Tory conference exclusive: Donors are deserting the Conservatives for Ukip

A string of Conservative donors has deserted David Cameron and poured nearly half a million pounds into Ukip's election fighting fund, The Independent on Sunday can reveal.

Fourteen individuals have switched support from the Conservatives to Nigel Farage's party in the three years since the 2010 election, donating £488,000 to Ukip. An analysis of Electoral Commission figures also shows that the number of individual donors to the Tories overall has halved since the election, while the average donation has decreased by £14,000.

News of the donor-defectors to Ukip emerged on the eve of the Tory party conference in Manchester, in which the Prime Minister will urge the country not to give up on the coalition's austerity plan, declaring that "we are on the right track" and that the Tory party is there "for hardworking people".

But one of George Osborne's closest allies has conceded that Britain is still going through a "living standards crisis" three years into the government. Skills minister Matthew Hancock said that only families in the bottom 20 per cent of earners have seen their incomes rise since 2010.

"We are very clear that life remains tough for lots and lots of families, and the only way sustainably to make that better is to make sure we stay on track and we win what the PM calls the global race," said Mr Hancock. "You improve living standards in the long term by strengthening the economy. And of course there's lots of micro measures you can take.

"After all, why have we got a living standards crisis? Because we had the great recession and the biggest banking bust in history and everybody knows that and they will still be remembering that in years and years to come. The figures show that since 2010, the only quintile group on average who have seen their incomes rise is the bottom 20 per cent."

Mr Farage, despite the efforts to ban him from the main conference centre, will be appearing at fringe meetings hosted by the Bruges Group, the smoking lobby group Forest, and the Freedom Association, all outside the secure zone where passes are not required. The Ukip leader said last night: "What these figures, delighted with them as we are, do not show are the large numbers of people who are donating £7,000 or under so as not to reveal their names. Some of these people are very big names indeed."

While all three main political parties are struggling with raising money ahead of the election, the slump in donations to the Tories is surprising because Mr Cameron had a previously strong record of attracting financial support. The fall in donations echoes a decrease in Conservative party membership – earlier this month it was revealed that there are 134,000 members, just over half the number in 2005.

The 14 donors who have switched support to Ukip are led by Stuart Wheeler, the party's Treasurer, who gave £3.9m in the last Parliament to Mr Cameron's party. He has given £300,000 to Ukip since May 2010. Others include Lord Hesketh, who has donated £30,000 to Ukip, and Andrew Perloff, the chairman of Panther Securities.

Other former Tory donors who have defected to Ukip are: James Hanson, £10,000; William Cole, £2,000; Robin Birley, £15,000; Michael Stone, £20,000; John Scott, £7,500; Sir John Craven, £12,500; William MacDougall, £8,000; David Caldow, £16,000; Lord Stevens of Ludgate, £10,002; Lord Dartmouth, £11,000; Patrick Barbour, £20,000.

Overall, between Mr Cameron's election as leader in December 2005 and the May 2010 election, the Tories received money from 1,923 donors, but in the past three years the party has received money from around half that number, 1,056.

According to a ComRes poll for the BBC's Sunday Politics, nearly a quarter of Conservative councillors would back an electoral pact with Ukip at the next election.

A Labour source said of the donors leaving the Conservatives: "As Tory membership has halved under his leadership, David Cameron is reliant on a smaller and smaller group of out-of-touch donors."

The Prime Minister unveiled long-awaited details of his marriage tax plan yesterday, worth up to £3.85 a week for couples, targeted at single earner, basic-rate-taxpayer families. Labour claimed this would not help two-thirds of married couples because those taken out of tax altogether would not benefit.

But Mr Osborne told The Times yesterday that the marriage tax break was "not seeking to be judgemental about any individual but saying that society is generally better off when more people are getting married than divorced".

Other policies being highlighted are Tech-levels, an elite form of vocational qualification which ministers hope will give less-academic pupils a strong alternative to A-levels that is relevant to work. State funding for thousands of qualifications which the Government sees as meaningless, such as ski-chalet hosting and key-fob design, has been axed. Instead, there will be a range of Tech-level courses in genuinely beneficial subjects, Mr Hancock said. There have been 263 applications to offer courses, which will start next year. He adds: "The goal has got to be you have got to have an elite standard. It's about making sure that everybody ... has the chance to reach their potential."

A Tory source, summing up the message of the party conference, said: "There's clear evidence the economy is turning the corner, but there is still a long way to go ... We mustn't squander our hard-won economic stability ... The alternative has been set out by Labour – more borrowing, more spending, more debt."

Today, a "Save our NHS" rally will take place in Manchester, with Unite claiming that Mr Cameron misled voters over plans to privatise parts of the health service.

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