The GMB trade union slashed its donation to the Labour party from £1.2 million to £150,000, questioning Labour's ties to unions and the viability of political parties' funding models. Party membership across parties has plummeted as individuals lose trust in politicians. State funding of parties could help address declining membership and donations from large donors. However, in an era of austerity, some argue taxpayer money shouldn't fund parties, especially controversial ones. Membership declines have made parties more reliant on large donations, risking donor influence over policymaking. The Conservative party similarly relies on City donors for over half its funding.

1. Mike Simpson, Bradford Grammar School
He who
pays the
piper...
The decision by the trade union, the
GMB, to slash its donation to the
Labour party from £1.2m to £150,000
not only poses questions about Labour’s
links to the unions but also about the
viability of political parties and the issue
of state funding for the parties.
The fact of the matter is that the parties are in crisis. Membership is
plummeting as individuals lose faith and trust in them and politicians.
If individuals are to get involved in politics these days, pressure
groups are more likely to the medium through which people get
involved in politics. In the heydays of the 1950s, party membership
reached over a million for the main political parties. Today, parties
are haemorrhaging members.
It is argued state finance of the parties would help end this vulnerability
and sever this dependency upon large donors. It should be recognised
that democracy needs parties. They serve the vital functions of
encouraging participation and representation; they provide ideological
choice and candidates for elections; as well as acting as the
government and opposition in Parliament. Given falling voter turnout
and declining confidence in political institutions, it could be argued
parties are needed more than ever.
At the same time, in an age of austerity economics, with government
cuts in public spending to vital services across the board of health
and welfare, can spending on parties be justified? Would we want to
see taxpayer’s money funding the BNP? How do you decide who gets
what? Parties could become even more remote from the public if
they did not have to seek their support.
Party membership in recent years
2010
2011
2012
Labour
193,961
193,300
187,537
Liberal Democrats
65,038
48,934
42,501
So in the space of two years, the Liberal democrats have lost 35% of
their membership! So much for the benefits of coalition! Labour have
lost a more modest 3% but still over a two year period, this is a
dramatic decline. The Conservatives do not release their figures
however estimates suggest that they have less members than the
Labour today.
This decline in membership leaves the party bereft of funds and more
dependent upon alternative sources for finance. This could leave
them vulnerable to any donor who is willing to make a significant
contribution to the party in return for access and influence to the
party leadership with a potential to influence policy making.
Whilst the Labour – union link may be headline news at the moment,
it is worth noting that the Conservative party finances too are equally
dependent upon a single source. Over half of their funds come from
the City. Hedge fund managers have become the single greatest
contributor with donations reaching £14.3m in the last 10 years and
with £2.2m being given in 2010. There have been recent scandals
with regard to a £250,000 donation buying the right to have dinner
with David Cameron. Is it any wonder the Conservatives were so
opposed to the Tobin Tax on financial transactions as proposed by
the EU and prepared to bail out the banks whilst other firms and
businesses can go to the wall in the present recession?
Questions
Research the Kelly proposals for party funding.
How is Miliband seeking to reform Labour’s relationship
with the unions?
Consider the extent to which we are ruled by a political
elite and career politicians.