Party funding

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  • Party funding
    • How are parties currently funded?
      • Collecting membership subscriptions
      • Holding fundraising events
      • Receiving donations from supporters
      • Raising loans from wealthy individuals or banks
      • Self-financing of candidates for office
      • Up to £2m per party available in grants from electoral commission, plus Short money which grants funds to parties for research depending on their size.
    • Short money
      • Named after Ted Short, the politician that introduced it.
      • Refers to funds given to opposition parties to facilitate parliamentary work (research facilities, etc.)
      • The amount is based on how many seats and votes each party won at the previous election.
    • Why is party funding controversial?
      • The income of parties varies hugely. Therefore, larger parties are advantaged over smaller parties.
      • Funding by large donors, both individuals and companies (party donations from abroad are illegal), may give these donors secretive and unaccountable influence.
      • Some donations verge on corruption. Some may be given in the hope and expectation that the donor be given an honour like a peerage or knighthood ('cash for honours').
      • Party memberships (and membership subscriptions) have been declining parties rely more heavily on donations from rich benefactors.
    • What measures have been proposed to solve these party funding problems?
      • Impose restrictions on size of individual donations to parties. Broadly the US system, but donors can grant funds to thousands of individual candidates). To be effective, this cap would have to be fairly low.
      • Impose tight restrictions on how much parties can spend. This would make large-scale fundraising futile.
      • Restrict donations to  individuals, i.e. outlawing donations from businesses, pressure groups and trade unions.
      • Replace all funding with state grants for parties, paid for out of general taxation.
    • Should UK parties receive state funding?
      • Yes
        • End opportunities for corrupt use of donations (cash for honours).
        • End possibilities of hidden forms of influence through funding.
        • Reduce huge financial advantage that large parties enjoy and give smaller parties opportunity to make progress.
        • Improve democracy by ensuring wider participation from groups who have no ready source of funds.
      • No
        • Taxpayers may object to funding what can be considered to be private organisations.
        • Difficult how to distribute funding, whether on basis of past performance or future aspirations?
        • Parties will lose some independence and see themselves as organs of the state.
        • May lead to excessive state regulation of parties.

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