Funding Local Political Parties in England and Wales: Donations and Constituency Campaigns
| Author | Ron Johnston,Charles Pattie |
| DOI | 10.1111/j.1467-856x.2007.00296.x |
| Published date | 01 August 2007 |
| Date | 01 August 2007 |
| Subject Matter | Article |
B J P I R : 2 0 0 7 V O L 9 , 3 6 5 – 3 9 5
Funding Local Political Parties in
England and Wales: Donations and
Constituency Campaigns
Ron Johnston and Charles Pattie
The funding of political parties is an issue of considerable contemporary concern in the UK.
Although most attention has been paid to the situation regarding national parties, the new funding
regime introduced in 2001 also applies to constituency parties, and some concerns have been raised
regarding the limits on spending and expenditure there. Using data released by the Electoral
Commission on all donations above a specified minimum to constituency parties, this article looks
at the pattern of donations over the period 2001–05. It then analyses the impact of spending on the
2005 constituency campaigns, showing that for the Conservatives and Liberal Democrats substan-
tial donations enhanced their vote-winning performances in seats where their candidates were
challengers whereas for Labour substantial donations aided its performance in marginal seats that
it was defending.
Keywords: local parties; funding; donations; campaigns
Party political funding has become an issue of considerable public concern in the
United Kingdom over the last decade, stimulated in particular by various allegations
of corruption. This has generated a range of inquiries into the nature of party
funding—some commissioned by the government, others by politically non-
affiliated interest groups. In turn, these have initiated debate about the desirability
of certain actions—such as limits on both donations to and expenditure by political
parties, as well as by other interest groups wishing to influence election results—
and the desirability of extending current arrangements for public funding of politi-
cal parties.
As a result of these inquiries and debates, political action has been taken for the first
time to regulate many major aspects of party political funding in the UK—although
there was earlier legislation covering particular issues such as access to broadcast
media, the ‘sale’ of peerages and other honours in return for donations to political
parties and the requirement for trades unions to hold ballots before establishing
political funds. The recent legislation covers both donations (from whom, of what
size, which should be declared and publicly documented, for example) and expen-
diture. Most attention has since been paid to the impact of these regulations—set
out in the Political Parties, Elections and Referendums Act 2000—on national
political parties, which now have to be registered (under the Registration of Political
Parties Act 1998). But the new regulations also change aspects of the law as it
relates to candidates and parties operating at sub-national levels, including in the
© 2007 The Authors. Journal compilation © 2007 Political Studies Association
366
R O N J O H N S T O N , C H A R L E S PAT T I E
individual constituencies which return Members of Parliament. Large donations to
local parties have to be declared to the Electoral Commission, for example, which
makes the details public.
After the 2005 general election, the availability of this information stimulated
concern. For example, The Sunday Times (9 April 2006, 2) reported that two of the
Labour Party’s major donors nationally also contributed to the 2005 constituency
campaign of Cabinet Minister Patricia Hewitt: Sir Ghulam Noon contributed
£2,500, almost one fifth of her total expenditure, and Lord Bhattacharyya also
made a substantial donation. (According to the Electoral Commission database, he
gave £2,000 in April 2005.) More generally, the defeated Labour MP for The Wrekin
(Peter Bradley) suggested that ‘a campaign by three Tory donors to pump money
into marginal seats led to Labour being outgunned financially by up to 10 times in
some seats, prompting large swings that ousted MPs’ (The Sunday Times, 26 March
2006, 5).1 He claimed that ‘Of the Tories’ 36 gains at the last election, 24 were
funded by donations from at least one of the trio ... [and that] in 20 of them, they
got bigger swings than the national average’; this, he argued, is ‘buying seats’—
entirely within the rules set by the 2000 Act—and The Sunday Times suggested that
the government ‘will now push for a cap on spending in each constituency, to stop
money being poured into a handful of critical seats which could skew the next
election’. An expenditure cap already exists, but it applies only to the campaign
period after the election has been called and local parties name their candidates in
campaigning literature; prior to that date there are no limits, and much can be done
preparing for the campaign within the rules (as the Liberal Democrats have long
done, though through voluntary labour rather than large expenditure (Cutts 2006a
and 2006b; Cutts and Shrayne 2006)).
The disquiet expressed over donations to local parties reflects wider concern about
various aspects of party funding. A study undertaken by a pressure group, Unlock
Democracy, found substantial differences between the main political parties in the
financial health of their constituency parties, suggesting that as a consequence
many ‘are now nearing critical condition’.2 But recent research conducted for the
Electoral Commission found widespread cynicism among participants in a series of
deliberative workshops regarding political parties and how they are funded.3 Such
cynicism and the particular concerns raised by the ‘cash for peerages’ issue stimu-
lated the prime minister’s invitation to Sir Hayden Phillips to undertake a review of
the funding of political parties, with particular reference to the case for state
funding of parties (perhaps as a consequence of a tighter cap on the size of
donations) and to the transparency of party funding (Review of the Funding of
Political Parties 2007).4 His interim report outlines the various issues, including
those relating to constituency parties,5 and his final report set out recommendations
which he hoped that the main parties would accept but which he had so far failed
to get agreement on.6
Given these concerns, in this article we take advantage of the new reporting
regulations to explore donations to local parties and their possible impact on the
most recent general election result—in the context of claims that the Conservatives
were able substantially to outspend, and thereby defeat, the Labour Party in a
number of marginal seats. After outlining the current regulatory system, we analyse
© 2007 The Authors. Journal compilation © 2007 Political Studies Association
BJPIR, 2007, 9(3)
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the total amount of money donated to local parties over a five-year period covering
two general elections, with particular reference to its sources. We then look in more
detail at the 2005 general election, to evaluate the arguments that large donations
may have influenced the local campaigns and their outcomes.
Party Funding Regulation in the UK
The debates over political funding in the UK, as in a range of other countries, reflect
changes in both the nature of political parties—especially the decline of mass
memberships and the availability of free labour to undertake various campaigning
and other activities—and the nature of political campaigns which involve ever more
sophisticated use of the media. The latter have required parties to seek increased
funding and, because of the impossibility of raising large sums through members’
subscriptions and fundraising activities, such support has increasingly been solicited
from wealthy individual donors (even where the party has access to some major
alternative sources, such as trades unions for left-wing parties).7
Much of the public and political concern over these trends has concentrated on the
potential—if not actual—influence that donors might have on party (especially
governing-party) policies and actions: there are fears that donors can ‘buy influ-
ence’. This has long attracted attention in the United States (Persily 2006), where
the most recent attempt at regulating funding—the Bipartisan Campaign Reform
Act 2002—was sustained by the Supreme Court’s decision in McConnell v. FEC (540
US 93 2003). That Act was particularly concerned with regulating ‘soft money’
donations to parties rather than candidates (‘soft money’ is defined as ‘money that
has an effect on federal elections but is not subject to federal contribution, expen-
diture or disclosure rules’ (Briffault 2006, 192)). The Supreme Court decided that
such regulations were justified ‘by the governmental interest in preventing the
corruption and the appearance of corruption’ (Briffault 2006, 196). This extended
its earlier ruling regarding the regulation of donations to and expenditure by
candidates, in Buckley v. Valeo (424 US 1 1976), further stressing its belief that the
prevention of both corruption and the appearance of corruption are ‘legitimate
and compelling government interests... for restricting campaign finances’ (cited in
Briffault 2006, from FEC v. National Conservative PAC, 470 US 1984, 496–497).
The US arguments that ‘special access procured by money ... is uniquely corrupt’
(Briffault 2006, 203) are reflected in recent UK debates, as with the reference of the
issue to the Committee on Standards in Public Life by Tony Blair’s government in
1997 (Committee on Standards in Public Life, 1998), and then establishment of the
Phillips Review of the Funding of Political Parties by...
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