Party funding

Party funding

Traditional sources
1. Membership subscriptions
2. Until 1990's
  1. Trade unions and affiliated organisations for Labour
  2. Wealthy business interests for Tories
Changing basis of party funding
1. Less members - adverse impact on party finances
2. Reduction in TU influence under Kinnock, Blair and Smith resulted in falling revenues
3. As a result, donations from wealthy individuals
  1. Ecclestone and Lord Sainsbury for Labour
  2. Sir Paul Getty and Wheeler for the Conservatives
  3. Speculation that money can 'buy influence'
    1. 1997 Ecclestone's £1mil donation to Labour delayed introduction of the ban on tobacco advertising in Formula 1
Political Parties, Elections and Referendum (PPER) Act
1. 2000
2. Limits party spending in general election campaigns (£30, 000 per constituency)
3. Parties publicly declare donations over £5, 000
4. Change perception of political parties being 'for sale'
5. Despite this, political party donations totalled £39.9 mil in 2012
Loans for peerages scandal
1. Labour encouraged supporters to offer the party long-term, low-interest loans instead of donations
2. The Philips Report
  1. Two reports followed these events
    1. 2006 Party Funding produced by the Constitutional Affairs Select Committee
    2. Philips Report
    3. Both conclude that greater state funding for parties was a way forward
  2. Suggested the 'pence-per-member' funding formula
Should parties be state funded?
1. For
  1. If not funded by taxpayers, they'll be funded by interest groups
  2. Allows politicians to focus on representing their constituencies
  3. Smaller parties could compete on an equal financial footing
2. Against
  1. Politicians could become isolated - it is beneficial that interest groups are at the heart of government
  2. Not air to pay for parties one doesn't support
  3. Parties will have unequal resources if finances are changed in this way

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