UK Funding Reform
Political Studies: Edexcel A Level, topic 2.1.3
Reforms to Party Funding
Controversies have led to proposals to reform party funding.
Funding controversies
- Controversies around party funding have come from a small number of large individual donations, including the 'Cash for Questions' and Bernie Ecclestone affairs.
- Controversies have led to the belief that individuals can buy access to and influence over political decision makers.
- Concerns are increasingly framed around “dark money”, transparency, and the potential for foreign-linked or opaque donations entering UK politics through intermediaries or shell companies.
Regulations introduced: PPERA
- One new regulation introduced was the Political Parties, Elections and Referendums Act (PPERA) in 2000:
- PPERA introduced party spending limits at general elections, now £54,010 per constituency (Elections Act 2022).
- PPERA also limits spending for elections to devolved bodies.
- A requirement that all donations over £5,000 must be declared publicly.
- Regulation of party finance through the Electoral Commission.
Regulations introduced: PPEA
- Political Parties and Elections Act (PPEA) was introduced in 2009.
- PPEA enabled the Electoral Commission to investigate and fine parties that broke the rules of the PPERA.
- PPEA also limits donations allowed from non-UK residents and reduces the amount at which donations need to be made public by parties.
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Have funding reforms worked?
- Regulations increased the transparency of party funding.
- But issues with funding and transparency remain:
- Parties have encouraged long-term 'loans' to circumvent PPERA rules.
- Main parties still receive large donations from wealthy individuals.
- Concerns remain about enforcement effectiveness and loopholes.
- Bigger reforms such as state funding remain unlikely due to public opposition and cost.
State Funding
State funding has been put forward as a new means of providing funding for political parties. The Phillips Report in 2007 suggested models of funding per voter or per party member.
Current public funding
- Current public funding exists through:
- Short money (for opposition parties in the Commons)
- Cranborne money (paid to opposition parties in the House of Lords)
- Policy Development Grants
- These forms of funding are designed to support opposition parties and improve their ability to scrutinise government effectively.
The case for state funding
- State funding would remove the influence and access private donors have to political decision makers.
- State funding gives politicians more time to serve the interests of their constituents rather than spending time seeking funding.
- Minority parties could compete better if the funding gap between major and minor parties was smaller.
- Greater funding for opposition parties would allow them to research policy and offer a strong alternative to the government, which is good for democracy.
The case against state funding
- Taxpayers might oppose funding parties they are opposed to, especially more radical parties.
- In practice, it would be hard to work out how much each party should receive.
- State funding will not solve the problem of parties having different levels of funding, as parties have different levels of membership to one another.
- In a democracy and a free society, it could be argued that individuals who wish to donate money to a party be allowed to do so.
Test yourself on UK Funding Reform
What is NOT a feature of the Political Parties, Elections and Referendums Act (PPERA)?
What are current issues with party funding and transparency?
What is NOT a case against state funding?
What is paid to opposition parties in the House of Lords?