Electoral Funding: Unincorporated Associations

Patricia Gibson Excerpts

Wednesday 27th February 2019 Westminster Hall

[Martin Docherty-Hughes]

Perhaps I can remind the Chamber that my hon. Friend’s name is Brendan O’Hara. I totally agree with him and commend those who have assisted in exposing dark money to the light.

Why is all that relevant to a debate about unincorporated associations in the political process? Mr Cook is the poster boy for the way in which UAs have been used to funnel vast swathes of dark money into our political process. Even worse, the Electoral Commission allows fraudsters such as him effectively to mark their own homework. The Electoral Commission gave me a very informative briefing ahead of this debate, and I will use its definition of an unincorporated association:

“UAs are associations of two or more people, which do not fall into any of the other categories of permissible donors, are carrying on business or other activities wholly or mainly in the UK and have their main office here. They are permitted to donate money to political parties, non-party campaigners, individuals in elective office such as MPs, and referendum campaigners.”

The key phrase in that definition is,

“which do not fall into any of the other categories of permissible donors”.

That is what today’s debate is about. If the Minister answers only one question in this debate, I would like it to be this one: why, given all the ways in which individuals and organisations can donate money to political parties and groups in a transparent and straightforward manner, do we still allow this backdoor method, which seems to me to be easily exploited by those who would seek to obscure the provenance of funds?

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

My hon. Friend is giving an excellent speech. Is he surprised and disappointed, as I was, to learn that when SNP councillors lodged a motion asking Tory councils in North Ayrshire to make a statement on dark donations to local Tory branches, the Labour councillors abstained? Does he, like me, suspect that that is not unrelated to the much-denied informal confidence and supply arrangement that exists between Labour and Tory groups across Scotland?

[Mr Ian Austin in the Chair]

[Martin Docherty-Hughes]

It sounds like “Better Together”.

The case that proves my argument beyond doubt is the unincorporated association that Richard Cook leads: the Constitutional Research Council, or CRC. He describes the CRC as a group

“to start promoting the Union in all its…parts”,

and while it is based in Scotland, critically, it has managed to spread its tentacles across the rest of these islands. The CRC is most famous—or should I say infamous?—for the £435,000 donation it made to the Democratic Unionist party during the Brexit referendum.

--- Later in debate ---

[Chloe Smith]

Thank you, Mr Austin.

I will set out the rules surrounding the involvement of unincorporated associations in election funding, which will be helpful in responding to the debate. These associations are included in the list of permissible donors set out in section 54 of the Political Parties, Elections and Referendums Act 2000. The additional Political Parties and Elections Act 2009 introduced reporting rules for UAs that supported political activities; those rules are in schedule 19A of the 2000 Act.

Unincorporated associations must notify the Electoral Commission if the political contributions that they make over a calendar year are more than £25,000, whether that is through a single contribution or several. An unincorporated association must also notify the Electoral Commission of the reportable gifts that it received in the calendar year before it made the contribution, the calendar year of the contribution, and the calendar year following the contribution. That information is published by the Electoral Commission in its register of unincorporated associations and its register of recordable gifts to unincorporated associations. In this way, there is transparency as to who is providing the funds that are paid out by the associations.

[Patricia Gibson]

Will the Minister give way?

[Chloe Smith]

No, I will not, for entirely unsurprising reasons.

Reportable gifts include a single gift of more than £7,500, two or more gifts of over £500 given by the same person in the same calendar year that total more than £7,500, and any additional gifts of more than £1,500 given by a source from which the UA has already received a gift of more than £7,500 in the same calendar year. Electoral Commission guidance also states that any UA that intends to make contributions of more than £25,000 should keep records of all the gifts it receives that are worth more than £500.

There are various ways in which offences are deemed to have been committed. As hon. Members are aware, responsibility for regulating political finance sits with the independent Electoral Commission. It is right and proper that that should sit with an independent body. Any concerns about breaches of the law should be reported to the appropriate authority, and a record of the regulated groups who make and receive donations, including MPs, MSPs and other politically active people, is publicly available on the Electoral Commission’s website. That data is a treasure trove of information, because it reminds us that the Scottish National party and pro-independence campaigners have accepted political donations from unincorporated associations. Who would believe it?