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Short money

Cutting the cost of politics?

One Spending Review announcement you may be excused for having missed was the cut to ‘Short money’ – the financial assistance given to opposition parties. Hannah White considers the purpose of financial assistance to opposition parties and the rationale for this reduction.

Short money is made available to all opposition parties that have secured either two seats or one seat and more than 150,000 votes at the previous General Election. Last Wednesday, the Chancellor proposed to reduce this opposition funding by 19 per cent, and then freeze it for the rest of the Parliament. It is not clear from the Spending Review what will happen either to the ‘Cranborne money’ provided to the two largest opposition parties and the Crossbench peers in the House of Lords, or to the ‘Representative money’ supplied to parties who have not taken their seats in the House of Commons (currently Sinn Féin). The government presented its proposed cuts to Short money as being in line with the steps it has taken to ‘cut the cost of politics’ – including its plans to cut the number of MPs from 650 to 600, the ongoing freeze to ministerial pay, and the abolition of pensions for councillors in England. The figures involved here are small (the total amount all opposition parties together could claim in 2015/16 will be under £10 million), so this cut will be largely symbolic. For those keen to address persistently poor public perceptions of politics and politicians, such a move to cut their costs may be attractive. If the primary motivation for this reduction is to cut the cost of politics, the Government’s messages on this front have been somewhat mixed. Cameron’s creation of 233 new peers since he became Prime Minister has added a potential £70,000 to the taxpayer’s bill every day that the House of Lords sits. Furthermore, if the Government thinks it is appropriate to ask other political parties to share the pain of austerity, it might seem reasonable for them to apply the same level of cuts to the budget for the special advisers who add a political dimension to the advice and assistance available to the governing party from the Civil Service. On the other hand, if the motivation for the cuts is that political parties must share in the austerity being imposed on the rest of the public sector, then the level of the cut is not self-evident. While 19 per cent is the average cut to unprotected Whitehall departments, a number of departments and budgets have been ring-fenced, or subject to lesser or greater cuts. In the absence of wider analysis it is not clear why a 19 per cent cut is necessarily appropriate here. The appropriate level of resourcing for opposition parties is, therefore, the issue the House of Commons will have to consider when the Members Estimate (the formal proposal for government spending that includes Short money) is presented by the Treasury in the spring. While the Members Estimate Committee – the parliamentary committee with responsibility for examining the Estimate – has very limited powers to amend it, the decision on whether the cuts proposed by the Government should be implemented will almost certainly require a motion debated on the floor of the House of Commons. Although the Government does have a narrow majority in the House, which may enable it to push this cut through, MPs will no doubt wish to consider the value of ensuring parties have the resources to scrutinise government and also to develop policy in opposition. As Sir George Young – then Shadow Leader of the House – observed on 26 May 1999 (the last time the arrangements for Short money were debated in the Commons) “A healthy democracy depends on a well-briefed, well-resourced Opposition. That is good for government as well.” Although Short money does include some administrative costs – including a fixed annual budget for the running costs of the Leader of the Opposition’s office, it also includes two other components that support opposition parties in fulfilling their democratic role of providing challenge to the Government: general funding intended to assist an opposition party in carrying out its Parliamentary business; and funding for the opposition parties’ travel and associated expenses. Some may argue that cuts to these pots of funding could impinge on the ability of opposition parties to hold government to account. There may also be concern that the cuts could affect the ability of parties to develop policy in opposition. As well as cutting Short money, the Government proposes to reduce by 19 per cent the Policy Development Grant fund (currently £2 million), which is divided between eligible parties to help them develop policies for inclusion in their election manifestoes. Whatever the outcome of the debate it is a reminder that, for political parties, good policymaking is not just how much money they have, but how they use it. We have long advocated for more rigorous policymaking in opposition; and for preparation of shadow ministers for the different set of skills and knowledge required in government. Using resources wisely while in opposition is crucial in enabling parties to turn their plans into action when they come into power. The way in which policies are developed in opposition can have a big effect on the quality of policy and the effectiveness of subsequent governments. That is something that is of interest to us all.

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