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Could state funding help fix Britain’s flailing political parties?

Transparency needed. Sean Dempsey/PA Archive

The latest batch of data on political party membership in Great Britain do not make happy reading for the faithful. Membership of the major parties is at a historic low, with less than 1% of the electorate a member of the Conservatives, the Liberal Democrats or Labour; and even with surges in membership for the Greens and the Scottish National Party, trust in politics in the UK as a whole is at a grim low.

This is in line with a broader, Europe-wide decline in party membership, and throws up the uncomfortable question of how political parties are supposed to fund their own existence. The simple fact is that they can no longer expect to be financially self-sustaining – if, indeed, they ever really were.

The funds they will need to survive might be private, public, or a mixture of the two, but the money will have to come from somewhere. And more and more, political reformers are looking to another Europe-wide trend as an example: an increasing reliance on states to foot the bill.

Cleaning up

Almost all changes to the ways European parties are funded have gone in this direction: away from private funding and towards an increase in state funding (Italy is a rare exception).

Theories as to why this might be are legion; one interesting explanation (clearly overlooking Italy) is that using state rather than private funding has become a remedy for ingrained party corruption – that private funding is seen as a necessarily more corrupt way for parties to fund their existence.

Such arguments are made in the UK with some regularity, and are often used to argue for reform. But there is no basis for the assumption that state funding is a necessarily less corrupt way of doing things (after all, the money parties are granted is still theirs to spend) – and in any case, public opinion tends to be firmly against it.

State funding might turn out to be a less corrupt way of financing British politics, but we just don’t know that for sure; like any system, it will raise its own problems of transparency and oversight. But seeing the problem as a matter of “state good, private bad” is unhelpful at best. What is more important is figuring out what kind of corruption challenge state funding represents, and how it differs from the challenges of private funding.

After all, expecting anything in politics to be entirely and permanently “corruption-free” – let alone party finance – is wishful thinking of the highest order.

Bad faith

But we have to distinguish between the idea that party finance is inevitably corrupt because politicians are all lying, cheating, snout-in-the-trough, self-serving scumbags – what Matthew Flinders calls the “bad faith model of politics” – and a competing, more realistic, worldview: that party finance of any type carries some inevitable danger of corruption, and that politicians in general do not seek office to abuse power for their own ends.

Accepting the premise that party finance is inevitably corrupt does not necessarily entail holding a negative view of politicians and the political elite. It simply means facing the reality: certain corruption problems are inevitable, and accepting that will allow us to pre-empt and deal with them whenever possible.

A report from the Committee on Standards in Public Life has proposed a shake-up of the way in which political parties were funded. The key recommendation was a cap on donations, which would effectively bring in increased state subsidisation.

As the report put it,

If the public want to take big money out of politics, the only way to do so is a cap on donations. It is unrealistic to expect to be able to do that at a level low enough to achieve the objective without at the same time increasing public support.

But public perceptions and expectations are often divorced from reality. That much has been demonstrated by research showing that while the public has little knowledge of the British party funding system, its ignorance is no barrier to hostility towards the system.

This means that increased state subsidies for party funding will most likely be seen as nothing less than an outrageous waste of public money – and that as far as public opinion goes, full state funding is almost inconceivable.

Long odds

For this reason, public opinion should not serve as a gatekeeper on party finance reform. The only financing model currently acceptable to public opinion as things stand would be one entirely funded by membership subscriptions – a system that has never really existed in Britain, and which would be totally unworkable with today’s politics at their current low ebb.

This is all testament to the damage that the bad faith model of politics can have on the effective working of the political process (although politicians have, of course, done plenty to feed it). When attitudes to politics in general are this caustic, everything about it can seem corrupt, further muddying the real issues and making meaningful change to the system next to impossible.

To get past this hurdle, the debate about the introduction of state funding should move away from the whole idea of more corrupt/less corrupt and instead revolve around about what system would actually work the best. The idea that the British electorate’s respect for politics will be magically revived the moment a bill capping donations gets passed is pie in the sky.

Above all, the acceptance that corruption is to some extent “inevitable” should not be read as a personal condemnation of our politicians or an indictment of our entire establishment. Any system of party finance in any country presents its own unique corruption challenges.

By dismissing politicians themselves as inevitably corrupt, we not only do the well-behaved ones a disservice; more seriously, we undercut the case for significant, effective reform, whether for anti-corruption purposes or just to keep our party system alive.

At their last party conference before the 2015 general election, the Liberal Democrats are proposing a £10,000 cap on donations to political parties, in line with recommendations Transparency International and others have been making for years. These proposals should serve to throw these debates into sharper focus, rather than rely on simplistic notions stripped of all nuance.

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