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Tuesday, August 24, 2010

Following the money

Most of the newspapers and the blogs this morning make mention of the huge sums of money raised by the three major parties both during and subsequent to the General Election. According to the Daily Telegraph donations to political parties around this year's general election were the highest level on record:

Almost £26.3 million was given to political parties compared to the previous record of £20.6 million, received by parties in January, February and March 2005 before that year's election.

According to figures released by the Electoral Commission, Nick Clegg’s party registered cash donations worth £1,899,382.

In April, May and June of this year, the Conservatives received £11,635,032, while Labour have received £10,864,653 in cash mostly from trade unions.

Amongst the big donors were C & C Business Solutions and Brompton Capital who gave the Liberal Democrats £100,000 and £250,000 respectively. Brompton Capital is based in Jersey and has Rumi Verjee as its founder. He was also behind the Domino’s pizza franchise so I suppose I will have to change my eating habits now as well. The Joseph Rowntree Reform Trust gave the Liberal Democrats £350,000.

The Conservatives received £750,000 from JCB Research and £117,000 from David Rowland. They also received £200,000 from MECM, the London arm of hedge fund group, Moore Capital, £50,000 from hairdresser John Frieda, £26,000 from the author Frederick Forsyth and £258,500 from City financier, Michael Farmer. David Cameron’s party also received flights worth £ 58,256.87 from Eastern Atlantic Helicopters and £ 25,475 in helicopter flights from Noble Foods. Lord Ashcroft’s Bearwood Corporate Services gave £63,564-worth of focus groups and opinion research costs.

In April, Labour was given £1 million by the steel magnate Lakshmi Mittal, as well as £1 million from the owner and chairman of Nottingham Forest, Nigel Doughty. The party also received millions from trade unions after the election.

As part of my summer recess West Wing marathon I watched an episode last night in which campaign manager, Josh Lynam was explaining to Democrat Presidential Candidate, Matt Santos, the reality behind the team of volunteers and donors behind his bid. Do you think, he asked, that these people will not be looking for jobs once you are elected or that donors will not be seeking help with some corporate deal or government contract?

I am sure that is not the case here but the question is always raised as to why people would want to give this sort of cash to political parties. I know that in my case, my modest donation was because of an ideological commitment to the Liberal Democrats and a desire to see the party advance in the region I represent. It may well be that this is the motivation for bigger donors too.

Despite the fact that it is now the Conservatives and the Liberal Democrats in government rather than Labour my view remains the same. There has to be better regulation of these donations beyond just registering it, limits on the amounts people can give and some element of state finance to take party funding out of the realms of suspicion. Perhaps that is something else that Nick Clegg can turn his attention to when he comes to reform our political system.
The figures do rather throw into perspective the claim that Lord Ashcroft 'bought' the election in various marginal constituencies. Though it's always possible, of course, that he simply employed the old scam of making large donations divided up into a series of smallish donations, through cooperative private individuals, to individual party branches.

Reform is certainly needed urgently.
I think there is a strong case that any legal person (which includes companies, trades unions, &c.) should only be able to donate to a political party in any period the ninth decile individual earnings — roughly £1000 per week. It is only a very small number of donations that are in excess of this sum, and it would encourage a more democratic form of fundraising by parties.
I'm sorry, Wyn Hobson, but the figures do not absolve Ashcroft. They are the official record of donations. They do not cover the direct help to Conservative candidates, and the indirect assistance given by "independent surveys" and so on.

I would also point out that the accounting for Zac Goldsmith's election campaign in Richmond Park is under challenge.
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