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Founder of Brexit campaign group Leave.EU, Arron Banks faces investigation by the National Crime Agency. 

Arron Banks investigated over £8m given to the Brexit campaign – what can this even buy you?

Dr Sam Power, Lecturer in Politics at the University of Exeter, writes for the Conversation UK

Founder of Brexit campaign group Leave.EU, Arron Banks faces investigation by the National Crime Agency after being referred to them by the Electoral Commission. The case centres around £2m that Banks (and his insurance companies) loaned to Better for the Country (Leave.EU’s parent company) and a donation of £6m made by Banks himself, on behalf of Leave.EU. Of this £8m, £2.9m was spent by the Leave.EU campaign.

The £8m that is under review is alleged to have come from a company called Rock Holdings which, while owned by Banks, is based in the Isle of Man, a British crown dependency that is not part of the UK, and therefore an “impermissable donor”. There are also questions being asked over the source of the funds after the Observer newspaper reported that between 2015 and 2017, the leaders of Leave.EU had multiple meetings with high-ranking Russian officials.

One thing we can do, without prejudicing an ongoing investigation, is contextualise the actual amount – the £8m – of money that is said to have changed hands. What can all this cash buy you on the campaign trail?

Spending in the 2016 referendum

Great Britain (the rules in Northern Ireland are slightly different) has a significant amount of transparency around campaign donations and spending due to the Political Parties, Elections and Referendums Act, a law passed in 2000. For example, we know that during the Brexit referendum campaign, major Remain groups spent about £16.2m and Leave groups spent about £11.5m. We also know that Leave groups reported donations of £16.4m compared to the combined total for Remain groups of £15.1m. Banks’ donation therefore represented a significant fillip to those supporting Leave.

We should be wary, however, of overstating the influence of money in elections. Remain actually spent considerably more than Leave and still lost. Similarly, the other big electoral event in 2016, the victory of Donald Trump in the US presidential election (a result also mired in controversy and accusations of Russian influence), saw the losing candidate, Hillary Clinton, spend more than the victor.

How the money gets spent

But what are these vast sums of money spent on? Again, we can dig around the figures from the Electoral Commission to uncover trends. Looking at general elections from 2001 onwards we can see that, over the past two elections a very clear trend has emerged.

The vast majority of all election spending tends to go on three activities: the circulation of unsolicited material, advertising and market research or canvassing. A similar story is told when looking at spending in the 2016 referendum. Out of the total £32.7m spend across all campaigns, £13m was spent in total by both sides on advertising, £8.7m spent on unsolicited material to electors and £1.9m spent on rallies and other events.

But by far the biggest story over the past eight years is the rise in digital campaigning – think ads you might see on YouTube, Facebook, Snapchat and Instagram. In 2016, campaigners spent 32.3% of their total advertising spend on digital (or around £5m), a figure that rose to 42.8% in 2017 (equating to around £4.3m) and had stood at just 1.7% at the 2014 referendum on Scottish independence (a mere £300,000).

This rise in digital campaigning raises a number of questions about the changing political landscape. Most notably, is this a new and existential challenge that undermines the democratic process and therefore requires new regulation? Or is it simply the same old style of campaigning, just packaged differently?

The jury is still out on the effectiveness of digital campaigns. It is possible that £2.9m spent online might go much further than the £9m the government spent on pro-EU leaflets sent through the door of every household, if nobody read them. But the potential to create more impressions is one thing. Whether digital campaigning actually leads to a greater number of people paying attention or becoming politically engaged is another.

Other reasons to donate

So what is the effect of these large donations? In search of an answer to this, I’ve devoted much of my research to asking a simple question to many big money donors: what’s in it for you?

The answer is, in typical academic fashion, complicated. Some, like Banks, donate and campaign for causes they believe in. But, more widely, money in British politics is generally linked with access to politicians. Access is, of course, very different to influence.

First, access can be a form social capital. Though these figures might seem astronomical to you or I, to the donor it’s often relative chump change. If you’re interested in politics, why wouldn’t you spend some money to go to dinner with a cabinet minister, or shoe shopping with Theresa May?

I’ve also spoken to members of the Conservative Party Leader’s Group, the party’s premier group of financial backers who are invited to join leading party figures at social events in exchange for £50,000 a year. They talk about the fees they pay a little like I might talk about my Netflix subscription. It’s a nominal amount that comes out of their bank account every so often. And much like discussing the latest prestige drama, for the rich and politically engaged there can be fewer greater pleasures than being able to boast that you were at dinner with the foreign secretary at the weekend over the garden fence.

There is, of course, also access as – perceived or actual – influence. This is the rather simple, most common, and perhaps most inaccurate of all the understandings of money in politics. That the money you provide gets you a seat at the table, and real influence in policy making. This might sometimes happen, as any number of cash for access episodes might indicate. But the problem is it’s very hard, nigh on impossible, to prove.

The best way to think about it, I think, is to consider the sage words of Kurt Cobain: “Just because you’re paranoid, don’t mean they’re not after you.” We could draw a similar sentiment when thinking about money in politics: just because there’s not always undue influence behind large donations – don’t mean that it never happens.

Date: 9 November 2018

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