Regulation of election campaign finances

There are rules on campaign spending and on donations to political parties. This summary includes a brief overview of the current rules.

Campaign spending Candidate spending

There is a ‘regulated period’ prior to each election campaign. The length of the regulated period depends on the election, but it covers the period that someone is formally a candidate. Prior to the 2019 general election, the earliest date someone could become a candidate was 6 November 2019, the day Parliament was dissolved, and the regulated period lasted until polling day, 12 December 2019.

During the regulated period, candidates can only spend a limited amount of money on campaigning, and only on certain activities.

In the regulated period prior to the 2019 General Election, the spending limits for candidates was £8,700, plus 6p per elector in borough constituencies (mostly urban seats) and 9p per elector in county constituencies (mostly rural seats).[1]

Money spent on the following activities counts as ‘candidate spending’ and so must be within the limit. Any money spent on these activities must be declared to the Electoral Commission.

• Advertising of any kind, including posters, television adverts and online adverts
• Leaflets sent to voters
• Public meetings
• Transport, office, staff and administration costs

Spending on other activities does not need to be reported.

Party spending

Political parties have separate rules for campaign spending. Items of spending that support the candidate are likely to count as candidate spending. Spending that supports the party is likely to count as party spending. The Electoral Commission provide detailed guidance on what counts as candidate and what counts as party spending in their Overview of party campaign spending.

The regulated period for party spending is longer. UK general elections usually have a regulated period beginning 365 days prior to the election.[2]

The list of what counts as party election spending is similar to the list for candidate election spending. But additionally, it includes market research, manifestos and rallies. It does not include party staff costs.

All regulated spending must be reported to the Electoral Commission after the election. If the party spent £250,00 or less then it must be reported within three months. If a party spent above this, then it must be reported within six months.

The full, detailed rules for campaign spending are set out on the Electoral Commissions website: Election Campaign Spending.

Donations to political parties

Donations and loans (including non-cash arrangements) to registered political parties are both regulated in a similar way. This summary only covers donations. Donations can be made to registered political parties and accounting units (sections of a party whose finances aren’t managed directly by a party’s headquarters).

The rules are slightly different in Northern Ireland because of the unique arrangements in place. This allows Northern Ireland parties to accept money from permissible donors in Ireland.

Anything with a value of £500 or below is not regulated. However, the Electoral Commission warns parties to be alert to situations where it appears that a donor is attempting to evade PPERA by making a series of small donations, for example, if a number of donations of £400 are made from the same source in similar circumstances.

Donations over £500 must be from a permissible donor. Permissible donors in Great Britain are:

• an individual registered on a UK electoral register, including overseas electors and those leaving bequests.
• most UK-registered companies.
• a Great Britain registered political party.
• a UK-registered trade union.
• a UK-registered building society.
• a UK-registered limited liability partnership (LLP) that carries on business in the UK.
• a UK-registered friendly society.
• a UK-based unincorporated association that carries on business or other activities in the UK.

Parties can also accept donations from some types of trust and where someone pays for the reasonable costs of an overseas visit, they are deemed to be a permissible donor.

Anonymous donations over £500 are not permissible.

Parties in Northern Ireland may accept donations from similar individuals and organisations registered in Ireland (and vice versa). Foreign donations are prohibited in Ireland also.

Parties must ensure they know the true source of the money. If money is paid on behalf of someone else, the person handing over the donation (the agent) must tell the party:

• that the donation is on behalf of someone else; and
• the actual donor’s details.

An example of someone acting as an agent is where an event organiser is handing over the proceeds from a dinner held specifically to raise funds for a party.

Recent Issues

In an increasingly digital world concerns have been raised about the transparency of election campaigns and the money behind them.

In the Electoral Commission’s annual Public Opinion Tracker 70% of those surveyed agreed that it should be clear how much has been spent promoting online adverts by whom and also know why it has been targeted at them. Almost half also agreed that what could be found online was not trustworthy. The truthfulness or otherwise of campaign claims is not a matter for any regulatory body and voters must make their own choices. The rise of ‘fake news’ was an issue investigated by the Culture Media and Sport Committee in the last Parliament. Its report, Disinformation and ‘fake news’ made a series of recommendations, including on digital campaigning. The Government’s draft Online Safety Bill includes a clause (number 7) to create an obligation on OFCOM to form an advisory committee on disinformation and misinformation.

In 2018 the Electoral Commission published a report on digital campaigning and increasing transparency for voters. It recommended that online campaign material should be required to have an imprint. Printed campaign material already does and it informs the voter who is sending out the material but the law was drafted before the rise of digital campaigning and omitted online material. The Government agreed and it is one of the measures included in the Elections Bill 2020-21 (see below).

Other recommendations were aimed at social media companies and campaigners. Some social media companies now maintain libraries of political ads in the UK to help transparency. These are Facebook, Google and Snapchat.

The Electoral Commission also recommended that the UK, Scottish and Welsh governments should introduce rules for more detailed and meaningful invoices from their digital suppliers to improve transparency on campaign spending.

There are also concerns on the use of people’s data during campaigns. Much of this is done legitimately and the Information Commissioner’s Office has published Guidance for the use of personal data in political campaigning on the importance of processing personal data in compliance with data protection law during political campaigning. The ICO has also investigated data analytics in political campaigns and details of the investigation are on the ICO website.

The All Party Group on Electoral Campaigning Transparency report, Defending Our Democracy in the Digital Age, highlights some of the same issues and also voices its concerns over the possibility for the current rules on campaign finance to be circumvented.

On 7 July 2021 the Committee on Standards in Public Life issued its latest report: Regulating election finance. The report makes 47 recommendations on the following themes:

1. Reducing the complexity of electoral law
2. The role of the Electoral Commission
3. Donations to political campaigns
4. The rules around digital campaigning
5. Campaign expenditure, reporting periods and regulated periods
6. The regulation of non-party campaigning

The Elections Bill 2021

The Elections Bill 2021 was presented to the House of Commons on 5 July 2021. It includes measures which would change some of the rules around campaign financing. These are detailed in Part 4 of the Explanatory Notes published to accompany the Bill, pp 88 to 92.

It also includes measures to implement the requirements for digital campaign material to include an imprint. These are detailed in Part 6 of the Bill and pp98 to 99 of the Explanatory Notes.

[1] Electoral Commission, Candidate and Agent guidance 2019 General Election, Part 3 spending and donations, 2019

[2] Electoral Commission, Overview of party campaign spending, 2020