Stop the Tory scam on party funding

Tomorrow, the Committee on Standards in Public Life will consider accepting the Tory proposal to cap political donations in the range £10,000 to £50,000. This is patently a device designed to hurt Labour disproportionately by putting a low limit on donations from the major unions. Research shows that whilst under the present uncapped arrangements the Tories have had a 3:2 funding advantage over Labour, a £50,000 would stretch this almost to a 4:1 advantage, greater even than the 3:1 advantage they would secure from a £10,000 cap.

That explains why the Tories carefully picked on £50,000, just as maximum differential advantage also explains why the Tories are now pushing through the reduction in the number of constituencies from 650 to 600, as . opposed to a cut of either 25 or 100. This is political expediency dressed up as a fairer system. But there’s a lot more to these proposals than meets the eye.

The most obvious question is whether trade union funding is regarded as a large number of individual donations or one single large donation. Since these affiliation fees have been individually collected by the unions either through the employer check-off system or via direct debits, there are strong grounds for seeing them as individual donations. Even if the Standards Committee took the other view, there would still be nothing to stop the unions acting as agents to pass through these individual payments from the point of collection directly to the Labour Party if they so wished. That would be plan B if the present system were disallowed by administrative dictat. But if that position were in fact opted for, it raises some key questions for company donations which have not yet been answered:

• First, what is a ‘company’? If, like many FTSE-100 companies, it is a conglomerate which has several, or even several dozen, subsidiary companies, can they all contribute £50,000 each or only once via the conglomerate parent? Presumably the latter, or if not, can each of the regional and district branches of a union contribute up to the £50,000 level?
• Second, shouldn’t company board decisions to make a political donation have to receive authority by a vote of all their shareholders, subject to a majority being secured of all those entitled to vote (as Tories are proposing for a vote to call a strike), not just those actually voting?
• Third, since most corporate shareholders are financial institutions (e.g. pension funds and insurance companies), shouldn’t they be required to ballot their own shareholders to get their consent first before they are authorised to participate in the company ballot? What is sauce for the union goose is sauce for the company gander.