Party Funding

Question 1

How are political parties funded?

Answer 1

Most political parties receive the bulk of their funding through membership fees and donations by individuals, corporations and trade unions.

Question 2

What are the rules on Donation?

Answer 2

Parties can accept donations if it comes from one these sources:
Someone on the UK registered electoral register.
A UK registered company.
A registered political party.
A registered trade union

Question 3

Are there limits on donations?

Answer 3

No, however the donation needs to be declared.

Question 4

What are the controversies about funding?

Answer 4

Large individual donations to political parties led to the perception that political influence could be bought. Example:
Bernie Ecclestone’s £1 million donation to the labour part in 1997 was speculated to have been prompted by a proposed ban of tobacco advertising in formula 1 racing. This donation wasn’t declared and later the Labour party was voted in.

Question 5

What is PPERA (2000)?

Answer 5

Imposed an overall limit on party spending in general election campaigns - £30,000 per constituency and required parties to declare any donation over £5000 to the Electoral Commission.

Question 6

What was PPERA trying to prevent?

Answer 6

Parties less reliant on wealthy individual backers.

Question 7

What was PPEA (2009)?

Answer 7

This built upon the regulations established under PPERA:
Electoral Commission can investigate cases and impose fines.
Restricted donations from non-UK residents.
Reducing thresholds for the declaration of donations.

Question 8

What is state funding?

Answer 8

Subsides paid by the government to political parties.

Question 9

Who typically receives state funding?

Answer 9

Oppositions parties, in the form of short/Cranborne money.

Question 10

What is Short Money?

Answer 10

Funds paid to opposition parties in order to help them cover their administrative costs so they can provide proper scrutiny of the government.

Question 11

Who can qualify for short money?

Answer 11

Any opposition party that win at least two seats / win over 150000 votes at a GE.

Question 12

What is an example of a short money payment?

Answer 12

In 2014-15, the labour party received a total of just under £7,000,000.

Question 13

What is Cranborne Money?

Answer 13

Funds paid to opposition parties in the HOL to cover their administrative costs in order to supply proper scrutiny of the Government.

Question 14

How would state funding of parties be approached?

Answer 14

‘pence per voter’ or ‘pence per member’

Question 15

What are the arguments on favour of state funding of parties?

Answer 15

Prevents wealthy groups influencing parties.
Parties can focus on representing the electorate, and not fundraising.
Smaller parties will get fair financial support.
Less wealthy pressure groups will get a more equal hearing by parties.

Question 16

What are the arguments against state funding?

Answer 16

Politicians may be less interested in what pressure groups have to say as it wouldn’t show the groups support.
Taxpayers would have to fund the parties.
There would be disagreements on how it is funded.

Question 17

How are MP’s funded?

Answer 17

MPs are paid from general taxation and are allowed to claim expenses to cover the costs of running an office, living in Westminster and their constituency and the travel costs. They receive an annual salary of £84,144, as of April 2022.

Question 18

What are scandals of funding.

Answer 18

2006 Cash for Honours - our wealthy businessmen, who had lent the Labour party a total of £5m, were nominated by Tony Blair for peerages. All four of the peerages were later blocked by the House of Lords appointments commission.

2020 Housing Scandal - Housing minister Robert Jenrick came under fire when admitted to helping a Tory donor avoid paying tax on a development.

2020 Oil Scandal - The Conservative party received more than £400,000 in donations from individuals and companies linked to the oil and gas industries in the last year. A new round of licensing for oil and gas wells would go ahead.

Russian Payments - Almost £2 million of donations to the Tory party since Boris Johnson came to power have been linked to Russia this led to widespread allegations that Russia tried to influence voters in the Brexit referendum. Going against PPERA and PPEA, these transactions weren’t investigated.

Question 19

What are the figures of Party income?

Answer 19

In 2016 the income of parties were:
Labour - £49.8m
Conservative - £28.3m
Lib Dems - £8.5m
SNP - £4.9m
UKIP - £3.4m