Party funding - does it matter that much?

Ever since Lord Nolan reported on standards in public life as cover for Labour's plans to introduce "transparency" in party funding (before it blew up in their face so spectactularly), I have been suspicious of attempts to limit the ability of individuals to donate to political parties. It is unfair, for example, that a busy person who chooses to donate more than £5000 must appear on a public register, but a person with a lot of free time can work unpaid for a political party and it is lauded as a healthy part of the process. In the US, it is treated as a question of freedom of expression that political donations can be made - albeit with certain limits imposed on donations to individual candidates.

As usual, I digress.

In amongst the funding scandal have been regular discussions of whether or not political parties should be funded by the state - here, for example. Given that both Labour and the Tories could probably get by on £20m per year and presumably the Libdems on a lot less, the amounts in question are a drop in the ocean, even when compared to the running costs of Parliament let alone overall government spending which runs at about £1bn per day.

Clearly, if there were to be state funding, the key issue would be as to how the money is handed out - and the advantage of incumbency would be completely unfair and open to abuse. Surely a perfectly fair route would be to combine donation limits with tax relief and/or match funding.

To be clear, I do not think donations should be limited, but sometimes when the writing is on the wall it is better to go for the least bad solution.