Wanted: a better way to fund our political parties

The Ashcroft affair warns politicians to keep the rich at arm's length, says Geoffrey Wheatcroft

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t was so much simpler in the 18th century. Pocket boroughs came in different shapes and sizes, and at various prices. A rich landowner could collect boroughs almost as a hobby, and the MPs to go with them. f he were politically ambitious beyond mere local influence, he could create his own party. The Rockingham Whigs were a formidable body in the 1770s - a group of MPs financed by a rich magnate, the Marquess of Rockingham, and graced by Edmund Burke, the greatest political mind of his age.

The nearest thing in our own time, come to think of it, was the little SDP rump in the mid-1980s, led by David Owen and paid for by the seriously rich David Sainsbury (now genetically modified into a New Labour minister). Lord Sainsbury of Turville may not have ranked with Rockingham, and Lord Owen's best friend would not call him the Edmund Burke de nos jours. But nor did anyone call their association corrupt.

Grave charges, by contrast, have been levelled against Michael Ashcroft, the Tory party treasurer, by the Times and by a Labour MP in curious collusion with that newspaper. Now that Mr Ashcroft is suing for libel, we shall have to wait and see whether he can clear the air and his name. Whatever happens, the episode shows that party financing is the most corrosive issue affecting democratic countries today. And it is precisely that: a problem of democracy, created by the coming of universal suffrage and mass political parties.

n Rockingham's time, corruption wasn't a problem because it was the undisguised way of the world. Walpole was the first man to be called prime minister, and he left his long years of office flagrantly richer than he began them. n his day and for more than a century after, many parliamentary boroughs, not just rotten ones, went to the highest bidder, and the Great Reform Bill did not end this. The "bought parliament" of 1839 was produced by the most corrupt of all elections. And yet the corruption was still on a local level, rich men exercising patronage in their own neck of the country at a time when parties in the modern sense barely existed.

The organisation of parties on a national level from the late 19th century was a function of democracy, but it created a new problem: these parties were money-hungry. Tories and Liberals vied for the support of the rich, and the more or less discreet sale of honours became the recognised means of securing that support. That happy arrangement came unstuck when Lloyd George sold honours in a particularly flagitious way to some exceptionally dubious personages. Since that scandal, there has been a more or less serious scrutiny of proposed honours.

Labour wouldn't or couldn't play the honours game and found its income instead from the political levy raised by trade unions, while the Tories came to rely on donations from limited companies. There has been no more sophisticated raiser of corporate bunce in recent times than Lord McAlpine, who has kept eloquently silent all week long about Ashcroft, refusing either to deny or to comment on the rumour that he was opposed to his appointment.

There is one irony here. Alistair McAlpine was a loyal supporter of Margaret Thatcher and one of the less fruity members of her own kitchen cabinet, that extraordinary galere of wizards, mountebanks and chancers. But Lady Thatcher, in contrast with her old courtier, is solidly behind Mr Ashcroft.

For William Hague there is another and bitter irony. He hasn't been quite so unequivocal as Lady T in support of Ashcroft, and yet this is a man whom Hague brought in supposedly to diversify the party's financial support and free it from damaging reliance on dodgy donors. Only a party graced by Jeffrey Archer as a former vice-chairman and now prospective candidate for Mayor of London could have turned to a man like Mr Ashcroft to clean up its act.

But there is some evidence that the desire to reform the system was sincere on Hague's part. t is no excuse for him to say so, nor much consolation, but there is nothing uniquely Tory about the problem, nor uniquely British. The rish Republic witnesses almost weekly revelations about financial skulduggery in high places, often related to the desperate need of parties to raise funds (though sometimes to good old-fashioned individual corruption).

Almost worse is the United States, where there is nothing surreptitious at all. The Americans already have "the best Congress money can buy", and they witness the gruesome spectacle of a presidential candidate like George W Bush quite openly raising scores of millions of dollars before he begins his actual campaigning.

Although the Government will, understandably and in some ways justifiably, milk the Ashcroft affair for all it is worth, Labour shouldn't laugh too loud. ts own financial record is not spotless. For each of three years Ashcroft has given the Tories a million pounds: the very sum which seems to be New Labour's own price. That was what Bernie Ecclestone paid before he found the rules changed as he wanted, and that is what an animal welfare group paid shortly before Mr Blair promised to ban hunting.

f the last Tory government had allowed the Neill committee to examine party funding, Mr Hague might not be in his present jam. As it is, he ought to support next week's government Bill to regulate funding, and any proposal to cap party spending. And all of us ought to think hard about how to pay for our parties.

The obvious points are negative ones. We don't want to go down the American Way. The First Amendment guaranteeing freedom of speech is one of the noblest sentences ever penned, but it has been gravely abused. A pedantic interpretation of the Second Amendment - "the right of the people to keep and bear arms" - has meant that psychotic children can take lethal weapons into American high schools. And another perverse ruling by the Supreme Court - that restrictions on political donations and television advertising infringe free speech - ensures that the most powerful country on earth is a plutocracy.

But other solutions are scarcely better. State funding of parties has been a gleam in the eye of our rulers for years past, and they say at Westminster that it has been dropped temporarily only because the Government doesn't think the public will wear it. Few politicians seem to have wondered whether state funding raises a moral issue. There is a huge assumption here, that it is necessary, and even virtuous, for political parties to have great sums of money so that they can tell their respective packs of lies at election time. But in terms of functional democracy, it cannot possibly be argued that the electorate is insufficiently informed about the party programmes, such as they are. Do we actually need anything more than national manifestos, constituency leaflets and a few party political broadcasts?

As much to the point, when the Royal National Lifeboat nstitute and Oxfam can raise their funds through voluntary individual donations, why shouldn't political parties be able to do the same? f that sounds a silly question to William Hague and Tony Blair, maybe that's because its answer is both too obvious and too painful.