Special interests and lobbying.

Political parties in Wales and Britain are financed by unions, businesses and wealthy individuals, and he who pays the piper calls the tune. Is there any real chance that the public interest will come before the interests of party donors? Another area of concern is the lobbying industry where many politicians spend time after losing elections or retiring. The personal connections politicians have established during their public life are then used to provide political access, at a price, over and above that available to the ordinary citizen. Both problems are well understood by the parties, and there have been well intentioned efforts to address the problems, but these good intentions can be frustrated by those who benefit from the present system.

Initiative and referendum systems offer a way past these problems as no amount of lobbying, or financial support of a party, is going to influence a system in which each citizen has as much power as a party leader, providing the system is set up carefully.

In most countries where initiative and referendum instruments are part of the political landscape, that do not have the careful controls we advocate, it is agreed that money can affect outcomes. However, it is disputed that the campaigning side with the fattest wallet buys a positive outcome.

The Swiss Government gives an amount of guaranteed free airtime for proposers and opponents of a referendum but beyond that either party can pay for more air time. Switzerland's strict financial secrecy laws prohibits disclosure of spending. In the US state of California, there are similar laws. A survey conducted in California in 2001 asked voters if they would favour increasing public disclosure of the financial backers of signature gathering for initiatives and initiative campaigns. 78% favoured more financial disclosure, only 14% opposed more disclosure and 8% didn't know. California is a special case among the US states because of the enormous impact of big money referendum campaigns. Big business interests routinely spend millions of dollars to defeat anti-corporate measures in the nation's largest state. In 2006, more than $600 million was expended on referendum campaigns in California.

Throwing money at a campaign does not guarantee success however. In the US states of Ohio and Arizona, referendums to ban smoking in most public facilities passed, despite opposition being financially supported by the tobacco industry. A Swiss campaign in 1971 to reduce criminal penalties for conscientious objectors spent very little money. The initiative did not get to referendum as Parliament made concessions which were accepted by the initiative proposers. Also in Switzerland, referendums about genetic engineering and stem cell research were compromise positions which fell short of what the influential Swiss pharmaceutical and biotech industries would have liked.

People can and do have decisive victories. A mountainous region of Switzerland, fed up with the pollution from freight traffic, much of it from outside Switzerland, got together to discuss the issue. The inhabitants of the region numbered 35,000, out of a country of 7.5 million people. Swiss people have a love for the Alps and the Alpine Initiative to transfer road freight to rail and stop expanding road systems through the Alps was opposed by government and business but won in a national referendum. Upon the victory of the Alpine Initiative a Parliamentarian conceded "There are always two ways of looking at a situation, for example the opinion of governments and bureaucrats, the other is the view of the people who are actually affected."

There is clearly a case for complete disclosure of funding sources and limits on spending, both being principles that are already established in the British political system. Knowing what interests are funding what causes can be a critical part of a decision to support or oppose a particular referendum.

Direct democracy does not stop groups or individuals spending money to promote a particular agenda, but their influence is diluted because they have to spend that money trying to get that message through to the whole electorate, millions of people rather than just a few influential people within government.