Home > Party funding > Party funding – a new inquiry, but any progress?

Party funding – a new inquiry, but any progress?

I haven’t seen the transcripts yet – but from the news reports of the hearing held yesterday by the Committee on Standards in Public Life, it sounds like there will be another inquiry on the funding of political parties. I think the Committee is the body to look at this issue, which should consider evidence from a wide range of perspectives (and not merely thrash the issue out among the major party leaders).

According to the BBC website, Jack Straw responded to criticisms of Labour’s link with trade unions, by saying:

there had been “no scandals about trade union funding” and he said he was sceptical about limits on donations because they could lead to avoidance, and “front organisations” set up by those seeking to dodge the rules.

Mr Straw added that the Conservatives enjoyed a higher “wealth base” among their supporters.

On the latter point, it is true that a cap of £50k on political donations per year would not make the system fair. Parties that can attract more supporters who can each donate the best part of £50k will be in a much stronger position – this is something I discuss in chapter 5. With such a cap, there may not be a multi-millionaire bankrolling a party, but inequalities in wealth could still shape a party’s fortunes.

Straw has a point about ‘front organisations’ but I disagree that this alone is an argument against regulation. Even if not perfect, a cap would at least set a standard signalling that large donations are not an acceptable part of politics. Straw’s point can be made against the current rules on the disclosure of donations, which have been evaded through front organisations too – but I think most people would accept that it is still important to have those disclosure rules in place. (I think the point depends on whether the harm brought about through the evasion of a donation cap would be worse than no cap at all.)

As for the trade union link – i think the role of all institutional donations needs to be considered (which I have written on before, on trade unions and companies).

I’ll wait to read the transcript before commenting further – but from the newspaper reports it seems like the same issues will continue to be sticking points for the leading parties.

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Categories: Party funding
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