The price of democracy

The controversy over the opaque practice of donors giving anonymous loans to political parties has triggered a chorus of calls for this loophole to be closed, despite the fact that those clamouring for change were the very parties who benefited from it.

Winning elections costs money. Everyone knows that party political campaigning does not run on good will alone. So what to do about a transparent funding system everyone can trust?

Yesterday, the Conservatives called for state funding of political parties as part of a package of proposals to "clean up" the party funding system. The Tory leader, David Cameron, suggested parties should receive £1.20 from the taxpayer for every vote won at the last general election, plus an annual payment of 60p for each vote. This would mean Labour and the Tories getting around £30m each, and the Lib Dems about £20m.

Yet, regardless of the wealth buried in party political coffers, there is a cap on election campaign spending. Under rules laid down in 2001 by the Labour government, each registered political party may only spend up to £18.84m for parliamentary elections held in mainland Britain, and a further £460,000 for those in Northern Ireland. Political parties rarely contest every seat. How much do the two leading parties spend, and what do they get for their money?

The Conservatives


Last year, the Conservatives spent £17,852,240 on their general election campaign. This was slightly less than Labour, a reverse of the 2001 election campaign, when the Conservatives spent £12,751,813, almost £2m more than Labour.

The Tories managed to secure 7,452, 000 (32.4%) of the votes cast last May by the 23m voters who came out on polling day. Dividing the Tory votes by their level of campaign spending, the Tories effectively paid £2.40 for each vote, and increased their share of parliamentary seats by 32.

Labour
In the 2005 general election, Labour spent £17,939,617 and secured 8,096,000 of votes (35.2%), equivalent to £2.22p per vote. Despite spending almost £7m more than at the 2001 general election (£10,945,119), the party lost 65 seats.

Figures being published next week will reveal the breakdown of campaign expenditure that took place before the last general election. Parties can spend the money on party political broadcasts, advertising, leaflets through people's doors, manifestos and other documents, market research, dealings with the media, transport and rallies and other events.

But details relating to 2001 show the parties' strategies for getting the best bang for their campaign buck vary slightly.

The biggest share of Labour's £11m campaign money in the 2001 election went on advertisement (45%). This can mean anything from advertising billboards and TV to print or radio ads.

Though the Tories spent more overall in 2001 (almost £13m) that Labour, less of it was invested in advertising (35%) and more was lavished on rallies and events (15%), market research and canvassing (13%).

The Tories also spent more on party political broadcasts (£567,456) than Labour (£272,533), but they spent less on media (3%) than Labour (7%).

Ultimately, it's not just about how much money you fundraise, but what you do with it that counts. Credible policies, untainted by the wishes of party funding donors, always help.