22.6.4 UK and US: The debates around campaign finance and party funding

Introduction to Campaign Finance and Party Funding

• Campaign Finance: Refers to the fundraising and expenditure of money for political campaigns. It includes donations to candidates, parties, and political action committees (PACs) to support or oppose candidates or issues in elections.
• Party Funding: Involves the financial resources used by political parties to support their operations, including election campaigns, administrative costs, and party activities. Both campaign finance and party funding are contentious issues in the UK and the US, raising concerns about transparency, influence, and the fairness of the political process.

Campaign Finance and Party Funding in the UK

Regulation and Sources

• Public Funding:
  • Political parties in the UK receive limited public funding. The most significant source is "Short Money," allocated to opposition parties based on the number of seats and votes they receive.
  • "Cranborne Money" is allocated to opposition parties in the House of Lords.
• Private Donations:
  • Donations are a crucial source of funding for UK political parties. These can come from individuals, businesses, trade unions, and other organizations.
  • There are strict limits on spending during election campaigns, and donations over £7,500 must be declared to the Electoral Commission.
• Trade Union Funding:
  • Traditionally, the Labour Party has received significant funding from trade unions. However, the Trade Union Act 2016 introduced new regulations, including opt-in requirements for political contributions.

Debates in the UK

• Transparency and Accountability:
  • Concerns about large donations from wealthy individuals or corporations potentially leading to undue influence over party policies and decisions. Critics argue that this undermines democratic principles and public trust.
  • The role of trade unions in Labour Party funding has been a long-standing issue, with some arguing that it gives unions too much influence over the party.
• State Funding:
  • Some argue for increased state funding of political parties to reduce dependence on private donations and the associated risks of corruption. Opponents of state funding argue that it is inappropriate to use taxpayers' money to fund political parties.
• Spending Limits:
  • The UK imposes strict spending limits on political parties during elections to create a level playing field. However, there are debates about whether these limits are sufficient to prevent an imbalance of power and influence.
• Recent Scandals:
  • Various funding scandals have highlighted weaknesses in the current system. For example, the "Cash for Honours" scandal raised concerns about the connection between donations and the awarding of peerages.

Campaign Finance and Party Funding in the US

Regulation and Sources

• Private Donations:
  • The US system heavily relies on private donations from individuals, corporations, and interest groups. The Supreme Court's decision in Citizens United v. FEC (2010) significantly impacted the system by allowing unlimited spending by corporations and unions on political campaigns through Super PACs.
• Political Action Committees (PACs):
  • PACs are organizations that raise and spend money to elect or defeat candidates. They are subject to contribution limits but can donate directly to candidates or parties.
• Super PACs:
  • Super PACs can raise unlimited amounts of money from individuals, corporations, and unions but cannot donate directly to candidates. They can spend independently to advocate for or against candidates.
• Public Funding:
  • Presidential candidates can opt for public funding, but in recent years, most candidates have declined it due to the spending limits it imposes.

Debates in the US

• Free Speech vs. Equality:
  • The Citizens United ruling has been highly controversial. Proponents argue that spending money on campaigns is a form of free speech protected by the First Amendment. Critics argue that it gives wealthy individuals and corporations disproportionate influence, undermining political equality.
• Transparency and Disclosure:
  • The role of "dark money" in US elections, where donors to Super PACs and other groups can remain anonymous, raises significant concerns about transparency. Critics argue that voters have the right to know who is funding political campaigns and influencing elections.
• Influence of Money on Politics:
  • There is widespread concern that the need for significant campaign funds forces politicians to prioritize the interests of wealthy donors over those of ordinary citizens. This can lead to policies that favor the rich and powerful.
• Reform Proposals:
  • Various proposals have been made to reform campaign finance in the US, including introducing stricter limits on donations and spending, increasing transparency, and providing more public funding. However, achieving meaningful reform has been challenging due to political and legal obstacles.
• Recent Trends:
  • The 2020 election was the most expensive in US history, with an estimated $14 billion spent. This has intensified debates about the influence of money in politics and the need for reform.

Comparative Analysis: Campaign Finance and Party Funding in the UK and US

Aspect	UK	US
Primary Funding Sources	Private donations, trade unions, limited public funding.	Private donations, PACs, Super PACs, minimal public funding.
Regulation	Strict spending limits, transparency requirements.	Limited spending restrictions, significant use of dark money, Citizens United allows unlimited spending.
Public Funding	Limited (Short Money, Cranborne Money).	Available but often declined by candidates due to spending limits.
Key Issues	Transparency, influence of wealthy donors, trade union influence.	Influence of money, free speech vs. equality, transparency of donations.
Debates	State funding, spending limits, donor influence.	Campaign finance reform, dark money, influence of Super PACs.

Conclusion

• UK: The UK's campaign finance system emphasizes transparency and limits on spending but faces ongoing debates about the influence of private donors and the role of public funding. Scandals and controversies have prompted calls for reform to ensure a more level playing field in elections.
• US: The US system is characterized by the significant influence of money, with few restrictions on spending and the controversial role of Super PACs. The Citizens United ruling has intensified concerns about the impact of money on democracy, leading to ongoing debates about the need for comprehensive reform. Examine the differences between UK and USA Campaign Finance

Paragraph 1:

• One difference is regulations surrounding campaign expenditure

• Eg in the UK, citizens who donate £500+ have to be registered and logged on

• However, in the US donations can be kept anonymous and Super PACs in the form of advertisements allow for unlimited donations Paragraph 2:

• Another difference is the route to fundraising and how money is allocated

• Eg UK parties like the Conservative Party are reliant on party memberships and donors. Labour and Conservatives are the biggest parties and receive the most

• Eg Both Con and Lab received over £5m each

• Build up to the 2019 G.E, £14m donated to parties

• However, in the USA, donors donate huge sums of money and Super PACs enable unlimited contributions-media exposure influence Paragraph 3:

• One difference is limits on spending

• Eg UK, limits on constituency spending at £9570 per constituent

• However, no limits on spending in the USA

• Eg in the 2020 election, $14bn was spent, where Biden spent $1.69bn and Trump spent $1.96bn