Political parties need state funding

17 April 2012

The renewed debate on party finance, while interesting and important, has yet again missed the point. Repeated failures to resolve the issue lead to the inevitable conclusion that substantial state funding of parties should be considered, something that many of our neighbours and allies have already realised.

Of the 15 “old” EU states, the UK stands alone with Luxembourg in not providing significant funding (defined as more than 25%) to political parties from state resources. Other Westminster model states, like Canada and Australia, have also moved in this direction. Political parties in the UK do receive some funds, but they accounted for only about 18% of party funding between 2001 and 2011(about £9m a year), and just 10% in the 12 months up to the 2010 general election.

Party funding per quarter 2001 – 2011 in millions of pounds, state and private sources.

State funding of political parties

Source: Electoral Commission.

Central to moving the debate on must be a recognition that political parties form an essential part of the governance landscape; they develop policy, recruit future representatives and leaders, and prepare them for government. There is no single way to fund these activities, but if the public wishes to control or limit donations, it is unrealistic to imagine that this can happen without substantial state funding providing an alternative source of income for political parties.

Other states have built funding systems around their own values, culture and political system, incorporating state funds in different ways. In the 1970s Swedish political parties entered into a voluntary agreement to cease to accept private donations. Public funding was introduced to allow parties to focus on long-term planning without being dependent on other contributions.  Likewise Canada introduced federal party funding to be able to introduce a ban on donations from companies. A set amount for each vote means that the Green party, which in a majoritarian electoral system has struggled get its first seat in parliament, has still received $1.9m reflecting their increasing level of popular support.

In Germany, it was decided that parties should not receive more from the state than they could raise through other means. State funds are distributed (in part) as matching funding for membership subscriptions, to increase the value to parties of reaching out to and engaging citizens. In Australia, state funding only covers election costs, while until recently Dutch state funding was restricted to covering the costs of party affiliated research institutes (it has since expanded to cover other expenses). There is a strong argument for linking any taxpayer or state funding to the activities of the parties in recruiting new members or attracting small donations.

There is no one single ready made model for funding political parties, and reaching agreement on a package which is acceptable to parties, funders and citizens has repeatedly proven itself to be elusive. However, until it is acknowledged that some form of state funding will be needed in order to reduce or cap donations from other sources, the debate can never progress.

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Comments (2)

  1. Peter Raynard on 18 April 2012 at 10:09 am

    Whilst I agree with the premise of your argument, as long as the UK is rated in the lower end of trust in its politicians across the EU, this will be a hard thing to sell. And the irony is that it is the politicians that have to sell it to their electorate.

  2. Liz Carolan on 18 April 2012 at 1:41 pm

    I agree. This is interesting as quite often it is in response to scandals or periods of mistrust that changes such as these are able to be brought about.

    Michael Koß, in his 2010 book, finds that “the introduction or reform of state funding becomes more probable… the more the discourse on political corruption identifies state funding as a remedy against practices in party politics”.

    By that logic, a national discomfort with political finance should push people in the direction of supporting more state funding.

    Perhaps the “distrust of politicians” we see in this country is more informed by how they as individuals and groups are perceived to spend the money they have, rather than where it comes from?

    Or at least that may be the presumption of parties attempting to rebuild rust in the wake of expenses scandal?

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