HOW DEMOCRACY COMES AT A PRICE

The money available for an election campaign is an important factor in how it is run

The money shapes how the campaign takes place but there are strict rules to expenditure, compared with the more laissez faire rules that govern spending in US elections.

So just how much are parties allowed to get? Election campaigns are subject to spending limits but there is no limit to how much a party can get during an election.

The amount parties are allowed to spend during an election campaign depends on the number of constituencies they are contesting and where these constituencies are located.

In England, parties are allowed to spend £810,000 or £30,000 per constituency contested, whichever is greater. In Scotland they are allowed to spend £120,000 or £30,000 per constituency, and in Wales they are allowed to spend £60,000 or £30,000 per constituency contested.

In practice, this means a party contesting one seat in England can spend the same amount on its national campaign as a party contesting 27 seats; while parties contesting 28 or more seats will be able to spend progressively more.

If a party were to contest all 646 constituencies, its expenditure limit would be £19.38 million.

The rules to political party spending are considered separately to spending by individual candidates. Candidates can spend 6.2p for every entry in the electoral register plus £5,483 in county constituencies.

In borough constituencies, the limit is 4.6p per elector plus £5,483. At the last election, the average amount spent per candidate was £3,581.

Under the Political Parties, Elections and Referendum Act, there are different limits for different categories including party political broadcasts, advertising, manifestos, market research, press conference and rallies.

• In England, Scotland, Wales, parties can spend £30,000 per constituency


• If contesting all 646 constituencies, a party can spend a maximum of £19.4m


• Candidates can spend 6.2p for every elector in county constituencies plus £5,483

Figures released in February by the Electoral Commission have shown that former Tory party treasurer Lord Ashcroft has been making individual donations of up to £21,000 to promising Tory candidates in winnable marginal seats.

He had bypassed party headquarters and gave cheques to 23 of the 100 Tory target seats after picking and interviewing candidates he liked. Making the donations via an offshore company called Bearwood Corporate Services, the money is to focus on support on a core of marginal seats.

However none of Lord Ashcroft's £229,593 ever went to the party headquarters. Over the last decade, Lord Ashcroft has donated £10m to the Tories. In total, during the last quarter, the Tories received £4.6m in donations, a figure which disguises the fact the party is getting less from private donors than Labour, which does not get public funding as the governing party.

Meanwhile Labour received £5.1m centrally in the last quarter of 2004, including a gift of £500,000 in December 2004 from Lord Grayson whose company Powderject won a disputed government vaccine contract. Donations to the Lib Dems totalled £1.1m.

An Electoral Commission report last year into party funding recommended that the national spending limit in general elections should eventually be reduced to a limit of £15m.

It also recommended an increase in candidate spending limits to encourage more activity at the local level. Any donation cap would need to be set at a very low level, around £10,000 per annum, it added.

Parties have three months from the end of the campaign period (or six months for those with expenditure over £250,000) to submit details of their spending return. These need to list all payments made by the party and include invoices or receipts for payments of over £200.

Political parties are prohibited from accepting donations of more than £200 other than from approved sources.

Of the registered parties, only two, the Tories and Labour, have ever received individual donations of more than £1m. The Tories received a £5m donation in 2001.

The Liberal Democrats received a cash donation of £200,000. The UK Independence Party, (UKIP) has received several non-cash donations of more than £200,000 since 2001.

In 2001, political parties received 1,948 donations worth just over £28m. The largest was received by the Tories who got separate cash donations of £1m from Norbrook Laboratories Ltd, £2.45m from Mr John Wheeler and £5m from Sir Paul Getty. The party also received five further cash donations from companies and individuals of between £105,000 and £775,000.

Labour’s biggest individual cash donation in 2001 was £200,000 from Sir Alan Sugar and it got 10 cash donations of between £335,000 and £750,000 from five trade unions. Meanwhile, the Lib Dems received one cash donation of £200,000 from the Joseph Rowntree Reform Trust.