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Thursday, May 29, 2008

Cash crisis

At least one blogger has already commented with glee on the financial crisis facing the Labour Party:

The party has five weeks to find £7.45m to pay off loans to banks and wealthy donors recruited by Lord Levy, Tony Blair's former chief fundraiser, or become insolvent. A further £6.2m will have to be repaid by Christmas - making £13.65m in all. The sum amounts to two-thirds of the party's annual income from donations.

The figures are a conservative estimate as they do not include interest that will also have to be paid. A Labour source said that although the total debt was listed as £17.8m on the Electoral Commission website, the true level, with interest, was nearer to £24m.

Am I the only one to think that this sort of crisis is bad for democracy? It is right that parties need to live within their means but the demands of modern campaigning make that all but impossible. The dependence on loans and donations from rich individuals and companies is a threat to the process of government.

We desperately need new rules and regulations that restricts party political spending to realistic levels, prevents parties becoming dependent on largesse and the suspicion that surrounds such generosity and which separates elected politicians from the whole process. In return the state should offer a suitable amount of funding for an approved range of work, which will help to guarantee plurality and level the playing field for those political parties who are able to secure a certain level of political support.
"parties need to live within their means but the demands of modern campaigning make that all but impossible"

The Lib Dems seem to manage it. The big two are spending more and more money on bigger and bigger marketing campaigns. Lib Dems knock on doors, manage websites and deliver leaflets.

They don't do that because they've destroyed their activist base and think everything's solved by throwing money at it.
Could the Labour Party fall victim to a vulture fund, of the kind which this government is doing so little to curb?
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