One of the Tory party’s largest donors has attacked the package of tax rises being lined up this week by Rishi Sunak’s government as “anti-Conservative” and refused to commit to donating to the party next year.
CMC Markets founder and chief executive Peter Cruddas described himself as a “big Boris backer” when questioned about his support for the current administration led by Sunak.
Chancellor Jeremy Hunt is expected on Thursday to unveil a wide-ranging set of tax rises, including taking corporation tax from 19 per cent to 25 per cent, freezing income tax thresholds and targeting dividend tax relief.
In response, Cruddas, who was made a peer by former prime minister Boris Johnson, said it was “hard to distinguish between this government and the Labour party . . . it’s anti-Conservative”.
In his biggest donation in recent years, Cruddas gave £500,000 to the party in February 2021, but has since given smaller amounts.
Cruddas owns more than 60 per cent of CMC Markets with his wife, which means that he normally gets a significant dividend payment given a corporate policy of distributing half of profits after tax. He is in line for a £6mn payout for the first half of the year, which he added could grow to £25mn for the full year, given rising profits at the company.
Cruddas said this week that Sunak and Hunt had no mandate having 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 supporter of Boris Johnson.”
CMC offers spread betting to make leveraged bets on financial markets, but is trying to grow a non-leveraged business in stockbroking and investment services.
On Wednesday the group said that it had ended plans to work on a separation of its investment business after 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 businesses operate within the current group structure for the time being”.
Cruddas said that separating the businesses was a “complex thing to do” and “too big a task with all the other opportunities”. Investing net revenue dropped by 14 per cent to £20.8mn in the first half of the year.
The company has recently launched CMC Invest UK, which will include ISAs, multicurrency accounts, mutual funds and SIPPS. It has also committed to launch CMC Invest Singapore by the end of 2023.
Net operating income rose a fifth to £153.5mn for the six months to the end of September. Pre-tax profit rose 1 per cent to £36.6mn.
CMC said its three-year growth plans remained on track, with new business expansion expected to increase net operating income by 30 per cent over the next three years and an expansion in profit margins expected from 2024.
“We are in great shape,” said Cruddas, who described CMC as a “business for all seasons” when asked how a recession would hit its balance sheet.