The coalition agreement promised “limiting donations and reforming party funding in order to remove big money from politics”. Sir Christopher Kelly was duly asked to find a solution, which he did back in November. Donations would be capped at £10,000 per individual, Labour must sign up trade union members as individual subscribers and the state would contribute more. This formula produced the most equal outcome for all parties, with sacrifices evenly distributed and a strong incentive to recruit more party members. State funds could be allocated per vote cast in elections, though Helena Kennedy’s Power Inquiry came up with something better: voters could tick a box on their ballot paper to allocate their share of state funding to a party of their choice.
That might well be the most equal outcome for extant parties. But this is to commit the usual lefty fallacy of assuming that such matters are static. It’s a fundamental misunderstanding of how markets work. And yes, of course, politics is indeed a market.
The prime mover in markets is not in fact competition. It is, rather, the possibility of competition. And that possibility of competition relies upon the ease of entry (and exit) in the market.
It doesn’t for example, matter that Google has 99.9999% of the search market (not that it does of course), only that Google act as if someone is about to enter the market with a new search engine and thus eat their lunch.
It is the same with political parties. If we assume that there will, forevermore, be two and a half UK political parties then state funding is just fine. But if we think properly, and assume that it is the possibility of a new party emerging which keeps those two and a half even vaguely straight, then state funding is the worst possible answer. For it makes that entry (and also that exit) that much more difficult. We’re entrenching monopoly positions rather than doing what we ought to, which is ease entry requirements so as to undermine those monopoly positions.
There is also the clinching argument: why in fuck should more of our money be extorted from us to pay for bastard scum politicians?
A question to which there is no answer, is there?