Politicians’ Piles

Could a Donald Trump — someone who says he can fix the country’s problems because of his extraordinary business acumen — be elected to high office in the UK?

Trump’s shtick is that he is an outsider who has come to clean up Washington. Yet in US terms Trump is not as unusual as he makes himself out to be. Trump’s wealth is hotly debated: he might be the only presidential candidate to have refused to publish his tax return, not because it will show how wealthy he is but because it might reveal that he is much less wealthy than he claims. Some well-informed observers estimate his wealth, due to the huge debts his businesses carry, at around $300 million, rather than the billions he claims. At least that level of wealth has been enjoyed by the losing candidate in the last three presidential elections: Mitt Romney in 2012, via Bain Capital; John McCain in 2008 and John Kerry in 2004, via their respective wives. 

The US Congress is full of extremely wealthy individuals who went into politics after making a fortune in business. This is partly an unintended consequence of the campaign finance reforms of the 1970s, which put strict limits (now $2,700) on how much an individual can donate to a campaign, but no limits on how much a candidate can spend of their own money on their campaign. Self-funding candidates were thus given a huge advantage. It remains to be seen if the Citizens United v. FEC Supreme Court ruling of 2010 will level the playing field once again. While not overturning donation limits directly to campaigns, this decision has allowed unlimited donations to go to theoretically independent third party organisations campaigning for a candidate.

In the UK there are few politicians who have had stellar business careers before entering politics — and the numbers are declining. The last politician who had become rich in business and was in the running to be Prime Minister was Michael Heseltine. He became involved in publishing in the late 1950s with a graduate recruitment guide and set up Haymarket Publishing, producing business and consumer magazines, in the 1960s. Haymarket is still owned by the Heseltine family; the Sunday Times Rich List now estimates his wealth at £300 million. Interestingly, Heseltine’s business success played only a small part in his pitch for the highest political office. Indeed, some of the more snobbish Tories sneered at the nouveau riche Heseltine: he was the kind of man who had “bought his own furniture”. In the mid-1990s, when Heseltine was Deputy Prime Minister, he did not help his reputation with the Tories’ small business supporters when he boasted that while he was building up Haymarket he only paid his smaller suppliers when their solicitors threatened to sue. Other Conservative politicians of that era who were very successful in business included Edward du Cann and Peter Walker — but in both their cases this ended in ignominy with the secondary banking collapse of the 1970s. Both were lucky: their political careers survived. In similar circumstances today this would be most unlikely.

Today, the Register of Members’ Financial Interests gives a very full picture of MPs’ non-parliamentary earnings and assets. Any payment, other than dividend or pension income, of more than £100, or if smaller cumulatively of over £300 in any year, has to be declared. Shareholdings valued at over £70,000 or representing more than 15 per cent of the company also have to be declared, as does land or property worth more than £100,000 which is not lived in by the MP.
Reading the Register is probably not good for the blood pressure of many MPs. Liam Byrne, the Labour ex-Chief Secretary to the Treasury, was paid a £500 advance for his recent book; the Tory former Chancellor Kenneth Clarke received £385,000 for his. Jacob Rees-Mogg got £1,500 for his appearance on the BBC’s Have I Got News for You; Nick Clegg, admittedly as presenter rather than panellist, was paid £15,000.

The two current cabinet ministers who have established thriving businesses are Health Secretary Jeremy Hunt and Chancellor Philip Hammond. Hunt set up Hotcourses, an adult education directory, which was sold earlier this year with Hunt realising £14 million for his 48 per cent stake.  Hammond has a controlling interest, now via a blind trust, in the Castlemead Group, a property development and construction company, valued in the low tens of millions. 

Other MPs have set up successful businesses — such as Rees-Mogg (Somerset Capital) and Nadhim Zahawi (polling company YouGov as well as interests in oil and property) — but they are very much the exception. There is another group of MPs who are, or will be, the beneficiaries of substantial family businesses, such as Jonathan Djanogly (Nottingham Manufacturing, a textiles business valuing the family at £300 million) and Richard Benyon (a landed estate valued at £125 million). Former Chancellor George Osborne stands to inherit a share of the upmarket wallpaper and fabrics company Osborne & Little, with 2016 sales of £32.8 million but posting a loss of nearly £400,000. The accounts say things should look up for Osborne & Little in 2017 — ironically due to Brexit, which cost Osborne his job. Some 48 per cent of its sales are in the US and the devaluation of the pound is therefore good news.

Such members are very untypical of today’s Commons. The number of politicians who practise other careers while in the House has declined sharply. With Labour’s Bob Marshall-Andrews leaving parliament in 2010 and the resignation last year of the dissatisfied Conservative Stephen Phillips, the Tory Geoffrey Cox QC is now the only sitting MP to make a substantial income as a barrister.

It is, of course, always possible that someone very wealthy from outside parliament will decide to enter politics in a big way. The experience of Sir Jimmy Goldsmith and his Referendum Party does not suggest that this is a route to high office. It seems unlikely that the most obvious candidate today, UKIP donor and Trump cheerleader Arron Banks, would fare any better. Don’t hold your breath for the British Trump.

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