Experts call for urgent update of Britain’s ‘wild west’ campaign funding rules

Posted on the 21st May 2019

  • Statement from the Electoral Reform Society for immediate release, 21st May 2019

The UK’s leading pro-democracy group is calling for an ‘urgent update’ of Britain’s political campaign rules, amid growing concerns over loopholes in party funding. 

A recent report by the Electoral Reform Society – with contributions from academics, campaigners, the Electoral Commission and ICO – called for swift action to ‘close the loopholes’ in UK political campaigning [1]. The organisations warn the UK is ‘wide open’ to foreign interference and unscrupulous actors.

MPs from across the political divide also stepped up efforts to update Britain’s analogue-age election rules last Wednesday, amid growing fears ‘dark money and disinformation’ could undermine elections [2].

The All Party Parliamentary Group for Electoral Campaign Transparency will launch an inquiry into Britain’s electoral campaign rules. It will take evidence from a experts and civil society to feed into a Green Paper advising the government on how to better safeguard and strengthen our democracy. It is backed by the MPs Stephen Kinnock, Ken Clarke, Caroline Lucas, Deidre Brock and many others.

In February, MPs across the divide challenged Theresa May to update Britain’s ‘dangerously out-dated’ electoral laws [3].

Dr Jess Garland, Director of Policy and Research at the Electoral Reform Society:

“This concern over donations is just one of a number instances where our electoral laws, drawn up more than 20 years ago, no longer do the job that was asked of them. There are multiple loopholes in our campaign rules through which potential foreign interference in the electoral process might be possible. We have been left with a system that is a wild west of campaigning and the rules need updating.”

Darren Hughes, Chief Executive of the Electoral Reform Society:

“Election rules should be followed to the spirit as well as the letter of the law given the tight timeframes of a campaign.

“Issues like these, exacerbated by online campaigning, once again demonstrate why we need a comprehensive review of our electoral laws to ensure they are fit for the 21st century.”

Launching the APPG on campaign transparency, Stephen Kinnock, Labour MP for Aberavon, who will chair the new group, said:

“The fall-out from the 2016 referendum has exposed the fact that our democracy is in danger of being overwhelmed by a toxic combination of dodgy data and dirty money. Drip by drip we have seen how our legislative and regulatory frameworks are simply not fit for purpose.

“Our political system can only function effectively if the public is confident that our elections and referenda are being policed effectively and that the playing field is level. Yet we currently have analogue regulations governing a digital age.

“That’s why I’m working with Fair Vote and the Electoral Reform Society on the APPG for Electoral Campaigning Transparency. If we fail to tackle this issue head-on now, then future generations will pay a heavy price.”

There are six key changes the government should make to ‘drag our out-dated election rules into the 21stcentury’, according to the ERS’ report on ‘wild west’ campaign rules [1]:

  1. No more ‘dark ads’: We need to extend the ‘imprint’ requirement – where materials must show who produced them and on whose behalf – to online political advertising. It’s an absurd inconsistency that physical leaflets have to say who’s promoting them but not online ads. The government has pledged to reform this, following pressure from the ERS and others [4].
  2. Reforming campaign finance: We need to improve how campaigners report funding and spending, including reporting social media spend separately. Spend/donations should be submitted in a digital format (rather than the archaic system of scanning hand-written files), and reported spend/donations in real time during a campaign.
  3. Creating a single online database of political adverts, which would be publicly available and easily searchable, to increase transparency and allow voters to identify who has produced a piece of content. In an age of ‘micro-targeting’ thousands of separate messages to small groups, this is vital for trust and transparency.
  4. Giving the regulators greater enforcement powers: strengthening the fines or sanctions so they can act as a meaningful deterrent against wrongdoing. The ICO’s powers were increased considerably in the past year, showing what can be achieved if there is political will. Now the Electoral Commission’s paltry £20,000 maximum fine for rule-breaking should be uncapped.
  5. Creating a level playing field: We must establish a statutory code of practice for political parties and campaigners without delay.
  6. Launching a comprehensive review and overhaul of our electoral law, to make it future-proofed for the digital age.

The report noted:

“The shift to online campaigning also creates problems for regulating money in politics and for attempts to create a level playing field…

“Reporting of spending online is subject to limited regulatory oversight (parties, for example, do not need to provide a breakdown of social media spend). This makes it now easier than ever to blur what is spent at the local/constituency level and nationally. In this context, spending caps appear increasingly meaningless.”

In the report, Tom Hawthorn, Head of Policy at the Electoral Commission, said:

Election law is based on a clear principle that funding from abroad is not allowed. Since 2013, we have recommended that company donations should be funded from UK-generated activities only. This would require a change to the law in this area, as the current requirement is for companies to be registered and carry on business in the UK – but not for the companies’ funds to have originated through UK-based activities. In the digital era, this is an overdue safeguard to help ensure that online and other campaign activities are not funded by foreign sources.”

Martin Moore, Director of the Centre for the Study of Media, Communication and Power, and a Senior Research Fellow in the Policy Institute at King’s College London and Damian Tambini, Associate Professor in the Department of Media and Communications at LSE wrote about the 2016 referendum in the report:

“The Electoral Commission found its investigations into alleged breaches equally challenging and complicated. It lacked the powers to require relevant evidence from the technology platforms (most notably Facebook), it struggled to keep track of spending by all campaign participants, and it was unable to trace campaign funding back to its ultimate source.

“Eventually, when it found evidence to suggest criminal offences had been committed it had to pass responsibility onto the National Crime Agency since it lacked the remit and capacity to trace the origins of the money.”

Stephen Kinnock MP noted in the ERS’ February report:

“A recent report by the Atlantic Council – Democracy in the Crosshairs: How Political Money Laundering Threatens the Democratic Process – included three case studies of opaque political funding: Banks, the German far-right party Alternative für Deutschland, and the staggering number of small donations received by Donald Trump’s campaign.

“It is notable that 59 per cent of the $624 million in donations Trump received were smaller than the $200 threshold at which donors must be identified under US federal law – either evidence of staggering success in generating grassroots support, or evidence of financial wrongdoing on a grand scale.”


Notes to Editors

See also:

[4] Government response to consultation findings:
See the ERS’ initial response to the consultation:

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