Political funding in the United Kingdom
Encyclopedia
Political funding in the United Kingdom has been a source of controversy for many years. There are three main ways a political party
is funded. The first is through membership subs; the second is through donations; the third is through state funding.
(PPERA) was an act that established the Electoral Commission
and required all political parties to register with it, set down accounting requirements for political parties, and introduced controls on donations.
released a white paper
analyzing party finance and expenditure. The paper proposed to tighten controls on spending by parties and candidates, substantially strengthen the powers of the Electoral Commission, and increase the transparency of donations.
relies on donations mostly from individuals and companies; as well as these sources the Labour Party
receives a significant portion of its donations from trade unions. For example, in the third quarter of 2009, eighteen political parties reported donations totalling £9,532,598 (excluding public funds). The Conservative Party received £5,269,186, the Labour party received £3,045,377 and the Liberal Democrat party received £816,663 . Donations typically peak before elections. Between the 6th of April and the 6th of May 2010 (a general election campaign month) the Conservatives took £7,317,602, Labour £5,283,199 and the Liberal Democrats £724,000 .
in the House of Commons starting in 1975, and Cranborne Money
in the House of Lords
starting in 1996.
In addition there is a general policy development grant available to parties with two MPs or one MP and one MEP.
For a while as a loophole
, loans did not have to be declared.
Political party
A political party is a political organization that typically seeks to influence government policy, usually by nominating their own candidates and trying to seat them in political office. Parties participate in electoral campaigns, educational outreach or protest actions...
is funded. The first is through membership subs; the second is through donations; the third is through state funding.
History
Starting in 2006, political funding came under scrutiny as concerns grew that the largest British political parties were too dependent on a handful of wealthy donors. Furthermore, during the Cash for Honours scandal, concern grew even more. A concern of the 1970s had been that the major parties were unable to raise sufficient funds to operate successfully.The Political Parties, Elections and Referendums Act 2000
The Political Parties, Elections and Referendums Act 2000Political Parties, Elections and Referendums Act 2000
The Political Parties, Elections and Referendums Act 2000 is an Act of the Parliament of the United Kingdom that sets out how political parties, elections and referendums are to be regulated in the United Kingdom...
(PPERA) was an act that established the Electoral Commission
Electoral Commission (United Kingdom)
The Electoral Commission is an independent body set up by the UK Parliament. It regulates party and election finance and sets standards for well-run elections...
and required all political parties to register with it, set down accounting requirements for political parties, and introduced controls on donations.
2006 Sir Hayden Phillips inquiry
In March 2006, former civil servant Sir Hayden Phillips was charged with setting up an inquiry to come up with proposal for reform. It reported a year later. He recommended capping individual donations at £50,000 and capping spending for political campaigns. He also suggested increasing state funding by £25m and expanding its reach.2008 Ministry of Justice report
In June 2008, the Ministry of JusticeMinistry of Justice (United Kingdom)
The Ministry of Justice is a ministerial department of the UK Government headed by the Secretary of State for Justice and Lord Chancellor, who is responsible for improvements to the justice system so that it better serves the public...
released a white paper
White paper
A white paper is an authoritative report or guide that helps solve a problem. White papers are used to educate readers and help people make decisions, and are often requested and used in politics, policy, business, and technical fields. In commercial use, the term has also come to refer to...
analyzing party finance and expenditure. The paper proposed to tighten controls on spending by parties and candidates, substantially strengthen the powers of the Electoral Commission, and increase the transparency of donations.
Membership subs
Membership subs provide one source of funding for political parties. However, in recent times membership has declined and campaign costs have grown.Donations
The Conservative PartyConservative Party (UK)
The Conservative Party, formally the Conservative and Unionist Party, is a centre-right political party in the United Kingdom that adheres to the philosophies of conservatism and British unionism. It is the largest political party in the UK, and is currently the largest single party in the House...
relies on donations mostly from individuals and companies; as well as these sources the Labour Party
Labour Party (UK)
The Labour Party is a centre-left democratic socialist party in the United Kingdom. It surpassed the Liberal Party in general elections during the early 1920s, forming minority governments under Ramsay MacDonald in 1924 and 1929-1931. The party was in a wartime coalition from 1940 to 1945, after...
receives a significant portion of its donations from trade unions. For example, in the third quarter of 2009, eighteen political parties reported donations totalling £9,532,598 (excluding public funds). The Conservative Party received £5,269,186, the Labour party received £3,045,377 and the Liberal Democrat party received £816,663 . Donations typically peak before elections. Between the 6th of April and the 6th of May 2010 (a general election campaign month) the Conservatives took £7,317,602, Labour £5,283,199 and the Liberal Democrats £724,000 .
State funding
Opposition parties receive state funding to pay administration cost; Short MoneyShort Money
Short Money is the common name given to the annual payment to Opposition parties in the United Kingdom House of Commons to help them with their costs. It is named after Edward Short , the-then Leader of the House of Commons who first proposed the payments...
in the House of Commons starting in 1975, and Cranborne Money
Cranborne Money
Cranborne Money is the common name given to the annual payment to Opposition parties in the UK House of Lords to help them with their costs. It is named after Lord Cranborne, who was the leader of the House of Lords when it was introduced on 27 November 1996...
in the House of Lords
House of Lords
The House of Lords is the upper house of the Parliament of the United Kingdom. Like the House of Commons, it meets in the Palace of Westminster....
starting in 1996.
In addition there is a general policy development grant available to parties with two MPs or one MP and one MEP.
Transparency
Donations worth over £5,000 or more to national parties must be declared, as must be donations worth £1,000 or more to local associations.For a while as a loophole
Loophole
A loophole is a weakness that allows a system to be circumvented.Loophole may also refer to:*Arrowslit, a slit in a castle wall*Loophole , a short science fiction story by Arthur C...
, loans did not have to be declared.
See also
- Campaign financeCampaign financeCampaign finance refers to all funds that are raised and spent in order to promote candidates, parties or policies in some sort of electoral contest. In modern democracies such funds are not necessarily devoted to election campaigns. Issue campaigns in referendums, party activities and party...
- Political financePolitical financePolitical finance covers all funds that are raised and spent for political purposes. Necessarily such purposes include all political contests for voting by citizens, especially the election campaigns for various public offices that are run by parties and candidates. Moreover all modern democracies...
- Political donations in AustraliaPolitical donations in AustraliaThe term political donations refers to gifts to a politician, a political party, or an election campaign.In Australia, the majority of political donations come in the form of financial gifts from corporations, which go towards the funding of the parties' election advertising campaigns. Donations...
- Federal political financing in CanadaFederal political financing in CanadaThe fair and transparent financing of political parties, candidates, and election campaigns is a key determinant in the health and proper functioning of a democracy...
- Party finance in GermanyParty finance in GermanyParty finance in Germany became an issue of political discourse, when in 1949 the concept of transparency was discussed in the constitional convention in connection with a new article to be entered into the constitution...
- Political funding in JapanPolitical funding in JapanIn Japan, the problem of political funding was intensely debated during the late 1980s and early 1990s, partly as a result of revelations following the Recruit scandal of 1988-89...
- Campaign finance in the United StatesCampaign finance in the United StatesCampaign finance in the United States is the financing of electoral campaigns at the federal, state, and local levels.At the federal level, the primary source of campaign funds is individuals; political action committees are a distant second. Contributions from both are limited, and direct...
Further reading
- J. Rowbottom, Democracy Distorted. Wealth, Influence and Democratic Politics; Cambridge University Press, Cambridge, 2010; 9780521700177
- K. Ewing, The Cost of Democracy. Party Funding in Modern British Politics; Hart Publishing, Oxford, 2007; 9781841137162