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The need for reform to party funding is palpable

Written by Chandu Krishnan on Wednesday, 9 May 2012

In a report published by Transparency International UK earlier this year, respondents were asked to rank several scenarios as a possible example of corruption. 86% of respondents thought that ‘a seat in the House of Lords for a resources-resources-businessman who has made large donations to a political party’ was potentially corrupt, the highest score for any of the scenarios.


In a report published by Transparency International UK earlier this year respondents were asked to rank several scenarios as a possible example of corruption. 86% of respondents thought that ‘a seat in the House of Lords for a resources-resources-businessman who has made large donations to a political party’ was potentially corrupt, the highest score for any of the scenarios.

The launch of Christopher Kelly’s report on Political Party Finance, which recommends that all political party donations should be capped at £10000, echoes what we have been calling for since 2006. The system is highly vulnerable to corruption – this is why UK politics has endured periodic scandals, such as the ‘cash for peerage’ controversy back in 2006.

Although the Political Parties Elections and Referendums Act 2000, the Electoral Administration Act 2006 and the Political Parties and Elections Act 2009 have lead to greater transparency in political party funding, the UK is one of the few industrial democracies that does not have a ceiling on donations to political parties. The so-called ‘arms-race’ approach to election spending, combined with decreasing party and trade union membership, puts financial pressure on politicians and parties. A high dependence on very large individual donations has resulted, increasing the risk of corruption and exacerbating public unease about donors’ influence over politicians.

A 2006 enquiry into the state of Britain’s democracy found that “there is a widespread perception that donations to parties can buy influence or position. It is clear that a system of party funding that relies increasingly on very sizeable donations from a handful of wealthy individuals or organisations creates an environment in which the perception spreads that democracy can be bought.” The enquiry’s conclusions further confirm that the current state of play impacts negatively on public trust in government.

In 2006 Transparency International UK undertook research into the issue of political party funding, and our recommendations remain valid. In the interests of reducing the vulnerability of political party funding to corrupt practice the following changes must be made. Firstly, the introduction of a cap of £10000 on donations per donor per year to political parties – as recommended by Christopher Kelly – must be introduced. We also recommend a lower ceiling (compared to the current one of £19 million) on overall election spending by parties at the national level.

Change is needed. Will the three main parties honour their manifesto commitments to reform party funding? Or perhaps we will be forced to wait for yet another scandal.

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Read 12403 times Last modified on Tuesday, 24 November 2015 11:47

Chandu Krishnan

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