Why has Michael Ashcroft become caricatured as a political devil by those in the media and other political parties? By looking at the Conservatives' funding of marginal constituencies and the funding of the party as a whole a better understanding of money and its relation to politics can be gleaned. This paper will look at whether Ashcroft, the Conservatives' and their candidates were guilty of manipulating the 2010 General Election or whether Lord Ashcroft is the victim of a slander campaign. The Ashcroft 'Affair' Lord Ashcroft and the opposition to the Conservative parties' funding of marginal constituencies Gareth Hunt
The Ashcroft Affair: Looking at the media's caricature of Lord Ashcroft and the wider analysis of Conservative Party Funding during the 2010 General Election. The Paper analyses the funding the Conservatives received from Ashcroft and how his 'marginal' constituency donations affected the outcome of the election.
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Transcript
Why has Michael Ashcroft become caricatured as a political devil by those in the
media and other political parties? By looking
at the Conservatives' funding of
marginal constituencies and the funding of
the party as a whole a better
understanding of money and its relation to
politics can be gleaned. This paper will
look at whether Ashcroft, the
Conservatives' and their candidates were
guilty of manipulating the 2010 General
Election or whether Lord Ashcroft is the
victim of a slander campaign.
The Ashcroft
'Affair'
Lord Ashcroft and the
opposition to the
Conservative parties'
funding of marginal
constituencies
Gareth Hunt
The Ashcroft 'Affair'
Contents
Section One
Introduction: Ashcroft, the Conservatives and the opposition to the targeting of marginal constituencies at the 2010 General Election...................................................................................................................................................................................................... 3
History of Party Funding: The controversy of donors………………………………………………………………………...............................4
A Margin of Error: The importance of marginal constituencies..........................................................................5 Section Two
Ashcroft: Was he „buying seats‟ for the Conservative party?..............................................................................................................7
Legislating the funding of political parties............................................................................ 9
Making Allowances: Ashcroft‟s reasons explained.........................................................................10
Political Rich List: Tories win again...................................................................................................................................................14 Section Three
The Guardians of Truth: Ashcroft‟s role „exposed‟………………….........................................15
What bearing did Bearwood have on the election ............................................................................................................................19
Mirroring an alternative reality: The morphing of the Ashcroft persona.........................................................................22
Conclusions: Ashcroft, the Conservative party and opposition media and politicians……………….........................................24
Introduction: Ashcroft, the Conservatives and the opposition to the
targeting of marginal constituencies at the 2010 General Election.
The funding of marginal constituencies created controversy which
reached fever pitch during the 2010 General Election. This was primarily
due to the activities of Michael Ashcroft, a Conservative peer and
businessman. His role, as the Deputy Chairman of the Conservative
Party, involved focusing the Conservative party’s electoral machine on
130 target seats. These seats had small majorities which could be
overturned with the strategic use of financial or professional resources.
This operation was attacked as unfair. The charges were levied by those
in the media and other political parties who are predominantly on the left-
wing. Those against Ashcroft stated that the issues surrounded two
central premises: first, due to his non-domiciled tax-status Ashcroft
should not donate to the party and second, that this activity was ‘unfair’ to
other political parties.
This paper will investigate whether the Conservative party and Lord
Ashcroft through his company, Bearwood Corporate Services, was
involved in an electoral conspiracy or were the victims of a targeted
campaign of slanderous accusations. This paper will seek to determine
whether the Conservative operation to fund marginal seats was unfair and
if so by examining party funding regulations and donations, we will then
be able to determine whether the Conservative party were guilty of
manipulating the election in these constituencies. Following on from that
will be a second analysis. This will look at the Conservative party, Lord
Ashcroft and Bearwood Corporate Services as victims of slander. This
will be done by interpreting press reports and opposition speeches to
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The Ashcroft 'Affair'
show how closely they relate to the facts of this case and understand the
reality behind the ‘spin’. The question is whether Ashcroft’s actions were a
concerted effort to ‘buy’ marginal constituency seats or was this furore
the result of sour grapes and jealousy because the opposition parties
could only look upon the targeting operation and the financial fundraising
with envy.
This paper will also seek to present the Ashcroft ‘affair’ as a unique
political event. The political donations scandals of the 90s surrounding
the Hinduja brothers or the Bernie Ecclestone donations to the Labour
party surrounded the acceptance and not the application or use of the
donated money. The Ashcroft ‘conspiracy’ or ‘affair’ is unique in that there are
no precursors to such a political event.
History of party funding: The controversy of donors
Before we can examine the actual charges of conspiracy it is worth
looking back at the history of donations, the political environment
between 1997 and 2005 and more importantly, to understand a little
more about Michael Ashcroft.
Michael Ashcroft is a businessman. He specialises in purchasing
companies which are in financial trouble and turning them around. Some
of the businesses he has turned around include the security firm, ADT,
Cleeneaze the cleaning company and Carlisle Group Limited, a holdings
firm. He is the founder of Crimestoppers and is a major contributor to his
old college, now University, Anglia Ruskin. He is an avid collector of
George and Victoria crosses and has donated his multi-million pound
collection to the Imperial War Museum along with funds to build a
dedicated wing. He is a staunch supporter of the Conservative party and
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The Ashcroft 'Affair'
a major shareholder in Tottenham Hotspur Football Club. He spends half
his time in the UK and the rest in Belize where his businesses operate.
Married with two children, he has recently resigned as Chairman of the
Conservative party to become a Polling and Focus Group consultant for
David Cameron’s political policy unit at 10 Downing Street. In the run up to
the 2010 General Election Ashcroft was Deputy Chairman in charge of
marginal constituency targeting and polling and data gathering for the
party. His roles have resulted in him being caricatured as a political devil,
causing a “ wave of controversy.”
It has been argued that "throughout the history of political parties,
funding has always courted controversy."1 As such there has been a
legacy of funding rivalry between the main political parties. John Stafford
argues that throughout the history of the Conservative party "cash crises
have often brought about change and donors of large amounts of money
[have] demanded influence and power."2 The Conservative party’s
record on money and its relationship with constituency associations is a
rather bleak one. The 1940’s saw associations reluctantly pay a
percentage towards the upkeep of Central Office, but by the 1980’s this
was not enough to keep the party operationally in place. The
Conservative party, post 1985, became "reliant on the few wealthy
individuals [who donated] rather than the mass membership in
Conservative associations."3
The reckless greed of successive Conservative party treasurers came to
a head in 1997 after the General Election defeat. The splurge of cash
1
John E. Stafford Report on Party Funding available at http://www.public-
standards.gov.uk/Library/Party_Funding___E80___J_Stafford.pdf, p1 (accessed 22/02/2011): See also Charlies Pattie and Ron Johnston, 'Conservatives' Grassroots Revival', The Political Quarterly, Vol 80, No. 2, (Apr-June 2009), p193-195 2 3
Information available at http://www.electoralcommission.org.uk/elections/results/general-
election/uk/general-election-2005/amber-valley.htm (accessed 20/03/2011) 17 Information available at http://www.electoralcommission.org.uk/elections/results/general-election/uk-
All three candidates were within the legal boundaries of election
spending rules that applied between the calling of the election and the
previous five months.
What this table does not include is the amount of money the sitting MP
spent on expenses. Between 2005 to 2009, Judy Mallaber had in total
£17,317 in Communications Allowances, which was a parliamentary
allowance which MPs could use to promote themselves to the electorate
during the length of the parliament. The second available allowance was
the Incidental Expenses Proportion allowance, an allowance which paid
for websites and extra costs, against which Mallaber claimed a total of
£2,056. Mallaber also transferred funds from her £46,666 Office and
Staffing allowances in which she could use 10% towards
communications which meant a further £4,666 was available to her for
spending on election campaigning. So between 2005 and 2009, Judy
Mallaber MP used £24,039 in public money to communicate her platform
to the electorate. If we include this we see that in reality Judy Mallaber
spent £42,046.22 between 2005 to 2010. Whereas her rival Nigel Mills
spent, between 2006 to 2010, only £ 21,709.51. Mallaber therefore had
a £ 20,336.7 advantage over ALL other candidates in the 2010 General
Election.18
This is reflected in other so-called ‘Ashcroft target seats’. We can see
the same pattern in Dover, Kent. The incumbent, Gwyn Prosser MP,
between 2005 to 2010, had £ 30,189.27 in expenses, along with
donations totalling £ 21,660.97. Prosser therefore had a combined grand
total of £ 51,850.24 and as a result was £ 15,063.31 richer than his
18
For candidate spending between 2005-2010 visit http://registers.electoralcommission.org.uk/regulatory-
issues/regdonregulateddonee.cfm; for information on Judy Mallaber MP expenses please visit either www.theyworkforyou.com/mp/judy-mallaber/amber_valley#expenses.htm or http://mpsallowances.parliament.uk/mpslordsandoffices/hocallowances/allowances-by-mp/judy- mallaber.htm (accessed 14/02/2011)
Information available at http://www.parliament.uk/documents/commons-finance-
office/hocallowances0809.pdf and http://mpsallowances.parliament.uk/mpslordsandoffices/hocallowances/allowances-by-mp/parmjit-dhanda/ (accessed at 03/03/2011)
that money does not necessarily win elections. This is not the general
argument that opposition media and parties employ. In fact, they
highlight higher spending as a factor in winning elections. If this were
true, in all probability John Major would have won the 1997 election,
William Hague would have remained Welsh Secretary and John Major
would have won the 2001 election, but would have lost to the Labour
party in 2005 because they spent more money. Now this virtual history
seems to suggest that money wins elections. The reality is very different
and this needs to be examined further. The media and press reportage
of Ashcroft and his ‘buying of elections’ needs to be placed within the
realpolitik of the modern day financial realities of political parties.
The Guardians of Truth: Ashcroft‟s role exposed?
Gordon Brown, in an interview with The Observer, told the paper that the
funding of the Conservative party by a billionaire tax-dodger was "a
scandal."26 The thrust of the article was that Gordon Brown highlighted
the scandal of the Conservative party’s biggest backer. This article is full of
inconsistencies and if we break it down we can investigate these
claims by looking at the facts. So let us look at the article in detail.
The Observer article was a precursor to another in-depth interview with
the then Prime Minister Gordon Brown. The premise of the article was
that the prime minister was about to make his ‘strongest comments’ on the
Ashcroft Affair. Brown stated that "it was now the duty of journalists and
opposition politicians to "press these people for answers."27 He
continued "it’s a scandal that we haven’t had proper answers about
26
'Gordon Brown attacks 'scandal' of Lord Ashcroft Donations', by Toby Helm and Rajeev Syaal, Sunday 7th of
February 2010, The Observer, p1, also available online at http://www.guardian.co.uk/politics/2010/feb/07/gordon-brown-ashcroft-donations-scandal (accessed 20/03/2011) 27
where [Ashcroft’s] money has come from and what the status of this
person is"28 The Observer states that "Ashcroft has generated
controversy because he has become the Tory party’s biggest donor."29
And he has done this "without clarifying his British tax status."30 They go on
to state that "the Belize-based Billionaire is pumping money in to help Tory
candidates overturn Labour majorities in swing seats."31 They go
into detail stating that:
"Donations worth millions from his company, Bearwood Corporate Services, are under
investigation by the Electoral Commission, following allegations that the company was not
eligible to give money because it was not „carrying on‟ business in the UK."32
The case being made is that Ashcroft‟s donations are seedy. This is
because of his tax status and the fact that the money is going towards
the unwholesome act of overturning majorities in Labour seats. The
broader theme is that his businesses are ‘off-shore’ and avoid UK tax.
Linking this to the ‘fact’ that he is the party’s biggest donor is, in some
way, illegal and suspect. The charge is that his donations are invalid
because of his tax status. Let us now investigate this further.
Michael Ashcroft was appointed to the House of Lords in 2000 as a
working peer sitting on the Conservative benches as one of William
Hague’s opposition appointments. This was approved by the House
Scrutiny Committee in 2000 and then signed-off by 10 Downing Street
before being stamped by the Queen at Buckingham Palace. Ashcroft
himself states that the process of securing ennoblement required inter-
government approvals:
28 29
30 31 32
Ibid, p1-2 Ibid, p2 Ibid, p2 Ibid,
p2 Ibid, p2
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The Ashcroft 'Affair'
"Under the unwritten conventions of the British constitution, the leader of the opposition is
permitted by the Prime Minister of the day to nominate a small number of people for a working
peerage. At the time, each nominee was, in turn, considered by the Honours Scrutiny
Committee to ensure that all nominees were fit and proper people to hold a seat in the upper
house."33
Ashcroft’s ennoblement did not actually occur in such a co-ordinated
way. His first two peerage applications, by William Hague, were
dismissed by the Honours Scrutiny Committee on the grounds that his
businesses were under investigation. They surrounded his interests in a
maritime accident in 1997 and whether he knew operationally what was
going on. An international maritime organisation investigation
exonerated Ashcroft, but his second peerage was blocked by Blair. His
third attempt resulted in Hague complaining to Blair directly, stating that
Blair was hampering the operational integrity of Her Majesty’s Loyal
Opposition, in the face of such a charge Blair backed down and on the
30th of March 2000 the London Gazzette published that "to be a Baron
Michael Ashcroft, Chairman of Carlisle Holdings Ltd."34
According to the Information Commissioner, Michael Ashcroft gave
"clear and unequivocal assurances that he will be taking up permanent
residence in the United Kingdom."35 The issue here is about
transparency - according to the information commissioner the leader of
the opposition, the Honours scrutiny committee and the Prime Minister
did not know what form this undertaking would take36 - and privacy is an
interesting point here. Ashcroft believes he, like any other citizen, has a
right to privacy, but this privacy has damaging consequences for trust
and having transparency with privacy within these processes perhaps
33 34
Michael Ashcroft, Dirty Times Dirty Politics, (BiteBack, London, 2009), p80 The London Gazette, Thursday 30th of March 2000 available at http://www.london-
revenues. This fact aside, he was still legally allowed to donate to the
Conservative party. This was investigated by the Electoral Commission
because of his donations through Bearwood Corporate Services to the
Conservative party.
What bearing did Bearwood have on the election?
Bearwood Corporate Services is a small company that has 7 employees
in Wokingham, Reading. It serves as a business agency whereby people
can sell their businesses to other people and Bearwood act as the
middle man. The company is owned predominantly by Astral Holdings a
company that Ashcroft retains 70 per cent stock control. There are
arguments being made that money is being filtered into Bearwood from
off-shore companies. This is a legitimate query and one that should be
investigated in full. Between 2009-2010 Bearwood donated £ 587,951.73
to the Conservative party.39 The reason behind Bearwood’s donations are
more to do with tax loopholes and loop holes in the Political Parties,
Elections, Referendums Act 2000 which allows companies which are
listed on Companies House database and who pay full UK corporation
tax to donate to British political parties. Ashcroft is then allowed to
transfer money between companies. This is legal, every major company
does it. Tesco stores Ltd transfers payments to Tesco wholesale Ltd and
Tesco finance Limited all separate entities but owned by a parent
holdings
39
Companies House WebCheck on Bearwood Corporate Services issued on 28/03/2011 available at
http://wck2.companieshouse.gov.uk/63b50752c36e45e72d09464d675062bb/wcprodorder?ft=1 and for Conservative donations by Bearwood Corporate Services which are available at http://registers.electoralcommission.org.uk/regulatory-issues/regdpoliticalparties.cfm?ec={ts%20%272011- 03-03%2013%3A39%3A43%27} (accessed at 27/03/2011)
group called Tesco plc. This is what Ashcroft did and It’s legal and
above board. The electoral commission investigated Ashcroft and
Bearwood and concluded that the donations were permissible and
legal.40 So if tax-status and impermissible donations are the main
accusations then Ashcroft is not guilty and thus the Guardian’s article is
incorrect.
Let’s now look at the second bulk of grievances raised by the article by
The Guardian. The funding of constituencies and the millions he has
donated. We need to firstly look at the state of Conservative party
funding during this period.
Ashcroft, through Bearwood Corporate Services (BCS), has donated a
total amount of £ 991,134.77 in cash donations and £ 3,710,958.34 in
non-cash donations, which paid towards advertising, focus groups and
polling. In total between the second quarter of 2005 to the second
quarter of 2010 BCS donated £ 4,702,093.11.41 The Conservative Party
as a whole received, in all donations, a total of £ 147,105,904.8642 which
means Ashcroft, as a percentage of the total, donated 3.1 per cent of
Conservative party funds. 43 That’s a lot of money but not a commanding
amount because they got 96.9% of their money from other sources.
The Guardian‟s charges were that he was the Conservative party‟s
biggest donor. Really someone who donated 3 per cent is their biggest
40
Electoral Commission findings on Bearwood Corporate Services Limited available at
http://www.electoralcommission.org.uk/news-and-media/news-releases/electoral-commission-media- centre/news-releases-donations/bearwood-corporate-services-limited (accessed 20/02/2011) 41 Electoral Commission register of donations available at
http://registers.electoralcommission.org.uk/regulatory-issues/regdpoliticalparties.cfm?ec={ts%20%272011- 03-03%2013%3A39%3A43%27} (accessed at 12/01/2011) 42 Ibid, (accessed at 12/01/2011)
Mirroring an alternate reality: The morphing of the Ashcroft
persona
If we look at the The Daily Mirror at a published article entitled ‘Fatcats
United: £45m from just 15 donors kept Tories afloat for 10 years’ by Tom
Mctague written on the 22nd of December 2010. This article argues that
the "Conservative party has been kept going for 10 years by just 15
super rich donors - fuelling accusations it is out of touch with ordinary
people."46 The reality is that these donors who gave £45m are still giving
less than the £ 145 million the Conservative party received overall. This
means more than just a few families make up the Conservative party
funding structure. The Daily Mirror in two other articles entitled ‘Lord
Ashcroft „bought 19 seats for the Tories’ written by Susie Boniface dated 6th
of March 2010 which argued that Bearwood Corporate Services bought
glossy leaflets for the Tories which "sparked a switch of tens of
thousands of voters from Labour to Tory."47 The premise here is that
voters changed their voting allegiance because of glossy leaflets and not
the track-record of the incumbent government. This belittles the
electorate and misses the point by not asking why they’re switching in
the first place? The final Daily Mirror article is entitled ‘Conservative
party links to fat cat banks revealed by Daily Mirror investigation’ by
James Lyons dated 10th of January 2011. The premise of the article is
that the Tories let the banks off the hook by imposing a small banking
levy because "the Tory-led government is deliberately giving its friends
46
Tom Mcteague, 'Fatcats United: £ 45m from just 15 donors keeps Tories afloat for 10 years', Daily Mirror,
22/12/2010 available at http://www.mirror.co.uk/news/top-stories/2010/12/22/fatcats-united-45m-from- just-15-donors-kept-tories-afloat-for-10-years-115875-22800476/ (accessed 02/02/2011) 47
Susie Boniface, 'Lord Ashcroft Bought 19 Seats for the Tories', Daily Mirror, 06/03/2010, available at
in the city an easy ride."48 This article is a great way of finishing off the
broader reportage by the Daily Mirror and is a theme that has been
broadly copied in other newspapers which we will explore further.49
Ashcroft, in media reportage from the Independent, the Mirror to the
Guardian, has been caricatured as a tax-dodging Billionaire who is
unfairly destroying the democratic foundations of this country. But once
the election was won, and a Conservative-led government was in place,
Ashcroft was forgotten about. A Guardian article of February 2011
argued that "the city accounted for £ 11.4 million of Tory funding -
50.79% of its total haul - in 2010, a general election year."50 Ashcroft is
not even discussed as „a major Tory donor‟. The reason is because
Ashcroft-bashing isn’t politically expedient at this moment in time -
Banker bashing is the current media fixation - and Ashcroft is old news.
But this in itself illustrates the reportage of events surrounding the
Ashcroft ‘conspiracy’ as being a politically expedient attack upon an
opposition party with a good chance at winning an election. By looking at
the reportage and cross-analysing their allegations with the facts we can
come to a conclusion that the left-wing media did participate in a
campaign of slanderous attacks upon Lord Ashcroft and the
Conservative Party.
48
James Lyons, 'Conservative Party links to fat cat banks revealed by Daily Mirror investigation, Daily Mirror,
10/01/2011, available at http://www.mirror.co.uk/news/city-news/2011/01/10/conservative-party-links-to- fat-cat-bankers-revealed-by-daily-mirror-investigation-115875-22838080/ (accessed 09/01/2011) 49
See Guardian article dated 08/02/2011 by Nicholas Wall and Jill Treanor, 'Revealed: 50% of Tory Funds come
from the City', available at http://www.guardian.co.uk/politics/2011/feb/08/tory-funds-half-city-banks- financial-sector (accessed 03/03/2011) 50