The review of funding political parties

Donations from individuals - how much can you give?

At the moment you can give as much as you want. But there are some key underlying principles: transparency and openness.

Political party funding must be transparent and open

There are no limits (or caps) on the size of donations, but donations must be declared and reported to the regulatory body, the Electoral Commission. Any donation of over £5,000 made to main political party offices must be reported, as must donations of over £1,000 to constituency or local party offices. Donations of less than these amounts, but more than £200, must be recorded by the party, but not reported. There is no requirement to record donations of £200 or less.

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Who can give money?

Foreign or anonymous donors are not allowed to give donations of over £200. Only people registered to vote in the UK (including overseas voters), and companies or organisations registered and carrying on business in the UK may donate money to UK political parties.

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How much do parties receive in big donations?

According to the Electoral Commission, in the years 2001-2003

  • almost £68m in reported donations to political parties;
  • £1m+ donations - nearly £12m - about 18% of the total donation income;
  • £100,001 - £250,000 donations - £15.9m - 23% of the total;
  • Donations below £25,000 - £18.7m - 28% of the total (the largest share), and 94% of the 5,366 donations received by parties;
  • In total, 58% obtained through donations in excess of £100,000.

(Source: Electoral Commission, The Funding of Political Parties, December 2004)

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Why are very large donations a problem?

Opinion is divided as to whether very large donations should be allowed.

Against a cap on donations

Some argue that an individual has a right to support a political cause that she or he agrees with by making a donation, and that this right should not be restricted by a cap on the amount that can be given.

Putting a limit on donations might encourage people to try and avoid the cap, by channelling money through friends, other businesses etc. According to this view a cap would make transparency more difficult to achieve.

For a cap on donations

Others argue that very large donations give the individual donors, who happen to be rich, too much influence and power over the political process.

In addition, it is argued that having a cap on donations would encourage parties to try to get many smaller donations. This would mean they would have to broaden their support base, getting in touch with many more people, and that this would have a beneficial effect on getting people involved and engaged in politics.

These are not the only issues, but they are central. If you feel that there should be cap on donations, the question is then at what level should this cap be set.

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If there is to be a cap, at what limit should it be set?

The leader of the Conservative Party, David Cameron, has proposed a cap of £50,000. The Liberal Democrats, since 1998, have been arguing for a cap of £50,000. Other parties, such as Plaid Cymru and the Scottish National Party have argued for a lower limit of £5,000. The Labour Party is currently considering its position.

Other groups have suggested caps of various levels. The thinktank ippr has argued for a cap on donations of £5,000. The POWER inquiry recently recommended a cap of £10,000 for individual donations, and £100 per member of an organisation. The New Politics Network has said a cap should be in the region of £5,000 to £10,000. Charter 88 has said that a cap should be set at £5,000 for an individual, and £10,000 for an institution.

The Electoral Commission, while not recommending a cap in its 2004 report The Funding of Political Parties, said that if a cap were to be set it should be at a relatively low level. They estimated this as £10,000 per organisation or per individual donor per year.

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We want your views

Should there be a cap on donations?


If there should be a cap, at what level should it be set?


Are there any other points you’d like to raise on this issue?


You are encouraged to provide your views on these questions to us by 31 July 2006.

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Page last updated: 21 Jul 2006