I guess I should have wrote about the cash for peerages scandal before now, but I didn’t want to rant about it until the details of the story had emerged. After all, the fact that politicians are corruptible and unscrupulous is hardly a radical concept.
For the record I would like to say that I have been, in the not-too-distant past, a member of the Labour Party. I foolishly believed that the state could be used to improve our society, and that wealth distribution was a route to social justice. I have seen my utopian hopes and dreams dashed by this Labour Party. I am now a fully-fledged, unreconstructed, political and economic libertarian. And you can thank New Labour for that.
As a registered Labour supporter I received emails during the last election, requesting a donation to help fight the election. I replied to the emails, rather indignantly, saying that they had little chance of receiving any funds from me. Another email, towards the end of the campaign, thanked all the supporters, claiming: that the party had raised record sums and that we had helped keep the election fight going. I was under the impression that this direct solicitation had funded the election – a victory, almost, for micro-finance over the big donor culture of the Tories.
Imagine the chagrin of well-meaning Labour campaigners, of which I am not one, to the news that the Party has, in return for loans, prostituted the honours system. Labour accepted loans to the tune of almost £14m (the election cost Labour £17.94m). To grass-roots Labour supporters, that is a lot of money – it may as well be £14-squillain, and for a party which is supposed to represent working families, accepting such large donations from successful capitalists, does whiff a bit.
The reality is that modern election campaigns are very expensive operations and parties are desperate for cash. Having unseated the Tories, and migrated its natural home on the left, voters are unable to find a reason to send a cheque to the Labour Party. Having dropped from around 400,000 members in 1997, to less than half that, Labour faces serious cash-flow problems and these loans were necessary to ensure they were not bankrupted by the costly election.
But why were they secret, surreptitious to the point, that the party treasurer and Deputy PM were not informed? The public, justifiably suspicious of politicians, naturally smell a rat.
The key factor in this case is the current solvency of the Labour Party, which is very suspect. Reports on cash-flow problems were rife in 2004 and 2005, and Labour needed an injection of capital prior to the election, and fund-raiser Lord Levy arranged loans to the value of £13,950,00. But how could a party with a dwindling membership afford the £900,000-a-year interest payments? The accusations, regarding any wrongdoings, are based of the fact that lenders were told not to declare the loans, and subsequently, a number of them were nominated in the honours list. Were these businessmen, as the media now suggests, promised a seat in the House of Lords?
A criminal factor must also be addressed. If indeed, as lender Sir Gulam Noon reports, that a “senior party man” told him, “there was no reason why I should declare this loan as it was refundable,” and the same official told him, “that because there was interest on the loan it was a commercial matter and would not come under the same party funding rules as a donation,” then this is surely a financial transaction that should be declared. The transaction is either a donation, which must be declared, or will represent – in the form of interest – taxable earnings for Mr. Noon. The loans must be declared to someone, is this why the Chancellor, was also kept in the dark?
The implicit understanding is clear. The Labour Party intended to reward many of the lenders with peerages, and when all had quietened down and the new peers were safely in the Lords, the loans would be turned into donations, and declared to the Electoral Commission. So the rules were, it is alleged, ‘bent’ to hoodwink the House of Lords Appointments Commission. This would explain the Prime Ministers prompt willingness to relinquish his right to nominate peers directly, if he had nothing to hide why would he so readily give up power? It is not in character for Mr. Blair to give ups such control.
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Scandals such as this have occurred throughout the history of our parliament, but today we are supposed to have developed legal mechanisms to prevent abuse of the system. It was a Labour law that was circumvented by this loophole, which raises even more concerns, that this was deliberate deception.
With the political parties fighting over the centre ground, their messages are becoming blurred. The modern body politic does not encourage ideological differences, meaning the parties are inseparable to the average voter – there is, therefore, little reason to be a member of a political party or contribute to its funds.
Starved of funds, parties are now – in unison – advocating centrally allocated finances. This would mean the taxpayer picks up the tab. Why the hell is this, the taxpayer’s problem? People are giving money to interest and activist groups at record levels, suggesting the populace is politically active, just not interested, in the main political parties; and why should they be?
If the main parties choose to disown their values, alienating their membership, to fight over the thinning oxygen in the centre, why should we – the taxpayer – subsidize them? They will become extinct, and rightly so. The political system will then be more representative of the will of the people and coalitions of new ideologically charged parties will rise to the power.
Why should we try and save shallow unrepresentative political parties?