Source · Select Committees · Public Administration and Constitutional Affairs Committee
Recommendation 16
16
Rejected
Paragraph: 67
The Government should provide an update in its response to this report on the guidance...
Recommendation
The Government should provide an update in its response to this report on the guidance it said it was considering in its response to the Committee on Standards in Public Life’s Regulating Election Finance Report, that would support campaigners to take a “risk- based” approach to donations, similar to the “know your customer” requirements in financial services.
Government Response Summary
The government has no plans to produce guidance on a "risk-based" approach to donations, stating that the existing legal framework and Electoral Commission guidance are sufficient, and that additional guidance would need careful consideration.
Paragraph Reference:
67
Government Response
Rejected
HM Government
Rejected
UK electoral law sets out a stringent regime of donations controls to ensure that only those with a legitimate interest in UK elections can make political donations and that political donations are transparent. All registered political parties, recognised third-party campaigners, candidates, registered referendum campaigners and regulated donees must check donations (valued at more than £50 to candidates, or £500 to political parties and other campaigners) to ensure they come from a permissible source within 30 days of receiving them. If a donation is found to be impermissible, it must be returned to the donor. The law is already clear about who is a permissible donor. To be a permissible donor, an unincorporated association must be made up of two or more persons, wholly or mainly carry out its business in the UK and have its main office in the UK. Unincorporated associations making political contributions of over £25,000 during a calendar year must notify the Electoral Commission. They are then required to report certain gifts they receive (and have received in at least the preceding 12 months) to the Commission, information about which is published by the Electoral Commission. Members’ associations, many of which are unincorporated associations, have additional obligations and must report on donations and loans they receive. 3 Public Administration and Constitutional Affairs Committee, ‘The Elections Bill’, Fifth Report of Session 2021-22, 13 December 2021, HC 597, p15 As the Committee indicates, it is important to consider the potential impacts of any further regulation. What may constitute an unincorporated association is broad and can include many different types of groups such as voluntary groups and local sports clubs and societies. It is important to avoid potentially discouraging the democratic participation of those groups. The Government absolutely recognises the risk posed by those who wish to evade the rules on donations. There are already provisions which explicitly prohibit money being funnelled through permissible donors on behalf of impermissible donors and it is an offence for donors and campaigners to purposefully evade the rules. The Electoral Commission already produces extensive guidance which helps campaigners identify if a donor is permissible. Beyond this, political parties may decide to undertake additional due diligence checks before they accept certain donations. Any additional guidance on non-statutory additional due diligence checks on donations would need to be carefully considered in terms of the value it would offer and who would be best placed to produce such guidance. The Government currently has no plans to produce guidance of this kind. However, the Government keeps the rules on donations under review to ensure they continue to provide an effective safeguard to the integrity of our political system.