Transparency International (UK)
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Executive Summary
5. In 2001, a new disclosure regime was introduced as part of the Political Parties Elections and Referendum Act 2000 (PPERA) to give transparency to and to regulate the funding and expenditure of political parties. It has been only partially successful in reducing the exposure of the UK political system to corrupt practice. 6. Public cynicism concerning the integrity of political parties has recently been aggravated by the exposure of doubtful practice in relation to postal votes. The “loans for peerages” affair, which broke in March 2006, has reinforced this cynicism. Trust in politics and politicians is low and the UK political establishment is perceived by the public to be the most corrupt of any UK institutioni. 7. The PPERA and resulting Electoral Commission have served chiefly to illuminate, but not reform sufficiently, the difficulties of political funding in the UK. The so-called ‘arms-race’ approach to election spending, combined with decreasing party and trade union membership, puts financial pressure on politicians and parties. In recent years, this has meant that the main political organisations are operating with significant deficits. A high dependence on very large individual donations has resulted, increasing the risk of corruption and exacerbating public unease about influence over politicians. 8. The recent ‘Power’ii enquiry into the state of Britain’s democracy found that “there is a widespread perception that donations to parties can buy influence or position. It is clear that a system of party funding that relies increasingly on very sizeable donations from a handful of wealthy individuals or organisations creates an environment in which the perception spreads that democracy can be bought.” 9. Experts and politicians are examining political funding regimes elsewhere. Specifically, they are considering the need for greater restrictions on donations to political parties and expenditure on elections, possibly combined with increased state funding in order to reduce the risk that political influence is for sale. 10. The imperative for change in the financing regime presents an excellent opportunity for reform. However, this should not overshadow the possibility that crimes may have been committed in the course of recently reported events. Nor should systemic reform divert attention from a perceived reluctance to prosecute ‘white collar’ crime. 11. In the interests of reducing the vulnerability of the UK political system to corrupt practice, TI(UK) is calling for caps on donations to political parties; a ban on all loans to political parties other than those on commercial terms from recognised commercial institutions; a lower ceiling on overall election spending by parties at the national level; research into the impact of extending aspects of state funding of parties; and strengthening of the regulations and penalties relating to party funding and nominations for honours. We also welcome the Scotland Yard enquiry into possible crimes that may have been committed if the allegations concerning the “loans for peerages” matter are 5