The Labour Party is to overhaul is central accounting procedures and improve training in such matters for local party treasurers after an internal audit showed that 120 separate constituency parties have broken the law on gifts.
Link: Labour hypocrisy in VAT ‘move’
The party high command may hire accountants as consultants to ensure the system works properly, senior sources revealed.
In a letter to the Electoral Commission – set up to remove the stain of sleaze from the political process – Labour Party general secretary David Triesman admitted the total amount involved was around £300,000.
He said that the sums in each individual case were small but that the total was much higher than initially thought.
Although the failure to declare these gifts in returns to the Commission could lead to criminal prosecution and the imposition of heavy fines or jail sentences on local party officials, Triesman hopes that by admitting to the unintended breaches of the law it can avoid such penalties.
The constituencies involved in the breaches were spread right across Britain.
The cases came to light after Triesman ordered an internal audit on how constituency Labour parties were coping with laws on declaring gifts introduced two years ago.
Constituencies are required to declare any gift worth more than £1,000.
Although the highest sum involved is £1,000, it is the scale of the non-compliance of the law which alarmed Triesman.
Many breaches involve failure to declare donations in kind, such as the loan of offices, staff or transport by trade unions.
Others were because local party treasurers did not realise that when a number of small gifts from the same source were added together and totalled £1,000 it needed to be registered.
There was also confusion about income from fund-raising dinners and auctions.
Triesman is asking the commission to simplify the rules and provide extra help for local activists when the operation of the law is reviewed next year.
He has promised to strengthen Labour’s central accounting procedures and improve training and guidance for local party treasurers.
But he is concerned that if the burden on party workers becomes too great and the risk of prosecution significant, ordinary people will be unwilling to undertake the work of party treasurers.
He said: ‘We’re not seeking to duck responsibility or make any excuses.
‘These laws are there for the right reasons but there is no suggestion of sleaze or even that anyone broke them willingly.
‘I am sure there are similar problems in other political parties.
‘The problem is that local constituency treasurers are volunteer members, but the regulations treat them as if they are chartered accountants.’
A spokesman for the Electoral Commission said: ‘We are aware of Mr Triesman’s letter. We are looking into it and take any breach of the law very seriously.’