Campaign and Party Finance (AQA A-Level Politics): Revision Notes

Campaign and Party Finance

Introduction: similarities between the UK and USA

Elections in both the UK and USA require substantial financial resources. Parties and candidates need funding for newspaper and social media advertising, website maintenance, printed publicity materials, venue hire, and campaign staff salaries. In the USA, there is also the significant expense of purchasing television airtime.

Both political systems share a common assumption: to achieve overall victory, a party or candidate must match, or ideally exceed, their opponents' spending. This is particularly true in swing states (USA) or marginal constituencies (UK), where undecided voters can determine the outcome.

A third similarity concerns the potential for undue influence. While all parties welcome small donations from ordinary voters, they also recognise the need to attract and retain generous individual donors with substantial wealth. These major donors typically expect some form of reward for their contributions, even if this is simply improved access to party leadership rather than direct policy influence.

Despite these fundamental similarities, UK and US parties operate within distinctly different political cultures and regulatory frameworks.

Structural aspects of campaign finance

Campaign finance is legally regulated in different ways in both nations, reflecting their contrasting constitutional arrangements.

Campaign expenditure caps

UK approach: The UK imposes strict limits on campaign expenditure. During election periods, national parties face a cap of $30,000 per candidate standing. With approximately 650 constituencies, this effectively limits total national party spending to just over $19 million.

Individual candidates also face clear spending restrictions. These limits are calculated by adding a fixed amount of $8,700 to either 6p or 9p per registered voter in their constituency. The rate depends on whether the constituency is densely or sparsely populated, with rural areas receiving the higher per-voter allowance.

USA approach: By contrast, US campaign finance regulations are far more complex and less restrictive. While formal legislation exists—such as the Bipartisan Campaign Reform Act 2002 (also known as the McCain-Feingold Act)—subsequent court rulings have significantly weakened these controls.

This fundamental difference stems from contrasting notions of sovereignty. In the USA, the Constitution and First Amendment rights represent the 'supreme will' of the people. Any legislation must be constitutional, which creates opportunities for legal challenges to campaign finance measures on the grounds that they restrict freedom of speech and political expression.

By contrast, parliamentary sovereignty in the UK means that statute law can be changed and enforced more straightforwardly without constitutional challenges.

State funding of campaigns

The structure and scope of state support for elections differs significantly between the two countries.

UK state support: The UK government provides substantial practical assistance on a politically neutral basis. Voter registration is undertaken centrally by government agencies, removing any opportunity for parties to become involved in this process. This contrasts sharply with the USA, where parties—particularly Democrats seeking to register minority voters—must invest considerable time and resources in registration drives.

UK candidates also receive free postage for one piece of election literature to every household in their constituency. This cost British taxpayers approximately $42 million during the 2017 general election. Furthermore, major parties receive allocated free television slots for party election broadcasts.

USA state support: No equivalent provisions exist in the USA. While 'matched funding' schemes have been attempted, they have been undermined by court cases (such as the 2011 Bennett case) and by leading candidates' unwillingness to accept voluntary spending caps. Significantly, no major party presidential candidate has accepted matching funding since 2008, as doing so would require them to limit their campaign expenditure.

Pressure groups

The regulation of pressure groups and interest groups differs markedly between the two countries.

UK restrictions: UK pressure groups face tight restrictions on political activities, especially during election periods. The Charity Commission ensures that registered charities do not spend money campaigning for or against particular parties or candidates. UK charity law explicitly states: "A charity cannot have a political purpose. Nor can a charity undertake political activity that is not relevant to, and does not have a reasonable likelihood of, supporting the charity's charitable purposes."

This means UK charities cannot legally support, donate to, or openly campaign for political parties or candidates.

USA freedom: In the USA, matters are considerably more complex and permissive. Many pressure groups actively donate to, endorse, and campaign for candidates through their Political Action Committees (PACs) or associated 501/527 groups.

Legal framework for spending

The legal framework governing what spending is permitted varies significantly.

UK restrictions: Under the Communications Act 2003, television airtime cannot be purchased for political advertising in the UK. Instead, major parties receive allocated free slots for party election broadcasts during campaign periods. This ensures some degree of equality in access to television audiences and prevents wealthy parties from dominating the airwaves.

USA market approach: No such restrictions exist in the USA. Candidates, parties, and Super PACs freely purchase television and radio airtime for political advertisements. The scale of this spending is enormous: estimates suggest approximately $10.8 billion was spent on political advertising during the 2020 election alone.

Comparative summary of structural and legal differences

Category	UK	USA
Main laws	Political Parties, Elections and Referendums Act (PPERA) 2000 Communications Act 2003 Charity Act 2011	Federal Election Campaign Act 1971 Bipartisan Campaign Reform Act (McCain-Feingold) 2002
Landmark court cases	None	McConnell v Federal Election Commission (2003) Citizens United v Federal Election Commission (2010) Arizona Free Enterprise Club's Freedom Club PAC v Bennett (2011)
Restrictions on fundraising and expenditure	No limits on party fundraising outside election times Limits on both national and candidate spending during elections Large donors must be publicly named No purchase of TV airtime allowed Regular submission of funding and expenses to Electoral Commission	Limits on direct donations to parties and candidates No restrictions on self-funding by candidates No limits on independent expenditure by Super PACs Most donations and donor identities must be declared to Federal Election Commission Some circumvention possible through 'dark money' via 501 groups
Role of other groups	Pressure groups prohibited by law from active involvement in election campaigns	Many pressure groups actively involved, endorsing and promoting favoured candidates

Rational aspects of campaign finance

Interest groups and donors

The sheer scale of involvement by interest groups and wealthy political donors in the USA far exceeds that in the UK. American billionaires such as the late Sheldon Adelson and George Soros are frequent major donors to political campaigns. There are far more opportunities, and therefore greater incentive, for wealthy individuals and pressure groups to donate and become actively involved in US political campaigning.

The UK's opportunities are more restricted, but wealthy individual donors still play a significant role.

In both countries, wealthy donors and organisations contribute partly out of genuine political empathy and alignment with party values. However, they also seek to secure policies favourable to their interests, or at minimum, to prevent policies detrimental to them. At the very least, major donors can reasonably expect enhanced personal contact with political figures and improved access to decision-makers.

Electoral battlegrounds

In both countries, campaign spending is disproportionately but rationally focused on electoral battlegrounds—the areas where national campaigns are won or lost.

This strategic targeting is easier in the USA, where vast sums are spent campaigning and advertising in swing states such as Florida, Pennsylvania, and Wisconsin. These states have recent histories of narrow victories that could go to either major party.

Targeting is more difficult in the UK due to tighter expenditure controls. Nonetheless, the growth of digital advertising has enabled UK parties to spend money on nationally funded but hyper-local advertisements. By purchasing demographic data, parties can target individual voters more effectively based on their characteristics and likely voting behaviour.

The cultural dimension to campaign finance

USA's explicit fundraising culture

Campaign finance occupies a much more explicit and prominent place in US political culture. Fundraising activity never stops, even between election cycles.

US politics is heavily influenced by First Amendment notions of individual rights and freedoms. This extends to the freedom to make political donations, which—particularly since the landmark Citizens United case in 2010—has been viewed as a legitimate extension of political expression. Across the political spectrum, there remains significant suspicion among the wealthy of government interference in donation matters. One could even describe a perceived 'right to spend' on political causes.

UK's more nuanced approach

The UK's political culture regarding campaign finance is more nuanced. There has long been a tradition of political donations, particularly from trade unions to the Labour Party and from private individuals to the Conservatives (and during the Blair years, to Labour as well). However, there is generally greater willingness to accept state involvement in regulating campaign funding, even though comprehensive reforms to party funding—including greater state funding of parties—remain politically stalled.

The UK is not immune from controversy, however. 'Cash for honours' allegations—suggesting that generous donors receive peerages or other honours—have been levelled at both Labour and Conservative leaders. Yet there is perhaps greater public sensitivity to such arrangements than in the USA, where the 'spoils system' openly enables presidents to appoint approximately 30% of diplomatic posts to political appointees (often generous campaign donors) rather than career Foreign Service diplomats.

Scale differences

Perhaps the most striking cultural and historic difference is one of scale.

While both countries experience controversies over trading cash for political favours, the USA's system is far more high-profile, explicit, and expensive than its UK counterpart.