I've just fitted some new mags and I've noticed that the rear wheels are able to move slightly with the handbrake on. I've taken the wheels off and had a look and it appears the hub with the stubs can rotate and jiggle around a bit whilst the actual drum isnt moving. It's actually quite pronounced on one side, you can hear it jiggle when you drive. This can't be normal. I've installed longer stubs but that hasn't fixed the problem much.

Is some level of movement normal? Cheers.

What happens with the wheel off - the drum should be a tight fit over the studs, hub centre etc and locate square on the axle flange.

Check centre bore of rim - sounds like rim is hanging up on the centre for the hub and stopping the brake drum being clamped between the rim and the axle flange.

jimmyd

Check centre bore of rim - sounds like rim is hanging up on the centre for the hub and stopping the brake drum being clamped between the rim and the axle flange.

 
I'd agree with Jimmy. 
 
However I did have a similar thing happen when I put a Mk2 brake drum over a Mk1 axle.  The Mk1 axle flange is wider than Mk2 drum centre hole - which had to be opened up a bit.

make shure ur studs arnt too long but most problably its wat Jimmy said the center portion of the rim is too small for the portion on the sideshaft the it sits snug on

Jimmy D is on to it. I think this is the problem. I'll get back to you in a few weeks with the results. Cheers