Political party funding in the UK

how do most parties receive most of their income?

in the form of membership subscriptions:

• in 2021:

  • Labour received £16mil from membership fees-around 35% of their total income

    • 430,000 members

  • Conservative Party received £2mil from membership fees-6.5% of their income

    • 100,000-175,000 members

decline in party membership in the past few decades has harmed party finances

ways political parties receive funding:

• donations

• public funding

• local constituency fundraising

• membership fees

why do political parties need funding?

• campaigning and advertising for elections

• holding party conferences

• carrying out research and developing policies and manifestos

• employing special advisers and full time members of staff

where does Labour receive a significant amount of its funding from?

from TRADE UNIONS- the Labour Party has a number of affiliated organisations/unions which give them funds (e.g. UNISION,UNITE AND GMB)

E.G. received £5,821,000 from trade union affiliations in 2021- comprised around 13% of their total income

what did the 2016 Trade Union act do?

obliged new trade union members to choose whether they wanted to opt into making payments towards political influence, rather than being opted in automatically like previously

this harmed Labour Party income from trade unions

what is the Conservative’s main source of income?

Conservative’s rely on large individual donations made by wealthy business interests

FURTHERMORE, under New Labour (Tony Blair), the Labour party was increasingly funded by large donations from small number of wealthy individuals such as Lord Sainsbury and Bernie Ecclestone

efforts were made by Tony Blair to decrease influence of trade unions in party

local constituency fundraising

political parties also receive a small amount of funding from local constituency fundraising through events such as raffles and dinners- often spent on local campaigns\

Labour received £200,000 from fundraising for example

what is Cranborne money ?(type of public funding)

funds paid to opposition parties in the House of Lords to help them cover their administrative costs and provide for proper scrutiny of the government

what is short money? (type of public funding)

intended to support parties to carry out parliamentAry research ( including policy research)

only available to opposition parties that win at least two seats, or win a single seat while also securing over 150,000 votes nationally in a GE

examples of public funding

in 2021, Labour received £6,954,000 from public funding-15.5% of their total income (75% of this was short money- Labour receives the most Short Money as they are the opposition party with the most seats)

• in 2021-22:

  • Labour-£7,670,000

  • Conservative-£451,000

  • SNP-£1,282,000

  • Lib Dems -£1,688,000

examples of large donations

in 2019, Boris Johnson helped to increase funding from donations due to his popularity- they received £56 mil in election year, compared to Theresa May’s £34 million in 2017

• in 2021:

  • conservative party - £20,500,000 (65% of their overall funding)

  • Labour Party- £9,933,000- (22% of their overall funding)

• Labour party’s £1 million pound donation from Bernie Ecclestone

what did the PPERA do (Political Parties, Elections and Referendums Act 2000)?

The PPERA 2000 imposed a limit on party spending in GE campaigns (£30,000 per constituency)

established additional spending limits for elections to devolved bodies and the EU parliament

parties need to declare all donations over £5000 to the Electoral Commission

what was the significance of the PPERA 2000?

the Act sought to make parties less reliant on wealthy individuals

more democractic

what did the Political Parties and Elections Act 2009 do (PPEA)?

• imposed tighter regulations on spending by candidates in the run up to an election

• allows the Electoral commission to investigate cases and impose fines

• restricted donations from non-UK residents and reducing thresholds for declarations of donations

arguments FOR state funding of political parties

• if partiea re not funded by taxpayers, tey will be funded by wealthy individuals and interest/pressure groups

• state funding would allow politicians to focus on representing their constituents rather than courting potential donors- curbs corruption

• would remove the disparity in resources available to differently sized parties-undemocratic two-party system challenged

• would remove need for parties to limit the funding of other parties (e.g. Trade Union Act)

arguments AGAINST state funding of political parties

• would cost the state a significant amount per year

  • taxpayers most likely wont want to support the party they dont support

• if there is secure Public funding then parties may feel less need to reach out and integrate themselves with varies interest groups in society

• parties will always have unequal resources regardless of equal funding

what was the cash for peerages scandal (2006-07)?

scandal concerning a link between individuals who had donated amounts to the Labour party in return for being nominated as a Life Peer in the House of Lords by Blair

what was the scandal surrounding Bernie Ecclestone and Tony Blair?

in 1997, within months of Blair becoming PM, he faced criticism as Ecclestone had donated £1 million to Labour in return for a delay in implementation of a ban on tobacco advertising in F1 racing

michael Brown and the Lib Dems scandal-2005

he donated £2.4 million to LDs- was jailed for perjury a year later

pressure on Lib Dems to return donation

what was the recent Frank Hester scandal?

Conservatives refused to return £10 million donation from Hester after racist comments towards Labour MP Diane Abbott were revealed

example of party funding disparity

2019 Tories received £19.4m in donations & Greens received £245,000