Fund manager Fidelity is right to stop funding the Tories. But could there be a downside?

Business

Fidelity International’s suspension of donations to the Conservative Party, which I reveal in The Independent today, is in many ways very welcome. 

Money is a corrosive and corrupting influence in politics. 

The way wealthy businesses and individuals can use their status as donors of sufficient clout to gain privileged access to senior members of the government up to and including prime minister Theresa May, simply through reaching for their cheque books, cannot be seen as anything other than bad for democracy. 

Fidelity also stewards the savings of millions of Britons through the pensions and ISAs it manages. Many of its customers will not be Conservatives, and they might very well wonder what it has been doing handing money over to a party whose actions they view as deeply damaging to their and their country’s best interests, especially given its recent descent into what many regard as extremism. 

As a corporate entity the firm gave multiple five-figure sums over every year between 2007 and 2017, when the last £20,000 was given. 

Representatives also attended “Leader’s Club” dinners for top donors where they were joined by senior figures from government. 

To my mind this is cash for influence. The chance to have a word in the ear of people in power. Otherwise, why pay and why go? 

What we don’t know, because the firm isn’t saying, is the reason why there has been no donation made for the past 15 months, and why Leader’s Club events have not had Fidelity in attendance. We can only speculate. 

It could be that the firm has decided the practice is inappropriate for an organisation charged with overseeing the good corporate behaviour of the businesses in which it invests. 

That it is, in my view, and if that is the reason, it speaks well of Fidelity. 

On the other hand, it could be a symptom of wider dissatisfaction with a party that has stopped listening to its traditional allies in the business community. 

The frustration over the handling of Brexit, and the crippling economic uncertainty it has left businesses facing, is palpable. 

Just this morning the CBI was moved to warn that the successful UK car industry faces extinction if the government quits the EU Customs Union, a demand of the Brexiteer zealots indulged by the prime minster. There is, opined CBI president Paul Drescher on the BBC’s Today Programme, also “zero evidence” that trade deals outside the EU will be of any benefit for the UK. 

Unfortunately, evidence is not something Brexiteers are overly fond of. 

Is this, and the tin ear the government has turned towards many other legitimate concerns raised by business groups, part of the reason? 

Again we don’t know. 

It’s fair to say that there could be a sting in the tail of Fidelity’s absence from the donors’ list: while I welcome and support it, it will serve to further concentrate the influence over the party’s direction in the hands of unsavoury and extreme voices within its donor community, depriving it of a moderate, pragmatic and mostly sensible voice.

But that doesn’t change the fact that Fidelity’s move is the right one. It simply strengthens the case for reform of way political parties are currently funded. 

And the Conservatives, anyway, don’t appear minded to listen to moderate and pragmatic voices. 

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