the anglophone interweb - precisely because it charts the path to that sort of political party.

The first major party to grasp that, and enact it, will enjoy a 20 year advantage over its rivals.

[Freddy]

Resident Leftie

Since when have trade unions been democratic? They still resent democratic ballots for members of their national executives!

If you don't want to pay the trade union levy to the Labour party don't you have to OPT OUT?

I always try to be pragmatic, as pipe smoking Harold was always saying!

[Norm Brainer]

I wouldn't kill it, but may change it drastically - and probably for the better, as long as labour are also limited so they don't have a monopoly.

At the moment it's the situation where the big corporates have dominated the market and this stifles innovation as they are too big and unweildy to do anything themselves but unreachable by anyone else.

just as the big guys in the business world are being brought down to size by the downturn, so should the political parties and if that means conservative/labour disappearing then so be it.
....except labour has to go first, it would be silly to kill of the only thing that can defeat them before they are dead.

[Cleethorpes Rock]

I'm working on a proposal for "Pound to get rid of Brown!" as we speak.

I'm going to send it to CCHQ and Copy it to Tim. If done properly, we should be able to fill our boots.

[Guido Fawkes]

It would make the Conservative Party have to appeal to many supporters rather than a narrow few rich supporters.

A good thing.

[Raj]

HF is correct. No one needs to shell out tens of millions of pounds on election campaigns. Providing no party has some sort of advantage because their main donors are exempt from a cap, everyone will spend less and therefore big donations will not be required.

Unless of course, Jonathan, you're arguing that the Conservatives would be the only major party that couldn't gain significant contributions from ordinary members of the public.

I believe that unlimited/virtually unlimited donations allow individuals, groups and organisations too much power in modern politics. They aren't evil, but they shouldn't be able to buy influence. They should use their role in the country's affairs to argue for political support. One reason people lose faith in politicians is that they believe they only care about a few big financial backers, not the man and woman on the street. This needs to change - a cap on donations would help.

[Freddy]

Sorry! don't know what happened there!

Anyway, as I was saying, I always try to be pragmatic. At the moment the Tories would be in Carey street if they didn't have Lord Ashcroft's donations, or donations from other wealthy individuals. If Labour didn't get money from wealthy individuals and the unions they would be in Carey street too. I also understand that the unions provide them with office equipment as well.

This doesn't bother me at all! It's the way of the world! Whatever restrictions you have in place there is always going to be somebody who finds a perfectly legal way of circumventing them.

I think that we do, however, have to worry that this situation is not going to go on forever! £1 to beat Brown seems to be a very good idea!

We've got a nettle to grasp! I mean Conservative party organisation! At the moment everything seems to be organised on a constituency basis. CCHQ issued a paper on altering this some years ago, but I don't know what progress they,ve made on putting their ideas into effect.

If we organised on a county, and city, basis, but kept the existing constituencies in being, this might help!

We could direct the funds where we needed them, to say, our target Labour and Lib Dem seats, within our area boundary. We could also deploy our volountary help better. Agents could service the area rather than individual constituencies. Snappy tabloid style election literature could be produced in house for the whole area. CCHQ would put in extra funds to supplement funds raised locally. Where the area contained a lot of target seats, and Conservative support was weak central funding would be higher!

No doubt, you're all going to tell me this can't be done for legal reasons. No doubt it would upset local stalwarts - but I think that it is an interesting idea!

[Cleethorpes Rock]

Good stuff Freddy. I think that some of our dying constituency organisations might benefit from amalgamation.

Young members in particular are put off by joining dying organisations and city-wide or amalgamatedd branches would be a better way to avoid this. It is something we're already trying to do in Lincolnshire, where constituencies of varying strength sit side by side. Resources can be better targeted at marginals and the power of long-standing Association cliques can be more easily broken.

[resident leftie]

Posted by: Freddy | April 04, 2009 at 13:05

Since when have trade unions been democratic? They still resent democratic ballots for members of their national executives!

If you don't want to pay the trade union levy to the Labour party don't you have to OPT OUT?

I always try to be pragmatic, as pipe smoking Harold was always saying!

Resentful or not, unions are democratic, and act in the best interests of their members. If this means donating money to the Labour Party and being part of the Labour movement, that's what they'll do. If a person joins a union they can opt out of the levy, which is more than shareholders are permitted. You choose to donate, or not.

[resident leftie]

Drat! I forgot. I'm not supposed to be posting for a while. Sorry. Back in two weeks!

[Sally Roberts]

You just miss us too much, Leftie ;-)

[Old Hack]

A 50k cap would not kill the Conservative Party but it might kill CCHQ. Without CCHQ the Conservative Party might perform a whole lot better.

Do Labour not realise this?

[Freddy]

@Cleethorpes Rock

Your £1 to vote out Brown is a brilliant idea!

Is the front at Cleethorpes still as windswept as ever?

What happened to the Conservative party paper on the subject of reorganisation? Did it get swept into the long grass?

[Freddy]

@Old Hack

I really want to know what is wrong with CCHQ - my few dealings with them haven't been brilliant!

I do think reform of CCHQ is necessary.

[Cleethorpes Rock]

The £1 to get rid of Brown idea was oldrightie's, but as long as it gets implemented who cares?

Tim, you should have my 2,000 word proposal document for the idea in your inbox now. If we can get it developed in time for the EU and local elections, we might be onto something.

[Tim Montgomerie]

Safely received Cleethorpes - thanks. Will look at it and get back to you within 24hrs.

[Freddy]

@Resident Leftie

Depends what you mean by democratic.

Most members regard TUs as an insurance policy. In return for your subscription you get help when trying to fight a pay reduction, redundancies, or you've got trouble with the boss.

In higher TU echelons what it is about are politics and power eg:- seeing that your faction dominates the national executive. Most of the factions on the executive will be extreme eg:- trotskyites, maoists, etc.

The interests of individual members comes bottom of the heap!

[Anon R]

£50,000 cap would kill the Conservative Party !
Hands up everyone in favour ! Make it £49,999 if that will do the trick !!

[James Maskell]

I dont see a problem with a 50k cap as long as the Unions change their systems.

Let the members have a proper choice as to whether they wish the Union to choose for them where their money goes to in terms of party donations.

Its quite something when whilst this site talks of Cameron becoming the worlds best conservative, so many parts of the country are struggling financially. The public havent been electrified by Camerons team. Obama is an example Cameron wishes he could follow but knows he cant (Im talking election campaigning and fundraising rather than actual political positions, though the jury are still out on that one!)

[Freddy]

@James Maskell

The unions will not change their systems.

It still amazes me that Lord Tebbit made his reforms stick.

It amazes me even more that they are largely unrepealed.

[niconoclast]

This is a monstrous tyranny.In a free country individuals or groups should be allowed to dispose of their money however they choose.This is a violation of property rights.That this idea should emanate from a Conservative leader simply beggars belief.

[Ross Warren]

"I'm working on a proposal for "Pound to get rid of Brown!" as we speak."

Stick with it make it paypal compatible, get as many pages as possible to Link to it...fill our boots yes its a winner.

[NorthernMonkey]

What's that you say...a cap on donations will kill off the Tory party??

Then what are we waiting for, let's get that cap in place ASAP!

[jailhouselawyer]

£50,000 is about the going rate for a good hit man, if for the same amount it disposed of the Tory party so much the better.

[Cleethorpes Rock]

The Tory website needs to have PayPal on the FRONT PAGE. The current donation page's layout, usability and prominence are woefully inadequate and CCHQ have been either dismissive or ignorant of ConHome's repeated pleas on the matter.

Eric Pickles, should he wish to redeem himself after the QT aberration, would be well advised to bang some heads together in our fundraising and marketing departments.

[joshuwahwah]

When is the conclusion of the lord Ashcroft investigation due? 5 million pounds to be repaid would be a bit of a blow to the Tory party.

[Jill, London]

If there was a cap placed on political donations, I would have thought the political party in danger of becoming an ‘endangered species’ would be the Comrades. They were founded – and funded [AND continue to be funded] – by the Trade Union Movement. Indeed, their whole raison d’être is to be the political arm of the Trade Union Movement. If Trade Union funding was removed, the Comrades would probably fade away.

Lefties argue Trade Unions are really just individual donations – but Trade Unions are set up as organisations – with their own names – and most importantly with paid officials – paid for by these Trade Union ‘subs’. Moreover, these Trade Union officials speak for their members as one entity – why else is their motto “Unity is Strength”.

And – despite being outlawed in 1993 – it appears that many Trade Union officials negate ‘one man, one vote’ – and are still operating the ‘block vote’ system! Very undemocratic.

Regarding more public funding of political parties – as others have pointed out, I really cannot see how this would be accepted in the current economic climate. As far as online fundraising [like Obama’s] is concerned – Americans aren’t taxed as heavily as we are in this country. Like me – I am sure others would object to their hard-earned money – robbed legally and called “tax” – being spent on even more funding for the Comrades. As Lady T once said “no, no, no”.

[Cleethorpes Rock]

Jill, I think people would really resent paying extra tax to fund Alistair Campbell and Steve Hilton, or spotty "researchers" running round in top-hats or Gordon Brown masks.

This is precisely why we need something like a "Text a pound, dump Brown" campaign, so that we can show practically that we want to build a broad supporter base. This could also be tied in with the spurning of Wheeler's "cash for policy" ultimatum.

[Cleethorpes Rock]

My previous post is in agreement with Jill, by the way.

[Jill, London]

Cleethorpes Rock – I’m not arguing against fundraising from more people for smaller amounts. I was objecting to having to pay ANYTHING towards funding the Comrades – and the thought of having to pay even more if the Comrades legislate in favour [before the next general election].

But the fundamental question is why should political parties receive ANY taxpayers’ money? If they can’t raise funds, there’s something fundamentally flawed with their policies.

[Cleethorpes Rock]

I agree with you entirely, Jill. I didn't mean for that post of mine to sound as if it was disagreeing with you. Your points are quite right.

[Jill, London]

Sorry, Cleethorpes Rock, your second posting hadn’t appeared when I posted in response.

[Dontmakemelaugh]

"I'm working on a proposal for "Pound to get rid of Brown!" as we speak."

Stick with it make it paypal compatible, get as many pages as possible to Link to it...fill our boots yes its a winner.

Posted by: Ross Warren | April 04, 2009 at 19:13

I am thinking of offering the public a 25pence donation to get rid of the three consensual parties in the House of Commons.
It would beat your £1 idea all hands down _(probably a 10 pence a head subscription would do the same).

[anne allan]

'Pound to beat Brown' is punchier.

[ToryBlog.com - Britain: Milked by politicians]

"Pound to get rid of Brown!

I guess the irony is that is about the amount per voter that Cameron wants to take from us to line the pockets of the political parties with his extension to state funding proposals.

Cameron clean up politics? You can't heal a gaping wound with these sticking plaster proposals.

[Steve Foley]

It can actually be quite difficult to opt out of the Trade Union Political Levy. I managed to do so when I was in the T&G as it was then called but it took some time for this to be enacted.

[chris southern]

Any sort of cap goes against the right of an individual to give his/her wealth away freely.
Loans to parties should be banned, as well as donations from charities (too many gain tax payers money from the goverment and as such, it could (does) get used as a way of funding parties and should stop/be disallowed.

Ensure that all donations are recorded to ensure transparency as well as people being able to check, thus ensuring bussines/individuals aren't recieving favours from a party regarding new acts/bills etc.

[abctory]

Tim, the 50K cap is not the big problem. What is more of an issue is that our fundraising base is not wide or deep enough.

Strategically we donot appear to have invested in internet or digitial fundraising, this is not because the party does not have good people, but just that they are too busy 'fire-fighting' raising the money for today, and don't have the time or resources to invest in sorting this out.

If the party is serious about sorting this out, it should have a team devoted to developing a stratgey to make it happen.

Perhaps then we'd have a much wider base of funders, which would make the party much less dependent on the larger donors you mention. However this would represent a major shift in the established power base of the party, which I suspect some would not be happy to see.

I donot believe increased state funding is the answer.If you can't get people to back a political party, it should be allowed to wither away.

Cleethorpes Rock, I agree totally with your comment about the website. Not sure why we don't use Paypal, but even so the emphasis of the current website ref giving money is poor, again that is not because we donot have people who haven't made these points, just that the thrust of the party is on campaigning rather than joined up fundraising. We are better than we were, but we have a very long way to go.

[Cary]

Any sort of cap on funding would be a denial of one of the most basic freedoms, which is to spend one's money as one wishes.

A cap would force a massive reduction in campaigning, but it's about time serious questions were asked how much difference a lot of the frenetic Ashcroft funded activity is making. We probably won't know the answer to that til after the election, but someone should be preparing for a cold, sober review of how much real value (ie extra votes) various campaigning initiatives add.

[Edward Huxley]

Just a thought, what about bequests? If someone leaves a large sum to a political party will that be banned and confiscated by the state?

Capping donations and state funding are stupid ideas. Sometimes I wonder about Mr. Cameron`s intelligence.