The Political Parties and Elections Act 2009: changes to election expenditure rules

Cross-posted from The Wardman Wire:

Hands up everyone who thought the problem with current rules for controlling constituency expenditure was that they work if a Parliament last for four years but not if it lasts for five? Nobody? Oh well, that’s the basis on which Parliament has just changed the law anyway.

This provision of the Political Parties and Elections Act 2009 has its roots in a sensible concern, but along the way disagreements between parties and lack of understanding of how campaigns actually operate has landed us with this rather odd change in the law.

The issue which should be at the heart of the matter is the dividing line between what counts as local expenditure and what counts as national expenditure. Local expenditure on a constituency campaign is controlled for the three or four weeks of the actual general election campaign, with a limit of around £10-12,000 per constituency per candidate. National expenditure is controlled for the year prior to a general election (which causes some budgeting headaches given we don’t know when polling day will be), with the limits running into the several million of pounds per party.

All parties try to concentrate their resources on target seats – difficult defences or ones they hope to gain. For any party, even one of the major ones, the number of such seats is relatively small compared with the total number of constituencies. Therefore, during the three or four weeks of the campaign proper, there is an incentive to do your campaigning in a way that counts against the national limit rather than the local limit. Although the national limit also has to cover national activities, it is sufficiently generous – and the number of seats which really matter sufficiently small – that if you can charge target seat campaigning against the national rather than the local limit then you can operate in practice without any real regulatory limits restricting your activity. It’s your bank balance rather than the law which restricts what you can spend.

So what can count as national rather than local campaigning? Imagine a letter, from a party leader to a voter. The voter has been selected because they live in a particular constituency and because of the canvass data the party has for them. The letter mention the local constituency by name. It gives the name of the health trust and the health waiting list figures. It gives the name of the local police force and changes in crime figures. It urges people to vote for that party in the general election. It even contains a “Vote for party X” window poster.

It can do all of that, and still only count against the national limit. It is only if names the party’s candidate that it has to count against the local limit.

Parties used to act as if the law said otherwise, but a combination of changes in the law and party competition egging each party on in turn to push the limits of the law means we’ve now reached the situation where letters like this have been done and counted against the national limit without any legal action or even expression of qualms from the Electoral Commission when it has inspected expense returns.

And so there is a real problem. We have one sort of activity relatively tightly controlled and another sort controlled in a very relaxed manner, even though both activities are carried out in order to achieve the same aim (more votes for a party in a particular constituency). What’s worse, this distinction encourages a change in campaigning behaviour goes against the general health of our democracy – because it means the less you talk about your candidate and their record, the more campaigning you can do. The more presidential the campaign, the more of it you can do in your target seats.

However, the changes in the law brought about by the Political Parties and Elections Act 2009 do not address problem. That’s for two reasons. First, many of the expert advisors to the Government have not appreciated that this is the current reality. I was at a consultation meeting a few months ago with the key people and it was clear that the descriptions from myself and those from other parties of how parties now operate was an eye-opener to many of them.

Second, the Labour Party has misunderstood how the “Ashcroft money” fits in to this issue. Many in Labour are concerned they were and will be out-spent in marginal seats thanks to the funds provided by Lord Ashcroft to the Conservative Party. They have responded to this by wanting to tighten up the expense rules, but have decided that the problem is that the local campaign limits do not apply for long enough.

As a result, during the passage of the legislation variants on “make the local controlled period longer” were proposed. They are all doomed to fail to achieve Labour’s aim because all the Conservatives have to do is to switch more of their campaigning to be about David Cameron and less about their individual candidates and such changes will not restrict the amount of campaigning they can do. Given that David Cameron is generally better known and more popular than Conservative candidates, forcing the Conservatives to say more about him and less about their candidates is not merely unproductive but also counter-productive.

So what does the mess that we’ve ended up with say? Well, one argument used by many against extending the local controlled period is that local expenditure is controlled by local volunteer agents, and without knowing when polling day is going to be, any rules which mean it starts before a general election is called means agents have to be in place for longer, keeping control and records, with a significant degree of uncertainty about what will turn out to matter when. It’s one thing to put that burden on the staff in party HQs, but putting it on volunteers – who are criminally liable if they get it wrong – will just put even more people off taking part in elections.

The messy compromise in the Act then is to have an extended controlled period, but to say that it can’t start before a date late in the Parliamentary cycle. Agents therefore don’t have to be in place and keeping records for years in advance of an election just in case there’s one sooner than expected.

There will therefore now be both a “pre-candidacy” and a “short campaign” period of controlled local expenditure (see sections 21 and 22 of the Political Parties and Elections Act 2009).

The pre-candidacy campaign period starts after 55 months from the previous general election and runs until the short campaign, which is when someone becomes a candidate as under the existing rules (i.e. either the day on which Parliament is dissolved or, if they’ve avoided calling themselves a candidate up to that point, the day on which they start doing so, which at the latest is when they hand in their nomination form).

For the pre-candidacy campaign period, expense limits will be a percentage of a sum equal to £25,000 plus either 5p (for borough constituencies) or 7p (for county constituencies) per entry on the electoral register. What percentage it is depends on when Parliament is dissolved:

(a) 100% where the dissolution was during the 60th month of the Parliament;
(b) 90% where the dissolution was during its 59th month;
(c) 80% where the dissolution was during its 58th month;
(d) 70% where the dissolution was during its 57th month;
(e) 60% where the dissolution was during its 56th month.

i.e. rather counter-intuitively, the longer the Parliament lasts, the higher the amount you can then spend in the pre-candidacy campaign period.

Just to add to the fun the version of the electoral register which is used for working out the limit is the one in force on the last day for publication of notice of the election, i.e. one which comes out well after the period starts for which it is used to calculate the limit.

At this point, Parliament then rather gave up trying to draft a law that works and added in that the Electoral Commission will produce guidance on what does and doesn’t get covered by these limits. An earlier attempt to do this was forcibly disowned by the Electoral Commission, in some of the most robust correspondence I’ve seen – very polite, but very firm – which said that Parliament couldn’t completely opt-out of coming up with rules and pass the buck. As a result, the Bill was changed somewhat in order to make the legal framework a little clearer, but it still leaves an awful lot up to the Commission to produce guidance to fill in the gaps.

One consolation for election agents at least is that as the guidance is required to be produced by law, and so although it law itself, following that guidance will offer a very high degree of legal protection.

The Electoral Commission is currently consulting on its guidance. Their consultation looks to be covering the right topics, including clearing up pesky details such as “Which side of the regulatory line would the day of dissolution itself fall?” and important broad questions such as “Does any of this have an impact on what donations are covered by the controls on donations to candidates?”

The consultation process is also forcing out in to the open guidance on some issues that have been rather fuzzy in the past. For example, one of the Commission’s notes on the state of its consultation says, “Staff and facilities may be shared between national/regional and constituency campaigns. We also recognise that during an election period, staff will be spending many additional hours on campaigning for which they are not paid and which may not form part of their legal employment contracts.” (Just to emphasise: this is a note of an ongoing consultation and therefore the final wording may be significantly different. What’s notable though is that this issue is being addressed.)

Fundamentally though the guidance can’t fixed the flaws in the legislation. It doesn’t address the issue of side-stepping local controls by charging campaigning against national limits, and indeed by having an extended period of local controls, the legislation will make that a bigger, not a smaller, problem. The result will be less control over expenditure, but more bureaucracy.

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Richard Coe
Richard Coe

The financing of Labour and the Conservatives make it impossible for them to sensibly tackle the issue. All of this of course is because they won't bite the bullet and make donations (a) registered electors resident in the UK for tax purposes only (no businesses or unions etc) and (b) put in a limit which restricts donations to a sensible sum that a committed person of only moderately affluent means might donate. The real solution to Lord Ashcroft et al is not to let them donate via their businesses and not to let them donate more than a sensible fixed sum each year. How all these politicians can have so little understanding of how they got elected in the first place is what amazes me.