New research by the Bureau of Investigative Journalism shows that 27% of Conservative Party funding came from hedge funds, financiers and private equity firms.
The proportion of donations to the Party from the entire financial sector reached 51.4% this year, an increase of 0.6%. This means that financial influence over the Tories has increased in the last 12 months.
This raises concerns as some of these financial parties would profit from financial instability and could influence government policy.
Although there is no evidence to suggest that any donor has made personal appeals to the Party, the Conservatives have introduced several measures that could benefit its backers:
- They promised to reduce corporation tax from 28% to 23% by April 2014 for companies who exceed annual profits of £1.5m.
- They made foreign branches of UK resident companies exempt from corporation tax.
- They allowed large companies in tax havens to pay a reduced tax rate of 5.75%
- They also oppose a Europe-wide financial transaction tax.
Dr. Stuart Wilks-Heeg, executive director of Democratic Audit, said that the situation was a troubling one:
“The coalition agreement included clear undertakings to take big money out of politics, but there appears to be no sign of this happening. What this study tellingly reveals is the scale of the Conservative Party’s reliance on a variety of City interests at a time when the Conservative-led government is attempting to kick banking reform into the long grass.”