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26 September 2013updated 30 Sep 2013 9:05am

Democracy Ltd by Bobby Friedman: Formula wrong

British elections used to be heroically corrupt.

By Jack Straw

On 15 September 1830 William Huskisson, the Tory statesman and local MP, was killed while attending the opening of the Liverpool and Manchester Railway. The by-election that followed “found over £100,000 (£10m today) being dispensed for the benefit of a mere 4,400 voters”, according to Antonia Fraser in Perilous Question, her brilliant account of the battle for the Reform Act 1832.

British elections used to be heroically corrupt. Even after the introduction of the secret ballot in the Ballot Act 1872, staggering sums were paid out by competing candidates. “Not only could it be said that corrupt practices had increased, but the expenditure incurred at the last election was excessive,” opined the Earl of Northbrook when the Corrupt and Illegal Practices Prevention Act was going through parliament in 1883. In the preceding general election, in 1880, the Conservative and Liberal Parties had between them spent roughly £2.5m – or £210m in today’s money.

Of that £2.5m, no more than £50,000 was spent by the central party organisations – the rest was spent at the constituency level. The controls that were introduced then, and progressively tightened right up to 1983, were all focused on constituency expenditure during the final few weeks of an election campaign. These controls, though necessary, were clearly not sufficient to cope with modern campaigning – increasingly centralised and extending over many months (sometimes years) before the election starting pistol was fired.

Comprehensive spending controls, with a ban on overseas donations and much stricter rules on the identities of donors, were brought in by the Political Parties Elections and Referendums Act 2000 (PPERA). As home secretary, I was the minister responsible for this act but its provenance was a magisterial report by the Committee on Standards in Public Life under the chairmanship of Lord Neill.

In the closing years of Labour’s last opposition, we were increasingly successful in exploiting a succession of allegations of “sleaze” that had engulfed John Major’s government. But we were daft to imply that the Tories had a monopoly of sin.

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In late autumn 1997 the Bernie Ecclestone affair blew up. Ecclestone, the Formula 1 boss,had given £1m to the Labour Party before the election. In mid-October 1997 he met Tony Blair to protest about a planned EU-wide ban on tobacco advertising, on which Formula 1 was heavily dependent.

Though the pre-PPERA rules did not require full disclosure of donations, the fact of Ecclestone’s largesse and his lobbying against the EU ban inevitably and quickly hit the press. The facts were damaging and so, too, as Tony very quickly acknowledged, was its handling. It severely dented our reputation as a party trying to conduct our politics in a better way. Bobby Friedman understandably devotes a chapter of his book to this saga – entirely fair if you’re writing one with the subtitle How Money and Donations Corrupted British Politics.

What undermines Friedman’s wider case is the sloppy way he has put this book together, which is a shame, given that the subjectmatter is so timely. “In the wake of the Ecclestone scandal,” Friedman writes, “Blair saw that reform could no longer be avoided and he asked Lord Neill’s Committee on Standards in Public Life to investigate the system of donations.”

That is simply incorrect. All this happened before the Ecclestone scandal blew up. There was an explicit commitment in the May 1997 Labour manifesto to ask the Neill committee “to consider how the funding of political parties should be regulated and reformed”, a reference to which was in the Queen’s Speech in May, with further details provided by Tony Blair to the party conference on 30 September 1997.

This is not the only irritating error in the book. We are told, for instance, about a donation to David Lloyd George of £50,000 in 1921, “equivalent to over £12m today”; a few pages later there’s a reference to Lloyd George selling baronetcies for “£25,000 (around £1.7m in current money)”. They can’t both be right. In fact, neither figure is: £50,000 in 1921 is about £1.9m in today’s prices, and £25,000 therefore £950,000.

Friedman recites at some length his version of the cross-party talks on party funding, on which I led for the Labour Party, under the chairmanship of Hayden Phillips, a retired civil servant.

In the summer of 2007 we were indeed tantalisingly close to a deal but Friedman is plain wrong in suggesting that the breakdown was Labour’s. Don’t take my word for it. This is what David Heath, the Liberal Democrat representative at the talks, said: “For the Conservatives to now, in effect, walk away is a tragedy and very short-sighted on their part,” and that the Conservative Party’s attitude to a deal “changed . . . markedly over the summer [of 2007] at about the same time as a certain Lord Ashcroft moved into Central Office”.

Away from his panting, conspiratorial narrative, Friedman is more sober in his last, analytical chapter on the future. He makes the crucial point that we already have state funding of political parties; that the total sum needed “to rid the political system of big money comes to around £23m a year – or roughly the cost of a postage stamp for every voter. This is not introducing state funding – just increasing it by a little under 50 per cent.” He considers the idea of a funding mechanism of, say, £3 for every voter; or, in my view, a better variant: that as people vote, they could if they wish tick a box to allocate such a sum to their party.

It may be that Ed Miliband’s reform will start the process to get how we fund politics into better order and cut the reliance on large donations. We need to. But we should also acknowledge that we are light years from the endemic corruption of the 19th century, and that by comparison with many comparable countries, party politics in the UK is both relatively clean and a remarkable bargain.

Jack Straw is the MP for Blackburn (Labour)