Home > Lobbying, Party funding, Political equality and influence > The super-rich paying and playing politics

The super-rich paying and playing politics

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.

    • December 31, 2010 at 3:43 pm

      Interesting article. I always thought that a cap of £50k does not go that far to address the problems associated with party funding. Donations of £50k can still lead to a perception of favours being bought and still permits considerable inequalities in participation. For that reason, a cap of £500 better serves the justification for limiting donations. However, a cap that low would arguably leave the parties short of cash, which in turn would lead to greater calls for more public funds – that seems a like a long shot in the current climate. Another interesting part of the article is the proposal to open up some voting rights to non-members who support the party. The parties seem to be looking for ways to make their procedures more fluid to engage more people. The experiments with primaries to select candidates are also part of that trend.

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