Who Owns our Government?

Your first though might be ‘We the people’ as we vote every 5 years for a new government, but the person who pays for something usually owns it.

Running a political party is not cheap, you can spend up to £54,000 per seat when you run candidates for Westminster^[1] so for the whole of Britain the cost could be £33million. Running for council seats or for devolved administrations is slightly cheaper, but large political parties such as Labour or the Conservatives need an income of £30-£50million per year. Where does this come from and why does it matter?

Most of us believe in democracy and want to elect the government we deserve, rather than the government that rich and powerful people have chosen for us, but recent events have highlighted that poor regulation has led to a lack of control over who funds our political parties.

Last week Mr Frank Hester (a Tory party donor) was in the news because of his comments about Dianne Abbott as a black woman and how she should be shot. Understandably, a discussion about racism has dominated the airwaves with many being surprised at the initial refusal of Tories to condemn his comments as racist and then by the refusal of the Tories to return Mr Hester’s donations to the Tory Party. As the size of the donations was slowly revealed (£15m in the past 18 months – one fifth of the Tory annual income) is became obvious how significant Mr Hester’s money was for the Tory Party. Mr Frank Hester is the sole owner and director of the Phoenix Partnership (TPP), which has been paid more than £400m by the NHS and other government bodies since 2016. ^[2] I am making no allegations of illegality.

This is not the first time the role of donors to a political party has given cause for concern. When Boris Johnson was on the verge of resigning as PM, his ally Nadine Dorries, in an interview with SkyNews ^[3] warned Tory MPs in marginal seats, that donors who had supported the party to the tune of £80m would not continue to support the party if Johnson was forced out. The unsurprising implication being that MPs should be influenced by who funds their party

These are very worrying comments, considering that some large donors to political parties benefit from financially rewarding government contracts.^[4] For reasons of transparency and trust, it seems better to keep the funding of our politicians separate from those who could gain significantly from decisions made by those politicians.

Who Owns our Local Political Parties

At one time political parties relied on their membership for their income, but today no political party can ignore their donors.

In 2022 two local political parties each received a donation of £30,000^[5] from Legatum Ltd run by Ben Habib. For the TUV, with an annual income of £76k this donation was almost half its annual income and even for the larger DUP this was a significant sum. It would seem reasonable to assume that the person contributing half the annual income to a political party would have significant influence on the policy of that party. What would happen if the party chose a course of action with which the donor disagreed?

We know the answer to that question, because on P5 of the Newsletter (today 18/3/2024) there is a report that in future Mr Habib will fund the TUV but no longer fund the DUP unless they change their position on the Irish Sea Border.

‘He who pays the piper, calls the tune’ is an old saying, but should the DUP dance to Mr Habib’s tune or follow the wishes of the ordinary voters?

How Should We Fund Political Parties

Other countries restrict how much can be donated by any one individual to a political party, they ban companies from donating to political parties and make up the shortfall by giving government grants to the parties based on their previous electoral performance and their number of elected representatives. For example, in Sweden it is estimated that over 80% of political party income comes from government grants.

The suggestion that political parties should be funded significantly by the state from our taxes has been made before and is usually ridiculed. Why should our money be spent on useless politicians, goes the argument, let them source their own funding.

The UK already gives some funding to political parties and if we followed the Swedish example and had to increase funding to make up the shortfall caused by restricting private and business donations, the cost would still be small in comparison to the huge cost of government (£1189 billion per year). The potential benefits could be massive, allowing politicians to focus on meeting the needs of the people, and reducing the constant distraction of wooing wealthy private donors or business interests with all the current potential for undue influence for a small number of very rich people.

We need action now before we fall further into the arms of the big donor, lobbying groups and PAC system that has corrupted US politics to the point that different US congressmen openly vote solely in the interests of their donors and directly against the interests of their voters.

https://www.electoralcommission.org.uk/party-spending-uk-parliamentary-general-election/spending-limit ↑
https://www.theguardian.com/business/2024/mar/13/key-health-figures-call-for-nhs-to-cut-ties-with-tory-donor-frank-hester ↑
https://news.sky.com/story/culture-secretary-nadine-dorries-accuses-colleague-jeremy-hunt-of-duplicity-in-twitter-spat-over-tory-leadership-12628934 ↑
https://x.com/BladeoftheS/status/1768720323510231396?s=20 ↑
https://search.electoralcommission.org.uk/English/Accounts/ST0026516 ↑