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Are hedge fund managers the Tories' trade unionists?

Robert Peston | 09:13 UK time, Wednesday, 9 February 2011

Labour leaders and Labour prime ministers have since time immemorial (well almost) taken millions of pounds of funding on behalf of their party from trade unions, and devoted a considerable slug of their waking hours to telling the world that these trade unions are not bossing Labour policies.

David Cameron

 

Tony Blair, as prime minister, made it something of a personal speciality to take trade union money with one hand and to sock trade union leaders in the moosh with his other. But that never stopped the Tory Party accusing him and his successors of being in hock to the brothers.

So it probably won't be especially easy for David Cameron to bat away as irrelevant the statistics published today by the independent Bureau of Investigative Journalism of the extent to which Conservative Party Central Office has become dependent on cash donations from companies and individuals working in financial services.

The trends are striking: in 2005, the financial services industry contributed 25% of Central Office cash donations; that had risen to 52% in 2009 before falling back to 51%.

It is probably worth overlaying on to the funding statistics separate research on the number of Tory MPs who have worked in the City and financial services. According to an analysis by the Mirror in January, 134 of 498 Tory MPs and peers were or are employed in the financial sector - which includes 70 MPs.

The question, which of course arises, is whether this gives the Tory Party and Tory Members of Parliament a deep and useful insight into one of the UK's most important industries. Or whether it biases the Conservative members of the government to favour this industry in a way that is unhealthy for the country as a whole.

If you were going to give the Tories the benefit of the doubt, you would refer to the performance of the former Barclays banker Andrea Leadsom as a Conservative member of the Treasury Select Committee. When the committee grilled Barclays' chief executive Bob Diamond last month, Andrea Leadsom was one of his more acute and merciless interrogators.

Those however who wish to see conspiracies will point out that for all ministers' tough talk about curbing bankers' bonuses, what will emerge as and when Project Merlin is formally announced is promise of restraint but the reality of millions of pounds being awarded to thousands of top bankers.

It should be pointed out, however, that the simplest conspiracies won't fly: the bulk of funding for the Tory party doesn't come from bankers; arguably the most important group of Tory donors are hedge fund managers, some of whom would be seen as critics rather than allies of the big banks.

Even so, when a party becomes as dependent as the Tory Party has apparently become on a group of individuals and institutions with a number of identifiable collective interests - their shared concern about the impact of European financial services directives would spring to mind - it becomes more of a challenge for a prime minister to demonstrate that he is governing for all.

If Mr Cameron has any doubt about the irksomeness of that challenge, he need only ask the advice of Mr Blair.

Comments

Page 1 of 2

  • Comment number 1.

    Well what a surprise.

  • Comment number 2.

    They're all in it together!

  • Comment number 3.

    No surprises here and nothing new in Tory politics. In addition to the ease of access that donors have to leading Tory politicians and they are pushing against an open door, the ethos of wow profits from money-go-round can be found in the average Tory DNA. So not only will Osborne indulge in a risk assessment of alienating his donors he will also not be motivated to make life hard for the the men of money.

    Yes Trade Unions have influenced and are influencing Labour leaders but so what as long as the influence is in the interests of the millions of workers they represent it is a real asset of the Party.

  • Comment number 4.

    The Government (which wasn't actually voted in by a majority, and doesn't seem to be sticking to it's mandate) is merely serving the interests of the banks and the wealthy financiers of this country.

    It's fascism folks - learn to recognise it.

    "Fascism should rightly be called Corporatism, as it is the merger of corporate and government power."
    Benito Mussolini

    I presume there are people who think this is all 'normal' - perhaps they enjoy putting their lives in the hands of a faceless few who's motives are unclear. I'm suspecting this is a minority however and most people simply don't know what's going on.

  • Comment number 5.

    You don't have to be a conspiracy theorist to make out that the Conservative Party are friends of the Bankers and the city. The proof is in the policy making. Tax policies that will benefit big business and the attempt to water down regulation on the Banks in Europe. Their policies on bonuses has been pathetic so far.

    We have gone from a tory lite government in New Labour, to a fully fledged right wing conservative government.

    We desperately need a reform to the way political parties are funded.

    http://bit.ly/fGkgQf

  • Comment number 6.

    I'd hope that any manager worth his performance fee would hedge by ensuring that no political party could survive without his largesse, rather than just the one. How else to ensure the best democracy that money can buy?

  • Comment number 7.

    For goodness sake will we stop moaning. There is a simple fix which is public funding of political parties. It will take away any conflicts of interests. Lets face it, but at it's very basic level democracy is a service, and like any service it has associated costs. So lets hold our collective nose and cough up or shut up!

  • Comment number 8.

    Not surprising. One day it will be nice to have a government who will focus on the real economy and not the short term gambling of the hedge funds, commercial bankers and fund managers who have inflicted so much misery on so many in the last few years in pursuit of their own gain and undeserved bonuses.

  • Comment number 9.

    Of course David is not in the pockets of the masters of the universe. They are well known for their philanthropic ways. I mean, who in their right mind will give away tens of millions of pounds to the Tories and not expect anything in return.

  • Comment number 10.

    "Labour leaders and Labour prime ministers have since time immemorial (well almost) taken millions of pounds of funding on behalf of their party from trade unions..." who are in turn exclusively funded by ordinary working people in the UK; whereas the Tories are funded by a financially independent elite. Whilst it's easy to find instances when Labour governments have missed the target, the fundamental aim of the Labour movement is to represent the interests of the working man and woman.

    Join the TUC March on the 26th March and make a difference.

  • Comment number 11.

    Given the type of funding arrangements for political parties we have in this country, this is inevitable. When one organisation, or grouping, is funding a party to this extent, we will wonder just how much pressure they can bring when they need to. The guess is that it will be considerable. Contributions to a political party will be made for a reason; it won't be altruism. In some way, they will be hoping or favourable decisions on issues that affect them; they will also be expecting access.

    George Osborne's decision to tax the bankers will be a bit of a blow, but they will recover from it as it will be used as a smoke screen to allow the Conservatives to say, 'we take the decisions we need to without fear or favour'.

    David Cameron and Lady Warsi will be acutely conscious of the potential for bad publicity. Maybe GO had to announce his decision and get his tax measure in first before this became general public knowledge. The other way round and Ed Balls could have made more of it. So perhaps the £800m is a tax on them that was unavoidable from a simple political viewpoint; maybe it had nothing to with the financial situation.

    The question of political party funding also comes to mind. How should this be achieved? Wherever the money comes from, it won't be the public purse now. The public outcry if taxes were spent on their organisations that are outside parliamentary control, and when so many will be made redundant in the public sector would bring the government into total disrepute. So this will be no more than an announcement made and then forgotten until Labour have a point or two to score.

  • Comment number 12.

    Trouble is, even the grandiose sounding INDEPENDENT BUREAU OF INVESTIGATIVE

    JOURNALISM is STILL FUNDED by individuals and parties, WHO ALSO HAVE

    INTERESTS in the OUTCOME of THEIR EFFORTS!

    So does the funding of Labour or Tories, by unions or moneymen - its still "interested parties" with hands in their pockets and an expectation in return.

    It really doesn't matter, will never change and YAWN there must be some faster news in the world than this.

    PS. Why is Mr Hague in Tunisia, really? Money?

  • Comment number 13.

    May I refer to you John Rentoul's list of "Questions to which the answer is no."

    For a start, you've scraped together several different industires to provide a total of 50.4%. The unions funded 75% of Labour in the election, and Unison personally prevented Labour from going bankrupt.

    The obvious difference is that the votes of the financial industry didn't choose the Tory leader. Ed Miliband's victory relied upon the money and the votes from the unions. This fact is so well-known that apparently you no longer think it's shocking that the man who's grounding BA and costing us millions through Tube strikes chose the Leader of the Opposition.

  • Comment number 14.

    Very frustrating times. Capitalist narrow minded 'ethnic cleansing that is going on since they came in.
    MP's should be out on the streets serving the people. Get out of London it is not England or Britain it is a seperate country.

  • Comment number 15.

    Yes i recall the tories getting a lot of political mileage from accusing new labour of being in the pockets of the unions. Yet here we are with tories in the self same situation and a conservative spokesman says it beggars belief that anyone could claim such a thing. And this straight after the phoney war on the banks. All the time we have party interests put before the interests of the people we will continue to see this duplicity. It seems that although honesty may be the best policy it isn`t good party policy.

  • Comment number 16.

    lol, excellent punch line Robert, and leaving the reader to decide what to decide, priceless. Have a great day (no, I'm English)

  • Comment number 17.

    Selling England by the pound.

  • Comment number 18.

    Robert - many people were confused by the timing of the trivial tax rise on banks yesterday. It certainly made no economic sense.

    If a journalist carries out an investigation, shortly before they publish do they not usually contact the organisation involved and ask for comment?

    Did this happen with the tory funding story?

    Did they contact the tories BEFORE the sudden, unexplained tax change?

    The tory spokesman has immediately trotted out the 'we increased their tax yesterday' smoke screen in response to the claims of influence.

    This does sound very convenient.

    How about some probing on this?

  • Comment number 19.

    I look forward to wails of

    Labour, unions blah blah, blah

    and Hedge funds did not have any role in causing the 2007-08 crisis.

  • Comment number 20.

    #9. At 10:06am on 9th Feb 2011, Seer

    Yes, I agree.

    Frankly it is ridiculous to suggest that hard headed businessmen hand out millions of pounds for absolutely no gain whatever.

  • Comment number 21.

    A possible sequence of events
    The Torys get wind of the investigative journalists story about Tory funds.
    Inorder to be able to show they are really being mean to bankers and most importantly to pull some teeth out of the funds story, they arrange with the bankers that the Government will make announcement about the extra levy. Not too much but just enough to make it look credible. The bankers agree to make furious noises but agree not to dump the Operation Merlin talks, as this is not in either of their interests. Both sides are not exactly happy but the damage is less than it might otherwise have been. The Torys can show they are not bankophiles and the bankers get hit less than they might have done.
    This possible sequence of events would explain why Osbourne made the extra levy announcement when he did, ahead of the budget.

  • Comment number 22.

    The banks didn't vote Labour to the dustbin, it was the British people. Whether the banks fund the Tories or the unions control Labour, is irrelevant, the voters decide who governs. The record of Labour's incompetence , in government as well as in their own party funding was what made the people get rid of them, not the source of their funding.

  • Comment number 23.


    I now understand why it was the Govt banned the sale of automatic weapons.

  • Comment number 24.

    7. At 10:06am on 9th Feb 2011, Dil wrote:
    "For goodness sake will we stop moaning. There is a simple fix which is public funding of political parties. It will take away any conflicts of interests. "

    It is also likely to make it more difficult for new parties to establish themselves so we would be left with a worse system

  • Comment number 25.

    Well, haven't any of these people heard of political economist Thomas Ferguson of MIT and his 'Investment Theory of Politics'? He says you can pretty accurately predict legislation from looking at who funds the candidates/partys. Obvious, or why would they do it? How many private healthcare firms and forestry firms fund the Tories, too?
    The difference with Labour and the unions is that since Blair, Labour have taken union funding for granted and ignored the unions' voices.

  • Comment number 26.

    Trade Unions funding Labour, choosing Labour leaders and actively seeking to affect company and country policy - Good

    Hedge Funds donating to Conservatives - Bad



    That's the basic gist of what we're meant to think.

  • Comment number 27.

    4. At 10:02am on 9th Feb 2011, writingsonthewall wrote:

    perhaps they enjoy putting their lives in the hands of a faceless few who's motives are unclear.

    ======================================================

    are you talking about the government or the corporations.

    TBH i think that they should get rid of the whole "contributions" system as its clearly just a way to gain control over the ruling party. Why cant we have a system where the person who the people actually want to have in power ends up in power.

    the whole voting system in particular needs to be overuled to a far simpler but better. "whomever has the most votes wins" policy.
    WOTW im looking at you to sort this out


  • Comment number 28.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 29.

    Oh come Robert get a grip are you really trying to tell us Hedge Funds and Bankers are oh so different? Can't you see the wood for the trees? It's surely all the part of the same Financial Services Continuum that leads directly to all your mates in the Tory Party.

  • Comment number 30.

    Is this not simply Plutocracy ?

  • Comment number 31.

    No doubt comments about political parties being funded by the public pure will abound today. However, this will never happen. The ruling parties will never ever allow it. Imagine some nobody from nowhere forming his or her own party and being granted the same financial wherewithal as the top parties. No way will a level playing field in the interests of the people ever come to pass. They just wont allow it. They are not in power for our benefit. Any rational mind will look at the past and see this to be stupefyingly clear. So clear that I'm sure the ruling classes are amazed that they have gotten away with it for so long. The recent meddle east grumblings must have put a few off of thier breakfasts though - well at least I hope so.

  • Comment number 32.

    Ropert Peston knows perfectly well that his 'times immemorial' assertion of trade union being donors of Labour Party was always at the heart of the labour movement to get a foothold in British politics, to offset the stranglehold on it by precisely the people who are now paying for the Conservative Party. The only answer to this is UKuncut demo March 26. They saw it coming long before everybody else, that Tories are governing for the rich.

  • Comment number 33.

    "4. At 10:02am on 9th Feb 2011, writingsonthewall wrote:

    The Government (which wasn't actually voted in by a majority, and doesn't seem to be sticking to it's mandate)"

    So a bit like the Labour party in the 2005 election then?
    Popular vote 9,552,436
    Percentage 35.2%

    Compared to the Conservatives in 2010
    Popular vote 10,703,754
    Percentage 36.1%

    Except that it's a coalition government at the moment.
    Combined Lib-Dems + Conservative voters.
    Popular vote 17,540,578
    Percentage 59.10%

    Odd that this government is taking so much flak from HYS posters about being 'unelected' and there was so little about the previous Government. If we should be complaining about anything it's how our voting system unfairly skews parlimentary seats to Labour and against the Lib Dems.

    Back to topic.
    It shouldn't come as any surprise that the Tories take a lot of funding from the big business. Historically that is how they've been funded. A shift to financial funding with the decline of manufacturing in the nation would also be expected but this looks like a far bigger lurch than the change in our economy.

    Along with the Labour party's union paymasters we have to wonder how much this effects policy. As much as the city says they create wealth for the nation and the Unions claim they support the common man, my experience has been that the City is out for the City and the Unions care only for themselves.

    Like the Labour party's trade union links, linking any direct interference from the hedge fund managers to policy is going to be difficult if not impossible due to the opaqueness of the high end decision making in government. What we'll have is a lot of circumstance and heresay unless somone stumbles accross something explosive.

  • Comment number 34.

    Without the Trades Unions financial support the non-monied class can have no political voice. That position obviously suits the Global Capitalist money launderers.
    By encouraging the Public at large to hate taxation the money men have conned the electorate, Osbourne and Co are only just starting. Be warned the UK is rapidly achieving third world statehood, with the money being hidden in UK off shore protectorates. The changes to Corporation Tax show very clearly what is happening, I think perhaps Gus O'Donnell has hit the nail on the head. He thinks GCHQ should be monitoring social media.

  • Comment number 35.

    That's why all welfare claimants are portrayed as "dole scum" and "Benefit Fraudsters" and are presumably responsible for the financial crisis due to the £15m they steal every year. Meanwhile the £1.5 Billion lost to "Tax Avoidance" (note they don't even call it evasion anymore) is encouraged and we are even told that these Tax Avoiders are the one who will drag the UK out of the mire
    @#13 Richard Manns ~ It's called "The Finance Industry" and there's only one of them. The only ones making a distinction between bankers and hedge fund managers are people inside the industry. Also, since when does Willie Walsh choose the leader of the opposition?

  • Comment number 36.

    #18 - I had exactly the same thought the moment I read this article. I imagine quite a few others did as well. Talk about manipulation of the masses. Here it is in tooth and claw.

  • Comment number 37.

    To add to Roberts comments take a look at this article in the Guardian.
    http://www.guardian.co.uk/commentisfree/2011/feb/07/tax-city-heist-of-century

    It seems that big business is part of the same Union.

  • Comment number 38.

    We're all in this together, but some of us are more in it than others!

  • Comment number 39.

    Out of curiosity, I wonder just how many Labour MPs/peers also have or had links with the City/financial services? The BBC recently ran an article highlighting the increasingly common heritage of many MPs (from any party) - whether it's certain schools or reading PPE at Oxford - and I wouldn't be surprised if the figures were quite striking.

    Let's not forget that New Labour's policy towards banking regulation was about as pro-financial services as you could possibly get.

    Don't get me wrong, I think the ties highlighted here are sickening and if I had any say I'd move towards strict public funding rules for all parties, but I don't think people should be fooled into thinking there's a brighter side of British politics. They're pretty much all in it for self-interest, and if the gravy flows from the City you can expects the snouts of MPs of all hues to be troughing.

  • Comment number 40.

    I see that I was not the only one to note the fundamental hypocrisy of Robert Peston article, which is to equate trade unions donating to the Labour Party with hedge funders donating to Conservative Party. He should know better the history of this country or be more honest.

  • Comment number 41.

    Call me old fashioned if you like, but Labour funding from the trade unions is sourced from millions of working people. Tory funding from the Hedge fund managers is protecting the lifestyle of the few.

    It is the way it always was and always will be. What did history teach us about the 'rotten Boroughs'.

  • Comment number 42.

    one key difference here is that the unions get a say - and some would say a final say judging by recent leadership elections - on who is leader.

  • Comment number 43.

    "Are hedge fund managers the Tories' trade unionists?"

    No, they aren't because their donations amount to less than 8% of Tory receipts. The sloppy reporting that prompted you to write this piece without checking if it was true has been exposed as fiction by forensic analysis elsewhere.

  • Comment number 44.

    The whole extra levy on Banks caught me by surprise, but then I did a little digging and found this rather angry article.
    http://www.guardian.co.uk/commentisfree/2011/feb/07/tax-city-heist-of-century

    Boils down to the fact that whilst it looks like the government is making more money out of the banks, in reality its not. Not even close.

  • Comment number 45.

    The lines are well drawn. Either you support the trade unions or you support the 'financiers'. I know life is full of grey areas, but not on this point surely. It's a choice between those who look to bring humanity, stability and justice to our everyday lives and those who thrive on the exact opposite. Quite how the 'opposite' get any support from hard working families on a limited income is completely beyond me. And that, by the way, constitutes 90% of the population of this country.

  • Comment number 46.

    Given some hedge fund execs 'earn' not the mere millions per year of investment bankers but literally billions per year, the donations they make to the Tories are just the small change.

    David 'we're all in it together' Cameron is never going to round on these folk, is he?

    This represents the politics of grotesque greed.

    It's up there with the best examples of how wrong capitalism is.

  • Comment number 47.

    You can see something on Thomas Ferguson's 'Investment Theory of Poliitcs' here:
    www.youtube.com/watch?v=ZMCcFt_1ezI

  • Comment number 48.

    A challenge ??? Is that a sick joke ?? What do they have to do exactly for it NOT to stink to high heaven ?? The paymasters of our Government are the very people who gain the MOST from any influence over financial reform. You think these hard headed businessmen donatee all this money for a joke ? For a laugh ? For the good of society ? No - these are the most selfish, single minded, extremely shrewd individuals on planet earth.

    And we are supposed to believe the Tories are being "tough" on these very same people ???????!!!!!!!! LAUGHABLE. Vlad Putin would be proud, and he is probably taking notes on exactly how Cameron is getting away with it so easily......

  • Comment number 49.

    33. At 10:38am on 9th Feb 2011, Sensibly Reckless wrote:
    Odd that this government is taking so much flak from HYS posters about being 'unelected' and there was so little about the previous Government. If we should be complaining about anything it's how our voting system unfairly skews parlimentary seats to Labour and against the Lib Dems.
    ====================================

    More tory myopia and general dimness:

    Let's look at your figures:

    Compared to the Conservatives in 2010
    Popular vote 10,703,754
    Percentage 36.1%

    I'll add some:
    Conservative Seats: 307
    Total Seats: 650
    Percentage: 47.2%

    So 36% of the popular vote gets 47.2% of seats and yet the system skews seats from libdems to Labour?

    Do you honestly believe everything you read in the Tory press, do you not think about things yourself? A 7 year old could work that out. And we hear these lies time and time again.


  • Comment number 50.

    #4 - WOTW

    Your comment below:

    "The Government (which wasn't actually voted in by a majority, and doesn't seem to be sticking to it's mandate) is merely serving the interests of the banks and the wealthy financiers of this country.

    It's fascism folks - learn to recognise it."


    This seems to be somewhat at odds with what RP's posted in his original blog:

    "It should be pointed out, however, that the simplest conspiracies won't fly: the bulk of funding for the Tory party doesn't come from bankers; arguably the most important group of Tory donors are hedge fund managers, some of whom would be seen as critics rather than allies of the big banks."


    Assuming that we take RP's quoted proportion of funding at face value, wealthy financiers maybe, but banks no. They may be guilty of a lot of charges, but not this one - if the govt is passing legislation that assists the banks, it's not because they're being funded by them at election time. Indeed, from RP's post, such helpful legislation would be contrary to the benefit of the main backers, the HF Managers?

  • Comment number 51.

    comments 18 and 36
    What you say, imply is entirely correct, though the real payment of that tax will be paid by current account holders. So yet again more smoke and mirrors from George and co.
    Until paid for and by lobbying is stopped the commoners are 'Goosed'.

  • Comment number 52.

    What mean moosh?

  • Comment number 53.

    Interesting remarks. As you point out, there are more questions than answers.

    What was the role of the Hedge Funds industry in the financial collapse, credit crunch and global recession?

    Is there a need for reform; legislation or regulation of this industry as a result of any culpability? What steps, if any has the government already taken to make any reforms?

    Does the evidence provided by the Bureau suggest that reform of political party funding in the UK is needed? If so, will the government be willing or able so to do?

    How much can or will the government, Ministers, the Conservative Party and the 70 MPs on the payroll of the industry be relied upon to act in the public interest, rather than narrow political and commercial interest in introducing any changes needed; both on party funding or Hedge Fund regulation?

    Should another follow up topic of research for the Bureau of Investigative Journalism be the activities of property developers and other businesses, including PR companies in the funding of the Conservative Party?

  • Comment number 54.

    Trade union political donations are made after income tax and nics are deducted. What about donations made by tax avoidance masters. Its obvious that large donations are made in the hope it will influence *direction*.

  • Comment number 55.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 56.

    35. At 10:39am on 9th Feb 2011, pandatank wrote:

    "Meanwhile the £1.5 Billion lost to "Tax Avoidance" (note they don't even call it evasion anymore) is encouraged and we are even told that these Tax Avoiders are the one who will drag the UK out of the mire"

    avoidance is perfectly legitimate. ISAs are tax avoidance, buying cigarettes from Europe and bring them back is avoidance and is legal.

    Evasion is illegal - paying cash so no VAT, not declaring correct income etc

    So the two are totally different

  • Comment number 57.

    Individual membership of the Labour party has risen exponentially since the last election. Hopefully Labour will no longer have to rely on militant, damaging unionistas such as Bob Crow and truly become a party of the people. Not sure Ed Miliband will help with this goal though, he's not someone whom many will identify with.

  • Comment number 58.

    The whole thing stinks doesn't it, anyway whoever believed it otherwise? So why do we continue to vote for these people who are going to save us when things go wrong? A lot more questions could be added here.
    Politics has replaced religion as before the church taught us to read and write, how to behave for the fear of God. Not so long ago they were there to heal us with prayers and teach us hygiene in our every day lives.
    So what have politicians brought us? As the French saying goes, you take the same and start again which of course brings us no further forward. They don't tell all but only what you want to hear and what they think is good for you.
    It's a sad world run by sad people who think they are above it all and don't live in the real world.
    Just keep your nose to the grindwheel chaps, your're doing fine.

  • Comment number 59.

    The banks did very well over the years of a Labour government - it makes you wonder why any of them would fund the Tory party.

  • Comment number 60.

    Hi Robert.

    Do you find credible the arguments between hedge fund managers and big bankers?

    Aren't they just public dialogues designed to make clear how long the latest speculative bubbles can last and how much they can inflate?......

    .....and of course negoitations as to how the spoils should be divided

  • Comment number 61.

    People can of course throw accusations of influence whether its Conservatives/financial services or Labour/Unions, the point is what is the alternative?

    1) Public funding - the media would kick up a huge fuss, especially post the expenses fiasco and the voters won't stand for it. One could still argue that if all the main parties agreed to tough out the negative publicity it could still be achieved, but I think the fundamental flaw of it not allowing smaller parties in and effectively creating a stale status quo would mean it would not be viable anyway.

    2) A limit on donations, say £10,000 per year, applied to all individuals and entities (companies, unions, charities) etc. But would be hard and expensive to police, people could set up subsidiaries to get round it, or pass money to other people to pass to parties. It would prove a huge distraction in the national political debate with parties constantly claiming others are breaking the rules.

    3) The status quo. Not ideal by any means, but if we are to live in a free society, then indivuals, unions and companies should be free to donate money to whichever legal political parties they wish, with the proviso in the case of the latter two that shareholders and members approve such payments. We have an independent media, political advertising on TV is strictly controlled, and a (largely) well educated population who can make their own minds up. The amount of money each party receives, and from where, so they can put up billboards or shove leaflets through doors can only make a very small difference at best.

  • Comment number 62.

    It comes as no shock to me, the banking budget is ring fenced and i can assure all present this is one ring fence that wont be broken by either of the major parties their second homes and duck houses depend on it.

  • Comment number 63.

    This is ridiculous. The unions own, run and finance the Labour party to a FAR FAR greater extent than the City gives money to the tories. To draw a comparison is risible.

    To those moaning about democracy, perhaps they could explain how the unions block vote electing Milband E rather than D (who got more votes) squares with their bleatings?

    We know the BBC hates the tories, it's just boring now.

  • Comment number 64.

    In a Hollywood script Corporate forces backing a political party deliberately take themselves to the brink, burden a country with huge financial debt just to discredit an incumbent government.

    The incumbent government is ousted at a general election after a ruthless campaign by a media magnate who uses press and independant news outlets to blame adminitration for all of society's ills including the debt burden.

    Despite this the Corporate Forces chosen Party are unable to get an overall majority and end up in an alliance that most people think will moderate the tone of the government.

    Media mogul takes over all forms of News, printed and broadcast. Corporate forces retrun immediately to profit despite their dire warnings.

    If I was a Holloywood producer I wouldn't buy it.

    Have the British Electorate?

  • Comment number 65.

    I seem to recall that in early 2009 hedge fund managers were identified who had made millions from selling short bank shares prior to Gordon Brown's 2008 decision to ban short selling of such shares. Some people called them 'spivs'.

    I wonder whether those Tory hedge fund manager donors agreed with Brown's decision and whether or not their view is shared by Cameron and Osbborn et al.

    Perhaps it is simply the case that the Tory party largely funded by spivs.

  • Comment number 66.

    Are the blues influenced by financial interests?
    Well if the reds were anything to go by:

    1997 Bernie Ecclestone million pound donation. F1 sponsored by tobacco manufacturers.
    1998 Peter Mandelson, resigns after failing to disclose £373,000 loan.
    2000 David Blunkett fails to declare income from rent on his Wimbledon home
    2000 John Prescott fails to disclose benefit of Union owned flat
    2000 Gordon Brown faces Inquiry over flat purchased from Maxwell ruins
    2001 Henry McLeish (Labour) failed to refund income received from constituency office 2001 Hindujahs receive passports after Labour donation
    2001 Buyer of Millennium Dome Robert Bourne accused over donation to Labour
    2001 Keith Vaz, Peter Mandelson and the Hinduja brothers.
    2002 44 constituency Labour parties in Scotland fail to register re: donations from unions. Failure to do so is a criminal offence
    2002 Labour MP Alan Meale in trouble over deportation case linked to donation
    2002 Labour accuse Paddington crash victim Pam Warren of being a Tory stooge
    2002 Stephen Byers resigns from government after various scandals
    2002 Jo Moore resigns over ‘burying bad news’ email
    2002 Labour spin doctors trash reputation of Rose Addis
    2002 Enron accused of buying access to Labour after donation
    2003 Margaret Hodge forced to resign over libelling Demetrious Panton
    2003 The apparent suicide of Dr David Kelly and the "sexed up" "September Dossier",
    2004 Revealed that 70% of Scottish quango appointees have links to the Labour party
    2004 Willie Haughey, who has donated hundreds of thousands of pounds to the Labour party, appointed to the post of chairman of Scottish Enterprise Glasgow.
    2004 Lord Drayson’s company wins non competitive tender contract after £50,000 donation to Labour
    2005 Blunkett resigns over links to DNA firm
    2005 Stephen Byers apologies for lieing over Railtrack
    2005 Labour MSP Ken MacIntosh resigns over non declaration of financial interests
    2005 Birmingham Labour Party accused over post voting irregularities
    2005 Revealed that Jack McConnell met with Labour donor Willie Haughey to discuss compensation on a land deal where the M74 would pass through Haughey's property. Initial compensation of £7.4 million rose to £16.5 million
    2006 Tessa Jowell, Labour cabinet minister, embroiled in a scandal about a property remortgage allegedly arranged to enable her husband to realise £350,000 from an off-shore hedge fund, money he allegedly received as a gift following testimony he had provided for Silvio Berlusconi in the 1990s.
    2006 Charles Clarke & the failed deportations
    2006 John Prescott's Affair(s)
    2006 Defeated Labour MP Calum MacDonald gets publicly paid job as Forestry Commissioner
    2006 Prescott pays no Council tax
    2006 Margaret Beckett’s Royal Flights
    2006 Cash for peerages

    And last but by no means least:

    2009 Details of covertly recorded discussions with 4 Labour Party peers in which their ability to influence legislation and the consultancy fees that they charge (including retainer payments of up to £120,000) were published by The Sunday Times.

    2010 Stephen Byers, Geoff Hoon & Patricia Hewitt secretly filmed offering to influence Government Policy.


    You may as well mark your ‘X’ on the wheelie bin, for all the good it ever does


  • Comment number 67.

    Gosh what a spiffing wheeze!

  • Comment number 68.

    This isn't a business story Robert, it's a politics story. But as you have obviously trolled for a reply - the government (of whatever party) is always given donations by businesses. It is in the interests of the country that the will of big business is followed remember as these create growth, wealth and jobs unlike the trade unions that see footballers's salaries as the target for the minimum wage or who argue about large corporate salaries (check their income out and many have never been to university and were state educated).

  • Comment number 69.

    Another interesting slant to this is that 57 people from the financial sector gave more than £50,000 in donations last year which entitles them to join the "Leaders Club". This exclusive membership gives them access to the ears of senior tory members including Mr Cameron. Now what could they be talking about while sipping wine at tory bashes? One thing i`m sure of it certainly isn`t the weather, especially winter snow. Is there a conflict of interest in this? Are they lobbying Cameron? We shall never know for sure but it seems certain that these donors are not donating money without some expecting some kind of return, after all they`re financiers and they expect any investment to yield greater rewards.

  • Comment number 70.

    I was pretty appalled when I saw this, but calmed down a bit when I saw this article (http://order-order.com/2011/02/09/bureau-of-investigative-journalism-more-like-inspector-clouseau/). Now I'm just wondering why the obviously bogus story was embraced as factual by the beeb. It's politically motivated and inaccurate.

  • Comment number 71.

    19. At 10:22am on 9th Feb 2011, Reticent_Trader wrote:
    I look forward to wails of

    Labour, unions blah blah, blah

    and Hedge funds did not have any role in causing the 2007-08 crisis.
    --------------------------------------------------------
    63. At 11:39am on 9th Feb 2011, thecoopster wrote:
    This is ridiculous. The unions own, run and finance the Labour party to a FAR FAR greater extent than the City gives money to the tories. To draw a comparison is risible.

    To those moaning about democracy, perhaps they could explain how the unions block vote electing Milband E rather than D (who got more votes) squares with their bleatings?

    We know the BBC hates the tories, it's just boring now.
    ====================================

    Exhibit A

  • Comment number 72.

    As expected a very skewed take on this issue from the HYS contributors (indeed I'm moved to contribute just to try and even it up a bit!)

    The problem with the issue in general is that no one here actually knows whether funding does equate to real political influence (and I include so-called "insiders" like Robert Peston in that). So this entire discussion is based on conspiracy theories and heresay. And of course, anyone who tries to argue that perhaps the grand conspiracy really isn't occurring is accused of naiveté.

    For example, in my view the idea that the government heard about this story (because the Bureau of Investigative Journalism called them up to ask for comment about it) and then decided, apparently on the spur of the moment, to increase the bank levy by 50% for this year so they could point to evidence of banker bashing is complete rubbish. But perhaps I was just born yesterday.

    Public funding for political parties is a good idea in theory, but if people are in favour of it they have to accept that that would mean giving public funds to the BNP. It's the same with proportional voting systems. If you had true PR at the last election by my (back of envelope) calculations, the BNP would have 14 seats. Do you really want to see Nick Griffin stand up in the Chamber of the House of Commons (an "honorable member") and ask a question at PMQs? [I know this is a slightly separate issue, so apologies for going off-track].

  • Comment number 73.

    • 27. At 10:34am on 9th Feb 2011, avalanche_invesmtents wrote:
    the whole voting system in particular needs to be overuled to a far simpler but better. "whomever has the most votes wins" policy.
    WOTW im looking at you to sort this out

    - This really made me chuckle. You want a communist anarchist (fantasist) who wants to get rid of capitalism and replace it with a lump of cheese to engage in political reform? Why not ask Sue Pollard or Bernie Clifton?

    - The franchise should be reduced, that is obvious. Only those that pay tax at the higher rate or who own businesses that pay tax should be allowed to vote. The age one can vote from should be increased to 35. Prisoners, the mentally ill, women etc. should obviously be excluded.

  • Comment number 74.

    #63 The Coopster:

    People bleating continually about BBC anti-Tory bias - is the real thing that's becoming boring. How can they win? Criticise the Tories and they're biased against them....Criticise Labour and that's alright?

    And your point about union funding of the Labour party is just laughable. As many others have pointed out, the unions represent millions of ordinary working men and women - the corporate funding of the Tories represents the interests of a tiny narrow elite.

    I find it amazing that intelligent people find it so difficult to grasp this concept. It's also amazing that they continue to slavishly follow the dictats of this tiny elite - they're not in it for you, they're in it for themselves! Wake up!

  • Comment number 75.

    66. At 11:49am on 9th Feb 2011, Dempster wrote:
    Are the blues influenced by financial interests?
    Well if the reds were anything to go by:

    ==================================

    That is some disgusting roll of honour.

    No mention of ethical foreign policy!

  • Comment number 76.

    Tories representing, and being funded by, The City and Labour representing, and being funded by, the workers. Well, who'd have thought it? Whilst I appreciate the specific details provided in this blog the fundamental issue is hardly breaking news, although I welcome you taking the chance to arm the general public with sufficient knowledge to be able to decide if the mantra "we're all in this together" is sincere or not.

    Unfortunately, whilst the Tories are still joined at the hip to big finance, the Labour Party can no longer be considered to represent the working man on the street - if they had done that during their 13 years in power then we may not be in the mess we are. Instead they decided they could also get into bed with bankers, live in a fantasy economy and enact all manner of crackpot legislation dreamed up in la-la land.

  • Comment number 77.

    Tories are in the pay of nameless capatalists.

    Labour is given money from the unions who are democratic and members have the right to opt out of the politcal fund.

    Labour money comes from the masses who want it to go there not the elite who would prserve their own privilige

  • Comment number 78.

    I agree with the earlier 'watriler' about trade unions being representative of millions of voting members. At least their funds to the Labour Party is credible - if we take things as read! However, the finacial institutions behing the Tory Party funding seem to me to only represent of themselves and their individual businesses. Ok, they employ several thousand working voters. But those voters have no say on how employer profits are spent. Hence the row over bonuses and for what? Is not a millioin pound stirling salary p.a. insufficient these days and so requires a bonus for 'job done'? I dont' think so.

    Cameron and his group of ministers, in especial those in charge of our exchequer, appear to not be able to read the short term impact of so-called long term policies. Indeed, they are capable of finding ways of saving public monies but then leaving it to the Local and Public Authorities to take the flack.

    This so-called government appears to be totally indifferent to the misery of the inevitable and subsequent unemployment of those staffs affected. If things carry on as they are over the next three years I am certain there will be another change of government!

  • Comment number 79.

    Look, this really isn't a surprising or shocking thing. The simple fact is that lobbying represented a good use of funds because the biggest threat to the financial services sector was the undermining of confidence in government bonds. There is very little doubt that the Conservatives have made this a priority.

    One might be worried about this effective political capture by one industry. However, like it or not, our economy is heavily dependent on the financial services sector. This means that we do have to keep the City happy, just as the US has to keep its military-industrial complex happy.

    The real problem is that, as the CBI have noted, we do not have any long-term structural plans. It would be folly to carry on being so reliant on the City, but it seems that there is little political incentive to do otherwise.

  • Comment number 80.

    74. At 12:03pm on 9th Feb 2011, Bluebaldee wrote:
    And your point about union funding of the Labour party is just laughable. As many others have pointed out, the unions represent millions of ordinary working men and women - the corporate funding of the Tories represents the interests of a tiny narrow elite.
    ====================================

    What I always find ironic is that the followers of free markets fully support the pusuit of self interest by individuals, yet find it morally repugnant that the economically weaker in society should collectivize and pursue their own self interest.

  • Comment number 81.

    @redyellowandgreennotblue - you wrote//Hopefully Labour will no longer have to rely on militant, damaging unionistas such as Bob Crow\\

    Bob Crow's union is the RMT. The RMT was disaffiliated from Labour because the RMT allowed branches to support other socialist groups several years ago, though a few branches remain affiliated at a local level.

    The RMT is one of the fastest growing unions, though still relatively small.

    But don't let the facts get in the way of a good story (or believe everything you read in the press).

  • Comment number 82.

    So what is the story, this just states the obvious, Labour is funded by the Unions, The Conservatives by Business, surprise surprise. The issue is whether the Government of the day looks after the majority or the interest group that funds it. A bit of analysis of that Mr Preston needs to do a bit more analysis of the benefits received for this support rather that batting sound bites around.

  • Comment number 83.

    "49. At 11:01am on 9th Feb 2011, Reticent_Trader wrote:
    So 36% of the popular vote gets 47.2% of seats and yet the system skews seats from libdems to Labour?"

    Not quite so much as 35.2% of the vote getting 55.2% of seats as per Labour in the 2005 election.

    I'm well aware of the numbers. Pointing out that the Tories are overrepresented in parliament and ignoring that the Labour party have been massively overrepresented in parliament and that the Lib Dems are massively under-represented is a distraction from the truth and the point that I was making that the current government has more mandate from the public to govern this country than the last .

    Numbers do not lie.

    So please would Labour party supporters stop claiming that the current government is unelected unless they would like to pull in their own party for the crime of running the country with a lower voter percentage, turnout and larger over-representation in parliament.

  • Comment number 84.

    Whatever the credibility of this article there are two things that should concern us all.

    1) The Tories ARE funded by finance houses and this WILL affect their policy decisons.

    2) Tory think tanks are full of corporate leaders and this WILL affect their poicy decisions.

    Worryingly this was the same under Labour as they courted their masters, more worryingly the public seem to accept the onset of fascism as "The way it is" which is exactly what the government want.

  • Comment number 85.

    #74 Bluebaldee.

    I can't let that one go. I am an intelligent person and completely disagree with you.

    I'd say your eulogising about the "millions of ordinary hard-working families who are members of Trade Unions" is laughable. Trade Unions today do not represent the views or interests of the majority of *ordinary* people in this country. Wake up yourself - Trade Unionsists are in it for themselves! They represent the narrow-minded interests of their members. I find the idea that Bob Crow represents ordinary people in this country to be laughable.

    The narrow-minded "elite" you speak of own and run businesses in this country which generate wealth and prosperity for themselves, yes, but also for us all. Today we live in one of the wealthiest countries in the world because of the hard-work of ordinary people, yes, but *also* of the industry and imagination of the demon big business men you decry.

    Stop trying to make this a "rich capitalists" vs. "poor ordinary classes" debate. It's not.

    PS. I am a student, not a "rich capitalist"

  • Comment number 86.

    For us, good reasons for investigative journalism and Wikileaks.
    For them, good reasons for tabloid pals and state repression.

  • Comment number 87.

    Now I've wasted my morning again! I wish RP would stop writing these provocative blogs :)

  • Comment number 88.

    Well, the politicians either have to accept that the funders have undue influence on the party they choose to fund or they don't. If the Tory's say that the Labour Party is under the thrall of their Union paymasters, then they have to accept that they are under the thrall of their City backers. If Labour say they are not influenced by the unions they have to extend the same courtesy to the the Conservatives. Personally I heartily agree with Dil @ #7 that it is time to move to a system of public funding for political parties, so that no-one can be accused of buying political favours. Politics is a public service and should be funded as such. When it comes to cuts in public services there should be a formula that cuts the funding to political parties in line with everything else - so that if we have to suffer - so do they.

  • Comment number 89.

    George Monbiot's acticle in yesterday's Guardian seems relevent here.

    http://www.guardian.co.uk/commentisfree/2011/feb/07/tax-city-heist-of-century

  • Comment number 90.

    Yes, the TU movement uses members political levies to influence government in the hope it can improve conditions for thousands. Don't forget members also have the right to be excluded from such levies.

    On the other argument in relative terms those donating to the Tories are a meagre handful in comparison to the thousands via the TU, it beggers belief that the few can easily donate millions while the many struggle to donate pitiful amounts!

    Yes indeed the few shall inherit the earth......two key words here 'FEW' / 'INHERIT'

  • Comment number 91.

    Memo to myself,...... Bankers fund Tories,...... Unions fund Labour.
    Glad that burning question has been answered, now I can walk my dog without being distracted by the worry of it all.


  • Comment number 92.

    Is it just me or wasn`t there about 60 comments published just a minute ago. where did they go?

  • Comment number 93.

    My guess would be that the extent to which the City funds a party increases whenever the party looks likely to win an election. To what extent was City funding of Labour higher in the years preceding 1997 compared to, say, the late 1980s?

  • Comment number 94.

    52. At 11:05am on 9th Feb 2011, ancientexpat wrote:
    What mean moosh?

    You cant be that ancient expat. Its an old fashioned word meaning FACE. Since Frankie Howard left us I though I was the only person still using it, only I would spell it mush (nothing to do with unions or bankers I know but there you go lol).

    Dont know why your all getting so upset about who runs the Country. Its not Labour/The Unions or The Tories/Their paymasters, its an unknown bunch of pen-pushers in Brussels!

  • Comment number 95.

    According to Guido Fawkes, the biggest donor was a property developer and when you take him out the figure falls to a massive 9%. If you read Guido's analysis of the analysis you find that this is very sloppy work.
    Robert do some fact checking of your own before rushing out with this

  • Comment number 96.

    @pjs501 (85) - trade unions represent 'narrow-minded' interests, do they? Your prejudice betrays you, as I suspect you meant to say 'narrow interest'. Either way, I disagree - without trade unions the Tories and their sidekicks would push further and get away with a lot more to the detriment of the lives of most people. As a student you have the opportunity to learn from history rather than repeat the gutter press attacks on the likes of Bob Crow - if he is so unrepresentative, then please explain why his union has seen such rapid growth?

    New Labour disenfranchised swathes of the left leaning population, and many of these hope that Ed Miliband will redress the balance (don't bank on it). So Bob Crow, outside of Labour, offers some hope of an alternative being put forward by somebody. That doesn't mean I support Bob Crow 100%, but it is so annoying to hear the rants in the press against him successfully indoctrinating their less discerning readership.

  • Comment number 97.

    As if proof was needed as to the extend of the collusion between the Conservatives and the City... we have a derisory 'no more Mr nice guy' increase in the banking levy from Mr Osborne yesterday - which of course will be passed on to 'customers' - the day before a critical report outlining the extend of the City's financing of its old school chums to get to the real prize, which of course is the billions in tax savings being orchestrated for those deemed too big to fail. http://bit.ly/f0kDTj

    And all of this will be washed over with the laughable, in name and design, Merlin Project which the banks will ignore, just as they did the lending targets to small businesses which were ordered as a condition of their bail out.

    Add to this the fact the banks are still enjoying a steady stream of additional subsidy from the taxpayer with their cartel right to borrow money at 0.5 per cent to then invest in Government Bonds with a rate of return of between 3 and 4 per cent and rising. http://bit.ly/6douGW

    For a bank, why bother investing in small business when the present subsidies provide little incentive to do so? Isn't that an ironic twist on the mounting criticism of the welfare state?

    WOTW is right on this one - we have walked blindly into a fascist state, and the dazzle of big TVs, cars and houses most could never actually afford is perpetuated in a concerted PR onslaught detailing the lives of others whose very existence is to sell the debt dream to us all.

    Sorry for the rant, but we are reaching a tipping point when people are going to say enough is enough.

    The fact the Liberal Democrats are sitting back and allowing themselves to be marginalised is a glaring indictment o their willingness to put up with pretty much anything to maintain their position at the trough.

    This is all going to end badly. Rewarding yourself with an obscene bonus for kicking the debt can up the road for another year or two until 'confidence' in the ponzi scheme returns gives you some idea as to the delusional nature of the people in charge of the money and the creation of same.

    And if we rewrite the accounting rules to allow banks to show money that doesn't exist and price assets to their own fantasy rather than their true worth, then we have a long way to go yet before this sorry mess unwinds.

  • Comment number 98.

    If MP's had more principles and served the people who voted for them rather than spending their time:

    Flipping Properties to avoid tax.

    Fiddling expenses.

    Asking questions for cash.

    Appearing on reality TV Shows. (so lets have no rubbish slagging off the masses watching the x factor)

    Tweeting endlessly.

    Taking on as much private consultancy work as they can get (essentially taking cash to pass on inside knowledge on how to work the system better)

    Committing perjury and being sent to jail for lying in court in an attempt to cover up one of above.

    Then they would have long since done the right thing and Nationalised the banks and slapped the hedge funds down.

    All 3 parties are equally useless. The difference it seems to me between Labour and the Conservatives is that the Conservatives generally know who is and who is not a member of their club and try to deliver to their paymasters unlike Labour who do very little for the working union members who pay them out of their modest wages in order to promote corporate responsibility and social justice.

    WOTW

    "Fascism should rightly be called Corporatism, as it is the merger of corporate and government power."
    Benito Mussolini

    Spot on as usual. Your tireless work is very much appreciated and a source of encouragement to many.

    On another slightly related point.

    I hope after the unpleasantness earlier this week we all know the difference between Socialism and National Socialism. The latter has a number of faces and they are all ugly.

    Fascists almost always start out as powerless outcasts with nothing more than a misanthropic desire to carry out retribution against those they are envious of hoping all the while to assume their place. They will usually select scape-goats; along racial or religous lines, as a distraction from their real objectives. To attain power. The seizing of power wether happening over time and incrementally or suddenly will always result in the people being robbed of their freedom of speech and supression of property rights, not in order to redistribute wealth but to embed the fascist in wealth and comfort and remove the ability for the people to criticise the injustice and hypocrasy. All the while the fascist will engage in rhetoric in an attempt to trick the less observant that they are indeed one of the people themselves when all they want is to make the people suffer as they have from the start. Once the scape-goats have been removed all that is left is a state of terror and paranoia, where not shouting the fascist lies loud enough becomes a criminal offence and children are taught to shop their parents for making remarks critical of the state.

    They have nothing to say worth listening to.

    I do hope that my views are shared on this or i really am wasting my time.

  • Comment number 99.

    "Are hedge fund managers the Tories' trade unionists?"

    Well no - because trade unionists are ELECTED to REPRESENT their MEMBERS. Hedge fund managers are self-appointed dictators.

    Very big difference, and shame on Robert for even proposing such a comparison.

  • Comment number 100.

    I wonder if this would be the reason the government announced yesterday £800 million of extra taxes on banks, yet failed to mention the deliberate creation of a massive loophole allowing these and other companies to save much, much more than that in tax every year?

    http://www.guardian.co.uk/commentisfree/2011/feb/07/tax-city-heist-of-century

    Methinks yesterday was nothing but a PR stunt to make the public feel warm at the same time as increasing our share of the debt.

    If you're a big enough business in this country, you can now pay zero tax. You can even get the tax payer to fund your own expansion in to other countries! Genius.

    Are we really wondering why the city puts so much money and time in to political parties? Time to cut the speculation and start shouting about both the causes and effects.

 

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