Political funding in the United Kingdom has been a source of controversy for many years. Political parties in the UK may be funded through membership fees, party donations or through state funding, the latter of which is reserved for administrative costs. The general restrictions in the UK were held in ''

Bowman v United Kingdom ''Bowman v United Kingdom'' 998ECHR 4is a UK constitutional law case, concerning the legitimate limits on campaign finance spending. A majority of the court held that countries joined to the European Convention on Human Rights may be required to ...

'' to be fully compatible with the European Convention on Human Rights, article 10.

History

The first effort to regulate the financial dimension of political competition was the

Corrupt and Illegal Practices Prevention Act 1883 The Corrupt and Illegal Practices Prevention Act 1883 (46 & 47 Vict c. 51) was an Act of the Parliament of the United Kingdom of Great Britain and Ireland. It was a continuation of policy to make voters free from the intimidation of landowners a ...

. Although this landmark legislation was concerned with constituency candidates, their campaign expenses and their agents only, all other efforts to create a political finance regime started from here. Edward 16 The next legislative step to deal with the subject was the

Honours (Prevention of Abuses) Act The Honours (Prevention of Abuses) Act 1925 is an Act of the Parliament of the United Kingdom, that makes the sale of peerages or any other honours illegal. The act was passed by the Parliament in the wake of David Lloyd George's 1922 cash-for-h ...

1925 that sought to end the selling of titles in exchange for donations to political parties. In August 1976 the Committee on Financial Aid to Political Parties, chaired by Lord Houghton of Sowerby, proposed that financial aid to political parties should be given in two forms: (a) general grants to the central organisations for their general purposes and (b) a limited reimbursement of election expenses to parliamentary and local government candidates. Starting in 2006, political funding came under scrutiny as concerns grew that the largest British political parties were too dependent on a handful of wealthy donors. Furthermore, during the Cash for Honours scandal, concern grew even more. A concern of the 1970s had been that the major parties were unable to raise sufficient funds to operate successfully.

The Political Parties, Elections and Referendums Act 2000

The

Political Parties, Elections and Referendums Act 2000 The Political Parties, Elections and Referendums Act 2000 (c. 41) is an Act of Parliament of the United Kingdom that sets out how political parties, elections and referendums are to be regulated in the United Kingdom. It formed an important ...

(PPERA) was an act that established the Electoral Commission and required all political parties to register with it, set down accounting requirements for political parties, and introduced controls on donations.

2006 Sir Hayden Phillips inquiry

In March 2006, former civil servant Sir Hayden Phillips was charged with setting up an inquiry to come up with proposal for reform. It reported a year later. He recommended capping individual donations at £50,000 and capping spending for political campaigns. He also suggested increasing state funding by £25m and expanding its reach.

2008 Ministry of Justice report

In June 2008, the

Ministry of Justice A Ministry of Justice is a common type of government department that serves as a justice ministry. Lists of current ministries of justice Named "Ministry" * Ministry of Justice (Abkhazia) * Ministry of Justice (Afghanistan) * Ministry of Justi ...

released a

white paper A white paper is a report or guide that informs readers concisely about a complex issue and presents the issuing body's philosophy on the matter. It is meant to help readers understand an issue, solve a problem, or make a decision. A white paper ...

analyzing party finance and expenditure. The paper proposed to tighten controls on spending by parties and candidates, substantially strengthen the powers of the Electoral Commission, and increase the transparency of donations.

2011 Committee on Standards in Public Life report

In November 2011 the Committee on Standards on Public Life, chaired by Sir Christopher Kelly, published a Report on "Political Party Finance. Ending the big donor culture". It is their 13th report, Cm. 8208. The report made five main recommendations: (a) Contribution limit of GBP10,000 per donor, party and year; (b) this limit should not apply to

affiliated trade union In British politics, an affiliated trade union is one that is linked to the Labour Party. The party was created by the trade unions and socialist societies in 1900 as the Labour Representation Committee and the unions have retained close institut ...

affiliation fees if such fees are raised by an "opt in"; (c) existing limits for campaign spending should be cut by about 15 percent; (d) in addition to the present "policy development grant" eligible parties should be granted public funding at the rate of GBP3.00 per vote in Westminster elections and GBP 1.50 per vote in devolved and European elections; (e) income tax relief should be available for donations up to GBP 1,000 and membership fees to political parties.

Membership subscriptions

Membership subscriptions ("subs") provide one source of funding for political parties. However, in recent times membership has declined and campaign costs have grown. The

Green Party A green party is a formally organized political party based on the principles of green politics, such as social justice, environmentalism and nonviolence. Greens believe that these issues are inherently related to one another as a foundation f ...

is the only major political party in the UK which receives the majority of its funding through membership fees and these are what cover the running costs of the organisation. Membership subs have become a more significant source in income for both the SNP and Labour in recent years, as both have seen substantial increases in membership.

Donations

The

Conservative Party The Conservative Party is a name used by many political parties around the world. These political parties are generally right-wing though their exact ideologies can range from center-right to far-right. Political parties called The Conservative P ...

relies on donations mostly from individuals and companies; as well as these sources the Labour Party receives a significant portion of its donations from

trade unions A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits ( ...

. For example, in the third quarter of 2009, eighteen political parties reported donations totalling £9,532,598 (excluding public funds). The Conservative Party received £5,269,186, the Labour party received £3,045,377 and the Liberal Democrats received £816,663. Donations typically peak before elections. Between 6 April and 6 May 2010 (a general election campaign month) the Conservatives took £7,317,602, Labour £5,283,199 and the Liberal Democrats £724,000.

State funding

Opposition parties receive state funding to pay administration cost;

Short Money Short Money is the common name given to the annual payment to opposition parties in the United Kingdom House of Commons to help them with their costs. It includes funding to assist an opposition party in carrying out its Parliamentary business, ...

Gay. ''The Funding of Political Parties''. pp. 9. in the

House of Commons The House of Commons is the name for the elected lower house of the bicameral parliaments of the United Kingdom and Canada. In both of these countries, the Commons holds much more legislative power than the nominally upper house of parliament. T ...

starting in 1975, and Cranborne Money in the

House of Lords The House of Lords, also known as the House of Peers, is the upper house of the Parliament of the United Kingdom. Membership is by appointment, heredity or official function. Like the House of Commons, it meets in the Palace of Westminst ...

starting in 1996 however, there is no state funding available to parties for campaign purposes. In addition there is a general policy development grant available to parties with two MPs or one MP and one MEP.Political Parties, Elections and Referendums Act 2000

Transparency

Donations worth over £7,500 to national parties must be declared, as must be donations worth £1,500 or more to local associations. Donations to members' associations – groups whose members are primarily or entirely members of a single political party – also need to be declared above £7,500. This produces a

loophole A loophole is an ambiguity or inadequacy in a system, such as a law or security, which can be used to circumvent or otherwise avoid the purpose, implied or explicitly stated, of the system. Originally, the word meant an arrowslit, a narrow ver ...

where donors can donate larger sums to local candidates while remaining anonymous, by channeling those donations through a members' association such as the United and Cecil Club. For a while, as a

, loans did not have to be declared. Northern Ireland political parties are exempt from revealing the identity of party donors due to security reasons.

References

External links

* http://www.idea.int/political-finance/country.cfm?id=77 * http://www.idea.int/publications/funding-of-political-parties-and-election-campaigns/upload/foppec-p8.pdf {{Political finance Political funding in the United Kingdom,