It is in Labour’s own interest to act on political funding

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On Monday this week I attended a panel discussion in Parliament hosted jointly by Transparency International UK, and the all-party groups concerned with anti-corruption and fair elections.  

Amongst the speakers was Baroness (Margaret) Hodge, for whom, it seems to me the adjective “indominable” is an essential prefix.   She is the anti-corruption tzar, a rather peculiar post with one foot in and one out of Government, which gives her the right to intervene on any possible case of political corruption, but with only soft power to act.  

Still, she is an expert when it comes to exercising soft power and, as a older statesman with no more political ambition to restrain her, she uses her platform to the full, making herself hard to ignore.

She used this particular platform to set out a number of simple and potentially effective proposals which might be included in the Elections Bill to be published later this year:

  • A clamp down on donations from foreign sources and unincorporated businesses;
  • Disclosure of the source of a political donations, in excess of £500;
  • A cap on individual donations possibly of £10,000 as proposed by Transparency International, but at least to prevent a single donor completely unbalancing the playing field;
  • Caps on party expenditure beyond the current restrictions in the run up to elections; and
  • A properly independent Electoral Commission able to pursue its own cases against those who broke the rules.

She stopped short of calling for public funding for political parties, recognising that such a proposal would fail the ‘real politik’ test.

It is hardly surprising that this agenda won widespread support from almost everyone in the room (given that the room was overflowing with democracy organisations) but it also seemed to command the backing of the handful of Labour backbenchers present.  

Indeed, the only person who appeared cautious was the person who matters most – the Democracy Minister, Rushanara Ali, who read her carefully crafted speech to the letter, listened to the other panellists and then made a break for it before anyone could interrogate her further.

Her speech started well “Foreign money has no place in British politics”, but that was the beginning and the end of the firm commitments.  Margaret Hodge is, however, a skilled enough operator to buy space for the Government to go further: the Minster is not saying no and it is fair to say she was never going to layout a full programme at this stage.

Nevertheless, it is important to consider what is holding the Government back as the threats to our political integrity gather pace, from the handful of Russian oligarchs who bankrolled much of the Conservative Party spending at most recent election campaigns, to  Musk’s suggestions of a mega-donation via a UK business, to Reform’s announcement that they will accept difficult-to-track Bitcoin.

The focus on foreign interference is important but as Transparency International’s Duncan Hames was quick to point out, Britain is not short of its own mini-me Musks and legalisation to counter the threat of a single donation – however large – is unlikely to make for good law.

The suggestion is that Labour’s party apparatus fears that any of Hodge’s wider agenda would impact Labour alongside its opponents, possibly disproportionately.  It is also concerned to protect is own Trades Union funding, although the transparency of those donations – and what the donors might expects in return – has a clarity that is lacking from undisclosed businesses and high net-worth individuals.

More importantly, however, I would gently urge the Government to think again about the nature of the threat and the balance of impacts.  I understand that MPs with super-slim majorities are nervous about their ability to fundraise, but of course decent legislation would impact their opponents similarly.

Furthermore, the majority of political funding which would be affected comes not from local constituency, but national, expenditure.  Here the sums are so much greater and the legislation would therefore be far more impactful.  Parties with large numbers of members and troops on the ground – such as the Labour Party – are more likely to be able to weather the storm than those without this local fundraising base.  Indeed, (not that this should be a consideration but I accept it will be) it seems most likely that the Conservatives rather than Labour would be most likely to suffer from a reduction in high value donations.  Furthermore, look state side and we can see the direct political consequences of a left-of-centre party seeking to defend its own funding stream at the cost of regulation.

Labour needs to act.  Election Bills are rare and it is hard to conceive a further opportunity in this Parliament.  Be overcautious and the possibility is that bad actors could help to install an alternative Government unlikely to have qualms about embedding its own advantages.  

Labour needs to care less about what it can raise and more about what its opponents might raise.  And it needs to focus more on what can be spent to reduce the pressure to raise ever higher and higher sums at greater and great risk.

Miss this opportunity and it is not overstating the case to say there might not be another.

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Radix is the radical centre think tank. We welcome all contributions which promote system change, challenge established notions and re-imagine our societies. The views expressed here are those of the individual contributor and not necessarily shared by Radix.

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