Tax avoidance – be it of Stanley Fink’s vanilla flavour or Starbuck’s pumpkin-spiced variety — is provoking a particularly strong public reaction at the moment.
And, as is often the case with affairs involving the very rich, talk has quickly turned to party funding. The Fink episode has played out alongside an unfortunately timed black-and-white ball to raise funds for the Conservative party – an event including an auction for prizes like shoe shopping with Theresa May and doing an Iron Man with Iain Duncan-Smith.
The event was, frankly, beyond parody, and was described variously as bringing democracy into disrepute and illustrative of the depth of corruption in party finance.
Now the Electoral Reform Society has joined the fray with a report called Deal or No Deal – helpfully subtitled “how to put an end to party funding scandals”.
But while the intentions are good, the organisation has fallen into the usual trap of assuming that a cap on donations represents a cure-all for UK politics. The report relies too heavily on public opinion on this issue when making its recommendations. It is an emotive issue and this pressure can lead those wanting reform to create unrealistic expectations of what an increase in state funding can achieve.
The problem of perception
The Electoral Reform Society concludes that big donors have too much influence over political parties and that the current funding system is corrupt.
A survey used to back up the society’s recommendations shows 41% of people think a publicly-funded political system would be fairer than the current system. It therefore calls for such a system to be introduced, to take the “dirty money out of politics”.
This figure is not actually all that impressive though, given that 42% of respondents favoured neither a public or privately funded system. That suggests they think politicians would find a way to misuse party funds no matter how they were provided.
And indeed, it is hard to envisage a situation in which legislation to increase state subsidies would, in reality, be anything other than wildly unpopular. Rhetoric is both specious and incompatible with calls for a system that will renew the public’s faith in politics.
The problem is that greater state subsidy would absolutely not guarantee an end to party funding scandals, whether they actually are scandals or not. For example, a Transparency International report from 2012 argues that the integrity of the Nordic countries (which receive healthy doses of state subsidy) is at threat from the link between politics and business.
In Finland, “old boys networks provide fertile ground for corruption to grow” and it is argued that revolving doors that take politicians and business people into each other’s spheres needs to be addressed. These are issues raise notions of the rich gaining unfair access and influence. Just like party funding episodes here.
So pushing for reform on the basis of fairer systems could lead to disappointment, which is likely to lead to further disenchantment. The public will not suddenly be filled with an overwhelming sense of goodwill towards politicians and their faith will not be restored.
The process of changing the party funding regime should focus not on whether politicians are all corrupt and self-serving (the vast majority are not), or on whether state funding is less corrupt, but on the challenges that the proposed system presents, or does not address – such as the revolving door.
Ultimately, the report by the Election Reform Society and ongoing work by Transparency International should be commended for bringing attention to an issue of low public visibility and low public understanding.
But perhaps because of this, proponents of change should be wary of relying too heavily on public perceptions and avoid promising too much. Enacting robust legislation that creates effective regulation may not be sexy, but that doesn’t mean it isn’t important.