What are the rules around political donations, do they change for an election and can parties give back money?
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.
Frank Hester has given millions to the Conservatives. Pic: PA
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.
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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.
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Why don’t we know when the UK election is?
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.
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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.
Labour handed back money given to them by Formula 1 chief Bernie Ecclestone. Pic: Reuters
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.
Tulip Siddiq has sought to distance herself from her aunt, deposed Bangladeshi PM Sheikh Hasina, claiming they never spoke about politics.
But Sky News can reveal that in a blog written by the now City minister she boasted about how close they were politically and published photos of them together.
In posts written in late 2008 and early 2009, when she was a Labour activist, Ms Siddiq described campaigning with her aunt in Bangladesh’s general election and celebrating her victory.
Our disclosure coincides with a new report in The Times which reveals how the embattled MP’s Labour Party flyers were found in the palace in Dhaka that belonged to her aunt, who was ousted in a coup last year.
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Labour’s Tulip Siddiq risks losing job
The blog is headed: “Tulip Siddiq, member of the Labour Party action team in Bloomsbury and King’s Cross”, and in a post on January 11, 2009, Ms Siddiq told supporters: “I was really busy in Bangladesh as you probably gathered…
“I’ve put up photos of Sheikh Hasina’s post-election press conference at Bangladesh-China Friendship Conference Centre in Dhaka.
“The most significant element of this press conference for me was Sheikh Hasina’s insistence that all the political parties in Bangladesh need to work together for the welfare of the country.
“It is no secret that past governments have not worked with the other political parties and we need to change this trend.
“The prime minister emphasised that the Awami League does not support the ‘politics of vengeance’ which is encouraging so let’s hope that a new political culture is created this year.”
She added: “Here’s an action shot of me with the prime minister at the press conference. I’m not sure what I was saying but it probably wasn’t that interesting!”
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‘Tulip Siddiq will lose job if she broke rules’
In a post on January 21, 2009, she wrote: “I was fortunate enough to travel with Sheikh Hasina in her car during election day.
“The prime minister-elect (Prime Ministerial candidate at the time!) drove to several constituencies in Dhaka and stopped quickly at each one to meet the parliamentary candidate or speak to the voters.”
Describing traveling in her aunt’s car, she wrote: “You can see all my photos from election day here… I apologise for the poor quality of some of the pictures. I was taking photos from inside her car which is actually quite difficult!”
“You’ll also see a photo of Dhaka Central Jail. I took that photo because Sheikh Hasina told me that this jail was practically her second home for most of her childhood as her father, Bangabandhu Sheikh Mujibur Rahman, was under arrest for many years.
“She told me that she visited him with the rest of her family every weekend, so it was a very familiar landmark.”
Earlier, on December 29, 2008, under the heading “Victory!”, Ms Siddiq wrote: “The Awami League have won the elections by a landslide! Sheikh Hasina is the prime minister-elect! I am ecstatic!
“I’ve been on the campaign trail with Sheikh Hasina all day so I don’t really have the energy to write much more but I will do so tomorrow.
“However, I can’t resist uploading a couple of photos. This is Sheikh Hasina’s face just before she heard the results from an unwinnable constituency.
“Here she is after she heard that the Awami League hard work had paid off in that seat.”
The Times reports that political literature of Ms Siddiq, Sir Keir Starmer’s anti-corruption minister, was found at the heavily guarded palace in Dhaka, covered by dust and debris.
At the top of a staircase were items produced by Ms Sidddiq. One was a thank you note to local Labour Party members following her election as MP for Hampstead and Kilburn.
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Another was her annual report for 2022, inviting readers to learn about her help for those affected by the cost-of-living crisis.
The new disclosures will pile further pressure on Ms Siddiq and lead to further calls on the prime minister to sack her.
Many Labour MPs believe her ministerial career is now hanging by a thread.
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On Sky News earlier, cabinet minister Peter Kyle told Trevor Phillips Ms Siddiq was right to submit herself to an ethics investigation over corruption allegations and strongly hinted she would be sacked if found to have broken the ministerial code.
Asked whether she should stand down until she is cleared of impropriety, Mr Kyle said: “I think she’s done exactly the right thing. She’s referred herself that the inquiry needs to go through. I think that that’s the appropriate way forward.
“I’m giving it all the space it needs to do. I’ll be listening for the outcome as the Prime Minister will be.
“There was a process underway and we know full well it will be a functional process, and the outcomes of it will be stuck to by the prime minister and this government, a complete contrast to what we’ve had in the past.”
Sky News has approached Ms Siddiq and the Labour Party for comment.
There comes a point in the arc of most political scandals after which a resignation risks prompting more questions than it answers.
The danger for Tulip Siddiq – and by extension Sir Keir Starmer – is that threshold may about to be passed, if it hasn’t been already.
In other words, if she goes now, plenty will wonder why it didn’t happen sooner and why Downing Street allowed the story to gather pace and inflict further damage before acting.
The answer to this is partly because nothing has emerged so far that’s such an explicit rule break that it would trigger an automatic sacking or resignation.
That means the affair still resides – just about – in the box marked “looks bad” rather than the more sinister one marked “is bad”.
The standards adviser has been asked to “establish the facts” – a classic political technique to try and smother a story by announcing an inquiry.
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Cabinet minister Peter Kyle told Sky News the outcome of that exercise “will be stuck to”, meaning the junior Treasury minister will be relieved of her responsibilities if a breach of the government’s code of conduct is identified.
But some within Labour are contrasting this case with the rapid resignation of Louise Haigh as transport secretary after Sky News revealed she had pleaded guilty to an offence in court shortly before becoming an MP.
They suggest the key difference is that Ms Haigh was relatively left-wing and at odds with some in Downing Street, while Ms Siddiq is a constituency neighbour and ally of the prime minister.
“Keir Starmer has been consistently ruthless against people perceived to be more on the left of the party and very lenient with people perceived to be more on the right of the party,” said former Jeremy Corbyn adviser Andrew Fisher.
A counter to this is that Ms Siddiq is not a cabinet minister.
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Minister suggests Siddiq could lose job
That said, she does oversee efforts to combat financial crime, money laundering and corruption – three activities she is now finding herself linked to, albeit in a different country.
The fact she pulled out from the chancellor’s trip to China this weekend also opens an easy attack line that the story is already stopping her from doing her job.
So where does this go now?
There is a chance that something may emerge that forces an immediate departure.
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Engaging the standards adviser may also backfire if a technical breach potentially relating to declarations or conflicts of interest is found.
But a third option is potentially most damaging for the government – that Ms Siddiq becomes politically paralysed by the volume of stories surfacing and is forced to step down simply to stem the flow.
The government will “mainline AI into the veins” of the UK, with plans being unveiled today by Sir Keir Starmer.
The prime minister is set to promise investment, jobs and economic growth due to a boom in the sector.
It comes as his government battles against allegations they are mismanaging the economy and stymied growth with the budget last autumn.
The government’s announcement claims that, if AI is “fully embraced”, it could bring £47bn to the economy every year.
And it says that £14bn is set to be invested by the private sector, bringing around 13,000 jobs.
The majority of those would be construction roles to build new data centres and other infrastructure, with a smaller number of technical jobs once the work is finished.
Sir Keir said: “Artificial Intelligence will drive incredible change in our country. From teachers personalising lessons, to supporting small businesses with their record-keeping, to speeding up planning applications, it has the potential to transform the lives of working people.
“But the AI industry needs a government that is on their side, one that won’t sit back and let opportunities slip through its fingers. And in a world of fierce competition, we cannot stand by. We must move fast and take action to win the global race.”
The prime minister added that he wants Britain to be “the world leader” in AI.
The government announcement said: “Today’s plan mainlines AI into the veins of this enterprising nation.”
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To achieve this, the government will implement all 50 recommendations made by Matt Clifford following his review last year.
This includes creating new AI “growth zones” – the first of which is set to be in Culham, Oxfordshire, where the UK’s Atomic Energy Authority is based.
These zones will get faster planning decisions and extra power infrastructure.
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The government also wants to increase UK computing power 20-fold by 2030, including by building a brand-new supercomputer.
Labour cancelled a planned supercomputer when it entered office, as it claimed it wasn’t funded. The new venture is expected to be a joint public-private project.
The government says its plans will have three pillars. This includes laying the foundations with new AI growth zones and the new supercomputer.
The second is to boost AI take up by the public and private sectors. New pilots for AI in the public service are set to be announced, and Sir Keir has written to all cabinet ministers, telling them to drive AI adoption and growth.
And the third pillar is keeping ahead of the pack, with the government set to establish a “team” to keep the UK “at the forefront of emerging technology”.
The announcement was welcomed by a slew of technology bosses.
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Chris Lehane, the chief global affairs officer at OpenAI, which released ChatGPT, said: “The government’s AI action plan – led by the prime minister and [Science] Secretary Peter Kyle – recognises where AI development is headed and sets the UK on the right path to benefit from its growth.
“The UK has an enormous national resource in the talent of its people, institutions and businesses which together, can leverage AI to advance the country’s national interest.”
The shadow secretary for science, innovation and technology, Alan Mak, said: “Labour’s plan will not support the UK to become a tech and science superpower. They’re delivering analogue government in a digital age.
“Shaping a successful AI future requires investment, but in the six months leading up to this plan, Labour cut £1.3bn in funding for Britain’s first next-generation supercomputer and AI research whilst imposing a national insurance jobs tax that will cost business in the digital sector £1.66bn.
“AI does have the potential to transform public services, but Labour’s economic mismanagement and uninspiring plan will mean Britain is left behind.”
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