Mega donations will do more damage to public trust in politics
3 min read
The two Reform mega donations, which saw the party receive an unprecedented £72m from two billionaires, have been a thunderclap moment for our democracy.
The sums dwarf any previous single donations to political parties and have opened up an urgent debate about the role money plays in our democracy.
These massive donations haven't happened in a vacuum; political parties have become increasingly reliant on wealthy donors in recent years. In 2023, Transparency International found that two-thirds of the £85m given to parties in private donations came from just 19 donors, the highest ever share from mega-donors at the time. This problem has become entrenched across the political spectrum.
The colossal Reform donations are of a different order of magnitude and mean we are entering a new epoch in the amounts of money flowing into politics.
This has profound implications for our democracy. The danger now is not just that ultra-wealthy individuals can influence political parties, but effectively buy them with vast donations. The UK is particularly exposed in this regard, in that it currently has no limits on how much individuals can give to political parties. This makes the UK something of an outlier, as countries as diverse as Canada, Australia, Ireland, and Spain all have curbs on political donations.
Huge donations also risk doing profound damage to trust in our democracy. When the public sees ultra-wealthy individuals giving gargantuan sums of money to political parties, they are left wondering what these donors expect in return. That has a corrosive effect on trust in politics, which the British Social Attitudes Survey shows is now at record lows.
There is a clear solution here: the government needs to impose a donations cap that limits how much can be given to a party in a single year. This is something that is supported by the public, with a clear majority wanting a cap.
We have also seen wide support for a donations cap among MPs as the Representation of the People Bill has made its way through Parliament. Two Labour MPs, Stella Creasy and Alex Sobel, proposed amendments for donations caps of £100,000 and £1m respectively. Even the Prime Minister has previously expressed support for a cap, saying he felt £500,000 was around the right amount.
So it was disappointing that no proposals for a cap were added to the bill, although a taskforce has now been given the job of looking at the issue.
The case for a cap becomes even stronger in light of the government taking up the recommendation from Sir Philip Rycroft’s review to introduce an annual donations cap of £100,000 for overseas donors. Yet, without a domestic equivalent, we risk having a donations cap for donors based in every country bar the one that matters most, the UK.
The events of the last week show how urgent the matter has become and that action needs to be taken now.
Our politics is currently dangerously exposed to being for sale to the highest bidder. Inertia would leave us heading towards a crisis of trust in our democracy.
At the heart of this debate there is a simple question: who is it that influences the politicians making decisions that affect all of us? A donations cap is a crucial step to ensuring the answer is always the voters, not wealthy donors.
Darren Hughes is Chief Executive of the Electoral Reform Society
