Guardian Exclusive: Election strategy of ‘not being the Tories’ is a timebomb, says Labour-linked thinktank Compass
Keir Starmer’s focus on winning over voters from the centre-right has delivered Labour a large but fundamentally shallow electoral win and a weak mandate to deliver real change, a report from a Labour-linked thinktank has warned.
The report by Compass, titled Thin Ice, argues that Labour should be less worried about losing 2024 voters to Reform UK and the Conservatives than to the Liberal Democrats and Greens, arguing this is the greater electoral risk.
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The Compass report sets out what it says are the fragile foundations of this victory, noting that Labour won 131 seats with majorities below 5,000, and that its total of votes won in the 31 “red wall” seats taken back from the Conservatives was actually slightly lower than in 2019.
“They won [in those seats] because they were not the Tories, because Tory voters stayed at home and because Reform split the regressive vote,” it concludes.
Hedge fund Quadrature Capital has given £4m to Keir Starmer’s Labour – the largest donation in the party’s history | Jack Taylor – WPA Pool / Getty Images
Quadrature’s donation is noteworthy not just for being Labour’s largest-ever, but for its timing ahead of election
The Labour Party’s largest-ever donation came from a Cayman Islands-registered hedge fund with shares worth hundreds of millions of pounds in fossil fuels, private health firms, arms manufacturers and asset managers.
While the £4m donation by Quadrature Capital is the sixth-largest in British political history, it is noteworthy not just for its size, but also its timing.
Electoral Commission records suggest Labour received the donation in the one-week window between former prime minister Rishi Sunak announcing the general election and the start of the ‘pre-poll reporting period’ in which all political donations over £11,180 had to be published weekly, rather than the quarterly norm.
This means that despite being made on 28 May, Quadrature’s generous donation was published by the Electoral Commission only last week, more than two months after Labour won the election.
Neither the Labour Party press office nor No 10 responded to openDemocracy’s questions on whether the timing of accepting this donation was intended to minimise scrutiny and critical coverage during the election.
Paul Holden, an investigative journalist and author of The Fraud, a forthcoming book on Starmer’s leadership, told openDemocracy that the donation’s timing fits the Starmer project’s pattern of delaying the disclosure of potentially sensitive or controversial political donations.
Holden said: “Sir Keir Starmer and the organisations close to him have an unfortunate history of reporting donations in controversial ways.
“During his bid to become leader of the Labour Party, Starmer refused to contemporaneously publish details of who had donated to his leadership campaign. His rivals, Rebecca Long-Bailey and Lisa Nandy, agreed to share details of their donors in real-time, which they published. Starmer, however, decided only to declare his donations via his MP’s register of interests, which created a significant lag between when Starmer accepted his donations and when they were made public.
“Labour members, as a result, had no idea at the time of voting that Starmer had been funded with large donations from the likes of wealthy millionaires like Martin Taylor and Sir Trevor Chinn and Baron Waheed Ali; the latter now at the centre of the furore about Starmer’s acceptance of gratuities.”
Holden also referred to a fine issued by the Electoral Commission to Starmerite think tank Labour Together in 2021 for its failure to declare donations worth more than £800,000 – including £730,000 received while it was under the directorship of Starmer’s key adviser and No 10’s director of political strategy, Morgan McSweeney.
openDemocracy has consistently reported on Labour’s increasingly strong ties with the financial sector in recent years.
The party has received more than £8m from businesses or people linked to the financial industry since Starmer became leader in 2020 and now boasts two multi-million-pound donors from the world of hedge funds; Quadrature and Taylor, who has managed several billion-dollar funds over his career.
While Quadrature had not donated to Labour before May, one of its senior employees has contributed significantly to the party under Starmer. Daniel Luhde-Thompson, a strategic adviser at the firm, has given the party more than £500,000 this year, according to the Electoral Commission.
Transparency campaigners have warned Quadrature’s huge donation raises questions about what the financial sector is getting in return.
Rose Whiffen, senior research officer at Transparency International UK told openDemocracy: “When the public see political parties relying on such large sums of money in donations from private sources, it understandably raises questions as to in whose interest politicians are working and can give the impression our democracy is for sale.
“More must be done to take this kind of big money out of politics. The new government should commit to introducing caps on individual donations to tackle this problem [and] restore public trust in how our democracy functions.”
Green Party co-leader Zack Polanski told openDemocracy that the donation shows Labour now “stands for multi-millionaires and billionaires over our working-class communities”.
Polanski said: “Far from being the party in service of working people, Starmer’s Labour Party seems indebted to the bankers and bosses who profit from pillaging our public services and our planet.
“Simply ‘following the rules’ and declaring donations isn’t enough to cast aside the doubts that the main parties have their loyalties tested by big donors. It’s time to implement strict rules on funding political parties, including a cap on how much any individual or business can donate to politics. Elections should be won by the people with the best ideas, not the parties with the biggest donors.”
Registered in the Cayman Islands
Quadrature Capital has a diversified share portfolio worth around $6bn, according to records filed with the US Securities and Exchange Commission (SEC) last month.
After its donation was made public last week, the firm shared a statement on its website.
It said: “In May 2024, we came to the view that a UK government with a commitment to the green transition of the economy would have the ability to drive change that is so urgently needed. Having analysed commitments set out by each party, we donated £4m to The Labour Party, in support of policies that will deliver climate action while also promoting social equity and economic resilience.
“This was a values-based donation, not a political donation, as Quadrature Capital Ltd remains non-partisan and apolitical. Going forward, our private giving will continue to be led by our values, and any further donations to political parties will depend on the parties’ commitments, track record and alignment with our mission for sustainable and equitable growth.”
Last year, the Guardian reported that despite donating to environmental charities through its climate foundation, Quadrature had holdings in fossil fuel companies worth more than $170m. The paper highlighted three holdings in particular with major polluters: ConocoPhillips, Cheniere Energy and Cenovus Energy.
openDemocracy’s analysis of the firm’s latest SEC filings shows that Quadrature has since increased its holdings in Cenovus, which was this year fined millions for an oil spill that released 250,000 litres into the Atlantic Ocean. Quadrature has scaled back its holdings with the other two firms but has taken up a major $67m stake in ExxonMobil, one of the largest oil and gas producers in the world.
Among Quadrature Capital’s other investments, its largest holding is in Apple, valued at $231m, and among its 10 largest holdings are other ‘bluechip’ stocks like Amazon, Shopify and Costco.
Quadrature also maintains significant holdings in the arms manufacturers Northrop Grumman ($31m) and Lockheed Martin ($6m); US private healthcare companies such as UnitedHealth ($31m) and HCA Healthcare ($16m); some of the largest asset management companies like Blackstone ($22m) and KKR ($7m), who potentially stand to benefit significantly from Labour’s plans to utilise private investment for infrastructure; and tech firms, including Palantir ($71m) and Oracle ($8m).
UK accounts filings for the firm show profits before tax of more than £230m in the financial year ending 31 January 2023, but paid corporation tax of only £5.3m. As is noted in the accounts, had the firm paid the standard rate of UK corporation tax of 19% during that period, this would have amounted to more than £43m.
The UK-based fund paid out £343m in wages last year – an average of £3m for each of its 113 employees – while back in 2021 one of its founders was eyeing a luxury central London penthouse valued at around £110m, according to a report by Bloomberg that cited “two people with knowledge of the transaction”.
openDemocracy can reveal that Quadrature was last year acquired by QC Ventures, a company registered in the Cayman Islands, which is now the 100% shareholder in the firm.
The Cayman Islands is a well-known tax haven, and the transparency requirements for companies registered there are much less than in the UK and most other countries.
Documents obtained by openDemocracy show that when QC Ventures was established in the Cayman Islands back in 2018, its directors were three senior directors at Quadrature and a corporate services provider based in Cayman.
Speaking in the Commons in July, Labour’s foreign secretary David Lammy pledged to tackle individuals and companies taking advantage of offshore tax havens “with full vigour”.
He added: “We were concerned that parts of the last government were turning a blind eye to these issues. I hope to come forward with further proposals in the coming weeks.”
When openDemocracy contacted Quadrature to ask about the donation and the acquisition by QC Ventures, a representative of the firm directed us to the statement on the company’s website. They also said the decision to set up a holding company based in the Cayman Islands to acquire Quadrature was not motivated by, or related to, taxation.
Robert Palmer, director of Tax Justice UK, said that “any company moving to a tax haven like the Cayman Islands has questions to answer” as the islands are “notorious for a lack of transparency and for ultra-low taxes”.
“Ultimately governments need to make sure that everyone is paying their fair share in tax, especially when public services are desperately in need of investment and we need to fund the transition to a greener economy,” he said.
Fran Boait, co-executive director at Positive Money, said: “In taking large donations from financial firms registered in tax havens, we have to question what influence the sector is getting in return.
“Labour’s plans to continue the previous government’s deregulation of the City of London are particularly concerning, especially when it has been shown that an oversized financial sector hinders rather than helps the rest of the economy.
“Labour should be looking at how to weaken the power of big finance in our democracy and economy. Right now it seems they are doing the opposite.”
One of the defining features of contemporary electoral politics in Britain is the age divide. Young people are far more likely to support Labour, and older people to support the Conservatives. This divide is still apparent following the 2024 election – but it hides the complexity of how young people in particular choose to vote.
To the extent that there is a “youth vote” in Britain, it is characterised not by support for a single party, but by a particularly fierce rejection of the Conservatives – alongside greater enthusiasm than their elders for left-wing, socially liberal alternatives to Labour.
YouGov surveyed 2,182 adults of all ages between July 5 and 8 for my research team at the University of Exeter. The sample was selected to be representative of the British adult population.
The data from this survey – published here for the first time – gives a snapshot of how people of different ages say they cast their votes. Five per cent of our respondents under 30 didn’t tell us how they voted so we don’t know how their votes might have changed the overall picture. More research in the coming months may give a fuller account.
As the graph below shows, it’s only among the over-65s that the Conservatives won more support than Labour (by around 26 percentage points). They trailed Labour by around 8 points among the 51-64 age group, 26 points among 30- to 50-year-olds, and 35 points among the under-30s. Almost incredibly for Britain’s oldest and most successful political party, the Conservatives won barely 7% of the vote of under-30s in the survey.
Parties voted for by age group:
Bar chart showing vote choice by age group. Source: YouGov for University of Exeter, 5-7 July 2024., CC BY-NC-ND
Another key characteristic of the 2024 election is the record-low combined vote share for Labour and the Conservatives, and concurrent record-high vote share for smaller parties. This was not a blip. Voters have been steadily shifting away from the two major parties for years. But in 2024, the extent to which they did so was unprecedented: overall, the combined Labour/Tory vote share was just 57%.
The rejection of the major parties is most profound among young voters. Their support has become fragmented to such an extent that it is not really accurate to speak of a singular “youth vote”. Less than half (49%) of under-30s surveyed voted for Labour or the Conservatives. This compares to 54% of 30- to 50-year-olds, 55% of 51- to 64-year-olds, and 60% of over-65s.
The combined vote share for smaller parties among the under-30s was greater – at 46% – than the 42% who voted for the Labour party. The most successful challengers to the major parties for the youth vote were the Greens and Liberal Democrats, each of whom were backed by 15% of under-30s in the survey.
“Others” – including the Scottish National Party, Plaid Cymru and independents – won a combined 10% of votes from young respondents aged under 30. But the young people surveyed were not simply casting around for any alternative to the major parties. Just 6% of under-30s in the survey said they backed Reform UK (compared with 17% among the over-50s).
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No Reform youthquake
In the closing days of the campaign, there was some suspicion that Reform might achieve a “mini youthquake” in this election or the next. A JLPartners poll found that Reform appealed strongly to soon-to-be-enfranchised 16- and 17-year-old voters, and mock school elections apparently saw Reform winning a great deal of support among schoolchildren across the country.
Our data suggests this did not materialise in 2024. Reform has had some success in appealing to young voters: among under-30s from poorer households, for example, 13% said they supported Reform, compared with 4% for those from wealthier households.
However, similar proportions of under-30s from poorer households also said they voted for the Liberal Democrats (11%) and the Greens (14%). While voters in older age groups who were fed up of Labour and the Conservatives were more likely to switch to Reform and may do so again in future, among the under-30s such voters appeared more likely to switch to the Liberal Democrats, Greens and nationalist parties in Scotland and Wales.
Turnout
Turnout is a crucial issue when considering how young people vote. They have always been less likely to vote than their elders in any particular election. This owes primarily to lower levels of political interest, as well as circumstances associated with early adulthood such as being financially precarious and being less settled in one location. This was true in 2024 as well.
The graph below shows self-reported turnout by age group. The figures are substantially higher than the true turnout numbers, reflecting the long-established tendency of people to exaggerate their voting behaviour in surveys, but they clearly illustrate the age divide: under-30s were the group most likely to say they hadn’t voted.
Turnout by age group:
YouGov for University of Exeter, 5-7 July 2024., CC BY-NC-ND
The graph shows not only was the turnout of under-30s lower than that of older age groups, but that of under-30s from poorer households was particularly low. Young people from poorer backgrounds are less likely to vote than their predecessors were 30 years ago, and so are under-represented in elections to an even greater extent today.
People who vote during early adulthood establish habits that make them likely to vote for the rest of their lives. Those who don’t form such habits by their late 20s are likely to remain serial abstainers.
Younger generations are becoming increasingly unlikely to vote in their first election, leading a greater proportion of them to develop lasting habits of non-voting.
It is this tendency that lies behind one of the major democratic challenges facing the UK: rising levels of disengagement with politics and with voting, as younger people age but continue their youthful pattern of avoiding the ballot box.
Rupert Murdoch supports the Red Tories (UK Labour Party) and needs his nappy changed.Zionist Keir Starmer is quoted “I support Zionism without qualification.” He’s asked whether that means that he supports Zionism under all circumstances, whatever Zionists do.
Green Party’s Carla Denyer arrives at the count (Image: PAUL GILLIS / Reach PLC) [Ani Stafford-Townsend is immediately to the right of Carla Denyer.]
As well as Bristol’s first-ever MP, the party finished second everywhere else
A Green surge right across Bristol not only saw the party’s first-ever MP in the city, but also saw voters put them in second place in every single other constituency.
The Green Party are now officially the main challengers to Labour in all five of Bristol’s constituencies – after Carla Denyer’s victory in Bristol Central was followed by strong support right across the city. A total of 65,762 people voted Green in the five Bristol constituencies.
In Bristol East, the Green Party candidate Ani Stafford-Townsend won more than 30 per cent of the vote to cut Labour’s majority down to just 6,606, while in Bristol South and Bristol North West, the Greens leapt from fourth place last time around to second.
Victorious Green MP Carla Denyer, the party’s co-leader, showed that her success – which was matched by Green wins in three other constituencies around the country – meant that people could vote Green and potentially get a Green MP.
The article is from a Bristol newspaper. The “the party finished second everywhere else” refers to everywhere else in Bristol.
Comments by dizzy: These comments may get extended and elaborated.
This article highlights a recurring theme in many analyses of the 2024 General Election: That the Green Party are the ruling Labour Party’s main threat.
The Green Party were mistaken in restricting their ambitions i.e. targetting only 4 seats. This article suggests that another 4 were within reach and to succeed in your goals suggests that those goals were too lax.
The rest of these comments is difficult because there are so many unknowns.
I would expect the Greens to do extremely well at the next General election. That’s assuming that general elections in the same way will be held in 4 or 5 years time.
The World is warming at a seriously alarming rate. Climate change is now and needs immediate action. The action needed is to stop burning fossil fuels and transition to renewable energy that doesn’t damage the climate. There are also other necessary measures: basically stop the rich trashing the planet with their ridiculously climate expensive lifestyles.
People are going to get very angry when they realise how their climate and future has been destroyed by a few rich cnuts.
later: The next few years are going to be extremely demanding, certainly beyond the capabilities of prospective presidential candidates.
