The billionaire Tory donor Lord Spencer has handed £250,000 to Rishi Sunak’s election campaign as the City gears up for the battle over No 10.
Financier Lord Spencer, dubbed the most successful treasurer in Conservative Party history after he raised tens of millions for the Tories from 2006 to 2010, has kicked off a charm offensive ahead of the July 4 election as the City readies for a possible Labour government.
Speaking from his ranch in Kenya, where he breeds critically endangered black rhinos, the tycoon – who made a fortune founding broker-dealer ICAP – says he has just given £250,000 to the Conservatives and now plans to “encourage all my business contacts to stick with the current government as a better choice than Labour” amid dire polling.
The donation, his largest since 2019, comes as analysis shows that no incumbent party has voluntarily entered an election campaign with worse polling.
Despite calling for an election seven months before he had to, Sunak is substantially behind his three predecessors David Cameron, Theresa May and Boris Johnson in the polls.
Lord Spencer, who was a major donor to Boris Johnson’s successful leadership campaign, backs Sunak as leader and is ready to set out his argument for why the Conservatives would be better for the economy to his sprawling network of wealthy contacts.
For a start, he says, the economy is now showing signs of growth. It smashed consensus for the first three months of the year after GDP expanded by 0.6pc, ending an official recession.
“The economy is like a supertanker, it takes time to turn around but it is turning around and Rishi does deserve some credit for that,” he says as he prepares his pitch to the City.
“What I’m saying to friends is, ‘I understand that there’s a lot of frustration with the Conservative Party after 14 years in power and there’s a feeling that it’s the other side’s turn, but [to] those people who are thinking of voting Labour: be careful what you wish for and be very careful of what you expect’.”
Lord Spencer might have his speech ready to go, but he has a tough PR job ahead. The former Tory adviser Iain Anderson, who has switched sides and is now advising Labour on how to support corporate Britain, says people are “crying out for stability and economic competence and just want more predictability to be able to invest”.
As the nation prepares to head to the polls, Anderson says businesses are feeling hopeful that they can “move on, turn a page – the current regime is exhausted”.
Lord Spencer’s intervention comes after Sir Keir Starmer and shadow chancellor Rachel Reeves courted business leaders and soothed concerns in the finance industry, where many bosses are now preparing for a Labour government.
Instead of focusing on redistribution, equality and an interventionist state, Labour is fighting this election on the economy.
Jamie Dimon, head of the world’s biggest bank JP Morgan, has praised “pro-business” Sir Keir’s commitment to growing the economy. Sir Keir’s mantra is “growth, growth, growth”.
But Lord Spencer doesn’t buy it.
“They may talk the talk on promoting growth, but will they actually walk the walk? I am profoundly sceptical,” he says.
In his view, Sir Keir is “not a Tony Blair”, and he fears that this could be the “most Left-wing [Labour] administration this country has ever had”.
“They’ve done a very good job at not frightening the electorate by representing that they’re very moderate and centrist,” Lord Spencer says.
Jeremy Corbyn is now standing against Labour as an independent candidate, risking exacerbating a split between Labour’s leaders and the Left wing of the party.
Although some business leaders fear being blindsided after the election, many have been frustrated with UK politics for years and have expressed a hope that Labour won’t fall short at the ballot box.
The Tory Winter Ball at Whitehall’s former War Office, now luxury hotel Raffles, was described by one senior banker as “the last party on the Titanic”.
A Tory donor who went to the event earlier this year admitted at the time that he had significantly reduced his donations amid fears that the party faced defeat.
Tory donors who have switched to Labour include Richard Walker, the boss of supermarket chain Iceland, while ex-Bank of England governor Mark Carney is helping Reeves in her attempt to become chancellor.
Labour officials are confident enough to have emailed business leaders last week urging them to support the party in public. At the time of writing, bosses who spoke to The Telegraph said they were yet to receive anything similar from the Conservatives.
Lord Spencer acknowledges all the criticism against the party he has donated millions to but also thinks the Conservatives have been dealt an unfair hand.
“The Conservative Party have received legitimate criticism for their performance but bear in mind they had to take over from the financial crisis, the wash over from Brexit and also Covid,” he says.
“I believe they could have done a better job, but the past period for the Tories has had some very big earthquakes in the global landscape.”
The problems still facing the country are huge and Lord Spencer has a list of challenges which he believes need to be tackled urgently.
First up is the country’s ballooning Civil Service. The state now accounts for around 45pc of GDP, with one in six people now working for the public sector.
“What are we going to do to reverse the public sector’s negative productivity? As a starting point, in many departments we know civil servants are only working in the office for two days a week – is it any wonder that renewing your passport is a nightmare?
“Civil service work practice reform is essential. Do you think Labour will do a good job on that? I doubt that very much.”
Next on his list is a desperate need for welfare reform.
“Welfare is now the biggest part of our budget, it is enormous and growing fast,” he says.
The number of Britons neither in a job nor looking for one has risen to 9.25 million since the pandemic, mostly due to a huge spike in long-term sickness.
“A significant number are undoubtedly fit for work. Who is more likely to get those into work? The Labour Party?” he says.
“Without welfare reform and civil service reform our economy is going to be absolutely stressed to the extreme.”
Then there’s the NHS.
“We all know the NHS is not this paragon of virtue that we have loved to believe. It is in desperate need of reform as well,” he says.
“Do we really think Labour will do that, or will Labour do what they have always done in the past which is simply put more money into it, thinking that alone will improve the output?”.
Lord Spencer’s mission to promote Sunak is a boost for the party at a critical time – David Cameron became Conservative leader six months after the City tycoon told him over a private lunch in 2005 that he had his backing.
But his pitch to friends won’t be so easy this time, as Sunak is sent out in the rain.
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