Tag Archives: party funding

Election spending limits: we’re going to spend, spend, spend (or are we)?

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Increasing the amount of money that political parties can spend during election campaigns might not sound sensible, but as Justin Fisher explains, the government’s proposal to do so seems reasonable in principle, but must be implemented with care to avoid disproportionately benefiting the two most popular parties.

On 20 July, Michael Gove, the Secretary of State responsible for overseeing party finance regulation, announced that party (and candidate) campaign spending limits for Westminster elections were to be increased in line with the value of money. This received little fanfare and was only touched upon briefly in the press the following month. This proposed change is both welcome and significant. So why is the change being proposed? To understand this, it is worth explaining how party spending limits are calculated.

Party Spending limits

Party (rather than candidate) spending limits were introduced by the Political Parties, Elections & Referendums Act 2000 (PPERA). Setting the period of regulation as 365 days before a general election, the act devised a formula for parties based on the number of constituencies in which a party fielded a candidate. The overall party spending limit was set at the number of seats contested multiplied by £30,000. Thus, at the 2019 general election, if a party fielded candidates in the 631 constituencies in Great Britain (assuming they did not contest the seat of the Speaker), the national party spending limit would be £18,930,000.

However, the sum per constituency (£30,000) set by PPERA in 2000 has never been adjusted for inflation. As a result, the national party limit is approximately 50% lower in real terms than when it was introduced. When accounting for whole-year inflation, the £18,930,00 spending limit equates to approximately £9,473,344 at 2022 prices. This erosion of the level in real terms has occurred over a period of relatively low inflation. So, given the relatively high rates of inflation experienced in 2023, this real-term figure will be even lower come the end of this year.

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Standards in public life: are we in a post-Nolan age?

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In 1995, the Nolan report established ‘Seven Principles of Public Life’. Twenty-five years later, questions have been raised about the continuing relevance of the Nolan principles. Lord (Jonathan) Evans of Weardale, Chair of the Committee on Standards in Public Life, argues here that although we are not not yet living in a ‘post-Nolan’ age, there are reasons for real concern.

In recent months we’ve heard a new phrase used by academics, commentators, and members of the public who have an interest in public standards. That phrase is a ‘post-Nolan age’. 

The sentiment is encapsulated in an email sent to my Committee’s mailbox earlier this year. A member of the public told us they ‘feel a great sadness that the moral framework which has guided British public life for the past quarter century appears to be well and truly over’.

The email referred to the growing perception that those in public life no longer feel obliged to follow the Nolan principles of selflessness, integrity, objectivity, accountability, openness, honesty and leadership – otherwise known as the Seven Principles of Public Life. 

These principles have long underpinned the spirit of public service in this country, and were first formally articulated in Lord Nolan’s seminal 1995 report – the first from the Committee on Standards in Public Life, of which I am now Chair.

Since 1995 it has been increasingly accepted that anyone in public service should act in accordance with the Seven Principles. The Principles apply to ministers and MPs, all civil servants, local government officials, public bodies, the NHS, agencies as well as private companies and charities delivering services on behalf of the taxpayer. The Principles are not a rulebook but a guide to institutional administration and personal conduct, and are given a hard edge when they inform law, policy, procedure and codes of conduct. 

In their essence, the Seven Principles are there to govern the legitimate use of entrusted power in public life. All of us in public life, whether through democratic election or public appointment, have some degree of power afforded to us on the public’s behalf, whether it is the power to make decisions on benefits, to spend money on schools, to legislate to protect public health or to influence debate. This power is lent to us to be used for the good of the public.

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Reforming party funding by stealth and compromise may have longer-term consequences

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Since the 2015 general election the government has introduced two measures –proposals relating to trade union political funds and cuts to Short money – that have the potential to affect the funding of at least some political parties. Justin Fisher argues that reforms such as these that have an asymmetric impact on parties could have longer-term consequences by causing a future government to exact ‘revenge’. That would do little for the prospects of reaching consensus on the vexed question of party finance reform.

The phrase ‘stop-go’ has become a useful means by which one can characterise Britain’s approach to party finance reform since 2000, when the wide ranging Political Parties, Elections and Referendums Act  (PPERA) was passed. Despite PPERA, the ‘problem’ of British party finance has refused to go away and, in the relatively short period since its introduction in 2001, there have been two subsequent government sponsored inquiries, both of which have recommended significant further reform but have failed to see their proposals implemented. The result is that Britain has developed a stop-go approach to reform, whereby reviews are entered into with reforming zeal, only for the ensuing proposals to be shelved by a failure of the main political parties to reach agreement. However, since the 2015 election two measures have been introduced which have the potential to affect the funding of at least some parties. In both cases the final proposals are likely to be somewhat less radical than was originally envisaged but could nonetheless have significant short- and longer-term consequences.

The Trade Union Bill

The election of the Conservative majority government in May 2015 very quickly signalled that reforms related to party funding would be attempted, not as a comprehensive attempt at reform, but with possibly far reaching consequences for some parties. In July 2015, a Trade Union Bill was presented, which included a clause requiring trade unions with a political fund to operate a ‘contracting-in’ system rather than a ‘contracting-out’ system. This had been a Conservative Party manifesto commitment, but went to the heart of the Labour Party’s relationship with the trade unions, following the Trade Union Act 1913. This established that for trade unions to engage in political activity, they must create a separate political fund. This covered all political activity – not just that with the Labour Party – and trade union members were required to actively ‘contract-out’ if they wanted to avoid paying this modest additional fee. The 1913 Act laid the ground rules for an important aspect of Labour funding for much of the next 100 years. Political activity through the Labour Party would be expressed collectively through a union’s decision to affiliate to the party.

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The grass roots are withering and the money is drying up – so what is the future for local parties in general election campaigns?

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Ron Johnston and Charles Pattie discuss the evolution constituency campaigning in the UK. Their book Money and electoral politics: Local Parties and Funding in General Elections was published earlier this month.

With the 2015 general election now less than a year away, political parties will again be focusing on funding of their campaigns. As in previous elections, candidates will need two resources to sustain their general election campaigns – people and money. Each is in increasingly short supply. As a result, the nature of constituency campaigning has changed very substantially in recent decades, and is likely to do so even more in the future.

People are needed to manage the constituency campaign and to promote the candidate’s/party’s cause across the local electorate: as the average constituency has some 70,000 voters, this means reaching a large number of people. In the past, most candidates could rely on activists drawn from their party’s local members, but as their numbers have declined the available pool has been reduced. Some candidates have replaced them by supporters – non-members who are nevertheless willing to promote the party’s cause – and by volunteers from nearby constituencies where there is an excess of supply relative to demand.

Money is needed to sustain the campaign organisation – its office and equipment, plus staffing – but in particular to meet the costs of posters and leaflets. Research has clearly shown that the more intensive the local campaign, as indicated by the amount that the candidate spends on those items, the better the performance: those who spend more tend to get more votes, and their opponents get less.

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