What the US midterms tell us about big money in politics

A decade ago, Trump won his first term while pledging to ‘drain the swamp’ in Washington DC. Yet in last week's midterms, which saw the most money ever spent on an election, corruption was high on voters’ minds. The UK is not the US, but our own political finance rules are heading in a similar direction. Now the dust has settled, and most results have been called, here are five key lessons the UK could learn from what has just happened across the Atlantic.

Voters care about corruption. Political graft is often dismissed as a storm in a teacup, only mattering to those within the Westminster bubble. Yet polling for the US midterms put it high up, even top, of the issues voters cared about. Analysts have pointed to corruption, along with inflation, as key reasons for the Republicans' heavy defeat. Any politician who thinks they can just brazen their way through scandal after scandal should think again. Viktor Orbán and Aleksandar Vučić can attest this is a strategy with a limited shelf-life.

And they want something done about it. One of the big problems is the eye-watering amounts of money involved in elections. Candidates, parties, and outside campaign groups are estimated to have spent over $12 billion (£9 billion) trying to influence voters. That is more than any other poll in US history – even more so than the last Presidential contest.

This money must come from somewhere – increasingly mega donors – and it does so with strings attached. Voters want this to stop. They are fed-up with billionaires trying to buy democracy, which is perhaps why ‘money out of politics, money in your pocket…’ went down well as a campaign slogan.

Weak laws are the problem. The US has complex campaign finance laws that do little to stem the flow. Donation caps are easily sidestepped by giving to Super PACs, which are not covered by them. There were some expenditure limits, but now they’re gone, leaving an unrestrained arms race between parties to outspend their opponents. And while many contributions must be reported publicly, vast amounts are routed through dark money groups.

The UK’s context is different, but not entirely. Record amounts are being spent on elections thanks to a loosening of the law in 2023, with parties increasingly reliant on a small number of extremely wealthy mega donors to fund them. Following our campaigning the Government has tasked the Electoral Commission to look at spending limits and is considering (though has not yet committed to) donation caps.

Reform is hard for parties that rely on big donors. Despite some successful small donor fundraising, the Democrats still rely heavily on mega donors. This presents a serious challenge to reform: do they bite the hand that feeds them, especially when there is a presidential election on the horizon? There are parallels over here, too.

Labour won a landslide two years ago on a promise to ‘protect democracy by strengthening the rules around donations to political parties.’ It has been coy about what this actually means, but voters think it should include an annual limit on how much any individual or organisation can donate. So far, though, it has gone only as far as a cap on donations from overseas electors. While controlling large contributions from voters based abroad is a small step forward, it leaves domestic mega-donors untouched, and on its own looks designed to hobble an opposition party rather than fix the system. MPs and peers have been pushing to cap all donations, wherever they come from, which would address the real problem of big money dominating our politics.

Money may not always buy votes but that does not mean democracy is safe. One of the most obvious learnings from these polls is that spending does not equal votes. It is hard to ignore that the world's richest man threw almost half a billion dollars at races and lost. It is also just as easy to assume, wrongly, that therefore there is no need for change.

It is deeply unhealthy for any democracy to be so reliant on a tiny number of donors to bankroll political campaigns. Win or lose, parties and candidates indebted to anyone for so much money leaves them captured to the vested interests of their benefactors. Claims there are no strings attached to such largesse makes a mockery of the public's intelligence. It is one of the most obvious and inalienable truths in politics that money talks, and big money gets heard the loudest.

To ensure power rests with voters, not a small minority of extremely wealthy individuals, the UK needs to address this problem head on. The Representation of the People Bill, now before the House of Lords, offers a chance to do just that. An annual cap on donations, wherever they come from, would show politicians had heard voters’ concerns. Parliament should take this opportunity to act.