Solutions to party funding with a focus on state funding

4 basic solutions to solve the undemocratic funding of UK political parties

1. Impose individual donation caps (would have to be low to be effective)

2. Impose spending restrictions to make fundraising futile

3. Only allow individuals to donate (so no trade unions, businesses or pressure groups)

4. Replace all funding with state funding (e.g. expand pre-existing Short and Cranborne Money

2007 Phillips Report - ‘Strengthening Democracy: Fair and Sustainable Funding of Political Parties’

• Suggested state party funding based on vote share/membership size would make UK party politics fairer and more democratic

Positives of state funding - equality

• It is the only solution that would create more equality

  • As long as market forces determine funding, large parties will be at a significant advantage

Positives of state funding - cost to the taxpayer

• Parties only need roughly £25m/year to carry out their functions, which is very little in the grand scheme of things

Positives of state funding - reliance on donors

• State funding would reduce reliance on donors

  • Parties would focus more on responding to voter’s and member’s demands

    • This would increase public trust in politics

Positives of state funding - pre-existing regulation

• Although there is regulation that governs donations etc. it is deeply inadequate and 

Problems with Short money

• Favours large parties as is calculated based on party performance (votes and seats) in the previous election

2019 - Short money received by Labour

£8m+

2019 - Short money recieved by SNP

£825,589.25

2015 - UKIP and Short money

• Refused £500,000+ in Short money after they won 1 seat as the MP (Carswell) suggested it was corrupt and designed to favour established parties

Public opinion on state funding of political parties

• Taxpayers do not want their money going to parties because

1. They don’t want it going to parties they don’t support, especially extremist ones like the BNP

2. Parties are decreasing in importance in people’s lives and people are becoming disillusioned with politics

3. Public resources are stretched thin enough already without tens of millions of £ going to political parties

4. They don’t trust politicians to spend this money wisely, especially after the 2009 expenses scandal

Negatives of state funding - choice

• Reduces citizen’s right to choose if they want to donate to a cause they believe in, in this case political parties

• We have the right to support and sustain causes and interests important to us

• Political parties do not have financial support like charities/faiths/interest groups so forcing them to be only state funded flys in the face of basic principles of a pluralist liberal democracy

Negatives of state funding - pre-existing regulation

• Donations are heavily regulated by the Electoral Administration Act (2006) and the PPEA (2009)

• Individual donations are now declared and transparent

Negatives of state funding - independence

• State funding will mean parties are less independent

• They will become part of the larger apparatus of the state as opposed to alert, independent entities

  • They will be less likely to challenge the political system and the state as it now financially supports them

• Having a large range of income streams (as promoted by Blair and Corbyn) means parties have links to larger society, meaning they listen to more voices

  • This would be taken away if state funding was introduced

Negatives of state funding - multi-party system

• Established parties will want to prevent new parties coming into the picture as more parties = dilution of income stream for all parties

• There will be fewer choices for the electorate and major parties will dominate

• It may also still favour established parties if the calculation is made on previous election data

Ways to eliminate abuses instead of full state funding

• Full transparency

• Limits on donations from businesses and unions

• Break the link between ‘cash and honours’

• Limit individual donations

Main parties and their standing - LibDems and Greens

• Vocal advocates for full state funding (although this might change under Polanski 💚)

Main parties and their standing - Conservatives and Labour

• Don’t want to do anything as they benefit from the failing system

• May strike a deal with capping trade unions and capping businesses to take away both of their main sources of income as a compromise