Is Party Funding Straining Democracy?

by Joshua Gordon

Party funding particularly in the UK has been on the discussion table for many years, however no Government of the day has made progress in addressing this issue. Some argue that donations from high net worth Individuals, global corporation and trade unions are pulling the levers of democracy, and such donations are influential in the movements of a political party. I will seek to dive into the mechanics of the private and public funding in the UK and explore funding systems throughout the world as a comparative measure.

Imagine the thought of being told that you were going to receive a grant, a donation or funding that requires no period of payback and carries no significance? In simple terms, the general public are led to believe that ‘donations’ which currently hold no upper limit are completely impartial. Progress has certainly been made on the front of transparency; I was able to source at all reported donations received from individuals and organisations from 2001. Interestingly the highest single donation to date is £3,459,340.00 received from Unite the Union to the Labour Party. This however does not address influence.

by Joshua Gordon

A recent study by Sir Christopher Kelly KCB entitled Political Party Finance made one suggestion of donation caps, he analysed such a cap in incremental stages and concluded the losses of income as a percentage of donations are rather significant (shown in the table above) which could start to answer the question of stagnated progress been made on this issue. I would argue that a cap would certainly be a step in the right direction. The amount of donations I don’t believe is the issue however the amount of influence one donation may carry can certainly become problematic in the name of democracy.

I am a strong advocate of Public subsidiaries which is exercised throughout Europe, this is essentially funding from the Government to a political party. This does occur in the UK, however is not the main source of funding, money is distributed proportionally to the number of seats secured in Government, could well be called performance based.

One may like to see Government funded by the people for the people, realistically in the short term this is a not a feasible solution. I don’t believe the level of engagement of the population in politics warrants this funding mechanism at the present time. What we do not want to build are political parties controlled by influential personal and business, some may argue this is already occurring through the levels or tax avoidance, most recently paying little less than £5,000 for the year 2014, which I may add is less than an individual earning the UK average salary in tax and National Insurance contributions, make up your own conclusion. Private funding is likely to remain, the question is how can we build an environment where the level of influence can be stemmed.

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