A surge in private donations to political parties has put a small number of super-rich individuals in a position to wield “substantial influence” over the UK’s political process, a new report has warned.
Almost half of political donations in the UK – and 60 per cent in the run-up to the 2019 general election – now come from wealthy individuals, compared to around 40 per cent in the early 2000s, found academics from the University of Warwick’s CAGE Research Centre.
And the gifts from so-called “super-donors” are going disproportionately to the Conservative Party, which received £21.5m from 71 private individuals in 2019.
The CAGE report found that the surge in private donations came against a backdrop of a steep rise in political gifts, which almost trebled from £41m in 2001 to £101m in 2019.
The former chair of the committee on standards in public life, Sir Alistair Graham, told The Independent that the growing reliance on cash from wealthy individuals to fund political activity was a worrying trend.
“I’ve always believed that the funding of political parties should be in part from public funds, as the parties are an essential part of our democratic system,” said Sir Alistair.
“It’s wrong that wealthy individuals should have such disproportionate power over possible policy developments of political parties, enhanced contact with the political leaders and even access to the legislature itself, as so many donors end up being appointed to the House of Lords.”
And Dr Jess Garland, of the Electoral Reform Society, told The Independent: “The fact that such a large proportion of donations now seem to be coming from a small number of very wealthy individuals is a concern for our democracy and raises questions over influence.
“The public will rightly question what is expected in return from political parties who receive such large sums.
“We need to look seriously at how our political parties are funded, as well as models of public funding, to ensure parliament and politicians are working exclusively on behalf of voters, not the highest bidder.”
The Warwick report found that the increase in private donations fuelled a growing financial imbalance between the parties, even after taking into account the public funding known as “short money” provided to the opposition to maintain a more level playing field.
In 2019, the Conservatives had financial resources totalling £27m more than Labour, the report found.
While private donations made up 60 per cent of gifts to parties in the 2019 election, these included 45.5 per cent which came from “super-donors” who were able to give £100,000 or more in a single year.
The growth in donations from private super-donors was driven by a small group of individuals donating more and more often.
In the 2019 election year, 104 super-donors gifted £46m between them – an average of £442,000 each.
Over the course of 2019, Tories accepted gifts worth £2.3m from theatre producer John Gore, £1.9m from art dealer Ehud Sheleg – appointed that year as party treasurer by Boris Johnson – and £1m each from financier Peter Hargreaves and GoCompare insurance tycoon Sir Peter Wood.
But the Brexit Party received the top donation in the election year – £9.7m from the businessman Christopher Harborne.
Report co-author Professor Colin Green, from the Norwegian University of Science and Technology, said “This growth in political donations, from a concentration of large individual donors, indicates how unelected private individuals are in a position to wield substantial influence over the UK’s political process.
“Traditionally, UK donations are seen as relatively unimportant when compared to the US. But the significant increase in party donations we see over the last 20 years suggests they are having a very real impact on how the UK democratic process works.”
And the CAGE Centre’s director, Professor Mirko Draca, added: “We estimate that the resource gap between Conservatives and Labour is over £27m. This dwarfs any support offered through ‘short money’.
“The Conservative finances are so vastly stronger than Labour’s that we could be looking at a prolonged period of financial imbalance between the parties that persists into the next election.”
A Conservative Party spokesperson said: “The Conservative Party is proud to have the support of so many leading figures in British business. They support the Conservatives because they understand what it takes to deliver economic growth and the damage that Labour would do to the economy.”
A Liberal Democrat spokesperson said the party had seen wealthy Tory donors switch their allegiance in recent months because of concern at Conservative stewardship of the economy.
“This government has trashed our economy, sent interest rates spiralling, hiked taxes and hammered living standards,” said the spokesperson.
“It’s little wonder former Conservative donors are switching to the Liberal Democrats instead, who are offering a clear plan to give people a fair deal and a stronger economy. The British public and British business want rid of this terrible government and are abandoning them in their droves.”