Home > Party funding, Political equality and influence > Inequalities in wealth and citizenship

Inequalities in wealth and citizenship

The National Equality Report, published in January, gave a comprehensive survey on inequalities in income and wealth in the UK. Among other stats, the Report revealed that the top 1% of earners took 10% of the share of net income, and the top 10% of earners took over 34%.

There are many reasons why we might be concerned about the findings of the report – it may indicate that  Britain falls short of equality of opportunity or raise questions about the just distribution of wealth. But the stats are also important for issues of citizenship. The report makes this point about why inequalities in wealth might be bad for a democracy:

Whether or not people’s positions reflect some form of ‘merit’ or ‘desert’, the sheer degree of difference in wealth, for instance, may imply that it is impossible to create as cohesive a society as they would like. Wide inequalities erode the bonds of common citizenship and recognition of human dignity across economic divides.

This line of argument has a long history. Yet there is another reason why these stats should be of concern for a democracy – economic resources can be used as political resources.

Take the trend of participating in politics through a chequebook, such as giving money to a political party or interest group. The headlines tend to focus on those giving seriously large sums of money to parties – those who give hundreds of thousands of pounds. Yet the capacity to give comparatively small donations to a party is still limited to relatively few people.

Under the current rules, only those giving a central political party over £7,500 or a local party £1,500 in a year have to be disclosed to the Electoral Commission. A donation of a few thousand pounds is often regarded as small (and compared to many of the donations from the super-rich, it is) and therefore attracts little attention. But just how many people have even that much money to spare?

According to the National Equality Report, the top 10% of households have a net income of £806 per week (£42k). So let’s say that a household decided to give £1,500 to a political party, that would represent approximately 3.5% of their annual net income. Individuals (as opposed to households) in the top 10% have a net weekly income of £542 (£28k per year), so the same donation would represent  5% of their annual net income. I use the figure of £1,500 because it represents the lowest amount possible to fall within the Electoral Commission disclosure requirements.

How many people would wish to give that proportion of their income to a political party? Such people may exist, but the point is that this would be a stretch for some of those in the top 10% – so it would be even less likely for the vast majority. Obviously, I refer to just one set of stats, and this focuses on earnings – people may have other sources of wealth which allow them to contribute to political causes. The point is, however, that the opportunity to give what is thought of as a relatively small sum to a political party is open to a small proportion of the population. Capping donations at £50k or even £10k may cut out the super-rich donors, but there would still be a long way to go to establish a fair and equal system of party funding.

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