| In February, the Conservatives confirmed that Frank Hester was the “biggest ever donor” to the party – giving £10m in a year. Hester told the Daily Telegraph that it was a specific endorsement of Sunak. Asked if he might give more before the election, he said: “If it’s going to help Rishi, then I would say, ‘Never say never’. I really think he’s the right guy.” Because Hester’s company had won NHS and prison contracts worth £400m over the last eight years, there was already scrutiny of his relationship with the party. Now the Conservatives reluctance to hand the money back has put a spotlight on his donations in particular – and the system of party funding in general. How important is Hester’s money to the Conservatives? Last year, the Conservative party raised £48m from donors; £10m of that came from Frank Hester. That money can be spent on the party’s ordinary running costs, but it is arguably most important as a contribution to the expense of running a general election campaign, from targeted online ads to telephone bills. Losing Hester’s £10m “would blow a really big hole in their finances”, Rowena said. “It would certainly be a problem for the party in the run-up to the election. Having said that, they’ve already comfortably exceeded raising the £34m they’re allowed to spend in the pre-election period – so others will argue that they would be able to handle it.” In any case, the clearest indication of the Conservative party’s own view of whether it needs the money is its actions: the easiest way to blunt the Hester story would be to pay the money back. So far, that hasn’t happened. What can donors expect in return for such vast sums? “The parties will tell you that the donors’ reward is the satisfaction of helping a cause that is close to their hearts,” said Rowena – and, of course, it is true that many wealthy people have strong political convictions. But there may be other factors in play, too. “We know that there is a pattern of donors tending to get access to ministers, getting invited to functions, and if they’re very big donors they may get to have discussions about policy areas that matter to them,” Rowena said. Hester said recently that he had had “some quite long conversations with Rishi about AI”. That’s perfectly legal – but many have noted that his company, the Phoenix Partnership, supplies computer systems to the NHS and has recently announced a “suite of AI solutions about to launch, focused on the NHS’s key clinical and operations priorities”. “If donors talk to politicians about party matters, they don’t have to be recorded anywhere,” Rowena said. “If those conversations veer into government business, they ought to be reported back to the relevant department. But it’s very difficult to know what happens in one-on-one conversations.” There is, meanwhile, the question of whether donors might get peerages or other honours in exchange for their money. In 2022, Rowena reported that one in 10 Conservative peers were big donors worth a total of £50m to the party. “The parties will deny this forever – but there is a clear correlation to honours,” she said. “But the parties say that they got there on their own merit.” (Hester does not have a peerage, and his prospects of getting one appear significantly smaller than they did a few days ago.) What are the limits on party funding? Political parties can take donations of as much as they like from private individuals registered on the UK electoral roll. Donations of more than £11,180 to the central party have to be reported to the Electoral Commission, recently increased from £7,500. Campaign groups are concerned about the loophole in donations from “unincorporated associations” – groups with loose registration rules that are allowed to donate up to £25,000 a year without declaring their sources. Last year, Politico reported that over the previous five years, such groups donated more than £14m to political parties. While there is no limit on donations, there are rules in place about how much the parties can spend on election campaigns. The government recently raised the spending limit for the pre-election period from £19m to £34m. That change reflects inflation since the limits were last set in 2000 – but, the Guardian’s Heather Stewart wrote in this excellent survey of the impact of money on politics on Monday, “the shift will only amplify the centrality of big money to politics in the UK, much of it raised from a small number of mega-rich donors”. Are Labour and the Conservatives evenly matched? | 