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State Funding of Parties Must Take Account of Scotland

The cash for coronets affair seems to have brought about a fundamental, indeed historic change in Britain’s attitude towards the funding political parties. Suddenly, everyone wants the state to pay for our politics.

The Tories want a cap on donations of £50,000, applied to individuals, organisations and firms, plus 60p per voter at election time. Labour want the trades unions to continue paying the political levy, and for there to be a limit on spending at elections. Others have suggested that payment should relate to the number of individual small donations from individuals, perhaps with tax relief and match-funding.

All very well. Though it’s perhaps a little unfortunate that the big parties didn’t discover their support for state-funding before they were caught red-handed prostituting themselves to rich donors. It has been a salutary experience, and it seems there is no alternative but to take private cash out of politics.

But has anyone thought this through for Scotland? We have a different political system up here, with a major political party, the SNP, which doesn’t exist in England. We also have separate Scottish elections. Does this mean that Scottish political parties will be paid twice by the state: once for UK elections and again for the Holyrood ballot? Under the Tory plan, it would mean a cash windfall for Scottish politicians.

The SNP might welcome such a change, if only to seek relief from its financial hardship. Bereft of businessmen who want to curry favour with Alex Salmond, the SNP has been in desperate financial straits for years. It was practically bankrupt before the last Scottish elections, all because of an overdraft that was little more than the price of a posh flat in Edinburgh.

By-elections are a mixed blessing for the SNP because they cost a lot of money. The Liberal Democrats reportedly spent #100,000 on the Dunfermline by-election in February, whereas the SNP could only manage around #20,000. It expects to be similarly outspent in Moray later this month. The Tories will want to push the by-election boat out for their candidate, Mary Scanlon.

These costs weigh ever more heavily on political parties today because of the collapse in party membership. The activists who used to do most of the canvassing have long gone, leaving parties hiring banks of telephone canvassers to do the work. In Dunfermline, the Liberal Democrats not only had the most sophisticated canvassing operation, they also enlisted helpers from as far away as Exeter.

With state funding of political parties, there may have to be some kind of financial firewall at the border. You simply can’t have big UK parties like Labour and the Liberal Democrats pouring money and effort into by-elections in Scotland and gaining unfair advantage over parties which have to be sustained by their Scottish membership alone. Mind you – just try and stop them.

The UK Labour Party spent something like £18 million on the last general election. If that funding were to be allocated on a “Barnett”-style formula, that might mean something like £1.8 million in Scotland – a figure the SNP couldn’t possibly compete with. The Tory proposal is to limit the cost of elections to £15 million, but that would also leave Labour with a massive financial advantage in Scotland, out of all proportion to its share of the vote. Or would the SNP be handed hundreds of thousands in public funds to even the financial score?

These are very complex matters which the advocates of state funding have hardly begun to address. At the very least there will have to be some kind of balancing formula applied to party funding Scotland to ensure a level electoral playing field.

But what would happen if the SNP, or any other independence party, were to start building up a massive vote in Scotland? Would the unionist parties in London be content to see the state pay for the dissolution of the United Kingdom?

We have some experience here from elsewhere in Europe where small parties have been in precisely this situation. Afew years ago, the Flemish nationalist party, Vlaams Block, started winning a larger share of the vote. The big Belgian parties tried to cut off its access to state funds on the grounds that the state shouldn’t fund separatism. Vlaams also happened to be a racist party, which helped the case against state funding.

But does the large parties have the right to do this in a democracy? Is it legitimate for the old party oligopoly to decide who is and who is not worthy of state funding? When it comes down to it, the British National Party is a legitimate democratic organisation, which has recently been cleared of charges that it incited racial hatred. It would be very difficult to rule that it should be denied state funds, even though everyone knows that it is a racist organisation.

Of course, the Scottish National Party isn’t in that category. It is a liberal, multicultural and democratic nationalist party which has no place for extremists of any kind. But it isn’t that long ago that a Labour Shadow Secretary, George Robertson, was talking about the “dark side of Scottish nationalism” and comparing the SNP to ethnic extremists in the Balkans. It is quite possible that a future government in Westminster might take a dislike to the SNP’s separatist vision, and choke off its funds.

The prospect of state funding is attractive to parties who see a way out of their financial difficulties. But it could be a devil’s bargain. Ideally, funding should relate, not just to votes, but to the ability of parties to attract members and donations from ordinary people. They shouldn’t get it just because they are there. Otherwise, we might be trading one kind of sleaze for another.

About @iainmacwhirter

I'm a columnist for the Herald. Author of "Road to Referendum" and "Disunited Kingdom". Was a BBC TV and radio presenter for 25 years - "Westminster Live" and "Holyrood Live" mainly. Spent time as columnist for The Observer, Guardian, New Statesman. Former Rector of Edinburgh University. Live in Edinburgh and spend a lot of time in the French Pyrenees. Will that do?


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