Electoral reform consultation

Chapter 4 - Campaigning

Campaigning and Finance

Summary of proposals

• To clarify the legal test for what constitutes notional campaign expenditure
• To restrict spending by ineligible foreign third-party campaigners, unless spending less than £700.
• To explore whether groups must register with the Electoral Commission if spending more than £10,000 across the constituent parts of the UK, but less than the limits in each individual country
• To create an order-making power to allow Scottish Ministers to add or remove categories of eligible third-party campaigners
• To ensure that the Electoral Commission's code of practice for third-party campaigning is extended to include devolved Scottish elections.
• To increase the maximum amount the Electoral Commission can fine people for breaking electoral law.

Background and discussion:

In the UK Elections Act 2022 a number of changes were made to existing campaign and finance laws. These changes only apply to reserved elections although, as noted below, there is also potential application to devolved Scottish and Welsh elections where the regulated spending period for a devolved election overlaps with that for a UK Parliament election. It is the view of the Scottish Government that a number of these changes (see Chapter Summary, above, for an overview) appear to represent an improvement upon existing law. Reflecting these changes in devolved Scottish electoral law may provide consistency and clarity for voters, campaigners, and electoral administrators.

The Scottish Government did not recommend that the Scottish Parliament give Legislative Consent to the campaign finance provisions in the Elections Act applying to Scottish Local Government and Scottish Parliament elections (referred to as "devolved Scottish elections" in this Chapter) as it was noted that the next national set of elections were not to take place until 2026. As a result there was sufficient time for the Scottish Government to undertake its own consultation on the impact of the campaigning and electoral finance provisions on Scottish Parliament and Local Government elections.

This consultation aims to explore the impacts of extending these changes to devolved Scottish elections. The changes proposed, particularly those affecting third-party campaigners, are intended to help ensure that Scottish elections are free from foreign interference and ensure that voters can transparently see who is funding election campaigns. However, this must be balanced against protecting the important role that legitimate third-party campaigners play in democracies, particularly in sharing a range of information with voters. The proposed changes aim to ensure there is a balance between these aspects of campaigning. Consultees might like to note that the Welsh Government is also consulting on election campaign changes in the Elections Act.

The regulated period for election spending before a devolved election falls within the devolved legislative competence of the Scottish Parliament (or Welsh Senedd in relation to devolved Welsh elections). However, the changes made by the Elections Act also apply to devolved elections where the regulated period before a devolved election overlaps or is combined with the regulated period for a UK Parliamentary election. This is because of the interaction of the Elections Act 2022 and the Political Parties, Elections and Referendums Act 2000 ("PPERA").

Third-party campaigners face a range of reporting and spending limits in other countries. For example, reporting and registration thresholds of €100/£85 (Republic of Ireland), $13,200/£6800 (New Zealand) to $14,500/£8,300 (Australia). Australia also has a higher tier of registration for significant third-party donors spending over $250,000.

Initially, it was proposed that the UK Elections Act would include further campaign finance provisions that did not appear in the final Act. One such provision was to restrict co-ordinated spending between third-party campaigners and political parties. This was removed after opposition parties raised concerns about the impact on trade unions. That restriction is not being proposed as part of this consultation.

In addition to responding to the changes in the UK Elections Act 2022, the Scottish Government is keen to explore views on the current maximum civil sanctions available in Scottish elections. The Electoral Commission has powers under PPERA and the Referendums (Scotland) Act 2020 to apply civil penalties for electoral offences – these can include mandatory action to prevent future breaches or restore normal conduct after a breach, as well as monetary penalties.

For referendums in Scotland, the maximum fine the Electoral Commission can give out to those breaking electoral law is £500,000, which is higher than the maximum for elections. Currently, the highest amount of fine that can be given in Scotland for breaches of elections law is £10,000. This would apply to anyone breaching electoral law in devolved Scottish elections, not just third-party campaigners. The Electoral Commission has previously suggested that a change in this area should be considered (see paragraphs 32 to 34 of the Electoral Commission's written evidence on the Scottish Elections (Reform) Bill). The Scottish Government is seeking views on whether these fines should be standardised at £500,000, whether a lower penalty for offenses in elections is appropriate to the different circumstances of this event versus a one-off referendum vote, or if another limit should be set. Some smaller parties and campaigners have noted that they would be disproportionately affected by such large fines. However, the Electoral Commission's guidance on enforcement emphasises that proportionality is a key factor they take into account when laws are breached.

On civil sanctions, the Electoral Commission has expressed interest in standardising the maximum fine they can impose for breaches of election spending rules for political parties or registered non-party campaigners. This is partly to clarify the existing rules, so that all offenses are understood to be equally serious, but also to reflect the amounts of money major parties and non-party campaigners raise and spend at elections and provide a suitable deterrent for non-compliance. Concerns have been raised that the current limit in Scotland of £10,000 is too low to deter large parties and campaigners from breaking electoral laws.

Changes being consulted upon:

To update the legal definition of notional expenditure in Scottish elections, so that when candidates are given goods or services for free or at a discount, the full value must appear in the candidate's financial returns. The goods or services are only required to be reported when specifically agreed by the candidate or their agent. This means candidates/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 definition of notional spending was clarified in the UK Elections Act. Introducing the same wording to apply to devolved Scottish elections will help ensure the rules are clear and consistent for campaigners and candidates. Because of the interaction of the Elections Act 2022 and PPERA, this change will already apply to a devolved Scottish election where it occurs within 12 months of a UK Parliament General Election.

To consider whether third-party campaigners should be required to register with the Electoral Commission if, during the period before an election, they spend more than £10,000 across the constituent parts of the UK, but less than the individual thresholds in each nation. This would impact, for example, campaign groups wishing to campaign in both Scottish Parliament and Welsh Senedd election periods taking place simultaneously. It would, for example mean that third-party campaigners spending more than £10,000 across multiple countries within the UK (e.g. £9,000 in Scotland and £5,000 in Wales) would be obliged to register with the Electoral Commission. Because of the interaction of the Elections Act 2022 and PPERA, this change will already apply to a devolved Scottish election where it occurs within 12 months of a UK Parliament General Election.

To ensure that overseas campaigning for Scottish Parliament and Local Government elections is restricted by significantly reducing the spending limit for non-UK campaigners. Section 26 of the Elections Act 2022 changed this limit to £700 during regulated periods for reserved elections. This means that only campaigners that are eligible to be registered with the Electoral Commission are able to spend more than £700.

To create an order-making power for Scottish Ministers to make additions, remove or change the categories of eligible third-party campaigners. In order to remove or change a category, the Electoral Commission must have first recommended the change. This approach would match that taken in the Elections Act 2022 and is intended to allow Scottish Ministers to quickly add legitimate categories of campaigner that are not currently on the list. By only being able to remove or change categories following a recommendation by the Electoral Commission, a safeguard is introduced that would prevent Ministers from removing legitimate categories of campaigner for political purposes.

To allow the Electoral Commission to provide a code of practice on controls relating to third parties. Currently, the Commission is compelled to provide this code of practice in relation to reserved campaign expenditure, and a change could extend this to Scottish Parliament and Scottish Local Government elections. The intention is that each of the above proposed changes to campaigning and finance legislation are consistent across reserved and devolved elections, and as the Electoral Commission already provides a code of practice, this should not substantially increase their workload.

To address the maximum level of fines the Electoral Commission can impose for electoral offences, either standardise maximum fines at £500,00 for all electoral events or consider specific limits for elections distinct from referendums in Scotland.

Question 33: 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?

Question 34: 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?

• The £10,000 registration threshold should apply to devolved elections across the UK
• The £10,000 registration threshold should apply to Scottish devolved elections only
• I have another view on the registration threshold

Question 35: 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?

• The spending limit should be reduced to £700
• The spending limit should remain the same (£10,000)
• I have another view of the spending limit

Question 36: 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.

Question 37: Do you think that the Electoral Commission should be able to provide a code of practice on third party expenditure in Scottish devolved elections?

Question 38: Do you think the maximum fine the Electoral Commission should be able to impose for breaches of electoral law in Scottish elections should:

A – Rise to £500,000, so it is in line with the maximum fine for referendums

B – Be set at another amount (please specify the amount below)

C – Remain unchanged at £10,000.

Digital imprints

Why is a change being proposed?

An imprint contains details on election campaign material (leaflets, campaign messages etc.) that show who has produced, promoted and, in certain circumstances, paid for the material. Imprints are required on printed devolved Scottish election and referendum material and serve to promote transparency about what is campaign material and who is doing the campaigning.

Requiring an imprint helps to ensure ownership in relation to campaign material by making campaigners responsible for their communications and improves voter confidence. The imprint regime also helps the Electoral Commission and the police to enforce spending rules by making it easy to identify those who are responsible for material.

In 2014, Scotland became the first part of the UK to require imprints on digital campaign material, with rules applied to the 2014 Independence Referendum. In 2020, digital imprint rules were applied to all Scottish Parliament and Local Government elections.

Prior to these changes, the requirement for an imprint on campaign material to identify campaigners at elections only applied to printed material, such as leaflets and posters. Campaigners had to include a description to identify who they were and on behalf of whom they were promoting campaign material.

At the 2021 Scottish Parliament elections and the 2022 Scottish Local Government elections an imprint was required on all online campaign material which promoted one or more candidates or registered political parties, one or more parties who supported (or who did not support) particular policies or candidates who held (or who did not hold) particular opinions or supported particular policies. The controls on digital material mirrored those for printed election material which fell within these categories.

In order to encourage free participation in the democratic process, an exemption to the requirement for an imprint was included for material which only expresses an individual's personal opinion and is published on their own behalf and on a non-commercial basis. This personal opinion exemption does not extend to direct participants in elections such as the candidates and other political entities.

The Feedback on the operation of the rules was positive for both elections. The Electoral Commission's Report on the 2022 Local Government elections concluded that:

"Candidates understood the new laws on the requirement for digital imprints on their campaign material but concerns continued to be raised around printed material" and reported that "Nearly nine out of 10 (88%) respondents agreed that they understood the requirement to include imprints on digital campaign material, compared to 5% who disagreed. A smaller majority (72%) agreed that it was easy to meet these requirements, with almost one in 10 (8%) disagreeing. 70% agreed that digital imprint requirements improve the transparency of digital campaigning, while 7% disagreed and 17% said they neither agreed nor disagreed."

The UK Elections Act 2022 contains digital campaigning measures which apply to all elections and referendums in the UK, including Scottish Parliament and Scottish Local Government elections. The Act introduces a new digital imprints regime requiring anyone paying for digital political material to be advertised to explicitly show who they are and on whose behalf they are promoting the material. Paid-for material is where a payment is made for the material to be published as an advertisement. The content must also meet one of the purposes set out in section 43 of the Elections Act. These purposes include influencing members of the public to support or withhold support from a political party, parties who advocate particular policies, candidates, future candidates, elected officeholders and the holding or outcome of a referendum in any area of the United Kingdom. This requirement applies all year round.

Certain campaigners (registered political parties, candidates, future candidates, recognised third-party campaigners, referendum campaigners, holders of elected office and recall petition campaigners) are also required to include an imprint on their other electronic material if it constitutes digital election, referendum or recall petition material. Aspects of this requirement apply at all times, unlike the legislation for devolved Scottish elections which is most relevant when there is an election or referendum in progress.

The Scottish legislation and the UK legislation are similar, with both sets of rules requiring an imprint on material produced by certain specified persons such as candidates. However, there are some differences. For example, some of the provisions in the UK Elections Act 2022 apply at all times, not just in the run up to an election. Also, the Scottish legislation's requirement for an imprint applies to anyone who is promoting the success of a candidate(s) or political party (parties), not just those listed in the Elections Act 2022, unless it is published on the individual's own behalf on a non-commercial basis and only expresses their own opinion.

The UK-wide regime applies to anyone that pays for material to be published as an advertisement. In addition, the Elections Act requires that certain political entities also include an imprint on their other electronic material. Members of the public, unless they pay to advertise material within the scope of the regime or are one of the specified political entities requiring an imprint on their other electronic material, will never require an imprint under the UK-wide regime.

The operation of two separate imprint regimes covering devolved Scottish elections would be likely to lead to confusion. The Scottish Government is concerned that this confusion around who may or may not be liable to be prosecuted is not in line with natural justice and believes that the position of individuals who may be partaking in political debate on social media needs to be clarified.

The proposal

Unfortunately, options are limited in this area as a result of the scheme set out in the Elections Act 2022 applying to all elections and campaign activity in the UK.

The Scottish Government considers that it would be too confusing for all aspects of the existing digital imprints scheme for the devolved Scottish elections to continue to apply alongside the Elections Act 2022 measures. There therefore appear to be two options: (i) Option A, a complete repeal of the Scottish provisions and (ii) Option B, a partial repeal, with some aspects of the Scottish regime preserved where it is considered that they could operate alongside the Elections Act provisions.

Option A

The simplest and clearest option is to simply revoke the existing Scottish Regulations and rely solely on the provisions of the Elections Act 2022.

Both sets of rules largely exempt members of the public from having to include an imprint when expressing their views online. However, there are some differences in how each regime goes about doing that. The Scottish Government is interested in the views of consultees on this option and, in particular, how it might operate in relation to material that is not paid for. The Elections Act scheme applies to other, more 'organic', campaign material where it is promoted by (or on behalf of) a registered party, a registered third party, a candidate or future candidate, an elected office holder, a referendum campaigner or a recall petition campaigner. The current Scottish Government regulations apply to anyone who is publishing campaign material on a non-personal basis. For example, the Scottish rules could potentially apply to a social media influencer promoting a candidate, party or policy without having been asked or paid to do so. The views of consultees are invited on the implications of relying entirely on the Elections Act 2022 provisions. This would mean that individuals other than those mentioned above not be required to include an imprint, unless they pay to promote their material as an advertisement or unless they are promoting other electronic material on behalf of those political entities mentioned above.

The advantage of this option is that the whole of the UK will be covered by the same requirement, and it would reduce the risk of confusion around what provisions apply where and when.

Option B

This option would involve revoking the Scottish Regulations and replacing them with a new set of regulations designed to preserve specific aspects of the current regime that are considered to serve a useful purpose. For example, some provision could be made in relation to individuals using social media to promote candidates, policies or political parties as discussed under Option A. This would, effectively, apply additional rules on top of the position for the rest of the UK set out in the Elections Act.

Whilst this option would retain the elements of the Scottish Government's current regulations, it would still run the risk of confusion with individuals, particularly those based outside Scotland, who may not be sure which legislation applies to which election. For example, the Elections Act 2022 provisions would apply to all elections and referendums in Scotland, but the additional Scottish Regulations would only apply to Scottish Parliament and Local Government elections.

Question 39: 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?

Question 40: Do you have any further comments on digital imprints?