Leading Article: State funding of parties is no answer

'IN AN ideal democracy, political parties would be financed entirely from voluntary contributions by their members. Neither the state nor institutions, such as companies or trade unions, would have any role to play.' So said Vernon Bogdanor, Reader in Government at Oxford University, in his evidence to the Commons Home Affairs Select Committee. His submission coincided with the debate about Labour's dependence on trade union funding, but preceded the current furore over secret contributions to the Conservatives. Few people, surely, would disagree with his definition of the ideal, well short of which the present state of British democracy manifestly falls. Only the Liberal Democrats survive on funds from members and individual supporters.

The failures of the present system are glaring. In the case of Labour, trade unionists' contributions are not entirely voluntary, and the party's dependence on (and constitutional links with) the unions has inhibited its modernisation. In the case of the Tories, shareholders of contributing companies are not consulted, and devious devices are sometimes used to conceal the money's origins: hence the present crisis. In both cases, the parties' dependence leaves them vulnerable to pressure from known or unknown benefactors.

So should Britain adopt either of the main methods used in many other democracies? These are, on one hand, direct state funding and, on the other, tax incentives that stimulate individual contributions (the second being also, if less obviously, a charge on the taxpayer).

A measure of state subsidy already exists in Britain. Since 1937 there has been an annual payment for the Leader of the Opposition, in recognition of the principle that an effective opposition is important to democracy; and since 1975 funds have been provided to opposition parties - for researchers and the like - to help them carry out their parliamentary work. Additionally, television companies are obliged to make time available, free, for party political and election broadcasts: no small contribution.

Mr Bogdanor and others argue that public funding should be extended, for two main reasons: first, to make the two main parties independent of interest groups; and second, to enable all parties to establish first-class policy-making machinery, in opposition as well as in government. To prevent them sinking back into their feather bed, some reformers advocate tying state subsidies either to the number of votes in the last election, or to the number of members.

Attractive though these proposals may seem, they derive from very different political cultures, and would be likely to create as many problems as they solve. There is nothing inherently wrong in the forces of labour and capital backing parties they consider sympathetic, providing they do so openly. Trade unionists must contribute willingly. Business executives should use their own money, or have the approval of shareholders. All contributions above a certain sum should be published.

Most importantly, political parties should set out to attract more members. Something is seriously wrong when the Labour Party can attract only half as many members as Greenpeace and a quarter as many as the Royal Society for the Protection of Birds.