£60m in 'dark money' funnelled into British politics

Exposed: The loophole that AfD-linked billionaires, hard Brexiteers and other anonymous donors use to bankroll politicians

The Carlton Club has donated more than £1m. (Image: Alamy).

‘Loophole’ is a strange word. It sounds small, almost insignificant - a minor technicality.

But when it comes to funding British politics, loopholes are anything but trivial.

Our election laws are riddled with ‘loopholes’. Foreign billionaires can donate via UK shell companies. Political parties can accept the proceeds of crime.

But perhaps the most dangerous — and least understood — loophole is how donors funnel money into British politics through shadowy groups called ‘unincorporated associations’.

Unincorporated associations don’t need to have a formal structure, file accounts or even say where their money comes from. Crucially, it’s perfectly legal for foreign money to be channelled through them.

New analysis by Democracy for Sale has found that over the past two decades, more than £60 million has flowed into British politics through this little-regulated route.

Transparency campaigners and senior political figures are now calling for urgent reform — and for this loophole to be closed in the Elections Bill, expected in the coming days.

David Blunkett, the former Labour Home Secretary, has warned that without major changes, “dangerous funding” could distort our democracy in the run-up to the next election.

“Our democracy is too precious and it’s already at risk — so we should get on with it,” Blunkett told this newsletter. “This isn’t about protecting a party; it’s about stopping dirty money from promoting a party.”

Since 2001, more than £55 million has been funnelled into party coffers via unincorporated associations.

The Conservatives have received the lion’s share — nearly £33 million. Labour has taken over £13 million, and the Liberal Democrats around £9.5 million.

That total includes millions from opaque donor clubs that refuse to disclose who funds them — and at least one group bankrolled by a billionaire involved in a secret donation to Germany’s far-right AfD party.

The notorious £435,000 donation to the Democratic Unionist Party’s Brexit campaign also came through an unincorporated association. The source of that money has never been revealed.

Described as ‘shadowy’ by former MI5 boss Lord Jonathan Evans, unincorporated associations have also given nearly £2.8 million to individual MPs.

One example: current Health Secretary Wes Streeting, who received £37,500 in opposition from a little-known group called Labour for the Long Term, which promotes ‘effective altruism’.

In 2025 alone, close to £700,000 has been handed to political parties through unincorporated associations. This loophole remains wide open, despite warnings from the official elections watchdog, which regulates the groups.

Speaking to Democracy for Sale, the Electoral Commission said unincorporated associations “present a weakness in the transparency requirements for political donations,” because they “are not required to ensure that those who donate to them are permissible donors.”

In plain English: these associations can legally pass on money from “otherwise impermissible sources”, including overseas funders.

Good news if you're a foreign oligarch. Not so good if you care about the integrity of British democracy.

Margaret Hodge, the government’s anti-corruption champion, said our revelations should act as a wake-up call. “There is growing concern over how our politics is funded,” Hodge said. “This work will help us to reach a good and appropriate answer to people’s concerns.”

She added: “The information uncovered by this research is hugely important in helping our understanding of party political funding.”

Unincorporated associations operate in a legal grey area. Under British election law, political parties must declare when they receive money from one of these associations — but it’s far harder to see where that money originally came from.

These groups only have to register with the Electoral Commission once they donate more than £37,270 in a calendar year. If they hit that threshold, they must report any gifts over £7,500 from a single source in a 12-month period.

But in practice, they rarely declare receiving any money at all.

Since 2013, unincorporated associations have registered just £122,500 in gifts — despite donating more than £36 million during the same period.

This may be because donations under £500 don’t need to be declared. Donors can give unlimited amounts in chunks of £499 or less without triggering any reporting requirements.

Concerns are also growing about potential foreign influence through unincorporated associations.

Right now, only 17 unincorporated associations are registered with the Electoral Commission. Among them is the National Conservative Draws Society, which has given over £15.3 million since 2001.

The United & Cecil Club — a long-time Tory donor outfit — has handed out nearly £1.8 million over the past 20 years. It’s registered at a suburban semi-detached house in Acton, West London. Before the last general election, it gave more than £140,000 to Conservative candidates — without declaring any donations.

Other high-value associations that have given to political parties include Focus on Scotland (more than to £2.1 million), Midlands Industrial Council (over £1.5 million), and The Spring Lunch (£1.25 million).

Several of these groups have shadowy origins or obscure membership lists. Some, like the Scottish Unionist Association Trust, have been repeatedly fined by the Electoral Commission for failing to report donations properly.

The Carlton Club, a private Conservative members’ club, has donated close to £1.2 million to the Tory party and its MPs. The club has received £250,000 from Strandbrook Ltd, a company once run by Swiss-German billionaire Henning Conle — the man linked to a €2.4 million secret donation to the AfD.

A spokesperson for the Carlton Club Political Committee told Tortoise Media that the club had “complied with Electoral Law in respect of all political donations”

In early 2024, Labour received £130,000 from the West Midlands Breakfast Club, an unincorporated association funded by property developers. The group failed to declare key details to the Electoral Commission, as the Observer reported late last year.

During his general election campaign, Keir Starmer pledged to clean up politics and take big money out of elections. But so far Labour has not committed to concrete action, although an outline of an elections bill is expected soon.

David Blunkett told Democracy for Sale the government must move quickly to close the loopholes and introduce new rules to bring party finance out of the shadows.

“The government has been very slow — and by the time we get legislation a lot of this might be too late,” Blunkett said. “There’s no point afterwards regretting slowness and indecision and tinkering. This has got to be a very rapid big bang to get this right.”

The last time the rules on unincorporated associations were updated was in 2009. Campaigners warn that without significant reforms, Britain’s political funding system will remain vulnerable to exploitation and influence — both domestic and foreign.

Duncan Hames of Transparency International UK said the sheer scale of unregulated donations shows just how exposed British politics has become.

“The fact that unincorporated associations have donated such enormous sums while operating with minimal oversight represents a fundamental weakness in our democratic safeguards,” he said.

“The upcoming Elections Bill needs to close loopholes, such as unincorporated associations, that allow dark money into our politics, stop undue influence of mega donors and give the Electoral Commission the powers needed to properly enforce the law,” he said.

The pressure for action is growing — from campaigners, watchdogs and even Starmer’s own MPs.

Now the government faces a clear choice: Will it finally close the loopholes in election law — or allow another wave of dark money to shape the future of British politics.

Democracy for Sale is committed to taking dark money and hidden influence out of our politics. If you haven’t already done so, become a paying subscriber to support us to do more work.