Wednesday, February 05, 2025
Are Labour's donors dictating policy?
The paper says that the plan, if implemented, would have scuppered any potential donations from the billionaire Elon Musk to Reform UK by making it illegal to donate unless donors were registered to vote in the UK or via companies owned by people based in Britain:
Labour has received £4m from a hedge fund based in the Cayman Islands, Quadrature Capital, though it pays corporation tax in the UK on profits.
But Lord Alli, the party’s fundraising chief in opposition, is said to have stopped the planned speech by Angela Rayner, the deputy prime minister, and Gordon Brown to announce the changes, according to a new book about Labour’s path to power.
The former Labour prime minister had already booked accommodation in London for the speech announcing the changes when it was canned, according to Get In, by Patrick Maguire and Gabriel Pogrund.
Labour and Alli declined to comment.
The book contains a leaked policy paper for the speech intended to take place in December 2023 at Chatham House – and suggests it had been signed off by Morgan McSweeney, Starmer’s now chief of staff.
Though McSweeney was reportedly concerned about seeming anti-donor, he is said to have agreed the plan on the basis it would prevent donations from those without “skin in the game”.
A Labour source told the authors that Alli had intervened to pull the announcement with a week to go, with no explanation.
Labour is said to be examining proposals to limit how much individuals and companies can donate to political parties as part of an effort to tighten the rules around money in UK politics. The Institute for Public Policy Research has recommended that ministers limit individual and corporate donations to political parties to £100,000 a year.
In its manifesto, Labour committed to “protect democracy by strengthening the rules around donations to political parties”. At the core of this promise was an aim to tighten protections around foreign interference in UK democracy.
Donation caps are among a number of measures the government is looking at as part of plans for an election and democracy bill in the next parliamentary session. The bill did not form part of the king’s speech in July.
According to the policy paper quoted in the book, Rayner’s proposal was to “close loopholes in UK donation law which currently allow dodgy money to enter our politics – primarily through the Tory party – via shell companies or companies with no connection to the UK.
“This policy will provide us with a robust defence to the Tories’ attack on our donations by laying out with full transparency the robustness of our donation due diligence, and inviting the Tories to close loopholes which allow foreign money into UK democracy.”
Whatever the truth, the impression that the government us being led by its donors is terribly damaging and of course plays into the hands of both Nigel Farage and the Tory Party.
