Tories Hit by New Racism Row on Donations as Labour Pulls Ahead

(Bloomberg) -- Rishi Sunak’s Conservative Party accepted over £5 million ($6.4 million) from the donor at the center of a racism row, but the latest data from the UK’s Electoral Commission showed the poll-leading opposition Labour Party still pulled in more money than the governing Tories in the first quarter.

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Keir Starmer’s Labour received £9.5 million from organizations and individuals between January and March, according to a Bloomberg analysis of the data released on Thursday. Sunak’s Conservatives raised £9 million. Company donations made up a record share of Labour’s funding, after the party tried to improve ties with the business community ahead of the July 4 election.

Yet it’s the donations taken by the Tories from The Phoenix Partnership, the healthcare IT company owned by Frank Hester, that will trigger the biggest headlines. Sunak and his party came under intense pressure in March to return money given by Hester, after the Guardian reported racist comments he allegedly made about Labour MP Diane Abbott in 2019.

At the time, opposition parties were focused on the £10 million Hester had given to the Conservatives last year. The Electoral Commission data confirms that at the time of the row, the Tories were sitting sitting on a fresh and — at that point undeclared — donation. That was reported at the time by Tortoise Media.

But the commission’s figures also show that on March 14, three days after the Guardian newspaper’s original story about Hester, the Tories accepted another donation of £150,000 from Hester’s company.

“How low can Rishi Sunak’s Conservatives go? If the Conservatives spend this money they will be proudly funded by a man who made the most appalling racist and sexist comments,” said Daisy Cooper, deputy leader for the Liberal Democrats. “Ultimately the buck stops with Rishi Sunak. Sunak must personally intervene and make sure not a penny of this money is spent.”

The row over Hester dominated British politics in mid-March after the Guardian cited the Tory donor — whose company has also received contracts from the state-run National Health Service — as saying in 2019 that Abbott made him “want to hate all Black women” and that she “should be shot.”

At the time, Hester apologized for being “rude” about Abbott but denied that what he said — he didn’t confirm the comments — was racist.

News of Hester’s latest donations dominated the Conservative Party’s morning broadcast round on Thursday. “The kind of remarks that were made were totally and utterly unacceptable,” Pensions Secretary Mel Stride told LBC radio, though he refused to say if his party should return the donation. “I’m not going to get drawn into those kinds of issues,” Stride later told ITV.

Meanwhile, the donation figures underscore Labour’s shift in fund-raising emphasis under Starmer and his shadow chancellor, Rachel Reeves. Company donations made up 27% of Labour’s total in the first quarter, close to double the proportion for the party’s traditional labor union backers.

They included about £1.6 million from Ecotricity, the clean energy company founded by Dale Vince. The Conservatives have tried to gain political capital from Vince’s links to Labour, as the Tories tries to win over voters skeptical about environmental policies by saying Labour’s plans will hurt working people.

“Money follows the winner,” Sam Power, senior politics lecturer at the University of Sussex, said before the latest release. “There will be people looking at the Labour Party, looking at all these polls that are released day after day that suggest that the Labour Party are going to win big,” he said.

Labour have received over £56 million in donations over the last two years. The figures do not include smaller donations which is where Labour traditionally can pick up more money as it has a wider membership base.

The Tories have received over £70 million over the same period, including the £15 million from Hester that will likely loom large in the election campaigns.

(An earlier version of this story corrected the publication date of the Electoral Commission data.)

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