The People Who Matter

Over in The First Post/The Week, Neil Clark writes:

"When we talk about your donations, the first thing we want to do is get you at the Cameron/Osborne dinners... If you are unhappy about something... we'll listen to you and put it into the policy committee at No 10." However much Conservative party apparatchiks, currently engaged in a desperate damage limitation exercise, try to portray the party's former Treasurer Peter Cruddas as a braggart and a bullshitter, the damage has surely been done. Peter Cruddas's words, captured on film in a Sunday Times sting, have exposed, for anyone who still had any doubts, the rottenness at the heart of British politics.

While the Conservatives are probably the worst culprits, it's not just the Tories who are cashing in on 'access' to the political elite. Labour has its Thousand Club, where, provided you donate a minimum of £1,200 per year, you can receive "complimentary invitations to summer and winter receptions". As for the holier-than-thou Lib Dems, the party held a 'business dinner' at their party conference last year where, at a cost of £5,000 per person for a 'premier table', guests could talk with "the people who matter".

Of course, the rich will always be more likely than ordinary people to rub shoulders with the political elite because, by and large, they frequent the same clubs, restaurants and Alpine ski resorts. But what we've got here is something far more serious than a company director having a quick chin-wag with a government minister in the car park after a parents' evening at Eton. Democracy in a multi-party parliamentary system is supposed to be about parties competing with one another to offer popular policies in an attempt to persuade the electorate to vote them into power. Instead we have something rather different: a form of plutocracy, where parties put the wishes of their wealthy donors before those of the general public.

In other words, the policies that we get are not those the public are clamouring for, but those the donors want - and which the politicians then try to sell as being 'good' for us. You don't have to look far for examples of such donor-friendly policies. At the last election, David Cameron expressly ruled out any "top-down reorganisation of the NHS". Yet on coming to power his government announced a Health Bill which did just that. The public didn't want the bill. Neither did doctors or nurses. But the private health care sector - the main beneficiaries of the reforms - most certainly did.

The Daily Mirror revealed in 2011 that private health care bosses had donated more than £750,000 to the Conservatives since David Cameron became leader, while in 2010 The Daily Telegraph disclosed that John Nash, private equity tycoon and then chair of Care UK plc, "a leading provider of health and social care", had bankrolled Andrew Lansley's personal office to the tune of £21,000 when Lansley was shadow health spokesperson. The paper noted that Nash managed "several other businesses providing services to the NHS and stands to be one of the biggest beneficiaries of Conservative policies to increase the use of private health providers".

Then there's the government's opposition to any meaningful reform of the financial services sector which brought the economy to the brink of collapse in 2008. While the public would like to see bankers and hedge fund traders strung up from the nearest lamp-post for the damage they have caused, the Conservatives have opposed EU moves to clamp down on 'predator capitalism' and have fought against the introduction of a financial transaction tax. Surprise, surprise - research by the Bureau of Investigative Journalism found that hedge funds, financiers and private equity firms contributed more than a quarter of all the Tories' private donations, with three of the City's hedge fund giants, Michael Farmer, Andrew Law and Lord Stanley Fink (now replacing Cruddas as principal party treasurer), together contributing £636,300.

How are we to stop the rot and once again have a form of politics in which parties offer policies that ordinary people - and not the wealthy plutocrats who fund them - want? Full state funding of political parties is most definitely not the answer. In a 2011 paper, Dr Michael Pinto-Duschinsky, an expert on party funding, quotes the work of Ingrid van Bieze and Petr Kopecky who warn that the increased direct state funding of parties in Europe has led to parties being "to a considerable degree" in control of the state and state resources. A better solution would be to introduce strict and extremely low caps on individual and corporate donations. Sir Christopher Kelly's Committee on Standards in Public Life recommended in its report last year a £10,000-a-year limit on annual donations. This, Kelly wrote in The Daily Telegraph this week, was "still a substantial sum. But we judged it low enough to convince most people that it was unlikely to secure favours in return".

The trouble is, Kelly wants the state to help make up the shortfall - to the tune of £23m. But why should a hard-working factory worker in the Midlands help finance the Liberal Democrats through his taxes if he thinks that Nick Clegg is a total wally? Instead, let the parties chase new members - and new, small-scale donors. Market forces, so beloved by our political elite when it doesn't affect their interests, need to be introduced to our political system. Parties which put forward genuinely popular policies will have nothing to worry about because they'll get public support; those which put forward unpopular policies will fail. We'd move away from a corrupt, oligopolistic political system where elite interests dominate, to one where majority concerns come top.

In short we'd be living in a real democracy, which will surely be better than what we have at present.