Electoral Commission declines fresh probe into Labour donations, citing legal loophole

London — The Electoral Commission said Thursday it would not reopen an inquiry into allegations that Morgan McSweeney, Sir Keir Starmer's chief of staff, helped conceal more than £730,000 in donations to Labour Together, the Labour Party's think-tank. The regulator cited a legal loophole that it said forecloses criminal charges, effectively ending the case despite renewed pressure from Conservative lawmakers. The decision comes as the prime minister has faced sustained questions about his top aide's conduct in recent days.

The commission’s 2021 findings detailed that Labour Together reported late donations with a cumulative value of £739,492 and that the group failed to appoint a responsible person. The watchdog said the offences were serious and that the fine reflected the gravity of the breaches. The decision to close the matter without a fresh probe was conveyed after Conservative MPs had urged the regulator to assess whether any additional offences had occurred. The commission said the offence of knowingly or recklessly supplying false information would have been relevant only if it had ordered Labour Together to hand over everything it knew, and noted that the original inquiry had been conducted on a voluntary basis.

Labour Together was fined in September 2021 after the Electoral Commission found more than 20 breaches of donations law. In a highly scrutinized episode that has roiled Westminster, a leaked Daily Mail email this week reportedly showed a Labour lawyer advising McSweeney to frame the affair as an admin error, a detail that has intensified political pressure and public interest in the case. The commission reiterated that its 2021 findings included late reporting of donations and the failure to appoint a responsible person, and stressed that the fine reflected the seriousness of the offences.

Conservative Party chairman Kevin Hollinrake vowed to continue pursuing the issue, arguing that the public deserved full transparency. “The Electoral Commission’s decision not to investigate McSweeney is wrong,” Hollinrake said. “The commission must now publish all of their Morgan McSweeney files to ensure the public has full transparency. It is clear that McSweeney deceived the Electoral Commission, but has dodged it on a technicality. This loophole won’t wash.”

Former Labour MP Simon Danczuk predicted the watchdog would backtrack, saying the EC’s position isn’t sustainable and that McSweeney could leave his post with or without the watchdog’s scrutiny. “McSweeney will go, with or without this watchdog’s scrutiny. And if it’s without it, then their leadership are finished and they’ll need to follow him,” Danczuk said.

Analysts noted that the decision removes the possibility of a criminal prosecution tied to the donations but leaves unresolved broader questions about donor reporting and political-finance oversight in UK politics. The ruling provides Parliament and opposition parties with fodder to press for greater transparency, even as the government asserts the matter has been resolved within the existing legal framework.

The case centers on the role of Labour Together in Sir Keir Starmer’s ascent to leadership and the shadow cast over how donations to party-associated groups are reported and overseen. While the Electoral Commission underscored that its 2021 findings remain the authoritative account of the breaches, opponents argue that more can still be learned from the agency’s records. In the days ahead, lawmakers may push for the release of additional documents to illuminate how such donations were handled and why the original inquiry did not lead to further action.

For observers in the United States and across the Atlantic, the episode underscores ongoing tensions in how political donations are tracked, reported, and scrutinized in major democracies. It serves as a reminder that the integrity of party financing remains a live political issue, with potential implications for campaigns, governance, and public trust regardless of national borders.