Political Parties- The Funding Of Political Parties Flashcards
Political parties have a number of different sources of finance, including:
+ membership subscriptions
+ fundraising events such as fetes, festivals, conferences and dinners
+ donations from supporters
+ loans from wealthy individuals or banks
+ self-financing of candidates for office
How much is available in grants per party ?
up to £2 million per party available in grants from the Electoral Commission, plus Short money, which grants funds to parties for research, depending on their size.
The proposals for reform of party funding include the following:
+ Impose restrictions on the size of individual donations to parties. This is broadly the system used in the USA (though donors can grant funds to thousands of individual candidates). To be effective the cap would have to be relatively low.
+ Impose tight restrictions on how much parties are allowed to spend. This would make large-scale fundraising futile.
+ Restrict donations to individuals.
+ Replace all funding with state grants for parties, paid for out of genera. taxation.
The debate about state funding
State funding is the most prominent and controversial proposal for reform.
State funding debate
ARGUMENTS FOR
-It will end the opportunities for the corrupt use of donations (often known as ‘cash for honours’). Some donors give money in the expectation of being granted an honour or access to decision makers. Example: Tory donor Lubov Chernukhin, whose husband was closely associated with Vladimir Putin, paid £1.7 million to the Conservative Party and has enjoyed personal meetings with the last three Conservative prime ministers.
-It will end the possibility of ‘hidden’ forms of influence through funding. Organisations and companies often deny they are seeking political advantage, but this claim is difficult to justify. Example: the £1 million donation from Formula 1 boss Bernie Ecclestone before the 1997 election appeared to influence the Labour government policy on banning tobacco advertising, once it had won office, as Labour initially exempted this sport from the ban.
-It could reduce the huge financial advantage that large parties enjoy and give smaller parties the opportunity to make progress. In the run-up to general elections, smaller parties often have to rely on taking out loans that can put their long-term viability in jeopardy.
-It will improve democracy by ensuring wider participation from groups that have no ready source of funds.
State funding debate
ARGUMENTS AGAINST
-Taxpayers may object to funding what can be considered to be ‘private’ organisations. There are many other calls on government revenue which are seen as more important.
-It will be difficult to know how to distribute funding. Should it be on the basis of past performance (in which case large parties will retain their advantage) or on the basis of future aspirations (which is vague)? Example: The 2007 Phillips Report recommended a ‘pence-per-voter’ formula for greater state funding of parties. Yet this formula would serve only to benefit the two main parties that receive the most votes.
-Parties may lose some of their independence and will see themselves as organs of the state.
-It may lead to excessive state regulation of parties. Example: the Political Parties, Elections and Referendums Act (PPERA)
2000 already imposes overall limits on party spending in general elections and in other elections, to make parties less reliant on wealthy individual backers. Any further regulation may limit their ability to campaign effectively.
