Lord William Wallace writes….Money, money, money

Liberal Democrats achieve remarkable successes on the foundation of determined campaigning, enthusiasm, and passionate promotion of liberal values.  But money also matters.  And shortage of money, compared to Labour and (above all) the Conservatives, is one of the major obstacles to a political breakthrough.

Last year our federal party raised £6.2m, and spent £6.5m.  That meant some painful cuts in staffing, as well as missed opportunities in media projection, campaigning, and organisation.  Those who complain in commenting on Lib Dem Voice postings that our media team are failing to make the most of our rise in the polls do not know how small our media team is at present, and how wonderfully effective they are for their size.  We could do with a larger leader’s office, a larger policy development team, and a much larger team of regional and field organisers to help and support local activists in their campaigns.  But all that requires money.

Press reports on problems within the Labour Party’s headquarters have noted that Labour has over 400 HQ staff.  Lib Dems currently have 60, working flat out to support the party throughout the country, to service our members, and not least to make sure that we fulfil all our legal obligations as a regulated political organisation.  

Labour had significantly expanded its paid staff between 2016 and 2018, and also doubled the size of its leader’s office – partly on the back of the impressive surge in party membership, which (as reported to the Electoral Commission [EC]) brought in £26m in fees in 2017.  This was still, however, less than a third of its total income.  Fundraising and donations, most importantly from trade unions, brought in £25m, public support for its role as a major opposition party (‘Short’ and ‘Cranborne’ money) brought in £8.5m, and conferences and other events contributed most of the rest.  The slump in Labour’s membership in 2018-19, together with a decline in donations, has now left the party with a widening gap between increased spending and declining income.

The Conservatives are more like a centralised campaigning organisation than a membership-based party.  They declared an income from membership subscriptions in 2017 of only £835,000: that’s a little more than £6 per member on their estimated membership.  They received more in legacies than that.  But the bulk of their income comes from major donors: a total of £30m in donations in 2017, much of it in five- or six-figure sums from a few hundred individuals.  J. C. Bamford, the excavator company chaired by Lord Bamford, is one of its largest donors, giving £1.5m in the three months before the 2017 election.  Labour analysis shows that a high proportion of major Conservative donors are hedge fund managers; others include wealthy Russians, and Middle Eastern millionaires, with homes in London.  EC figures show that the Conservatives received £7.5m between October and December 2018 from 230 donors: more than our entire income last year.

The Brexit Party is a limited company controlled by Nigel Farage.  It reports £2.75m in online donations (each below £500, thus not reportable to the EC) through PayPal in the first half of 2019, as well as several larger donations – including £200,000 from Jeremy Hosking, a City financier who finances a number of right-wing causes.  The Financial Times on July 26th reported that Farage  has just launched ‘World4Brexit’ at an event in New York, attended by leading figures on the hard right of US politics (Peter Thiel, the CEO of PayPal, is a supporter).  Farage is already attacking the Electoral Commission for querying his fund-raising methods, claiming ‘an Establishment stitch-up.’

We don’t need as much money as the Conservatives.  They depend on commercial deliveries to get their messages through people’s doors; we have active members who push them through the letterbox.  But having a paid organiser to coordinate volunteers, and a headquarters from which to operate, makes a huge difference in winning a constituency; and larger regional and central staffs would raise our capabilities across the board. Paid-for private polling helps to identify target voters and key messages: targeted social media campaigns are a necessary part of contemporary campaigning.  In the final stages of the Euro-elections, we ran an impressive and effective campaign on social media, paid for by an extra whip-round of party donors which raised tens of thousand pounds.

It takes a lot of small donations to outweigh a hedge fund manager or two.  So spare some sympathy for the next letter you receive from our party asking for another contribution.  More members will help to spread the burden of financing what we do: an average of £30/40 per member for the national party (fees are split between local and national bodies) will give us an additional £3/400,000 for every 10,000 new members.  Supporters in their thousands will help further: the more small donors we bring in, the wider our base for funding campaigns.  Every meeting we hold should include a financial appeal.  (Note for new members: I recall addressing 70 enthusiasts in a pub with an impressive new candidate in the 2017 election, and she thanked them at the end without asking for donations, which would have gathered £500-£1,000 to support her campaign).  

Any constituency with more than 300 members should be able to raise the £15,000 or so which is the permitted maximum in the formal election campaign (when I was a candidate friends, family and people I worked with, well beyond the party, also usefully contributed).  Conservative local parties seem unable to do that; they get grants from the centre and from fund-raising bodies like the United and Cecil Club and the Midlands Industrial Council.  But for the longer haul locally and regionally, and the national campaign, much larger sums are needed, from small contributors and large.  So please recruit as many extra supporters and members as you can, and chat up sympathetic local employers, consultants, vice-chancellors and other well-paid people.  But be wary yourself of the wiles of the party treasurer in extracting yet another donation to support another initiative or campaign.  I do my best to avoid his entreaties – but it’s not easy when we both sing bass in the Parliament Choir!

* Lord Wallace of Saltaire is a Liberal Democrat member of the House of Lords.

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25 Comments

  • Indeed a timely piece. Memberships fees are mostly retained for HQ purposes, with a portion going to regional parties and almost none to local parties. Local parties do receive services like Sales Force and Connect from HQ but have to rely on their own fundraising to meet local expenses. I don’t think the bulk of members realize that and therefore the need to contribute to local party funds on top of their membership fees.

    Relatively few local parties employ even part-time staff and a regular giving scheme such as most charities have would go a long way to help fund a staff person to coordinate volunteer activity.

    The English Party’s constitution requires that elected councillors set an example and tithe part of their allowances to fund local party expenses. Not all local parties observe this requirement.

  • Tony Greaves 30th Jul '19 - 3:16pm

    My advice to activists is to think carefully about where they give their money. The model of extracting lots of money from non-campaigning largely derelict places and recycling it to “target seats” which are already a lot better off in all kinds of resources is no longer viable if we are going to remain (or rather become) a truly country-wide party. Give locally, spend locally and make sure it is spent wisely in effective campaigning.

  • I was unaware there was a policy development team – all I have heard for the past two years is endless preaching about how the party won’t implement a democratic decision of the electorate because it doesn’t like it (or in the case of Ms Swinson, also any future democratic decisions she doesn’t like). I look forward to the “Democrats” element of the party name being removed forthwith.

    How badly the party has drifted in the years since I let my membership lapse – they’ve gone from the best policy platform by a country mile to a single issue party.

  • William Wallace 30th Jul '19 - 4:09pm

    Tony: I agree that giving to the central party is not the only answer – though national campaigning, research and social media are all vital. But it’s not just supporting each local party, given our need to help weaker seats and take advantage of a rise in support in seats where we had few or no members not long ago. I have a standing order for my regional party (Yorkshire) and another for my city party (Bradford), rather than for the national party: those levels of organization also matter.
    Martin: I went from treble to 2nd bass at the age of 12, and have been a 2nd bass ever since. That’s a pity in some ways: tenors are more rare, and more valuable!

  • I see the comedian Mike Harding has joined the LibDems today, from having been a lifelong Labour man. Younger members may not know him but I remember loving his TV shows in the 1980s. He’s a great Mancunian working class folk singer/comic.
    I also noticed from twitter that Dom Jolly joined us recently. (older members might not know him but he’s a comedian who is a bit younger than Mike H!)
    Is HQ making lists of these new celebrity members? It’s something that journalists always ask for at General Elections.

  • “If a democracy cannot change its mind, it ceases to be a democracy.” is a famous quote from a senior politician Michael. I know it is a shocking quote, surely you need to nip over to his website and tell him he isn’t a democrat, implying the will of the people can change. Tis David Davies, Michael one of your beloved leaders. Tis sad when the rank and file can’t keep up with their leadership’s thoughts, but there you go it obviously doesn’t fit with Michaels fixed view of demicracy where nothing can change, especially if he doesn’t agree with it.

  • richard underhill 30th Jul '19 - 5:06pm

    William Wallace: did you sing at the 1953 coronation?
    If not you then who?

  • richard underhill 30th Jul '19 - 5:11pm

    Michael 30th Jul ’19 – 3:32pm

  • richard underhill 30th Jul '19 - 5:25pm

    Michael 30th Jul ’19 – 3:32pm
    Jo Swinson often says ‘Liberal’ without the ‘Democrat’
    Please consider the power that previous PM’s boasted that they had, such as being able to call a general election on their decision alone based on opinion polls. Fixed terms remove this corrupt bias about which we have often complained.
    The AV referendum was a mistake, asking the Tories for something that only some Labour MPs wanted. Did David Cameron lie to his party? or did they merely calculate they could win the referendum?
    Even the Reform Act 1832 is not perfect Although it made important changes it did not include the secret ballot or votes for women, nor would the Parliament Acts legislated in 1910 have been possible in 1832.
    Votes at 16 is party policy, but has only happened in Scotland and then only once.
    We must continue to campaign for progress.

  • I think one thing that may be not fully realised is that the Conservatives have considerably raised their fundraising in lib Dem marginal seats.

    In 1997,in a seat where I was an activist we easily outspent the Tories in a marginal seat and won it (by 2 votes!) I remember thinking that hiring two fast laser printers (they were more expensive to buy then) was outrageously expensive!. But at a guess both us and the Tories spent well under £15k each for the six months preceding the general election.

    For work reasons, I moved from there, but my understanding is that within a few years the Tories were raising in excess of £100k a year there and regained the seat and that level of spending was replicated by a large number of tory/lib Dem marginals particularly in 2015 (onwards)

    Any serious lib Dem target seat should be raising £150k + a year on its own. And as I noted before Lynton Crosby spent £1 million on polling alone in 2015.

    So I am afraid that Tony Greaves who is normally right is IMHO on this occasion wrong.

    We need both a much stronger national operation and also much more spent on target seat s. Of course activists always moan about hq wastage or key seats getting all the resources but sadly our history up until 97 at least is one of an ineffective national operation and too spread out in the seats.

    But let’s hope as had been suggested on LDV we close our central London office which is a complete waste of money.

    Let’s also hope that after our terrible leadership contest we can now have a real discussion on LDV and elsewhere of how we operate as a party and have strong messages. And while I appreciate it’s a public forum and a cheerleader for the lib Dems, that LDV abandons some of its Pravda-esque tendencies.

    We may be doing well but when you’re doing well in politics is the time to worry!

  • So since the 2017 election Labour have had £17m in public money for policy development? Heavens.

    I wonder how much extra cash it will take for them to reach a position on Brexit?

  • @Tom McLean: ” see the comedian Mike Harding has joined the LibDems today, from having been a lifelong Labour man. ”

    He also states that his whole philosphy is based on socialism. It’s always great to have new members, but he may not find much sympathy in the party for his views outside of a small (but vocal) minority.

  • Richard Underhill writes “Jo Swinson often says ‘Liberal’ without the ‘Democrat’”

    Fantastic – how pleasing to have a leader who recognises the power of our name, standing in opposition to Socialism and Conservatism.

  • William is trying to encourage all members and “supporters” to donate £40 a year to the Federal Party, which would raise £4.8 million if Caron is correct and we have 120,000 of them (https://www.libdemvoice.org/the-lib-dem-lowdown-swinson-surge-special-61551.html).

    He believes that all out target seats have at least 300 members (I wonder if that is true). He wants these people to give another £50 to their Local Party to raise the £15,000 for the short campaign. However, we put our leaflets all year round and at least fight local elections twice in four years if there is no unitary council. I would expect this to cost an extra £15,000 a year, perhaps the councillors will pay for half of this, so maybe these 300 members should donate £40 a year to their Local Party.

    I wonder how many members think they can afford to pay £80 a year to the party? And I wonder how we get them to pay this or maybe £120 a year (£10 a month) to make up for the 20% plus who can’t afford this?

  • William Wallace 31st Jul '19 - 11:41am

    Richard Underhill. Yes, I sang at the Coronation. If I was a treble then.
    Yes, we need to raise a lot of money to match raised prospects and ambitions. Little and often from as wide a pool of members and supporters is the best way to do it. But the richer areas need to subsidise poorer seats that are becoming winnable. Many members can’t afford three figure sums over a year. But many can. Retired people on good pensions, for example – like me. And thankfully we are attracting some potential four-figure donors. I met a well-known businessman the other evening who told me he has just followed his children into our party. The point is: we need to raise more money!

  • Sue Sutherland 31st Jul '19 - 1:19pm

    It seems to me that the first appointment we need to make is that of a fundraiser. If they are good then being able to afford better campaigns will follow. Most medium size charities have them so they can afford to help their clients. It’s not easy asking people for money which is why we need the guidance of a professional fund raiser. One fund raising resource that we have and most charities don’t have is lots of Lords and Baronesses who could host events for owners of businesses local to where they live. We are the only party of Remain and many businesses are unprepared for the No Deal Brexit Boris seems hell bent on inflicting on our country. If they back us we may all get out of this disaster.

  • Tony Greaves 31st Jul '19 - 8:32pm

    Michael 1: It may well be the case that “any serious Lib Dem target seat should be raising £150k+ a year on its own” though in present circumstances that might be more than ambitious due to the increase in the number of seats we might be able to win, outside the traditional list. But that is not my point. I want to be a member of a countrywide party. So if there are new members willing to give a reasonable amount of money I think they should give it to support competent campaigners in places where at present we hardly exist. Or places where we can turn a group of five or six councIllors into control of the Council. I don’t think that money given to party HQ will do that.

  • Ruth Coleman-Taylor 31st Jul '19 - 10:02pm

    There has been plenty of comment and debate about the opportunities for the Liberal Democrats in this volatile political climate and the potential to gain not dozens but hundreds of seats in the next General Election and blast our sclerotic political system open. To achieve this end, I believe that we need to build up our assets of ambition, imagination and cash.
    I’ve been in the Party for over 50 years and we have never before been in this position. It’s an exciting – if scary – prospect. But do we have the ambition to raise our game for this kind of campaign? Judging by the discussion about ‘money, money,money’, we are alarmingly unambitious, with modest targets and minor improvements to our present system of fund-raising.
    If we intend to fight to win in over 300 seats, we need to raise a humungous amount of money and get people thinking seriously about the prospect of winning, not just in our ‘winnable seats’ but in many others where local circumstances offer the opportunity. I’m happy to discuss ambition again on another day but we won’t even have the possibility of winning unless we raise the money to fight the next election like a party that is ready to be the Government.

  • I think both Ruth and William are right!
    William is being cautious and basing his income projections on previous experience and reasonable projections and I think we should applaud those local parties who achieve this target. However, Ruth is also right, the party needs to decide if it is going to cease the moment and “go for it” – this is exactly the same dilemma many start up businesses find themselves in: do I grow organically or do I get the venture capital and really go for it? Unfortunately, in my experience very few manage to sustain rapid growth without external funding.

    Personally, given how damaging Brexit is going to be to UK businesses, I suggest the LibDems probably should start doing a fund raising round of businesses and business representative bodies such as the local chambers of commerce, CBI, etc.

  • oops “cease” should be “seize” 🙂

  • Richard Underhill 9th Aug '19 - 3:38pm

    William Wallace 31st Jul ’19 – 11:41am Thank you. I thought I remember you describing the service. Do you expect a different format next time?

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