The finances of politics: What's in the party accounts?by
As Britons begin to gear up to a general election that is likely to take place in the second half of next year, AccountingWEB takes a look at the accounts of the leading contenders.
For reasons buried deep in political history, where funding for candidates to be President of the United States now runs into billions – Michael Bloomberg spent almost $1bn getting nowhere and Donald Trump $14.4bn losing (or is that winning?) the presidency – the United Kingdom lives up to its reputation for being rather more genteel and curmudgeonly.
What quickly becomes apparent is that where Americans seem desperate to fling eye-wateringly large donations at political parties, on this side of the Atlantic income is as likely to be derived from members, fundraising activities, grants and the annual conference.
Scottish National Party
Having said that all is lower key, as readers will be aware, the Scottish National Party’s most recent accounts were qualified after the party had an embarrassing, headline-grabbing scramble to find replacement auditors in the wake of events that led to the police arresting various leading figures then releasing them without charge. The issue that concerned the newly-appointed auditors was no more sinister than poor record-keeping.
The accounts show that in 2022 the party turned over little more than £4m, had assets of £1m and made a loss of £750,000. Their income wouldn’t even have funded Donald Trump for a day, let alone a campaign, talking of which with accumulated reserves of less than £600,000, the SNP’s efforts in 2024 could be somewhat muted but what of their competitors?
At first glance, the Lib Dems seem to be similarly modest but, rather than consolidating, they prepare separate accounts for the central party, the parties in individual nations and the Parliamentary office.
Combined, their income is over £10m and expenses a little higher. At the end of 2022, the combined reserves for a fighting fund a couple of years ahead of the election stood at under around £1.1m.
Given the respective reputations of the big guns, it is something of a surprise to discover that the total income of the Conservative and Unionist Party is about 40% lower than that of Labour.
Drilling down, while the Conservatives tend to have richer and more generous donors, despite dissension and gradual dissipation in membership, the trade unions do Labour proud.
Given their commercial associations and succeeding chancellors’ desire to balance the books of UK PLC, it is somewhat ironic that the Conservative Party’s income of just over £30m (60% of which comes via donations and 20% from the annual conference) is comfortably exceeded by expenses.
The most worrying statistic for the party might be the negligible level of accumulated reserves, which stood at £111,000 and would probably not currently pay for a single TV advert. That’s what happens if you run a £2.4m deficit a couple of years ahead of a general election.
Where does the money go? £20m was paid out to staff combined with covering costs of running the party office, which seems an exorbitant amount on the face of things.
In what might or might not be an indication of political strength when the parties fight head-to-head next year, the Labour Party has the strongest accounts by some considerable way.
Their members have stumped up approximately £16m while affiliations, with presumably relate to trade unions, were a little under £5.5m. Contrarily, the conference finances do not go through the accounts or are accounted for under another heading. Even so, on £47m of income the party ran up a surplus of £2.7m.
You quickly see why when you note that staffing costs reduced by over £6m in 2022 compared to the previous year.
While the competition has combined reserves that are negligible, Labour’s finances are healthy, to say the least, with an accumulated fund of £16.34m.
There are various smaller groupings under the major parties, generally representing local associations but none of these is particularly material.
What does this mean?
The big question is what all this means for the country going forwards. Given its massive lead in the polls and strong bank balance, Labour looks to be riding high and sounds very bullish in its accounting overview but, as Donald Trump found out, money isn’t everything.
For those interested in the minutiae, partially redacted accounts together with information relating to donations and other salient matters can be found on the electoral commission website.