Labour and the Tories must accept state funding

The political class is in denial over the need for democracy to pay for democracy.

The latest sleaze scandal is a symptom of a chronic malady which will not be cured until all parties accept that external financing of democracy inevitably opens them to the accusation of exchanging influence over policy for receipt of cash. Every continental and commonwealth parliament has gone through the same agony of political scandals arising from parties having to raise cash for core democratic activity from external sources. Every country has had to come to terms with the need for democracy to pay for democracy.

British political parties remain in denial on this issue. The Conservatives remain addicted to big donations from rich business chums. Labour depends on trade union cash and even if the cheques are an aggregate of small payments they allow a small number of union leaders to wield influence and have access.

In the past two decades, both parties have been rocked by allegations over cash for access and influence, or the undemocratic concept that appointment as a legislator may be connected to payment to political parties.

I have seen in so many other countries the same process of parties defending occult external financing and then, as scandal after scandal broke, coming round reluctantly to accept full democratic funding.

The Conservatives would benefit as people would no longer see the party as being the servant of the rich. Labour would benefit as the accusation that unions dictate candidates and policy would fall away. Wealthy businessmen and major trade unions would of course support the Tories and Labour, and campaign for causes and policies just as is the case in other countries. But the public would no longer believe that money-rich donors have undue influence.

I urged these measures after 1997 but failed to persuade Labour ministers. I put up papers to Robin Cook with whom I worked at the Foreign Office but despite Robin's commitment to radical reform he was too nervous of making the case for democracy paying for democracy. At the time, Labour was awash with external business donations even though the £1 million offered by Bernie Ecclestone marred Tony Blair's first term. That should have been a warning but Labour refused to embrace party funding reform. This denial ended with the disaster of the police investigation into the loans for peerages scandal that blackened the last years of Labour in office.

I tried to persuade Labour ministers to amend the seriously defective Political Parties, Elections and Referendums Bill to bring some extra money for policy work. It was an attempt to augment the already existing level of state funding available.

But Tony Blair and Gordon Brown (and to be fair most Labour ministers) were locked in denial on the need for more state funding. They did not want to provoke rows with trade unions and thought the cash from pro-Labour wealthy individuals would keep on flowing in.

Yesterday in the Commons, Francis Maude for the Conservatives proved that he, like his Labour predecessors, remains in denial on democracy paying for democracy as he continued to denounce the idea of state funding. Labour is enjoying the Tories' discomfiture but no Labour MP urged democracy paying for democracy in the exchanges in the Commons.

The most recent scandal is very damaging to David Cameron but Labour's current Schadenfreude is transitory. The only way this problem has been solved in other countries is full democratic, transparent funding for political party work. The rest of the world has learned that lesson. It is worrying that British politics remains in such denial.

Denis MacShane is MP for Rotherham and a former Europe minister. Follow him on Twitter: @denismacshane

David Cameron speaks at the Alzheimer's Society announcing more funding for research into dementia. Photograph: Getty Images.
Denis MacShane is MP for Rotherham and was a minister at Foreign and Commonwealth Office
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Former Irish premier John Bruton on Brexit: "Britain should pay for our border checks"

The former Taoiseach says Brexit has been interpreted as "a profoundly unfriendly act"

At Kapıkule, on the Turkish border with Bulgaria, the queue of lorries awaiting clearance to enter European Union territory can extend as long as 17km. Despite Turkey’s customs union for goods with the bloc, hauliers can spend up to 30 hours clearing a series of demanding administrative hoops. This is the nightmare keeping former Irish premier John Bruton up at night. Only this time, it's the post-Brexit border between Northern Ireland and the Republic, and it's much, much worse.   

Bruton (pictured below), Taoiseach between 1994 and 1997, is an ardent pro-European and was historically so sympathetic to Britain that, while in office, he was pilloried as "John Unionist" by his rivals. But he believes, should she continue her push for a hard Brexit, that Theresa May's promise for a “seamless, frictionless border” is unattainable. 

"A good example of the sort of thing that might arise is what’s happening on the Turkish-Bulgarian border," the former leader of Ireland's centre-right Fine Gael party told me. “The situation would be more severe in Ireland, because the UK proposes to leave the customs union as well."

The outlook for Ireland looks grim – and a world away from the dynamism of the Celtic Tiger days Bruton’s coalition government helped usher in. “There will be all sorts of problems," he said. "Separate permits for truck drivers operating across two jurisdictions, people having to pay for the right to use foreign roads, and a whole range of other issues.” 

Last week, an anti-Brexit protest on the border in Killeen, County Louth, saw mock customs checks bring traffic to a near standstill. But, so far, the discussion around what the future looks like for the 260 border crossings has focused predominantly on its potential effects on Ulster’s fragile peace. Last week Bruton’s successor as Taoiseach, Bertie Ahern, warned “any sort of physical border” would be “bad for the peace process”. 

Bruton does not disagree, and is concerned by what the UK’s withdrawal from the European Convention on Human Rights might mean for the Good Friday Agreement. But he believes the preoccupation with the legacy of violence has distracted British policymakers from the potentially devastating economic impact of Brexit. “I don’t believe that any serious thought was given to the wider impact on the economy of the two islands as a whole," he said. 

The collapse in the pound has already hit Irish exporters, for whom British sales are worth £15bn. Businesses that work across the border could yet face the crippling expense of duplicating their operations after the UK leaves the customs union and single market. This, he says, will “radically disturb” Ireland’s agriculture and food-processing industries – 55 per cent of whose products are sold to the UK. A transitional deal will "anaesthetise" people to the real impact, he says, but when it comes, it will be a more seismic change than many in London are expecting. He even believes it would be “logical” for the UK to cover the Irish government’s costs as it builds new infrastructure and employs new customs officials to deal with the new reality.

Despite his past support for Britain, the government's push for a hard Brexit has clearly tested Bruton's patience. “We’re attempting to unravel more than 40 years of joint work, joint rule-making, to create the largest multinational market in the world," he said. It is not just Bruton who is frustrated. The British decision to "tear that up", he said, "is regarded, particularly by people in Ireland, as a profoundly unfriendly act towards neighbours".

Nor does he think Leave campaigners, among them the former Northern Ireland secretary Theresa Villiers, gave due attention to the issue during the campaign. “The assurances that were given were of the nature of: ‘Well, it’ll be alright on the night!’," he said. "As if the Brexit advocates were in a position to give any assurances on that point.” 

Indeed, some of the more blimpish elements of the British right believe Ireland, wedded to its low corporate tax rates and east-west trade, would sooner follow its neighbour out of the EU than endure the disruption. Recent polling shows they are likely mistaken: some 80 per cent of Irish voters say they would vote to remain in an EU referendum.

Irexit remains a fringe cause and Bruton believes, post-Brexit, Dublin will have no choice but to align itself more closely with the EU27. “The UK is walking away,” he said. “This shift has been imposed upon us by our neighbour. Ireland will have to do the best it can: any EU without Britain is a more difficult EU for Ireland.” 

May, he says, has exacerbated those difficulties. Her appointment of her ally James Brokenshire as secretary of state for Northern Ireland was interpreted as a sign she understood the role’s strategic importance. But Bruton doubts Ireland has figured much in her biggest decisions on Brexit: “I don’t think serious thought was given to this before her conference speech, which insisted on immigration controls and on no jurisdiction for the European Court of Justice. Those two decisions essentially removed the possibility for Ireland and Britain to work together as part of the EEA or customs union – and were not even necessitated by the referendum decision.”

There are several avenues for Britain if it wants to avert the “voluntary injury” it looks set to inflict to Ireland’s economy and its own. One, which Bruton concedes is unlikely, is staying in the single market. He dismisses as “fanciful” the suggestions that Northern Ireland alone could negotiate European Economic Area membership, while a poll on Irish reunification is "only marginally" more likely. 

The other is a variation on the Remoaners’ favourite - a second referendum should Britain look set to crash out on World Trade Organisation terms without a satisfactory deal. “I don’t think a second referendum is going to be accepted by anybody at this stage. It is going to take a number of years,” he said. “I would like to see the negotiation proceed and for the European Union to keep the option of UK membership on 2015 terms on the table. It would be the best available alternative to an agreed outcome.” 

As things stand, however, Bruton is unambiguous. Brexit means the Northern Irish border will change for the worse. “That’s just inherent in the decision the UK electorate was invited to take, and took – or rather, the UK government took in interpreting the referendum.”