Christopher Hope, chief political correspondent Peter Dominiczak, political editor 12 APRIL 2016 • 10:00PM

Conservative donors prepare to sink £5million into Brexit campaign amid anger about pro-EU leaflet

Major Tory dors are preparing to fund a grassroots campaign to leave the European Union following David Cameron’s decision to spend millions of pounds on a pro-EU leaflet, the Telegraph can disclose.

Members of the Midlands Industrial Council, a group of businessmen which have bankrolled the Conservative party for 20 years, are planning to donate between £4million and £5million to the anti-EU campaign over the next 10 weeks.

It will be seen as an attempt to redress the balance following the Government’s controversial decision to spend £9.3million of taxpayers’ money in order to send a pro-EU leaflet to every home in Britain.

David Wall, the Council's secretary, says his members are "incandescent with rage" over Mr Cameron's decision to send the leaflet.

Their decision will come as a major blow to Mr Cameron ahead of the June 23 referendum and is a sign of the anger among many traditional Tory backers at the decision to publish the leaflet, which has been described as “propaganda” by critics.

It came as the International Monetary Fund (IMF) warned that a “Brexit” would cause "severe regional and global damage" and cause “major challenges” for Britain.

Both Mr Cameron and George Osborne, the Chancellor, seized on the comments by the IMF, which downgraded its growth forecasts for the UK because of the risk of a “Brexit” and added that leaving the EU would cause “major challenges” for the UK.

However, campaigners pointed out that the IMF had been "consistently wrong" in past forecasts and had been forced to apologise to Mr Osborne in 2013 for having predicted that his austerity measures would harm the UK economy.

“The IMF’s warnings about our exit from the EU are stark,” Mr Osborne said. “For the first time, we’re seeing the direct impact on our economy of the risks of leaving the EU.”

Members of the Midlands Industrial Council have, since Mr Cameron became Prime Minister in 2010, donated between £1million and £2million to the Tory party every year.

Ahead of last year's general election, the Council's members supported between 40 and 50 Conservative MPs' seats, as well as the central party.

David Wall, the Council’s secretary for the past 20 years, joined Grassroots Out Movement’s board earlier this year.

In an interview with the
Telegraph, Mr Wall said that five members of the Council, who are all Conservative party donors, have already put around £500,000 into the “Brexit” campaign.

Asked how much the Council might donate to the anti-EU campaign ahead of
the vote on June 23, he said: "I would say there is a potential of £4million or £5million."

The Electoral Commission must decide by tomorrow whether Grassroots Out Movement or the rival Vote Leave group is made the official designated “Brexit” campaign. The official EU

The two sides have been at loggerheads for months over the designation, which will give the winner the right to raise £7million during the 10 week campaign.

All other campaigns will have their spending capped at £700,000.

Vote Leave is seen as the favourite because it is backed by senior Tory politicians including Michael Gove, the Justice Secretary.



Grassroots Out merchandise CREDIT: PA/PA

Grassroots Out Movement comprises five parties – including Ukip, the Liberal Party and the new Communist Party of Great Britain – and 14 other organisations including Leave.EU, Labour Go, Conservative Grassroots and the Democracy Movement.

Ukip will be allowed to spend £4million because of its large vote share at the 2015 general election.

However, each of the other 18 groups making up Grassroots Out Movement can still spend up to £700,000, meaning the Midlands Industrial Council members can donate to the individual groups in order to vastly increase the money being funnelled into the “Brexit” campaign.

Mr Wall added: “I believe that significant sums will now to go Grassroots Movement – the umbrella organisation – or Grassroots Out, either one.”

Mr Wall said that most of the council’s 27 members – who he described as a group of mainly male “self-made people” – wanted Britons to vote to leave at the June 23 referendum.
Mr Cameron’s decision to send out the leaflet had “has hardened a lot of people’s attitudes in the last few days”, he said.
Mr Wall said: “This leaflet they are sending out –a number of my members are incandescent with fury about it. They see that as a blatant misuse of power.”

Any donations were "hypothetical" at this stage and “will be made by permissible donors themselves," he said.

Mr Wall insisted that the donations to the out campaign did not undermine Mr Cameron’s leadership.

He said: “This is an issue of conscience. It isn’t that any of my members disrespect David Cameron in any way, shape or form. We do hold him in very high regard. But in this area we think he is wrong.”

In 2006, the Council agreed to publish “in the interests of transparency” a list of its supporters, which included Lord Bamford, the chairman of digger manufacturer JCB.