Big money, politics and public opinion; a difficult mixture

UK democracy is in a crisis of confidence. These are the findings released in a report on Friday by Transparency International (TI) entitled ‘Take Back Control: How Big Money Undermines Trust in Politics’.

The headline figures undoubtedly make grim reading for the British political elite: 76% of respondents think wealthy individuals often use their influence on government for their own interests, 59% of respondents thought financial support by companies to political parties and candidates should be banned completely and 28% thought ‘most’ or ‘all’ MPs are involved in corruption.

These findings are based on the TI Global Corruption Barometer (GCB). The full results of the 2016 survey are not yet available but previous polls are also instructive. The 2013 GCB, for example, found that 66% of respondents felt that political parties were corrupt, or extremely corrupt.

The GCB is not without its methodological failings. Taken at face value the poll would mean the UK would rank somewhere between Afghanistan (performs better) and Zimbabwe (performs worse) on the same measures. Despite the legitimate, and legion, disappointments we might have with our political elite that is not a ranking that holds up to serious scrutiny. Indeed, when the same poll asks about actual experiences of corruption, the UK comes out much better.

Following the Voters’ Wishes

However, as I show in the recently published collection ‘More Sex, Lies and the Ballot Box: Another 50 Things You Need To Know About Elections’ findings such as these are consequential. Politicians feel compelled to respond to the overwhelming public belief that the system is broken. In 2010 and 2015 the Conservative, Labour and Liberal Democrat manifestos all included some form of pledge to introduce (or at least discuss) reform of party finance. Alongside this, in the past ten years there have been two major government sponsored commissions on the subject: the Hayden Phillips Review (2006-2007) and the Committee on Standards in Public Life (CSPL) Inquiry in 2010-11.

This is no less ironic as the public overestimates how much businesses contribute and (considerably) underestimates how much individuals contribute. Although, in fairness, the knowledge that almost 50% of the financing of British parties is made up by (often large) individual donations is, perhaps, unlikely to quell public unease.

In fact, when it comes to party funding reform, we find ourselves in a situation in which policy recommendations are made – and put into manifestos – almost entirely based on public perceptions. Yet we also know this is a subject about which the public doesn’t really know much at all. Many experts also believe these perceptions to be mistaken – or at least exaggerated.

Where to from here?

TI suggest that their findings show that the ‘public want tougher controls on money in politics’. The solution proffered is to draw on the recommendations from the CSPL and cap donations at £10,000. The problem with this is the report entirely neglects to include the logical conclusion of this policy – as quoted on release of the CSPL report in 2011:

“If the public want to take big money out of politics, the only way to do so is a cap on donations. It is unrealistic to expect to be able to do that at a level low enough to achieve public support.”

You simply cannot remove a large institutional form of funding and expect parties to get by. Although Labour party membership has positively ballooned (technical political science jargon) party subs still only account for 18% of Labour’s total 2015 income.

Yet state funding continues to be unpopular with the public. When the CSPL held focus groups on the subject of increasing public funds they described a particular journey respondents generally followed. There was an initial concern about donations followed by that concern increasing and state funding becoming viewed as acceptable.  However, when facing the reality of trade-offs between caps on donations and increased state funding there was quickly a decrease in acceptability and a reluctance to introduce a cap or indeed to increase state funding. That’s no solution at all.

This, if nothing else shows you that focus group researchers do God’s work. More importantly it shows that there is an essential collective action problem, a paradox at the centre of debates surrounding party funding. The public by-and-large detest the current system – but aren’t willing to pay for it to change.

Further muddying the water is that there’s little evidence that reforms would have the desired effect. A cap on donations, for example, may or may not significantly reduce the risk of corruption, but it is even less likely to make a difference to perceptions of corruption.

As the report suggests a mistrust in politicians and the current political order is not unique to Britain, it is a (at the very least) Europe-wide phenomena. Significant state subsidisation is the norm on the continent.

As the public have little knowledge of how party funding works (and to be fair, that in and of itself is not unreasonable; Joe Bloggs has other things to worry about) it is unlikely that such reforms will work. Especially if framed as a panacea for both political disaffection and political misbehaviour. This makes it all the more perplexing that recommendations and policy reform lean so heavily on public opinion.

Any report that attempts to put party funding reform at the front and centre of public debate outside of a perceived episode of political malfeasance should be lauded. The problem TI have is that they fail to grasp a question that has foxed policy makers (and academics) for decades. What do you do when the voters are wrong?

Sam Power

University of Sussex

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