party funding

• Short money: funds to cover administration costs and for HoC to scrutinise work of gov
• Cranborne money: to cover administrative costs and for parties in HoL to scrutinise gov
• To be granted Policy Development Grants parties need 2 seats or 150,000 votes
• up to £2 million can be granted in policy development grants
• UKIP refused short money funding in 2015 because they saw the money as contaminated, so rejected it. anti-establishment rhetoric
• Labour benefits most from short money as they are the current (2023) leading opposition, have the most votes/seats which gives them the most, minor/emerging parties don’t benefit
• MPs earn £86,584 per year
• party funding can come from:

  • membership
  • donations
  • fundraising events
  • electoral commission
• Parties must declare donations over £500 and limits on election spending (£30000 per constituency)
• Phillips report: after cash for honours scandal phillips recommended they should be state funded on either pence per vote or pence per member
• parties should be state funded (1):

  • would reduce the huge financial advantage large parties enjoy e.g. 2019 election Tories revived around £50 million in donations whereas the lib dem’s only received around £20 million
• parties should be state funded (2):

  • would end “hidden forms of influence through funding” e.g. Ecclestone donated millions to Labour then F1 was excused from the Tobacco advertising ban enforced
• parties should be state funded (3):

  • would improve democracy by ensuring wider participation from groups that have no ready source of funds
• parties should spruce their own funding (1):

  • taxpayers might object to funding what can be considered ‘private’ organisations or parties
• parties should source their own funding (2):

  • would be difficult to know how to distribute funding should it be on the basis of past performance (in which large parties would retain their advantage) or on the basis of future aspirations (which is vague)
• parties should source their own funding (3):

  • parties might lose some of their independence and would see themselves as organs of the state
• Bernie Ecclestone: donated 1 million to Labour in 1997, after his donation there was to be a ban on tobacco advertising but it was delayed in F1 racing - which Ecclestone is Chief Executive of
• Lord Sainsbury: donated £16 million from 1996-2006 to the Labour party in batches of 1 and 2 million pounds. donated a further £2 million in 2007 under Gordon Brown and a further £500000 in 2008 = £18.5 million
• policy development grants (PDGs: established under section 12 or PPRRA public funds are in place in the form of short money and cranborne money, available to not only the main opposition parties
• short money = House of Commons
• Cranborne money = House of Lords
• Funding of parties was regulated in 2000 by the Political Parties, Elections and referendums act
• Political Parties, Elections and Referendums Act 200:

  • people not on the UK electoral roll could not make donations
  • limits placed on spending
  • donations over £500 declared
  • over £7500 to be registered
• Phillips Report 2007:

  • min 2006 Tony Blair and other politicians were questioned by the police investigating the “cash for honours” scandal
  • PPERA had made small donations recordable, but if donors “loaned” at commercial interest rates they didn’t have to be declared
  • Sir Hayden phillips report stated parties should receive state funding on either “pence-per-vote” or “pence-per-member”
• Political parties and Elections Act 2009:

  • regulations further developed in wake of the MP’s expenses scandal
  • act gave the electoral commission the power to investigate and impose fines, restricted donations from foreign residents and impose tighter regulations in the run up to elections
• Basic annual salary for an MP from 1st April 2023 is £86,584
• In the commons, some MPs are paid more because of the special jobs they hold. For example, the speaker and the chairs of committees receive an extra salary
• Most MPs who are also ministers in the gov are paid an extra ministerial salary
• PM is in the top 1% of earners in the UK
• since 2010 parties have received £541 million in large donations from companies, individuals and - for Labour - trade unions
• in the third quarter of 2019 the conservatives accepted £5,763,445 in funds while UKIP only revived £161,501
• Large donations are an issue in politics as it represents a hidden and unaccountable form of political influence
• parties aren’t allowed to change policies but donors expect some kind of return of their investment
• the steady decline of party membership has meant that parties are even more reliant upon donors, further opening possibility of corruption and influence
• Labour have faced criticism over whether members of trade unions are given clear enough choice as to whether their subscriptions should be spent in donations
• Labour have also faced criticism as many say they are unduly influenced by union leaders
• there is little support for state-funded programmes as taxpayers are naturally reluctant to see their taxes being used to finance parties at a time when attitudes to parties are low