The Home Secretary David Blunkett said that political parties will eventually be financed by the state. He said that democracy depended on the proper accountability of political parties. But why the change, what is wrong with the current system and how with this effect the people of this country?.
The current way in which a political party gets funding is predominantly by donations, either from wealthy individuals or big business. In the case of Labour, around 8% of its costs are paid for by party members' subscriptions, with affiliation fees from unions contributing only around 27%. Donations make up the remaining two-thirds. For the Conservatives, the ratio is much higher, with around 90% of their funding coming from political donations. Even the Liberal Democrats find donations outnumber subscriptions by about two to one.
The disadvantage of this current system is that it leaves the political party in power in a venerable position to sleaze even John Prescott has admitted that allegations of sleaze relating to large business donations are a problem for the government. Sleaze in fact has been a major problem for the Labour party when it comes to donations being given for favours. One such occurrence was when Bernie Ecclestone donated one million pounds to labour, and then week's later formula 1 was announced as the only sport to be exempt from a ban on tobacco sponsorship to fund the sport. Tony Blair was later forced to apologise over the handling of the incident on national television, however he still said that the government had done nothing wrong. He promised to immediately publish the notes from his crucial meeting with Mr Ecclestone on October 16, but he said there was no need for a public inquiry into the affair and the money was later returned in its entirety.
Another very damaging account of sleaze was in 2001 when the Conservatives called for an inquiry into the £32m smallpox vaccine contract awarded to a Labour donor without being put out to tender.