The big idea: why we need to kick big money out of UK politics | Party funding

The big idea: why we need to kick big money out of UK politics | Party funding

If you live in a marginal constituency and felt bombarded by leaflets, billboards and online ads at the last general election, brace yourself. Last year, Michael Gove dramatically increased the limits on campaign spending. A tsunami of bumf is heading your way.

Ministers argued that the changes – which saw the cap on party spending increase by 80%, and the one on candidate spending by almost a third – reflected inflation since the limits were last set, in 2000. But the shift will only amplify the centrality of big money to politics in the UK, much of it raised from a small number of mega-rich donors. With the election looming, it’s past time we stopped to ask whether there is a less murky way of doing things.

The problem may be much less blatant and pervasive than in the US, where paid TV advertising is permitted, and legislation to crimp corporations’ power to bankroll elections was effectively neutered by the supreme court on the grounds of free speech. But financial influence permeates Westminster.

It runs all the way from the practice of firms showering MPs with free tickets for sporting and music events through to providing backing for all-party parliamentary groups. At its most raw, it sees wealthy individuals writing six- and seven-figure cheques directly to the political party of their choice. All of these donations are declared, of course; but the conversations before and after the cash is handed over are not.

Some of these funders are ultimately rewarded with a seat in the House of Lords. Analysis by the Guardian a year ago found that one in 10 Tory peers – 27 of them – had given at least £100,000 to the party. Perhaps the fur-trimmed robes help to muffle outrage about this shameful quirk of the British constitution. But a peerage is not just a bauble – it brings with it genuine power, including the opportunity to grill ministers and vote on legislation. It’s not hard to imagine what we might say about another country’s legislature in which members were hand-picked by the head of government (and leader of the opposition) at least in part because of their financial generosity.

Every donor does have to make it past the House of Lords Appointments Commission (Holac), which sifts nominations. Holac’s rejection of several Labour candidates in 2006 kicked off the cash-for-honours affair, in which Blair’s government was accused of dangling peerages in exchange for party loans. No charges were ever brought, but the accompanying scandal highlighted the opaque nature of this particular collision of politics and money.

But Boris Johnson’s appointment of City hotshot and £3.4m-plus Tory benefactor Peter Cruddas, in defiance of Holac’s advice, underlined the weakness of the existing checks and balances. Explaining the “real reason” for his peerage to the Telegraph, Cruddas mentioned his work for the Vote Leave campaign, to which he donated £1.3m.

Significant donors can also exert influence in more subtle but potentially more powerful ways, because they tend to be rewarded with senior politicians’ attention – in some cases by literally buying it, like the Tory donor who reportedly paid £40,000 to have dinner with Jeremy Hunt and three of his predecessors last year.

It may just be the opportunity to bend ministers’ ears about a political hobby-horse. For Lord Brownlow, the Tory donor who initially bankrolled Carrie Johnson’s fancy wallpaper, it was an idea for a new Great Exhibition, which then culture secretary Oliver Dowden was dispatched to hear about. (Brownlow was subsequently repaid by the Johnsons.)

Mohamed Amersi, the controversial former Tory backer, suggested individual political contributions should be capped at £25,000 – because as a big donor “you feel that you can dictate things”.

So what should be done? Like many demands for reform in our creaking democracy, the idea of driving out big money from politics tends to be dismissed as naive. But not so long ago there was cross-party consensus that something needed to change. The 2010 coalition pact included a promise to “pursue a detailed agreement on limiting donations and reforming party funding in order to remove big money from politics”, something Labour had also espoused in its manifesto – but on-off party talks ran into the sand.

The public, disillusioned with the political status quo, appear to support tightening the rules. Even back in 2016, long before Johnson’s fancy wallpaper, 76% of UK respondents to a survey by anti-corruption campaign group Transparency International “strongly believed that wealthy individuals exert undue influence on governments and action needs to be taken to stop this”.

There is a blueprint on the shelf already: the Committee on Standards in Public Life published a report in 2011 on “ending the big donor culture”, which called for a £10,000 cap on all individual donations (about £14,000 in today’s money). It also argued that overall campaign spending limits should be cut. This would, of course, provoke howls of outrage at parties’ headquarters – but is every last leaflet and lavishly paid strategic consultant really necessary in order for the public to understand what they are voting for?

More controversially, the committee also recommended an increase in state funding for parties, allocated in proportion to votes won at the previous election. At the time, they suggested this might cost perhaps an extra £23m a year, or 50p per voter. It would be a bold politician who would make the argument for more taxpayers’ money being spent on politics at a time of deep public disillusionment. But as the chair of the Committee on Standards in Public life, Lord Jonathan Evans, has argued, the sense that rich individuals are able to buy influence is one source of that very disquiet.

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A Labour government pursuing party finance reform would have to wrestle with the issue of how to treat union contributions. The standards committee recommended its £10,000 cap be applied here, too – with no exemption for the £3-a-head affiliation fee that allied unions pay the party annually.

That feels overly restrictive, given the unions’ central role in Labour’s constitution, and the fact their contributions are made within a democratic framework: individual members can opt out of their union’s political fund (indeed, since 2016, new members have to actively opt in). In effect, these are many thousands of individual donations, bundled up together.

It’s harder to argue that case for vast one-off campaign contributions, like the £3m Len McCluskey’s Unite handed Jeremy Corbyn’s Labour in November 2019 (though, of course, the Conservatives were taking in money hand over fist from rich donors who had not, unlike McCluskey, been elected). In any case, the status quo is impossible to justify in principle and, in practice, chips away at democracy. Historically, constitutional reform in the UK has often followed a crisis. But a new government would be wise not to wait for the next party funding row to blow up, as it inevitably will, at the expense – yet again – of public trust.

Further reading

Kleptopia by Tom Burgis (William Collins, £10.99)

Moneyland by Oliver Bullough (Profile, £10)

Buying the Vote: A History of Campaign Finance Reform by Robert E Mutch (Oxford, £14.99)

Heather Stewart is the Guardian’s former political editor.

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