Party Funding

Question 1

How are parties funded?

Answer 1

• membership subscriptions

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Question 2

Decline in party membership impact

Answer 2

Harmed party finances

Question 3

Local Constituency fundraising

Answer 3

Political parties receive a small amount of funding from local constituency fundraising through events such as raffles and dinners. Funding is then spent on local campaigns.

Question 4

Public funding

Answer 4

Political parties also receive some public funding in order to support their activities. The vast majority of this is available to the opposition, as they lack the support of the civil service.

Question 5

Short money

Answer 5

Forms the vast majority of this and is intended to support parties to carry out parliamentary business, including policy research. It is primarily used to cover the salaries of researchers and advisers in the central offices of parties.

It is only available to opposition parties that have won either two seats in the HoC or one seat and more than 150,000 votes in total from all seats contested.

Question 6

Donations

Answer 6

Political parties receive a significant proportion of their funding through donations from businesses, organisations and rich individuals. There are no limits on how much can be donated to political parties.

Question 7

Conservatives receive the majority of their funding from….

Answer 7

Donations from businesses and rich individuals, for example billionaire Lord Cruddas who has donated millions.

Question 8

The 2000 Political Parties, Elections and Referendums Act

Answer 8

• in an attempt to overcome the perception that party funding was undemocratic, the Blair government passed the 2000 Political Parties, Elections and Referendums.
• an independent Electoral Commission was established to supervise election campaign spending by parties.
• current requirements for recording donations and loans:
  Donations or loans over £7,500 to the central party must be reported to the Electoral Commission.
  Party sections whose finances aren’t managed by the central party must report donations over £1,500.

Question 9

Concerns over party funding in the UK

Answer 9

• major concerns in relation to the reliance of parties on donations from rich individuals and businesses. This is especially in relation to the Conservative Party, as the majority of their funding comes from donations from big businesses and rich individuals.
• there are worries that rich donors are able to buy political influence, which is highly undemocratic, and there have been a number of scandals in relation to party funding across a range of parties,
• Both labour and conservative parties have been accused of offering places in the HoL to donors.

Question 10

How would state funding work

Answer 10

In Australia state funding supports parties’ in election campaigning, whilst in the Netherlands it is intended to further reasearch.

The approach could include state funding based on the number of votes in the previous election, or match donations from members of the public, which is the case in Germany.

Question 11

Arguments for state funding

Answer 11

• state funding would reduce the reliance of parties on funding from trade unions, businesses and individuals, who have vested interests.
• it would remove disparity in resources available to different-sized parties. As a consequence the undemocratic two-party system would be challenged and pluralist democracy would improve.
• state could match small donations by party members, which would improve the participation of the public in politics and ensure those who are supported the most receive the most funding.
• parties and politicians could focus more on representing the public and effectively governing, rather than focusing on raising money, especially before elections.
• it would curb the possibility of corruption and those who have the money to donate to political parties having undue influence on policy/being able to get into positions of power, which undermines democracy.

Question 12

Arguments against state funding of political parties

Answer 12

• as they would no longer need to seek financial support, it could isolate parties from the wishes of the public and their members, which could be seen as harming democracy.
• it could cost the state a significant amount per year and may taxpayers likely wont want to fund parties they don’t support, especially as they don’t trust those in power.
• if funding was linked to past performance in elections, they it would likely uphold the power of existing parties and not further pluralist democracy.
• limited public funding currently available ensure that parties are independent from the state.