Is Britain a Chumocracy?

Data on political donations from the Electoral Commission shows that money in politics is much more a question of the exercise of class power of capitalists rather than direct corruption.

9 min read

A series of outsourcing scandals by the Tory government over the last year has led to the adoption of a new term to describe the close relationship between the Conservatives and their corporate allies: the Chumocracy. From the alleged preferential treatment given by Housing Minister Robert Jenrick to private developer and Tory backer Richard Desmond to the granting of a Covid test production contract to Matt Hancock’s neighbour, these scandals have revealed egregious deal-making between the government and companies that have either donated to them in the past or have personal relations with ministers. The latest of these involved the paltry food parcels sent to the families of poor children by a firm with close links to the Tory Party. In this case, the former chair of the Compass Group (which owns the rent-seeking caterer, Chartwells, behind the food parcel scandals) is a Tory donor and former business advisor to the party. But there is more to the world of party political donations than backslapping and favours. As the Electoral Commission’s searchable database on donations to political parties in the run up to the 2019 general elections shows, an unprecedented amount of cash was mobilised to support the Tory campaign effort. This data supports the view that some donors are highly ideologically and politically motivated representatives of the most mobile and active layers of British capitalism. This class power of leading capitalists is often ignored - or even actively obscured - in accounts of money in politics. Many are quick to point to self-interest or sheer corruption to explain the involvement of big money in politics - avoiding the question of capitalists’ specific political interests.

Along with the depiction of Tory donors as simply self-interested contractors out for a quick buck, some reporters have encouraged the public to view such donors as part of a secretive cabal of money men – often of dubious foreign origin – funded by ‘dark money’ and driven by a desire to distort democratic outcomes. Otherwise insightful investigative reporting by OpenDemocracy (among others) is coloured by this conspiratorial edge. This conspiracism ultimately serves to let the British capitalist state and the general class power of leading capitalists off the hook, by implying the alternative possibility of an uncorrupted, neutral British state. While there is no doubt that money is having a corrosive effect on democracy and that there are plenty of donors who are motivated by raw self-interest alone, there is another way of thinking about the impact of party political donations. Particularly in the run up to general elections, donations to parties (rather than significant individuals) can arguably tell us a lot about who the most politically active capitalists are and what exactly they want.

The conspiracism of 'dark money' ultimately serves to let the British capitalist state and the general class power of leading capitalists off the hook, by implying the alternative possibility of an uncorrupted, neutral British state.

The Electoral Commission’s data is readily available from its website and the views of donors are a matter of public record. What these sources tell us is that few donors feel any great need for secrecy or dissembling about their strong ideological preference for a Tory government. Particularly in 2019, an unprecedented avalanche of cash boosted Conservative Party campaign efforts.

According to the data, daily total donations to the Conservative Party spiked dramatically following the announcement of the highly anticipated General Election on 29th October 2019. Many of the Party’s largest donors stepped up the size and frequency of their donations around this time, including frequent individual donors such as Peter Cruddas (a banker and disgraced former party treasurer who resigned over the cash-for-access scandal in 2012 before being ennobled in 2020) and lesser known financial firms like IPGL and Flowidea. The former is the investment vehicle of billionaire Tory backer Michael Spencer. The latter is linked to City of London investment banker Henry Angest. Both are former Tory Party Treasurers. Major donors also included Mercantile & Maritime Ltd, an oil and gas shipping company whose directors include Murtaza Lakhani and former senior army officer, Lord Charles Guthrie. Familiar faces such as Lord Bamford, the Brexit-supporting head of JCB and long-term Tory collaborator, also make appearances. There were fifty-eight individual donations from firms registered at addresses in the City of London. There were sixteen donations of between £500,000 and £1 million in the period; seventy-four of between £375,000 and £100,000. Many of these were returning donors who nevertheless vastly increased the scale of their contributions relative to previous elections. The daily high for total donations was reached on 7th November 2019 - shortly after the election was announced.

As was widely reported following the election, the Conservative Party raised over £37 million in the last three months of 2019 – a record for any general election and a startling increase on previous years. The number of donations from individuals vastly outstripped those of companies. But among the largest single donations to the central party were major companies such as JCB and the publicly-traded Bridgemere company (a property company run by Stephen Morgan CBE). Of the 58 donations from companies registered at City of London postcodes, the most prolific was ‘self-made’ billionaire Michael Alan Spencer’s (Baron Spencer of Arlesford) investment company, IPGL ltd. Several single donations of over £1 million were made over the course of the election – including that by the aforementioned Bridgemere. Peter Hargreaves (of the financial services company Hargreaves Lansdowne) and the theatre entrepreneur John Gore made up the other £1 million one-off donors. Other major donors include Peter Wood and John Caudwell, the founders of GoCompare and Phones4You, respectively.

Some of these figures are more retiring than others, but of those who court the public eye, Michael Spencer is perhaps the most revealing. Spencer is a so-called ‘self-made billionaire’ who started the inter-trader broking firm ICAP. His personal vehicle is IPGL and it is through the latter that he made a string of donations to the Conservative campaign in 2019. Spencer is a former Conservative Party Treasurer and is vocal about his support for the cause.

ICAP was implicated in the infamous LIBOR fixing scandal – a fact which apparently denied Spencer a peerage under the Cameron government (ICAP’s brokers were later cleared and at least some of the fines levelled against the firm were scrapped). The power of inter-trader broking firms like ICAP – which later became NEX before being sold off to a US based investment firm – is based on their ‘market making’ role in so-called over-the-counter (OTC) markets. Without the aid of a centralised exchange, firms like Spencer’s match buyers with sellers and take a cut of the profits. They have privileged access to pricing information and can potentially use this monopoly to their benefit. It was precisely this kind of power, which, according to the Guardian, allowed the LIBOR scandal to unfold.

Spencer is not shy about his political allegiances. He spoke openly about the ‘really quite severely bad’ consequences of a Corbyn election victory and the need to ensure that the Tories won a workable majority. Of particular interest is his reference to the reaction of capital to a Labour victory. Capital flight, he predicted, would necessitate restrictions on the free movement of capital. ‘New investment in the UK will shrivel,’ Spencer is reported as saying. ‘Why on earth would you invest money in the UK if you know you’re going to have ten per cent of your company taken away from you by a Labour Government with no compensation and where, if you have a public company, it might be nationalised?’ Spencer is referring here to the structural power of capital over the economy. The threat of capital flight is used to ward off political challenges to the power of capital. The likes of Spencer use donations where they need to secure electoral outcomes - but they can also use their ‘structural’ power - that is, the threat of a capital strike - to ward off any unfavourable action by politicians.

What the 2019 General Election data on political party donations shows, then, is an unprecedented mobilisation of specific groups of capitalists for the purposes of defeating the socialist threat of a Corbyn-led Labour Party. The ‘instrumental’ power of capitalist wealth (that is, the power of money to influence particular decisions or to curry favour with specific politicians) may not be well captured in this data. Instead, the data reveals how some capitalists work for political ends to which they are ideologically committed. It should be clearly stated that these donors do not include the entire capitalist ‘elite’ as it exists in the UK. Though there is significant crossover with, for example, the Sunday Times Rich List, the two are not identical. Many of the super-rich prefer not to associate themselves directly with party politics – or do so only rarely. The structural power of capital – its freedom to move, to undermine government action, to threaten the basic investment functions on which the capitalist economy relies – is not purchased through the political donor system. Instead, it is constituted at the level of social production relations – that is, in the basic dependence of most people on wages earned from capitalist enterprises – and reproduced through the state – which is reliant on and co-constituted through the economic order that derives from capitalist investment and wealth.

Whereas workers require permanent organisations (specifically, trade unions and parties) to articulate and represent their interests, capitalist political organisation is generally less collective and durable - as argued by Offe and Wiesenthal. That is because the imperatives of the capitalist system are such that many capitalists benefit without needing to explicitly fight for their interests. Many of the super-rich either don’t involve themselves in the dirty work of politics because they rely on their structural power or because they want to avoid the negative reputational costs of associating with one or other political party. Nevertheless, during general elections, some capitalists make much more obvious, concerted political efforts to secure favourable outcomes – a fact which is particularly clear in the case of the 2019 election. This may well have been because for certain groups of capitalists – those heavily materially and ideologically invested in UK politics – Corbyn represented an extreme threat to their way of life. These capitalists may be those who are based mostly in the UK and are heavily reliant on the specific model of capitalist accumulation used here. The 2019 donors include a great number of government contractors, private property firms, and financial companies that are registered in the UK and are emblematic of its rentierised economy.

Whereas workers require permanent organisations, capitalist political organisation is less collective and durable. That is because the imperatives of the capitalist system are such that many capitalists benefit without needing to explicitly fight for their interests.

The left is often inclined to think of capitalist politics in terms of hegemony – that is, who or what sectors comprise the ruling ‘bloc’ of a given polity and how do they exercise ideological leadership over others? But, in this case at least, it may be more revealing to think in terms of the most politically active capitalists in a system that broadly tends towards rentierism. The latter – usefully defined by Brett Christophers as a set of behaviours that exploits monopoly control of scarce assets in order to extract profits – has evolved in the UK out of the defeat of the labour movement, the privatisation of public assets, and the general increase in capitalist social and political power since the mid-1970s. Corbynism represented a political threat to this system – and so provoked unprecedented financial action by politically active capitalists in the run up to the last general election. The politically ‘active’ capitalists we see donating to the Tory Party may see their futures are particularly bound up with that of the UK economy: they are those with an interest in and a political will to entrench the UK’s deregulated, rentierist status quo. It must also be acknowledged that there is major crossover between the top Tory donors and those who gave generously to the different Brexit campaigns. Beyond raw self-interest, there is a political project here that involves both destroying the socialist threat and using Brexit to impose further deregulation on the UK economy.

The widely-held view that British politics is dominated by a “Chumocracy” does point to the deal-making of networks of self-interested elites, but fails to capture the full and specifically political dynamics of British capitalism. At the same time, the argument that the secret sources of ‘dark money’ are driving perversions to democracy such as Brexit ignores the truth that is hiding in plain sight. This is that politically active capitalists take perfectly legal action to pursue their ideological goals. At the 2019 general election, they successfully defeated the Corbynite threat to their power. That power is rooted not in political donations or lobbying per se, but in the class system – in other words, their power over the lives of working people. Given Corbynism’s defeat and subsequent disappearance, the liberal public sphere is not likely to learn this basic lesson of political economy any time soon.


Adam Blanden (@Adam_Blanden)

Adam Blanden lives and works in London.