Unlimited donations boost UK parties’ election war chests

To fund their election campaigns, UK’s political parties can count on millions of pounds from generous donors – without any limit.

The controversial system has been the source of numerous scandals and raised concerns about corruption and cronyism, but it remains hard to reform due to a lack of cross-party consensus.

UK parties must declare donations over £11 180

The “primary difference” between the UK and several European countries is that the former has “no cap on donations whatsoever”, said Sam Power, a political financing expert.

Parties must ensure that donations over £500 come from a permissible source based in the UK.

Donations over £11 180 – increased since January from £7 500 – need to be declared to the Electoral Commission.

The ruling Conservative party and the Labour party, currently tipped to win the July 4 election, receive donations from a number of wealthy individuals and businesses.

Labour also draws a part of its finances from trade unions.

Where the money comes from does often matter.

The Tories were at the centre of a storm after it was revealed they had received £15 million from a businessman accused of making racist, violent and misogynistic remarks about Britain’s first black female MP Diane Abbott from the Labour party.

In 1997, Tony Blair’s Labour found itself embroiled in scandal over an exemption for Formula One from a ban on sports sponsorships by tobacco companies, after the party received a million-pound donation from its then chief executive Bernie Ecclestone.

‘Unknown provenance’

Power, from the University of Sussex, said wealthy donors receiving honours or a seat in the House of Lords happens “almost every year”.

Most recently a property developer who was a Conservative party donor won approval for a major building project, he added.

Although it is difficult to prove any direct “quid pro quo”, the frequency of such cases in the media gives the public the “perception of undue influence” or “corruption”, Power told AFP.

The perception that donors “might get something in return” is “incredibly problematic” for confidence in democracy, he added.

Another pitfall is the loopholes that allow existing rules to be bent.

According to Rose Whiffen, a researcher at anti-corruption group Transparency International UK, the current system allows the influx of “too much money of unknown provenance”.

One such loophole involves unincorporated associations – broadly used to describe groups of people with a non-profit goal – who can donate to the parties and do not have to declare how they are financed.

This election could also be the most expensive since 2000, after the campaign spending limit was raised by almost 80 percent to £35 million last November.

In 2023, political parties accepted £94 million, including public funds, up from £52 million received the year before, according to the Electoral Commission, which pointed out that a spike before an election is not unusual.

In the first three months of this year, parties have received almost £23 million.

These high figures give “the public a sense of unease, that some voices might have more influence than others in our political system”, said Whiffen, whose organisation is among several calling for a cap on donations.

Democratic damage

“We need to kind of switch the system back to being far more focused on ordinary voters,” said Jessica Garland, director of research at the Electoral Reform Society, which advocates for tighter rules and more power for the Electoral Commission.

Following a 2011 parliamentary report that recommended, among other things, a limit of £10 000 on individual or business donations, parties began discussing ways to improve the system.

Talks collapsed two years later.

What will it take to finally change the system?

“A massive scandal would probably help,” said Sam Power, suggesting an increase in public funding for parties as a solution.

But he pointed out that the UK seems “allergic” to that level of “state involvement”.

At the same time, it would be “incredibly hard” to get both major parties to make moves “at the same time”, he added.

Parties would need to “get back around the table again”, said Garland, and the next government would have to focus on the issue and “realise the damage that it’s doing to democracy”.

In the current campaign, only the smaller Liberal Democrat party is promising to limit donations. Labour has pledged to strengthen “the rules around donations to political parties”, without giving more details.

By Garrin Lambley © Agence France-Presse