Gift and idea for man uk

Tony Blair will have to clean up party funding if he is to avoid the scandals which beset the Tories.

Very rich men are now the key element in the finances - and thus arguably the policies - of both major British political parties. The historic division in party funding, in which the unions supported Labour and big business the Conservatives, has given way to a more mobile universe wherein both parties vie for the favours of entrepreneurs - sometimes the same entrepreneurs.

In such a universe, scandal is inevitable. These men, creators of their own fortunes, are often attended by controversy, lawsuits and high-profile publicity. They are routinely described as "driven", rarely hide their wealth and invariably stand to gain - or lose - commercially from decisions made by government.

Labour and Conservatives both depend on them, but both suffer very large headaches because of them. The Tories' is the larger: the businessmen they turned to as corporate donations declined and the cost of elections soared included a number of foreign-based individuals against whom criminal charges are pending, or around whom scandal circles. Now William Hague, the Tory leader, wishes large donations to he openly declared and has decreed an end to money from abroad; that threatens the financial base of his party, but the extraordinarily compromised nature of some of his large donors leaves him little choice.

He has made an unconvincing start. Last month he appointed as deputy treasurer of the party Michael Ashcroft, a Florida-based tax exile who is allowed to spend 90 days a year in the UK and who moved his company, ADT, to Bermuda. If Ashcroft is to concentrate on raising money from UK-based business, he is a strange choice.

Labour's dilemma is less acute than the Tories', but is more complex. The success enjoyed by the party fundraisers over the past three years in attracting very large donations has left it with a curious cocktail of support, which embraces everything from large sums from the trade unions and from business people who dislike trade unions; through individuals such as Bernie Ecclestone of Formula One and David Sainsbury of the Sainsbury store chain, whose business could benefit directly from government decisions; to a group of businessmen involved in Jewish charities whose decisions to give to Labour have been crucially influenced by the party's strong pro-Israeli stance under both Tony Blair and his predecessor John Smith; and a strong endorsement from corporations and individuals because of a more pro-European policy. In all of these areas there are growing tensions.

The approval that business extended to the Conservatives grew thin in the 1990s. The agenda of union reform, privatisation and lowering of taxes had largely been achieved; the party was turning against the European Union, which frightened the big corporations; and John Major proved unable to avoid the gradual Balkanisation of the party.

Big corporations do still give to the Tories. Just before the last election, the Weetabix cereal group gave [pounds]250,000, perhaps the largest corporate donation ever, having previously only given small amounts. More than 400 companies gave more than [pounds]14 million between 1992 and 1997, with the food group Wittington leading the list at [pounds]600,000 over the five years, followed by the Hanson group at [pounds]500,000, Hambros Bank at [pounds]430,000, P&O at [pounds]400,000 and the merchant bank Robert Fleming at [pounds]325,000.

But some large companies stopped giving, including Glaxo Wellcome, Allied Domecq and - an unkind cut - the United Biscuits group, which had been, under the chairmanship of Sir Hector Laing, one of the great Thatcherite supporters in the eighties. And even the largest donor among the corporates was easily capped by the rich individuals upon whom the Tories have increasingly come to rely.

Two of these begat large scandals which dog the party still. Asil Nadir, the Turkish businessman, head of Polly Peck and donor of [pounds]400,000, fled to Northern Cyprus when his company collapsed in October 1990 and has refused to return: the party refuses to return the cash to Nadir's creditors until absolute proof is given that the money donated was fraudulently received - a hugely difficult operation, according to the accountants working on the case, Deloitte Touche. Octav Botnar, the Romanian-born head of Nissan UK, gave (he claims) [pounds]1 million to the Tories between 1976 and 1983, and is accused of defrauding the UK government of [pounds]139 million in tax.

These cases, while still embarrassing, are fading with age; much more recent is the rich seam of cash the party secured in the eighties and nineties from Hong Kong Chinese businessmen. These donations were very large, were ardently lobbied for by Conservative ministers, and in at least one case, were clearly meant as a payment for a favour.

The gifts included donations of more than [pounds]500,000 from Li Ka-Shing, one of the former colony's richest men, who was identified in a 1986 report as engaged in insider trading; at least [pounds]50,000 from TT Tsui, an explosives manufacturer with links to China's state arms corporation; and a reported total of [pounds]1 million from Sir Y K Pao of Wharfe Holdings.

In all of these cases, and in others which cannot be named, the donors had met Conservative ministers or the Prime Minister John Major at social occasions or dinners. In all cases, too, the official line on both sides was that there were no strings attached - a line which came unstuck in the most highly publicised case, that of Ma Ching Kwa. It, more than any other in the Hong Kong connection, hangs heavily over the Tory party.

Ma's father, Ma Sik-Chin, was charged in 1977 with drug smuggling - but managed to escape to Taiwan. The younger Ma lobbied indefatigably for an amnesty so he might return, hiring the QC and former cabinet minister David Mellor and the Tory MPs Terry Dicks and Tony Durant as consultants to assist him. He gave between [pounds]1 million and [pounds] 1.5 million to the Tory Party, met the grandees in Hong Kong and London and was nicknamed "Golden Boy" in Conservative Party headquarters - but though vague undertakings appear to have been made and an honour for him was discussed, nothing came of it. Ma, angered, had the story told in the Oriental Press, a newspaper he owned, saying his "expectations had been raised" that his father, a dying man, would be returned to Hong Kong. Lord McAlpine, Tory treasurer under Margaret Thatcher, said the affair was indefensible and called for the money to be handed back to Ma; it has not been.

The Hong Kong connection has more to reveal. Money has poured into the Tory party in recent months; those with suspicious minds look to figures in the former colony who benefited from the pre-independence granting of concessions for telecommunications, airport extensions and other projects. Stephen Byers, the education minister who in opposition did much to reveal the Hong Kong connection, says now that "there was a massive inflow of funds into Tory coffers just before the election. I am certain there is a great deal more to be revealed."

Labour's funding nemesis is Bernie Ecclestone, a man whose [pounds] 1 million gift to the party was revealed only when he successfully petitioned the Prime Minister not to ban cigarette advertising in Formula One racing, an event which he has created in its modern form. Ecclestone made the sport into show business, recognising that television would change it utterly, from a minority sport for men in greasy overalls and loyal women in head-scarves, to a world event. Gaining control of Formula One events in country after country, by the mid-nineties he was the highest paid chief executive in the UK.

He met Blair with his wife Cherie at Silverstone racing circuit in 1994, and thought of him (as he said in a Mirror interview last November) as a "capable young guy who wanted to take Britain in the right direction". A friend asked him over dinner to donate; he was finally persuaded, he says, by one factor above all.

"I invested a million quid," he told the Daily Telegraph in December. "They could have got in, changed all the tax structure. My tax bill could have gone up by five or six million, so it seemed like a good idea. I didn't want to see the Labour Party in a position where they were going to be influenced by the trade unions to the extent that the trade unions would be controlling the government."

The furore over Ecclestone's [pounds]1 million was focused on the part it was alleged to have played in side-stepping the cigarette advertising ban - on which Formula One is heavily dependent. Both Ecclestone and Blair hotly deny that it figured in their conversations; but lost in the issue has been Ecclestone's admission that he did mean to influence the party: away from a union-supported policy of higher taxes for the rich.