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Latest 26 April 2024

‘Murky’ groups have poured £5m into politics since 2022

Debonairchap / Wikimedia Commons (cc by-sa 3.0)

Since Rishi Sunak became prime minister, anonymous dining clubs and special interest groups, set up as ‘unincorporated associations’, have funnelled millions into political parties. But who’s splashing the cash?

Politics in the UK is awash with dark money raised from opaque members’ clubs, special interest groups and anonymous dining societies. Since Rishi Sunak became prime minister in 2022, the three main political parties have brought in almost £5.3m from “unincorporated associations”, with much of this untraceable money poured into the marginal constituencies that will determine the general election.

Unincorporated associations are groups that two or more people can set up without complicated legal structures. This light-touch regulation is ideal for running a local football club or a community hall. But it also allows details of the individual donors pumping millions into our divided politics to remain entirely hidden.

While all three major parties receive money from unincorporated associations, the Tories bag the lion’s share. Powered by fine dining societies and exclusive members’ clubs on the London circuit, which often offer privileged access to ministers, the party has raked in £3m during Sunak’s premiership – about a fifth of the total the Tories spent on the 2019 general election.

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The most venerable of these secretive groups is based in a grade II listed building a stone’s throw from Buckingham Palace. Founded in 1832, the Carlton Club is often referred to as “the spiritual home of the Conservative Party”. This exclusive members’ club also plays an important role in the party’s finances, donating £1.47m to the Tories since 2001, and handing out almost £200,000 to 23 candidates from 2022 to 2023.

The Tories regularly hold fundraisers within its walls. In 2020, the Carlton Club distributed almost £250,000 to Conservative MPs after receiving £850,000 in Covid-related bailouts. Some of the donors whose details have emerged include peers and members of the aristocracy. There’s also a property developer with alleged links to the German far right, and an access-peddling Russian lobbyist. But, because of the rules surrounding unincorporated associations, there’s no way of telling where most of the money given by the Carlton Club has come from.

In the UK, political parties must declare how they raise money to the Electoral Commission, so that everyone can see where they get their funding. There are strict rules around donations to make sure that foreign powers and people who live abroad can’t buy influence. But there’s no need for unincorporated associations to declare anything to the commission unless they give more than £37,270 in any one donation, or the same amount in any calendar year. And even if an association needs to register, gifts of less than £500 can be kept entirely anonymous – even if someone gives £499 again and again.

According to George Havenhand, a senior legal researcher at the campaign group Spotlight on Corruption, a “vast amount of money from unknown sources is being channelled into our political system through unincorporated associations”.

“These murky groups are not required to check that those who give them money are lawful donors,” Havenhand said, “which means they can donate to political parties using funds from people who are not allowed to donate – despite repeated calls from independent experts to close this loophole.”

Another dining club taking advantage of this situation is the United and Cecil Club, founded by Winston Churchill in 1949. One of the party’s largest donors, it has given a total of £1.36m since 2010, including £158,500 under Rishi Sunak. The club has a particular focus on channelling money into tight contests all over the country. In the runup to the 2015 election, the United and Cecil club was the biggest contributor to Tory candidates in the 10 most marginal seats in the country. 

Another secretive organisation, the 1900 Club, started donating again in 2023 after a pause since 2017. Very little is known about the 1900 Club. It doesn’t disclose members or donors, or have an active webpage, but a pamphlet unearthed by Good Law Project helps shine a light on some of the group’s objectives.

Writing in 1986, a former deputy chairman calls it a “dining club that does more than dine” and describes how, even as early as 1906, the club had “played some part” in helping Tory MPs get elected. One of the aims the pamphlet lays out for the club is to “become a more effective political force, for example in elections”.

Four decades later, it’s an ambition that has been largely achieved. The 1900 Club has given £10,000 to marginals under Sunak, and nearly £60,000 in total.

While the Tories have bagged £3m from unincorporated associations since October 2022 – 56% of the total – Labour has raised £1.24m and the Liberal Democrats £960,000. Most of this comes from groups associated with local areas, such as clubs attached to councils or constituencies. Both Liberal Clubs and Labour Groups largely give the money they raise back to the local constituencies where it was raised.

All three major parties also accept donations from other bodies set up as unincorporated associations, like country-specific “Friends Of” organisations, used to lobby politicians on behalf of and build relationships with foreign states, as well as an assortment of other foundations and special interest groups.

According to the Electoral Commission, transparency over political funding is “crucial in supporting voter confidence in the integrity and fairness of the system”.

The commission said it has already highlighted “weaknesses in the checks on political donations to unincorporated associations, as associations are not required to ensure that those who donate to them are permissible donors. This means that they could legitimately make donations using funding from otherwise impermissible sources, including from overseas.”

The commission added that there are “no transparency requirements in law for unincorporated associations which donate to candidates, rather than to political parties or campaigns”, and said it was “ready to work with government or parliament on strengthening controls around political donations”.

For Havenhand, unincorporated associations have such a “corrosive effect on the health of our democracy” that the government should consider banning their donations to political parties.

“The government’s recent decision to increase spending limits and reporting thresholds has compounded the risks,” Havenhand said. “With public trust in our politics at a record low and a general election on the horizon, we need more transparency in the funding of political parties, not less.”

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