Select Committee on Trade Union Political Funds and Political Party Financing, Call for evidence SUBMISSION FROM TRANSPARENCY INTERNATIONAL UK
1. Introduction 1.1
Transparency International UK’s (TI-UK) research indicates that there are serious and systemic problems with our politics and policy-making process in the UK. This includes the opacity of lobbying, the conduct of officials and inequality of access to decision-makers. These have contributed to a continued and worsening trust in political parties, parliament and government. Political party funding sits within the wider context of these issues with our political system.
1.2
At the heart of many of these problems is the distortive impact of those with large financial resources at their disposal. According to research by our international secretariat, the UK public perceive the government’s response to this problems to be inadequate1. Our overall assessment is that recent reforms in this area fail to address the scale, nature and breadth of the problem.
2. Public Trust in Government 2.1
1
TI’s Global Corruption Barometer (GCB) 2013 revealed the scale of the problem. The Barometer surveyed over 114,000 people in 107 countries for their views on corruption:
90 per cent of UK respondents believe that the UK Government is ‘run by a few big entities acting in their own interest’
67 per cent of UK respondents said they thought political parties in the UK were corrupt or extremely corrupt
55 per cent felt that the UK Parliament is corrupt or extremely corrupt
62 per cent of UK respondents think that the UK Government’s actions in tackling corruption are ineffective
2.2
Voter engagement is low and we are living in a society that is sceptical of politicians and the political process. The steady stream of political corruption scandals in recent years has eroded public confidence not just in individual politicians, but also in political institutions. All political parties must act with urgency to demonstrate to the public that they are cleaning up politics and can be trusted.
Transparency International ‘2013 Global Corruptions Barometer’, UK specific data.
3. Political party finance 3.1
Political party finance is one of a number of areas in which special interests, backed by money, can subvert democracy. Despite several steps towards reform, it remains a major source of concern in the UK. The 2013 TI Global Corruption Barometer found that political parties were judged the second most corrupt among a list of key sectors of UK public life.
3.2
Political parties are essential to democracy. However, they exercise significant influence within our political system and have become increasingly reliant on a small amount of wealthy donors. This raises risks that funders will expect gratitude in the form of special influence and that parties will allow themselves to be influenced in return for much-needed funds. There is particular concern that a handful of wealthy individuals and organisations can buy access, influence or positions of power through making large donations.
4. The current situation 4.1
introduced a ban on political donations and loans to political parties from outside the UK over £5002
set limits on national campaign spending at parliamentary elections
provided that all donations and loans above £7,500 to the central party, all donations and loans above £1,500 to an ‘accounting unit’ of a party, and all donations above £50 to a candidate must be disclosed as a matter of public record
introduced transparency about donation and loans to other political actors, including holders of elective office and members of political parties
4.2
2
The Political Parties, Elections and Referendums Act 2000 (PPERA):
Whilst this law improved the transparency of political party financing, and introduced some loose controls on the demand for funding through national spending limits at elections, there are still issues with:
parties being overly reliant on a few large donors
insufficient controls on the demand for funding, with national spending limits being too high to be effective
big donors seemingly buying access and influence
continued attempts to evade the transparency rules through both legal and illegal means
The ‘permissibility’ threshold for candidates is only £50 and applies only to donations
5. Permissible behaviour under current rules 5.1 The following behaviour is currently permissible within the rules that govern political financing and the UK political institutions:
big donors can contribute unlimited amounts of money to political parties within any one year
political parties can spend up to £19million on campaigning in the year before a UK Parliamentary general elections, and this does not include potentially expensive campaign staff costs, which means the figure is actually much higher
big donors can buy access to senior politicians and seek to influence party policies
big donors can be offered positions in the legislature – through appointment as Peers
donors can evade the transparency rules so their identity remains anonymous, for example, by contributing via unincorporated associations or donating just below the £7,500 threshold for central parties
6. Recommendations
Donation cap: there should be a £10,000 cap on the amount individual donors or organisations can give to political parties within a year to reduce the supply of big money in politics.
Spending controls: there should be greater controls on the amount political parties can spend at elections to reduce the demand for large donations.
Company transparency: private companies donating to political parties should declare their ultimate owner to demonstrate that their owners would be permissible donors if they had given the same money directly.
Honours: if a cap is not placed on donations to political parties, a political party should be prohibited from nominating a person for honours where that person has provided financial or other support of more than a total value of £10,000 in any one year to that party or to a person or organisation associated with that party.
7.
About Transparency International UK
Transparency International (TI) is the world’s leading non-governmental anti-corruption organisation. With more than 100 chapters worldwide, TI has extensive global expertise and understanding of corruption. Transparency International UK (TI-UK) is the UK chapter of TI. We raise awareness about corruption; advocate legal and regulatory reform at national and international levels; design practical tools for institutions, individuals and companies wishing to combat corruption; and act as a leading centre of anticorruption expertise in the UK. We work in the UK and overseas, challenging corruption within politics, public institutions, and the private sector, and campaign to prevent the UK acting as a safe haven for Corrupt Capital. On behalf of the global Transparency International movement, we work to reduce corruption in the high risk areas of Defence & Security and Pharmaceuticals & Healthcare. We are independent, non-political, and base our advocacy on robust research. www.transparency.org.uk
Contact Rachel Davies, Senior Advocacy Manager, rachel.davies@transparency.org.uk Steve Goodrich, Senior Research Officer steve.goodrich@transparency.org.uk
11 February 2016