Those following US politics lately will know that over there, cash is king. Even before the polls closed, 2024 was poised to be the country’s most expensive set of elections on record. In Ohio alone, Democrats and Republicans spent $441 million on advertising – an amount that dwarfs the sums spent here.
The pressure on parties and candidates to fundraise and spend big is immense and inevitably corrupts the political process. And following the Supreme Court’s judgment in Citizens United v FEC, which effectively abolished campaign spending limits for corporations and private interest groups, money talks louder than ever.
This insatiable demand for funds puts those with deep pockets at a distinct advantage over any Joe on the street. Their cash, and that of their lobbyists, provides substantial political leverage, giving them ample opportunity to seek favours that would entrench their position at the apex of society. As election expert Daniel Weiner puts bluntly ‘a tiny sliver of Americans now wields more power than at any time since Watergate’.
Some may look at this with false comfort, reassuring themselves that our democracy is not plagued by the same disease as in the United States. Yet they would be only half right.
Yes, the expenditure in Ohio this year was more than the UK’s 300 plus political parties spent in the past three years combined.
We know from history that big money causes big problems in our democracy. The exchange of cash for access, potential influence and honours are widespread – when the price is right. That political parties are increasingly becoming dependent on a small number of very wealthy donors only exacerbates this problem. When you have one person alone accounting for one in every seven pounds of political donations last year, and leadership candidates charged substantial sums by their party just to throw their hat in the ring, we don’t look too different from the US after all.
The incoming government made a welcome manifesto commitment to protect our democracy by strengthening the rules around political contributions. This presents a significant opportunity to reverse recent trends and avoid the oligarchic tendencies from across the Atlantic. It also has a sizeable majority to deliver this pledge, which has the potential to restore trust in politics and avoid scandals from undermining its programme for change.
It will be tempting for many to put substantive reform on the too difficult pile. Limiting how much money one can accept from a single donor will for some, instinctively, feel like making work harder. However, history tells us that ignoring the corrupting influence of big money in politics seldom ends well, and tends to end political careers that parties have invested so much to develop.
While it may take a while for ministers to pluck up the courage to cap donations, there is much that can be done in the meantime.
First, it should reduce the cost of politics. Lowering the maximum amount that can be spent on election campaigns is a no-brainer. Increases to these limits in the last Parliament were made without adequate explanation and blew the lid off an already hard-to-reach ceiling on campaign costs. To dampen the demand for funding effectively, they should be halved. Similarly, parties could do more to reduce the cost of their internal elections, which are spiralling out of control and recently ended a winner’s claim on high office.
Second, it should bring dark money out of the shadows. This involves stopping shell companies and unincorporated associations being conduits for funds of unknown provenance, and encouraging parties to know their donors better. The law also needs to be clearer so ministers aren’t able to avoid transparency by regulation shopping, and the public knows who funds the candidates seeking their vote.
Third, it should make the law enforceable. Reinstating the independence of the Electoral Commission and its ability to bring forward prosecutions would be a simple reversal of an undesirable and unjustifiable hobbling of the regulator. Giving it meaningful sanctions, as the Committee on Standards in Public Life (CSPL) and others have recommended for years, would help give the law the teeth it currently lacks. While enacting un-commenced laws left by the last Labour government could deter attempts to evade the rules.
This Parliament is still young and has time to show a new cohort has learned the mistakes of its predecessors. Tackling this issue early on should win these MPs credit in the eyes of a sceptical and increasingly distrustful electorate. If ministers leave it unresolved, it will surely come back to haunt them.