Christopher Harborne made headlines by donating £9 million to the Reform party in a single day, a sum that surpasses the total contributions from all trade unions to the Labour party during the last general election. This level of financial influence in politics, once considered exceptional, has now become a frequent occurrence. In 2015, only 1% of political donations came from individuals or companies giving £1 million or more; by 2024, that figure is projected to rise to one-third. Wealthy individuals are already preparing to influence the upcoming election, raising the question for Labour: are we ready to confront the consequences of allowing this to happen unchecked?
The Prime Minister deserves acknowledgment for recognizing the damaging effects of this trend and the public’s call for action. Consequently, on Wednesday, new regulations aimed at limiting donations from overseas contributors will be introduced in the Representation of the People Bill. However, concentrating on the geographical origin of donations rather than their magnitude overlooks the potential for affluent individuals to establish UK shell companies or use local addresses to continue exerting influence over our democracy. With numerous British millionaires already supporting political organizations and more poised to enter the fray, our objective must be to prevent anyone, regardless of their location, from purchasing influence in Westminster.
Labour has yet to endorse this initiative due to concerns that imposing limits on individual donations might prompt similar restrictions on collective contributions from membership organizations and trade unions. This hesitation is not new; the Phillips review of party funding in 2007 fell apart over similar fears, despite backing from significant Labour supporters like Lord Sainsbury. In retrospect, this indecision has contributed to the current crisis.
To address this issue, I have proposed an amendment to the bill, known as new clause 120, which would establish an initial annual limit of £500,000 on donations, reducing to £100,000 in the subsequent year. This would provide the government until the end of the second year to implement a permanent cap. Any final limit would not exceed £500,000 and would require parliamentary approval, allowing all MPs to participate in shaping the regulations.
Importantly, NC120 would exempt trade unions from this cap as long as they adhere to existing regulations regarding political funds. The collective contributions of thousands of workers through a democratic membership organization are fundamentally different from a single affluent individual donating millions. Since 1913, legislation has governed the use of trade union funds, highlighting the stark disparity in how contributions from corporations and individuals are regulated.
Most individuals would find it difficult to contribute £100,000 to a political party. We express our voices through voting, campaigning, volunteering, joining political parties, and organizing collectively. Protecting these organizations across the political spectrum is essential for a robust democracy, as they empower those without significant financial resources to unite and advocate for their interests.
The government has indicated it will consider reducing the amount political parties can spend, which is a positive step, but this action alone will not suffice to ensure that the voices of everyday citizens are not overwhelmed by those of the wealthy and powerful. Without a cap on donations, contributors may exploit loopholes through local groups, parties may hoard funds, and enforcement could be ineffective at best.
If the proposed legislation is passed, it would mean that the government would not need to agree on a specific limit immediately. Instead, there would simply need to be a consensus on establishing a cap for all donors, regardless of their nationality, and implementing this before the next election. Such a timeline would help prevent disputes over details from becoming an excuse for inaction.
Like Donald Trump, Nigel Farage is open about his intent to continue accepting large donations and even celebrates those who contribute. When political parties are allowed to accept unlimited individual donations, it leads to a competitive fundraising environment where one party seeks wealthy backers to match another’s funding.
As a democratic and socialist movement, Labour cannot remain passive while our democracy is eroded by these pressures. Opposing donation limits contradicts our mission to organize the collective will of the working class against the influence of capital. Political power should not solely rest with those who possess the most financial resources. Without meaningful limits, each quarterly report on donations will represent another setback for our aspirations to effect meaningful change. If we do not act decisively now, the wealthiest individuals will dominate the discourse on Britain’s future.
Stella Creasy, Labour and Cooperative MP for Walthamstow.
