UK: A FAREWELL TO ALMS? - CONSERVATIVE PARTY DONATIONS. - Pity the poor Conservatives. Well poorer anyway, since corporate donations for political purposes seem to be drying up. Why should this be? Is it a corporate reflection of popular dissatisfaction

Last Updated: 31 Aug 2010

Pity the poor Conservatives. Well poorer anyway, since corporate donations for political purposes seem to be drying up. Why should this be? Is it a corporate reflection of popular dissatisfaction with the Government's performance, or are there more deep-seated reasons? And why, for that matter, do some businesses continue to give financial support to the Conservatives?

The last question is easy. David Miller, group secretary of Sun Alliance, spells it out: 'Donations to the Conservative Party are made by the board, reflecting directors' considered view of the potential benefit to the company and its shareholders of the economic environment associated with the objectives of the Conservative Party.' Other big supporters of the Tories, such as Hanson, P&O, Forte and Hambros, would doubtless agree.

But the old justification that the Tories are protectors of the free-enterprise system carries less weight than it once did. Many business leaders now accept that the battle to preserve free enterprise has been won. Besides, not everyone these days is keen to be identified too clearly as a Conservative provider. In the words of one leading industrialist, it doesn't help that 'honours have a horrid habit of being linked to political contributions'. It may not help either that such controversial tycoons as Polly Peck's Asil Nadir, Harrods' Mohamed al-Fayed and Robert Montague of Tiphook were significant donors.

In any case, is the decision 'just a matter for the board', as Rolls-Royce's chairman told the company's AGM this year? Labour wants the issue to be put to shareholders, and some industrialists seem sympathetic to the argument. 'We have come to the view that it is not our money to hand out - it belongs to the shareholders,' said British Airways' managing director, Robert Ayling. BA may have been helped to this conclusion by the Government's own actions. Having poured £200,000 into the Conservatives' coffers in the three immediate post-privatisation years, BA gave up in 1991 after a row over slots for rival airlines at Heathrow.

However, a growing list of business leaders has been coming to the same conclusion as Ayling. Other drop-outs include Allied Domecq, Argyll, Reckitt & Colman, Taylor Woodrow and Thames Water. United Biscuits, once the top contributor with £130,000, chipped in only £40,000 last year. The company's creator Hector (now Lord) Laing was one of Lady Thatcher's most trusted advisers but no longer has a management role in the group, and it would cause little surprise if UB stopped donating altogether. Glaxo, Scottish & Newcastle, Slough Estates and Tate & Lyle have also cut back.

None of these companies has explained its position in terms as forthright as those of BA. Allied Domecq euphemistically 'blames' the increasing internationalisation of its business. Reckitt & Colman protests that it never paid direct into Tory funds, but channelled donations though the now disbanded British United Industrialists, which had a general commitment to free enterprise. Conservative Central Office may regret having helped to kill off BUI.

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