Campaign Money is Ruining Politics
Party Donations in 2012

In his latest article for OneEurope, our guest author Ian Freeman discusses the impact of campaign money on politics in the United Kingdom, and makes the case for fairer regulation of funding for political parties.

About the Author: Ian Freeman was born in Edinburgh and holds a degree in Journalism from Edinburgh Napier University. His main interests in politics include the importance of increased localism, finding effective alternatives to prevalent neo-liberal ideologies and the effectiveness of liberal social justice policies. 

Since 1883 legislation of some form in the UK has been in place to stop political parties from dominating elections purely through wealth. The law has changed with time but any revelatory progress has been slow to materialise. Political consensus on this issue is rare; a detailed review of the issue was held in 2006 but talks were suspended without agreement the following year. Promises were made by both coalition party leaders - David Cameron and Nick Clegg - that reform would be implemented, with Cameron in particular claiming the amount spent on general elections "should be cut". He has since reneged on this promise in spectacular fashion.

A massive leap - 23% - has now been pushed through by the Conservatives in a move that went unnoticed by the other political parties until it was too late for the legislation to be challenged. This rise, from £26.5 million to £32.7 million, greatly benefits the Conservative party; they are flush with funds in comparison to their main competitor, the Labour Party. 

The argument for such a rise was ostensibly that the amount had not changed since 2005 so inflation had to be taken into account. The elections watchdog the Electoral Commission , however, argued such a hefty raise was unnecessary. The Conservative party chose to ignore their recommendation.

The Coalition Agreement, made in 2010, explicitly stated they would attempt to "remove big money from politics". Despite some efforts made by Deputy Prime Minister Nick Clegg this has evidently not been the case. As recently as November 2012, Clegg was still calling for politics not to be "hollowed out by big money as has clearly happened in the United States." In the end, an extremely watered down Bill was all that could be passed with cross party consensus. The failure to make progress on such a key issue was described by the Committee chair as "deeply disappointing", and emanating from "narrow party interest."

Along with the passage of the 2014 Transparency of Lobbying Bill - also known as the gagging bill, which curtails trade union's spending power in the run up to general elections - it is evident that the Conservative party are doing all they can in order to ensure they can outspend their nearest rivals by a massive factor. As has been shown in America, this can prove decisive.

Labour must also acknowledge their fair share of the blame. They had 13 years of commanding a majority in parliament. In this time they could have easily passed a bill curtailing the excessive expenditure by political parties. Instead, they changed little - thus ensuring that they would be able to continually outspend any grassroot parties that could have sprouted and challenged their dominance of the left-wing field of British politics.

There was an obvious pretext behind the dramatic rise of campaign funds now available for political parties to use. The Conservative party will outspend their main rivals, Labour, three-to-one in the upcoming general election. They do tend to spend more - their spend was almost double Labour's in the last election - but the change in law will set them far beyond even previous campaign efforts.

Due to the nature of Policy Development Grants in the UK, the amount of money allocated will always favour larger political parties. To qualify at all, parties must already have sitting members in the House of Commons. Then, the more votes they receive, the more money they get. The result of such a system is that start up parties are greatly disadvantaged. This has contributed greatly to the homogenised make-up of the parliament the UK has experienced for decades. Such a system does nothing to break the two party monopoly at the heart of British politics. 

Hedge funds have accounted for over a quarter of the money the Conservative party has raised in the past four years. Such funds are run by a relatively tiny number of people; their money, though, seems to buy them special favours. The 2013 budget benefited these organisations by £145 million by abolishing stamp duty reserve tax on funds.

The campaign group Unlock Democracy have proposed a number of solutions to the problems of centralisation and the ever increasing powers of single large donors. The most notable of these are capping donations at a strict level so one group cannot have undue influence on a political party; also, providing a lowering of funding thresholds so that smaller parties receive grants easier and can compete on a more level playing field.

The issue has now been kicked into the long grass and will not be touched upon until after this year's general election. To avoid slipping further into a parliamentary system where the wealthy elite have privileged access to government and can dictate policy, reform is an absolute necessity. Trust in the current parliamentary system cannot begin to be restored until steps are taken to stop corporations and wealthy individuals wielding undue power.