The upcoming UK general election is expected to be the most expensive in British history. Large amounts of money are already being poured into party funds, but what does this mean for our political landscape? Unlike many European countries, Britain has little public funding for political parties. Instead, our system relies on private donations, although it is much cheaper than the US, where the 2020 elections cost $14 billion. For example, the Conservatives spent just over £16 million to secure their 2019 general election victory.
A notable trend in recent political donation data is the heavy reliance of British parties, particularly the Conservatives, on a small number of donors. In the first quarter of this year, the Conservatives received over £14 million, mostly in cash donations from a few wealthy individuals. The last time the Tories received such large donations outside of an election year was in 2009. However, this figure is somewhat inflated by a single £5 million gift from Mohamed Mansour, a former minister in Egyptian dictator Hosni Mubarak’s regime.
Labour is also amassing a substantial war chest, raising over £5 million in the first quarter of this year. While unions remain a significant source of funding, party leader Keir Starmer has been actively targeting private donors. There are signs that Labour’s own network of donors, known as the “Rose Network,” is gaining momentum. Notable contributions include £180,000 from investor Stuart Roden and a potential pledge of up to £5 million from former Autoglass boss Gary Lubner.
Labour’s increased reliance on high net worth individuals is partly due to a decline in membership dues, resulting in a deficit of £4.8 million according to their latest annual accounts. These wealthy donors often benefit from preferential access to political elites, with examples of Tory donors receiving privileged treatment during the Covid pandemic. Moreover, some members of a secret advisory board, composed of major Tory donors, reportedly lobbied for the government to lower taxes.
Donors can withdraw their support if they are dissatisfied with how a party is being run, as seen with Peter Cruddas, who has shifted his funding from the Conservatives under Rishi Sunak to the Conservative Democratic Organisation. Other donors have stopped contributing altogether or switched their allegiance to Labour due to concerns over Conservative complacency. Nevertheless, the Conservatives continue to attract new funders, such as Orikolade Karim and Amit Lohia, who donated £50,000 and £2 million respectively.
The Conservatives have a long history of successful fundraising, with Alistair McAlpine famously collecting large sums of cash in the City of London during the 1980s. However, the Brexit vote in 2016 caused pro-European business elites to withdraw their support, leaving the Tories dependent on pro-leave donors and international businessmen.
Accepting private donations exposes parties to accusations of hypocrisy and cronyism. Labour has pledged to clean up politics, making Conservative demands for them to return money from certain donors a partisan issue. Political donations can provide special interest groups with a seat at the table and influence broad policies. As Labour becomes more reliant on private funding, there may be pressure to adopt more business-friendly policies and tone down radical elements.
The UK’s model of political funding is controversial and prone to abuse. Outdated electoral laws and loopholes create significant vulnerabilities. While the Conservatives introduced mandatory voter ID, they have taken no action to address the threat of foreign funding in British politics. The maximum fine for electoral law violations is a meager £20,000.
Implementing caps on donations would be the most effective way to curb the influence of money on politics, but it appears unlikely to happen. Therefore, the race for political contributions is expected to intensify as the next general election approaches.
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