Steve Richards: Fundraising is humiliating but party leaders see no option

Partly, this is about the decline of parties. It is cheaper and more fun to tweet or blog than pay a fee

Here we go again. We have had cash for honours. Now we have cash for influence. We have had that before too, or at least cash for access, which is more or less the same thing. Party funding is a nightmare for leaders. David Cameron is not the first to be exposed by the need to raise cash and the hunger to raise a lot more than his opponents. Unless there is sweeping change soon, he will not be the last. I have not met a party leader who enjoys this side of the job. Most find it humiliating and yet see no option but to face humiliation.

Each time a leader is caught in the act, fresh light is shed. The story is familiar and yet every new eruption is unique. In the case of Cameron, his indiscriminate appetite to raise as much cash as possible tells us something about his approach to the next election. He and George Osborne could have decided to seek broader electoral appeal by appearing genuinely "modern", instigating a deal on party funding with the other parties that was so fair there could not even be a suspicion of a stitch-up. Instead, they fell into the old trap, taking risks as they sought to bring in millions for their party and hoping controversies over funding would go away. Cameron and Osborne had planned to overwhelm the other parties in terms of campaigning wealth. Along with the boundary review that will benefit the Conservatives, and their relaxed approach to persuading potential voters from signing up to the electoral register, which will also benefit them, their energetic cash raising illustrates how ruthlessly determined they are to win on their own next time as well as their sense they cannot do so without a lot of factors working in their favour, including an army of generous donors.

The risk for Cameron, as it was for his prime ministerial predecessors, was being found out. The risk is high, raising the question as to why leaders with astute enough antennae to become prime ministers lose some of their judgement when raising money. Tony Blair's biggest nightmare, in a competitive field, was when "Yates of the Yard", widely deified at the time, launched an investigation into "cash for honours". The absurdly sinister inquiry went nowhere, but it might have done and arguably Blair's glitter faded significantly when much earlier in his rule it seemed as if Bernie Ecclestone's generous donation had changed a policy. Cameron has huffed and puffed about being different and there he is having dinner in No 10 with friends who happen to be big donors. The revelation will be as damaging for Cameron as similar ones were for Blair, who had the protective shield of a landslide majority, a booming economy and the fact that in his case the story was counter-intuitive, a reason why Blair's antennae failed him. He assumed he would be praised widely for switching to wealthy donors rather than being dependent on the unions.

In both his case and Cameron's there is also an obvious explanation for the risk-taking. Their parties need the money and, like the arms race in the build-up to the First World War, battle becomes a trial of strength in itself.

The Labour leadership is enjoying the storms erupting around Cameron, the poorly received Budget and the separate funding explosion that feeds the narrative about Tories and privilege. Their enjoyment is fuelled and modified by recognition. Most of them were close to power when entirely separate stories erupted around Blair or Brown. The tempests became interconnected even if they were not and there is little a government can do. But they know, or should know, that their link with the unions is as damaging. Big donors to the Tory party might be offered the chance to influence policy, and perhaps they do. The unions have more formal influence over Labour. Their unofficial power to choose candidates in winnable seats and their influence in leadership contests are important factors in a party's mindset. A look at the current Parliamentary Labour Party, not the greatest pool of talent, shows that such influence has consequences. But the Labour leadership needs the money. The Tories need money too.

Partly, this is a story about the decline of parties. Memberships are falling. It is cheaper and more fun to tweet or blog than pay a fee to join a party and attend tedious meetings. Decline feeds on itself. Ageing memberships make it less likely younger people will join. Instead they tend to become involved in single pressure groups. Famously, if politicians made a speech at a Make Poverty History rally or spoke at London Citizens they were mobbed by fans. If they made the same speech at a party meeting, few turned up. But take parties out of the picture and what is left? To avoid finding out the answer, the parties need to reach agreement on new forms of funding, quickly. The alternative is more leaders being caught out or no parties at all. Don't hold your breath agreement will be reached.