Party Funding

Since Margaret Thatcher successive governments have systematically refused to tax the wealthiest members of society, in fact even worse they allow them to avoid billions in tax. Why? Because rather than an economic crisis, it is our so-called democracy which is actually in crisis, with the politicians and policy makers either rich themselves and acting in their own interests, or else having simply become pawns in the hands of the wealthiest members of society. Consider – of the 29 members of David Cameron’s Conservative cabinet, no fewer than 18 were millionaires. Is it any wonder they took care of their own interests first, and society’s disadvantaged second?

In addition most of the Tory party funding comes from wealthy individuals and big business, funding that comes with the price that these donors expect government legislation to be enacted in their favour. If that seems typical of a Tory-led government, unfortunately the Labour party are little better. Labour too receives donations from many rich businessmen (some of whom have threatened to withdraw their support if the Labour party moves to the left).

Thus our political process has been utterly corrupted by the influence of money, and if that still seems hard to believe in a society that we have been led to believe is open honest and transparent, consider these examples of government policy being controlled by wealthy elites:

File:2010 Malaysian GP opening lap.jpg
Formula 1 Racing – proof that if you’ve got enough money you can buy government legislation.
Picture © Morio

1. In 1997 The Labour party had committed in its manifesto to a ban on tobacco advertising. After Labour received a £1m donation from Bernie Eccleston, the head of Formula 1 racing*, the legislation was amended to exempt Formula 1 from the advertising ban. After this was exposed the Labour Party returned the donation and Tony Blair apologised.

2.  In March 2012 the Tory Party treasurer Peter Cruddas* was forced to resign after being filmed offering to give personal access to David Cameron in return for a £250,000 donation to the party.

3. Since 2010 the Labour Party has received over £600,000 worth of free services from Price Waterhouse Coopers*, the accountancy firm. PWC admits that it ‘cultivates relationships with parties to further the interests of the firm and its clients.’

File:Lord Mayor of London - John Stuttard - Nov 2006.jpg
The Lord Mayor’s Parade – with over half their funding coming from the City, is it any surprise the Tories are always quick to defend the interests of the financial sector?
Photo by DAVID ILIFF. License: CC-BY-SA 3.0

4. The Tory Party frequently defends the financial industry in the City of London. Over half of all Tory party funding comes in the form of donations from the City of London.*

5. Before the 2010 General Election the Labour Party was taking steps to clamp down on tax avoidance being carried out in the Cayman Islands. When they were elected the Tories quietly shelved this legislation. The beneficiaries of this change of policy were the many hedge funds that operate out of the Cayman Islands*, several of whom also happen to have made significant donations to the Tory Party in the run-up to the General Election. In recent years the Tory Party  has received £22m of donations from people linked to hedge funds.*

6. The Tories have received over £10m in donations from private health companies while pursuing a policy of privatising the NHS, and they have returned the favour by awarding £1.5bn of contracts to companies that have donated to their party*. Investors in one company, Circle Health, made donations totalling £1.5m to the Tories, and the company was shortly afterwards given the £1bn contract to run Hinchingbrooke Hospital.

7. Although not directly linked to legislation, the parties also have a dreadful record of giving honours, titles and peerages to people who make party donations. In the last three months of 2013, the Tories and the Lib Dems received £2.6m in donations from people to whom they had given peerages.* In addition to this, after his resignation, David Cameron forced through pay-offs far in excess of official guidelines to all his advisors; while putting forward many of his personal friends for peerages – a complete abuse of power.*

These of course are only the examples we know about. The financial accounts of both the main parties are littered with large donations from wealthy individuals and big business, and we can only wonder to what extent those donations came with the requirement for laws to be enacted in their favour. In addition the parties like to do everything they can to hide the sources of their donations. For example in recent years the Tory Party has received £5.5m donated through ‘Associations’, where the actual donors do not need to reveal their identities.* And they are even now going as far as to advise their members on the best way to keep political donations secret.*

The term for all of the above is Legislative Capture, where the process of law-making has been ‘captured’ and is now controlled by wealthy vested interests rather than being done for the good of the people. The reality of our system now is that whereas politicians are supposed to represent the interests of the people who elect them, in reality they represent the interests of the people who bankroll them.

One way to deal with this would be to ban private funding of political parties, and have all parties funded by the tax-payer only. The argument against this is that it would be expensive for the taxpayer to pay for political parties. However given that the cost of funding political parties is only a few tens of millions each year, whereas the cost to the taxpayer of corrupt law-making runs into billions every year, this argument is false and it would soon pay for itself to the taxpayers’ advantage.

Unfortunately party funding isn’t the only way government policy is corrupted. There is also the influence of Professional Lobbyists to consider, who apply constant pressure on the government to make policies which serve their clients over and above the interests of ordinary people. For more on Lobbying click here.

* References:

Formula 1:

http://www.telegraph.co.uk/news/politics/labour/3179722/The-Ecclestone-Affair-Labours-first-funding-scandal.html

Peter Cruddas:

http://www.dailymail.co.uk/news/article-2120010/Peter-Cruddas-Tory-treasurer-resigns-selling-secret-meetings-David-Cameron-250k.html

Price Waterhouse Coopers/Labour Party:

http://www.theguardian.com/politics/2014/nov/12/pricewaterhousecoopers-tax-structures-politics-influence?CMP=twt_gu

City Funding for Tory Party:http://www.theguardian.com/politics/2011/feb/08/tory-funds-half-city-banks-financial-sector

Cayman Islands Legislation:

http://www.prospectmagazine.co.uk/magazine/tax-avoidance-cayman-islands-channel-4-dispatches/

Tory Party/Hedge Funds:

http://www.huffingtonpost.co.uk/michael-dugher/tory-party-funding_b_3588382.html

Tory Party/Health Companies:

http://www.mirror.co.uk/news/uk-news/fury-tory-party-donors-handed-3123469

Honours: http://www.mirror.co.uk/news/uk-news/david-cameron-nick-clegg-received-3143558

David Cameron abusing his position to help his Political Chums: http://www.dailymail.co.uk/news/article-3702489/Cameron-s-list-honours-friends-former-aides-blocked-civil-servants-ethical-concerns.html and http://www.dailymail.co.uk/news/article-3693272/David-Cameron-accused-cronyism-ignoring-Whitehall-advice-boost-redundancy-pay-political-aides.html

Tory Party Anonymous Funding: http://www.theguardian.com/politics/2014/aug/26/harriet-harman-accuses-tories-relying-shady-money and http://www.thesundaytimes.co.uk/sto/news/Politics/article1467490.ece

 

 

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2 thoughts on “Party Funding

  1. It is self evident that political parties are controlled by the people who donate and it is also obvious that most do it for self interest. For a potential donor to say that he will not donate if a “Hard Brexit” is pursued must be bordering on illegal. To interfere with the running of a democracy by financial coercion should be sufficient to make private donations an exclusion for any political party. Can you imagine if High Court Judges were able to receive donations from private sources?

  2. I was venting to the wife yesterday about our society, and she said well what can be done about it? My answer, outlaw lobbying and have political funding limited to £10 per adult, per week.

    It doesn’t solve every problem, but creates a democratic chance!

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