When parties become vehicles for vested corporate interests, democracy is fatally undermined

Martin Shipton

It was Deep Throat in All The President’s Men, the film based on the Watergate scandal that led to Richard Nixon’s resignation as US President, who popularised the phrase “follow the money”.

Fifty years later, it’s as pertinent as ever in these strange and volatile political times.

Another phrase – this one in Latin, is also relevant: cui bono? Who benefits?

As things stand, Nigel Farage and Keir Starmer lead the two parties that are likely to be the main contenders at the next general election: Reform UK and Labour.

It’s important to understand where both parties are getting their funding from, and how that is likely to influence their policy positions.

Those who make donations to political parties do so for a reason. It would be good to think they did so out of pure altruism. Some undoubtedly do – those with a profound and lifelong commitment to the cause of Welsh independence, for example. It’s also true that some with what I would regard as a misguided belief in the nature of sovereignty were impelled to back groups campaigning for the UK to leave the EU at the time of the referendum in 2016.

Nevertheless, the great majority of those who make large donations to political parties do so because they want something in return.

Vaughan Gething’s fate was sealed when he accepted donations totalling £200,000 from a businessman who had been convicted of environmental offences. The businessman’s attempt to convince us that he simply considered Mr Gething the best man for the job was not seen as credible. He may as well not have bothered to make such an assertion or Mr Gething to have repeated it.

There is no reason why we should be any less suspicious about the sources of money that make it possible for parties to employ their staff and fund election campaigns.

Both Reform UK and Labour need to face much more scrutiny over the donations they have received.

It’s naive to assume that there is no correlation between the policies they are putting forward and the donations they have received.

Easy ride

Reform has had a very easy ride up until now. Their appeal has largely been based on the extremely superficial charisma fostered by Farage as a bloke who would be good to have a pint with in the pub – with those adopting such a view oblivious to the likelihood that he would regard them as a bunch of oiks. The other pull factor has been the amplification of the small boats phenomenon by right wing news outlets and social media channels who blame it for all of Britain’s ills. Such outlets, as well as Reform itself, fail to mention that the small boats issue has been made worse by Brexit, for which Farage himself is largely responsible.

At last Reform is revealing more about its approach to the economy, with Farage delivering a keynote speech on the subject the other day.

Having previously promised to raise the level at which people stop paying income tax from £12,570 to £20,000, bringing many out of tax but costing the Treasury more than £40bn, Farage now says the £20,000 threshold is an eventual aspiration rather than a firm commitment.

He also stated: “When it comes to Brexit … we have not taken advantage of the opportunities to deregulate and become more competitive. The harsh truth is that regulations and regulators, in many areas, are worse than they were back in 2016.” He didn’t, of course, mention that thousands of businesses that trade with the EU have had extra bureaucratic burdens placed on them as a result of Brexit. And by mentioning “opportunities to deregulate”, he is hinting at lowering standards aimed at protecting consumers, human health and the environment.

Wealthy people

On the two-child benefit cap, Farage says it would only be lifted for UK nationals in circumstances where both parents work.

In his speech Farage emphasised the need to provide a tax system that didn’t drive wealthy people out of the UK – a broad hint that he’d cut their tax burden as a priority.

He also ramped up the rhetoric against net zero, instead promising to prioritise new drilling for fossil fuels in the North Sea.

We already know Reform’s negative attitude to workers’ rights from the party’s MPs’ decision to vote against the measures introduced by Labour. Farage indicated that he would favour cutting the minimum wage for young people.

Such policies are not coincidental.

As a bulletin from the campaign group Open Britain put it: “Nigel Farage wants you to believe he’s shaking up the establishment. That he’s the outsider who finally speaks for ordinary people. But today, you can see who he’s really fighting for.

“Farage has outlined a new economic plan, and it’s not for the people who keep this country running. It’s a plan written for the people who fund him.

“Since the general election, Reform UK has pocketed millions in donations from wealthy business interests. Property firms, investment companies, and wealth funds who don’t hand over that kind of cash for nothing.

“Now Farage has announced plans to deregulate big business while ditching tax cuts for ordinary people.

“And just to underline who he’s really answering to, his party has also proposed cutting the minimum wage for young workers.

“Nigel Farage isn’t a party leader. He’s a CEO. And his investors have spoken.”

Cap

Open Britain goes on to call for “a cap on big money in politics, so access and influence can’t be bought, transparency for every pound that shapes our democracy, strong, independent watchdogs that keep money and power in check, as well as a fair voting system, so seats in Parliament match votes and governments reflect the public’s interests.”

Reform, however, isn’t alone in being beholden to its corporate donors. Labour has haemorrhaged hundreds of thousands of members since Starmer became leader, as well as alienating some of its traditional trade union backers, most prominently Unite. Inevitably that has left the party more reliant on donations from wealthy individuals donors and their businesses.

At a time when the majority of Labour’s traditional supporters have been appalled by Israel’s murderous attack on the people of Gaza, the party has received substantial donations from supporters of Israel. No wonder it refuses to accept that a genocide has been taking place.

In addition, Labour has accepted its biggest ever single donation of £4m from the hedge fund Quadrature Capital, which held $121m worth of shares in a range of arms, tech and logistics firms that have all supported Israel’s ongoing military campaign.

They include companies that help make Israeli F-35 fighter jets, which have been used in devastating airstrikes on a so-called humanitarian zone.

Owned via the Cayman Islands tax haven, Quadrature Capital’s donation was the sixth-largest donation in British political history.

When parties become vehicles for vested corporate interests, democracy is fatally undermined.