The Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill is proving to be controversial for various reasons – not least for proposing amendments to controls on third party spending during election campaigns (under the current law independent organisations have to register with the Electoral Commission if they spend over a certain amount on election material, and such spending is subject to an overall cap). Many of the criticisms have focused on the potential for the proposed law to apply to the political speech of charities, think tanks, blogs and campaign groups.

I have had mixed feelings when hearing the debate. While the critics argue that the test being proposed to define electoral purposes is potentially broad and vague – I find that to be true of the current law. The current test does not simply ask whether the third party actually intends to influence the election when it spends money, but asks whether the money is spent on material that ‘can reasonably be regarded as intended to’ have such an effect. The current law can, in theory at least, apply to blogs, think tanks and campaign groups that spend over a certain amount. I think there is good reason for a relatively broad test that goes beyond express partisan advocacy, and there is a need to limit some third party spending to protect the integrity of the electoral process. On my reading, however, the current law is not clear-cut and, as I told the Kelly Committee a few years ago, I struggle to see how the existing rules apply in some cases. But for whatever reason, the law does not seem to have had an inhibiting effect on the political speech of independent organisations and only a relatively small number of organisations register.

The test for electoral purposes is only part of the Bill. A significant change proposed in the Bill lies in the types of activity that the test will apply to. In particular, the spending controls no longer apply just to the production and publication of material ‘made available to the public at large or any section of the public’ – it will extend to events such as rallies and meetings, and include market research done for electoral purposes. This proposed extension of the law follows a reform suggested by the Electoral Commission earlier this year, and has an obvious rationale – if we regulate spending on publications, then why shouldn’t the same rules apply to a public rally?

The real issue is the combination of this change, along with the lowering of the thresholds for registration and spending limits. At present third parties only have to register with the Electoral Commission if they spend £10k in England in a general election campaign. This will be reduced to £5k. The threshold for registration in Scotland, Wales and Northern Ireland will also be reduced from the current £5k (for each country), down to £2k. This combination means that spending on a wider range of activities will be count towards determining if the lowered threshold for registration has been met. Common sense tells us that this change will mean more organisations will have to register with Electoral Commission. The major concern here is that such a requirement could impose a administrative burden on some smaller organizations.

As I have said, under the current law there are difficult borderline cases that can arise when applying the test for election purposes. However, if more activities are to count towards a lower spending threshold, then the number of cases referred to the Electoral Commission is likely to increase, and in turn increasing the number of tricky borderline cases (which the Electoral Commission discusses in its briefing paper). This means that the ambiguities that are present in both the current and the proposed law are more likely to come under pressure.

One part of the proposals, which has received less media attention, concerns a new regulation of ‘targeted expenditure’. The government Bill defines targeted expenditure as:

‘Controlled expenditure is “targeted” at a particular registered party if
it can reasonably be regarded as—

(a) intended to benefit that party or any of its candidates, and

(b) not intended to benefit any other registered party or any of its
candidates.’

Under this proposal, for spending that falls within this definition, the third party will be subject to a cap of 0.2% of the maximum amount that can be spent in that part of the UK (this is a low limit). If the third party wants to spend more than that amount, then it must gain authorisation from the political party and count towards that party’s spending limit.

This proposal I find slightly puzzling. First, I think the rationale for this measure needs to be set out more clearly (it seems to treat certain types of partisan advocacy as analogous to a donation in-kind, but this needs further explanation). Secondly, it adds considerably complexity to an already complex law. Under the proposals, there will be three categories of third party political spending: the non-electoral (where no controls apply); the electoral (subject to the controls discussed earlier); and the targeted (subject to very low spending limits unless authorised by the party). This would raise difficult questions of line drawing between the various categories.

Thirdly, the provision could give some fairly odd incentives to campaigners. For example, the proposed ‘targeted expenditure’ controls would apply only to spending that is reasonably regarded as intended to benefit a particular political party, but not multiple parties. So, a positive message saying ‘vote for Party X’ would meet this test. However, a negative message directed at the character of the leader of Party Y (like the old Swift Boat ads from nearly a decade ago in USA) would arguably benefit multiple parties (ie all of party Y’s opponents). Consequently, negative messages by a third party may avoid the stricter controls on targeted expenditure. While I don’t think there is anything wrong with truthful negative campaign messages, I am not sure it is something the law should incentivize.

I don’t think we should rule out changes to the law regulating third parties. Some measures are necessary to stop the democratic process being distorted by well-healed front organisations or astroturf campaigns. Improvements can no doubt be made to the current law. However, this is a delicate area that requires care in striking the right balance and there are dangers of over-regulation. Before taking any steps, the workings of the current law on third party spending need closer examination. In particular, a proper assessment needs to be made of the way the current law is interpreted, to identify any deficiencies in the current law and the cause of those deficiencies. This should tell us whether lower thresholds for registration and third party spending are necessary. In other words, we need a diagnosis of the problem before legislating a remedy.

The need for such an assessment is also relevant to any free speech challenges. Earlier this year, the European Court of Human Rights upheld the ban on political advertising on TV and radio in Animal Defenders International, itself a measure that can impact on charities and other campaign groups. A central plank in the Court’s reasoning concerned the quality of the procedure of parliamentary and judicial review that the ban had been subject to. The fact it had been subject to rigorous scrutiny meant that the Court gave greater respect to the UK’s judgment. If the Bill is rushed, by contrast, then it may be more vulnerable to legal challenge in Strasbourg.

Jacob Rowbottom is a Fellow of University College, Oxford.

Suggested citation: J. Rowbottom, ‘Third Party Spending Controls and the Lobbying Bill’  UK Const. L. Blog (5th September 2013) (available at http://ukconstitutionallaw.org)