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Reform UK's £72m Shows Why Private Donations Must End
Firms donating to UK parties got £1,294 in public contracts for every £1 given. It's time to ban private political donations - here's how we pay for democracy.
Politics for sale? We must end it
With private money pouring into British democracy, it's no wonder recent polls show that the public has lost faith. We have a political funding model that allows private wealth to purchase access, influence, and most likely policy. Reform UK's recent £72m in donations are the obvious case: one of the highest-polling parties in the UK now has 80% of its funding from just two billionaires.
As political theorist Samuel Bagg notes, democracy relies on preventing the capture of our governing institutions by elite groups. Yet under the present rules, wealthy individuals and corporations can pour vast sums into politics, dwarfing the voice of the average citizen.
When a construction magnate donates £500,000 to the governing party, and his firm subsequently wins public contracts, the democratic principle is fundamentally broken. Our research has documented 373 companies that sit on both sides of this exchange: donating to parties while receiving public contracts. For every £1 these "giver and taker" firms have donated since 2000, over £1,294 of public funds has flowed back to them in the form of government contracts.
Our most recent analysis showed that Labour's business donations surged by 1,707% between the 2019 and 2024 pre-election periods, rising from under £1m to over £14m. But it is not a problem confined to just one party: corporate funding's share of all pre-election finance reached 29% in 2024 – the highest level this century. Tinkering with transparency requirements – as the recent Representation of the People Bill broadly proposes – is no longer sufficient and that Bill could well be a missed opportunity. What is needed is the elimination of private donations to political parties, replaced by a fair and transparent system of public funding.
Slashing the financial incentive would do three key things: it would dampen, or destroy, any informal agreements between donors and political parties, breaking the links of corruption; it would force parties to broaden their appeal in order to accrue a wider base of paid members; and most importantly it would be a clear signal to the public that politicians are no longer being bought off.
A predictable objection to public funding is that it is politically not viable, that the public will never accept "taxpayers' money going to politicians". This objection deserves serious engagement, but does not hold water.
Firstly, the framing is essential. Public opposition to "giving taxpayers' money to politicians" is understandable when more than two-thirds of Britons feel that politicians primarily act out of self-interest. Who would want to give politicians money when the question is posed in those terms? But when the same proposition is framed as "removing the ability of corporations and wealthy individuals to buy political influence", public support would likely flip dramatically.
France's ban on corporate donations was driven by a series of corruption cases. The partial public-funding mechanism was presented not as a gift to politicians but as the price of getting private money out. Thus, much depends on whether it is presented as the cost of cleaning up politics or as a subsidy for politicians.
Secondly, this is not a radical experiment: banning donations is established practice in countries the British public would recognise as its democratic peers.
If private donations are to be banned, the replacement must be credible, fair, and resistant to partisan manipulation. We propose two models: a dual-channel "multiplier" and a "democracy voucher".
Backstop
At the heart of the multiplier proposal is a simple idea: tie every party's annual budget to the size of its democratic membership. The state would pay £50 a year for each paid-up member of any party holding at least one Commons seat – a formula that would provide a decent budget for today's politics, and rewards parties for doing the unglamorous work of persuading real people to sign up.
To stop this from quietly hollowing out smaller parties, a Participatory Democracy Fund would sit behind it as a backstop, guaranteeing every qualifying party a floor of £3m a year so that no party with a parliamentary foothold is starved out of meaningful political life. And crucially, membership subscriptions would remain in place, but capped at £10 a month.
At today's membership levels, this model would cost the taxpayer just over £50m annually, which could be paid for entirely from a ring-fenced fund drawn from the highly profitable Crown Estate.
This is an incredibly low price to pay for a cleaner, more engaged politics: we would shift the balance of power overnight, from a small elite to a wider electorate whose political convictions now carry new weight. With such a system in place, the billionaires who want to buy our democracy would be shut out for good.
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