I have long adopted Chomsky’s formula: capital buys power to make policy. I was interested therefore to read a new report ‘Politics for Sale: Analysing Twenty-One years of UK Political Donations’ by Tom Mills and colleagues. The report draws on official data from the Electoral Commission plus data from Companies House, Wikidata and the Parliamentary API data over a twenty-one year period (Jan 2001- Dec 2022). The authors make the points that greater transparency is needed and that the data sets themselves need to be improved.
The reliance of politicians and political parties on donations from businesses and wealthy individuals has long been recognised and signalled as a problem:
‘if political parties and politicians rely on businesses and the wealthy to fund election campaigns, policy research and other costs, then it is reasonable to assume that politicians, political strategies and policies aligned with these interests will be strengthened compared to those more representative of ordinary citizens. In short, the political sphere will have material pressures to become more attentive to the interests of businesses and the wealthy.’
It is a statement that sits comfortably with Chomsky’s formula; and with my ‘class/command dynamic’, which notes a greater sway of capital monopolistic interests over UK national government policy and practice in post-1970s rentier capitalism. I have published and blogged about my theories so often that I will not go into them again here.
In this brief blog I am offering only a summary of the ‘Politics for Sale’ report’s findings, and am drawing heavily if not exclusively on the executive summary. Political donations ‘closely align with political power’. Over the period of the investigation the Conservative Party received over 40% of all political donations, adding up to £465 million, excluding public funds. The Labour Party received 33% and the Liberal Democrats just under 10%. On balance, the two main political parties, the Conservatives and Labour, remain associated with business and workers respectively. The Conservative Party receives most of its donations from businesses, and the Labour Party form trade unions. During Jeremy Corbyn’s leadership, there was a decline in donations to Labour from companies and wealthy individuals, while the 2017 and 2019 general elections saw significant peaks in Conservative and Liberal Democrat donations. Donors, the authors conclude, are ‘overwhelmingly ideological’ rather than pragmatic, typically remaining loyal to one political party. However, ‘some donor types, notably large companies and non-profit organisations, are less partisan.’
Large companies are more likely than businesses in general to donate, but still comprise only a small proportion (8.8%) of business donations overall. Most of the big business donations (52%) come from large private companies – frequently controlled by millionaires – while only 12% come from public limited companies. Companies provide a higher proportion of non-cash donations that other donors. This includes the secondment of staff, most notably on the part of the Big Four accounting firms.
The business sector that has donated the most is construction and real estate, followed by finance. The former broadly reflects the economic size of the sector, but in the case of finance the volume of donations is greater than would be expected given its size.
There is a higher concentration of business donors in industries that are highly regulated. These donors might have a special interest in engaging with politicians in the hope or expectation of influencing policy-making with a potential to restrict their activities. The five industrial sectors with highest proportion of donor companies are: (a) mining, oil and gas; (b) gambling; (c) food and beverages; (d) utilities; and (e) finance, investments and insurance.
The authors conclude as follows:
‘The system of political finance regulation in the UK currently disincentives business donations since companies require shareholder approval to provide funding to political parties. This is likely one of the reasons that large corporations are much less significant as political donors in the UK compared with other political systems; a long term trend since the 1980s when large companies were significant Tory donors. However, this does not mean that big business is not politically influential, and wealthy individuals have meanwhile become increasingly significant donors, many of whom will of course be shareholders and/or business executives. With no cap on the amount that can be donated, this has the potential to corrupt the political process. The significance of individual donors also raises serious issues around political transparency. As we have detailed in this report, the current form in which political donations data is published is of very poor quality and makes identifying individuals difficult, sometimes impossible. The exploratory analysis we have undertaken, and have outlined in this report, demonstrates that in the case of businesses there are different levels and types of political funding coming from different company types and sectors. This kind of analysis is important because citizens should be able to determine not only which named wealthy individuals or companies are funding particular politicians, political parties and organisations, but also what kind of interests they – and donors collectively – may represent. Yet, in many cases neither is possible to determine under the current rules. Future work from the research team that produced this report will connect individual donors to companies, allowing us to extend the analysis we have so far undertaken for companies to individuals also. Yet without reform of the regulation of political finance, researchers will never have the necessary quality of data to deliver the level of transparency that citizens should be afforded. We therefore conclude this report with recommendations that would address some of the problems with the data that we have identified in the course of this work.’
They advance three specific recommendations:
- The full name and date of birth of any donating individual should be reported to the Electoral Commission by donees as a mandatory requirement for receiving donations. These data should then be made publicly available in the Commissions’ register so citizens and researchers can definitively identify individual donors.
- All donees should be required to disclose if a donor has made any prevuous donation recorded in the public register. If any previous donation is recorded, then the donor ID number allocated by the Electoral Commission should be reported – again as a condition for receiving the donation. This would ensure that the ID numbers in the Commission’s data are reliable.
- Parties should be required to disclose if a donating organisation is registered at Companies House and should be obliged to report the organisation’s company number if they are. This would further ensure organisations are not duplicated across donor categories, as is currently the case in the official data.
I have stuck closely here to the words of the author because their findings, conclusions and recommendations are specific.
How often have I heard from colleagues and associates with different political views to my own that ‘we have followed the rules’, conveniently overlooking who made the rules and in whose interests.
Thanks to Tom Mills and colleagues for beginning to shine light on what remain overly murky corners in our explicitly ‘capitalist’ parliamentary politics.