4. Who pays for digital campaigns?
- Social media companies should put in place new controls to check that people or organisations who want to pay to place political adverts about elections and referendums in the UK are actually based in the UK or registered to vote here.
- Each of the UK's governments and legislatures should clarify that spending on election or referendum campaigns by foreign organisations or individuals is not allowed. They would need to consider how it could be enforced and the impact on free speech.
- The UK Government and Parliament should make clear in law that campaigners cannot accept money from companies that have not made enough money in the UK to fund the amount of their donation or loan.
- The UK Government and Parliament should consider with us how to improve the controls on donations and loans to prevent foreign money being used in UK politics. Approaches for enhanced due diligence and risk assessment could be adapted from recent money laundering regulations.
- The UK Government and Parliament should amend the law so that all new parties and referendum campaigners with assets or liabilities over £500 have to submit a declaration should include an estimate of the costs the campaigner has invested in buying or developing the data they hold when they register.
The UK Parliament made rules so that only those with a real interest in the UK’s politics can use their money to influence voters. The only groups that can give money to parties or campaigners, or register as non-party campaigners are people who live in the UK or are registered to vote here, or organisations based here. But global digital communication tools are challenging these rules.
Preventing spending from outside the UK
Registered campaigners in the UK have been open about their use of digital campaigns to reach voters. However, anyone outside the UK can also pay for adverts on digital and social media platforms to target voters in the UK. This means that people who are not allowed to register as campaigners can still spend money to influence voters in the UK. This could be from foreign nation states or from private organisations and individuals.
Although there is a general principle that funding from abroad is not allowed, the rules do not explicitly ban overseas spending. The UK’s rules set minimum amounts for campaign spending before people or organisations have to register as a non-party campaigner. This means that a foreign individual or organisation that spends under these amounts would not have broken any specific electoral laws in the UK.
These rules were meant to reduce the risk of too much spending by non-party campaigners and bring more transparency, while not limiting free speech. At the time when the rules were made in 2000, the UK Government and Parliament were worried about foreign donations to political parties. They had not seen the potential for foreign sources to directly purchase campaign advertising in the UK.
The UK Government and security services have recently set out their view on foreign interference. They said that foreign sources are likely to have tried to disrupt and interfere with UK election and referendum campaigns using digital and social media tools. Academic research has also started to show that foreign sources appear to have carried out some social media activity in the UK.
The current evidence available to us does not suggest that this has taken place in the UK on the scale alleged at the 2016 US Presidential election. We will continue talking to the UK Government and security services about any more evidence if it comes out. In any case such activity is unacceptable. The Government has informed us that it “is alert to the threat of subversion and other means of seeking to manipulate the electoral process or undermine democratic institutions”.
Facebook, Google and Twitter have said that they will put in place new controls to check that people or organisations who want to pay to place political adverts about elections in the United States are actually based there. We would like to see similar controls introduced for elections and referendums in the UK.
A specific ban on any campaign spending from abroad would further strengthen the UK’s election and referendum rules. Digital and social media companies’ own controls would be one set of tools to stop foreign spending on digital advertising or promotion.
The UK would need to look carefully at the practical and legal implications of a ban on any campaign spending from abroad. This includes how a ban could be enforced and the impact on free speech. It should also look at the impact on UK citizens who live abroad who are registered to vote at UK elections and referendums. This includes changes that have been proposed in a Bill to the UK Parliament to allow any UK citizen living abroad to register to vote in the UK.
Preventing company funding from outside the UK
Companies that are registered in the UK or a European Union member state and that are carrying on business in the UK can give or lend money to campaigners in the UK. These companies can also register as campaigners.
Companies do not have to show that they have made enough money in the UK to give or lend to campaigners. This means that campaigners could receive money which originally came from outside the UK. This could include goods or services that companies give to campaigners as a gift or at a discount, including digital campaign services.
In 1998 and 2011, the Committee on Standards in Public Life said foreign companies should not be able to use subsidiaries in the UK just for the purpose of giving money to campaigners. Companies should show that they had made enough money in the UK to give or lend to campaigners.
In 2013, we recommended that the UK Government and Parliament should look at whether the rules were strong enough to stop campaigners using money that comes from outside the UK. We said the rules should reflect more closely the Committee on Standards in Public Life’s recommendation.
We repeated this recommendation in our report on the 2016 EU referendum. The UK Parliament has not changed these rules yet, but the UK Government has said it will discuss it with us.
Improving controls on donations and loans
It would also help to look at other ways to improve the controls on the money that campaigners accept. The UK’s money laundering rules require businesses to take steps to make sure that money does not have any obvious link with criminal activity. The UK Government updated these rules in 2017.
We think that some of the tools that businesses use for risk assessment and due diligence on customers could also be considered as part of the rules for campaigners at elections and referendums in the UK. These kinds of changes could help to make sure that foreign money is not used in UK election and referendum campaigns, including in digital campaigns.
New campaigners’ assets and data
The rules on donations and loans only apply to campaigners after they have registered with us. The rules do not require transparency about money or assets that campaigners have before they register.
Even after a party has registered, the deadline for submitting the first statement of accounts may be 18 months away. These accounts provide information about a new party's finances. But the rules mean that voters and other campaigners will not have information about a campaigner's early financial position. It also means we have less information to plan and focus our monitoring and other regulatory work.
We therefore recommended in 2013 that all new parties should submit a declaration of assets and liabilities over £500 upon registration. We also think that this requirement should apply to all referendum campaigners who have to register with us.
Datasets and databases are an increasingly valuable asset for running targeted election campaigns. The declaration should include an estimate of the costs the campaigner has invested in buying or developing the data they hold when they register.