What do Labour’s donors want from Andy Burnham?

Remember that piece I wrote about how Labour has become a cartel party dominated by donors and lobbyists and that wasn’t going to change under Andy Burnham? Well, we just found out that Burnham received £345,000 in donations over the course of the past year and almost half of that came from one source: Lord Sainsbury.

The donations that the main parties receive reflect the class interests of different sections of capital. The Conservatives (and now Reform) are closer to what might be called ‘footloose’ capital – sectors like tech, real estate, and certain parts of finance that aren’t as dependent upon state or consumer spending for their revenues. The priorities of this group include influencing regulation, shaping trade and investment policy, and extracting grants and subsidies from government.

Labour donors, meanwhile, tend to derive a significant share of their profits either from consumer spending (like Sainsbury’s), or the state itself (e.g. management consultants, outsourcing firms). This group favours maintaining decent levels of public spending – either because it benefits them directly, or because it stimulates consumer demand. They also expect to be able to extract favours from Labour governments.

This picture is somewhat simplified – a lot of capitalists will simply spend their money supporting whichever party they think is most likely to win. And we can’t completely discount the high-minded reasons that many big donors claim motivate their support – no doubt many of these are sincere. But it is nevertheless true that both Sainsbury’s the supermarket – and Lord Sainsbury himself, who was made a peer in the late 1990s – have benefitted substantially from their relationships with the Labour Party.

Naturally, this relationship was discontinued under Jeremy Corbyn. Policies like nationalising public utilities, taxing wealth, and investing in public services were clearly a step too far for Sainsbury. Labour’s big business donors want public spending that stimulates consumption – not public spending that makes it easier for people to survive without lots of consumption. And they certainly aren’t in favour of public ownership.

Capitalists like Sainsbury know that their wealth and influence are safe in the hands of someone like Burnham, who wouldn’t dare to challenge the economic status quo. His major intervention to tackle the cost-of-living crisis has been a ban on subscription traps, and his major intervention to tackle the climate crisis has been a ban on disposable barbecues.

And it’s not just Sainsbury. Burnham’s government is just as captured by vested interests as was Keir Starmer’s. The most direct example of this corporate capture comes in the form of Burnham’s stance on North Sea oil.

We know that the Labour Party has taken cash from vested interests linked to the fossil fuel sector. Now, it’s been revealed that the Housing Secretary, Angela Rayner, took £20,000 from a major oil lobbyist. Signum Global Advisors made the donation towards Rayner’s staffing costs in July. Earlier this year, Signum organised a trip for oil execs and hedge fund managers to Venezuela to discuss opportunities for exploiting the country’s oil wealth.

The sums involved are not particularly significant – but that’s not really the point. The relationships being built between the oil lobby and this Labour government are more subtle than an exchange of cash for favours. The oil lobby clearly has the ear of senior Labour politicians, giving them the chance to present their well-honed, and highly selective, arguments in favour of new North Sea drilling. These people are paid to convince politicians that their clients’ interests are completely in line with the national interest – and they’re pretty good at it.

Meanwhile, those on the other side of the argument simply don’t get a look in. Where the oil lobbyists are the same calm, reasonable men with whom these politicians attended school and university, climate activists are seen as an unhinged, idealistic rabble with no understanding of the challenges the country faces. And this image strengthens when the only opportunity the climate movement has to address politicians is by shouting at them during protests – while the oil lobbyists are invited into Parliament to calmly make their case over tea (or cheap pints).

This is a great example of what Marxists mean when they say that the state is a social relation. The people with power outside of formal state institutions are much better able to wield power within them. And those without this same influence are left shouting from the sidelines.

Subscribe to read more, and access this week’s podcast. Can’t afford it? DM me for a solidarity discount!