Only radical change will do

We need massive devolution of power to reverse the centralising excesses of Thatcher, Blair and Brow

Rightly or wrongly, 89 per cent of British people think politicians put themselves or their party ahead of constituents and the national interest. There is only one rational response to learning that nine out of 10 citizens think politicians are schmucks: change.

For too long, however, most politicians have chosen a different course. The elitist, Establishment view is this: the people (bless their cotton socks) are misguided, and should be ignored. Instead of changing politics, the two establishment parties have pulled up the drawbridge and fallen back into the comfortable arms of their own vested interests.

This strategy will fail. People are voting with their feet: at the last general election, a third of voters chose a party other than the Big Two; still more people chose not to vote at all. The old, exclusive politics, with power and influence sewn up between a few chums at Westminster, is doomed. It is time to build something new.

I spoke at my party conference in Liverpool earlier this month about building a new kind of government. I meant that our entire political system needs to be reconstructed from the bottom to the top. We need a new voting system, of course, but that isn't enough.

We need massive devolution of power to reverse the centralising excesses of Thatcher, Blair and Brown. I am leading calls for a Constitutional Convention, led by a citizens' jury of 100 people, instead of by the usual great and good. And I want wholesale reform of pay and expenses so that there is no scope for, or suspicion of, misdeeds. The second-home allowance should be replaced, perhaps by a "per diem" allowance for nights spent away from home, to help stop MPs seeming like they profiteer from taxpayer-subsidised housing.

The wish-list is long - and getting longer as politics drifts further away from ordinary people. The question is, how to create the momentum to begin this kind of fundamental change. Once it begins, the tide will be unstoppable.

The Liberal Democrats are in a unique position. Only we can change the system, because we are not part of it. I joined my party because we were an independent force at a time when Labour was in the pockets of the trade unions and Conservatives in the pockets of big business.

Both are still in hock to millionaire businessmen, trade unions, or both, and that is bad news for us all. When cash determines the rules, they will always be weighted in favour of people with the largest wallets. That is what happened in the United States, where the humble voter has long played 17th fiddle to the big money donors. If Britain is to avoid this fate, we need to take money out of politics.

Tinkering is not enough. We need a universal system where no donation over £25,000 is allowed. Big union donations must go, as must offshore finance from Belize. Trade unions must allow members to donate, through their political funds, to any party of their choice, not just to Labour. Union donations that are given on top of individual contributions must be subject to the £25,000 cap. And no non-dom should be allowed to sit in parliament. Spending should be slashed, too: no party should spend more than £10m a year, not just in an election year, but every year.

And to put power over parties into people's hands, as the Power Commission proposed, we should consider allowing every voter to donate £3, funded from the public purse, to the party of their choosing, by ticking a donation box on their general election ballot paper. If people want to support parties, it should be their choice. And we shouldn't put up taxes or cut vital investment to pay for it. The money must come by cutting the cost of politics in other ways: reducing the number of MPs and peers and cutting the government's £200m advertising budget.

The establishment parties now face a choice: join the Liberal Democrats in removing financial influence from politics, or protect short-term vested interests and condemn our political system to an early grave.

Freeing parties and politicians to listen to the people, instead of just to their major donors, will be the catalyst for fundamental change. It is this change that makes other changes possible.

Nick Clegg is leader of the Liberal Democrats and MP for Sheffield Hallam. Clegg initially trained as a journalist before working as a development and trade expert in the EU. He was elected as MEP for the East Midlands in 1999, stood down in 2004, lectured at Sheffield and Cambridge universities, and was elected to the UK parliament in 2005.

This article first appeared in the 17 March 2008 issue of the New Statesman, Iraq: the war that changed us