4 Party funding

• Political party


  A group of people drawn together by a broad ideology who aspire to form a government and enact a range of policy commitments through standing in elections and setting out manifestos
• Key roles of political parties

  • Represent the views of people with common beliefs
  • Encourage political participation
  • Recruit future politicians and leaders
  • Formulate policies to deliver on their ideas
  • Form governments
• Political spectrum


  A way of measuring and describing the overall policy positions of different political parties, e.g. left-right, authoritarian-libertarian
• Left-wing parties

  • Desire change, reform and alteration to how society operates
  • Often in favour of big government and a large welfare state
• Right-wing parties


  • More supportive of conserving the status quo and supporting little or no change
  • Stress importance of order, stability, hierarchy and private property
  • More in favour of smaller government, individualism and self-determination
• Types of political parties

  • Major/mainstream parties (e.g. Conservatives, Labour)
  • Minor/minority parties (e.g. Lib Dems, SNP, Greens, UKIP)
• Minority parties


  Stand candidates in elections but have very little chance of winning themselves, may enter government as a minor partner
• Top 5 total incomes of UK political parties in 2021


  • Labour - £45m
  • Conservatives - £32m
  • Lib Dems - £8.6m
  • SNP - £4.5m
  • Greens - £3m
• Key sources of party funding

  • Membership subscriptions
  • Trade union donations
  • Private donations
  • Public funding
• Membership subscriptions


  Members of political parties pay monthly fees, a key source of funding especially for Labour
• Decline in party membership since 20th century has harmed party finances
• Key reasons why the Conservative party had less funding than Labour in 2021


  • Conservative party members pay slightly less in membership fees
  • Conservative party has a much lower number of members (estimated between 100-175,000)
  • Conservative party received just 2 million pounds from membership fees in 2021, forming 6.5% of their total income
• Examples of other parties' membership numbers

  • SNP has around 100,000 members
  • Liberal Democrats have around 70,000 members
• Membership subscriptions


  Used to be a bigger proportion of party funding, but are not so much anymore
• Trade union funding for Labour party


  Labour party receives significant funding from trade unions, which charge members a political levy as part of their membership fees
• Major trade unions that fund the Labour party


  • Unison
  • Unite
  • GMB
• In 2021, the Labour party received nearly 6 million pounds from trade union affiliations, which was around 13% of their total income
• Trade unions also regularly donate directly to the Labour party
• The 2016 Trade Union Act, introduced by the Conservatives, reduced Labour’s funding from trade unions by requiring new members to opt into the political levy instead of being automatically enrolled.
• Political parties receive a small amount of funding from local constituency fundraising events such as raffles and dinners
• In 2021, the Labour party received 200,000 pounds from local constituency fundraising
• Public funding for political parties


  Provided to support the activities of opposition parties, as they lack the support of the civil service that the government has
• Short money


  Public funding introduced in the 1970s provided to support the activities of opposition parties , including policy research, and paying for staff and advisors
• To receive short money, opposition parties must have won either 2 seats in the House of Commons at the previous election, or 1 seat and more than 150,000 votes in total
• In 2021, the Labour party received nearly 7 million pounds in public funding, around 15% of their total income, with around 75% of this being short money
• Public funding received by other opposition parties in 2021-22

  • Conservative party: 450,000 pounds
  • SNP: 1.282 million pounds
  • Liberal Democrats: 1.7 million pounds
• Donations to political parties


  Significant proportion of funding, with no limits on how much can be donated
• Under New Labour in the early 2000s, the Labour party became more friendly to business and started receiving more funding from businesses and wealthy individuals, in addition to trade unions
• Lord Sainsbury, a major donor to Labour under Blair, Brown and Miliband, stopped donating when Corbyn became leader, but has resumed donating since Starmer moved the party back to the center
• The Conservative party receives a very large proportion of its funding, around 65% in 2021, from donations, especially from wealthy individuals and businesses
• In contrast, in 2021 the Labour party received just under 10 million pounds in donations, around 22% of their total funding
• The 2000 Political Parties, Elections and Referendums Act introduced an independent Electoral Commission to supervise election campaign spending and require reporting of large donations and loans
• There are concerns that large donations from wealthy individuals and businesses allow them to buy political influence, which is undemocratic
• There have been a number of scandals related to political party funding, including the "cash for peerages" scandal involving the Labour party under Tony Blair, and the Bernie Ecclestone donation to Labour
• The Liberal Democrats also faced a scandal in 2005 when a 2.4 million pound donation from businessman Michael Brown was later found to be fraudulent
• Bernie Ecclestone, a motor racing boss in F1, donated 1 million pounds to the Labour party
• There was an alleged link between the donation and a delay in implementing a ban on tobacco advertising in F1 racing


  Ecclestone had to justify himself on TV and the money was subsequently returned
• There was pressure on the Lib Dems to return the donation due to suspicions it was fraudulent (Michael Brown)
• The Lib Dems ultimately kept the donation after the Electoral Commission concluded they had accepted it in line with electoral rules and had done nothing wrong
• Lord Brownlow, a billionaire Conservative donor, was made a peer in the House of Lords in February 2021, just days after donating 500,000 pounds to the Conservative party