Yet the founder-chairman of a FTSE 100 company felt he had to resign yesterday after he was shown to have made an undisclosed £1 million pre-election loan to Labour. Capita’s Rod Aldridge lent the cash from his personal fortune, not from the company, but felt he had to go to assuage “spurious” suggestions that the loan helped Capita to win big Whitehall outsourcing contracts.

Times have changed. Construction companies openly gave money to the Conservative Party because it was more likely to back new roads, airports and power stations. The contracts would be let after proper competition conducted by civil servants, but at least the business would be available.

This generalised form of self-interest was the main motive for supporting a political party. Most investors from the 1940s to the 1970s would approve of companies giving to the Conservatives, whether they knew about it or not. For private companies, it was a case of charity begins at home. The Conservatives stood for private enterprise, lower income taxes and tax breaks for homebuyers. Labour was hostile to private business. It practised nationalisation, at least until the late 1970s, depending on whether you count Network Rail. Labour saw business owners as synonymous with the rich, to be taxed highly on “unearned” income.

Millions of trade union members, most of whom then worked in manufacturing, mining or transport, equally rationally contributed collectively to Labour. It was more likely to promote the welfare state, decent housing and free public services. At election time, big business could be relied upon to help the Conservatives to outgun Labour, but most people’s interests were so clear-cut that there were few floating voters.

These clear-cut class conflicts have been driven to the fringe of politics. The Times’s survey at the 2005 election found that “the policies of particularly the Conservative and Labour parties, on public expenditure, taxation and the public services, the main areas on which people decide how to vote, are more akin to splitting hairs than splitting the nation”.

The demand for organisations representing an umbrella of shared interests has collapsed. Membership of the two biggest parties has slumped in favour of much greater support for single-issue interest groups.

Most people no longer feel any need for the product offered by broad-spectrum parties, which assume that people who favour higher public spending or lower taxes also share a common view on policing, curriculums, pensions, windpower or immigration. For the same reason, fewer people bother to sign away all these individual choices on a ballot paper.

Political parties have lost mass, low-level financial support or can no longer be bothered to nurture it. They have been driven to rely ever more on a few big contributions to fund general elections, which absorb most of the cash. Yet they have competed with each other to cut off big donations, too. Labour’s attempts to choke off rich people’s gifts to the Conservatives have rebounded on itself. The party used a loophole in its own law to fund its 2005 election campaign.

Across Europe, similar attempts to curb private party funding, usually in the name of honest government, have led to endemic corruption, suspicion or subterfuge. The parties’ final refuge is to ask for funding out of taxes, a solution proposed in the UK by the Neill report and also in the stalled EU constitution, though only for pan-European parties. But if political parties are to be subsidised out of general taxation, why not bowler hats, brass bands or hunt balls? Old-fashioned political parties were invented to allow Victorian elites to win over a mass electorate and then to represent class interests. They have lost their economic function. If politicians want to revive parties and election turnouts they should not rely on state handouts to keep them alive. They can either abandon funding rules or develop a democratic product that offers more than the right to scrawl an “X” once every five years.

graham.searjeant@thetimes.co.uk

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