Training | 2009.06.06
It's all about the money | James Purnell
Limiting its corrosive power throughout our democracy can start with state funding for parties
The last few weeks have been deeply uncomfortable for anyone who believes that politics is not a means for enriching yourself but a vehicle for us to change our society. All politicians are under scrutiny and will have to answer to their constituents. For two weeks we have looked inwards. But now, as the whole country starts to recover from the shock of moats and mystery mortgages, it is time every member of parliament starts to contribute to the debate of what comes next.
Everyone agrees we need to reform MPs\' expenses. A growing number agree we need to open up democracy. But the long overdue process of introducing transparency to the expenses system should only be the start of opening up politics.
The prime minister has already set out a radical reform of the MPs\' expenses system to end the gentlemen\'s club where members make up the rules for themselves. Some of my colleagues in cabinet have begun to set out their own ideas of how we can reform the democratic process.
Better scrutiny of parliament is key and we shouldn\'t forget about electing the Lords or dodge the debate about electoral reform. And the public must be involved in reshaping their democracy, perhaps through a citizen\'s convention that would debate and deliberate on urgent constitutional reform before the general election. Constitutional experts and politicians should be involved, but on an equal basis as other citizens.
Yet a debate on constitutional reform alone would ignore the elephant in the room – money. Without recognition that in our society and in our politics money buys power and dictates influence, any talk of "power to the people" will be meaningless.
Earlier this week in the Guardian, David Cameron set out the Conservatives\' response to the political crisis. Despite his flighty rhetoric, most of what he said was either traditional Tory ideas dressed up in new language or tinkering at the margins of reform. I suspect Cameron\'s real goal is not to rebuild trust in politics but to use the current anti-political sentiment to rehabilitate a platform based on hostility to the role of government.
His position is both too ideologically narrow and not ambitious enough for the economic and political challenges we face. Text updates on legislation are fine, but is this really a fundamental redistribution of power?
The Tory leader says he wants to rebalance the power people have over their lives. This is something I have long argued for. Yet the Tory conception of power fixates on where the state has too much power and individuals and communities too little. This is often the case – and it is why public service reform is vital so that individuals have power over their own lives.
But Cameron\'s Thatcherite "smaller state equals greater power" analysis is incredibly partial and shallow. It ignores the way power is distributed and exercised – and the way one person\'s power can constrain another\'s. While an overweening state can disempower, so too can failing markets or unjustified inequalities.
The Tory vision completely ignores the role of money – both an excess of and a lack of – in creating inequalities of power in both society and politics. Given that the current political crisis is all about money, it is striking that Cameron\'s contribution to this debate completely ignores the corrosive nature of money in our democracy.
Money means power. It affects the extent to which you have control over your own life and whether others – either people or institutions – have control over you. For example, many people who are losing their jobs now are doing so because of the power exercised irresponsibly and unaccountably by the banking sector. I believe this is the crucial challenge we face if we want to truly open up politics.
Politics is the means by which we seek a fair distribution of power, wealth and opportunity in society. Whenever politics comes into contact with big money the effect is too often negative: we see it in the expenses scandal, in questions about the motives behind large donations to political parties, in elections where the size of your war chest counts more than the value of your ideas.
Money has allowed parties to focus on narrower and narrower segments of passive voters. It makes no strategic sense for our campaign machines to seek to engage the citizenship at large when their sole purpose is winning the support of targeted swing voters.
Whereas David Cameron wants a system in which "the powerful simply left the powerless to get on with the rest of their lives", Labour wants to increase the power of the powerless. Key to that is a body politic open to all and a political system that incentivises parties engaging with the many, not the few.
If we are serious about opening up politics to different sorts of people, we must avoid creating a system where only the wealthy can afford to be parliamentarians. Or, worse still, moving further towards a system where big money purchases political power and influence.
This needs radical action. A first step is to open up our political selection and widen the gene pool of politics. We need politics to be attractive and available to people from more varied backgrounds and careers, and we also need to open it up to late entrants – American politics benefits from being able to recruit the likes of Tim Geithner or Robert Gates to the cabinet.
Beyond this, we need to further open up political debate. One way to do that is to legitimise the House of Lords. They should be elected and given the task of amending legislation. To maintain the primacy of the Commons, the Government could overturn Lords amendments on a two-thirds majority, as broadly also happens in Congress.
And we need to take big money out of politics. We can debate what a cap on annual donations from any individual should be, but I would suggest it should be in the hundreds of pounds – certainly not the £50,000 that David Cameron wants, which would still mean parties chasing donations from wealthy individuals.
We could also provide 100% tax relief on the smallest donations, quickly tapering out to encourage parties to seek small donations from the many rather than larger ones from the few. That way, pound for pound, parties would have more incentive to chase large numbers of small donors, rather than simply chasing donations at the level of whatever the cap was. Parties would once again require hundreds of thousands of supporters rather than hundreds of thousand-pound donors.
However, there may still be a gap in allowing political parties to promote a vibrant democracy that engages society. The same fear that led parliamentarians to evade difficult questions about their own incomes should not cause us to avoid tackling this question. We need more democracy, not less. And democracy needs money from a democratic source or it will become dominated by those who have money themselves.
Amid the current anger at politicians and politics we must bite the bullet of state funding for political parties – alongside cutting the overall amount the taxpayer spends on politics. This funding must not be money for newspaper advertisements, billboard posters or spin doctors. By offering state funding to parties in return for them engaging the entire public through local activism and policy-making we would incentivise them to return to their roots as vehicles for bringing citizens together to change their communities – not separating them into narrow segments of valued voters.
We should ensure that, deprived of big donations, the only way parties can sustain themselves financially is through broad-based support. By offering state funding to those parties in return for them engaging the entire public through local activism and policy-making you would incentivise them to return to their roots as vehicles for local people to come together to change their communities – not just targeting a narrow segment of the voters.
We should reduce the total amount that parties can spend on general election campaigns so that it\'s the content of the campaign not the colour of the money that makes the difference. And we should cap annual spending in the years between elections too. If these annual caps applied to individual constituencies, parties would not be able to simply pile resources into marginal areas while neglecting so-called "safe seats".
Such a system would pose questions for all political parties, including how in Labour we maintain our historic and vital link with the trade union movement. Under the system I suggest Labour would have an incentive to properly engage with the hundreds of thousands of individual trade unionists who are linked to our party.
The block grants that trade unions contribute towards my party represent a collective donation on behalf of millions of working people, but that contribution has to be more directly made. Under the proposals but forward by Hayden Phillips but blocked by David Cameron, Labour would lose our large union donations, but the link would continue through the affiliation system – this seems the obvious way to keep big money out of politics while keeping the party rooted in the lives of working people.
The Conservatives too would have to fundamentally reassess how they raise and spend resources, not least in their key seat strategy – organised by Lord Ashcroft and funded in part by his company, Bearwood Corporate Services.
This is an uncomfortable but urgent debate. If the last fortnight has taught us anything, it is that we cannot let another chance to reform politics be wasted. The lesson of the expenses scandal is that if you allow another closed, even occasionally corrupt, system to continue unreformed, you will eventually end up with a catastrophe for politics.
Democratic reform matters. If the people have power they will use it to make the changes in society we need; and, because those changes would be more legitimate, it would make it harder for vested interests to resist them.
If we are bold enough to take on this issue then the test for Cameron won\'t be whether he expels a handful of MPs, it would be whether he is willing to create a politics where the few with money no longer wield power over the many without.
For more information, please visit
http://www.guardian.co.uk/commentisfree/[...]rliament-reform-a-new-politics
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