Donations to Political Parties
Debate between Lord Sikka and Baroness Blake of Leeds(2 days, 12 hours ago)
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Lord Sikka (Lab)
My Lords, this week Transparency International published its global index on corruption. The UK has dropped to its lowest ever score and now is more corrupt than Estonia, Hong Kong, Uruguay, Japan, Ireland and Australia. The main reason is that political parties and too many legislators are available for hire to corporations and the super-rich. Of course, corporations and the super-rich do not donate; they invest and expect a return. The grateful politicians oblige by organising threatening issues off the political agenda, feather-duster regulatory systems, tax perks to the rich, crony contracts, VIP lanes, honours and even peerages. This skulduggery happens behind a wall of organised secrecy.
In the 2023 OECD Open, Useful and Re-usable data (OURdata) Index, the UK was ranked 25th. It is now less open and transparent than Colombia, Denmark, Estonia, France, Ireland, Korea, Lithuania, Poland, Slovenia, Spain and Sweden—what a state of affairs. In the year before the 2024 general election, companies handed £42 million to political parties and individual legislators. The Conservatives accepted £15 million from Phoenix Partnership, which is wholly owned by Frank Hester, even though he said that MP Diane Abbott made him “want to hate all black women” and that she “should be shot”. Since 2016, Hester’s company has received £591 million from public contracts. Labour received £4.7 million from Quadrature Capital, a company controlled from the Cayman Islands. Not so long ago, Elon Musk promised £100 million to Reform UK to secure his ideological objectives.
The Electoral Commission does not know the origins of money used as political donations. Any person on the electoral register can pass money, whether from Elon Musk or the Mafia, as political donations. No one knows where foreign-resident UK voters get their money from. Even if the Electoral Commission could investigate, it will not get access to foreign bank accounts and cannot follow the money trail, so there is no way of stopping any foreign money. Companies registered in the UK can hand money to parties, but this does not have to come from their trade or profits in the UK. Even if that requirement were introduced, it could not be effectively implemented. Profits can be manufactured through intragroup transactions and aggressive accounting. In any case, small companies that frequently front these donations on behalf of the rich do not publish meaningful accounts because of the obsession with deregulation.
Greater transparency is considered to be good, but that alone will not end political corruption because political parties remain for sale to the highest bidder. The biggest casualty of political donations and corruption is confidence in the institutions of government. In the 2024 general election, the voter turnout was 59.9%, and people say to me, “It doesn’t matter who we vote for. Corporations and the super-rich always win because they fund parties and legislators”. Policy-makers eagerly meeting donors rarely show the same enthusiasm for meeting the homeless, the hungry, the less fortunate and the poor, who seem to be written out of the system altogether.
Normal people cannot fund political parties or buy suits and glasses for Ministers and they are on the receiving end of some terrible policies. More than 120,000 people die every year from fuel poverty, but Governments do not curb profiteering or upset the interests of corporations and the rich. By design, the poorest 20% pay a higher proportion of their income in taxes than the richest 20%. Some 300,000 people die every year while awaiting a hospital appointment, sacrificed to the so-called fiscal rules.
Abraham Lincoln associated democracy with government of the people, by the people and for the people. Such an ideal cannot be achieved as long as big money can buy political parties and legislators and subvert public choices. We need to end the direct funding of political parties by corporations, trade unions and the rich. I have already argued that it is impossible to keep foreign money out of politics. Corporations can be used, and have been used, to circumvent constraints. Some want to put an upper limit on corporate and personal donations; of course, only corporations and the rich will still be able to fund parties and the corruption we suffer from will continue. Normal people cannot compete in this kind of arms race. In a country where 24 million people live below the minimum living standards, handing more of their income to political parties is simply not possible at all.
The press release issued last night on the Representation of the People Bill suggests that the Government will tweak the system, but that tweaking will not end the political corruption. It will not stop the rich and corporations buying the political system. We need a fundamental rethink. My proposal is this: no limits on political donations on any legal or natural person, but no political party may directly receive a penny from them. All the money should go into what I call a fund for democracy, then that money should be shared in accordance with political parties’ share of the vote and membership. Parties producing good policies will get a bigger share. On realising that they cannot buy the political system, corporations and the rich will inevitably stop political donations. At that point, we can discuss the alternatives, including possible state funding of parties.
Finally, we cannot not have government of and for the people without ending direct political donations. Will any party rise to the challenge and rid us of inbuilt political corruption?
Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)
My Lords, Members may have noticed that the clock is not working at the moment. I ask noble Lords to stick to their time limit of three minutes—I will wave when their time is up—because we need to make sure that we have time for the Minister’s response.
Independent Commission on Adult Social Care
Debate between Lord Sikka and Baroness Blake of Leeds
Baroness Blake of Leeds (Lab)
One of the real differences in the work that the noble Baroness, Lady Casey, is embarking on is that she is committed to working with unpaid carers. The noble Baroness, Lady Tyler, raises a critical point. We know how much this country relies on unpaid carers. I am pleased that we have raised the earnings limit by the highest amount since it was introduced, but the figures are staggering. The significant number of people who are carers has to be taken into account. I am delighted that the noble Baroness, Lady Casey, will work with vested interests, and unpaid carers come very high up that list.
Lord Sikka (Lab)
My Lords, between 2011 and 2023, 804 out of the 816 adult care homes that were forcibly closed by the Care Quality Commission in England were run for profit. Corporations running such homes have had profit margins of 35% to 40%, removing billions from front-line services, as is the case with many privatised essential services. Can the Minister say when the Government will end profiteering in the adult care sector?
Baroness Blake of Leeds (Lab)
My noble friend raises an important point. I would stretch that out to talk about the care market’s sustainability. The whole system is in real difficulty, not least because of the funding taken away from local authorities over the past 14 years. Local authorities have had difficulties in sustaining provision. Of course, the whole market needs to be looked at so that we can find the most cost-effective and efficient ways forward which benefit the most people from the most vulnerable cohort in our society.