Future Challenges: The Cost of Democracy

Professor Keith Ewing, Australian National University, 19 June 2008

The funding of political parties is currently very newsworthy in many countries across the globe. Exceptionally the story is a good one - such as the capacity of Barack Obama to raise large sums of money in small amounts from large numbers of small donors, as well as the capacity of Obama to buck another trend by enrolling an army of volunteers prepared to work for him in their own time and at their own expense. But usually the story is a bad one, such as the recent claims of regulatory failure in the United Kingdom, with the Labour Party having been donated money through intermediaries - causing major embarrassment for the new Prime Minister and the resignation of the highly regarded and singularly unfortunate General Secretary, who has claimed innocence of any wrong-doing. Similar bad news of alleged regulatory failure was to follow shortly from Canada (a country that is usually highly regarded on issues of fiscal probity), this time relating to the raiding of the offices of the governing Conservative party by the RCMP with the authority of a search warrant, following allegations that they had overspent at the last federal general election. It is in the context of what appears to be a growing concerns in party funding in many countries, that I propose to address three themes. The first is the nature of the party funding problem, the second is the objectives that should govern the regulation of party funding, and the third is the strategies that might be adopted to implement these objectives.

The problem of party funding

The problem of party funding has moved from the dark corners of what some see as a deep swamp to the pergola in the middle, sometimes fully floodlit. The image of the pergola is very poignant, in view of the current controversy about MPs expenses in which one former Cabinet minister is said to have asked the taxpayer to pay for a pergola in her garden, a request that was unsuccessful. In looking at this problem, let me make three points. The first is that it is not a new problem, with scandal being associated with many countries from an early stage of democratic development. Canadian confederation was built on corruption, with the Canadian Pacific scandal of 1873 - when it was revealed that a contract to build a railroad across the length of Canada was awarded to the Canadian Pacific railway company in return for a donation to the funds of the governing Conservative Party, leading to the resignation of Sir John A McDonald as Prime Minister and the successful election of the Liberal Party at the election in 1874. As Graeme Orr has shown, British elections were an orgy of bribery and abuse in the nineteenth century, with votes openly bought and sold and lavish sums spent by candidates in order to secure these votes. This was a problem that was addressed by a number of strategies, but not least by the introduction of strict limits on candidate spending by the Corrupt and Illegal Practices Act 1883, provisions which are with us to this day, with proposals for their further amendment announced by the government this week. But it was not only the House of Commons that was to be engulfed by sleaze. So too was the House of Lords, following Lloyd George's selling of knighthoods and peerages apparently to raise money to establish a new political party. This gave rise to great indignation in the Lords itself, and the passing of the Honours (Prevention of Abuses) Act 1925, but the alleged continuation of the practice in one form or another by most successive Prime Ministers.

The second point is that this is a contemporary problem as well as a historical one, and as such it is one that continues to claim great prizes. It is an issue with a capacity to destroy great political parties, as in the case of the Italian Socialist Party which was destroyed by corruption involving party funding in the 1980s, leading the party eventually to dissolve in 1994. It is an issue with a capacity to undermine the integrity and authority of governments, as in the case of the United Kingdom from 1997 - 2007, when the Blair government was blighted by a succession of scandals, beginning with the controversy of the 1 million pound donation from the F1 chief Bernie Ecclestone, followed by the much smaller but equally controversial donations from a newspaper proprietor and alleged pornographer, the second richest man in the world Lakshmi Mittal, and the government contractor Paul Drayson, who subsequently became a member of the House of Lords nominated by Tony Blair, and a junior minister in his government. These were followed in turn by the 'cash for peerages' or 'loans for lordships' affair in which led to allegations that peerages were sold by the Labour Party in return for loans to party funds. According to the BBC, everyone on the list of lenders was nominated for a peerage, though it needs also to be said that a 16 month criminal investigation - that saw a serving Prime Minister questioned by the police for the first time in such an investigation (albeit as a witness rather than a suspect) - found insufficient evidence of criminal wrong-doing.

Otherwise party funding is an issue with a capacity to destroy the reputation and legacy of individuals, including the most distinguished politicians in the most sophisticated liberal democracies. We recall how Chancellor Kohl - who played a leading part in the re-unification of Germany - lost his reputation on the back of secret funding of the Christian Democrats (CDP). Kohlgate is not a toothpaste, but a scandal that broke in 1999 when it was revealed that several million DM were funneled through secret Swiss bank accounts in breach of the German party funding law. Part of the allegations are that the fund received donations from Saudia Arabia as well as from a French oil company acting under orders from President Mitterand. Apart from Kohl, there were other German casualties including a party official who was arrested, as well as the CDU itself which saw its State subsidy temporarily withdrawn. Apart from Mitterand, the long international tentacles of this affair are said also to have implicated a former Canadian Prime Minister. But it is not only at this level that party funding has an impact. In the United Kingdom we have seen - as already pointed out - the resignation of the General Secretary of the Labour Party at the end of 2007 and his subsequent investigation by the police, and we have also seen the resignation of a Cabinet minister earlier this year for failing to report donations to his campaign for deputy leadership of the Labour Party. In neither case was the sum involved very large. But in the febrile atmosphere that has surrounded the coverage of this issue, the amount is irrelevant as the press scent blood in a new era of Presbyterian probity.

But not only is this both a historical and a contemporary problem; it is also one that is likely to be a continuing problem for the foreseeable future. There are a number of explanations which lead to this pessimistic conclusion. The first relates to the end, or if not the end at least the reduction, of ideological competition between the main political parties in many jurisdictions. All parties are keen to see business as a friend, and business now seems generally happy to work with what were previously parties of the Left. One stunning example of this is the conduct of News International, whose main title was very hostile to Labour in 1992, but which has now supported Labour in the general elections since. Other stunning examples include the willingness of very wealthy people to make donations to governing parties of whichever colour, but also the promiscuity of donors who are willing to change party as often as others are willing to change their partner. But as money is more readily available, so the capacity to spend it has grown exponentially, as the parties engage in their unique form of arms' race, unique in the sense that unlike the conventional arms' race the weapons are periodically discharged and the parties must then collect even more money to maintain the previous equilibrium between them. It is also an arms' race in which the costs of battle have been raised considerably from the old days of campaigning on the back of a printing press. Now unlimited broadcasting and the new media - and their associated expenses - mean that the parties can never be satisfied that they have enough money for the campaign.

In this context it is difficult to avoid the cheap observation that in some countries at least the arms' race between parties has become more intense as the differences between them have become much less pronounced, in what has become a competition to manage rather than to govern. But alongside this we have the changing role of the State, which in an era of privatization is now much less engaged as the provider of services as the licensor and regulator of service providers, and which has enormous power of patronage as a result. This makes the parties in particular and the political process generally especially vulnerable in an era of promiscuous private wealth and rising campaign costs. Clearly the great majority of those who deal with government do so in an honest way and with complete integrity. But there is always the fear - and the risk - that the patronage role of government will attract to governing parties in particular all manner of vain and committed individuals and companies, themselves anxious to act in a public interest that happily and conveniently coincides with their own personal or corporate interest. There are individuals who for reasons of personal vanity may seek political honour, people who for personal gain may wish to seek government contracts (with government contractors banned in some countries), people who for personal gain may wish to seek help with regulators who might otherwise obstruct their path, people who for personal gain may need political support in dealing with foreign governments, and people who for personal gain may seek to smooth licensing or planning decisions. There is a risk that money may change hands to secure these decisions, and the risk of a knowledge on the part of the decision - maker that money has changed hands when these decisions are taken.

The objectives of regulatory reform

The problems of party funding are such as to suggest that there is a need for some kind of response. It may be - of course - that there are jurisdictions where these concerns do not arise because the system has its own natural equilibrium and self control. A system where the parties have enough money from private sources and resources to meet their immediate and reasonable needs; where no one by his or her donations has undue influence or control; and where the main parties have a fair opportunity of reaching the electors. I must say, however, that although some systems may have some of these features, I am unaware of any system that has them all. The first concern of the regulator then is the need to ensure that parties have adequate funding. This makes a big assumption that political parties are important and that they ought to be sustained. It is an even bigger assumption given that in many countries party membership is in freefall (the Labour Party in the United Kingdom has lost perhaps as many as half of its members since 1997) and that electoral turnout in countries where there is no compulsory voting has fallen to record low levels. At the general election in 2005 Labour won a majority for a third time on a turnout of only 61%, with the support of only 35% of those voting, and 22% of those eligible to vote. But for all that, no one has been able to devise an alternative way of government in our system of parliamentary democracy, and while this continues to be the system by which we are governed, competitive political parties will continue to be indispensable even if the relationship they have with citizens is different and much more passive.

The second concern is that in ensuring that parties are adequately funded, we need to ensure that this is by means that do not expose them to the dangers of corruption and conflict of interest. The days when we could expect the parties to be funded by the small contributions of a vast army of individual and collective members have long past, if they ever existed outside a few exceptional parties. But in worrying about corruption, it is of course the case that corruption is a strong word in its proper sense; it is not to be used lightly, and it is unlikely to be seen in its most extreme form, namely the making of donations in direct exchange for policy benefits or personal patronage. But corruption stalks the swamp in various forms and guises, to include toll-gating, and kick-backs, as well as favouritism, with the point being made by Rose Ackerman when she wrote that:

Even entirely legal contributions from wealthy interests are a source of concern. The worry is favoritism. Groups that give funds to elected officials expect help in the legislative process. They may also expect special treatment on dealing with the bureaucracy or in seeking contracts and concessions. If the interests of such groups or individuals conflict with those of the general public, this undermines democratic values.

This is written in the context of US politics, and it is not clear what empirical evidence it rests upon. It is not clear - for example - if the motivation to respond to the interests of donors relates to the donation or to other considerations which are more compelling, in an era in which governments may be more dependent on businesses than businesses on government.

But even if there is empirical evidence to support these conclusions, it may be less true of other jurisdictions where donations are more likely to be made to parties than to candidates, with the former more constrained by the need to appease a wider range of interests than the latter. Nevertheless, whatever the system, it may be naive to think that donors do not expect access, especially in times of difficulty. At the very least, donations may be likely to enhance the opportunity of access, and consequently enhance the possibility of benefits being given in return. Yet even if they do not, even if the process of giving is wholly altruistic, and even if the donations is not an exchange, there is always the problem of the appearance of corruption, which can fuel cynicism and can be just as destructive. It is for this reason - the appearance of corruption as well as the fact of corruption - that regulatory initiatives were sanctioned by the US Supreme Court in 1976. A good example of the need to protect against perception and risk as well as reality is the row in the United Kingdom caused by the donation by Lakshmi Mittal to the Labour Party in 2002. Mr Mittal made a donation of £125,000 to the Labour Party at the time he was said to have been negotiating to buy a Romanian steel company. Just over a year later, the Prime Minister wrote to his Romanian counterpart, apparently lobbying on behalf of the British based bid for the steel company. Although any link between the donation and the letter was strongly denied, the coincidence was nevertheless enough to raise concerns about the impact of big donations on public confidence, to the extent that the press is a weathervane of public opinion.

The third concern in the field of party funding is that in ensuring the parties are adequately funded, we need also to ensure that there is fair competition between the parties. The issue here is to avoid great disparities in arms available to the parties by recognizing the right to equality of arms, an idea familiar to human rights lawyers. In this context, however, the right to equality of arms is an issue located in the principles of universal suffrage and representative government, which recognizes not only the right of us all to vote as political equals, but also the right of us all to stand for election and to compete for elected or representative office on an equal basis. It also means, however, the right of us all to ensure that those we wish to represent our views - those for whom we vote - have a fair chance of being elected and that they are not at a disadvantage because of a lack of financial or other resources. So in the same way that we struggled for an equal franchise, so parties of the Left have struggled for an equal electoral system, including (i) a right not to stand for election and to do so on equal terms, as well as (ii) a right not only to choose who our representative will be and to do so on equal terms with others . This principle is recognized in different countries in different ways - it may be by the provision of free broadcasting time to the main parties, or it may be by a generous reimbursement of election expenses to parties and candidates, or it may be putting a cap on how much parties or candidates can spend so that the wealthy are not allowed to dominate the process.

The main point here of course is that politics and elections are by definition competitive processes, and the main concern here is to ensure that the political market-place is not monopolized by those with the greatest resources. If we want to use the classical liberal metaphor of the market-place of ideas, there can be no market-place of ideas if one voice has disproportionate access to the electors; and if we want to use a more modern commercial metaphor based on the need to safeguard against anti - competitive behaviour, there can be no fair competition if one brand has a disproportionately dominant voice. This is not to say that real equality between parties is achievable at election time. Some parties are smarter than others, in the sense that some parties will have better policies, some will have more charismatic leaders, and some will have better organized campaigns. Other parties will be small and have no legitimate claim to compete on the same basis as the other parties which represent much larger sections of the population. But although strict equality may be impossible, fair competition or fair rivalry is not, for it is within our power to ensure that the main parties are adequately funded, and also within our power to ensure that none has a disproportionate financial advantage over its rivals. This is less of a problem in some countries than in others, but it is something that we need to bear fully in mind when we think about the impact of regulatory options for the reform of the party funding system. Proposals that may look fair in form may have major implications for the principle of equality of arms in practice.

How do we deal with the problem?

Turning then to the question of regulatory options, there is no magic bullet and no single solution to the party funding problem, with different countries having responded in different ways. There are essentially three dishes on the menu. The starter is transparency, which is now fully recognized as the pre-requisite by almost everyone. Transparency enables us to know who is funding the parties and what they are getting in return. Where there is a coincidence of donation and benefits, transparency invites investigations to be made and explanations to be given. To that extent transparency may serve to eliminate the worst forms of corruption, by virtue of the adage that sunlight is the best disinfectant. But if the swamp is to be disinfected, it will require sunlight at regular intervals beating down on every dark corner. This raises questions about the frequency of transparency obligations, which - to be effective - need to be contemporaneous. There is also the question of which donations and to whom the obligation should apply. It is unlikely that we will want to include all donations, and that we would want to include very small donations, in which case we would need to deal with the problem of bundling whereby people might be tempted to give large numbers of small donations to evade the duty to disclose. It is likely also that we would want the transparency obligation to apply to all parts of the party organization, that the party nationally should be legally responsible for reporting all donations; and that account should be taken of the aggregate value of donations as well the value of one off donations. It is important to recognize, however, that while transparency obligations will address one problem, they will create others. They will address the problem of secrecy in the funding of political parties, but they will create a new problem of ensuring that the law is applied as all kinds of evasion is undertaken to conceal the real source of donations. In the case of the United Kingdom a range of strategies have been adopted, including the use of private companies, the use of unincorporated associations, and the use of secret loans.

The main course on our menu, however, consists of various forms of regulatory device, principally in the form of contribution caps or spending limits. Contribution caps take the form of restrictions on who may give (impermissible donors, usually aimed at foreign citizens, companies and governments who may want to meddle in the affairs of other states), or how much they may give. In a number of countries - including Canada, France and the United States - a cap is imposed on the amount which any individual or company (where companies are permitted to give) may donate in the course of a single year. The amount of the cap varies from country to country, and supply side measures of this kind are seen by some as an attractive way of dealing with the problem of corruption and the rising costs of campaigning. It is, however, a solution that was rejected in the United Kingdom in 1998 for a number of reasons, but principally because it would be difficult to enforce. Experience has shown that big donors do not give big amounts every year but that they do so intermittently, and that they can continue to give the same amount under a cap by spreading it out with a number of smaller annual donations under a donation plan helpfully devised by the party. Money can also be channeled through family members, with very recent US experience revealing a number of eight year olds with an acute interest in politics and an unusual financial ability to express their interest. These I guess are the tadpoles in the swamp. Critics of this solution also observe poignantly that the United States has contribution caps, but also has the most expensive elections in the world, the 2004 federal elections alone costing more than the GDP of Zimbabwe for the same year.

More seriously in my view, there are also problems for countries which have mixed parties of individuals and organizations where the latter are involved as members of the party and not only as donors, with a guaranteed right to a voice under the constitution of the Party. It is difficult to see how parties of this kind could be covered by a contribution cap without the State effectively outlawing a particular form of party organization; and it would be difficult to see how such parties could be exempt from a contribution cap without causing undue unfairness to the other parties. As a regulatory alternative, spending limits thus seem more attractive, being designed to reduce the demand for money by restricting the ability to spend it. As such they are a direct response to the problem of the arms' race, by putting a cap on the arms that can be accumulated and discharged, while leaving the parties enough space to decide which arms to employ and when. This form of regulation has been pioneered in the United Kingdom and Canada, two countries which now seem to be engaged in a form of regulatory competition. But again, experience has shown that this form of regulation needs to be wide and deep. If you impose a cap on the national campaign spending of the parties, the money will flow to the candidates and will be spent at constituency level instead. If both national parties and candidate are capped, there is a danger that the money will flow to third parties to campaign on behalf of or against a particular party or candidate. This is why in both Canada and the United Kingdom spending limits apply at all three levels of activity. But even here problems abound, as the parties and candidates find ways to get round the limit, though the problem here are much less acute than in the case of contribution limits: a contribution is by its nature a private transaction, while an electoral expenditure in contrast is by its very nature very public and designed to be so.

This brings finally to the sweet course in the form of State Funding, seen by many as a panacea for the woes of party funding. State funding is attractive for a number of reasons, but mainly because it would help to reduce the dependence of the parties on rich donors, particularly if it was to be accompanied by spending limits so that the State was not inadvertently fuelling the arms' race between the parties. It would also help with the problem of electoral competition by ensuring that the core needs of the parties were met, and in particular ensure that the needs of the opposition parties were met, parties which sometimes find difficulty in raising money from private sources particularly during periods when the electoral cycle is against them. A good example of this was the Conservative Party in Britain in the years immediately after 1997, deserted by voters, members and donors. The question which arises here, however, is how much should the State provide? There is a danger that by providing too much money to the parties we create bloated quasi - State bureaucracies: the risk is that we create disincentives for the parties to recruit members or supporters at a time when popular engagement in the political process is already on the slide. In other words, we conscript individuals as taxpayers to administer life support to organizations that individuals as citizens are unwilling to sustain; or to use a different metaphor, we would put political parties on the welfare at a time when we are trying to encourage everyone else to get off; or to use a different metaphor still, we would be nationalizing the parties at a time when we are trying to privatize everything else.

This in turn raises questions about the amount that political parties should receive from the State, and suggests to me that while the State has a clear and compelling role to play in supporting political parties, this is an area where less rather than more would be better, though it is also the case that a low contribution cap would place a heavy onus on the State to bankroll the parties to a much greater extent than is already the case. It also raises questions about the conditions by which political parties should receive money from the State. State funding should be used to encourage political parties to recruit, retain and engage members and supporters, it should be applicable to all parties that represent significant sections of the community, and it should be linked to requirements that parties operate democratic internal procedures. We have passed the age of innocence when - as in Sweden - we could confidently ask citizens to give money for democracy without requiring the recipients to comply with core democratic values. This is by no means a novel suggestion, with Germany leading the way in its Basic Law of 1949, containing a provision that 'Political parties shall participate in the formation of the political will of the people. They may be freely established. Their internal organization must conform to democratic principles'. Although pioneered in Germany, this is a requirement that has been adopted elsewhere (notably by Spain when it rediscovered democracy after fascism in 1978), and is important to ensure that State funding does not wrap in concrete what Robert Michels referred to in 1915 as the 'iron law of oligarchy' - that is to say important to ensure that State funding does not become a means of protecting party bureaucracies from party members.

Conclusion

So international experience suggests that there is a menu of options available to deal with the problem of political parties and their funding. That experience suggests that each country must make its own way through the swamp, by building paths that take account not only of the need to reform, but also of the nature of party organization, the balance of constitutional principle, and the particular ways in which the problem of party funding presents itself in the jurisdiction in question. Sometimes the answer can best be dealt with by ways other than party law, such as by public procurement law (if the problem is donations by government contractors), or freedom of information law (if the problem is access to ministers or the Prime Minister), or electoral law (if the problem is one of candidate selection or expenses), or constitutional law (if the problem is one of buying access to an unelected second chamber), or planning or licensing law (if the problem is one of donations by developers, breweries or gambling companies). But so far as party law is concerned, the differences between nations is reflected in the fact that

• in Sweden there is no disclosure and no regulation but generous State funding; in Germany there is soft disclosure, little regulation, and generous State funding (but capped at 50% of a party's total income);

• in the United States there is tough disclosure as well as contribution limits, but no spending controls and no public funding except a voluntary scheme for presidential candidates which is rapidly becoming redundant;

• in the United Kingdom there is also tough disclosure but no contribution caps, though there are spending limits but very limited State support (though free broadcasting time is provided at elections, with political advertising otherwise being banned); and
  
  
• in Canada a greedy regulator has chosen all the options in one of the most comprehensive regimes anywhere in the world (though the French also have something similar).

The Canadian experience in fact addresses one of three points I would like to make by way of conclusion, the first being that regulation is a process not an event, and that party funding law reform will create a dynamic for even more party funding reform. The Canadian system has been changed on several occasions since it was first introduced in 1974, partly as a result of the intervention of the courts, though not exclusively as a result of the courts. The same is true of the US system also introduced in 1974, while the British system introduced in 2000 has also been significantly amended to close a loophole whereby the parties solicited and accepted unreported loans rather than donations, while an announcement of more far reaching changes was made in a lengthy White Paper published at the beginning of this week, which addresses the question of contribution caps on the one hand and State funding on the other. The moment for State funding may, however, have passed with escalating food and fuel prices in the domestic economy being hardly the most propitious time for the government to be asking taxpayers to be paying for political parties, especially as there is also currently a controversy about the alleged abuse of expenses by MPs and MEPs. The main parties are in any event split on the future direction of funding reform, with the Conservatives supporting contribution caps that would include trade union affiliation fees, which Labour opposes as a matter of party patriotism; and Labour supporting further spending limits to undermine the work of Lord Ashcroft whose company Bearwood Holdings is funding constituency campaigns, a form of regulation which the Conservatives naturally oppose.

This brings me to my second concluding point, which is that party funding reform should be based on consensus within the parties, as well as consensus between the parties. So far as the first of these is concerned, party funding reform should not be used as the displaced site of other battles within a governing party. In the United Kingdom, party funding reform was seen by some as the anvil on which they could break the chains that link the Labour Party with the labour movement. So far as the second of these issues is concerned, it is equally the case that party funding reform should not be used as a battleground to visit revenge on other parties by deliberately undermining their organizational capacity. It is a well-worn aphorism that good government needs good opposition, as Labour ministers in Britain complained in the years immediately after the landslide election victory in 1997, though this is not a refrain so widely heard today! It is an equally well-worn aphorism that today's government is tomorrow's opposition, and it is a wise governing party that treats it political enemies with the same respect that it would like to be treated when in opposition, however hard the opposition may work to ensure that they are unable to earn that respect. This is not a rallying cry of go back to your constituencies and prepare for opposition, nor to say that the opposition parties should have a veto to block egregious abuses that undermine the integrity of the political process. But it is a reminder that the halcyon days do not last forever, and that in this area the political parties have a mutual interest in moving forward in large measure on the basis of mutual agreement, even if the debate clearly must be led and shaped by the government.

The third and final point I want to make by way of conclusion is that as we dredge the swamp party funding law is only one of a number of tools that need to be employed. There are several other pre-requisites. First, the effectiveness of transparency depends on a vigorous press, which we have in the United Kingdom in spades. It is sometimes said that the over heated work of the press in recent years - over Ecclestone and Mittal, as well as the loans for honours affair - has done much to undermine public confidence in the integrity of the political process and has done much to fuel distrust and cynicism of politicians. But while this may be true, it is also true that it is the parties which by their conduct provide the copy for the press to use (to the implications of which I will return). But we rely on the press to make sure that transparency is not being abused - to identify who is making loans, to identify the supporters of unincorporated associations, and to discover the ownership of private companies. The second pre-requisite is that the parties themselves have to change their methods of operating, and cease behaving as if they are operating in an unregulated private world. One reason for the problems that the Labour Party faced in the period after 2001 is that it failed to anticipate the consequences of disclosure and failed to think about the implications of its conduct in receiving certain donations.

Whatever the law may say, there may thus come a point when the governing party has to set higher standards than the minimum standards prescribed by legislation. That means discretion about the people from whom the party is prepared to accept money - it is no longer acceptable that a donor is engaged in a lawful activity, and sometimes parties do have to sit in moral judgment of those from whom they solicit money. It also means not looking for loopholes and having found them not exploiting loopholes in your own legislation. So legislation needs to be accompanied by high ethical standards within parties. And thirdly, there is the question of enforcement and policing the legislation. This is a problem in the United States where the Federal Election Commission is established as a bi-partisan body with equal representation of the two parties, and as a result regulatory issues are part of the political horse-trading between parties. It is also a problem in the United Kingdom where the Electoral Commission is established as a rigorously independent body but has lacked necessary competence and expertise to be able effectively to deal with the regulated community. There is little point in introducing legislation if there is not the regulatory capacity to administer it, and it is for regulators wherever they may be, not to allow professional pride get the better of professional judgment, by advancing the case for legislation which is beyond their capacity to ensure that it is being fully complied with.

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