Will party debts and “cash for honours” lead to very different campaigns?

A report in the Independent this morning suggests that Labour now has debts of £26m after running at a £14m loss in the last financial year to add to its existing £11.5m deficit.

While no one can predict what’s going to happen in the “cash for honours” investigation one thing must be a near certainty – that it is going to be a lot tougher for political parties to raise money in the future.

If making a donation or loan to your chosen party is going to result in police questioning and public doubts being raised about your motivation then the big funders, surely, are going to be scared off. And, of course, in the new environment making a political gift will make it LESS likely that you will ever receive an honour

The harsh fundraising reality is that it is the mega-donors who provide the bulk of the cash. Mass fundraising is never going to replace the major gifts. Thus if every single Labour member was to give an extra £50 then less than £10m would be raised and a considerable amount would have to be spent on carrying out the fundraising.

For one of the other fundraising realities – and being a professional fundraiser is my day job – the mega-gifts cost far less to raise. A mass campaign could easily see a quarter of the total returns going simply to fund the fundraising.

In reality such an effort will produce less than a 20% response rate so each of those who did give would have to be producing £250 to get near to that £10m figure which is a near impossibility.

And all the talk about state funding for political parties is not going to help Labour, the Tories or the Lib Dem handle their reported current deficits.

So will the next General Election have to be fought on the cheap? If so what’s the impact going to be on the outcome and could we see turnout level fall even further if the parties don’t have the funds to promote themselves to voters.

Everybody points to the massive bill-board campaigns that the the main parties ran last time and clearly those budgets are likely to be much reduced. Maybe we will see many more of the phoney poster campaigns where the press are summoned to an unveiling – but only one poster is ever produced.

I simply don’t know where this is all going – but my guess is that the Tories are going to find it easier to raise big sums and come out of this better.

Mike Smithson