Election Finance Regulation

Monday 20th November 2023 Written Statements

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)]

In July 2023, the Government confirmed their intention—20 July 2023, Official Report, HCWS985—to proceed with uprating reserved and excepted party and candidate spending limits and donations thresholds to reflect historic inflation in the years since the respective limits were set. The intention to review these thresholds was set out in December 2020, and the Westminster Parliamentary Parties Panel was consulted in September 2022. This is a necessary action as many of these statutory limits, set in absolute terms, have not been uprated for over 20 years.

Today, the Government have uprated in line with inflation the expenditure limits for candidates and registered political parties at UK parliamentary elections, Northern Ireland Assembly elections and local government elections in England. The same statutory instrument also uplifts the reporting thresholds for donations and regulated transactions for political parties, regulated donees, permitted participants at relevant referendums and unincorporated associations making political contributions. These changes are made through the Representation of the People (Variation of Election Expenses, Expenditure Limits and Donation etc. Thresholds) Order 2023.

The lack of change in absolute terms impacts campaigning ability, given the increased costs of printing, postage and communication, which is vital for parties and candidates to engage with voters. For example, a second-class stamp cost 19p in 2000; it is 75p today.

Parliament anticipated this, which is why the legislation allows for these limits to be adjusted to account for inflation. The Government’s policy is now to increase them so that they are the same in real terms as the original limits set by Parliament.

It has been more than a decade since the donation reporting thresholds were last uprated—by the last Labour Government—in 2009, following their introduction in 2000. If these limits are not uprated from time to time, the effect is to cut the thresholds in real terms. The principle of a threshold for publishing donations was established following the report by the Committee on Standards in Public Life—the “Neill Committee”—on the funding of political parties in 1998 (Cm 4057), noting the need to balance privacy and transparency. The Labour Government’s response in 1999 (Cm 4413) agreed with this principle.

The purpose of these reporting thresholds is to provide transparency around the granting of larger donations, balanced with the administrative burden such reporting may create for the recipient and with the privacy of smaller donors. Uprating these thresholds will ensure that balance is maintained in line with the original policy and legislative intent of Parliament when setting the thresholds. Again, there is no change in real terms.

The Government have decided not to increase the £500 threshold relating to the point at which a financial contribution is considered a regulated donation and subject to permissibility checks. This approach will ensure that the checks on the permissibility of donations and donors remain as they do now, and reflects the broader stance the Government have taken to prevent foreign interference in elections.

The substantive provisions on donation reporting thresholds come into force from 1 January 2024 to align with the reporting year for political parties.

The Government have also made the Police and Crime Commissioner Elections (Amendment) Order 2023. This delivers the uprating of spending limits for candidates standing at police and crime commissioner elections. These limits have not changed since they were first set in 2012, which has the effect of reducing the spending limits in real terms. The order will be laid before Parliament and will come into force on 12 December, subject to annulment in pursuance of a resolution of either House.

Further secondary legislation will follow in due course, to complete the delivery of spending limits uprating—for local councils, combined authorities and the Greater London Authority—and to deliver the Government’s commitment to exempt reasonable security-related expenses from contributing to election spending limits.

None of these reforms costs taxpayers money. Indeed, in Britain, taxpayers do not have to bankroll political parties’ campaigning. Political parties have to raise money themselves, while following transparency and compliance rules laid out in law. Those who oppose party fundraising need to explain how many millions they want taxpayers to pay for state funding instead.

The Government will further engage with the Parliamentary Parties Panel and the Electoral Commission to ensure that those affected are aware of these changes.

Taken together, the measures will support continued democratic engagement by political parties and candidates; and facilitate continued freedom of political expression and association, whilst ensuring our elections remain free and fair.

[HCWS53]