First three weeks of donation data show that money is attracted to power

Author:
Hazel Gordon, PHD Student Placement

Posted on the 3rd July 2024

From the dissolution of Parliament through to polling day, political parties are legally required to report any large sums of money they receive in donations. Within the first three weeks of campaigning for the upcoming general election, parties accepted over £12 million. Considering how they are polling, it is perhaps unsurprising that from this hefty sum, £8.8 million poured into Labour (including donations made to the Co-operative Party). The Conservatives, Liberal Democrats and Reform UK captured most of the rest in roughly equal amounts; the Conservatives took in £1.2 million, while the Lib Dems and Reform UK received just under £1 million each.*

Pre-poll disclosure law exists to provide transparency to regulators and voters alike, making it quicker and easier to spot lawbreaking and corruption.

What counts as a large sum, however, was revised in 2023, raising the threshold from £7,500 to £11,180. Although justified by the government as accounting for inflation, this change was met by the ERS and many others with widespread concern. It could, for example, make it easier for some donations to fly under the radar, preventing opportunities for public scrutiny. The decision also jarred uncomfortably with awareness that voter’s faith in the transparency of campaign finance has been declining over recent years.

Funds tend to flow towards power

Tracking donations during a campaign offers a window into what drives financial backing in politics. For the most part, money flows where success is expected. In the first three weeks of the current campaign, for example, Labour received 72% of donations reported by all parties.

In contrast, by polling day on the 12th of December in 2019, the Conservatives had racked up £19.4 million in support, making up 63% of all donations reported across the campaign.

Poll predictions are perhaps not the only driver of financial support. The issue of Brexit attracted over £4 million into Reform UK (then, the Brexit Party) in 2019, even with the Conservatives pushing ‘Get Brexit Done’ as their central message. Reform is also doing well this year on donations, tying neck and neck with the Lib Dems and the Conservatives, despite being predicted to only take a handful of seats in the Commons next week at best.

However, a look at the last two elections makes it apparent that the party widely expected to win is likely to receive far more donations during the pre-poll period than any other party.

Some donations are more transparent than others

The most notoriously untransparent of donors are unincorporated associations. These make up a relatively small – but still sizeable – chunk of total donations reported. During the first three weeks of this campaign, the Conservatives received £249,000 worth of support from them.

Ensuring only UK based entities can donate is an important protective barrier against foreign interference in our elections. Still, unincorporated associations face fewer requirements than other donors when it comes to making their sources known, potentially leaving a door open to possible influence. Stricter rules would better ensure only UK-based entities can donate.

Those facing more rigorous checks are individual donors, companies and Trade Unions, who together make up the majority of large-sum donations to political parties. In the first three weeks of campaigning this year, Labour accepted £6.2 million from individual donors, £2 million from Trade Unions, and £520,000 from companies.

The unknown influence of big donors

This begs the question, what influence do big donors have on our politics? Unlike the US and many democracies across Europe, the UK does not ban companies with public contracts from donating to political parties, or big donors from winning them.

Last week The Guardian released an article bringing public attention to how billions of pounds worth of government and NHS contracts granted since 2016 went to companies linked with Conservative party donors. By their calculations, the donors received 150 times more in profit than what they donated in support.

In the article, a Conservative Party spokesperson stated, correctly, that these associations are not evidence of legal wrongdoing. Yet, this very fact stresses the point we wish to make. While it is true donor-party links are not alone evidence of corruption, allowing for a clear conflict of interest weakens our protections against it.

Paired with increasing thresholds on anonymous donations, the laws as they stand are unlikely to reassure any voter already sceptical about the transparency of campaign finance.

Our laws could be stronger

A look at the vast amounts of money donated during this general election campaign brings back into sharp focus the need to reconsider our laws. Extending current transparency requirements to cover more donations, particularly those from unincorporated associations, and increasing the powers of the Electoral Commission to ensure legal compliance, are just a few steps out of many that can be taken to further secure both the integrity our elections and the strength of our democracy.

*Numbers calculated by the ERS using data made available through the Electoral Commission donations search tool. Only donations from weeks one to three have so far been made available for the 2024 general election pre-poll period.

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