The review of funding political parties

Objectives of the Review

I have set some clear objectives for the review. These articulate the principles that my recommendations will be based on, and what, overall, any proposals for reform should achieve. They set the criteria for assessing the different options for funding parties. They complement the terms of reference which set the framework for the review, and the assumptions I have made.

I feel that these objectives are both challenging and realistic.

Objectives

  1. To improve public confidence in party funding
  2. Parties should compete on the basis of policies and competence, not money
  3. To contribute to greater democratic engagement
  4. To be as fair as is possible to all political parties and candidates

1. To improve public confidence in party funding

The public needs to be reassured that the system of party funding is transparent, open and well-regulated. Many people are currently unaware how parties are funded, including that there is already some state funding for parties. Any system of party funding, especially if the public's money is involved, must be fully accountable. The Electoral Commission regulates the system on the public's behalf.

2. Parties should compete on the basis of policies and competence, not money

I want to avoid an "arms race" on campaign expenditure. In 1998 the Neill Committee recommended a cap on the amount that political parties can spend at elections and this was introduced, and there are have been caps on what candidates can spend in existence for many years. It is now suggested that the expenditure allowed in an election year should be further reduced, and some think there should be a ceiling on expenditure in every year.

3. To contribute to greater democratic engagement

I want to increase engagement with the democratic system in general, including with political parties, and the funding system may act to stimulate that engagement. It certainly should not inhibit it. Although the review is about funding, rather than democratic engagement, engaging citizens in the party political process should be a factor taken into consideration when weighing up different options for the party funding system.

4. To be as fair as is possible to all political parties and candidates

I want to avoid giving advantage to parties on the basis of any of the following:

  • Whether a party is new or established
  • The size of the party
  • Whether the party is contesting seats in all of the UK or only part of it
  • Whether the party is in government or not
  • The wealth and influence of the party's supporters

Fairness does not necessarily mean treating all parties or candidates equally. It also does not mean giving them all the same chance. In a democracy, the factor that differentiates parties should be popularity among voters. Those who give money to political parties should have no more influence over events than those who do not. Popularity will, of course, not remain constant.

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Tests

The tests against which I will assess both the various proposals put to me and my final recommendations lead on from the objectives. They are:

  1. That political parties have sufficient money to fulfil their function
  2. That there is sufficient transparency so that sources of funding are clear
  3. That the proposals can be properly policed in a cost effective way

These objectives and tests reflect other publicly available statements of principle, such as those published by the Electoral Commission, the Hansard Society, and the Council of Europe, as well as the statements made by the political parties.

Just as a comparison, here are the Electoral Commission's principles I hope that my objectives are complementary.

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Electoral Commission Principles

Any system for the funding of political parties must therefore:

  • encourage smaller contributions from a larger number of people rather than small numbers of high value contributions
  • ensure that no single funding source can exert undue influence
  • ensure that parties continue to generate a significant proportion of their income from voluntary contributions
  • neither entrench the existing party system nor inhibit the development of new parties
  • be based on clear and fair rules for how parties qualify for any public funds
  • be simple and practicable in terms of implementation
  • be open and transparent so that the public can see clearly the sources and uses of funds
  • take account of the needs of parties at all levels and in all parts of the United Kingdom

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Page last updated: 31 Jul 2006