The Party of Oligarchs: How Big Money Came Back to Rule British Politics

The party of oligarchsHow Big Money Came Back to Rule British Politics

The Conservative leadership candidates have a net worth of around £1 billion. Sascha Lavin examines whether millionaire politicians are bad for democracy

Since Boris Johnson’s resignation last week, the Conservative leadership contenders have clamoured over each other to promise a “fresh start” from Johnson’s premiership – accompanied by radical new policies (sandwiched between most of the radical old ones).

Indeed, the current leadership contest has already underlined a major shift, but not entirely in the way the Tory hopefuls had intended. 

This election has been awash with cash – the wealth of the Conservative candidates nearing £1 billion – echoing previous eras when politics was an elite sport reserved for the landed gentry.

The fortune of former Chancellor and leadership frontrunner Rishi Sunak could rival the riches of many traditional oligarchs. With an estimated household wealth of £730 million, Sunak became the first frontline politician to appear on the Sunday Times Rich List earlier this year. Despite his lucrative hedge fund career before Parliament, most of his millions stem from his Indian heiress wife, Akshata Murthy, and her £690 million stake in her father’s IT company, Infosys.

While widely thought to be the richest MP in the Commons, Sunak has not been the only super-rich Conservative hopeful: current Chancellor Nadhim Zahawi – who claims not to know how rich he is – is thought to have a personal fortune of more than £100 million, including a vast property portfolio and shares in the polling firm YouGov he co-founded.

Multi-millionaires who have put their names forward also include Jeremy Hunt – estimated to be worth £14 million – and Sajid Javid, reported to have earned £3 million a-year at Deutsche Bank, before joining politics, and owned £6 million-worth of London property as of 2014.  

This Torygarchy is reminiscent not only of past political hierarchies in Britain, but also appears to mirror the American presidential system – reserved for those who can raise big bucks, and increasingly a play-thing for maverick billionaires.

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Empathy Deficit

There has been no overt wrongdoing, nor any crimes committed, on the part of any of the candidates. Yet there is something unappetising about the staggering wealth gap between the future prime minister and ordinary Britons struggling to survive the cost of living crisis. 

Can a politician who acquires such vast sums of wealth still relate to the people that he or she represents? Maybe not. Numerous studies suggest that rich people are less empathic, less charitable, and more likely to defend an unfair status quo. 

Explaining her research on the impact of feeling rich, Professor Kathleen Vohs said: “When people are reminded of money, they get better at pursuing their personal goals. On the negative side, they become poor at interpersonal functioning… they can be insensitive.”

These personality traits can be vividly witnessed within recent Conservative cabinets, dominated by the privately educated (led in 10 of the last 12 years by Old Etonians), Oxbridge graduates and the super-wealthy. Some 65% of Johnson’s post-election Cabinet had attended private school, compared to just 7% of the population overall.

University of Berkeley researchers also found that people with a higher socioeconomic status were less likely to be compassionate towards people in need than people from lower socioeconomic backgrounds.

Suella Braverman, one of the Conservative Party’s privately-schooled hopefuls, used an interview with ITV News on Monday to suggest that there are “too many people in this country” of working age and of good health who are “choosing to rely on benefits”. Braverman’s remarks mirrored the rhetoric of the Coalition Government led by David Cameron (Eton; Oxford) and George Osborne (St Paul’s; Oxford), who demonised the ‘undeserving’ poor – and neglected the fact that 40% of Universal Credit claimants are in work.

The empathy deficit of the ultra-rich also manifests in the maintenance and shielding of their wealth. At least three of the 11 original leadership candidates have legitimately used tax loopholes and offshore jurisdictions to protect their staggering wealth. Both Javid and Murthy, Sunak’s wife, used their non-domiciled status to legally avoid tax on overseas earnings.

Suank has repeatedly ignored calls to reveal whether his multimillion-pound personal fortune – held in a blind trust – is invested in offshore tax havens. Before embarking on his political career, the former Chancellor co-founded his own hedge fund, registered in the Cayman Islands, one of the world’s top offshore tax havens. 

Zahawi also has close financial ties to two firms based in a tax haven: Balshore Investments and Berkford Investments operate from a lawyers’ office in Gibraltar. While it is not illegal to hold assets via offshore companies, it raises questions as to whether the current Chancellor registered these companies in Gibraltar to avoid a hefty UK tax bill. Zahawi is also reportedly under investigation by his own department, HMRC, after his tax affairs were previously investigated by the National Crime Agency. He denies all wrongdoing.

Despite protestation by all candidates that their leadership would see a clean break from the Johnson era, a history of tax avoidance raises concerns that the next Government will oversee a continuation of Johnson’s divide-and-rule doctrine. Regardless of the legality, using schemes to avoid tax, while withholding financial information from the public, is another iteration of the elitism that underpinned the ‘Partygate’, COVID cronyism and ‘Wallpapergate’ scandals.

Conservatives have, in the words of Edmund Burke, a “disposition to preserve” – a notion valued by those who wish to retain their vast wealth, including those who donate to the Conservative Party. One in three of the UK’s billionaires bankrolled Johnson’s Conservative Party, according to 2019 Labour Party research, while the Tories amassed £19.3 million in private donations during the 2019 General Election campaign, compared to just £350,000 raised by Labour. Despite concerns over Russian interference in British politics, the Conservative Party has accepted comfortably more than £2 million from Russian-linked sources since Johnson came to power in July 2019.

Both the patrons and their beneficiaries in power would be protected by the economic policies proposed during the leadership contest: of lower taxes and less state interference.

And so, if a Torygarch is to replace Johnson in Number 10, the UK could see economic inequalities once again being normalised and encouraged, while poorer people are inflicted with the brunt of an economic crisis.