FactCheck: party donors – who funds Labour and the Tories?

July 15, 2013 By Emma Thelwell

The claim

“I’m proud that Labour have links with ordinary working people. David Cameron is bankrolled by a few millionaires #PMQs”

Ed Miliband, tweeting after Prime Minister’s Questions, 10 July 2013

The background

David Cameron and Ed Miliband battled furiously over party funding and Labour’s links to the unions across a wall of noise at Prime Minister’s Questions last week.

The Labour leader’s promise to crack down on Unite the Union – following allegations of unionvote rigging in Falkirk – was scorned by the PM.

Mr Cameron told the opposition leader that the unions “own you, lock stock and block vote”.

Hitting back, Mr Miliband said the Tory leader was “owned by a few millionaires at the top of society”.

The fuming Labour leader then took to Twitter from the front bench as PMQs ended, telling his followers he was proud of Labour’s links to ordinary people.

It’s an argument that won’t go away. But is it true? FactCheck does the numbers.

The analysis

Labour has received just over £60m in donations, while the Tories have taken just under £45m since the general election of 2010.

Labour’s biggest donor by far is Unite, which has provided 20 per cent, or £11.9m, of party donations since the election.

Unite is the country’s biggest union with 1.42m members, and the automatic levy they pay is worth £3 per person to Labour.

Unite says it has given Labour £8m in fees in the last three years. The union told FactCheckthat the remaining £3.9m (that makes up the £11.9m) “lumps in everything” across Scotland, England and Wales: sponsorship, conference fees, any funding to re-elect Ken Livingstone, regional campaigns – every last leaflet.

So this means that “ordinary working people” – 1.4m of them – are Labour’s biggest backers.

Or does it? Unite’s General Secretary Len McCluskey doubts that members would pay if the fees were optional. He said Mr Miliband was “taking a gamble” in proposing to abolish affiliation fees in the wake of the Falkirk scandal.

Worse still, he told Channel 4 News: “One thing’s for certain – if his (Miliband’s) ideas come to fruition, we won’t be affiliating one million members to the Labour party which costs us £3.25m a year. We might be affiliating – it might be as low as 50,000 – and that’s obviously a dramatic reduction in affiliation fees.”

50,000 affiliated members would be worth just £150,000 to Labour. That would be worth £450,000 over three years – a far cry from the £8m Unite has handed over in the last three years.

Beyond the unions, Labour doesn’t get much money from companies or individuals.

Company donations make up just 3 per cent of donations – and the largest company donor is Saatchi and Saatchi, which has donated £322,605.41 worth of advertising since the election.

Individual donations meanwhile bring in 7 per cent of Labour’s funding.

Only 13 of the 230 individual donations are for more than £50,000. The top donors include the businessman John Mills – who has the made the largest single donation of £1,647,500 since the election.

Property developer Andrew Rosenfeld has donated a total of £661,440. There are a handful of donations around the £100,000 mark – and then in at number six is a one-off donation from a certain Anthony Blair for £76,304.10.

The £30.2m that Labour receives from the unions isn’t actually too far off the amount that the Tories get from individuals.

Individual donations to the Conservative Party account for £27.9m – or 62 per cent of the party’s donations. The party has been given 1,398 individual donations since the election (Labour has clocked up 230).

Donors who drop more than £50,000 are invited into The Leader’s Group – and get to meet David Cameron and other senior Tories at dinners, lunches, drinks and important campaign launches.

For this honour, 61 people have made a one-off donation– but the party has received a further 141 donations of more than £50,000 – with people donating two, three, four or more times.

The Tory party’s biggest individual donor is Michael Farmer – who has made eight donations totalling £2,191,392.42. Mr Farmer is the Conservative Party co-treasurer who founded the hedge fund RK Capital Management and made his fortune in the international metal markets.

The Tories’ second largest donor since the election is property multi-millionaire David Rowland – responsible for the party’s single largest donation since the election of £1,277,936.32.

Behind these two, comes May Makhzoumi – the wife of the billionaire Fouad Makhzoumi would was at the centre of the Jonathan Aitken arms scandal – who has donated £908,000.

And then former Tory treasurer Peter Cruddas, South African born mining magnate Michael Davis and former Man Group hedge fund boss Stanley Fink – who have donated £723,000, £712,000 and £692,841 respectively.

As for companies, they make up 25 per cent of Tory donations. The biggest donor by far is JCB Research – which has donated a total £1.4m since the election. Few companies hold a torch to JCB’s generosity, but other notables include mobile phone group Lycamobile with £343,442 and city investment group Flowidea with £315,950.

Meanwhile, the National Conservative Draws Society – a fundraising lottery for Tory members – pings up on the radar as having donated £2.6m.

The verdict

Delving into the Electoral Commission’s party funding records, the first surprise is that Labour has received 25 per cent more funding than the Tory party since the General Election of 6 May 2010.

It’s hard to argue with Mr Cameron, when he says the unions “own” the Labour party. The unions and their affiliation fees account for half of Labour’s funding.

Without them, only a handful of individuals have given the party big donations – and even those have been one-offs or bequests rather than regular donations.

Labour’s single largest donor since the election is Unite, whose money has accounted for 20 per cent of all party donations.

Mr Miliband says he’s proud of the link to “ordinary working people” in the unions. But Unite boss Len McClusky has questioned if these people would want to bankroll Labour given the choice.

He has warned that if Mr Miliband scraps affiliation fees, Labour could see a “dramatic” drop in the number of people willing to pay fees to just 50,000.

Dramatic or ruinous?

If he’s right, Unite’s contribution to Labour in fees could drop by 94 per cent to just £450,000 over three years (rather than £8m).

And what of Mr Miliband’s assertion that the Tory party is bankrolled by a few millionaires? Well – it’s not a few, it’s a few hundred.

The Tories have a slew of high rolling donors – the most generous donor, hedge fund founder Michael Farmer, has given the Tories £2.1m since the election.

Mr Cameron however has remained tight lipped over his donors – is he as proud of their background FactCheck wonders?

By Emma Thelwell