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Statement on Court of Appeal judgement on donations to UKIP

Published: 19 Oct 2009

The Electoral Commission has welcomed the Court of Appeal’s decision to uphold an appeal in relation to the acceptance of impermissible political donations by the United Kingdom Independence Party (UKIP).

In 2007, the Commission sought forfeiture of £367,697 in impermissible donations accepted by the United Kingdom Independence Party. Westminster Magistrates Court – while accepting that all the donations were from an impermissible source – ordered forfeiture of only £18,481 of this amount.

The effect of the Court of Appeal’s judgement is that, in all but exceptional circumstances, political parties should give up in full donations accepted from an individual who is not a ‘permissable donor’.

Peter Wardle, Chief Executive of the Electoral Commission, commented: “We brought this appeal because the Magistrate’s Court decision created some uncertainty for political parties about the way the law should be applied. In this case, a party had accepted money that it should not have, but was allowed to keep most of it.

“Political parties need to raise money to campaign, develop policy and communicate with voters. But all parties also need to follow the rules. And these rules need to be clear, simple and easy to follow.

“Parliament decided that political parties should only be able to accept money from individuals if they are on a UK electoral register. This provides a straightforward test of whether they should accept money or not. They simply need to check the electoral register. The United Kingdom Independence Party did not take these simple steps.

“The Court agreed that we took the right approach in this case, an approach that was in line with the intentions of Parliament when passing this legislation.”

Ends

Background for journalists

In February 2007 the Commission decided to seek forfeiture from the United Kingdom Independence Party of donations amounting to £367,697 from Alan Bown and Nightech Ltd. These 67 separate donations were received between December 2004 and January 2006. These were from impermissible sources as Mr. Bown was not on the electoral register at the time of making the donations and Nightech was not registered in the UK under the Companies Act 1985.

The application by the Commission for a court order for forfeiture was heard at Westminster Magistrates Court in July 2007. In August 2007 the District Judge ordered that UKIP should forfeit £14,481 of donations given to the party by Alan Bown. The Judge also ordered them to forfeit the £4,000 from Nightech ltd.

The Commission was disappointed that, given all donations in question were from impermissible sources, forfeiture of the full amount was not ordered. On 28 August 2007 the Electoral Commission filed papers to appeal the 7 August judgement to the High Court.

On 22 January 2009, the High Court upheld the Commission’s appeal and ordered the re-hearing of the case at Westminster Magistrate’s Court. However, the Commission felt that the High Court provided insufficient clarity for political parties as to how the rules should be applied. The Commission filed papers to appeal the 22 January judgement to the Court of Appeal. Today’s decision is the conclusion of that appeal.

The case has now been now been referred back to Westminster Magistrate’s Court, for the Magistrate’s Court to reach a decision in accordance with the Court of Appeal’s judgement.
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.

2. Under section 58 of PPERA, the Electoral Commission has the power to apply to the courts for an order to forfeit a sum equal to any impermissible donation a party has accepted and not returned within the statutory 30 days.

3. Any amount forfeited is paid into the Consolidated Fund. It is not retained by the Electoral Commission nor returned to the donor.

Journalist