Usually Dale Vince, the Ecotricity green tycoon and Labour donor, confines himself to harrying the Government for cleaner energy solutions or proffering occasional Budget advice. This week he ventured into being a reputational danger to the party.
Vince faced condemnation for saying the Israeli government is partly responsible for the rise in anti-Jewish sentiment globally, after the murder of 15 people at a Hanukkah event in Bondi Beach near Sydney. In a post sent on Sunday afternoon, the same day as the Bondi attack, he quoted Benjamin Netanyahu as saying that “antisemitism spreads when leaders stay silent”, linking the attack to the war in Gaza and adding that “Netanyahu wants antisemitism to be a thing, it validates him”. A day later he clarified, calling the attack an “atrocity” but repeated his attack on the Israeli prime minister.
His intervention was a gift to the opposition. The Conservatives immediately demanded Sir Keir Starmer condemn Vince, who has given more than £5m to Labour. He’s also given smaller sums to the Greens and Liberal Democrats.
The case reflects a debate over how much power and influence party donors wield, and simultaneously whether their donations buy them more attention than they deserve. While Vince was indeed a Labour donor, he hasn’t given them any money since May last year and isn’t a party member. How many headlines does £5m give you?
Between 2001 and 2019 there was a rapid rise in overall UK political party donations, irrespective of inflation. This increase has been mainly because of a rise in gifts from high-net-worth individuals, also known as “mega-donors”, although parties have other sources of income including membership fees and affiliations.
It’s a dilemma the Tories are well aware of. Before the last election, they faced pressure to return money from their biggest single donor, the entrepreneur Frank Hester, over comments he made to colleagues. Hester, who by then had given £10m to the Tories in a year, said looking at Labour’s Diane Abbott made him “want to hate all black women” and that the MP “should be shot”. The party, in need of the cash in the run-up to the election, resisted calls to return the money after Hester apologised, and then even accepted a further £5m.
Short of asking the public to fund political parties through general taxation, how do we call a halt to the arms race between the parties vying to outpace each other to secure donations to pay for staff, office space and campaigns?
According to the Electoral Commission, Reform UK received donations totalling more than £10.2m between July and September, including the biggest ever amount from a living donor: £9m from Christopher Harborne, a Thailand-based cryptocurrency investor. Reform outpaced the Conservatives, who received £4.7m in donations, followed by Labour on £2.2m and the Liberal Democrats on £1m.
Party strategists say modern communications mean the nature of election spending is changing. While they formerly used the bulk of funds in the weeks leading up to election day for leaflets and campaign posters, they now use the spending more evenly on social media campaigns and staff costs.
On Tuesday, Communities Secretary Steve Reed launched a separate investigation into foreign election interference “to get dirty money out of politics” after a former senior Reform UK politician accepted bribes to parrot Russian interests in the European Parliament.
Nathan Gill, Reform’s ex-leader in Wales, admitted he accepted bribes for television appearances and speeches, and last month he was sentenced to 10-and-a-half years in prison.
Reed’s review will report in March, by which stage the Elections Bill, to be published early in the new year, will be at a point where it can take on amendments.
However, behind closed doors in Westminster, some MPs want a general cap on political contributions, not just to bar wealthy international contributors.
The Elections Bill does not currently propose any monetary limitations on contributions. According to several MPs this represents a missed opportunity to clean up politics, and the bill will almost certainly be subject to amendments to introduce a total ceiling.
However, Government sources said a limit on contributions from British citizens would not secure enough cross-party support. “If a British businessperson has done well and wants to donate to a political party, I can’t see any support for stopping them,” a source suggested.
As for Labour, there are other squalls in their funding stream too. It would be easy to assume the party might be tempted to use a cap on donations to abandon financial aid from its largest union donor, since the affiliation occasionally seems more problematic than beneficial.
The Unite union gave the party £362,625 over the last quarter but arguably cost Labour much more in reputational damage. The problems ranged from the never-ending bin strike in Birmingham to ongoing criticism of Starmer from its general secretary Sharon Graham, to the left of this Labour Government. If Unite wasn’t affiliated to the Labour Party, her unhelpful public interventions would carry less weight.
According to a Cabinet minister, while it would be better for the party to keep the funding that comes with Unite’s Labour affiliation, hard-left factions in the union’s leadership mean it is out of touch with its membership, and wider party values.
“The battles in Unite’s internal elections are between different factions of the hard left, but their membership is not hard left. The membership will vote roughly in proportion with the population, so the leadership is not really representing its own members. So, if there was a mechanism to make the union more accountable to its own membership, then that would be a good thing,” the Cabinet minister told The i Paper.
“Have we done enough to democratise the trade unions? I don’t know. I think that’s very unfinished business myself, because the left that we kicked out of the Labour Party, that’s where they’ve gone. They’ve gone into the trade unions; that’s where they learn organising.
“That’s why the left is very process-focused; they found they could control these great big union machines with loads and loads of money, and influence politics that way, and could get a hearing electorally, because voters are repulsed by them. So, there’s a problem there. There’s a back door they can still come through, and we do need to look at how we close that back door.”
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Given Unite’s support for approximately half of individual Cabinet ministers’ general campaigns last year, it seems unlikely that any senior figure will distance themselves from the union.
Ironically, Dale Vince himself has called for a ban on political donations despite giving more than £5m to Labour – justifying his gift as evening up the playing field with the Tories.
Unless Parliament calls time on this arms race, the influence – and potentially embarrassing comments – of every party donor won’t end any time soon.
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