Original article by Ethan Shone republished from OpenDemocracy under a Creative Commons Attribution-NonCommercial 4.0 International licence. 

Party accused of breaching Electoral Commission rules by failing to publish value of staffer seconded from banking giant

The Electoral Commission has been urged to investigate Labour over its year-long failure to declare the value of a donation from banking giant HSBC.

HSBC seconded one of its staff members to Keir Starmer’s party in February 2023, in an arrangement that sees the bank continue to pay the staffer’s wages while they carry out work for Labour.

More than a year later, the party has still not published the value of this in-kind donation – an apparent breach of the Electoral Commission’s rules.

The former chair of the Committee on Standards in Public Life warned it is “absolutely crucial” that Labour follows the rules around declarations, and said the commission “should be looking at this”.

The HSBC staffer, whom openDemocracy is choosing not to name, works in shadow business secretary Jonathan Reynolds’ office in a part-time role focused on engaging with businesses.

They have appeared on every edition of the official register of MPs’ staff and researchers, which is updated monthly, since February 2023.

The register lists people who have parliamentary passes through their work for MPs, as well as any outside interests they may have, or benefits they have received over a certain value.

Prior to joining HSBC in October 2021, the staffer was previously a consultant at Westminster lobbying firm Portland Communications. They joined Portland in January 2020 from Labour, where they held a number of senior roles over 15 years, most recently working in the party’s HQ as the head of policy development and engagement.

Labour has accepted many in-kind donations of seconded staff members from banks, lobbyists and consultancies in recent years, but this is the first time it has failed to declare the value of such an arrangement.

Before Starmer took over the party’s leadership in 2020, Labour had banned such secondments over concerns that they amounted to “institutional corruption”, according to James Schneider, who was director of strategic communications for former Labour leader Jeremy Corbyn.

Schneider, now communications director at campaign group Progressive International, told openDemocracy: “If Labour policy is written by people who were, are or expect to be corporate lobbyists in the future, it will represent those corporate interests, not its members, unions or the public.

“In this way, the revolving door between corporate lobbying and Westminster is a form of legalised corruption that insulates the rich and powerful from democratic demands.”

He added: “With this seedy revolving door fully reinstated in Labour HQ, it’s no surprise that the party is busy rejecting policies that would benefit the many not the few.”

Political parties complete quarterly returns detailing all their donations received, with Electoral Commission rules stipulating that in-kind donations of staff time must be declared in the quarter that the arrangement began.

When openDemocracy contacted Labour about this story, the party said it had declared the donation and it would be published in the next set of returns, which relate to quarter four of 2023.

Sir Alistair Graham, who chaired the Committee on Standards in Public Life between 2004 and 2007, told openDemocracy “the Electoral Commission should be looking at this”.

Graham continued: “In the run-up to a general election when the leader of the Labour Party has stressed how he wants to demonstrate that the party will have the highest ethical standards of any government, it is absolutely crucial that they are seen to follow the rules.

“If the bank is facilitating the secondment then it is a donation which should be declared to the Electoral Commission, and the member of parliament who is supervising this secondment should really have declared it on the MPs’ register of interests.

“They’ve now got as their [chief of staff] Sue Gray, who used to be in charge of ethical standards in the Cabinet Office, so she should be overseeing that the rules are abided with and there’s full disclosure to the Electoral Commission.”

Last week openDemocracy revealed that Labour has accepted cash and in-kind donations worth £2m from banks, financiers and firms linked to the City of London since 2022.

Natwest and the lobbying firm Lowick seconded members of staff to Reynolds’ office in 2022 while he was the shadow City minister, and Reynolds’ successor in the role, Tulip Siddiq, currently has a financial services specialist seconded to her office from lobbying firm Global Counsel.

Tom Brake, director of democratic standards campaign organisation Unlock Democracy, said: “Any party receiving multi-million-pound donations from a particular industry, whether it is banking or building, has to be hyper-vigilant both about the transparency of any donations and the risk that that sector is unduly influencing Party policy.

“The Electoral Commission needs to examine whether the Labour Party has failed the first test, and the Labour Party needs to prove how it has avoided falling foul of the second.”

A HSBC spokesperson said “We are apolitical. We work with different political parties to advocate for our customers and build their understanding of the issues facing financial services. We have constructive conversations with both the government and the opposition in the UK.”

Labour declined to offer a comment or provide further details about the arrangement.

Original article by Ethan Shone republished from OpenDemocracy under a Creative Commons Attribution-NonCommercial 4.0 International licence.