Leading Article: Poor Tories, poor democracy

THE DIRE state of Tory finances, detailed today by an Independent investigation, is much more than a crisis for the Conservatives. It threatens democracy. The virtual bankruptcy of Britain's governing party leaves administration of the country prey to unsavoury and unaccountable influences.

Party officials are increasingly concerned at cutbacks in donations from once-loyal big businesses and impoverished constituency organisations. Finance managers in Central Office will inevitably feel tempted to take money from whoever will pay off the overdraft. Furthermore, opinion polls indicate that the Conservatives will feel obliged to stage a massive publicity campaign to try to stave off defeat at the next general election. Given that pressure, fund-raisers will find it ever more difficult to be scrupulous.

Worse still, voters are unlikely to learn the identity of all the donors whose generosity is needed to bail the Tories out. The electorate will not be supplied with a list of benefactors. Yet experience suggests that the pattern of contributions is a significant factor in the distribution of government patronage, knighthoods and expenditure.

In other words, the present situation is an invitation to corruption. The need for reform is now urgent. A first step must be to require disclosure by all political parties of funding sources. Only the names of individual donors should be exempt, to encourage the development of mass party membership.

No rule of disclosure exists for party funding, so information is acquired only by combing through hundreds of company accounts. Even this fails to provide a comprehensive picture. British companies are obliged to identify donations in their accounts, but overseas donors escape the requirement.

But greater candour from the parties themselves will not alone be enough to solve the problem. British political parties should be freed from their slavish reliance on large donors, be they the commercial interests that fund the Tories or the trade unions that bankroll Labour. In this endeavour, it may be necessary for the state to offer some financial support, perhaps by matching donations pound for pound.

Alternatively, public funds could be divided between the parties according to electoral strength. Better still would be tight controls on election campaign spending at a national level, as already exists for constituency battles. A ban on expensive advertising would further reduce the need to raise large sums of money.

These measures would force political parties back to canvassing on doorsteps, rather than through the post and advertisements. Parties would continue to enjoy plenty of publicity in the media and the freedom to make unedited appeals through party political broadcasts.

These developments would make for a more democratic, transparent political system, allaying suspicions that government policy is sometimes designed to return favours to donors. Until such change is instituted, no one can feel confident that the Tory party is not endangered by moral, as well as financial, bankruptcy.