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Peter Geoghegan is investigations editor at openDemocracy and the author of "Democracy for Sale: Dark Money and Dirty Politics" (August 2020, Head of Zeus).
LONDON — Scandals about money in British politics are like London buses: You wait an age expecting one to turn up, then a slew arrive all at once.
The recent report into Kremlin interference into British politics — which caustically noted the cozy financial relationship between Russian elites in London and senior politicians, without naming the Conservative Party explicitly — came on the heels of a British summer dogged by series of questions over political donations. Among them, the admission by Housing Minister Robert Jenrick that he had shown “apparent bias” toward a Conservative donor’s £1-billion property development.
The ensuing furor even prompted Nick Timothy — once the right-hand man to former Prime Minister Theresa May — to warn about sleaze and corruption in British politics.
“We should not be surprised that members of this privileged class scratch one another's backs, but that does not mean we should meekly and passively accept it,” Timothy wrote in the stolidly-Tory Daily Telegraph last month.
Timothy is right to be concerned: Britain’s politics looks increasingly like America’s, with private money buying ever more access and influence inside the corridors of power. Unchecked, this influx of cash will wreak even greater havoc on our political system.
Small change
Westminster is no stranger to “cash for favors” scandals, of course. Former Prime Minister David Lloyd George shamelessly sold peerages to wartime petty criminals and profiteers to fund his prime ministerial lifestyle.
A century on, British political parties — unlike their counterparts in many European countries — still rely on raising money to survive. And where donors on the other side of the Atlantic routinely spend millions on corporate lobbyists and bankrolling politicians, in Britain relatively small amounts of money can buy a lot of access. That makes the system that much easier to potentially manipulate.
“A little bit of money goes a long way,” former Conservative Minister Guto Bebb told me. “We are not America. You don’t have to spend half a billion on a general election campaign. If you are willing to put a quarter of a million into a think tank, you can get a lot of bang for your buck.”
The numbers are stark. The 2018 U.S. midterm elections were estimated to have cost almost $6 billion. In Britain, almost anyone with £50,000 burning a hole in their back pocket can join the Conservative Leader’s Group.
In return, Leader’s Group donors receive regular off-the-record dinners, lunches and drinks receptions with the prime minister and Cabinet ministers. “The donors are treated like an intelligent fan club. If there is a businessman who wants to have a chat with a future prime minister, then this is his opportunity,” said one regular.
Information on who is a member of the Leader’s Group is not publicly available. In 2012, then Prime Minister David Cameron agreed to release details on donors after it emerged that he was hosting private parties for them the Downing Street flat. But the Tories stopped publishing this information a few years ago, and when I checked recently all previous releases had been scrubbed from the party’s website.
What's in it for donors? For some, it’s status. Spending £90,000 on a game of tennis with Prime Minister Boris Johnson — as Lubov Chernukhin, wife of a former Russian finance minister, did earlier this year — has social cachet.
Others seek influence and access. Over the last decade, almost one-fifth of leading Conservative donors have received honors, including knighthoods and peerages, after donating to the party. The number of government contracts given to businesses with long-standing ties to the Conservatives during the COVID-19 pandemic has been well-documented.
Oversize influence
All told, money is playing an increasingly powerful role in British politics. In the run-up to last December’s general election, the Conservatives alone received more than £40 million from large donations.
The trend is also, to a lesser extent, apparent among the opposition Labour Party. Although it is still largely dependent on trade unions and smaller donors and the super-rich donors that supported Tony Blair are long gone, some private money has returned since Keir Starmer replaced Jeremy Corbyn as leader earlier this year.
What is perhaps most concerning, however, is that the money fueling politics — and the Tories in particular — has changed. After the Brexit vote in June 2016, the Tories’ already narrow funding pool contracted sharply. The pro-European business elite fled the party. Around two-thirds of existing donors reduced their contributions, or stopped giving at all.
Dislocated from their traditional support, the Conservatives are now largely dependent on funding from a small number of overwhelmingly pro-Brexit donors. When Johnson became prime minister in June 2019, promising a hard Brexit, donations increased sharply, particularly from corporates and wealthy individuals involved in hedge funds and other speculative finance.
We don’t need to look far to see what happens when a small group of donors have an oversized influence on politics. “A federal election in the U.S. is supposed to be decided by 150 million voters, and yet the policy preferences are being determined by literally 20 people, 20 major donors,” says Adav Noti, a U.S. election lawyer with the Campaign Legal Center, in Washington D.C.
Something similar is happening in the U.K. “The Tory party is now wholly unrepresentative in any way of the U.K. population. Its source of funds is so restricted,” says economist Frances Coppola. “And because they are so dependent on this small group of donors, Tory party policy is going to be skewed.”
There are already signs of this type of influence, as obscure projects — such as post-Brexit "free ports" — making their way onto the British political agenda.
None of this is irreversible. The role of money in British politics could be reduced significantly. If the maximum individual donation was, say, £10,000 a year, parties would be forced to rely on a far wider, and more inclusive, donor base.
However, there is little sign of any willingness for change. Although the parliament's committee on standards in public life in June announced a long-overdue review of British electoral regulation, for example, its remit doesn't include party funding.
“Political parties have a vested interest in the status quo,” says Labour MP Stephen Kinnock, chair of a parliamentary working group on electoral reform. “They would rather stay with the broken system we have currently because they know how to maximize their advantage within it.”
Britain, as Kinnock warns, is in the process of being "Americanized" — "Dark money and dodgy data are playing an increasing role in our politics. That is a very dangerous place to be. We have been complacent about our democracy. We thought it would just look after itself.”
Unless the U.K. moves to protect its democracy from easily bought influence, its politics will become ever more in thrall to the kind of money that bought us Brexit.
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