A new report published by the Bureau of Investigative Journalism has revealed that the Conservative Party received £3.3m in donations from hedge funds, financiers and private equity firms over the last 12 months. This amounts to 27 per cent of all donations made to the Party during that period. The report also shows that roughly half of the £12,182,558 raised by Conservative Central Office since September 2010 was from companies based in the Square Mile. This includes £1.16m from David Rowland — a financier linked to Banque Havilland and hedge fund Blackfish Capital Management.
Since entering government with the Liberal Democrats 18 months ago, the Conservatives have introduced a number of measures designed to reduce the role of the state in regulating City activity. According to the Bureau, its flagship policies in this regard are a new 5.75 per cent tax rate on the treasury functions of large corporations in offshore tax havens, a reduction in stamp duty tax for bulk purchases of residential property and an exemption for UK resident companies from corporation tax on the profits generated by their foreign branches. They have further pledged to reduce corporation tax to 23 per cent by April 2014 for companies whose annual profits are more than £1.5m.
Iain Overton, the Bureau’s editor, said the aim of the report was to “reveal the influences on our political leaders” and accused the Tories of benefiting from “the largesse of money-men, [who] in turn seem to be benefiting from soft-touch regulation and tax breaks from government.”
One of the Tories’ key lines of attack against Labour since the election of Ed Miliband has been the degree to which the party has become reliant on the trade union movement for funding. As such, the Bureau’s findings should provide Miliband with some much needed ammunition. In fact, the close relationship between the Tories and the City tie into a key theme of his keynote speech on Tuesday — the distinction between “moral” and “predatory” capitalism.
Miliband aims to cast himself as the defender of the honest, hard-working majority, of the “grafters” who suffer as a result of a “rigged market”. With the Tories financial reliance on the City now out in the open, he has just been presented with a golden opportunity to do exactly that.