22 May 2014

Money, money, money...

And in a single bound, free. The Confederation of British Industry got lucky.  Having accidentally registered as supporters of the No campaign with the Electoral Commission, and created an almighty boorach for themselves, the captains of industry finally got their act together, and wriggled out of it.  While the referendum legislation contains no mechanism to take your name off the Commission's books, it seems a minor flunky signed the CBI's registration papers rather that the bigger wig required under the 2013 Act.  The registration as a No body was legally void and the CBI writhed off the hook they'd spiked themselves on.  None of which seems to have dampened the organisation's enthusiasm for making dire proclamations about the perils of Scottish separation. 

Cue some rhubarbing from independence-supporters online. What is the point in the Electoral Commission having a register, if you can continue to campaign against independence with impunity? If they're not registered supporters of Better Together, how can the CBI get away with its interventions? Shouldn't they be obliged properly to declare their allegiances? If it is good enough for Business for Scotland, National Collective and Women for Independence, why not the corporate lobby? While I can understand where these arguments are coming from, they fundamentally misunderstand (a) what registering with the Electoral Commission is all about and (b) why and when it's necessary under the legislation. 

Firstly, if you or your organisation - or the CBI - want to participate in the referendum campaign in a partisan way, you don't have to register. If you want to appear on telly arguing for or against a Yes vote, make critical comments in speeches, submit letters to newspapers, write blogs or columns, you don't have to present your credentials to the Electoral Commission. And a damn good thing too. Registration is all about money. The Scottish Parliament decided to try to cap the amount of cash sloshing around the independence campaign during the "regulated period" - which starts at the end of May and spans the sixteen weeks before the 18th of September. 

The cap isn't on all forms of expenditure, just on "referendum expenses". These cover many of the kinds of things you'd expect - advertising, literature, press conferences, rallies and so on, but there are important exceptions. For example, salaries don't count towards the permitted total, nor does rent, or vast piles of doughnuts, or fancy interior decoration for your swank campaign office. Unregistered organisations or individuals - like the CBI and me - are entitled to spend up to £10,000 on referendum expenses without reporting to the Electoral Commission. 

If, however, you want to spend any more than this, you've got to sign up as a "permitted participant" in the referendum, submit to the Commission's regulation and declare your major donors on a regular basis. In exchange for submitting to Commission oversight, you earn the right to spend up to £150,000 during the regulated period without being committed to Barlinnie. It was this status which the CBI initially applied for, and then withdrew from.

Other organisations have higher spending totals still. Political parties have their maximum spending totals calculated separately, while the two "designated organisations" - Yes Scotland and Better Together - can shell out one and a half million quid over the campaign period. If individuals or organisations exceed these limits, they're liable to penal fines and prison sentences.  The CBI and its functionaries would have to be daft, or reckless, to conceive of shelling out more than their permitted £10,000 total.

These rules have important implications which may not be obvious to the casual observer. Firstly, if an organisation rakes in significantly more cash than its permitted maximum spend on referendum expenses, it can either sit uselessly on the funds, invest in glamorous office space, a rhinestone diamante sceptre for the campaign head - or hire an additional pile of staff.  Because only some kinds of spending is capped, general talk about organisations' campaign limits is potentially a bit misleading.

For instance, according to its website, the pristine astroturf of the anti-independence Vote No Borders campaign has now secured £248,328 in donations - just shy of £100,000 more than the group can legally spend on campaigning during the regulated period. Unless the organisation sheds a whack of cash before the end of the month, that money would have to be ploughed into payroll. Or rent. Or yum yums. Feel those green shoots sprout.  

The same goes for Yes Scotland, whose campaign spending is capped at £1,500,000. The latest reports suggest that they've taken in over £2,500,000 in individual donations.  While I imagine a chunk of that will go on salaries and premises hire, anything above and beyond its maximum expenses spend could still be used to employ campaign staff. Potential advantages on that score are not to be sniffed at.  But it shouldn't get lost amid talk of the one and a half million total either.

There's also the outstanding issue of a "common plan" under section 20 of Schedule 4, which Ian Smart has been nattering about recently. If different organisations are campaigning in cahoots, that has implications for their spending totals. If, for example, Women for Independence form a common plan with YesScotland, then anything they spent on that plan is deducted from Yes Scotland's total spending under the Act.  But what is a common plan anyway? If, for example, the Yes Scotland twitter account retweets another pro-independence organisation's event, are they engaged in a shared enterprise? What about the inclusion of a distinctive Yes Scotland sticker on a Business for Scotland advertisement in a newspaper? Common plan? Or take a speaker-event, with representatives from a range of separately-organised Yes organisations on the platform. A common plan? 

Under the legislation, none of this is clear and the Electoral Commission are under a legal obligation to produce guidance for campaigners. They've not yet done so, but the nature of their definition of a "common plan" will be of critical importance. If they are strict, holding that every connection and tie constitutes a common endeavour, Yes Scotland is at risk of having its spending total cannibalised by grass-roots activity. This could have awkward implications in terms of strategically allocating the official campaign's funding, not least in the last days of the campaign. If you've got a last-minute advertising bonanza planned, you don't want to be told that half the cash you'd earmarked to spend on it has all been soaked up by an unauthorised and amateurish pro-independence circular plastering the streets of Cumbernauld.

While the Scottish Government 2013 legislation makes a brave stab at regulating the amount of money sloshing around the campaign, the regime has obvious gaps, challenges and opportunities for manipulation. Given the figures currently being bandied about, it is salutary to remember that in the 2011 Holyrood campaign, the total campaign spending of all of the political parties put together was just £2,631,246. Whatever else it will be, the referendum looks set to be best-funded political campaign in Scottish history. The Union only cost Queen Anne £20,000 in bribes and backhanders. A bargain at several hundreds times the price. 


  1. Presumably Vote No Borders would have no spending limit on providing sick-bags for unsuspecting cinema audiences?

    1. Provision of a vomitorium is, I'm happy to confirm, not subject to regulation.

    2. Och a vomitorium is simply an exit passage, Romans would be black affronted at anyone throwing up in one - from what I read of both Yes and No meetings, provision of clear exit passages would be a very Good Thing indeed!

    3. *struggles to keep the lark's tongues down in the name of social propriety*

  2. How will the Electoral Commission check that non-permitted participants are spending less than £10k? Can they take the initiative themselves to investigate somebody? Can people report other people or organisations? Is the onus on you to document that you haven't spent that much money? In other words, should we all be holding on the all receipts for the next few months, just in case?

    1. It is a good question, Thomas.

      The simple answer is: with profound difficulty if material comes out in dribs and drabs, limited to a particular locality. That said, it might be difficult for a full £10,000+ spend to go undetected. The Commission have a range of investigatory powers under the legislation. Exceeding your spending limits is a criminal offence and accordingly, can be reported to the usual authorities. The Commission can also issue civil sanctions under Schedule 6. I dare say the Commission would investigate issues brought to their attention, or on their own motion.

    2. So what you're saying is that if I print a few thousand leaflets advertising my blog, I'll probably be OK, but if I start producing Arc of Prosperity billboards, I should expect a letter from the EC?

      My only worry is that reporting other people/groups to the EC could be used as a sort of harassment if the campaign gets dirty.

    3. The main lesson is: if someone stings you to the tune of £10,000 for 2,000 leaflets, they better be the best and glossiest publication in the world, or you've been stung like a good 'un. To go back to the legislation, it'd really depend on what your advertisement said. It'd be potentially caught if it could be said to be: "otherwise in connection with promoting or procuring any particular outcome in the referendum."

      Even if your blog took a pro-independence slant, but also encompassed writing about other things, I don't think that's critical. You might, for example, promote your blog simply out of a desire to expand your audience. Wings Over Scotland is the obvious concrete example here. If Stuart used some of his lucre to install a vast Wings over Scotland ad in the south side of Glasgow, without any explicit reference to a Yes vote, would it be advertising "in connection with promoting or procuring any particular outcome in the referendum", given the blog's contents? A bit of a tricky one, that. Though if you have permitted participant status, you do enjoy a bit of a buffer, simply because the £150,000 spending threshold is so high.

      As to your last point, I expect that vexatious complaints on this score are absolutely inevitable.

    4. Thanks. I totally agree that £10k for 2,000 leaflets would be ludicrous, which is why I'm saying it should be safe. I think the question is where it stops being obvious that you've spent less than £10k. My guess is that is you spend more than £5k or so, you should be prepared to document that you haven't actually spent more than £10k, especially if you're annoying the other side of the campaign. 8-)

  3. Is the UK Govt registered with the Electoral Commission? What about the BBC?

    1. The Commission's current list of registered persons & bodies is here. In terms of the bodies you mention, there's no reason for the BBC to register, as the organisation isn't campaigning, in the sense of the legislation, for one outcome or the other.

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