Making all-out efforts to court donors

Billionaire John Caudwell, one of the governing Conservative Party’s biggest donors before Britain’s last national election in 2019, says he no longer wants to back a party that he feels wasted 14 years in power.

But he’s not quite ready to donate to Labour.

With a general election due early next month, Caudwell, who made nearly 1.5 billion pounds ($1.9 billion) in 2006 when he sold his mobile phone retailer Phones 4u, still feels he doesn’t know enough about the centre-left opposition party’s plans.

With the race on to raise campaign funding after Prime Minister Rishi Sunak shocked politicians and big business by calling an early election on July 4, both the Conservatives and Labour are redoubling efforts to court donors.

Labour’s leader, Keir Starmer, a former public prosecutor, has charted a centrist course since he took over in 2020, moving the party away from a leftist agenda that saw it lose heavily at the previous election. Polls now suggest that Labour will sweep to victory in July.

But some wealthy donors, like Caudwell, are remaining on the sidelines, unconvinced the party has demonstrated it has the policy solutions to revive Britain’s flagging economic growth, modernise its infrastructure and protect public services from attrition.

“Keir Starmer’s Labour Party is untested ... and that’s a risk,” Caudwell said at his marble-floored mansion in London’s luxurious Mayfair district. That’s a sentiment shared by many voters. A survey by pollster YouGov in April showed that 50% of respondents were unclear what Labour under Starmer stands for.

Traditionally, the left-leaning party received the bulk of its funding from Britain’s union movement.

According to a Reuters’ analysis of data from Britain’s electoral commission, Starmer has received the second-highest level of private donations for the Labour Party in a single election cycle – behind Labour’s term in power in 2005-2010 under former prime ministers Tony Blair and Gordon Brown.

The party has collected about 24 million pounds ($30.6 million) in private donations since 2020, according to Reuters’ analysis of data running to April.

More than 9 million pounds have come from new donors, including Lubner. At least eight former Conservative supporters have now switched their allegiance and are now giving money to Labour, with some saying they are persuaded by Labour’s promise of a stable environment for business.

Private donations aside, the remainder of Labour’s money comes from a mix of trade unions, public funds and other sources.

Labour received just 239 million pounds from trade unions under Starmer, compared with more than 50 million pounds under both his predecessor, the left-wing veteran Jeremy Corbyn, and the prior party leader, Ed Miliband.

One Conservative donor, who made a large donation at the last election, said he would not be giving money to the party for this campaign as he didn’t expect it to win. The businessman, who requested anonymity so he could speak frankly, also ruled out donating to Labour, citing the risk of higher taxes if they are elected.

Labour has said there will be no rises in income tax or National Insurance social security contributions if it wins power. A Conservative spokesman said the party was “taking bold action to secure a better future for the whole country”.

Labour, traditionally seen as the party of tax and spend, scaled back a target to invest 28 billion pounds a year in green industries if it wins the election because of what Starmer called the deteriorating economic outlook.

Instead, the party would ramp up investment over time. It plans to adopt a tax break for business known as “full expensing” introduced by the Conservatives last year that allows companies to deduct 100% of the cost of qualifying plant and machinery from their taxable profits.