The false debate over the public funding of politics

by Atul Hatwal

Here’s a question: who is Labour’s biggest donor under Ed Miliband?

Is it Unite? Unison? Maybe the GMB?

Answer: none of the above.

An Uncut analysis of donations to the Labour party since Ed Miliband became leader reveals that the biggest single donor is the House of Commons, giving £9.6m. This so called “short money” is a stipend paid to the opposition to balance the advantage a government gains from the enormous resources of the civil service.

Roll in the funding the opposition receives from the House of Lords, the Scottish Parliament and grants from the Electoral Commission for policy development and Labour has banked almost £11.3m from public funding sources since October 2010. That’s more than the combined donations to the central party (as opposed to individual constituency parties) from the all of the unions.

This isn’t a recent a development either. A decade ago, when the Tories were at their nadir, what was their biggest source of funding? Was it Lord Ashcroft? Or a.n.other city gent, eager to run down his bank balance?

Of course not. In 2002 the total donations from individuals to the Tories came to £2.3m. In comparison the amount the Tories drew from public funds was nearly double at £4m.

These figures expose one of the myths in the political debate on funding – that the public will not accept state funding of politics.

Newsflash: they already have.

There have been no torchlit mobs marching on parliament, or any campaigns in the popular press linking pounds spent on politicians to closed hospital wards. Most people take a common sense view on the short money.

They might not be over the moon at their taxes being spent on politicians, but our rulers need to be held to account and spending a few pennies per voter on helping the opposition do their job is a worthwhile defence against an over-mighty government.

As party negotiations on funding are poised to restart, it’s important for all sides to bear this in mind.

Several Labour MPs have privately continued to trot out the trope that the public will not tolerate their money being spent on pampering politicians at a time of austerity, no matter what Cameron has got up to.

Labour’s small “c” conservatives are being ably aided and abetted by their capital “C” comrades on the other side of the House of Commons. It’s almost an article of faith on the Tory benches that state funding for political parties is bad and to be minimised.

Both sides are being disingenuous. Although there are some genuine concerns about the public response to such proposals, opposition to change is driven by a common motivation on both sides of the House: partisan advantage.

Labour and Tory stalwarts fixate on those heady days, when funds are pouring in and the other side is at a crippling financial disadvantage. It makes the bad times seem worthwhile.

But this reverie is not reality. Over time the wheel will turn full circle. And when it does, in the depths of opposition, it’s public funding that will keep them going when the alternative is virtual collapse.

As Peter Watt set out in his post on party funding, both Labour and Tories were  jointly culpable in ensuring the Kelly proposals were dead on arrival last November. Now the window has been re-opened, there is an opportunity to right that wrong.

A marginal increase in public funding of political parties will make a major difference to parties’ dependence on the whims of their big donors, the public’s perception of politicians and help ensure a more balanced democracy, particularly at those times when a government is at the height of its powers and an opposition is struggling financially.

The principle has been accepted. The argument is understood. There are questions on the right level of public funding, but this is no binary issue of principle.

The question is whether both parties are self-aware enough to see their own true self-interest?

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11 Responses to “The false debate over the public funding of politics”

  1. Nick says:

    As one of the biggest funders of Labour, are you going to stop short money?

  2. Nick says:

    No principle has been accepted. It’s just you using the threat of violence to get money out of people to fund your party.

    Either you convince people that they want to give you money, or you stop taking it.

  3. swatantra says:

    Well done to Uncut for exposing the myth! Lets hope that more pople get to hear about the ‘short money’.

  4. james says:

    errr, so what you’re saying is `you receive 9.6m from the taxpayer `as a stipend paid to the opposition to balance the advantage a government gains from the enormous resources of the civil service.`

    So, let’s put it another way, even with 9.6m Labour can’t find a credible economic policy. Makes you think, doesn’t it?

  5. paul barker says:

    Yes the debate is about how much state funding & the form its given in (free post is much less contraversial than cash).

    That said, why cant labour & tories manage with the sort of funding level that the libdems manage on ?
    We could at least compromise, you manage on half of what you spend now & the libdems can have their income doubled.

  6. Pedantry corner: it’s ‘Short money’, capital ‘S’, after Edward Short, the (Labour) Leader of the House who introduced it.

  7. BenM says:


    “even with 9.6m Labour can’t find a credible economic policy. Makes you think, doesn’t it?”

    It does. And leads me to this thought:

    The Tories have the whole apparatus of government and have managed to tank the economy.

  8. Atul Hatwal says:

    To the good resident of pedantry corner, your point is well taken. We live and learn.

  9. james says:

    I don’t know about the country’s economy tanking – I know Labour’s has –

  10. BenM says:


    As Cameron made out this week, the Tories were in exactly the same hole after their heavy defeats. It goes with the territory after an electoral battering.

    In time, and with Tories shooting themselves in the foot, Labour’s poll ratings get restored and so does people’s interest and willingness to fund the Party.

  11. madasafish says:

    Just because the Tories are rubbish does not mean Labour become credible.

    Governments have become very unpopular mid term and recovered to win General Elections – try reading some history.

    Ed Miliband is a millionaire socialist who like Livingstone says one thing and does another. Credibility = zero except to the tribal.
    With the Tories, there is no attempt to paint a pig. WYSIWYG.

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