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The Electoral Commission has yesterday published a report of its investigation into the Labour Party’s 2015 UK Parliamentary General Election campaign spending return.

The Commission has concluded that the party’s spending return was incomplete, as it was missing 74 payments totalling £123,748, along with 33 separate invoices totalling £34,392. The registered treasurer of the party committed two offences in delivering this incomplete return, and the party has been fined £20,000. The party’s cooperation during the investigation was taken into account, but this remains the largest fine the Commission has imposed since it began operations in 2001.

Commenting on the outcome of the investigation, Bob Posner, Director of Party and Election Finance at the Electoral Commission said:

“The Labour Party is a well-established, experienced party. Rules on reporting campaign spending have been in place for over 15 years and it is vital that the larger parties comply with these rules and report their finances accurately if voters are to have confidence in the system.”

Background

The Commission’s investigation into the party’s 2015 UK Parliamentary general election campaign spending return was opened on 22 January 2016 following allegations made to the Commission that the return may have been incomplete. This followed its publication by the Commission on 20 January 2016.

Under the Political Parties, Elections and Referendums Act 2000 (PPERA) it is the responsibility of a political party’s registered treasurer to ensure that a full and complete campaign spending return is submitted to the Electoral Commission by the statutory deadline. The Labour Party submitted its spending return in advance of the deadline for the 2015 UK Parliamentary general election, which was 7 November 2015.

Offences relating to missing campaign spending

Section 80(3) of PPERA requires that the spending return contains a statement of all payments made in respect of campaign spending incurred during the campaign period.

Initial enquiries aimed to determine why two payments totalling £7, 614, relating to spending incurred on a stone tablet – referred to in the media as the “Ed Stone” - were missing from the party’s campaign spending return. It was established that these payments were missing from the Party’s return and the Commission launched an investigation.

The Labour Party cooperated with enquiries and undertook an internal review of all expenditure that had been incurred during the campaign. The review identified that as well as the missing items relating to the stone tablet, an additional 24 items of expenditure with a combined value of £109,777 were also missing from the return.

Later enquiries by the Commission identified further missing payments. These included a further 49 payments relating to costs associated with the Labour Express tour and Labour Students tour, which should have been included in the party spending return. These payments had a combined total of £11,357. They also included two items of spending by a Party candidate that had been apportioned to the party spending but not included in the Party return, which came in total to £1,743.

Offences relating to missing invoices

Section 80(4) of PPERA requires that the return contains all invoices or receipts related to the payments of a value greater than £200 and a declaration of all notional spending. The investigation found that a total of 33 invoices were missing from the Party’s return, with a combined value of £34,392.

Conclusions

The investigation concluded that Mr Iain McNicol, the Party’s registered treasurer committed an offence under section 82(4)(b) of PPERA in respect of the missing payments and a further offence under section 82(4)(b) in respect of the missing invoices.

The Labour Party has therefore been fined £20,000 under the Political Parties, Elections and Referendums (Civil Sanctions) Order 2010. The Party have paid the fine.

The Commission called in February 2016 for an increase to the maximum £20,000 penalty available to it for a single offence, to an amount more in proportion with the spending and donations handled by large campaigners.

The Commission has published a full report into the investigation, which can be viewed on its website here:http://www.electoralcommission.org.uk/__data/assets/pdf_file/0003/216507/Labour-UKPGE-Investigation-Report.pdf

For more information please contact Megan Phillips in the Electoral Commission press office on 0207 271 0714 or mphillips@electoralcommission.org.uk

Out of office hours: 07789 920414

Notes to editors:

1. The Electoral Commission is an independent body set up by the UK Parliament. Our aim is integrity and public confidence in the UK's democratic process. We regulate party and election finance and set standards for well-run elections and are responsible for the conduct and regulation of referendums held under the Political Parties, Elections and Referendums Act (2000).
2. The Electoral Commission has a range of enforcement powers under PPERA. For more information on the regulatory work of the Commission see the website here.
3. Any potential breaches of the rules which regulate political party funding are considered in line with the Commission's enforcement policy which can be accessedhere, details of sanctions issued can be found here.
4. An individual or organisation that is issued with a sanction by the Electoral Commission has 28 days to appeal that decision. Any such appeal is made to the County Court.
5. Unpaid fines will increase by 50% if not paid within 56 days of being imposed. After a further 28 days we may take action to obtain payment through the courts using the debt recovery process. The Labour Party have already paid their fine in this case.
6. Any penalties that are imposed by the Commission go into the Consolidated Fund. This is managed by HM Treasury and not the Electoral Commission.