The UK’s most expensive general election is widely believed to have been in 1880, when at least £170m in today’s terms was spent by candidates, with the increased cost of campaigning to an expanded electorate and a peak in corruption that led to the first regulatory controls on political spending. After more than 140 years, and scandals ranging from cash for honours to foreign money and dodgy donors, parties and candidates are now subject to rules on expenditure and donations. An increase in spending limits, announced last year, means this general election is likely to be the most expensive since regulation of party spending began in 2000. So what are the rules when it comes to political donations?
Who can make donations?
The rules on donations to political parties stem from the Political Parties, Elections and Referendums Act 2000 (PPERA). It requires all donations (and loans) of more than £500 to come from what the Electoral Commission describes as “permissible sources”. The key requirement for most permissible sources is that they must be UK-registered, either on the electoral register or as a company, trade union or LLP. Donors can also be unincorporated associations based in the UK. Companies, LLPs and unincorporated associations must all be carrying on business in the UK. But a change in the 2022 Elections Act expanded the franchise to overseas voters who have been away from the UK for more than 15 years, allowing British citizens living abroad for more than 15 years to vote and donate to political parties. The rules for donations to candidates are similar, but with a lower threshold. Donations of more than £50, given to support election expenses, must come from permissible sources.
How much can donors give?
There are no limits on how much money any donor can give to a party or a candidate. Commissions into political finance and transparency campaigners have for decades argued for a limit on the size of donations. A 2011 report by the Committee on Standards in Public Life recommended a cap of £10,000 with additional state funding. A “detailed agreement on limiting donations” was part of the coalition government’s agreement, but cross-party talks collapsed in 2013. Parties and candidates are under no obligation to accept donations. They must return them within 30 days if the donation is from an unidentified or impermissible source. Very few donations from permissible sources have been voluntarily returned. Bernie Ecclestone gave £1m to Labour before the 1997 general election, but the party returned the funds when months later, it was revealed Ecclestone was lobbying Tony Blair’s government to exempt Formula One from a tobacco advertising ban while discussing a potential further £1m donation.
How does the public find out about donations?
The Electoral Commission publishes data on donations of more than £11,180 given to political parties and what are called “regulated donees”, mostly holders of elected office, on a quarterly basis. This threshold was recently increased from £7,500 in line with the new spending limits. Donations made via local associations have a lower threshold of £2,230. During the general election campaign, the Electoral Commission will publish three pre-poll reports of recent donations to parties. MPs register with the House of Commons the details of donations received by them personally and by their party where relevant to their political activity. The threshold for reporting donations to MPs is lower, at £1,500. Newly elected MPs will have to register their interests going back a year.
How much can be spent in a general election?
Parties contesting every constituency can spend £35.1m in the 365 days up to and including polling day. This is for spending towards promotion of the party and its policies at a national level, and is different to spending towards promotion of a specific candidate or in a particular constituency, although some election expenses may fall into both categories. From the dissolution of parliament until polling day, candidates can spend a base amount of £11,390 plus either 8p or 12p per voter, depending on the type of constituency. This difference reflects the traditionally higher cost of campaigning in bigger and more rural constituencies. In a constituency with the average-sized electorate, candidates can spend just over £17,200, or £20,200 in more rural seats.
Why might this be the most expensive general election in modern times so far?
In November 2023, the government increased national party spending limits from about £19.5m to £35.1m, while also increasing the potential total spending limit for candidates by about £4,000 for each candidate. Parties might not reach the new spending limit, and the majority of candidates are unlikely to spend as much as they could, but the increased cap has come alongside record sums being given to parties, with £93m in donations accepted in 2023, including £10m to the Conservative party given by Frank Hester and his company the Phoenix Partnership.