The bulk of Labours income comes from the Trade Unions, though they still have wealthy individuals, such as Bernie Ecclestone and Lord Sainsbury, donating large quantities of money to the Labour Party. Like the other parties, a fall in the number of members has led to a decline in revenue, of which most of their money comes from, which has effected their earnings. It is well known that the Labour party would collapse without its vital Trade Union beneficiaries, though Labours reliance on them has declined over recent years.
Critics argue that parties funded by private means, like the previously mentioned, act on their behalf, which does not help everyone. When Labour declared it would be banning cigarette advertising, Bernie Ecclestone promptly donated one million pounds to the party. In return, his Formula 1 Empire was exempt from this law, albeit for ten years until other means of finance could be found. Sir Alex Ferguson (it is argued) may have received his knighthood from the £20,000 a year, which he donates to the Labour Party. The Conservatives also carried out ‘favours’ for people who donated money to them, most notably in Margaret Thatcher and John Major’s terms as Prime Minister (1979 and1997). It is known that during this time, in which 18 life peerages and 82 knighthoods went to industrialists in 76 companies. These industrialists and companies had donated upwards of £17,000,000 to the Conservatives’ cause. This is why people feel that parties are ‘puppets’ to these individuals, and policies can be aimed more at these individuals than at the electorate.
One thing that the Lib. Dems support is the idea of parties being funded by the taxpayer. Advantages of this is that there is a fairer system, so the electorate have more choice, as smaller parties can spread out more funds across constituencies, which will increase the democratic system in Britain, as more smaller parties can be better represented. There are problems with this, as some people will want their tax money to go to a certain party, which could result in a more complex system. Another main problem is that millions of pounds will be spent on parties, rather than health and education. Perhaps the most complex is what would each party receive to spend on campaigns. Due to this reason, this system would not actually be fair, as the big two would still receive more than the other parties.
What the parties have been more active at in increasing income is trying to attract more members. In the past, people would join a Conservative club (or any other such club) to socialize, or as one popular political commentator said, ‘I joined because they had table-tennis.’ Nowadays, people can go to a wine bar, a club or to a restaurant more to socialize, so these political clubs are not so popular. A good example of a leader trying to get back support was William Hague. In hi ‘Fresh Future Reforms’, he pledged to obtain more than a million members by the millennium. To do this, he tried to make the membership more influential, rather than a ‘leader leads, party follows’ structure, it did seem to work, but membership was up on 2000 by 12,000 members in 2002. His idea did not work and he was replaced. Parties have been less successful than, say, the RSPB in attracting members is probably because people have certain beliefs, so will want to join something they feel reflects them. For example, you may want to join Conservatives because of their tougher stance on asylum seekers, yet disagree with their ‘anti’ Europe stance.
To limit the amount of donations, a limit of £1,000,000 was enforced to maximise a single donation. There are ways around this. For example, you can offer to pay for the use of property for a party, which can free up other money in the party. A newspaper can also give priceless support for your party, which could gain more votes. In general elections, the parties are now allowed to spend a maximum of £30,000 per constituency, and £40,000 for the national assembly of Wales. Though, this act has only just been introduced, so parties have been spending freely. The idea of these limits is to allow each party to spend a maximum of £19,230,000; perhaps so that the parties do not try to receive funding from sleazy characters (i.e. Richard Desmond-Porn entrepreneur) and therefore the parties have to do less ‘favours’ for their donors.
It has to be said, that spending from all three main parties in 2001 is more than 50% less than the spending in 1997, which could be down to Labour’s majority, and if that trend continues, there would be no political parties, except ones that are bankrolled by an ambitious businessman. This is perhaps why state funding for parties has come into question more, as parties rely more on wealthy individuals than on their members (except the Liberal Democrats). Labour have already suffered a blow as the Rail, Maritime and Transport Union has withdrawn its funding, due to disagreements with some Labour policies, and other Unions (i.e. the FBU) could follow suit.