Economic Performance or Electoral Necessity? Evaluating the System of Voluntary Income to Political Parties
| Date | 01 June 2000 |
| Author | Justin Fisher |
| Published date | 01 June 2000 |
| DOI | 10.1111/1467-856X.00033 |
| Subject Matter | Article |
British Journal of Politics and International Relations,
Vol. 2, No. 2, June 2000, pp. 179–204
Economic performance or electoral
necessity? Evaluating the system of
voluntary income to political parties1
JUSTIN FISHER
Abstract
Whilst the public funding of political parties is the norm in western democracies, its
comprehensive introduction has been resisted in Britain. Political and electoral arrangements
in Britain require parties to function and campaign on a regular basis, whilst their income
follows cycles largely related to general elections. This article shows that the best predictor
of party income is the necessity of a well-funded general election campaign rather than party
performance. As a result, income can only be controlled by parties to a limited degree, which
jeopardises their ability to determine their own financial position and fulfil their functions
as political parties.
The financing of political parties has been an increasingly important fea-
ture of British politics during the past 15 years. Three major examinations
of the system have taken place. The Trade Union Act 1984 challenged the
basis of trade union political activity (Fisher 1992). It required unions
holding political funds to review this by regularly balloting their members.
In both rounds of ballots to date (1985–1986 and 1995–1996), members
supported the continuation of their union’s political funds. In 1993–1994,
the Home Affairs Select Committee investigated whether parties’ income
were adequate for their needs and whether there was therefore a case for
additional funds to be made available by the state. The Report concluded
© Political Studies Association 2000. Published by Blackwell Publishers, 108 Cowley Road, Oxford OX4 1JF and
350 Main Street, Malden, MA 02148, USA 179
that the case for additional funds was not compelling. Finally, in 1998, the
Committee on Standards in Public Life (often known as the Neill Com-
mittee after its chairman, Lord Neill) conducted a very extensive review of
many aspects of British party finance. It made some 100 proposals, which
at the time of writing are under consideration.
At present then, British party finance is based upon voluntary income.
This form of funding relies on the principle that parties will raise money
from members and supporters and underlies the notion that political
parties are voluntary organisations and that support should be provided
voluntarily. In short, those who support the party’s performance will fund
parties. In this article, that assumption is tested with regards to parties’
economic performance.
In addition to voluntary income, some state assistance is available.
However, it is at a considerably lower level than in other democracies and
much of it is concerned with electoral contests rather than the day-to-day
running of parties. This is potentially problematic since, in addition to con-
testing regular elections at various levels, parties need to sustain political
communication, recruitment and research, as well as their basic infra-
structures. In short, they require a constant flow of income in order to
fulfil their functions as political parties.
This article first summarises overall trends in the income of the two
main political parties and compares them with patterns of party finance in
other comparable democracies. Subsequently, it examines the extent to
which parties can determine the levels of income required to fulfil these
functions by analysing the conditions under which parties receive more or
less income.
Party funding in Britain
Since the last World War, British political parties have tended to be
financed in ways common to other democracies where comprehensive
state funding has not been introduced (Heidenheimer 1970, 5–9; Paltiel
1981, 143–147; Ewing 1992, 6–7). Thus, in addition to monies received
from their individual membership, the Labour party has received income
from trade union affiliations and donations, and the Conservatives from
corporate donations. However, in recent years these patterns have been
changing. In the Conservative party there have been three important devel-
opments in techniques of party fundraising that indicate something of a
shift away from institutional sources of finance (Fisher 1996b, 1997 and
2000). First, in recent years there has been a re-emergence of personal
Justin Fisher
180 © Political Studies Association 2000.
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