I’m instinctively attracted to the idea of state funding for political parties, designed to remove the temptation to allow powerful groups (both corporations and trade unions) and individuals to distort democracy.
So I was interested to read about Ed Miliband’s suggestion that there should be a £5,000 cap on donations to political parties – the current arrangements for levying individual union members would remain unchanged:
But Mr Miliband added that he would keep the system where members of unions affiliated to Labour are asked whether they would like to “opt out” of giving the party a levy of £3 a year, rather than changing to an “opt-in”.
Last month a post on Left Foot Forward also argued in favour of reform:
With membership of said parties in close to terminal decline, seeking more, smaller donations and being funded in part by the taxpayer would mean the parties were a) more accountable; b) would genuinely need to reach out to their paymasters which would be everyone; and c) would be about as transparent as they could be.
3. Funding tied to votes or private contributions might “reinvigorate the parties’ drive to win more support.”
But parties already have incentives to win public support. Indeed, the threat of going bust without public funding might give them more incentive to engage with the public than handouts from the taxpayer would. The idea that throwing money at people improves incentives is naive. Sometimes the stick works better than the carrot.
But I think it could be argued that, at present, the threat of going bust gives the parties far more incentive to engage with the rich and powerful than with the public more generally.
But in a more recent article Stumbling and Mumbling does make an important point:
But the economic case is not all there is. There’s also the matter of freedom. This speaks against capping donations – a man should be free to donate to a party, as long as he’s not buying policy – and against using the tax-payers’ money. I’m not sure if any argument is powerful enough to trump this.
However I’m still, on balance, inclined to support a move towards state funding of political parties, with a cap on donations.