More top firms halt donations to Tories

TWO MORE of Britain's leading firms have cancelled their contributions to the Conservative Party, deepening the party's cash crisis and raising further questions over how much it will have to fight the next election.

The engineering giant Lucas Industries and the car distributor Inchcape have decided to stop their donations, worth pounds 25,000 and pounds 40,000 respectively last year.

Both companies figure in the stock exchange's FTSE 100 index, and join a growing list of blue-chip firms that have already shunned John Major and his party's pounds 11.4m overdraft this year.

And there may be more to come. Among other traditional Tory donors, broker Smith New Court is reviewing its pounds 10,000 donation, while Rolls-Royce and Trafalgar House say they have yet to take a stance for 1995.

Both Lucas and Inchcape made their decision before last week's Tory party conference, but like much of British business they are concerned at the party's increasing hostility towards Europe, as demonstrated in Michael Portillo's conference speech last week.

"The Single Market is absolutely vital to Lucas," said Sir Brian Pearse, chairman of the components group.

"We have to be very much a global company. I think that some of the comments coming, not just from politicians, are worrying ... they give the impression we can go it alone," he said.

Business confidence in Mr Major's administration has been hit by anger at Tory squabbling and hard times in many parts of the economy - including the construction, pubs and drinks sectors - where industry feels the party has turned a deaf ear.

Blue-chip firms that have already cancelled donations this year include brewers Whitbread, the drugs giant Glaxo Wellcome, the entertainment group Rank, and United Biscuits - with pounds 130,000 once the Conservatives' largest benefactor. Last week the sugar giant Tate & Lyle combined insult and injury by cutting support for the Tories to pounds 15,000 from pounds 25,000, and for the first time giving pounds 7,500 to Labour and pounds 2,500 to the Liberal Democrats.

In February the media group Pearson - owner of Penguin books and the Financial Times - became the first major company to give significant backing to Tony Blair, giving pounds 25,000, the same as to the Tories.

While many Tory stalwarts such as Hanson and the builders Taylor Woodrow have remained loyal, several indicate they are unlikely to increase donations as usual in an election year, threatening future campaign spending.

See Business, page 7