PARTY FUNDING
State Funding
Suggestion that large money sums for party funding could come from the tax payer
However, we already pay MPs from taxes
Financial Donations
Conservatives
Labour
Big businesses such as JCB
Large sums from wealthy individuals
Hedge funds and banks
Cameron met with electorate in return for cash
Problems
Vested interest
Tories overly care for rich donors
Low income and corporation tax
Little attempt to close tax avoidance eg trust funds and offshore accounts
Anti trade union laws
Membership fees (500,000)
Proportion of union member fees go towards Laboour
Trade unions eg unite and unison
Problems
Not everyone can be in a trade union
When striking, members may have voted for it but may be opposed to gov
Striking can damage economy
Influence over Labour leadership elections and to a degree MP selection
Labour: safer on union laws
Lib Dems and smaller parties
No level playing field
Struggle to get anywhere near as much as Labour and the Tories
Arguable: lack of comparable funds has negative impacts on their ability to get elected
Large individual donations
Under Blair, Jan 1997
Mr Ecclestone (Formula 1 chief) donated £1m to Labour party yet was only declared November
After gov said F1 was exempt from tobacco ban which was a key part of their manifesto
Ecclestone had lobbied for this at meetings in No10 with Blair (16th Oct)
Funding types
Short money: available to opposition parties to help cover costs and provide proper gov scrutiny
Cranborne money: same as short money but for Hol
Policy Development Grants: £2m shared across those parties with 2+ sitting MPs with oaths of allegiance
Parties received subsidised TV and postage during GEs
2016 Trade Union Laws
Fair
Unfair
Not all members in unions want to support Labour
Union members may not have been aware of funding Labour
Labour has own memberships to gain money
Tories did this to weaken Labour
People are less likely to actively 'opt in'
Reforms
Inquiry and Report from Committee on Standards in Public Life 2011
Cap on individual donations inc. trade unions of 10,000 p/y and £23m p/y in public subsidy
Tories approved Trade Union factors
People more engaged with parties
But....
coalition gov (2013) rejected recommendations due to austerity
ignored once again
2000 PPERA
Independent electoral commission to supervise party spending
Spending capped £30,000 per constituency
Parties must publish donations regularly
£5000 national and £1000 constituency donations must be declared
Loans now subject to these rules (2010)
Donations not from electoral roll banned
PPEA 2009
But...
Doesn't remove vested interest
'Cash for peerages' scandals 2006- Labour claimed donations were loans
Cast shadow over Blair
Political Parties and Elections Act
Tighter regulations on spending in run in to elections and empowers regulation
Electoral Commission allowed to investigate cases and impose fines
Tories fined £70,000 2015 for constituency over spending (29)
Donations £7500+ declared - only UK residents
But...
Fines= affordable to parties and they can carry on contesting
Risen donation declarations
Phillip's Report 2007
Proposed to address private donations and move towards tax payer funding
Supported by Lib Dem and Labour in 2015 GE - impose limits on individual donations
eg. pence for vote / member basis
But...
Couldn't be implemented as austerity is already burdening the tax payer
Tories contradicted these limits and limited Labour with trade unions
Nothing came from report
Cash for Honours
Lords aren't elected but chosen by PM (patron)
PM may be inclined to award peerages to large donors
2006: Blair recommended several who weren't accepted by the HoL Appointment Commission - Labour donors
2016 Cameron recommended Tory donors when resigning such as Olivia Bloomfield (Former Governor of Cheltenham Ladies College) who had raised millions for Tories.