Political donations in the UK

Political funding in the United Kingdom has been a source of controversy for many years. There are three main ways a political party is funded. The first is through membership fees; the second is through donations; and the third is through state funding (though only for administrative costs). The general restrictions in the UK were held in Bowman v United Kingdom to be fully compatible with the European Convention on Human Rights, article 10.

When the UK passed the Corrupt and Illegal Practices (Prevention) Act in 1883 this was the first effort ever to regulate the financial dimension of political competition. Although this landmark legislation was concerned with constituency candidates, their campaign expenses and their agents only, all other efforts to create a political finance regime started from here.

The next legislative step to deal with the subject was the Honours (Prevention of Abuses) Act 1925 that sought to end the selling of titles in exchange for donations to political parties.

In August 1976 the Committee on Financial Aid to Political Parties, chaired by Lord Houghton of Sowerby, proposed that financial aid to political parties should be given in two forms: (a) general grants to the central organisations for their general purposes and (b) a limited reimbursement of election expenses to parliamentary and local government candidates.

Starting in 2006, political funding came under scrutiny as concerns grew that the largest British political parties were too dependent on a handful of wealthy donors. Furthermore, during the Cash for Honours scandal, concern grew even more. A concern of the 1970s had been that the major parties were unable to raise sufficient funds to operate successfully.

The Political Parties, Elections and Referendums Act 2000 (PPERA) was an act that established the Electoral Commission and required all political parties to register with it, set down accounting requirements for political parties, and introduced controls on donations.

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