Matthew Taylor: Fair funding will benefit all parties

From a speech by the director of the Institute for Public Policy Research at University College, London

One of the fallacies of the debate on party funding is the view that it is only happening because of damaging press stories about funders and their possible motives. IPPR first published research on this in 1994. Then as now the problem was that some parties have a much greater capacity to attract large donations.

Most politicians accept that there is a simple choice: either allow parties to go bankrupt, rely on major donations or expand state funding. The Liberal Democrats have long suffered from the present system. Conservatives know their funding will come under uncomfortable scrutiny should they ever get closer to power. Most Labour politicians are uneasy at big-gift fundraising and concerned about fairness. Nearly everyone we spoke to agrees that state funding should provide incentives for parties to recruit new members and small donors.

We are probably closer to a consensus on state funding than ever before. Given the state of Labour finances and the history of being outspent by the Tories, it is an irony that the big barrier now is the Labour movement. The relationship between unions and party could be modernised to the benefit of union and party members, to the image of the unions and to the constitution of the party. But I fear too many Labour politicians and union leaders will choose to put their power base and career aspirations before the need for a funding system that is fair, trustworthy and can breathe new activism into our increasingly moribund political parties.