Democracy, and funding political parties in UK

The method of funding political parties in the UK has been controversial and troubled for a very long time. Outrage abounds in the media, as rich donors make large donations, with allegations of buying influence or honours, or both. Funding of the Labour Party by trade unions, via a levy on their members’ subscriptions, has also been controversial, both from the implied assumption that all the members of a trade union would be Labour supporters, and from the influence, or even control, of the political Party by trade union leaders through their power as the source of finance.

Membership of political parties has never been very high in the UK;  most of the electorate are not politically “active”, though most will vote in General  Elections. This chart [1] shows turnout in General Elections since 1945. It is arguable that the numbers show a worrying indifference to, or disenchantment with,  the political process, particularly since the turn of the millennium.

UK election turnout

According to Party press releases and media estimates [2] about a year ago, in August 2015,

  • The Conservative party had about 149,800 members (as at December 2013)
  • The Labour Party had about 270,000 members (as at August 2015)
  • The Scottish National Party had about 110,000 members (as at June 2015)
  • The Liberal Democrat Party had about 61,000 members (as at May 2015)
  • UKIP had about 42,000 members (as at January 2015)
  • The Green Party (England & Wales) had about 61,000 members (as at June 2015)

 

Membership of the 3 main political parties (Conservatives, Labour, and Liberal Democrats) was bumping along near a historic low, with ~1% of the electorate a member of one of these three parties in 2015, ~0.8% in 2011, compared to 3.8% in 1983: nearly a fourfold reduction.

However, these figures are in contrast to some stark increases in other parties.  The referendum on Scottish independence in September 2014 saw a large increase in political engagement in Scotland, with the SNP increasing its membership from around 25,000 at the end of 2013 to 110,000 in mid-2015. The turnout in that referendum of 84.6% was the highest recorded for an election or referendum in the UK, since the introduction of universal suffrage with the 1918 Representation of the People Act.

The Green Party has also been growing.  In late 2013 its membership was about 13,800; by mid-2015 it had risen by 440%, in only 18 months.

UKIP is a relatively new party, founded in 1993, and has seen its membership grow from small beginnings as the single-issue “leave the EU” Anti-Federalist League in 1991, through 32,000 in December 2013, to around 42,000 in January 2015. It remains to be seen whether such growth will continue, now that it’s main aim of achieving Brexit looks to have been won, or whether the party has an ongoing raison d’être at all.

But it’s in the Labour Party that recent membership upheaval has been by far the most dramatic and far-reaching, and it is this in particular which has driven me to think more deeply about political party membership and funding, and whether there might be a better way.

A radical change in Labour’s leadership election process, abandoning their electoral college system in favour of One Member One Vote (OMOV), was first moved by Ed Miliband in 2014, and was already in place  for the election of Labour’s new leader after the party’s poor showing in the general election of May 2015, and Ed Miliband’s ensuing resignation . It seems a while ago now, but Labour fielded four candidates for Party Leader: three “mainstream” MP’s, Andy Burnham, Yvette Cooper, and Liz Kendall, and a left-wing “wildcard” in Jeremy Corbyn, included apparently for “balance” to ensure that the candidates covered the spectrum of the Party’s political views.  It was in the gift of the Party’s MP’s to decide on the candidates who would stand in the leadership election, and some of them decided to lend their vote to Jeremy Corbyn to get him into the contest, even though they did not intend to vote for him in the leadership election itself.  Notable amongst these was ex-Labour Foreign Secretary Margaret Beckett, without whose last-minute vote Jeremy Corbyn’s  name would not have made it on to the ballot paper. She is on record about how much she rues that decision. It might yet prove to be a blunder which contributes to the demise of the Labour Party, or not – time will tell.

The Labour Party had three classes of membership for their leadership election in September 2015: party members, affiliated supporters, and a new category called “registered supporters”.  In late August 2015, the  Party reported that about 552,000 members and supporters were eligible to vote, as follows:

  • Full members: people who had joined the party and paid their membership subscriptions, numbering  about 292,000. There had been a surge of new members in August 2015 – the previous total was somewhere just over 200,000.
  • Affiliated supporters: members of trade unions and socialist societies who opted to affiliate, numbering about 148,000.
  • Registered supporters:  people who signed up with payment of a £3 fee, entitling them to vote in the leadership election. In late August the number in this category was reported as about 112,000.

The introduction of the new category of registered supporters at short notice proved problematic to manage, as at only £3 per head, there was lots of temptation to abuse by people seeking to influence the result, whether in favour of Corbyn or as an attempt to increase votes against him.  In the event, a huge number (around 56,000) of these “supporters” were rejected, for example because they could not be found on the electoral register, or because they were members of other political parties. This chaotic situation might have made the leadership contest result questionable, but in the event Corbyn won handsomely in one round of voting, with nearly 50% of party members, nearly 58% of affiliated members, and nearly 88% of registered supporters.  The total turnout was 76.3% of the eligible voters.

The events following Corbyn’s election of leader have not been edifying. He has certainly polarized opinion: on the one hand, a significant sized body of enthusiastic supporters who welcome his election as a much-to-be-desired break from the “old” politics of so-called centre left, or “Tory-lite” as some would style it, and on the other hand the vast majority of the Parliamentary Labour Party, who see him as weak, ineffectual, and an electoral liability. Whether they are right, and the electorate at large would decide that Corbyn is non-credible as Prime Minister, has yet to be verified in practice.

The following view, expressed by columnist Janice Turner in the Times [3] (Saturday 23 July 2016), seems bang on the money to me:

“ …. among Corbyn supporters during this leadership contest all reason has gone: this is now a movement run on faith alone. Not so last summer. Then many thoughtful people, contemplating lacklustre alternatives, decided to give this quirky, old-time leftie a spin. They imagined a genial, grandfatherly figure heading a broad, inspiring progressive movement, welcoming opponents, gathering brilliant minds. Instead, one by one, these supporters have realised Corbyn is a shambolic, rather dim man, who surrounds himself with reptilian ideologues, will ensure ten more years (at least) of Tory rule and doesn’t even care. Such rational folk, fearing their party is about to die and seeing a confident new Tory government with no one to hold it to account, have ditched Corbyn.

What remains is a cult: its members cannot be persuaded by reason or argument. Some believers are benign and well-meaning, like the women I keep meeting who “just love Jeremy” and, like Mary Magdalene, would happily wash his feet with their hair. Or the young folk who (understandably) want to smash a system that has laden them with debt and poor prospects, and cannot comprehend that beyond their Facebook bubble millions of voters will never share their faith in JC.”

“Facts become malleable when steeped in faith. Corbyn announced he’d ensure drug development would be conducted by the state, not evil corporations, without knowing or caring that this would bankrupt the NHS. Just as he can go to Yorkshire and demand the pits be reopened; impossible when they’re filled and flooded. Or declare that Article 50 should be immediately invoked and later dispute he said it. Never mind the truth, enjoy the socialist vibe.”

I suspect if you are one of the legion of traditional Labour voters up and down the land, who has never taken a particularly active interest in politics, you might view with similar despair the turn the party has taken since September 2015. Even the avowed socialist academic and author, Robert Harris, is equally scathing of Jeremy Corbyn’s abilities [3] :

“The current leader is about as useful at the dispatch box as a centre-forward with only one leg. The problem with Corbyn is not the policies, because there are no policies. They are simply soothing bromides for everybody. The problem is his sheer incapacity for the demands of the job, which require speed on one’s feet, cunning, skill in debate, wit, decisiveness. Almost everything it is necessary for a political leader to possess he does not possess. People say he’s like a geography teacher — he’s not qualified to be a geography teacher.”

Where am I going with all this? My point here is not to assert that Jeremy Corbyn is a cataclysmic choice as Labour Party leader.  While that is my firm opinion, there are many others out there who take an opposite view, and time will tell which view is more accurate. No, my point is about the impact of relatively low numbers of people  involved in the selection process,  and actively involved in politics in general. You might argue that 552,000 is a large, and therefore representative, number;  however, it is something under 6% of the number of people who voted Labour at the last general election in May 2015.

I can make the same point even more starkly by looking at the process of electing Theresa May as leader of the Conservative party, and de facto as Prime Minister, in July 2016. The Conservative Party rules required the parliamentary party, in the event of more than two candidates standing for election,  to produce a choice between a final two candidates; the party membership would then vote to select the leader from these two. One might argue that in our parliamentary democracy, there is nothing wrong with such a process; nevertheless, the electorate in this case would have been about 150,000 individuals, ie approximately 1.3% of the number of people who voted Conservative at the last general election in May 2015. There are many people who felt that this was highly unsatisfactory. As it  happened, one of the two final candidates (Andrea Leadsom) withdrew very early into the campaign, and we ended with a “coronation” of Theresa May, but this hardly detracted from the point about a small number of people making a key decision of great importance to the running of the country.

A more recent outcry has arisen from the Labour Party leadership challenge in July 2016. In this case, the Party NEC decided again to allow registered supporters to vote in the election, but increased the fee from £3 to £25, and set a very brief window for registering. The arguments in this case included accusations of trying to make it harder for people to vote, in order to manipulate the result against the incumbent, and of seeking large financial gain from the fact that a leadership challenge was taking place: if 100,000 people registered to vote, the Party would gain a windfall income of £2.5m.

It is undeniable that our political parties always struggle to bring in enough money to fund their activities. There is a trade-off between keeping the membership subscription low enough not to discourage people from joining, and high enough to deliver the income required. In the case of the Labour Party, full standard membership costs £47/year. For the Conservative Party, it is £25/year. These might not seem very large subscriptions, and it is unclear whether if the fees were lower membership would increase markedly. There are all sorts of factors at play besides the cost.

But funding of political parties has been a vexed question for a very long time in the UK. Funding via general taxation has been mooted from time to time, but always rejected. Part of the problem has been how to deliver an equitable system, fair to all political parties whether large or small. What is clear is that the system at present doesn’t work well. A good arrangement would deliver reasonable but not excessive funding, funding roughly proportional  to a party’s popular support, reasonable predictability of income to allow planning of expenditure, better engagement of the public with the political process, higher numbers of people involved in the decision making processes of parties, such as selection of parliamentary candidates and party leaders, complete transparency and fairness, and independence from the whim of a few wealthy individuals. The good news is that such a system is available, relatively simple, and not costly, and that is what I propose.

How would it work?

The general principle is to attach a notional “political subscription” to every individual on the electoral register. There would be a register of UK political parties, to which any party could subscribe, on payment of a reasonable fee (to discourage frivolous registration). Each year, the electoral register would be refreshed, and each individual (not household) would be presented with the option to allocate their notional political subscription to any one of the registered political parties, in a way that their choice could, if they chose,  be confidential to them,  to the civil service department operating the system, and to the political party to whom they had allocated their support.  On allocating their notional political subscription to a party, the individual would become a registered supporter of that party, until the next annual occasion that the electoral register was refreshed. This of course would be quite independent of the way that individual might decide to vote in any election.  The party to which the individual chose to allocate their notional political subscription would receive one unit of funding for that year, paid for out of general taxation.  Each party would be notified of the names and contact details of all people who had allocated their support to them for that year. If the individual chose not to allocate their notional political subscription to any party, no funding would be delivered in their name to any party for that year.

A key question of course is what level the “unit of funding” should be set. The UK electorate was 44.7m in 2015.  If say about 90% of the electorate chose to allocate their notional political subscription, then at a unit of funding of £5, the cost would equate to about 0.12% of UK income tax receipts, or 0.03% of total annual government revenue. It would however be somewhat offset by eliminating the need for “Short Money”[4], the funding given as an annual payment to Opposition parties in the UK House of Commons to help them with their costs. For those interested in the history,  it was introduced by the Harold Wilson Government of 1974–76, and named after the then leader of the House of Commons, Edward Short.  Under this system,  eligible parties receive annual funding, comprising £16.7k for every seat won at the last election plus £33.33 for every 200 votes gained by the party;  so the funding given to the Labour party, for example, following the 2015 general election, is £6.2m/year (including the £0.78m provided for the running costs of the Leader of the Opposition’s office).

If the numbers voting for the various parties at the 2105 general election were translated 1:1 into allocated notional political subscription, then the parties would receive an annual income as follows

PARTY 2015 GENERAL ELECTION VOTES 2015 SEATS WON NOTIONAL FUNDING
Conservative Party 11,334,576 331 £56.7m
Labour Party 9,347,304 232 £46.7m
UKIP 3,881,129 1 £19.4m
Liberal Democrats 2,415,862 8 £12.1m
SNP 1,454,436 56 £7.3m
Green Party (England & Wales) 1,156,149 1 £5.8m
Plaid Cymru 184,694 3 £0.9m

 

 

Benefits of the proposed system

  • Such an income would transform the financial fortunes of all political parties, allow them to offer full membership at very low rates, and go well beyond the “Short Money” [4] system to redress the unfairness of the first-past-the–post system, whereby UKIP, for example, won only 1 seat despite gaining nearly 3.9m votes, whereas the Conservatives won one seat for every 34,450 votes.
  • A very large potential increase in the numbers of people recorded as registered supporters of the various parties, and therefore the opportunity for decision making, such as selection of party leader, to be much more representative of the views of people who support a party- should parties want to adopt it.
  • Increase in public engagement with the political process, as people consider whether to allocate their notional political subscription, and if so, to whom.
  • A reduction in the presently disproportionate influence on party politics of a small number of wealthy donors, with the associated distortion of “honours for cash”.
  • A reduction in the arguably disproportionate influence of a small numbers of trade union leaders on the policies and decisions of the Labour party.

Of course, £5 per unit of funding might be seen as too large, and too expensive on the public purse. A smaller amount might be chosen – at say £2.50 per unit, it is likely that most of the benefits of the proposal would still accrue. The optimum level of funding would need to be considered by Parliament, and reviewed as necessary, rather as is the existing system of “Short Money”.

 

References

[1]          http://www.ukpolitical.info/Turnout45.htm

[2]        http://researchbriefings.files.parliament.uk/documents/SN05125/SN05125.pdf

[3]          The Times, Saturday 23 July 2016

[4]          “Short Money”: http://www.bbc.co.uk/news/uk-politics-32719087