Stuart Wheeler restores cash flow but says Ukip will still fall short

LONDON, ENGLAND - APRIL 22: Stuart Wheeler leaves the Royal Courts of Justice for lunch on April 22, 2008 in London. (Photo by Bruno Vincent/Bruno Vincent)

Stuart Wheeler has reopened his wallet after the apparent truce between Neil Hamilton and the Ukip leadership

One of the UK Independence party’s most generous donors has dropped his threat to cut off funding and plans to spend £100,000 on its general election campaign.

Stuart Wheeler, who has given Ukip more than £700,000 during the past five years, has threatened to stop donating to the party after a row about the fate of Neil Hamilton, his ally and the party’s deputy chairman.

But in an interview with the Financial Times, Mr Wheeler said he had decided to give a further £100,000 during the next few months to secure the seats Ukip is targeting at May’s election.

Despite his donations, Mr Wheeler predicted Ukip would fall well short of the £7m-£8m target he said had been set by Nigel Farage, the party’s leader.

An FT analysis of Ukip’s finances shows it is reliant on a handful of larger donors, almost all of whom are male, white and libertarian in their outlook. The donors are largely former Conservatives.

Of the top 10, at least five have given to the Tories previously. Seven have given more than £100,000 in the past five years, according to figures compiled by the FT. The equivalent figure for the Conservatives is closer to 150.

“I expect to donate . . . I’m getting poorer but I hope it’ll be reasonably worthwhile,” Mr Wheeler said. “I’ve given, I suppose, about £50,000 already and I should think it likely that I’ll give another £50,000.”

The money, however, will not come without strings.

Reflecting the conflicting views among the party’s hierarchy about how it should run its campaign, Mr Wheeler has decided to specify how his money should be spent.

The UK’s main political parties are facing the prospect of a close and unpredictable national poll on May 7 as they struggle to address the march of the populists.

“I’m not entirely sure that I would feel it would otherwise be spent in the best possible way for the party. I have given some money for polling and I have given money for two particular constituencies — South Thanet and Ashford. I expect that I’ll give some money to some more constituencies,” he said.

Mr Wheeler is not the only big donor to exercise control over his funds.

Paul Sykes, the party’s biggest benefactor, has always paid for advertising rather than handing over cash, his money going to fund poster campaigns.

Mr Wheeler’s comments come just weeks after he threatened to halt donations when his friend Mr Hamilton fell out with the Ukip hierarchy.

The former Tory MP had attempted to become the Ukip candidate in South Basildon but withdrew after a letter was leaked from Ukip high command alleging anomalies in his expense claims.

Mr Hamilton mended fences with the leadership after it dropped its investigation into his expenses, although he has been told he will not be given a seat to fight at the election.

This rapprochement has paved the way for Mr Wheeler to re-enter the fray at a key time for the otherwise cash-strapped party.

“I know Nigel would like to get £7m or £8m for the election but that may be very, very hard to come by,” Mr Wheeler said.

Ukip has been buoyed in recent months by announcements that Arron Banks, a former Tory donor, and Richard Desmond, owner of Express newspapers, will give it hundreds of thousands of pounds.

“The big donors are very inhibited in many, many cases by the rule that if you donate more than £7,500 in a calendar year, it goes on to the Electoral Commission’s website,” Mr Wheeler said. “So there were quite a few people who’d donate exactly that.”

The FT has spoken to several of the party’s biggest backers, including Mr Banks, Patrick Barbour, the multimillionaire entrepreneur, and Andrew Reid, Ukip’s head of donations.

Mr Barbour said he favoured a much flatter tax system, an idea rejected by the leadership, which favours a two-tier regime. “The whole tax system has got to be simplified . . . Playing about with the system as opposed to radically reforming it is just tinkering,” Mr Barbour said.

Mr Banks echoed those thoughts in a recent interview with the FT. “I would say provide great schools, provide great hospitals, build nice roads, build airports and get the f**k out of everything else, as they did in Hong Kong. And have a flat tax of 10 per cent.”

Ukip has successfully appealed to receive government funding for opposition parties to help them develop policies for their manifestos, though the party refused to say how much.

The fact that the bulk of Ukip’s declared donations had come from former Conservative backers highlights their influence over how closely the party should stick to its libertarian roots.

That debate came into the open recently when Louise Bours, the party’s health spokesman, publicly criticised Mr Farage for suggesting that Ukip consider advocating a more insurance-based health service.

The party publicly backs keeping the National Health Service free at the point of delivery, but several Ukip donors advocated reopening the debate after the 2015 election. “This is the position for now, but this will all become a live issue again once we get through the election,” one said.

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Three of Ukip’s biggest donors

Paul Sykes

Like most of Ukip’s major backers, Mr Sykes was once a Conservative party donor, but left in the 1990s over his opposition to the Maastricht Treaty. Mr Sykes, a Yorkshire-born miner’s son, built the Meadowhall shopping centre near Sheffield and was once estimated to be worth £650m. Instead of donating cash, he pays for large-scale poster campaigns, though reports last year suggested he plans not to make any more donations before the election.

Stuart Wheeler

Mr Wheeler made his money through IG Index, the company he set up in 1974 which helped pioneer spread-betting. Mr Wheeler is still a self-confessed gambler, and has staked £200 on this year’s general election — £100 on Mr Farage winning a seat in South Thanet and £100 on the party winning two or more seats. His decision to continue funding the party comes despite tensions with some at the top of Ukip.

Arron Banks

Mr Banks aimed to create maximum impact with his announcement that he would give Ukip £1m by making it during the Conservative party conference, having defected from the Tories not long beforehand. He has set up several insurance companies and been chief executive of two Aim-quoted companies. He has funded internal polling for Ukip, and is also helping to run events with its youth wing.

From The Financial Times . Report by Kiran Stacey. 16.02.15.

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