In the next of our series on Tory party funding, we turn the spotlight on the Tories and the financial sector.
Not that that’s easy – in fact it isn’t easy to discover the real picture of Tory financial donations at all.
You may think that all party funding is open and accessible. And in one sense it is. But the publicly available figures only tell part of the story.
Donations are often made by family members, company directors will donate alongside partners at the same business, groups of wealthy people have even banded together to make political contributions. The result is that the real concentrations of donations are obscured.
Revealing the truth is time-consuming and laborious – and as a result most figures are a couple of years out of date. But academics like Stuart Wilks-Heeg of the University of Liverpool, and journalists like those in the Bureau of Investigative Journalism have taken the trouble.
And the results are striking.
Wilks Heeg and Crone for example showed that just over 50 key ‘donor groups’ gave 51% of the Tories’ income between 2001 and 2010 – with the top 15 giving just over a third.
And using data from Companies House and the Electoral Commission, the Bureau of Investigative Journalism [Feb 2011] showed the dominance of the City in Tory finances.
‘The City’s contribution to the Conservative Party has more than doubled since David Cameron became its leader . . . .the percentage of donations from companies and individuals connected to the financial services industry has now reached more than half.
‘Last year [this was in 2011] City money made up 50.8% of all Conservative Party donations, a leap from 25% five years previously, when Cameron and Osborne took over the helm.
‘The City has donated a total of £42.76m since 2005. Last year City money accounted for £11.4m, compared with £2.75m when Cameron took over.
‘57 individuals from the financial services sector made a donation of more than £50,000 each.
‘In the past two years, individual donations from bankers, hedge fund managers, private equity financiers and insurance executives have increased sharply reaching 58.5% (£9,150,064) of total individual contibrutions.
‘Ten individuals alone have given more than £13m since 2005 out of a total central office funding of £101m. The top donor is David Rowland who first made his money through property investment before investing more widely.
‘There are six hedge fund managers among the top ten individual City donors, and two of the top ten – Stanley Fink and George Magan received peerages last year.
‘Bankers and financiers who were deeply linked to the global financial crisis have also been bank-rolling the Conservative Party the figures reveal.
These include Jeremy Isaacs, the former head of Lehman Brothers in Europe and Asia, who has given £190,000.
A small group of powerful financial public relations leaders has also contributed nearly £500,000 to the Conservative Party. These include Finsbury and Pelham PR.’
As the Telegraph reported their findings at the time
‘The largest contributors across the business sector studied by the bureau was hedge funds which donated £1.38m (11.4 per cent). Three of the City’s biggest name hedge fund bosses – Michael Farmer, Lord Stanley Fink and Andrew Law – together contributed £636,300.
Fink was the man the Tories turned to to take over as the Conservative Party’s Treasurer following the resignation of David Rowland. Labelled the “Godfather” of the hedge fund industry after a long stint at Man Group, he now runs hedge fund International Standard Asset Management and is believed to have a personal fortune of over £100m.’
This increasing dominance of City money in Tory party funding has gone hand-in-hand with a decline in Tory party membership at local level – and thus a decline in individual party member contributions. Conservative Home stated this week voiced its concerns
‘Is the Party simply going to stagger on as it is, losing more and more members each year – all the way to the point where they may be a Conservative Party in the Commons, but there will no longer be one on the ground? As Gavin Barwell points out on this site today, local Associations don’t exist in most Labour-held urban seats, and scarcely do in many suburban marginals, either. Much of the Conservative machine is as out of date as an Austin-Healey car.’
So should we be concerned?
As the Bureau puts it ‘there’s no direct evidence to suggest that any individual has used their influence to demand a relaxed approach to bank, hedge fund or private equity remuneration, tax or leverage limits.’
But we’ve had a reduction of the tax rate on top earners; we’ve had fudge after fudge on banking reform; tax evasion and tax havens are far from the top of the Coalition’s agenda; Britain stands alongside Malta and Luxembourg in blocking EU attempts at a financial transaction tax; top executive pay and bonuses rage on unchecked – while the rest of us face increasing austerity and the results of lost tax revenues.
Every time there’s an attempt to reform the banking and financial sector, we’re told to tread softly, because it’s essential to the economic health of the country.
Since the banking and financial sectors gave us the present economic crisis, there’s some room for debate there.
But there’s no doubt that they’re essential to the health of the Tory party.
A hollowed out party dependent on City money for its existence – that’s the Tory party in 2013.
We should ALL be concerned.