Lord Sainsbury returns to Labour with £2m donation after cutting ties during Corbyn era

Sir Keir Starmer has been given a £2m boost from a major New Labour era donor, as dozens of top business leaders are asking how to “get on board” with the Labour Party ahead of the next election.

Labour confirmed that David Sainsbury, the former supermarket chair who withdrew his financial support for the party during the Jeremy Corbyn era, has provided his first multimillion-pound donation since 2016.

Lord Sainsbury said in a statement that he was donating to Labour again because he wanted “to see Keir Starmer become prime minister as soon as possible”. He added: “I believe that Keir Starmer has the leadership skills and ability to deal with the economic difficulties we currently face.”

It comes as a former Tory donor who defected to the opposition told The Independent that “dozens” of leading figures – including some former Tory donors – had approached him asking how they could help to put Sir Keir in No 10.

Gareth Quarry said that Sir Keir and shadow chancellor Rachel Reeves had led a “miraculous” turnaround in Labour’s reputation in the country’s boardrooms.

Asked if the party’s image in the business community had been transformed, Mr Quarry said: “Without question. It’s nothing short of miraculous. Jeremy Corbyn kept us all away, because we were petrified what he would do.”

“Keir, Rachel, [shadow health secretary] Wes Streeting and others in the team are sensible people who put the country first,” continued the 63-year-old entrepreneur. “People in business need certainty. Labour is offering stability in contrast to constant Tory turmoil.”

The former City lawyer, who chairs the legal recruitment giant SSQ, added: “I’ve being approached by others in business about it. A lot of people are saying, ‘You’ve done this for a reason – how can we get on board?’ I’m not searching them out. They’re searching me out.”

Mr Quarry said he had spoken to owners of large businesses, as well as top figures in finance, consultancy and the legal sector, about donating. “There are also plenty of people running smaller and medium-sized firms – it’s the whole range. They’re all in despair about the Tory government.”

He said the £100,000 he and his wife have given to Labour was only the start of their connection to the party. “My wife and I totally believe in the Labour project now, and we will be writing further cheques.”

Mr Quarry was scathing about Rishi Sunak and the Tory party, referring to Boris Johnson’s alleged “F*** business!” comment in the wake of the Brexit vote.

“We’ve not had stability for years. And we’ve now got a weak leader who can’t stand up to the Tory factions. Frankly, they need 10 to 20 years in opposition to get their s*** together, and it looks like that is what they will be consigned to,” he added.

Mr Quarry also joined other business leaders in calling for closer ties to the EU in order to “sort out” the Brexit trade friction – but backed Labour in ruling out a return to the single market.

“We’re not going to rejoin, there’s no future in that. But we’re nowhere near having got Brexit done. We’ve seen a softening in attitude from Brussels since the blonde-haired clown [Mr Johnson] left. There is a basis for a far more sensible set of agreements,” he said.

It comes as new analysis by The Independent shows that Labour increased its donations from wealthy individuals by a significant amount during 2022, while the Tory party has seen a slump in support from rich backers.

Labour raked in more than £2.8m from individual donors last year – up £1.3m from the previous year, according to Electoral Commission data.

The Tories still boast more wealthy supporters than the opposition, but donations from individuals fell by £1.6m to £11.3m last year amid the turmoil overseen by Mr Johnson and Liz Truss.

Labour said it is now “debt- and deficit-free” after having been hit by falling membership and large legal bills. Waheed Alli has been tasked with leading the party’s fundraising drive for the general election, by trying to expand the “rose network” of donors so that the party can boost its campaigning.

Kasim Kutay, the chief executive of life sciences investor Novo Holdings, donated £25,000 to Labour last year, having previously given to the Tories. He said Sir Keir had “demonstrated an understanding of the challenges facing the UK”.

Labour’s biggest single individual donor in the past year was Francesca Perrin, the daughter of Lord Sainsbury, who gave the party £500,000 in July. Among its other large backers, River Island chair Clive Lewis gave the party £100,000 in August, while Carlisle housebuilder Fred Story donated £100,000 in September.

Mr Quarry’s comments come after Paul Drechsler, a former CBI president and a former government skills tsar, told The Independent that Tory turmoil was damaging investment and Labour was now winning the argument among businesses.

A Labour spokesperson said: “Serious business people can see that Labour has changed and are signing up to support us. Business has had enough of the chaos of the last few years. Only Labour can be trusted to grow the economy and raise living standards.

“Thanks to Keir Starmer’s leadership, the Labour Party is in a strong and positive financial position, having experienced significant growth in income throughout 2022, leaving us debt- and deficit-free.”