Wednesday, June 20, 2012

Political Party Donations

In the UK, although political parties and MPs do receive some public funding, the majority of their funding comes from private donations, whether it be from an individual, organisation or business. This is standard practice, an accepted norm in the political world, but which is in my opinion, inherently unhealthy for democracy and opens the door to dishonesty and corruption.

As it stands, donations are an essential part of any political party campaign, allowing them to get their message across to the public, as well as financing the day to day running of their party. Party campaign expenditures, among other things, include: transport, advertising, broadcasts, market research, party manifestos, and canvassing. None of this comes cheap, and if a party wants to be successful it is important that they are as visible to the public as their rivals, if not more so. Considering the amounts of monies that are involved, it would on the face of it seem like a good idea to allow private donations, saving tax payers millions of pounds in any given year. But when you dig a little deeper you soon find some worrying drawbacks to the current system of party funding.

Donations are not in any way supposed to influence or affect a politician's decision making when concerning policy. But how can we ever be sure of this. If for example, a politician or party receives regular or large donations from big business leaders, who's own wealth and the wealth of the companies they represent are directly or indirectly effected by polices which are passed through parliament, there is a huge conflict of interest. It creates an “I'll scratch your back if you'll scratch my back” culture which compromises the integrity of both politicians and business leaders alike. Anyone who has an interest in politics and/or economics will probably tell you that politicians are increasingly at the mercy of big business. Nowhere is this more obvious than in the United States, where the system appears to be less democratic than in the UK. In America it is usually the party who receives the most dollars who goes on to win the election, therefore placing even more pressure on politicians to do what is necessary to secure big donations. Of course there are many other reasons as to why democracy in the US is suffering, one being politicians having business interests of their own, but to discuss them here would be getting a little off the subject.

In the UK, the Conservatives have for a long time received large funding from people connected with the world of big business and finance, where the majority of the Labour Party's funding comes from the unions. I'm sure that both parties often make choices that are unpopular with their donors, but the I have no doubt that many politicians make decisions with their benefactor's interests niggling away at the back of their minds, well aware that losing these big financial contributions could have a detrimental effect on whichever party they represent. The ongoing Leveson inquiry, which among other things is examining the relationship between the media and politicians, has shown just how cosy and inappropriate the “I'll scratch your back if you'll scratch my back” relationship can be. Some politicians, who are understandably fearful of bad and unflattering press, have be socially involved with influential members of the tabloid press, including former editor of The Sun, Rebekah Brooks, and the Chairman and CEO of News Corporation, Rupert Murdoch. The Leveson inquiry has exposed the dangers of such relationships. One example unearthed by the inquiry was of a text message regarding News Corporation's takeover bid of BSkyB. This was sent by Conservative MP Jeremy Hunt to Deputy Chief Operating Officer of News Corporation and son of Rupert Murdoch, James Murdoch. The text congratulated him on “European clearance” for the takeover bid and went on to say “just Ofcom to go!”. Ofcom being the UK regulator and competition authority on communication industries. Hours after this text, Prime Minister David Cameron gave Jeremy Hunt responsibility for overseeing the takeover bid. Considering the magnitude of such a takeover and the effect it might have had on the media, and even the effect it might have had on politics with the possibility of skewed and biased reporting, putting Mr Hunt in charge was clearly a mistake. Cutting out any temptation and reward for politicians trying to please the media or their financial benefactor would make for a cleaner and better functioning democracy.

So what are the alternatives?

Well, caps on the amount that contributors can donate is one idea that might help to stem the unhealthy relationship between politicians and donors. The smaller a donation is from one source, the less important that one source becomes, therefore discouraging the need for an inappropriate relationship, and possibly even eliminating the need for a relationship altogether. Although this system would be an improvement, depending on how high the cap is set, some might argue that as long as there are private donations involved, corruption and immoral behaviour will continue.

The other option is to totally ban private donations, using tax payer's money to fund the running of political parties. Much deliberation would be needed before implementing a system like this. Which parties would receive funding and how much would they be allocated. And what about the smaller grass roots parties; would they receive public funding at all.

The amount of public money that would be needed to fund a system like this might initially be seen as unacceptable, particularly in times of recession. But, the amounts need not match that of current private donations. In fact, they could be considerably less, forcing parties to concentrate more on policy and less on style. The drain on the public pot would be minimum. It gets a little more complicated when deciding which parties receive the funding and what happens to the parties who don't qualify. Maybe the answer to that is to fund the bigger, more popular parties, but allow smaller parties to receive private donations up to a capped amount.

With the right planning and a small amount (in the big scheme of things) of public money, a new and fairer political party funding system could be introduced. This would encourage a more honest and vibrant democracy that would benefit us all. The only losers would be those unscrupulous individuals and organisations who put their own interests first, to the detriment of society.  


  1. Completely agree with 99% of this, especially this bit " But, the amounts need not match that of current private donations. In fact, they could be considerably less, forcing parties to concentrate more on policy and less on style."

    I'd prefer to see every candidate in every election get the same funding rather than big parties getting more than smaller parties or independents though, as that might help the big parties maintain their dominance, which isn't good for democracy in my opinion. I know there are some unpleasant and even potentially dangerous parties like the BNP, but unless unemployment is allowed to go even higher i doubt they'll get far anyway - wherever they've got local councillors elected they usually don't get re-elected because they do nothing for the people who elected them except the same ranting about "ethnics" and "immigrants" they did before they got elected.

  2. I think you're right, it would be great to see some smaller grass roots parties coming through, which equal funding to all candidates would encourage.

  3. New Statesman article on state funding for political parties: