What are the rules around political donations, do they change for an election and can parties give back money?

Published

1 year ago

March 14, 2024

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It’s an election year – and that means political donations have ramped up.

And this has been compounded by the alleged comments of Frank Hester, who is reported to have said Labour MP Diane Abbott made him “want to hate all black women”, after giving £10m to the Conservatives.

But what exactly are the rules on donations? Do they change for elections? Who gets the most money? Why do people donate? And can parties give funds back?

Here we explain:

What are the rules on donations?

Politics and money is a rabbit hole that Lewis Carroll would be jealous of, and the UK’s system is no different.

One of the most important things to note is that the figures are on a much smaller scale to those in the US – in the tens of millions rather than billions.

One key distinction is that donations to MPs are different to political party donations.

MPs have to declare all their interests on a public register, which can be easily searched using the Sky News Westminster Accounts tool.

This is how we know that Frank Hester’s The Phoenix Partnership donated a £15,900 helicopter flight to Rishi Sunak late last year.

His company gave £5m, and he gave £5m personally to the Conservative Party itself.

The rules for these donations require all contributions over £11,180 to be declared. This was recently increased from a threshold of £7,500.

Money donated to political parties in this fashion goes into their accounts but, according to Professor Justin Fisher, an expert in political finance at Brunel University, it does not need to be “ring-fenced”.

This is why there is no way to see what the money donated by Mr Hester and his company was spent on.

The body responsible for regulating and setting standards for donations and party finances is the Electoral Commission.

Are there different rules for elections?

In short – yes, many different restrictions.

The aforementioned increase in the floor for the declaration of donations was done as part of measures to update financial restrictions that had laid untouched for two decades.

The spending limit for parties during elections also increased. For a party contesting all 650 UK seats it went from around £18m to just over £35m.

However, as no party contests every seat, the effective limit is just over £34m.

According to the Electoral Commission, this applies to spending on certain activities in the 365 days before the election.

Confusingly, it is impossible to know the start date of this period, as the government can call an election whenever it wants, so in November 2023 the Electoral Commission encouraged parties to “behave as if you are in a regulated period from now onwards”.

Other changes included how often parties have to report their donations.

In normal times, figures are published quarterly. After an election is called and parliament is dissolved, publication takes place every week.

There are also restrictions on how much money a prospective MP can spend in an election period.

Each constituency has a limit based on the number of people who live there.

And those hoping to get elected have to declare all their spending, as well as any donation the candidate received over £50.

Who gives the most money – and why?

The biggest donors to political parties can be easily identified through the Sky News Westminster Accounts interface.

It is dominated by individuals, unions, and just a few companies.

At the top of the list sits Lord David Sainsbury, the supermarket heir, who has given more than £13m in donations since the last election – including £5.1m to Labour and £8m to the Liberal Democrats.

He is not to be confused with his cousin, the late Lord John Sainsbury, who gave £10.2m to the Conservatives in the same period.

Next up is the union Unite, which has given £10.7m to Labour, and hundreds of thousands of pounds to Labour MPs.

The GMB union and Unison have both given around £6m to Labour since 2019.

Businessman Graham Edwards gave £5.2m to the Conservatives in this period.

Next on the list is Mr Hester’s The Phoenix Partnership, which has given £5.2m, including the helicopter flight to Mr Sunak.

Mr Hester also donated £5m in a personal capacity to the Conservatives.

Prof Fisher explained that it used to be more common for companies to donate, instead of individuals – but it is harder to justify this now in an era when spending plans have to get past powerful boards.

Instead, companies can benefit from different, less expensive (on a balance sheet) endeavours, like lobbying or hosting events.

Donors tend to hand over cash or gifts because they want to see a party win which will improve their position, or because of a prior affiliation. Or an individual could just be politically aligned with the party in question.

Can parties return money?

Once again, the short answer is yes.

There have been calls for the Conservatives to return the money given to them by Mr Hester or his company.

Political parties can spend their money how they choose – and this could include giving it back or donating it to charity.

It is not the first time there have been calls for money to be returned.

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The Liberal Democrats faced calls to return money donated to them by Michael Brown, who lived in Majorca but gave money through a company based in the UK – something the rules do not allow.

The Electoral Commission investigated but did not take further action. Mr Brown was later convicted of fraud.

The Labour Party faced calls in 2002 to return a donation from publisher Richard Desmond because his publication “titles are demeaning and degrading to women”.

One time when money did get returned was when Labour accepted a £1m donation from Formula 1 chief Bernie Ecclestone shortly before they came to power in 1997.

At the time, the donation was not made public as there was no requirement to do so. Labour did, however, have a policy at the time of declaring donations.

After coming to power, Labour announced it would ban all sports sponsorships from tobacco companies.

But, following talks with Mr Ecclestone, the government proposed exempting Formula 1 from the ban.

The donation then became public, and a political scandal erupted, so the party committed to give the money back.

In March 1998, Mr Ecclestone cashed a cheque which Labour had written to him for the £1m.

This shows money can be returned, if there is a will to do so.

Politics

Australian regulator asks High Court to allow appeal in Block Earner case

Published

4 hours ago

May 22, 2025

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Australian regulator asks High Court to allow appeal in Block Earner case

Australia’s financial regulator will seek the High Court’s permission to appeal a lower court’s ruling favoring fintech firm Block Earner, which found the company’s crypto-linked fixed-yield earning service is not a financial product.

The Australian Securities and Investment Commission said on May 21 that it wants to ask the High Court of Australia to clarify what the definition of a financial product is and clarify the circumstances when an interest-earning product and the conversion of assets from one form to another are regulated.

“The definition of financial product was drafted in a broad and technology-neutral way, and ASIC believes it is in the public interest to clarify this,” the watchdog said.

“This clarification is important as it applies to all financial products and services whether they involve crypto-assets or not.”

On April 22, Federal Court Justices David O’Callaghan, Wendy Abraham and Catherine Button found that Block Earner’s crypto-linked fixed-yield earning product is not a financial product, a managed investment scheme or a derivative under the Corporations Act.

ASIC said the court will consider its application. Special leave is required in an appeal to the High Court, and it’s only granted in cases where it would answer significant legal questions or matters of public interest.

A Block Earner spokesperson told Cointelegraph the matter has now escalated to a “broader legal question” around the definition of a financial product, which extends “well beyond Block Earner, and the crypto sector.”

“We believe the Full Federal Court’s April ruling was a strong and well-reasoned decision that upheld the integrity of our operations,” the spokesperson said. “We remain confident in the soundness of that judgment and will respond to ASIC’s application through the appropriate legal channels.”

Legal saga ongoing since 2022

ASIC first launched legal proceedings against Block Earner in November 2022, arguing the company needed a financial services license to offer its yield product, which was available from March 17, 2022, until the company shut it down on Nov. 16, 2022.

In February 2024, an Australian court initially ruled the fintech firm would need a financial services license to operate its crypto yield-bearing products.

Another June 2024 ruling in Australia’s Federal Court released Block Earner from any financial penalties because it had “acted honestly” and pursued its legal opinions before launching the products, which ASIC appealed.

Block Earner appealed the Federal Court’s decision that it needed a financial services license on July 9, 2024.

Magazine: SEC’s U-turn on crypto leaves key questions unanswered

Politics

VanEck to launch Avalanche ecosystem fund

Published

6 hours ago

May 21, 2025

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VanEck to launch Avalanche ecosystem fund

VanEck plans to launch a private digital assets fund in June targeting tokenized Web3 projects built on the Avalanche blockchain network, the asset manager said in a statement shared with Cointelegraph.

The VanEck PurposeBuilt Fund, available only to accredited investors, aims to invest in liquid tokens and venture-backed projects across Web3 sectors, including gaming, financial services, payments, and artificial intelligence.

Idle capital will be deployed into Avalanche (AVAX) real-world asset (RWA) products, including tokenized money market funds, VanEck said.

The fund will be managed by the team behind VanEck’s Digital Assets Alpha Fund (DAAF), which oversees more than $100 million in net assets as of May 21.

“The next wave of value in crypto will come from real businesses, not more infrastructure,” Pranav Kanade, portfolio manager for DAAF, said in a statement.

Thematic crypto funds

VanEck’s PurposeBuilt Fund is the latest in a series of funds from the asset manager and rivals designed to offer exposure to projects and companies in fast-growing segments of Web3.

On May 14, VanEck launched a new actively managed exchange-traded fund (ETF) to invest in stocks and financial instruments providing exposure to the digital economy.

In April, VanEck launched another ETF investing in a passive index of companies operating in the crypto space.

Asset managers such as VanEck are requesting the US Securities and Exchange Commission’s (SEC) permission to list upward of 70 crypto ETFs.

The wave of ETF filings is in response to US President Donald Trump softening the agency’s regulatory stance toward crypto after Trump took office in January.

Avalanche RWA ecosystem

Avalanche has emerged as a hub for real-world assets (RWAs) and other institutional-oriented crypto projects.

Its interrelated networks, called subnets, allow institutions to run Ethereum-style smart contracts in a controlled environment. On May 16, Solv Protocol launched a yield-bearing Bitcoin token on the Avalanche blockchain, targeting institutional investors

Avalanche has around $1.5 billion in total value locked (TVL) as of May 21, according to data from DefiLlama.

“We’re seeing a shift away from speculative hype toward real utility and sustainable token economies,” John Nahas, chief business officer at Ava Labs, said in a statement.

Magazine: Danger signs for Bitcoin as retail abandons it to institutions — Sky Wee

Politics

US lawmaker reintroduces bill amid pushback on Trump’s crypto ties

Published

6 hours ago

May 21, 2025

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<div>US lawmaker reintroduces bill amid pushback on Trump's crypto ties</div>

A Democratic representative in the US Congress will support a blockchain bill at a time when many left-leaning lawmakers are blocking crypto-related pieces of legislation due to concerns with President Donald Trump’s potential conflicts of interest.

In a May 21 notice, Minnesota Representative Tom Emmer said he had reintroduced the Blockchain Regulatory Certainty Act, a bill that “solidifies that digital asset developers and service providers that do not custody consumer funds are not money transmitters.”Emmer, a Republican, said Democratic Representative Ritchie Torres would co-lead the bill, making it a bipartisan effort in Congress.

“The Blockchain Regulatory Certainty Act reflects a thoughtful, bipartisan effort to get digital asset policy right,” said Torres. “While similar language was voted down in markup last Congress, we took that feedback seriously and returned with a smarter, sharper framework that protects innovation without compromising oversight.”

Cryptocurrencies, Law, Politics, Congress — *Reintroducing the Blockchain Regulatory Certainty Act on May 21. Source:* *Tom Emmer*

Representatives of advocacy organizations, including the Crypto Council for Innovation, Solana Policy Institute, Digital Chamber, Coin Center, DeFi Education Fund and Blockchain Association, said they would support the proposed blockchain regulatory bill. It was unclear whether Emmer and Torres had a majority of votes in the House of Representatives for the legislation to pass.

Torres has supported many bills and policies favorable to the crypto industry since assuming office in 2021. Together with Emmer, he has led the Congressional Crypto Caucus to advance crypto-friendly policies in the House since March.

A bipartisan blockchain bill amid memecoin concerns?

Other Democratic House members, including Representative Maxine Waters, have suggested they intend to block any legislation related to crypto and blockchain until Republicans address Trump’s connections to the industry, such as his family’s stake in World Liberty Financial and his TRUMP memecoin. The president is planning to host a dinner with up to 220 people holding the most significant amounts of his memecoin on May 22.

Cointelegraph reached out to Torres’ office for comment but had not received a response at the time of publication.

Magazine: Trump’s crypto ventures raise conflict of interest, insider trading questions