Protecting the global position of the City of London and the financial services industry which it feeds has always been a shared concern for senior British politicians. Now the leftward move of the Labour Party under Ed Miliband has driven leading City names into the arms of other parties.
Despite political differences with the last Labour government many in the City still believed their voices were heard by the government during that time. Before he became Prime Minister in 2007 Gordon Brown was a Chancellor of the Exchequer who encouraged the “light touch” of the industry regulator and after leaving Parliament in 2010 Labour’s most successful post-war Prime Minister, Tony Blair, became an adviser to JPMorgan Chase. Central to New Labour’s project was the idea that markets could be harnessed to progressive outcomes. Speaking to The New York Times , Dr Jonathan Hopkin, a professor at the London School of Economics, said:
“Between ’92, and especially in ’94 when Blair took over, until the crash, Labour was totally aligned with the financial industry, Labour lost the election after the crash and new leadership came in that first of all rejected that political strategy.”
In return for rejecting that strategy it now appears that the financial industry has rejected the Labour Party. With no US-style campaign finance limits imposed on permissible individual donors to British political parties , gifts to the Conservative Party have reflected the industry’s gratitude for the efforts made in recent years. Leading figures in financial services recognise that few have done as much as the Conservative-led coalition government to defend hedge funds and bankers in the face of sustained attacks both domestically from politicians and the media, and internationally from regulatory attacks by European institutions.
Three hedge fund founders alone have been responsible for donations to the Conservative Party totalling together in excess of £13 million since 2001. With many more contributing lesser sums bringing the total hedge funds have donated to over £55m, the Labour Party has called the Conservatives “ the political wing of the hedge fund industry”
Those responsible for the £13 million, Michael Farmer of Red Kite, Stanley Fink, formerly of the Man Group and British-Australian Michael Hintze of CQS, have all been rewarded by the party. The President of the United States may reward loyal donors with visits to the Lincoln Bedroom or coveted ambassadorial posts, but in the United Kingdom political honours in the form of titles are awarded. Fink and Farmer, now known as Baron Fink, of Northwood in the County of Middlesex are Baron Farmer, of Bishopsgate in the City of London, are now both life peers serving in the House of Lords and Sir Michael Hintze was knighted in 2013.
UKIP has also found a donor in the hedge fund industry. In 2014 Crispin Odey of Odey Asset Management donated £22,000 to the party (although in the same year he later donated £10,000 to the Conservatives). Odey spoke warmly of Nigel Farage to The New York Times explaining: “I would rather we were out of Europe.”
Despite the odd outlier like Nevsky Capital’s Martin Taylor (who has donated nearly £600,000 to the party since 2013) the Labour Party appears thoroughly divorced from the finance industry. Guardian columnist Polly Toynbee characterises Britain now as “profoundly split between a tribe of revolutionary state-breakers and preservers of the public realm.” Miliband’s focus on inequality, evidenced by his vocal support for President Hollande of France, and disdain for the financial sector is sufficient for the LSE’s Dr Hopkin to say:
“…I don’t expect he’s going to get any job offers when he leaves Parliament.”