Stuart Wheeler as he leaves the High Court after losing his case against the government over the Lisbon Treaty in 2008 (Photo by Cate Gillon/Getty Images)
Artillery Row

Why are political donations suspect?

Donors pay twice: with their money and by having their reputations tarnished

In 2001 the Conservative Party was at a low ebb. Having endured one landslide General Election defeat it was about to face another. It was at that point that a businessman called Stuart Wheeler made a donation to them of £5 million. He made clear that he would not accept a knighthood or a peerage. Nor did he want any special treatment for his business. His motive was that he wanted the Conservative Party to win because he thought that would be “better for the country”. He added that since he had £90 million after floating his company he felt he had more money than he needed and so could easily afford to give some of the stuff away. 

Wheeler died last year. I met him a few times and he struck me as rather diffident. He would sometimes come along to think tank seminars and sit in the audience with the rest of us. No hint of demanding special treatment for being rich.

When it comes to the motives of donors there is a presumption of guilt

The difficulty is that other donations have been more problematic. When it comes to the motives of donors there is a presumption of guilt. Base motives will be assumed. The Financial Times has reported on an “Advisory Board” on those donating over £250,000 to the Conservatives – which allows them to meet Boris Johnson and Rishi Sunak. Sir Keir Starmer, Labour leader, claimed this appeared to be a case of “cash for access on a huge scale”. 

Sir Keir has a bit of a nerve. The Labour Party’s Rose Network Chair Circle over cash for access. Those who donate over £5,000 a year are invited to private dinners with him and other Shadow Cabinet members. Then we have the trade unions. They hold 50 per cent of the votes at the Labour Party conference. The three largest affiliates – Unite, GMB, Unison – have considerable clout. 

I happen to believe that overwhelmingly the donors to all political parties are not venal. They are putting their money where their mouths are. Backing the causes they believe in. Corruption scandals in this country are exceptionally rare. Bernie Ecclestone, the Formula One owner, did give Labour a donation in exchange for exempting his races from the ban on tobacco advertising. But that corruption was the exception not the rule so far as the funding of political parties is concerned. 

They say that no good deed goes unpunished. Ben Elliot, the Co-Chairman of the Conservative Party and the co-founder of Quintessentially Group, a highly successful business. He is the nephew of the Duchess of Cornwall. He has raised a lot of money for charities associated with the Prince of Wales. He has also raised a lot of money for the Conservative Party. There is no “conflict of interest” in any of this. Yet he is traduced. 

Far from getting favours, those giving money to a political party must expect to be penalised. 

Someone who has given generously to charity and is given an honour in recognition of it would be well-advised not to have the arrangement tarnished by having also made a political donation.

Bad publicity will prompt political parties to be hasty in disowning their benefactors

If a businessman seeks a meeting with a Minister over some grievance it is far more likely to be portrayed as a scandal if a donation has been made and thus it is more problematic to assist even if the grievance is valid. 

Some categories are especially vulnerable. For example, those contracted by the public sector. Last year Sir James Dyson agreed to assist with manufacturing ventilators to help with the pandemic. He didn’t make any money out of it. The BBC sought to make it into a “sleaze row” by claiming he was a Conservative Party donor. As it happens he wasn’t. But if he had been, so what? 

Then any property developer who gives money is inviting special opprobrium. As Dan Hannan observed on Conservative Home: “It is a curious feature of our present discourse that, despite an acute housing shortage, developers can be presented as being almost on a level with arms dealers or pornographers.”

What makes matters worse is that bad publicity will prompt political parties to be hasty in disowning their benefactors. Peter Cruddas, a former Conservative Party Treasurer, was accused of improper fund-raising methods. He won a libel case against the false charges but was hung out to dry by the Party hierarchy. 

The upshot is that donors pay twice – with their money and in putting their reputations in the firing line.

What is the alternative? It is right that there is transparency for large donations and that the media should be free to scrutinise and report on them. Cynicism is a human failing that can not easily be overcome. 

Some then say that state funding is the answer. That rather than the bother of persuading us to hand over our money voluntarily it would be much less vulgar for political parties to rely on compulsion. Such an arrangement would be much worse. As Charles Moore put it in The Spectator: 

“Is it seriously suggested that you have only to give a large sum of money to a party for you not to be allowed to meet the leader? They should not be able to buy policy change, but there is nothing wrong with them telling him what they think. Their voices are different, thank goodness, from those of all-encompassing officialdom, and ministers need to hear them. The great corruption would be if politicians were to be spared the humiliating business of raising money from the freewill offering of citizens and grab it all, by law, from taxpayers.” 

Yet this does leave us with the difficulty of widespread public mistrust in the democratic process. Even if the problem is one of perception it is still significant. 

The answer is for political parties to have a larger number of small donations. Here the state could assist – not by forcing us to give money to those we disagree with but encouraging us to support those we believe in. The means to achieve this is through tax relief, in the same way that giving to charity is encouraged.

The answer is for political parties to have a larger number of small donations

Lord Neill of Bladen, when he was Chairman of the Committee on Standards in Public Life, proposed this in a report in 1998. He suggested it apply on donations up to £500 if at the last general election two members of the party were elected to the House of Commons or one member was elected and the party won at least 150,000 votes. 

His report noted “they are given in several countries, including the United States, Canada and Italy.” It added: 

We were told by Dr Michael Pinto-Duschinsky that in Germany, where a system of tax relief was introduced in 1974, the pattern of giving to political parties has changed in favour of many small donations and against large donations.

Neill hoped that by encouraging political parties “to seek donations from a larger pool of individuals than previously, so more individuals might be encouraged to participate actively in party politics generally” and that “it can be strongly argued that giving to political parties is meritorious and is a contribution to the democratic process.”

The proposal was never implemented. But the case is stronger than ever. Democracy is not to be taken for granted. In much of the world it is in retreat. To defend it we need people to be proud of the democratic process. That includes being proud of those who give their hard earned cash to political parties. The wider the participation in that commendable activity the more secure the process will be.

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