Electoral Reform Consultation Analysis

5. Campaigning and finance

An analysis of responses to questions about campaigning and finance is presented in this chapter. The UK Elections Act 2022 made a number of changes to campaign and finance laws. The Scottish Government is in favour of adopting some of the changes made to campaign finance rules to reserved elections, creating consistent and clear rules by bringing Scotland in-line with UK elections.

Notional expenditure

Q33: Do you think that the language clarifying the definition of notional spending adopted in the UK Elections Act 2022 should also apply to Scottish devolved elections?

Notional spending is when candidates are given goods or services for free or at a discount, and the candidate must declare what would have been the full value of the goods or services in their financial returns.

The UK Elections Act 2022 updated the legal definition of notional spending so that candidates or their agents do not need to declare spending they had no knowledge about (e.g. political party posting flyers without the candidate's consent or knowledge), even when the spending may have been to their benefit. This does not represent a change in what is considered notional spending, but makes the language easier to understand.

There was widespread backing for this proposal, with three quarters (75%) of the organisations who answered and 84% of individuals indicating their support.

Third party campaigning

Q34: Do you think that third party campaigners should have to register with the Electoral Commission if they spend more than £10,000 across the whole of the UK, even if they spend less than £10,000 in Scotland?

Third party campaigners, sometimes called non-party campaigners, are not candidates or political parties. Under the UK Elections Act 2022, third party campaigners now need to register with the Electoral Commission if they spend more than £10,000 across the whole of the UK, even if they are spending less than each individual country's registration threshold (e.g. spending £9,000 in Scotland and £5,000 in England).

This registration threshold is already £10,000 in Scotland, however adopting this change for Scottish devolved elections would mean campaigners could not exceed £10,000 of spending in devolved elections across all the UK without registering with the Electoral Commission.

Over four fifths of respondents (82%) indicated that the £10,000 registration threshold should apply to devolved elections across the UK, with three quarters (75%) of organisations who answered holding this view.

Very few respondents expressed another view on the registration threshold at Q34; only 24 comments were received. Ten respondents called for all third party campaigners to be required to register with the Electoral Commission, regardless of the amount spent.

"Any spending should be declared." – Individual

"Register everything no matter the cost." – Individual

"I think all spending should be recorded." – Individual

Others felt that the limit should be reduced; some suggested that £1,000 was a fairer threshold, and one thought £3,000 was suitable. Those who supported reducing or removing the £10,000 threshold did so as they felt it would increase transparency over electoral campaigning. Two called for the introduction of a campaign budget cap but did not suggest what this limit should be.

Q35: Do you think that the spending limit should be reduced to £700 for overseas based third parties that are ineligible to register with the Electoral Commission?

Overseas-based third party campaigning has been significantly reduced by the UK Elections Act 2022, and non-UK campaigners can only spend £700 during election campaigns. This means only third party campaigners eligible to register with the Electoral Commission are able to spend more than £700. Extending this rule to Scottish devolved elections would help ensure that our elections are free from foreign spending.

Both organisations that answered this question agreed that the spending limit should be reduced. There was also broad support among individuals with 66% in agreement.

The most common opinion among those who selected 'I have another view on the spending limit' was that overseas-based third parties that are ineligible to register with the Electoral Commission should not be able to spend any money on Scottish election campaigns, i.e. the limit should be reduced to zero. Some went further and proposed that all non-UK-based companies or individuals should be forbidden from spending on any UK election. Most of these respondents did not provide a reason for their position. Those who did cited a desire to limit foreign interference and influence in Scottish or UK political matters.

"No overseas third parties should be permitted to campaign or seek to influence any form of plebiscite in the UK or any devolved UK regions, including the use of social media or other forms of communication media." – Individual

A few made other suggestions. One respondent thought that the proposed limit should be reduced to £500 instead of £700, and another suggested the limit should be increased to £20,000. Neither provided any explanation for their proposed spending limit.

Q36: Do you think that an order-making power for Scottish Ministers should be introduced which allows them to add, change, or remove categories of third-party campaigners? A recommendation by the Electoral Commission would be required before a category of third-party campaigners could be changed or removed.

The UK Government has the order-making power to add, remove or change categories of eligible third party campaigners. To change or remove a category, the Electoral Commission must first have recommended this in a report. Scottish Ministers would require a similar power to ensure that the categories of third parties eligible to campaign in Scottish devolved elections was the same as for the rest of the UK.

A majority of both individuals (58%) and organisations (67%) opposed the proposal.

Q37: Do you think that the Electoral Commission should be able to provide a code of practice on third party expenditure in Scottish devolved elections?

Currently, the Electoral Commission provides a code of practice on the rules and regulations of third party campaigning. This code relates to reserved UK elections, and the Scottish Government wishes for the Electoral Commission to provide a similar code explaining the rules around third party campaigning in Scottish devolved elections.

There was widespread support for this proposal, with 85% of individuals and all four organisations who answered Q37 giving their backing.

Q38: Do you think the maximum fine the Electoral Commission should be able to impose for breaches of electoral law in Scottish elections should rise to £500,000, so it is in line with the maximum fine for referendums, be set at another amount, or remain unchanged at £10,000

The Electoral Commission can fine people and organisations who break electoral law. The maximum fine they can currently give out is £10,000 for breaches related to elections, but £500,000 for breaches related to referendums. There are concerns that the £10,000 limit is too low to deter major parties and donors from breaking the law. One proposal is to make the maximum fine £500,000 in all cases.

Three quarters of individuals (75%) agreed with the proposal to increase the maximum fine to £500,000; this equates to 90% of individuals who felt there should be a change. The four organisations were evenly split between through who supported the maximum proposed find and those who supported no change.

There was little consensus among respondents who felt the maximum fine should be set at another amount; some felt £500,000 was too high, while others felt it was insufficient. A range of different upper limits were suggested:

• three respondents - a maximum fine of £50,000
• 10 suggested £100,000
• six - an amount other than £500,000 between £200,000 and £600,000
• four - £1 million
• two - £5 million
• five - unlimited fines

A few respondents discussed different approaches to calculating fines, for example: making them equal or proportional to the amount spent on illicit campaigning; or making them proportional to the culprit's assets and income. A small number suggested other consequences should be imposed for breaching electoral law, such as legal action, custodial sentences and bans on participation in future election campaigns.

Digital imprints

Digital imprints contain information showing who has produced and paid for online election campaign material. The UK Elections Act 2022 introduces a new UK-wide law for regulating digital imprints. In doing so the Act has introduced a UK-wide change that seeks to supersede the existing Scottish regime for digital imprints.

Q39: Do you think that the Scottish Government should revoke its own regulations for digital imprints and rely on the provisions of the Elections Act 2022?

All organisations and two thirds (64%) of individuals agreed with the proposal.

Q40: Do you have any further comments on digital imprints?

There were 40 open-text responses to Q40, with little consensus among them. Some comments were brief affirmations of the respondent's position on Q39 without any further reasoning or justification. Others provided more detail; for example, a few who supported revoking Scottish Government digital imprint regulations and instead relying on the UK Elections Act 2022 described it as a simpler, more consistent approach that would lead to less confusion and better compliance.

"The Scottish Government should revoke its own regulations for digital imprints and rely on the provisions of the Elections Act 2022 as a means of providing clarity and consistency in electoral processes." – Returning Officer

While Electoral Reform Society Scotland supported aligning with UK legislation, they highlighted a loophole in the UK Elections Act 2022 which allows for the imprint to not appear on the material itself 'if not reasonably practicable'. They called for strict monitoring to ensure that this technicality is not unduly applied or exploited.

Some commented on the concept of digital imprints in general; a few individuals raised concerns, describing them as more difficult to understand and implement than those required for printed material. Others welcomed the transparency offered by digital imprints.

"Digital campaigning accounts for an increasingly large proportion of spending reported by campaigners after elections. Requiring campaigners to include imprints on digital campaign material delivers greater transparency for voters and helps improve public confidence in digital campaigning at elections and referendums." – The Electoral Commission

One respondent called for more stringent restrictions on political campaigning to be applied. Another advised that a detailed risk assessment should be undertaken before any changes are made to the regulations.

A few respondents misinterpreted the question and used their responses to share concerns about digital voting, such as fears over privacy and security.