Major Lib Dem donor, Lord Jacobs, quits party

The Times’s Sam Coates reports:

Lord Jacobs of Belgravia, a member of the party since 1972 and Liberal Democrat peer since 1997, told Mr Clegg he is leaving the party because he believes that its tax policies are too timid. … The former Liberal Democrat treasurer and strategist, who is worth an estimated £128 million from his involvement in the British School of Motoring, will now move to become an independent crossbencher in the Lords. …

Lord Jacobs,77, told The Times that Mr Clegg was too timid and should offer lower taxes both for the poor and the better off. Mr Clegg and Vince Cable “feel society wants the rich to pay more, whereas I’m arguing the rich could pay less provided the poorest pay nothing or very little indeed.” He said he could not support tax policies which leave those on minimum wage paying combined income tax and employee national insurance of 31 per cent tax on about half their income. He said this “quite frankly is a disgrace and utterly regressive.”

Asked about the current state of the party, he pointedly only offered an endorsement of a former leader: “Paddy Ashdown is great,” he replied. …

In addition to the role of Treasurer, Lord Jacobs was also chair of the party in England and helped devise the target seat campaign alongside Lord Rennard in 1997 which helped the party double its representation in the Commons. Lord Jacobs has given over a quarter of a million pounds to the party since the register was introduced in 2001, and is believe to have given up to a million over the last two decades.

As well as giving around £100,000 to party headquarters in the months leading up to the 2005 election, he has also given financial support to the constituencies of Vince Cable and Charles Kennedy. He gave £5,000 to both Mr Clegg and Chris Huhne for their respective leadership campaigns last year. His most recent contributions came in July this year.

A spokeswoman for Mr Clegg said: “He appreciate that he wishes the party every success in the future and we are very grateful for his support in the past.”

You can read the full story here.

Update (8/12/08): Sam Coates also has the text of Lord Jacobs’ resignation letter here – together with a sharp response from a party spokesman:

It is important that no member of the party, whether they are a donor or not, can simply dictate the party’s policies. Nick made clear to Lord Jacobs that he agreed that the tax burden on ordinary tax payers should be lowered as the party has been advocating for months. But that Lord Jacobs wider proposals do not stand up to economic or political scrutiny. Nick Clegg and Vince Cable will not change their principles in response to threats of resignations from donors on anyone else.”

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  • Hywel Morgan 7th Dec '08 - 6:27pm

    “He said he could not support tax policies which leave those on minimum wage paying combined income tax and employee national insurance of 31 per cent tax on about half their income. He said this “quite frankly is a disgrace and utterly regressive.””

    And so he’s leaving the one party committed to doing something about it. Am I missing something?

  • Martin Land 7th Dec '08 - 6:27pm

    So the story is rich donor leaves party because we don’t believe in giving more money to the rich? Am I bovvered?

    Once again, proof that we should only give peerages to ordinary hard-working members with a proven track record.

    If only we had the guts to limit ourselves to donations (except in Wills, where the donor concerned has nothing to gain) of say £10k per annum, we could avoid so much of this nonsense….

  • He does seem rather out of touch with what the party is offering. Was he standing up at conference arguing for these things?

  • Theo Butt Philip 7th Dec '08 - 6:58pm

    Whilst I wouldn’t agree with the majority of Lord Jacobs’ tax plan (he took out an advert in the papers outlining it a few weeks back) there is a strong argument that our priority should be increasing the personal allowance rather than cutting the basic rate.

  • It is easy to rush to attack someone who is leaving, but I think this is a bit churlish. Lord Jacobs has worked very hard for the party over the past twenty years, in financial and other ways. He is not someone who turned up, donated £100k one day and became a Lord the next without understanding or supporting our principles. When someone that committed leaves the sensible thing is to sit them down and talk to them. Because who knows, they may be representative of a chunk of the party.

  • Chris Rennard 7th Dec '08 - 8:03pm

    It is important to note that Anthony’s letter of resignation wishes Nick and the party every success in future.

    Anthony also asked me to make plain today that he remains supportive of Nick and of Liberal Democrat policies in general (including our tax policies), strongly supports the Clegg/Cable plans to cut the basic rate of income tax by 4p in the pound, but wants the party to go further in reducing tax including for the most well off.

    Nick and Vince have made it plain that they do not support Anthony’s proposals for very substantial increases in the the rate of National Insurance paid by employers (“a tax on jobs in a time of recession”) and to scrap totally any taxpayer funded incentives to invest in pensions (Lib Dems just want to equalise the value of contributions from all taxpayers).

    Perhaps other parties would change their policies in response to requests from donors (eg Labour on tobacco advertising in response to £1m from Bernie Ecclestone).

    But Liberal Democrats do not and Anthony wishes to argue his case as a cross-bencher. It seems highly unlikely to me that any other party would take up such controversial positions on increasing employers’ NIC and and abolising tax incentives for making pension contributions in the near future.

    In the meantime, Nick and Vince deserve more credit for leading the way in many of the present economic arguments and in particular arguing for reductions in the burden of income tax on people with ordinary incomes whose spending could then help the economy.


  • Clegg's Candid Fan 7th Dec '08 - 8:40pm

    “Anthony also asked me to make plain today that he remains supportive of Nick and of Liberal Democrat policies in general …”

    Presumably the bit in the Times report that says “He may join one of the other parties” isn’t true, then?

  • Chris Rennard 7th Dec '08 - 8:45pm

    So called “Candid Friend” – In the interests of candour, how likely is it that any other party would adopt these sort of tax proposals: – employers NIC up by 6%, abolition of all tax relief on pension contributions etc.?

  • Matthew Huntbach 7th Dec '08 - 8:56pm

    Anthony Jacobs has been a long-term member of the party, and the party has not in the past had the sort of tax cuts for everyone policy he now seems to think it should have otherwise he’s leaving. So, if he is a decent man, he really ought to say why he was happy to support it in the past, and isn’t now. It seems strange for him to be saying “Paddy Ashdown is great” when Paddy Ashdown’s tax policy was not much different from what Jacobs now regards as so bad he’s going to leave the party over it.

    My feeling is that with the economy in a mess, anyone who’s lucky to still be in a job should think it natural to be asked to contribute more. Those who are able to contribute the most should contribute the most. That is known as “all pulling together”. I think there are names for those who when asked to contribute for the good of their country say “No, I’ll run away and sign up somewhere else”. Any political leader who had some strength and some sense of what works with the people of this country would be able to make a powerful appeal on those grounds.

    Chris Rennard hints at Anthony Jacobs having some cunning plan for raising tax in some other ways. So I suppose the story really is Jacobs approaching the party leadership with his cunning plan, the party leadership telling him it disagreed, and Jacobs walking off in a huff. Well, ok, I can see that Jacobs might wish to go public on what his plan is and feel he couldn’t do that while still being a LibDem Member of the Lords. But I think then he ought to be honest about it, rather than let his story be spun by those who are our political opponents.

  • Clegg's Candid Fan 7th Dec '08 - 9:29pm

    Chris Rennard

    With respect, that wasn’t an answer to my question.

  • “…Jacobs his obviously flounced off in a huff…”

    Oh dear, I don’t think anyone could seriously believe that (I mean seriously!).

    For someone who has been around our party (and forebears) for so long he is clearly aware of our role in the process and pragmatic enough not to have walked away during more contentious times.

    Jacobs clearly sees some other merit in these actions as he is still overtly supportive, so I think it will be interesting to see whether he continues to be a donor to the party… wheels with wheels…

    My feeling is that he has deliberately isolated himself in order to open up a debate on this issues. If the Fabians and others are coming out in favour of Clegg’s leadership then these manoeuvers demonstrate clear political dexterity and a full awareness of how opinion is formed.

    At age 77 such a principled gambit should be applauded and it shows he has both the nous and the cojones to make one more throw of the dice.

  • Darrell,
    what do you think of his proposals?

    employers NIC up by 6%, abolition of all tax relief on pension contributions etc?

    like I said it would be interesting if he remained a donor…

  • David Allen 7th Dec '08 - 10:15pm

    Hywel Morgan,

    “Am I missing something?”

    Well perhaps we all are! To cut everybody’s taxes, but then raise NICs… er why?

    It’s a bit late but, why don’t we ask Lord Jacobs to write LDV the standard 500 words of explanation, and see if it looks any more sensible then?

    Perhaps we’ll all belatedly see what he’s driving at…

    Or perhaps we’ll be the ones who can explain who’s missing something!

  • Clegg's Candid Fan 7th Dec '08 - 10:17pm

    There’s a bit more on Sam Coates’s blog at TimesOnline. It scarcely sounds “supportive” of either the party or its leader:
    “Now Lord Jacobs wants to be free to hawk his tax plan around Labour and the Tories – and he isn’t ruling out joining another party.
    To be clear, he is quitting over policy rather than personality – and in particular Team Clegg’s failure to implement his detailed plans.
    But he hints quietly he’d rather have Vince as leader …”

  • Darrell,
    if Lord Jacobs proposed policy line is “utter madness” (ie unaffordable), doesn’t that mean by implication ours are ‘good, sound sense’, economically competent and therefore socially just?

    Of course we all aspire to a world where taxes are virtually non-existent while public services function perfectly and there is no crime, violence or fraud and we can look forward to a better tomorrow… Of course we can all agree on aspirations, but the important question is: how do we get there?

    While the two largest parties exist in a consensual duopoly opposing each other and trying their best to ignore us we need a devils advocate to pipe up to give us the right of reply and offer a counterpoint.

  • shh, don’t mention it too loudly, but I think we just created one with this resignation.

    I really hope Lord Jacobs becomes even more trenchant and vocal in his advocacy of these proposals.

    There are never enough free-thinkers in parliament, ahem.

  • Hywel Morgan 7th Dec '08 - 11:00pm

    It’s all a bit odd as Lord Jacobs is not a “johnny come lately” peer having been an open supporter and donor back in those “happy” merger days.

  • Clegg's Candid Fan 7th Dec '08 - 11:06pm


    What I quoted above was written on the blog of Sam Coates, the journalist who wrote the Times article. Of course, he may have got hold of the wrong end of the stick, as you imply.

    But there is more in the piece on the leadership and the party’s prospects (none of it quoted in the article above, of course):

    “Asked if Mr Clegg has been strong enough in his first year, he said the priority for any Lib Dem leaders should be to make sure they are heard.

    “The only person who ever got exceptional hearing was David Owen. I don’t know whether leaders today do that. There wasn’t a media guy who couldn’t get hold of him,” he said.

    He was also downbeat about the party’s chances at the next election saying they could be squeezed by Labour and the Tories. “When there’s a real dogfight, and there’s going to be a real dogfight this time, it doesn’t bode well.””

  • I rather get the impression that Lord Jacobs considers that his cheque book entitles him to dictate the party’s policy. Then when the leadership tells him to get knotted, he flounces out and reveals himself to be the crypto Tory he has probably been for some time. Was it not Lord Jacobs who tried to tell the party who its Treasurer should be immediately after merger and engineered a bust-up at Conference?

  • David Morton 7th Dec '08 - 11:11pm

    I suppose there is no point speculating but it all looks very odd. If you think of the highs and lows he’ll have seen in a 36 year membership it seems a bizzare issue to go over. Also he makes some choice quotes which positively invite alternative interpretations.

  • Sunder Katwala 8th Dec '08 - 12:41am


    Just to clarify: what I (personally) was saying was a good thing was your party leadership telling major donors that they can’t expect to bounce a party on policy. I would say the same if the Tories had a massive row with Stuart Wheeler or somebody like that, or a Labour case (as I hope you all no doubt would do).

    That wasn’t a ringing endorsement of Clegg. He seems rhetorically in not a massively different place sometimes from Jacobs on tax. But then if I knew what Nick Clegg’s economic and tax policies really were, I would be better placed to offer you a proper view. I can see aspires to major tax cuts but I don’t see where from, in that he’s allocating savings he hasn’t yet got (and which you may no doubt choose to spend some of too) to gain some headlines.

    On the issue of less taxation at the bottom, there is a strong argument. Those who think it can go with less tax at the top either are either simply having their cake and eating it, or want much much less spending (or, as appears the case here, have some alternative but quite unworkable plan)

    Of course, everybody on all sides respects and has faith in Vince Cable’s abilities. I trust he will keep the rest of you sane, and I hope you might even meet a progressive redistribution test across the piece last time. (I will often say you were good on the top end in the past, but it does so often seem to go to the middle, not the bottom, as LibDem priorities). And do please take asset and wealth inequality more seriously – and drop this idea of scrapping the child trust fund, which is a small step in the right direction for anyone who cares about that.

  • “Lord Jacobs,77, told The Times that Mr Clegg was too timid and should offer lower taxes both for the poor and the better off.”

    It feels strange, then, that he didn’t leave already during the past decades, when the Liberal Party / Liberal Democrats supported even higher taxes. He has been patient for – what? 40 years? – and now when finally there has happened some movement to his preferred direction, it isn’t quick enough.

  • Hywel Morgan 8th Dec '08 - 12:40pm

    “I rather get the impression that Lord Jacobs considers that his cheque book entitles him to dictate the party’s policy.”

    There’s not much evidence of that over the years though

  • Hywel Morgan wrote:

    “There’s not much evidence of that over the years though”

    Ask Ian Wrigglesworth.

  • Hywel Morgan 8th Dec '08 - 2:13pm

    Well Sir Ian hasn’t been involved to any degree for nearly two decades so I’m not sure what that would prove.

  • Thomas Hemsley 8th Dec '08 - 7:09pm

    I’m not sure whether this has already been said, but I’m wondering how he could remained in the party when Kennedy was leader, what with the 50p rate…good luck to him, and I’m glad he has donated all that money, but this wouldn’t be an issue if we had a state funding/membership subscriptions mix.

  • Matthew Huntbach 9th Dec '08 - 2:17pm

    Er, yes, Tom, and what a stunning success your policies have been recently. Those of us who your type were so happily writing off as low-life socialist scum have turned out to have a point – actually we can’t all make money by selling houses to each other.

    If we want to have tax breaks for those genuinely investing in real productive industry, well let’s have them. But all those big City bonuses? Is that where they went? No, your clever investments were all a Ponzi trick, and the poor people of this country were being ripped off by your lot, Tom.

  • Reading the comments left on this Lib Dem website, one can only modify slightly and recall with amusement the highly appropriate comment of Mandy Rice-Davies …. “Well, they WOULD say that wouldn’t they?”
    Just keep blindly following the part line chaps – your lot are never going to see power, so your views are of little significance.

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