State funding is no solution for bankrupt political parties

The revelations about dodgy political party funding in the UK have exposed something far more important than some creative accountancy by New Labour. This carry-on confirms that the established party system has not only run out of money, but has exhausted its political capital, too.

On spiked, we have previously discussed the drawn-out demise of political parties and movements in Britain and across the West (see Where have all the political parties gone?, by Mick Hume). The collapse of the old left/right divide has left political life bereft of clear competing principles. Established parties, trade unions and campaigning movements have withered, and the business of government has been reduced to an increasingly bean-counting, managerial affair, as embodied by the sort of lifeless budget speech given this week by Gordon Brown, New Labour’s heir apparent.

Two consequences of this process of decline have combined to create the party funding crisis so graphically revealed through the recent ‘loans-for-peerages’ scandal. On one hand, political leaders no longer have such large and vibrant party organisations through which to raise support and money. On the other hand, they need more money than ever before, since the demise of party activism, public meetings and core voter constituencies has left them more dependent on expensive media stunts and advertising for their campaigns.

As a result, the major parties have been left with major financial deficits; before last year’s General Election campaign even kicked off, it was being reported that New Labour was up to £20million in debt, and the Conservative Party too was in dire straits. The empty shells of the old parties were left with little alternative other than to rely upon large donations and loans from a relatively few individuals, who were less likely to be party loyalists than opportunists with an eye on the main chance. We now know that the Labour Party arranged some £14million worth of such ‘secret’ loans (much of which was expected to be converted into donations at a later date) to get it through the victorious 2005 election campaign. The Tory Party has yet to reveal how much it raised in large loans/hand-outs, but there have been reports that it borrowed even more heavily to fund its third consecutive heavy electoral defeat.

Despite all of the recent hullabaloo about these loans and what favours they might have been buying, there has been too little attention paid to political dangers that go way beyond the distributing of a few peerages and baubles. These developments highlight the advance of a new oligarchy in British politics – an elite political class, cut off from and largely unaccountable to any popular constituency.

Already, the workings of the New Labour government look like a modern version of ancient monarchical court politics, where back-stabbing cliques and factions based more on personalities than political differences compete for influence and the crown in an isolated world of their own. This was well illustrated in the response to the funding scandal, when party officials and government ministers again proved incapable of presenting a united front and instead sought to blame one another.

Now the anti-democratic tendency towards political oligarchy has been pushed further by the decline of parties and the increased reliance on a few wealthy financers. Surprisingly, the one critic I heard come close to understanding this was Clare Short, the dissident former Labour cabinet minister. She argued that the loans deals showed how a ‘bubble’ had been created at the top of the political system, within which a few New Labour leaders had captured the state with the help of their rich friends. In her usual overly conspiratorial way, Ms Short seemed to see this as a deliberate Blairite plot to dump the Labour Party. This surely gets things pretty much the wrong way round: it was the collapse of her beloved party as a live political force – something for which even Blair cannot take all the credit – that laid the basis for this desperate situation.

The withering of parties and meaningful debate, and the tendency towards managerialism and oligarchy, raise some very serious questions about the future of political life. Most of the ‘solutions’ offered during the ongoing debacle, however, only seem likely to make matters worse.

Take all of the sanctimonious breast-beating about the problems of individuals or organisations making donations to political parties whose policies they support – a complaint which, bizarrely, is now being echoed by the Tory Party leader and senior Labour Party officials themselves. The implication here is that there is something wrong with parties serving the interests of particular constituencies, that instead they ought somehow to be above, well, politics.

Yet it is fundamental to real democracy that parties ought to be partisan, standing up for conflicting interests and outlooks. It is through the clash of such competing social visions and constituencies that clarity of issues can be achieved, and the future direction of society decided. Instead, the new demands for a non-partisan politics will encourage the sort of empty debate and bureaucratic attitudes that are already stifling political life. The sight of new Conservative leader David Cameron and prime minister Blair coming together to cook up a solution to the funding issue confirms that this is the deathly direction in which things are heading.

The obvious corollary of demands for a limit on donations from individuals and organisations is the call for state funding of political parties. This would be another big nail in the coffin of political life. Politicians already act more like glorified state bureaucrats than inspiring popular leaders. To make their organisations more dependent on state patronage than active support – effectively to nationalise the parties – would formalise their status as civil servants rather than servants of the people. The discussion that has already started about how state funding might be denied to ‘extremist’ parties hints at the anaesthetising effect this might have on political debate, at the very moment when we need more open arguments about where we are heading and what comes next.

There is nothing wrong with making political donations. Giving money is a sure and sound way of expressing commitment to a cause and claiming a stake in its future. The problem is that party donations have become separated from politics. If parties need cash, let them go out and convince people that they stand for something worth supporting. If they cannot do that, then they are dead men and women walking. There is no democratic reason why state funding should then be made available to act as a life support machine, artificially sustaining outward signs of life.

While the oligarchs struggle to find a way out of their predicament, those of us who do want to make a stand for important political principles, but see no reason to throw good money after bad parties, might usefully spend our time discussing some alternative ways to make our contributions count.

Mick Hume is editor of spiked.

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