Big firms cut back donations to Tories

Large companies are increasingly refusing to donate money to the Conservative Party but the shortfall is being made up by smaller firms whose donations are not so open to public scrutiny.

A survey of 5,000 large companies by Labour Research (LRD), a trade union-funded organisation, shows that only 133 of these companies gave to the Tories in the year ending 31 March 1996, compared with 194 in the previous year. The drop in cash from such companies - pounds 2.82m to pounds 2.55m - was compensated for by companies that remained loyal digging deeper into their pockets in anticipation of the general election.

The desertions include a number of well-known names, such as United Biscuits, Rolls Royce, Wimpey, Smiths Industries and Barings, most of whom gave up soon after the 1992 election and have not returned to the fold. One big recent withdrawal is the builder JJ Gallagher, which was the second highest donor traced in the 1995 survey, having given pounds 114,016.

While most companies refuse to give reasons for their withdrawal of support, Clare Ruhemann, editor of Labour Research magazine, said that some had stopped giving because of boardroom rows over political affiliations, and others cited specific reasons such as growing globalisation of the firm, which made it inappropriate to give to particular political party in one country.

Ms Ruhemann said: "Few companies cite disenchantment with government policies, but clearly with such a large number of major firms no longer donating there is a growing reluctance to become associated with a party that looks like losing the election."

Racal and Vodafone, bothchaired by Sir Ernest Harrison, are the only past donors to have returned to the fold, giving pounds 75,000, and a third company he chairs, Chubb, became a first-time donor with the same sum. The top donor was a Yorkshire-property group, Paul Sykes, with pounds 214,891, followed by Wittington Investments with pounds 200,000, and pounds 100,000 from Hanson, P&O and Trailfinders, which increased its donation from pounds 1,000.

Analysis of Tory party funding by LRD shows that the party raised pounds 18.82m in donations in 1995-96, its best showing ever in a non-election year. LRD says: "This suggests its donations are coming from rich individuals and private companies, rather than from large companies." Smaller companies are thought to donate around pounds 2.2m.

Company donations to the Labour Party uncovered by LRD are at a record high, having increased from pounds 81,000 in 1994/95 to pounds 268,096 last year, just over 10 per cent of the Tories' total. The largest donation came from Political-Animal Lobby with pounds 125,000, and the other seven corporate donors include Caparo Group with pounds 47,000, GLC (financial services) with pounds 30,000, and the media group Pearson, which matched its donation of pounds 25,000 to the Tories.

9 Labour Research: December 1996; LRD; 78 Blackfriars Road, London SE21 8HF; pounds 2,60.