The Lib Dems' money woes are growing

Clegg's party might need a spell in opposition just to balance the books.

The Electoral Commission has published its accounts of political party income and expenditure. The table showing the financial state of health of the top 14 - the ones that get £250,000 or more - is available here.

The item that has made a few headlines is the drop in income for the Tories. The party's takings were down by 45 per cent on the previous year - now at the same level they were last at in 2003. That's wilderness income. Of course, the Conservative coffers will fill up again as an election approaches. They always do. But the fall in revenue might also reflect disquiet among big donors at negative publicity attached to the status of being seen to be a Cameron crony (especially after this incident) and irritation at the party leadership's willingness to indulge media bashing of bankers, high pay and fat-cattery.  The Telegraph's Ben Brogan wrote a column earlier this week suggesting donors were sniffing around Boris Johnson as a friendlier protege.

Labour also received less than last year but, thanks to the trade unions, the party's funding stream is a little more stable (although there is a political price to be paid for that dependency ... the subject of another much longer blog another time).

One thing that caught my eye in this year's accounts though was the perennial shortage of cash felt by the Lib Dems. They take in a fraction of the sums enjoyed by the big two and, unlike their rivals, spend more than they earn. One of the cruelties of coalition for the Lib Dems is that power has not suddenly opened up new exciting financing opportunities. Joining the governing big league has not granted entry to some exclusive high rolling donors club. Meanwhile, the party has lost the "short money" made available by the state to official opposition parties. And to make matters worse, Lib Dem councillors traditionally chip in around 10 per cent of their allowances to help fund the party. So the massacres in local elections in recent years have put a further squeeze on income. The Lib Dems, in other words, are utterly broke.

One senior Labour figure recently suggested to me that this would ultimately be the factor that breaks the coalition. The Lib Dems, this theory goes, will have to quit the government a year or so before an election so they can get their short money back. Without it they simply wouldn't be able to mount a campaign. Now that could be spite and mischief from the enemy camp (the shadow cabinet figure involved is no admirer of the Cleggists) but senior Lib Dems themselves don't deny privately that they have serious money woes. Maybe staying in government to the very bitter end will prove a luxury they can't afford.

Entering government has cost Clegg's party money as well as votes. Photograph: Getty Images

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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Why the Liberal Democrats by-election surge is not all it seems

The Lib Dems chalked up impressive results in Stoke and Copeland. But just how much of a fight back is it?

By the now conventional post-Brexit logic, Stoke and Copeland ought to have been uniquely inhospitable for the Lib Dems. 

The party lost its deposit in both seats in 2015, and has no representation on either council. So too were the referendum odds stacked against it: in Stoke, the so-called Brexit capital of Britain, 70 per cent of voters backed Leave last June, as did 62 per cent in Copeland. And, as Stephen has written before, the Lib Dems’ mini-revival has so far been most pronounced in affluent, Conservative-leaning areas which swung for remain. 

So what explains the modest – but impressive – surges in their vote share in yesterday’s contests? In Stoke, where they finished fifth in 2015, the party won 9.8 per cent of the vote, up 5.7 percentage points. They also more than doubled their vote share in Copeland, where they beat Ukip for third with 7.3 per cent share of the vote.

The Brexit explanation is a tempting and not entirely invalid one. Each seat’s not insignificant pro-EU minority was more or less ignored by most of the national media, for whom the existence of remainers in what we’re now obliged to call “left-behind Britain” is often a nuance too far. With the Prime Minister Theresa May pushing for a hard Brexit and Labour leader Jeremy Corbyn waving it through, Lib Dem leader Tim Farron has made the pro-EU narrative his own. As was the case for Charles Kennedy in the Iraq War years, this confers upon the Lib Dems a status and platform they were denied as the junior partners in coalition. 

While their stance on Europe is slowly but surely helping the Lib Dems rebuild their pre-2015 demographic core - students, graduates and middle-class professionals employed in the public sector – last night’s results, particularly in Stoke, also give them reason for mild disappointment. 

In Stoke, campaign staffers privately predicted they might manage to beat Ukip for second or third place. The party ran a full campaign for the first time in several years, and canvassing returns suggested significant numbers of Labour voters, mainly public sector workers disenchanted with Corbyn’s stance on Europe, were set to vote Lib Dem. Nor were they intimidated by the Brexit factor: recent council by-elections in Sunderland and Rotheram, which both voted decisively to leave, saw the Lib Dems win seats for the first time on massive swings. 

So it could well be argued that their candidate, local cardiologist Zulfiqar Ali, ought to have done better. Staffordshire University’s campus, which Tim Farron visited as part of a voter registration drive, falls within the seat’s boundaries. Ali, unlike his Labour competitor Gareth Snell and Ukip leader Paul Nuttall, didn’t have his campaign derailed or disrupted by negative media attention. Unlike the Tory candidate Jack Brereton, he had the benefit of being older than 25. And, like 15 per cent of the electorate, he is of Kashmiri origin.  

In public and in private, Lib Dems say the fact that Stoke was a two-horse race between Labour and Ukip ultimately worked to their disadvantage. The prospect of Nuttall as their MP may well have been enough to convince a good number of the Labour waverers mentioned earlier to back Snell. 

With his party hovering at around 10 per cent in national polls, last night’s results give Farron cause for optimism – especially after their near-wipeout in 2015. But it’s easy to forget the bigger picture in all of this. The party have chalked up a string of impressive parliamentary by-election results – second in Witney, a spectacular win in Richmond Park, third in Sleaford and Copeland, and a strong fourth in Stoke. 

However, most of these results represent a reversion to, or indeed an underperformance compared to, the party’s pre-2015 norm. With the notable exception of Richmond’s Sarah Olney, who only joined the Lib Dems after the last general election, these candidates haven’t - or the Lib Dem vote - come from nowhere. Zulfiqar Ali previously sat on the council in Stoke and had fought the seat before, and Witney’s Liz Leffman and Sleaford’s Ross Pepper are both popular local councillors. And for all the excited commentary about Richmond, it was, of course, held by the Lib Dems for 13 years before Zac Goldsmith won it for the Tories in 2010. 

The EU referendum may have given the Lib Dems a new lease of life, but, as their #LibDemFightback trope suggests, they’re best understood as a revanchist, and not insurgent, force. Much has been said about Brexit realigning our politics, but, for now at least, the party’s new normal is looking quite a lot like the old one.