Andy McSmith's Diary: Hedge funds, the Tories’ cash cow, eagerly repay favours


A measure in George Osborne’s 2013 Budget which made no headlines outside the financial pages was the abolition of stamp duty reserve tax on UK-domiciled asset management funds. That may not sound like an attention grabber, but it was manna for Britain’s hedge-fund bosses, who by the Government’s estimate saw £145m drop off their companies’ collective annual tax bill.

One good turn deserves another. When the Electoral Commission released the latest quarterly figures for political donations, Labour Party researchers combed through them to get a measure of how much the Tories depend for their income on hedge funds. They uncovered £848,288-worth of donations in just the three months from July to September this year. Added to what they had gleaned from previous figures published by the Electoral Commission, going back to 2001, it brought the total of hedge fund largesse to £36,785,700.

Heading the list of 49 major donors from the world of asset management is Michael Farmer, who runs one of the world’s largest industrial metals hedge funds, and who is so impressed by David Cameron’s leadership that he has given nearly £5.4m. That puts him ahead of Michael Spencer, whose firm was fined £55m for its role in the Libor scandal, who has given £4.8m, and David Rowland – who was going to take over as Conservative Party treasurer in 2010 until the publicity about his status as a former tax exile made him decide to drop it – who has given nearly £4.7m.

Hacks enlist Almighty’s aid

There was a touching ceremony at St Bride’s Church, Fleet Street, on Tuesday night, entitled “A mission in peril: celebrating the media in troubled times”, which was a memorial service not just for journalists risking life and limb in war zones, but for an entire industry whose future is uncertain. There was even a prayer for help for those “in legal proceedings”. One worshipper said afterwards: “That’s the first time I have been asked to pray for Rebekah Brooks.”

Iron Lady recycled suitor

I do not know whether Margaret Thatcher was taught the saying “waste not, want not” in her childhood, but it was a maxim that she observed, sometimes in extraordinary ways, as illustrated by another tale from Charles Moore’s biography.

When she was Conservative candidate in Dartford in the late 1940s and early 1950s, she was courted by a wealthy local farmer named Willie Cullen, a Scot whose many good qualities included that he was careful with money. However, he wanted nothing more than to live the farmer’s life, making him an unsuitable husband for an ambitious politician. Rather than let him go to waste, Margaret sent for her sister, Muriel, four years older than her, and all but shoved her into Willie Cullen’s arms. “The process of being gently dumped by Margaret and pushed towards Muriel must have been a complicated one,” Moore observed.

A considerable understatement: but unlike many of Thatcher’s initiatives, this was an unqualified success. The Cullens were happily married for almost 40 years, until Willie Cullen’s death in 1998. They had a daughter, born in 1955, whom they intended to name Agnes, after Willie’s sister, until a letter arrived from Margaret, saying: “For heaven’s sake, let one of your children have an English name.” So they called her Jane.

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