Opinion: Electoral funding reform is vital for the future of our democracy

Election finance reform may not be at the top of many people’s Christmas list, but it is arguably a more important issue right now than even electoral reform. As Liberals we hold the fundamental values of fairness and equality as sacrosanct, while as democrats we believe that power and influence should be derived through the ballot box. The most grotesque feature of this election was the amount of money that the Conservative party spent.  To be absolutely clear, until the Electoral Commission releases the spending stats, all we can work off is declared donation income, which reveals an eye watering income disparity between the parties. In the first two quarters of 2015, the Conservatives received around £24m in donations – nearly 4 times that received by the Liberal Democrats, in fact, the top 20 Tory donors gave more than all Liberal Democrat donors put together. The influence that these rich and powerful donors have over their parties is potentially toxic to our democracy, skewing politics towards special interests, and weakening the power of individual voters. While I am no fan of the Labour party, or the money which comes from the Unions, David Cameron has already announced his intent to weaken this financial association, thus crystallising for his party an insurmountable fundraising advantage, this is a naked attempt at a ‘political kneecapping’, and an outrageous abuse of Government power.

Here in the West Country, the Conservatives appeared to pour huge amounts of money into Liberal Democrat seats, by not referencing the local candidate the Conservatives have bypassed Electoral Commission spending limits. This might be entirely within the letter of the rules, but it is clearly not within the spirit of the rules as this tactic has obliterated any sense of fair play. Coming back to those basic values of fairness and equality, the only conclusion I can draw is that the current system of electoral funding is broken. Unless the system is changed now, it risks damaging public trust in the electoral system, and continuing to skew policy.

Only our party can champion the change we need, as both Labour and Conservatives receive enormous donations from their financiers, they have no incentive to reform. This was evident when both parties blocked Liberal Democrat attempts at meaningful reform, most recently in 2013, when Nick Clegg pushed for a package of measures in the wake of the expenses scandal. The Coalition Agreement stated that they would “pursue a detailed agreement on limiting donations and reforming party funding in order to remove big money from politics”, the Conservatives were not true to that promise (as usual!). We must find allies in this fight, but perhaps it will have to wait until the next scandal to shame Labour and the Tories into action. Our next leader will either have to achieve reform, or will have to raise more money than ever, starting now.

* Mike Hewitson is a pharmacist by background, and own two businesses in rural West Dorset.

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  • Thanks for writing Mike. I agree, I raised this with Clegg nearly a decade ago and he really didn’t like the idea then. Truth is this isn’t in the overton window, there’s no public outrage about these numbers and only the likes of you and I seem to care about party funding. I don’t see we’re in a great position to pursue this issue, to rebuild we’ll need to focus on policies that make people’s day to day lives better in a tangible, obvious way. This isn’t that, so I’m afraid it may be another decade before we see any change on this subject – when it does get addressed it’ll probably be as part of a larger reform package, the like of which isn’t currently on the cards. That’s not to say we shouldn’t develop a plausible, liberal funding model in the interim, just that we should also know when and when not to trumpet such a policy.

    People aren’t angry enough yet, but 5 years of a Tory government might help them get there!

  • While your analysis of the problem is accurate, it has to be pointed out that the Lib Dems rather shamefully while in office participated in changes to party funding rules that impacted pretty much solely on the opposition; the Tories on their own are simply carrying on with the same anti-democratic project.

    “The influence that these rich and powerful donors have over their parties is potentially toxic to our democracy,”

    I totally agree, which is why I see state funding of parties as the only option that is likely to work. Many Lib Dems (of which I am not one) still oppose this in principle, but given that the only alternative seems to be the kind of situation you describe, this is very much a case where pragmatism must win the day. In principle we’d all prefer a kind of mass participation funding system, but this is utopian day-dreaming – it will never happen. The closest thing we have to it – the millions of union members who pay tiny political levies – is of course habitually condemned by Lib Dems, mainly (though this is never the reason given) because they are sore that none of the money comes their way.

    So state funding is the only way to get big money out of politics – unless anyone has a better idea that will actually work.

  • Richard Underhill 6th Jun '15 - 4:25pm

    This is what Shirley Williams was saying on the television immediately after the election, quoting from her experience in the USA. She is right and the system must change or the UK will cease to be a democracy.

  • I totally agree on this — reforming how parties are funded is at least as important as changing the mechanisms of voting. Funding from the vested interests of bankers, industrialists and those who are simply wealthy ensures that the Conservatives get an unfair share of the public’s attention for their messages.

    I live in an ultra-safe Conservative constituency – their candidate polled around 2/3 of all the votes and was never in any serious danger of not coming out on top. Other parties including LibDems don’t seem to bother to put up any credible candidate. Yet despite having a shoo-in candidate, the Tories still vastly outspent all other parties put together on campaign literature, posters, etc. I received at least four leaflets through the door from them, as well as two personally-addressed “letters” from the candidate. From where I sat, it was certainly not a fair contest so far as campaign expenditure went.

  • Christine Headley 6th Jun '15 - 9:18pm

    @ Stuart: ‘the Lib Dems rather shamefully while in office participated in changes to party funding rules that impacted pretty much solely on the opposition; the Tories on their own are simply carrying on with the same anti-democratic project’.
    This completely passed me by. Can you elaborate?
    I suspect any lack on our part was something to do with being so heavily outnumbered by Tory MPs. We couldn’t stop them doing everything we disliked.

  • @Christine Headley
    “This completely passed me by. Can you elaborate?”

    It would have been more accurate for me to refer to election funding rules, but what I had in mind was this :-


    The above Act impacted pretty much entirely on charities and trade unions while leaving pro-government spending virtually untouched.

    Whatever one thinks about individual parts of the funding rules, I would hope that most people would recognise that for a governing party (or parties) to unilaterally tweak the rules to disadvantage the opposition is seriously out of order; especially when one of the governing parties in question already had a massive financial advantage.

  • Peter Watson 7th Jun '15 - 5:31pm

    @Geo Meadows “in order to bring about these changes we need a government that is neither Tory or Labour”
    Didn’t we just have one of those?

  • Hugh Warner 7th Jun '15 - 6:54pm

    @Mike, your article sets out how the campaign was run this time. I have heard similar comments from others. I hope that our LPs in the the seats targeted have recorded the level and timing of the Tory efforts which proved so successful for them. We should endeavor to quantify the cost involved in their campaigns for future reference.

    All three UK main parties have invested in election software to follow the systems developed in USA. It is easier to use it in the UK since only a limited number of voters in “target seats” need the full treatment, once they have been identified. Both ourselves and Labour should understand that this software needs a long term investment in paid staff to operate it effectively. While we may be able to achieve this for a single by-election, or Council ward, only the Tories have access to the long term level of cash required at a national level.
    If we want to know where we will end up without both electoral reform and funding reform we only have to look at elections in the USA. With the tools now available, and the current election system, the weight of cash will prevail. The party with the ability to raise the cash will win – and in the UK that will always be the Tories.
    There should be opportunity over the next 5 years to build a consensus for reform. To this end I have to agree that the initial suggestions put forward by Tim Farron on this make sense to me. We must not allow Labour to claim to be Progressive if they will not openly and publicly come on board with a fixed process and timetable for reform. A Constitutional Convention should decide what that reform will be.

  • Mike Hewitson 8th Jun '15 - 10:17am

    In the short term the only answer is to raise more money.

    Were the Conservatives to continue the same policy at the 2020 General Election, they will effectively be able to concentrate and leverage their financial resources in the small number of seats we currently hold, and in their most vulnerable seats. The big problem for our party is the size of some of the losses, our top 10 target seats for the next election (I know, we’ve only just had the last one!) need an average 5.2% swing against the Conservatives, for Labour, their top ten seats need an average swing of 0.8%. A lot can change in 5 years, granted, but the Tories ability to raise money isn’t one of them, in the same period before the 2010 election they raised £27m , so if anything £24m in 2015 was something of a disappointment for them! Serious consideration needs to be given to the financial strategy leading up to 2020.

    In the medium term, we need to raise public awareness of the scale of the problem, and why it is important to a fair democracy. Doesn’t sound like the most sexy PR campaign I must admit, but it is only a matter of time before the next donor scandal. While I don’t hold out much hope for reform, we can at least make the liberal case for reform.

  • David Murray 10th Jun '15 - 8:30am

    In December 2009 I had the following letter published in our local papers: ‘After the furore over MPs expenses, it is interesting to look back to The Reform Act of 1832, which was designed to “take effectual Measures for correcting diverse Abuses that have long prevailed in the Choice of Members to serve in the Commons House of Parliament.”
    Rotten boroughs with only a few electors returned two MPs to Parliament, and these were defended by the successive Tory governments of 1807 – 1830 because a substantial number of Tory constituencies lay in rotten and pocket boroughs! It was the Whigs, led by the Prime Minister Lord Grey, who succeeded in getting the Act passed, despite significant opposition from the Tories, especially in the House of Lords.
    Some rich individuals controlled several boroughs – the Duke of Newcastle is said to have had seven boroughs ‘in his pocket’. The representative of a pocket borough was often the same person who owned the land, and landowners could evict tenants who did not vote for them publicly.
    The pocket boroughs were not abolished until the 1867 Reform Act, which established the principle that each parliamentary constituency should hold roughly the same number of electors. (We are about to see a re-run of this in 2015 with new primary legislation for the Boundary Commissions to start work on in 2016) But when the Ballot Act of 1872 introduced the secret ballot, ‘patrons’ were greatly hindered by not knowing how their electors had voted.
    Today, ‘rotten borough’ is sometimes used to refer to a parliamentary constituency in which one political party has such a large majority that its candidate is effectually unopposed – although a more euphemistic term is ‘safe seat’.
    However, we now have a more insidious threat to democracy, whereby rich candidates can use their personal resources to ‘buy’ a constituency. Any expenditure incurred before an election is called, is not counted as election expenses, which are controlled by law.
    Some candidates may be ‘bank-rolled’ by their party for a year or two before an election, so they can put their careers on hold while they get themselves known in the constituency they seek to represent. What this represents is a form of discrimination based on wealth, which increases the likelihood of those with the most money to spend being elected, and their less-well-off opponents, however talented, being disadvantaged. Although ‘treating’ individuals is outlawed, where a particular seat is targeted, large sums of money can be spent on marketing the candidate, and influencing groups of voters. Over a period of time, the quality and quantity of the promotional material distributed can condition the recipients into believing the message by repetition. After all, that is what advertising hopes to achieve commercially!
    Apart from promising a referendum on European issues, the Labour government has signally failed to implement a fairer voting system, which they have put off time and again since being elected in 1997. If we want people to feel that their vote counts, and engage in the democratic process, then we need to change the first-past-the-post system.
    At election time this would ensure that the political parties did not just concentrate on the marginal constituencies, where they hope to make gains, and ignore voters in their ‘safe seats’. We have yet to see the ‘real change’ take place in attitudes, which we are constantly being promised!’
    The 2015 general election has more than ever exposed the gross inequalities of the system. We must keep up the fight for changes to electoral law to establish a fairer alternative, and not let the new 2020 constituencies be bought.

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