Following the Money: Navigating the Complex Terrain of Political Donations Ahead of the July Election

As the July 4th election approaches, political parties are intensifying their fundraising activities.

Journalism specialized

Tuesday, June 18, 2024, 11:

Campaign season is in full swing, leading to a surge in political contributions.

What are the guidelines governing contributions? Do these guidelines vary during election periods? Which candidates receive the highest amount of funding? What motivates individuals to contribute? Additionally, is it possible for political parties to return the donations they receive?

In this section, we will clarify

What are the guidelines for giving contributions when there are no elections?

The intertwining of politics and finance creates a complex labyrinth that even Lewis Carroll would envy, and the British system exemplifies this perfectly.

It should be highlighted that the numbers are significantly lower compared to those in the US, measuring in the tens of millions rather than in billions.

A significant difference lies in the fact that contributions made to individual Members of Parliament are not the same as those given

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Members of Parliament are required to record their interests in a publicly accessible register, which can be conveniently searched through the Sky News Westminster Accounts tool.

The regulations mandate that any donations exceeding £11,180 must be reported. This limit was recently raised from the previous cap of £7,500.

Funds contributed to political parties are deposited into their general accounts and are not required to be earmarked for specific uses, explains Professor Justin Fisher of Brunel University, a specialist in political finance. Consequently, tracking how these donations are utilized is frequently impossible.

The Electoral Commission is the organization tasked with overseeing regulations and establishing norms for contributions and financial activities of political parties.

Discover more: Sunak seems to dismiss the idea of returning funds to Hester. Labour celebrates record-breaking year in personal contributions.

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Do election regulations vary?

To put it simply, yes, numerous restrictions exist.

The rise in the minimum threshold for reporting donations comes as part of a refresh to fiscal constraints that remained unchanged for twenty years.

The campaign expenditure cap for political parties participating in elections has seen a significant rise. Parties vying for all 650 seats in the UK can now spend up to approximately £35 million, up from the previous limit of about £18 million.

Nonetheless, since not every party fields candidates in all constituencies, the practical cap is slightly above £34 million.

The Electoral Commission states that this regulation covers expenditures related to specific activities occurring within the 365 days leading up to the election.

In a perplexing situation, pinpointing the exact beginning of this phase is unfeasible because the government has the discretion to schedule elections at its convenience. Consequently, in November 2023, the Electoral Commission advised political parties to "act as though the regulated period has already commenced."

Adjustments were also made to the frequency with which political groups must disclose their contributions.

Under usual circumstances, data is released on a quarterly basis. However, when an election is announced and parliament is dissolved, these figures are expected to be issued weekly.

Limits are placed on the amount of funds a potential Member of Parliament can use during a campaign period.

Every electoral district is capped by its population size.

Candidates aiming for election are required to disclose all their expenditures along with any contributions they receive exceeding £50.

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Who contributes the most financially – and what are their reasons?

The Sky News Westminster Accounts interface allows for the straightforward identification of major contributors to political parties.

It is controlled by a handful of people, labor groups, and a limited number of corporations.

Before the election season began, grocery chain magnate Lord David Sainsbury emerged as the leading donor, contributing over £13 million since the previous election. His donations were divided between £5.1 million to the Labour Party and £8 million to the Liberal Democrats.

It's important to distinguish him from his cousin, the deceased Lord John Sainsbury, who donated £10.2 million to the Conservative Party during that time.

Following Unite, the union has contributed £10.7 million to the Labour Party, along with hundreds of thousands of pounds to individual Labour MPs.

Since 2019, both the GMB union and Unison have contributed approximately £6 million each to the Labour Party.

During this timeframe, entrepreneur Graham Edwards contributed £5.2 million to the Conservative Party.

Coming up is The Phoenix Partnership, founded by Frank Hester, which has contributed £5.2 million, featuring a £15,900 helicopter ride for Mr. Sunak the previous year.

Mr. Hester personally contributed £5 million to the Conservative Party.

Discover more: Sky News secures award in data journalism for their coverage of Westminster Accounts. Labour demands a prompt probe into Tory donor.

Search for a Member of Parliament by entering their name or postcode, and quickly view a visualization of their income from work, along with any donations and gifts they have received.

Professor Fisher noted that there was a time when corporations were more likely to make donations than individual people. However, he pointed out that in today's environment, where budget decisions are closely scrutinized by influential boards, this practice has become more challenging to justify.

Rather than spending heavily, businesses might find value in engaging in cost-effective activities such as advocating through lobbying or organizing events.

Benefactors often contribute money or gifts to a political party either to support a victory that could benefit their own interests or due to a previous connection. Alternatively, a person or group may simply share the same political ideology as the party they are supporting.

Is it possible for parties to give

Indeed, the concise response is affirmative.

There are demands for the Conservative Party to reimburse the donations received from Mr. Hester or his firm.

Political parties have the freedom to allocate their funds as they see fit, which may involve returning it or contributing it to charitable organizations.

Demands for Mr. Hester to return the money are not unprecedented, as there have been previous calls for similar reimbursements.

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The Liberal Democrats were urged to give back funds they received from Michael Brown, a resident of Majorca who contributed through a UK-based company, a method prohibited by regulations.

The Electoral Commission conducted an inquiry but chose not to pursue additional measures. Subsequently, Mr. Brown was found guilty of fraud.

In 2002, there were demands for the Labour Party to refund a contribution received from publisher Richard Desmond due to the criticism that his magazines were disrespectful and belittling towards women.

On one occasion, the Labour Party received a £1 million donation from Formula 1 boss Bernie Ecclestone just before their 1997 electoral victory.

Upon taking office, the Labour Party declared its intention to prohibit any sports sponsorships by tobacco firms.

However, after discussions with Mr. Ecclestone, the government suggested that Formula 1 be excluded from the prohibition.

The contribution was subsequently revealed, leading to a political uproar, prompting the party to issue a £1 million cheque to Mr. Ecclestone.

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