Clegg and Farron on party funding: yes to action now, no to more taxpayer contributions

By Stephen Tall | Wed 23rd November 2011 - 6:20 am

Sir Christopher Kelly’s report for Parliament’s Committee on Standards in Public Life was published yesterday, Political Party Finance – Ending the big donor culture: you can read it and the evidence considered by the inquiry here.

Here are the main proposals:

A cap of £10,000-a-year on donations from any individual or organisation — including trade unions — to any political party with at least two MPs or two representatives at the Scottish Parliament, the Welsh and Northern Ireland Assemblies. Trade union affiliation fees could be counted as a collection of small individual payments, but only if members are required to “opt in” to the fees

Increased state funding for political parties worth £3 for every Westminster election vote received for parties who have at least two MPs or representatives in the devolved assemblies. This would rule out taxpayer funding for UKIP, the BNP, and other fringe parties. There would also be funding worth £1.50 a vote in the devolved and European elections. Recognising the current economic climate of austerity, the Kelly Report recommends this would not start until the beginning of the next Parliament, in 2015.

Here’s how the BBC estimates the current Westminster parties would benefit from this proposal based on the 2015 general election:

Allowing Gift Aid-style tax relief on donations of up to £1,000 and party membership fees. Though this would by no means replace all the money lost by parties through the cap it is designed to enable parties to broaden the basis of their support.

Cutting the current limits on campaign spending in the run-up to elections by 15%. Currently parties can spend up to £30,000 per seat in the run-up to a general election – or £19.5m overall, if all 650 Westminster seats are contested.

This was Nick Clegg’s initial reaction to the Kelly Report:

“The government believes that the case cannot be made for greater state funding of political parties at a time when budgets are being squeezed and economic recovery remains the highest priority.”

And here’s what party president Tim Farron had to say:

“Money currently plays far too big a role in politics and the Liberal Democrats have long called for major reform in party funding. Any move to limit undue influence on the political process by private individuals, businesses and the Trade Unions can only be a good thing.

“There has been much talk of political reform over the years, but nothing has happened. Parties dependent on money from the unions and big business have always have worked to block reform, determined to protect the secrecy of their paymasters.

“The Kelly report goes a long way to open the murky world of party funding. While it is clear now is not the time for more public money to be spent on politicians, that shouldn’t stop us taking immediate action to reform political funding, hopefully by consensus.”

What do LibDemVoice readers think of the proposals…?

Read more by Stephen Tall or more about christopher kelly, committee on standards in public life, nick clegg, party funding or tim farron.
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14 Comments

Geoffrey Payne 23rd Nov '11 - 6:58am

As a proportion of the UK national budget, the amount of state funding being proposed is miniscule. Yet it is the only way that political parties can be fairly funded. The alternatives either allow business and trade union funding to scew the system in favour of Labour and the Tories, or members subscriptions and donations of which rich people can pay more and that favours the Tories.
Most of the electorate do not want the political parties to get any money. Yet in a democracy that does not work. State funding as proposed is the only sensible solution and it is disastrous that Clegg rejects this. Not only that, what does HE propose as an alternative?
Jason 23rd Nov '11 - 8:16am

Geoffrey Payne…I agree completely.

As far as Nick Cleggs concern over taxpayer’s money goes…How much did the, abortive (“I am not going to settle for a miserable little compromise thrashed out by the Labour party”), AV referendum fiasco cost councils?
Andrew Ducker 23rd Nov '11 - 8:54am

I totally agree. The party funding seems entirely reasonable, and if it gets massive individual donations out of politics then it’s totally worth it.
Alex Macfie 23rd Nov '11 - 9:06am

My concerns about state funding for political parties are that it would result in the nationalisation of political parties, and that it would freeze the party system into place. If parties are funded according to their share of the vote, then the amount of campaigning they will be able to do will always depend directly on their share of the vote, so they will probably always stay in the same relative positions.
George Kendall 23rd Nov '11 - 9:19am

I agree with the others, state funding is desirable, in order to prevent the wealthy having undue influence on politics.

As to Nick Clegg’s response, two points:
– He was speaking as DPM, and on behalf of the government. There’s no way he would have been able to do more, speaking on behalf of the government.
– And he didn’t rule out state funding, just state funding in this parliament.

In fact, that is compatible with what Sir Christopher Kelly is proposing, who responded to Nick Clegg by saying that he was not suggesting changes be made immediately – but at the start of the next Parliament in 2015.
George Kendall 23rd Nov '11 - 9:23am

@Alex Macfie
One way of dealing with your concern would be to give the parties a choice. They can accept the restrictions on large private donations and have state funding, or they have no state funding, but are then free to accept large private donations.

This would mean that new parties, without the necessary two seats in parliament, could continue to be funded as, for example, UKIP is now: with large private donations. It would still be a disadvantage for new parties, but no more so than the existing situation.
Hywel 23rd Nov '11 - 9:56am

“- He was speaking as DPM, and on behalf of the government. There’s no way he would have been able to do more, speaking on behalf of the government.”

Where’s the law that says that then?

Would the world stop turning if the DPM said “The Government’s initial view is X, but my personal view is that this doesn’t go far enough and as we debate this important reform to the way we do politics I will be pushing for greater progress on this”.

It’s just possible people might respond to the idea that two different parties don’t have a homogenous view an every single issue that comes along
Hywel 23rd Nov '11 - 9:58am

@George

I think that is the situation in America where you can forgo Federal money and evade a lot of restrictions
http://www.fec.gov/pages/brochures/pubfund_limits_2008.shtml
g 23rd Nov '11 - 10:12am

Once again the Lib Dem leadership are supporting proposals that benefit the Tories and nobody else. They have been happy to talk about restricting union donations to Labour, but will not countenance, at least not yet, the far lower cap and tax payer funding.
Alistair 23rd Nov '11 - 3:24pm

I support state funding but there is a lot wrong with the formula. Parties should get funded according to how many votes they won at the GE, set a threshold by all means in terms of # of votes, but not in terms of # of MPs.
Maria Pretzler 23rd Nov '11 - 11:45pm

It’s pretty harsh on the Greens, I have to say – otherwise I think this is a petty good proposal.

I’d like this to be introduced earlier – the money actually spent is indeed small (given the scale of state expenditure). The cap on large donations as well as the opt-in for the Unions’ political levy would be an excellent innovation.

I’d still like them to explore the idea that some of the funding should not depend on General Election votes, but should be matched funding for donations up to £100.
Nick Noble 24th Nov '11 - 9:21am

The proposals from Kelly are overall a step in the right direction and I would be very happy to see them implemented, even as they stand.

They would be improved if the funding was decided on the basis of the percentage of votes cast, and funding provided to any party that achieves over a pre-set threshold even to the BNP and UKIP who achieve little in any one seat but clearly have a reasonable level of support over the country as a whole. Doing so would remove the objection that it fairly well fixes the current party system in place and allow an easier growth of new parties which must be to the benefit of democracy.

I would like to see Clegg getting behind the proposals and pushing for legislation in this parliament so that the system can start with immediate effect after the next election; failure to legislate now will in effect mean the proposals will likely never be put on the statute book, unless there is a big enough future scandal involving the governing party (parties?) that something like this proposal can be used as whitewash.
John Heyworth 24th Nov '11 - 12:00pm

@Alistair “I support state funding but there is a lot wrong with the formula. Parties should get funded according to how many votes they won at the GE”.
I think you will find that this IS exactly what Kelly is proposing in his report which recommends – “state funding for political parties worth £3 for every Westminster election vote received for parties who have at least two MPs or representatives in the devolved assemblies.” and further that there would “also be funding worth £1.50 a vote in the devolved and European elections.”
The qualifying criteria being the number of elected members will, quite rightly, stop the extreme fringes (BNP) getting state financial support.
Adam 24th Nov '11 - 10:00pm

Too austere to tackle corruption?

“In response to claims that expanding state funding of political parties cannot be afforded at this time, Unlock Democracy has called for the government to scrap its plans to introduce expensive elected police commissioner elections next year, which the report itself notes will cost roughly the same amount.”