Labour’s real funding scandal

12:23 pm - December 3rd 2007

by Chris Dillow    

      Share on Tumblr

Charlie and Mick have been debating the bloggers’ role during the Abrahams affair. My take here is that the main task of bloggers is not to chip in snippets of Westminster gossip, but rather to ask: why does this matter?

And here, the MSM misses the wood for the trees. The real scandal is that this was never supposed to happen. The ideal of the Labour party is that it was supposed to be funded by a mass of tiny donations. And the funding was supposed to pay for party officials and organizers, not for advertising.

The job of campaigning for Labour ideals was meant to be done gradually and subtly by Labour supporters themselves, in everyday informal chats over teabreaks and in the pub, not by bill-boards and TV adverts.

As Dave says, the very fact of Labour relying upon kleptocrats’ money is a sign that the party has abandoned democratic left ideals.

Instead, the party has become, at best, just another consumer good provided by big business, and, at worst, a cabal of megalomaniacs clinging to office for its own sake. The Abrahams affair matters not because it shows that Labour politicians are petty, corrupt and incompetent – anyone who seeks advancement in any hierarchy is – but rather because it highlights the death of a noble ideal.

You might reply that all this is obvious. And isn’t this the biggest scandal of all – that we’ve taken the death of mass politics for granted? And this is where bloggers come in. Insofar as we have a role, it’s to resuscitate mass politics – to assert that politics is something the people do, not something that’s done to us.

    Share on Tumblr   submit to reddit  

About the author
Chris Dillow is a regular contributor and former City economist, now an economics writer. He is also the author of The End of Politics: New Labour and the Folly of Managerialism. Also at: Stumbling and Mumbling
· Other posts by

Story Filed Under: Blog ,Labour party ,Our democracy ,Westminster

Sorry, the comment form is closed at this time.

Reader comments

I like that.

I’m for taking everything except small individual donations out of party funding, and no government funding either. That would make the parties re-engage with the grassroots.


I also agree. It shouldn’t be nearly as difficult as it seems.

– Sensibly capped individual donations only (say, £25k)
– All donations publically declared (party website say)
– Must be UK registered voter for say 3 years min before you can donate
– Absolutely no proxy donations
– Organisational donations also banned (or at least subject to far greater domcratic scrutiny and linked to member numbers)

Only possible objections to that from left or right would be based on self-interest and not principle.

3. Margin4 Error

This article is factually incorrect.

“The ideal of the Labour party is that it was supposed to be funded by a mass of tiny donations.”

Actually the Labour party started with no ideals and was set up by the Trade Unions simply to represent the working man and achieve specific aims like the national minimum wage (which took a century to do).

The labour party was never about individual members, it was about the power of collective agreement.

It thus stopped being labour not because of iraq and faith in the market (as much as some pretend those were inherrantly un-labour things).

It will only stop being labour when it starts demanding big donations (£1000 for example) off hard working people in return for representing them.

sadly though, that seems to be what people want.

You can only fund a political party with a mass of small donations if it has mass support. Which political party does these days?

I suggest it is not really about funding, the underlying problem is the lack of engagement in democracy.

Perhaps the Lib Dems and Tories should take the ball away and come up with proposals in 18 months at the next election.

The criminal investigation will take ages, anyway.



£25k limit on personal donations, Cassilis?
How many folk do you know that could afford to throw that much in the pot?
(No, me neither…)

Let’s limit donations to a tenner a week and give each party an administration allowance based roughly on the proportion of the national vote they received?

If they feel the need to advertise, I hear that a pot of paint and a brush are going cheap at B&Q.

I agree with ceedee. I asked in the pub yesterday lunchtime if anyone there would ever consider making a donation to a political party, and our crowd looked at me as if I was a lunatic. The most telling point made was from someone who asked, “Why would anyone make a donation… unless they were looking for something in return.”

Now, that may be an extremely cynical point of view… but I suspect it is exactly how most people think.

But Bob I think that’s the problem- overall one of the real issues is that the parties don’t have to compete for our memberships- one millionaire is worth more to attract than a thousand ordinary voters. One of the issues I think is that the parties have to recapture the idea of attracting people- they used to do it- both the Labour and Tory parties used to be the centres of communities- putting a cap on donations would force them to think more about creating large memberships and less about the needs of millionaires- it would incentivise politicians and organisers to creatively sell the parties.

Hi Bob, I think people are turned off by giving to political parties for various reasons.

1) There is little attempt as much nowadays to do that grassroots campaigning as there used to be. It basically comes down to distributing leaflets just prior to elections.

2) The mood seems to be cultivating a vicious circle here – because if people within the Labour party feel that mass-membership is an outdated model, then they won’t bother and carry on reaching out to rich businessmen for donations in return for favours. Everyone knows the Tories are there for the interests of the narrow elite, but why should Labour follow that model?

3) I’d also like to see more civic, special-interest organisations that directly engage their members with the political process and encourage them to vote along special interest lines. Then, people can judge what policies they are voting for and politicians will have to be more concrete about their plans (and stick to them) rather than making vacuous remarks. I think, for all its faults, the American model has a lot going for it.

Combined with a healthy dose of German style proportional representation and we’re talking business.

Building from the grassroots seems like an admirable goal, but without a large and identifiable sector of disenfranchised potential supporters the aim of unifying them under a single umbrella is likely to be so long-winded and imperceptable that most commentators will die before they recognise the change happening around them.

The great expansions of a decision-making electorate all capitalised on the large numbers of lowerlings and underlings that existed in their midst, but the initial approval of mass appeal has always gradually been overwhelmed by the same (as well as some newer) threats.

It was always a false expectation to be “whiter than white, purer than pure” – syllologistically, at the very least – so why do we maintain the belief of an attainable incorruptible ideal as an aspiration? Any political organisation that does so is a fraud and is bound by this incoherence to fail. Similarly anyone whose opinion is swung by that position should be handled with utmost care.

In the longer term the perspective one takes does depend upon your political world-view and the emphasis you place on different values. Since we mostly agree that confidence in the current system is shaken, partly because the political class is open to abuse, but that it must remain open to all to enable all to benefit, some clearly understood simple measure must be provided to check and balance the threats from all sides.

My personal view is that each vote, and therefore the number of votes recieved, should be monetised (eg 1 vote=£1) and directed at the level of organisation which gained them, but this would require reformulation of governmental and party structures that most would resist, although the knock-on effect of clear funding of parties and positive voting for policies would be assured.

This could easily be implemented using the tax-credit mechanism, but it must also be combined with institutionalised representation of the more traditional donees in a reformed HoL to neutralise their common partisanship.

As Bob Piper says, a lot of voters won’t consider donating to a political party. That, to my mind, makes the idea of funding parties solely by small donations quite difficult [it would take something like 5m donors each giving £10 to fund either Labour or the Tories]. That is not going to happen.

To my mind, a strong democracy does require strong parties (in theory, independents could stand for election but a coherent government/administration does require parties in my view].

I am not sure how we could square the circle. I still think that _open_ institutional funding from trade unions and from businesses is thus necessary. Donations per se aren’t a problem. It is hiding them that i see as wrong.

12. Margin4 Error

Perhaps the problem isn’t parties – its the people.


you asked “It was always a false expectation to be “whiter than white, purer than pure” – syllologistically, at the very least – so why do we maintain the belief of an attainable incorruptible ideal as an aspiration?”

I can’t help think the answer is in Bob Piper’s comment “Why would anyone make a donation… unless they were looking for something in return.”

That is a pure consumer outlook.

As consumers we never compromise. We expect perfection every time. We pay for a basked of goods having selected each good personally to fit out preference.

In politics we have to buy a hamper, which only has some things we like, and innevitably has some things we don’t.

Unable to compromise we simply stop funding and stop voting. Leaving only a small collection of committed party supporters, including a few people with lots of money, who might fund politics.

Understandably the parties then have to focus on those with more money since there are too few of those able only to make small donations to add up to much.

We need to counter that consumer outlook in politics.

Some of us sussed this real scandal five years ago and acted. We brought together a broadly representative group of members to form the LabOUR Commission. Our interim report was published in May and can be found here:

It challenges the command party model and repositions the member at the centre of the party, whether as an individual or affiliate. Party funding was not our main focus, but we accepted a role for all types of donation made transparently within the legal framework established by the PPERA 2000.

On a personal note, I favour revisiting the Electoral Commission recommendations on the funding of political parties published in December 2004, which opposed any increase in state-funding, but suggested ways of…yes, you’ve guessed…increasing membership and small donations.

That is why Hayden Phillips Inquiry has to be exposed for what it is, a fig leaf for the political class to plunder more taxpayers’ money.

Thatnks for posting that link, Peter – a fascinating report.

What do people think about match funding, or Gift Aid for political donations, combined with a strict cap on donations?

M4E – so we are all consumers now?

I disagree – we cannot individually choose the politics or personality of our political system, we communally choose them.

If you go to a supermarket to fill your basket, every available space screams for your attention. Politics is not the same and neither voters or politicians treat it as such. If you cannot be convinced to vote in a specific direction, the second-best for that candidate and party is for you not to vote against them, thus self-defeating apathy is built into the system. The winner takes it all – there is no scale of victory, no measure of achievement and no sense of proportion.

The only thing which needs to be done to reestablish honesty in politics is to create an objective value which is recognised, can be measured and understood for what it is.

This is why I’m going to repeat my demand that votes be monetised. Only then we can behave like consumers who actually pay for what we get.

16. Margin4 Error


I don’t understand what you are disagreeing with.

“we cannot individually choose the politics or personality of our political system, we communally choose them.”

That’s entirely my point.

And because of a widespread consumer mentality built on individually choosinge every aspect of our car, furniture, food and clothes, we detest politics for not giving us a tailored service.

for example.

How many people won’t vote labour because of Iraq? 5million?
How many people will vote Labour because of the Minimum Wage? another 5million?

Now think of Mercedes.

Mercedes offers the public well over a thousand choices when making a purchase. It offers a range of colours, interiors, models, and technical customisations.

In effect, if fuel consumption is your Iraq, Mercedes has a model for you. If space is your National Minimum Wage, Mercedes has a model for you. And of course, those models can be customised to meet your equivelents to preferences about how the NHS is run, how education is provided, and funding for the police.

Labour offers just one model, in a standard colour, with no options available. It simply can’t offer those choices since it needs to deliver its model, with whatever specification, and in whatever colour, to the entire nation. It can’t give one consumer one government, and another consumer a different government.

And so people choose not to buy, whining about parties all being the same, or that it doesn’t make any difference – all the time meaning ‘i don’t get what I want’.

Thought some of you might be interested in peeking into US Presidential hopefuls’ campaign funding. I wonder if the UK could ever see such enthusiasm again?

“We’ve noted on ReadWriteWeb before how Obama and Paul have used the Internet to successfully build a grassroots campaign and raise lots of money. Of the record $32 million that Obama raised in January, $28 million was via the Internet, and 90% from small donations under $100 each. “That’s a whole new paradigm for fundraising,” we wrote. “Rather than chase $2,300 checks from a few hundred rich people at lavish fundraisers (okay, they still do that), campaigns can more easily focus on collecting thousands of smaller donations from regular people that add up to the same amount (or more).””

Source: ReadWriteWeb

Reactions: Twitter, blogs
  1. What to think of New Labour corruption V « OurKingdom

    […] Chris Dillow at the Liberal Conspiracy (long may it grow!) takes a similar approach that something structural is amiss and argues that the […]

Sorry, the comment form is closed at this time.