One of the Tory party’s biggest donors has attacked the tax hike package being prepared by Rishi Sunak’s government this week as “anti-conservative” and has refused to commit to a donation to the party next year.
Peter Cruddas, founder and CEO of CMC Markets, described himself as a “huge supporter of Boris” when asked about his support for the current Sunak-led government.
Chancellor Jeremy Hunt is expected to announce a series of sweeping tax hikes on Thursday, including raising the corporate tax rate from 19 percent to 25 percent, freezing income tax thresholds and seeking tax breaks on dividends.
In response, Cruddas, who was made a peer by former Prime Minister Boris Johnson, said it was “difficult to distinguish between this government and the Labor Party. . . it is anti-conservative”.
In what was his biggest donation in recent years, Cruddas gave £500,000 to the party in February 2021, but smaller amounts have since been given.
Cruddas, along with his wife, own more than 60 percent of CMC Markets, which means he usually receives a sizeable dividend payment given the company’s policy of paying out half of after-tax profits. He is on target for a £6m payout for the first half of the year, which could grow to £25m for the full year given the company’s rising profits.
Cruddas said this week that Sunak and Hunt had no mandate because they had been rejected by Conservative members in their respective leadership contests against Johnson and Liz Truss.
When asked if he was a supporter of Sunak’s Conservative government, Cruddas said: “I am a supporter of democracy and a supporter of Boris Johnson.”
CMC offers spread betting to make leveraged bets on the financial markets, but is trying to build an unleveraged business in exchange trading and securities services.
On Wednesday, the group said it had ended plans to work on a spin-off of its investment business following a strategic review.
The company said the review concluded that given the “strong commercial and operational synergies . . . Shareholders’ interests would be best served by ensuring that both companies operate within the current group structure for the time being.”
Cruddas said that separating the companies was a “complex thing” and “too big a task with all the other possibilities.” Net income from investments fell 14 per cent to £20.8m in the first half.
The company recently launched CMC Invest UK which will include ISAs, Multi-currency Accounts, Mutual Funds and SIPPS. It has also committed to establishing CMC Invest Singapore by the end of 2023.
Net operating profit increased by a fifth to £153.5 million in the six months to the end of September. Pre-tax profit rose 1 per cent to £36.6 million.
CMC said its three-year growth plans remain on track, with new business expansion expected to boost net operating income by 30 percent over the next three years and expect profit margins to expand from 2024 onwards.
“We’re in great shape,” said Cruddas, who described CMC as a “all-seasons business” when asked how a recession would affect its balance sheet.
https://www.ft.com/content/138670e6-119e-4388-92d5-cc794514072c Tory donor Cruddas attacks ‘anti-conservative’ tax hikes