Archive for August, 2010

Donations to parties published for second quarter of 2010

August 23, 2010 Leave a comment

The Electoral Commission has just published the stats on donations to political parties in the second quarter of 2010. A quick glance at the stats shows that Labour depended on a greater proportion of very large donations in that period. It received 9 donations of more than 250k (totalling 7 million pounds). By contrast the Conservative Party received 7 donations of more than 250k, but these in total came to just over 2.7 million pounds. Unsurprisingly, the reason is that Labour got some million pound plus donations from unions and a few wealthy individuals.

The Conservatives received 15 donations bewteen 100-250k (totalling 2.3 million pounds), while Labour received 6 donations in the same range totalling just over 1 million pounds. Of donations between 50-75k, Labour received 2 totalling 122k and the Conservatives received 15 totalling 931k. Of donations between 25-50k, the Conservatives received 55 donations totalling 2.48 million pounds, while Labour received 10 donations totalling 355k pounds.

Of the smallest bracket of donations, totalling 7.5-25k, the Conservatives received 529 donations totalling 3.5 million pounds. Labour received 491 donations totalling 1.78 million pounds.

A major caveat to all this: these numbers do not aggregate separate donations from the same source (either given in the same quarter or over the whole year). This means the numbers may hide some more large donors. This (very) rough glance at the numbers shows how both parties rely on high value donors, but suggests that the Conservatives´donation income is spread more across donors in the various brackets. This goes to show why in the discussions of party funding, trade union donations is such a high stakes issue. It also suggests that the Conservatives seem to be more successful in securing a wider range of donations that are large (ie beyond the reach of most people), but not over the million or half million mark. So probably not a surprise that the Conservatives may have a wider range of supporters that can give 50k, 25k or a thousand pounds. This does have implications if a cap on donations is fixed at 100k, 25k or 10k. It could potentially cut off the institutional support to Labour, while giving an advantage to the  party that can attract the widest range of rich (but not necessarily super-rich) supporters.

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The super-rich paying and playing politics

August 20, 2010 2 comments

The connection between the super-rich and political power is back in the spotlight through several news stories. The first story is about David Rowland´s decision not to take up the post of Conservative Party co-treasurer. The reason is that he wishes to develop his business interests. While that is the official position, the media coverage is focusing on Rowland´s former tax status. All this is a legitimate area of concern for the media. However, even if we put the tax issues to one side, we might still ask what message such an appointment sends out. This is not to criticise Rowland, but rather to question the criteria used by the Conservatives. By appointing a multi-millionaire donor to a senior role in the party, doesn´t it show that: a. those who make large donations do well in the party hierarchy, b. that the party is keen to maintain its existing funding model (i.e. appoint a rich donor, with all the right connections, who can raise funds from similarly wealthy individuals). The appointment of party donors to such roles is quite common (and is by no means unique to the Conservative Party), but isn´t the government supposed to be reforming the system of party funding and changing the political culture?

Compare this with John Prescott´s Guardian article, in which he is campaigning to become treasurer of the Labour Party. He says the party needs ´to campaign in a smarter and more cost-effective way.´  In this he refers to certain activities being funded through small donations made via the internet (which is something of the holy grail for political parties) and relying on technology to cut costs. I have some scepticism about the latter point, as while certain activities become cheaper as the technology develops, new costs are introduced. All of this may be a matter of necessity for a party that is out of power and struggling financially, rather than a stand based on principle. Prescott goes on to write:

Labour’s finances have always depended on trade unions, small donations and high value contributions by party members.

Their value and role will be even more significant as the ConDem coalition looks to tackle party funding to our disadvantage.

The statement shows how the forthcoming review of party funding will be a deeply contested process, with high stakes for all the parties (how could it be anything else). The Committee on Standards in Public Life will have a difficult job. The statement also shows that Prescott too seems committed to continuing the role for ´high value contributions.´ Again his message is to cut spending rather than change the funding model.

The other big story on the super-rich and politics concerns Sir Philip Green, who has been asked by the government to review spending cuts. Like Rowland, the media focus is on Green´s tax arrangements (although for a counter argument, see here). I can see why the media are attracted to this line of argument – it generates a sense of outrage and provides a simple argument. But there is a bigger point, which has little to do with his tax arrangements, and that is the flow of wealthy individuals and businessmen into government. This shows how the path for the wealthy to gain political influence is not just through political donations or lobbying (while Green is reported to have paid to play tennis with Tony Blair, I don´t think he is a big donor to the parties), but through the government´s love of and seeming dependence on such people. The super-rich  don´t need to court government to gain influence, those in power seem to gravitate towards them. Green is just one example – for another take Lord Browne´s role in the university funding review.

Contact with such people clearly is necessary in terms of their expertise and the importance of their activities to the economy. Yet there are questions as to whether they should get such a central role in government affairs and also whether the experience in the private sector equips them to tackle public sector issues. This trend is discussed in Stephen Armstrong´s book, The Super-Rich Shall Inherit the Earth, which discusses the ´British oligarchs´and dedicates a whole chapter to Sir Philip Green. The connection between the rich and politicians was well-known with the Labour Party, so it is not a criticism of just the present government. So while the parties in office change, a small elite group of people still continue to wield influence. The point is not new, but I think it is more important than any individual´s tax affairs.

No photos on our land

August 8, 2010 Leave a comment

A tourist walking through Cambridge town centre is told by security that he cannot take photographs of a row of shops. Sounds like another heavy-handed use of s.44 of the Terrorism Act? No. This wasn’t a policeman using statutory powers to stop the tourist, but a private security guard at Grand Arcade. You can read the story in the Cambridge Evening News here.

You might think it is fair enough, as Grand Arcade is private property (an indoor shopping centre). This line of thinking says that if you enter the land, you do so subject to the conditions of the landowner. However, it is also a publicly accessible area that forms part of the town centre. Unlike police powers, the private security guard’s actions are not subject to legal review and are much less accountable. Remember too that it involved something as innocuous as a taking a photo, so any more expressive activities like leafleting are probably a non-starter. It goes to show that the private ownership of central quasi-public spaces come with costs in terms of liberties (even if it does bring other benefits in terms of investment).

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The problem with philanthropy

August 6, 2010 Leave a comment

We can all agree that money should not buy political power. The integrity of the political process is undermined if people can use their wealth to decide what laws will be passed or which policies will be pursued. Philanthropy does not involve the use of state power, but it raises a similar issue, in so far as those with economic power get to decide what projects will be funded (like which diseases will be subject to research, etc). This use of economic resources is a form of political power.

Peter Wilby makes this point in a good piece in the Guardian today:

So billionaires, not the democratically elected and (at least theoretically) accountable representatives of the people, get to decide on the good causes. Those who already wield enormous economic power can determine social priorities too.

This leaves me with mixed feelings about philanthropy. On the one hand, as Wilby comments:

Far better that they open their wallets to deserving causes than that they spend yet more money on yachts, carbon-emitting private jets or garish mansions.

Seems like common sense. But it raises questions about political equality. A choice to buy a yacht (while more selfish) can be seen to be an individual choice and does not have an effect on broader social priorities. By contrast the choice of the philanthropist can have great impact on others, if it determines which illnesses are most likely to be cured. As Richard Bellamy points out in his book Political Constitutionalism, inequalities in wealth do not lead to a form of domination if a person uses his money to ‘indulge a taste for classic cars,’ but do ‘when the wealthy man is able to influence public affairs more than the poor simply on account of his wealth.’ If we accept that the choices made by a philanthropist engage ‘public affairs,’ then this leads us to the slightly odd conclusion that billionaires should stick to buying yachts rather than funding good causes. The former does not violate the principle of political equality, while the latter arguably does. Yet this is a clearly unattractive position.

My conclusion is first that philanthropy cannot be a substitute for government action and democratically determined goals. Secondly, it highlights the problem with gross inequalities in wealth and whether such inequalities can ever be kept separate from the political sphere.