It appears that the storm following Sir Keir Starmer’s acceptance of gifts and donations is showing no signs of slowing. Canterbury MP Rosie Duffield resigned from the party last weekend, accusing the prime minister of “hypocrisy” regarding his acceptance of gifts from donors, including Labour peer Lord Alli.
“Since the change of government in July, the revelations of hypocrisy have been staggering and increasingly outrageous,” Duffield wrote in a resignation letter published by The Sunday Times on Saturday. “The sleaze, nepotism and apparent avarice are off the scale. I am so ashamed of what you and your inner circle have done to tarnish and humiliate our once proud party.”
Sir Keir has faced mounting criticism for accepting expensive gifts and donations, including high-end clothing for his wife Lady Victoria, the use of a corporate box at Arsenal football club and a £20,000 donation to pay for a flat where his son revised for his GCSE exams. According to Sky News, since 2019, Sir Keir has accepted £107,000 in gifts, which is twice as much as any other MP. Other Labour MPs, including health secretary Wes Streeting and education secretary Bridget Phillipson, have come under fire for accepting tickets to see Taylor Swift in concert.
To combat the criticism, Cabinet Officer Minister Pat McFadden told the BBC that the government would be tightening its rules around hospitality gifts. A rule - which McFadden referred to as a “loophole” - was introduced under David Cameron, which meant that ministers can declare hospitality linked to their jobs in the departmental declarations, however, an estimated value is not required.
So what are the rules around giving and receiving gifts and donations?
How much do donors give?
The UK’s political parties are funded through membership fees and donations from individuals, companies and trade unions to run their campaigns. Figures released by the Electoral Commission found that, in the ‘prepoll period’ of this year’s general election (May 30 - July 4), Labour received £9.8 million worth of donations, which is more than five times the amount reported by the Conservative Party. The Conservatives, Liberal Democrats and Reform UK received £1.9 million, £1.7 million and £1.6 million, respectively.
What is Lord Alli getting in return?
Estimated to be worth around £200 million, Lord Waheed Alli is a media entrepreneur, a member of the House of Lords and the Labour party’s biggest donor. Sir Keir Starmer has been criticised for accepting a number of gifts from Lord Alli - including eyewear and work clothing worth £18,000 and clothing for his wife Lady Victoria. But what does Lord Alli get in return for these gifts?
A source close to Alli told the BBC that the media mogul was “mortified” at the uproar and “never wanted to become the story”. Speaking to The Guardian, other sources explained that part of Alli’s appeal to politicians is that he never asks for anything in return for his donations. “Waheed is a millionaire and he already has a peerage,” one cabinet minister said. “What more can he possibly want?”
Do political donors get a tax break?
As it stands, donations made by individuals to political parties in the United Kingdom are not tax-deductible. However, in 2015, Reuters found a loophole where, if an individual donates from a company they control, the donor can avoid paying income tax - allowing them to donate more than they might have first thought.
What was the cash for the honours scandal?
The cash for honours scandal came to light in 2006, when it was suspected that wealthy party donors across the political spectrum were being offered peerages in exchange for donations and secret loans. A loophole in the law meant that those loaning money to a political party at commercial rates did not have to publicly declare a loan - which would otherwise need to be declared.
It was found that one donor, millionaire Chai Patel, was nominated for a peerage by then-Prime Minister Tony Blair after giving the Labour party a £1.5 million secret loan on top of a £100,000 donation. While Labour confirmed it had received almost £14 million in secret loans before the 2005 general election, the Conservatives admitted to borrowing £16 million and the Liberal Democrats £850,000. However, in 2007, the Crown Prosecution Service announced that no charges would be brought forward due to a lack of evidence.
What do the rules state?
There are several rules that donors and politicians have to follow when it comes to party gifts and donations.
Currently, there is no limit on the amount of money that a donor can give to a party - despite many calling for one to be placed on donations. Every quarter, the Electoral Commission publishes data on any donations that are made of over £11,180, which is made available to the public.
According to the Government website, MPs have to register gifts and donations they receive in the register of MPs’ interests within 28 days of receiving said gift/donation. Gifts worth more than £300 have to be formally registered, and if their value is more than £500, the MP has to ensure they have been given by a “permissible donor”, who is registered in the UK.
Regarding hospitality, the rules state that MPs “should not encourage business contacts to provide hospitality to them, or indirectly to other colleagues, friends or relatives”.
