Home > National Politics, Principles, Uncategorized > Public Funding of Political Parties: Yet another nail in the coffin of British Democracy and a giant leap away from listening to the voices that must now be heard?

Public Funding of Political Parties: Yet another nail in the coffin of British Democracy and a giant leap away from listening to the voices that must now be heard?

Political Party funding has once again become a regular topic of discussion in the media and many will today find themselves asking why the Public may now be required to pay to promote an exclusive list of what are membership-based organisations, when many more worthy causes that bring much better value to our communities could never even dream of securing this kind of help.

Following Ed Milliband’s now seemingly disastrous attempt to re-package a few multi-million Pound Union donations into many more smaller and politically expedient ones from union members who should apparently have been just as willing to choose to ‘opt-in’ as pay through the historical non-voluntary default, it seems that we are again faced with the dubious meanderings of a few politicians who will do anything that they can to make the system work just for them and for the parties that they represent.

Talk of a £5000 cap on donations to political parties would have worked extremely well for Labour if they had managed to manipulate 2 or 3 donations to qualify as the same sum given by a sudden deluge of fee-paying Labour supporters. It is after all rather unlikely that the Conservatives could find a way to do the same.

But Ed missed one vital calculation in this plan and one that no considerate and fully cognizant politician should ever miss – that people will only voluntarily pay for things that they actually want.

The penny of impending political disaster having now dropped almost as far as the current Labour Leader’s jaw, we now find ourselves looking public funding for political parties in the eye as the Westminster set again swans around under the misguided belief that the existence and perpetuity of their ideals and their impractical application should be assured by right and statute, rather than by the will and best interests of the majority of people – which isn’t after all what politics is actually supposed to be all about?

Just this week within the Council where I am an Elected Member, a whole Borough has witnessed the down side of party politics when a bad decision which may have profound effects on many lives for years to come is compounded and enforced by the use of the Party Whip to guarantee that the aspirations and agendas of the few will overcome the needs and potential benefits from alternative and better paths for the many.

De facto funding for Political Parties that even their Members no longer want to financially support will make such outcomes even more likely than they are right now and those politicians who are already awake to these perils will be well aware of the potential cost of this approach to us all.

With the common ground between Conservatives, Liberal Democrats and Labour being that the Leadership of all 3 have lost sight that doing what’s right for all, rather than what’s right for the Party or the idea’s that they specifically hold dear; all of the main Parties now fail to gain the lifeblood funding and support that they need from everyday voters, simply because they aren’t considering the realities and practicalities of what it takes to live, work and survive in our everyday world.

The message should therefore be simple. Large donors will always want to influence decisions and processes for their own benefit and adequate membership level financial support will only ever be assured when those members feel that they are likely to benefit – ultimately just the same.

If any political party is unable to secure that support, its leadership and executive should surely ask the question why it cannot do so and then be thinking about changing the way that it operates so that it can – if it can do so.

Those of us outside the Westminster ‘bubble’ should perhaps be asking ourselves whether the funding crisis that Political Parties are now facing is the best illustration yet that Politicians are out of touch and failing to connect with the critical mass of the population.

If their approach to governing our lives cannot be sustained or promoted without State intervention within a democracy, do political parties really have the right to say that they represent anyone but themselves?

  1. October 21, 2013 at 2:06 am

    Hi Adam,

    I enjoyed reading your blog and share your passion towards politics and the funding of political parties. I would love to hear your thoughts on following subjects:

    The political arena is a marketplace no doubt. The hundreds of different political parties supply us citizens with different products (a bundle of policies and values) and as consumers, we decide between them.
    Government intervention within a marketplace can be justified if there is a case of market failure. So is there market failure within Britain’s political system? Is there a market failure within the political systems of the developed world?

    Consider three primary causes of market failure: lack of competition (ie monopolies, oligopolies) leading, asymmetric information and free-rider issues. Each of these, I believe, can be found in the market for political parties:

    Lack of competition: In the developed world (inc England), the most common political system is a two party system. For example The Republicans and the Democrats in the U.S or the Labor party and the LNP in Australia. There has been recent evidence to suggest that the two party system in Britain is fading out, however it could no doubt still be considered an oligopoly. One must ask if there is a lack of competition in the market for political parties. Although it is not overly troublesome to start a political party, there exists a huge barrier to entry for a new political party to be competitive with either of the two majority parties. Arguably, part of this ‘barrier to entry’ is campaign funding. Smaller parties do not have access to the massive political donations that larger parties have and hence cannot run their campaigns as effectively.
    On a different note, there is also evidence to suggest that private entities who are politically active gain financial benefits in the form of government contracts for doing so (Reis et al. 2013). This is also a lack of competition.

    Asymmetric information: As mentioned above, smaller political parties are at a disadvantage when it comes to promoting their ideas due to their lack of funding. As consequence, it would be hard to make to argument that the average consumer in the market for political parties is fully informed of all the different policies of every party.
    Another point in regards to asymmetric information is the lack of disclosure laws regarding political donations from private entities. The average voter is not informed about which parties receive money for which companies.

    Free-riders: You mentioned in your blog that “that people will only voluntarily pay for things that they actually want”. Adam Smith disagrees with you. If everyone was honest in their willingness to pay and your statement was in fact true, then we could effectively scrap taxes. Scrap government payments to the unemployed, the disabled, foreign aid, infrastructure projects, education etc, because if society actually wanted them, they would naturally exist? Perhaps like public education, public funding to political parties is necessary, but would naturally not exist.

    It is my personal opinion that a cap on political donations from the private sector and an increase in public funding has the potential to be an effective means of mitigating the issues of market failure listed above. It would also decrease the incentive for political parties to alter their behaviour (policies and values) to order to receive private funding. Consider a country like Brazil whose political parties are 100% privately funded and there is little restriction/regulation of corporate political activity. The countless incidences of government failure are a testament to the ineffectiveness of such a policy.

    Also my opinions seem very left-wing, that is not my political stance. I believe strongly in efficient competitive markets, not to be confused with the ideologies of free markets and Austrian economics.

    Again, I very much enjoy reading posts such as yours, which disagree with my own opinions entirely. I am writing a research paper on ‘Corporate Political Activity within Australia’ and wish to keep it as unbiased as possible by including both sides of the argument. Your blog has already given me some interesting points for the other side which I am very thankful for. I would greatly appreciate it if you took the time to respond to this post and address some of the concerns that I raised.

    Cheers,
    Brandon

    • October 21, 2013 at 2:02 pm

      Hi Brandon,

      Thanks for finding my Blog and for taking the time to consider the points that I have made about the issue of funding Political Parties in the UK.

      I think that I would wholeheartedly agree that on a particular level, the political arena is or rather has become a ‘marketplace’, simply because it has evolved into a system which is reliant upon politicians undertaking one giant sales job for the period of their elected terms with the transaction coming in the form of a cross or tick in a box (or not) on the next relevant election day.

      However, I wouldn’t agree that the political arena should actually be a ‘marketplace’. If politicians are doing what is best for everyone and considering all the factors that they should be – rather than the more transient and self-serving aspects of their position, it necessarily follows that they wouldn’t then have to sell what they are doing, but perhaps do a lot more to explain why they are doing it.

      From this point of view and in respect of your points, I would say the failure of the ’marketplace’ is that politicians are treating it as a ‘marketplace’ at all. Public office is or rather should after all be considered as the responsibility to all that it is supposed to be, rather than the reward to self and to party that it increasingly seems to have become.

      In terms of ‘free-riders’ as you put it, people don’t voluntarily pay taxes. In fact it has become a cause celebre recently in the UK that many people and corporate entities do just about everything that they can to make sure that they avoid doing so. What people and companies still do in the majority of cases however, is obey the Law. This is why it is so essential that the very complex way that Law is actually made is kept free of bias and influence of any form, and that policy decisions are made with fairness, propriety and the best outcomes possible for all in mind.

      Sadly, appearances and results suggest that this is very far from the case and that it is because there are such influences as corporate political activity that the political system works in the very peculiar and to many the mind-numbing way that it does, rather than the very selfless and public minded way that it actually should.

      Removing such influence is likely to have a far more genuine and beneficial result than tinkering around the edges to make ‘things work’ – as has so often become the case in politics today – and at a cost which continues to hit the ordinary and unconnected voter the most.

      Regards,

      Adam

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