Elections watchdog examining Labour drinks receptions with businesses

The Electoral Commission is investigating whether Labor should have announced its sponsorship of a series of corporate receptions under the UK’s political donation rules.

Since the party took power last July, it has organized at least seven social events with companies including Mastercard and housebuilder Vestry, attended by MPs and ministers at the company’s headquarters or development headquarters.

The working classes dispute events such as “business partnerships purchased on a standard commercial basis”, arguing that any income or benefit in kind is therefore not a donation and does not need to be declared.

The value of none of these partnerships was stated, and it is not clear, in each case, exactly what the companies provided in terms of hospitality, money or venues.

The Electoral Commission confirmed that it was examining whether the Labor Party had applied the law correctly.

The regulator said it was “looking into the matter” and confirmed it was collecting information about any relevant events, but said it was “unable to comment at this time as it may impact our business.” [enquiries]”.

If it deems it necessary, the Electoral Commission can open a full investigation into a suspected breach, and has the power to issue fines of up to £20,000.

A Labor spokesman said such business partnerships were “established practice”, adding: “We adhere to all rules when making these arrangements.”

Steve Goodrich, Transparency International’s UK director of anti-corruption, said the law relating to political parties was “clear” that “large sums of money or in-kind support for party events must be reported to the Electoral Commission”.

“If Labor accepts contributions to receptions without proper advertising, this is a serious failure to comply,” he said.

Under the Electoral Commission’s definition, ‘sponsorship’ is support – including money or benefits in kind, such as a venue – given to a party to help it cover the cost of any event, publication or research. Any support of £500 or more must be declared.

Some exceptions apply, such as events at party conferences, where shows are regularly agreed with companies at trade prices between £20,000 and £50,000. None of the events in question were held at party congresses.

Labor did not explain how each drinks reception was a business arrangement, or state its monetary value to the party.

The regulator’s inquiries come after a series of uncomfortable headlines for Labor regarding donations and party funding.

A year ago, the Prime Minister repaid £6,000 in undisclosed clothes and gifts given by party donor Lord Waheed Ali. In the same month, Energy Secretary Ed Miliband urged his party to stop selling access to ministers, after it emerged that companies had been offered breakfast with Business Secretary Jonathan Reynolds for up to £30,000.

Ahead of the summer recess, the party’s parliamentary and regional offices sent MPs a series of invitations to “partnership” drinks receptions.

MasterCard’s July event at its London headquarters was referred to as a reception to “kick off economic growth” and was attended by the Prime Minister. The company declined to comment.

Some of the companies that were partners in such events had a special interest in policy making at the time. The Vestry, which hosted a reception over the summer, has since benefited from two government announcements on affordable housing policy.

A Vestry spokesman said it regularly communicates with parliamentarians “from across the political spectrum”.

They added: “Labour offered us the opportunity to participate in the PLP reception for London MPs, which we accepted as a business arrangement.”

“While Vistry, as one of the UK’s largest housebuilders, routinely works with government officials across Whitehall to support affordable housing initiatives, this reception has been entirely disconnected from those policy discussions.”

North West MPs and council leaders attended Labour’s North West summer drinks reception in July at the Embankment Exchange development in Salford, built by Liverpool developers Legacie. MPs and council leaders were given the opportunity to “relax in a private space with party dignitaries”.

The annual event is described in this year’s invitation as a “partnership” with Legacy and the Chartered Institute of Housing. It included a site tour with Legacie CEO John Morley, as well as a ribbon cutting by then ministers Lucy Powell, who is now deputy leader of the Labor Party, and Jim McMahon.

It included speeches from Morley and Powell, according to an agenda drawn up by the regional party, in which Powell was to call Legacy “a force in real estate and construction across the Northwest.”

“We were thrilled to be a sponsor,” CIH CEO Gavin Smart said in the video.

The Labor Party has not made any sponsorship announcements in relation to any of the events.

Legacy and CIH did not respond to requests for comment.