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Should political parties be funded by the state? 

Most western democracies have state funding of parties; in Australia this is for the cost of elections, in Germany state funding matches what the parties raise in donations and in the Netherlands it is for research. Both the Phillips Report, commissioned by the last Labour Government and the Committee on Standards in Public Life, in 2011, have recommended state funding based in part on numbers of votes and in part on matching donations or making them tax deductible.  Arguments between the two main parties about whether Labour’s funding by trade unions should be included and whether the limit on individual donations, from which the Conservative benefit more, should be set at a low level have prevented any agreement. In the current climate when there is a distrust of politicians and public expenditure is being cut back, it makes it more difficult to gain public support for the idea.

Arguments for state (public money) funding

-        Parties play a key function in a democracy, by recruiting candidates, developing policies and stimulating public debate and it is important that they are properly funded to do this. If parties had more money to spend in financing a wider range of people to apply for Parliamentary selections it would make Parliament more diverse.

-        It would end the dependence of political parties on wealthy donors and firms and therefore the suspicion that they can use donations to parties to buy influence and change policies and government decisions.

-        The era of mass membership, when parties had millions of members, is over and far fewer people identify strongly with any of the political parties.  This means that parties cannot hope to fund all their activities from membership fees alone. Secure public funding would allow the parties to plan their activities over the long-term and give more job security to staff.

-        It would allow Labour to become more independent from the trade unions and would also mean that trade unions would not have to support Labour Policies when their interests diverge.

-        If parties had state funding which matched their vote it would encourage them to campaign in all seats to increase the party vote and not just in the key marginals.  Equally if funding was matched to small donations then it would encourage parties to seek more money from all their supporters.

-        State funding would make it easier to limit the spending on elections, much of which goes on advertising, as part of the overall deal on the future of party funding.

Arguments against state (public money) funding 

-        Funding based on the existing share of the vote strengthens the larger parties further and makes it more difficult for smaller parties, who may represent new patterns of support, from breaking through, especially given First Past the Post system for Parliamentary elections.

-        People will object to their taxes going to parties that they do not support, especially extremist parties.  It would be possible, however, to devise a scheme whereby people chose which party they would like to fund.

-        Firms, interest groups and wealthy individuals are able to get access to politicians anyway, whether or not they donate to parties.  In countries with state funding of parties there has still been corruption.

-        If there is secure public funding then parties may feel less need to recruit members and reach out to various groups in society for support.

-        If there is State funding of parties there will be increased calls for the regulation of what the money is spent on and parties will be less independent of the State.  The Party in Government will have the power to change the rules on funding to their advantage.

-        Some party spending goes on advertising, attacks on other parties and ‘spinning’ stories and these are, by and large, not activities than enhance democracy.

-        With all the information that is available on the internet about policies and issues and the various political blogs, the role of parties in informing voters is less necessary than it was.


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