Selling Out: Labour Given £4m from Tax Haven Hedge Fund with Shares in Oil and Arms

From Hope to Hypocrisy: Labour’s Descent into Tory Land

“Change is coming,” Sir Keir Starmer boldly declared to Labour activists on the eve of their Liverpool conference. Indeed, change has come, but not the kind Labour voters might have hoped for. Instead of a shift towards the interests of working people, we’re witnessing a transformation that would make even the most ardent Tory blush with embarrassment.

The gathering follows a tumultuous period for the government, marred by questions over donations of clothing and gifts, and damaging briefings about No 10’s operations. Yet, in a display of breathtaking hypocrisy, Starmer, Deputy PM Angela Rayner, and Chancellor Rachel Reeves found themselves embroiled in their own donation scandal, accepting thousands of pounds worth of clothing from donors including Labour peer Waheed Alli. Only after public outcry did they announce this practice of ‘accepting clothing’ would stop,

Of course, that leaves them open to accepting all the other little gifts they seem to feel they are entitled to, like a private box at the Gunners…

Someone should remind them…“It is not titles that honour men, but men that honour titles.”― Niccolò Machiavelli

Meanwhile, Cabinet Minister Lucy Powell’s assertion that Labour is “not in hock” to vested interests rings hollow in light of recent events. Her claim that Labour is “taking on” water companies, rail companies, and football clubs, standing firmly “on the side of fans, consumers, and ordinary people,” now seems like a cruel jest.

As Labour supporters gather for their first conference as the party of government in 15 years, one wonders what exactly they’re celebrating. From one betrayal to the next, the Labour Party seems determined to reinvent itself as the Tory Party in all but name the only thing that sets them apart now is the logo on the rosette.

Behind the façade of their freshly gifted attire, Labour’s dirty laundry hangs in plain sight, flapping in the wind of public scrutiny. The party’s coffers, now bulging with millions from tax-avoiding corporations, reek of hypocrisy. This isn’t just a wardrobe malfunction; it’s a full-scale ethical meltdown.

British politics has long been a quagmire of deceit, a pantomime where the winners are always big business and globalist interests. Now, we’re witnessing the latest act in this farce: a bait-and-switch of epic proportions. The Labour Party, once the standard-bearer of working-class interests, has donned new robes – not of the people, but of the powerful.

Prime Minister Starmer’s Labour accept £4m from tax haven-based hedge fund

The latest act in this tragicomedy comes as OpenDemocracy reported that the Cayman Islands-registered Quadrature Capital had made the sixth largest political donation in British history to Starmer’s Party just after the General Election was announced. This revelation lays bare the hollowness of Labour’s promises and the depth of their newfound allegiances.

The timing of this £4 million windfall is about as subtle as a sledgehammer. Conveniently tucked away just before the “pre-poll reporting period”, it escaped the weekly scrutiny reserved for donations over £11,180. This isn’t transparency; it’s a magic trick – now you see it, now you don’t. But the question remains: what else is Labour hiding up its designer sleeves?

You have to wonder who gave who advice on this dodgy accounting. The website rightly points to the timing as “notable” that the £4 million donation was made before the “pre-poll reporting period” which sees all donations over £11,180 published weekly, rather than quarterly.

This means that despite being made on 28 May, Quadrature’s generous donation was published by the Electoral Commission only last week, more than two months after Labour won the election.

Think about it – A £4 million donation from Quadrature Capital, a hedge fund nestled comfortably in the tax haven of the Cayman Islands. This ‘gift’ arrived with impeccable timing, slipping through a narrow window between the election announcement and the start of rigorous reporting requirements. Some might call it clever. I’ll call it contemptible.

Labour claims to champion transparency, yet accepts this donation comes in a manner that reeks of obfuscation. The donation’s timing allowed it to remain hidden from public scrutiny during the critical election period. This is not the behaviour of a Party confident in its principles, but one playing hide-and-seek with its integrity.

Richard Murphy from Funding the Future made it clear to the BBC, that even if UK tax is paid on the UK operations of this fund, no one sets up a Cayman Islands cooperation without wanting to take advantage of the lighter regulation, lower taxes, and greater opacity there.  And no doubt they have done so. In that case, the messaging from Labour in accepting this is that they do not mind people undermining the rule of law in the UK by choosing to make use of other jurisdictions instead.

£4 million from Cayman? That will do nicely, thank you https://t.co/96mmqrTKEM Labour would have been wise to turn down £4 million form a tax haven, but the Venn diagram with wise and Labour as the only options has no overlap in it right now.

— Richard Murphy (@RichardJMurphy) September 19, 2024

In this theatre of the absurd, Labour has traded its workingman’s cap for a hedge fund manager’s top hat. And we, the audience, are left wondering: when did the party of Keir Hardie become the party of Avarice and Treachery?

Paul Holden, an investigative journalist and author of The Fraud, a forthcoming book on Starmer’s leadership, told openDemocracy that the donation’s timing fits the Starmer project’s pattern of delaying the disclosure of potentially sensitive or controversial political donations.

Holden said: “Sir Keir Starmer and the organisations close to him have an unfortunate history of reporting donations in controversial ways.

“During his bid to become leader of the Labour Party, Starmer refused to contemporaneously publish details of who had donated to his leadership campaign. His rivals, Rebecca Long-Bailey and Lisa Nandy, agreed to share details of their donors in real-time, which they published. Starmer, however, decided only to declare his donations via his MP’s register of interests, which created a significant lag between when Starmer accepted his donations and when they were made public.

“Labour members, as a result, had no idea at the time of voting that Starmer had been funded with large donations from the likes of wealthy millionaires like Martin Taylor and Sir Trevor Chinn and Baron Waheed Ali; the latter now at the centre of the furore about Starmer’s acceptance of gratuities.”

Holden also referred to a fine issued by the Electoral Commission to Starmerite think tank Labour Together in 2021 for its failure to declare donations worth more than £800,000 – including £730,000 received while it was under the directorship of Starmer’s key adviser and No 10’s director of political strategy, Morgan McSweeney.

This pattern of behaviour reveals a Labour leadership that has learned the worst lessons from its Tory opponents. They’ve embraced the dark arts of political funding, where money flows in shadowy streams and accountability is an afterthought.

Quadrature Capital, for its part, performs a laughable dance of contradiction. It claims the donation was “values-based, not political” while holding stakes in fossil fuel giants, arms manufacturers, and private healthcare companies. One struggles to see how these investments align with Labour’s purported values – unless, of course, those values have silently shifted to mirror those of their new bedfellows.

Quadrature Capital has a diversified share portfolio worth around $6bn, according to records filed with the US Securities and Exchange Commission (SEC) last month.

After its donation was made public last week, the firm shared a statement on its website.

It said: “In May 2024, we came to the view that a UK government with a commitment to the green transition of the economy would have the ability to drive change that is so urgently needed. Having analysed commitments set out by each party, we donated £4m to The Labour Party, in support of policies that will deliver climate action while also promoting social equity and economic resilience.

“This was a values-based donation, not a political donation, as Quadrature Capital Ltd remains non-partisan and apolitical. Going forward, our private giving will continue to be led by our values, and any further donations to political parties will depend on the parties’ commitments, track record and alignment with our mission for sustainable and equitable growth.”

Last year, the Guardian reported that despite donating to environmental charities through its climate foundation, Quadrature had holdings in fossil fuel companies worth more than $170m. The paper highlighted three holdings in particular with major polluters: ConocoPhillips, Cheniere Energy and Cenovus Energy.

Analysis of the firm’s latest SEC filings dated 14 August shows that Quadrature had since increased its holdings in Cenovus, which was this year fined millions for an oil spill that released 250,000 litres into the Atlantic Ocean. Quadrature has scaled back its holdings with the other two firms but has taken up a major $67m stake in ExxonMobil, one of the largest oil and gas producers in the world.

Among Quadrature Capital’s other investments, its largest holding is in Apple, valued at $231m, and among its 10 largest holdings are other ‘bluechip’ stocks like Amazon, Shopify and Costco.

Quadrature also had significant holdings in the arms manufacturers Northrop Grumman ($31m) and Lockheed Martin ($6m); US private healthcare companies such as UnitedHealth ($31m) and HCA Healthcare ($16m); some of the largest asset management companies like Blackstone ($22m) and KKR ($7m), who potentially stand to benefit significantly from Labour’s plans to utilise private investment for infrastructure; and tech firms, including Palantir ($71m) and Oracle ($8m).

Transparency campaigners have warned Quadrature’s huge donation raises questions about what the financial sector is getting in return.

Rose Whiffen, senior research officer at Transparency International UK told openDemocracy: “When the public see political parties relying on such large sums of money in donations from private sources, it understandably raises questions as to in whose interest politicians are working and can give the impression our democracy is for sale.

“More must be done to take this kind of big money out of politics. The new government should commit to introducing caps on individual donations to tackle this problem [and] restore public trust in how our democracy functions.”

Green Party deputy leader Zack Polanski told openDemocracy that the donation shows Labour now “stands for multi-millionaires and billionaires over our working-class communities”.

Polanski said: “Far from being the party in service of working people, Starmer’s Labour Party seems indebted to the bankers and bosses who profit from pillaging our public services and our planet.

“Simply ‘following the rules’ and declaring donations isn’t enough to cast aside the doubts that the main parties have their loyalties tested by big donors. It’s time to implement strict rules on funding political parties, including a cap on how much any individual or business can donate to politics. Elections should be won by the people with the best ideas, not the parties with the biggest donors.”

Where does Labour stand?” you might ask. Well, it seems they stand wherever the multi-millionaires and billionaires tell them to.

Gone are the days when the party championed the working class. Now, they’re in bed with the bankers and bosses who’ve made an art form of pillaging our public services and our planet.

The Labour Party seems to have forgotten a fundamental truth: you cannot serve two masters. You cannot claim to represent the interests of working people while courting the favour of tax-dodging hedge funds. You cannot promise climate action while accepting money from those invested in its destruction.

Fran Boait, co-executive director at Positive Money, said: “In taking large donations from financial firms registered in tax havens, we have to question what influence the sector is getting in return.

“Labour’s plans to continue the previous government’s deregulation of the City of London are particularly concerning, especially when it has been shown that an oversized financial sector hinders rather than helps the rest of the economy.

“Labour should be looking at how to weaken the power of big finance in our democracy and economy. Right now it seems they are doing the opposite.”

This is not mere hypocrisy; it’s a betrayal of Labour’s founding principles. The party that once stood proudly for the many now seems content to kneel before the few, exchanging its soul for a fistful of silver.

As we watch this sorry spectacle unfold, You can’t help but wonder: has Labour become so desperate for power that it’s willing to become indistinguishable from its opponents? Have they forgotten that the purpose of winning elections is to enact change, not to perpetuate the status quo?

The British people deserve better than this cynical charade. They deserve a Labour Party that lives up to its name – one that truly labours for the interests of the common person, not one that cosies up to the very forces it once sought to challenge.

Until Labour rediscovers its moral compass and rejects these Faustian bargains, it will continue to drift further from its roots and closer to the very Party it claims to oppose. The irony would be delicious if it weren’t so damned depressing.