Hope not Hate under reports Euro campaign expenditure by £22k on consultants alone

Hope not Hate Ltd director Lowles -
another incorrect return to the
Electoral Commission

We discussed at the beginning of this year about how one way or another Hope not Hate escaped paying £70,000 in VAT after consultants Blue State Digital failed to include the government's slice on their invoices, thus illegally reducing their bills by the then VAT rate of 17.5%.

It now seems that once again Hope not Hate are playing games with BSD invoices on their electoral returns. This year, the company itself appears to escape the taint of scandal which always surrounds Nick Lowles' electoral declarations of expenditure as the interesting bit is the lack of BSD invoices submitted as a part of HnH's overall expenses. Included in this batch are just two, totalling some £14,000. At least this time they contain the appropriate amount of VAT. Blue State Digital, as explained in our earlier article, also provide consultancy services to the Labour Party and several trade unions, and many of the senior management have close links to Labour. In their own publicity material, they boast about how they act only on behalf of 'progressive' causes. Belonging to Euro-fanatic Sir Martin Sorrell's WPP group, BSD sprang from Howard Dean's failed presidential bid in the US, and specialise in running online campaigns.



Blue State Digital - at least they remembered to add VAT

For the European elections, the 'regulated period' of expenditure set by the Electoral Commission ran from January to May this year, and yet HnH have submitted BSD invoices for only March and April. Both of these feature 'Strategic Consulting - European Parliament Elections Retainer' for £ 5166.66 per month, plus VAT. One features monthly technology licensing fees at £900/month, while the other doesn't - did they stop using the technology for campaigning? Did BSD decide they could have it for nothing? - in which case, where is the donation report relating to it? And what happened in January, February, and May? BSD are retained consultants of Hope not Hate, and have historically charged around £6,000/month for their services in addition to the technology fees. HnH's website and e-mail tools are maintained by BSD, and nobody could deny that their website formed a major part of their campaign against UKIP, so why did Lowles fail to declare this expenditure to the Electoral Commission? By our reckoning, Hope not Hate should have included Blue State Digital costs of £36,399.95 in their return rather than the £13,479,98 they actually declared, an under-reporting of £22,919.97.

HnH Witch-in-Chief Ruth Smeeth,
charged with magicking up the
entire campaign with no donations

We're not certain why Hope not Hate submitted such a laughably low return to the Electoral Commission. Despite boasting the 'largest ever' campaign against UKIP including 2.5m leaflets and an 8 page, full colour wrap around on the Daily Mirror, they claim to have spent just over £129,000 during the entire controlled period while receiving no donations whatsoever. If you remove the true cost of their consultants - £36k - then they claim to have run this campaign for just £93,000!! Remove 5/12th of Lowles reported £60k salary - £25k - and the rest of the campaign cost £68,000. Witchcraft, particularly given that they claim to have received no donations in excess of £500 during the controlled period. In the 2010 general election, they claimed expenditure of over £319,000 and a full list of donations from Unions and others for a much smaller campaign.

What we can't quite work out is what the point is of all this. The largest trade unions still admit to funding Hope not Hate - UNISON boast of the 'joint campaign' on their website - so what is the point of pretending that they don't have big money behind them unless it is a trial run ahead of the introduction of the 'Lobbying Act' (the Transparency of Lobbying, non-Party Campaigning and Trade Union Administration Bill) to see what they can reasonably expect to get away with in terms of concealing expenditure and donations from disclosure. We're at a loss as to what the alternatives are, unless they are attempting to play down their 'big money' links as they continue to try and raise un-needed donations from private individuals, but even that would be connected to the Lobbying Act: this was the reason for their 'become a supporter for a quid' campaign.

We're well aware that the Electoral Commission has a history of bullying the smallest boy in the playground, as previous focus on UKIP has proved: most recently, Nigel Farage was fined £200 for failing to specifically declare his constituency office even though it appears on his European Parliamentary declaration, while the Liberal Democrats have still not been forced to return the £2.5m of stolen money they received from a jailed, non-resident donor. Will they act on this? Several people have indicated a willingness to submit complaints and we expect them to be with the Electoral Commission within the week, but we suspect that vested interests within the big unions and the Labour Party will prevent much happening.

Hope not Hate and the £70k VAT fraud

As promised yesterday on our Facebook page, news reaches us that senior Hope not Hate staff face having their collars felt as research indicates they misused the VAT exemption certificate for their charitable arm - Hope not Hate Educational Ltd - to evade VAT on services relating to their anti-UKIP political campaigning.

An in-depth report by former UKIP staffer Mark Croucher - available in full on his own blog - suggests that campaigning work carried out in the 2010 General Election by political strategy company Blue State Digital was invoiced without VAT being included. On publicly available invoices this amounts to a little over £12,000 they fraudulently evaded, but as Blue State Digital still work for Hope not Hate, this could amount to a total of over £ 70,000 over the past 4 years. In this time, Hope not Hate have received over £150,000 from the Department for Communities and Local Government towards their charitable aims.

The question must now be what will Hope not Hate's financial backers think of such tax avoidance? The Daily Mirror wrote 3 months ago that

"Tax avoidance is now running at £35billion a year – £3billion more than when Labour was in power....Because think how many nurses, police officers and teachers could be employed with that £35billion. Think how many vital services could have been saved from the cuts and how many jobs protected."

Nick Lowles - owner of Hope not Hate
who sanctioned VAT fraud

While trade union UNISON wrote

"UNISON supports the introduction of a general anti-avoidance principle in the tax code that would allow for HMRC to take action against any tax avoidance and placing an obligation on individuals and corporations operating within the UK to pay their fair share of taxes"
UNITE has had plenty to say about tax evasion, but as a tax evader itself, it will probably applaud Hope not Hate's fraudulent use of their exemption certificate.

Quite what other unions with a more traditional bent will think remains to be seen: PCS, CWU, GMB, NUT, TUC, AMICUS and the FBU remains to be seen.



Ruth Smeeth - Hope not Hate
Educational Ltd's general
secretary: did she know of
VAT fraud?

We understand that the matter has been reported to the Charity Commission - who censured HnH a decade ago for mixing its political activities with its charitable ones - HM Customs & Excise, the police, and the Electoral Commission as their 2010 return was fraudulent and not a true reflection of their financial affairs. It can only be a matter of time before Nick Lowles and Ruth Smeeth have their collars felt.

HnH comply with Data Protection Act after Nope not Hope pressure, but who knows who will get your data?

Good news - sort of - for those who value their privacy in the internet.

After our story last month about Hope not Hate breaching the European Data Protection Directive  and the Data Protection Act, they have finally added a privacy and cookie statement to their website. Never ones to spend money when a cheapskate solution is available - they need the cash for the purposes of champagne socialism - they have opted for a free of charge solution available from the achingly right-on and inclusive 'Civic UK' company.

The option they have chosen ensures that visitors to their site still don't know what information is gathered by their cookies, and there is no option to browse without them - there is a Hobson's Choice of 'take it or leave it'.

Still, it is a start even if only a small one, and an acknowledgement that after a call from the Information Commissioner's office, even Hope not Hate are required to adhere to the law. We may have to wait a while to discover exactly what information HnH are harvesting though, as they have still failed to provide any information on what the multiple cookies they run actually do and what information they store.

Hope not Hate have also finally got around to publishing their privacy policy. It all sounds good - they will not share your information or sell or rent out their mailing list without your prior approval. Sadly, this rather contradicts the tacit permission you give if you do contact them, where the privacy statement says they will not share your personal information with anyone not connected with the Hope not Hate campaign. This rather broad, catch-all statement would allow them to pass your details on to the Daily Mirror (who help fund them), the Labour Party (likewise), Unite, Unison, NUT, NUJ, and a whole host of other trades unions. Who knows, if you live in the right area, you could even find yourself signed up as a Labour Party member by one of the unions.

The end result is that while Hope not Hate are playing lip service to complying with the law, their

broadly worded 'privacy policy' pretty much lets them pass any data you give them on to just about anybody. If you have contacted them, look forward to receiving anti-UKIP e-mails from a whole host of organisations ahead of next year's European elections.

It is worth remembering that Hope not Hate's 'technology consultants' are Blue State Digital, who are also employed by the Labour Party, and whose director is the Labour Party's favoured candidate in the Falkirk selection scandal currently gripping the Labour Party. Who knows what will happen to your information if they get their hands on it?