The Political Parties, Elections and Referendums Act (PPERA) 2000

By: James Sweetland

On Thursday, voters will head to the polls in the Rochdale by-election. They’ll be voting to replace Sir Tony Lloyd, the late Labour politician who spent a remarkable 36 years as an MP, including seven representing Rochdale. 

It was expected to be a straightforward race. Even in the 2019 General Election, where Labour won its fewest seats since 1935, the Party won Rochdale with plenty to spare. It secured 52% of the vote with a majority of nearly 10,000. Given the current polls, this year’s by-election should have been a one-horse race.

And yet, one recent news report asked if Rochdale has become “the most chaotic by-election ever.” That’s partly because both George Galloway and ex-Labour MP Simon Danczuk are running in this safe seat. But the real reason has to do with the Labour candidate, Azhar Ali. 

After reports that he’d repeated the anti-Semitic conspiracy theory that Israel “deliberately allowed” Hamas to carry out the October 7th terrorist attacks, Labour dropped its support for him. But under the Representation of the People Act 1983, nominated candidates can only be withdrawn before “4PM on the nineteenth working day before the poll.” Labour had missed that deadline, so couldn’t drop Mr Ali as their candidate. 

This means that on Thursday, the designated ‘Labour’ candidate might win, but no new Labour MP will sit in Parliament. 

This isn’t unprecedented. In 2019, SNP candidate Neale Hanvey was elected MP for Kirkcaldy and Cowdenbeath. But he’d also been suspended from his party mid-campaign – this time for anti-Semitic social media posts. Once again, the deadline to withdraw his nomination had passed. He was elected as the SNP candidate, but initially sat as an independent – only regaining the SNP whip in May 2020.

Behind the door-knocking, speeches and digital adverts, there’s a whole set of complex laws that govern how the political process actually works. One of the more consequential examples – passed nearly 25 years ago – is the Political Parties, Elections and Referendums Act (PPERA) 2000.

Money, money, money

The story of this Act goes all the way back to 1994. That year, Prime Minister John Major established the Committee on Standards in Public Life (CSPL), tasking it with making sure the conduct of MPs, civil servants and others upheld the “highest standards of propriety in public life.”

In November 1997, Tony Blair widened the CSPL’s terms of reference significantly. He put money on the agenda, asking it to: “review issues in relation to the funding of political parties, and to make recommendations as to any changes in present arrangements.” 

This was partly a response to a high-profile scandal involving a £1 million donation from F1 boss Bernie Ecclestone to the Labour Party. Despite Blair’s public apology – memorably defending himself as “a pretty straight sort of guy” – questions about money and politics were back in the headlines. Political funding was mostly unregulated at that stage. There was suddenly an appetite for more oversight.

Ending the “arms race”

In October 1998, the CSPL published its final report: ‘The Funding of

Political Parties in the UK.’ Based on 17 days of oral evidence, 400 written submissions and access to financial information for the main parties, its verdict was striking: 

Without doubt the parties’ belief that elections can only be won by the expenditure (mainly on advertising) of vast sums of money has given rise to something of an arms race. This in turn has put enormous pressure on party fundraisers to devise innovative ways of attracting donations. The result has […] give[n] credibility to accusations that money buys access to politicians.

The report proposed various funding reforms: “full public disclosure” of donations above £5,000 (or £1,000 for those in a single constituency), a £20million spending limit for parties in general election campaigns, capping anonymous donations at £50, and an effective ban on foreign donations. The last of these had already appeared in Labour’s 1997 manifesto.

It also recommended a “totally independent and authoritative Election Commission with widespread executive and investigative powers, and the right to bring cases before an election court for judgment.” This commission would advise on future reforms to funding rules too.

Their recommendations were mostly taken up in PPERA. The Act (which regulated donations of £500 or more) was the legal basis for a new Electoral Commission, set up in 2001. Spending in the year up to and including general elections was limited to around £19 million for parties standing in every constituency. Anonymous donations were banned (though at the £500 level, not £50). And the proposal to publicise donations above £5,000 also came into law. 

Money troubles

Unsurprisingly, PPERA didn’t offer all the answers. In 2006, news reports revealed that Labour had received millions of pounds in loans from private supporters. As they weren’t ‘donations’, but loans on ‘full commercial terms’, they didn’t have to be declared under PPERA. Other questions persist. The Conservatives are criticised for relying on wealthy donors, Labour is often attacked for its dependence on trade union funding. 

In 2011, the CSPL offered its own verdict on party funding:

We do not think that the piecemeal changes made since the 2000 Act, which leave the basic framework intact, are enough. We believe there is a compelling case for more radical reform. It would be a significant mistake in our view not to respond to public concern in an orderly way, before another scandal further damages public confidence in good government and the workings of democracy.[1]

Pointedly, their report was subtitled ‘ending the big donor culture.’ It noted survey evidence showing that 85% of people thought MPs ‘very often’ or ‘sometimes’ do “special favours for people and organisations who give very large contributions.”[2]

The CSPL made the case for overhauling the whole system. PPERA should be strengthened, in effect, by capping donations from any one source at £10,000. Campaign spending limits should be cut by 15%. And more radically, political parties should receive more public funding: £3 per vote won in a general election.

Public funding for political parties was no new debate. Some – including the CSPL – felt that it could reduce the influence (or perceived influence) of big donors and boost public trust. And, they add, it’s only an extension of Short Money anyway. Others suggest that the public shouldn’t have to fund political parties, especially those that hold extreme views. They also argue that while big donations are controversial, there’s little evidence of actual corruption. 

Whatever the merits, politicians haven’t backed this public model. And without a cross-party consensus, they’re unlikely to do so. What party’s going to campaign alone on something so easily stereotyped as ‘more money for politicians?’

More money, more problems

The other big question is whether PPERA is fit for 2024. After all, the CSPL’s 2011 verdict – “piecemeal changes made since the 2000 Act” – still rings mostly true.

In one respect, PPERA has been reformed. For over two decades, general election spending limits were frozen at around £19million. Then in November 2023, the Government quietly increased this in line with inflation. Catching up on 23 years of inflation meant an 80% increase, with a new limit of £35million. 

Other reforms have been fairly limited, even as political campaigning has changed enormously. In 2000, social media didn’t play the part it does today. There was no Twitter, let alone ‘X.’ Facebook took another four years to arrive. Micro-targeted digital advertising, deepfakes and generative AI weren’t a concern. 

These aren’t all funding issues, of course. But both PPERA and the Electoral Commission now operate in a radically more complex world. Keeping track of who funds what, where, and under what rules is harder than ever.

There are concerning loopholes too. One example (highlighted by Politico) are ‘unincorporated associations’, which have given £14million to political parties over a five-year period. Despite this, these associations aren’t transparent and increasingly won’t have to be. From January 2024, they can give parties up to £37,720 per year before they have to register with the Electoral Commission. And in 2021, the CSPL warned that they could help foreign donations influence our elections.  

PPERA 2.0?

If you were asked to name some of New Labour’s great constitutional reforms, PPERA probably wouldn’t come top. The Scottish Parliament and Welsh Assembly, an elected London Mayor, the Human Rights Act – all of these might rank higher.

But, despite its limitations, PPERA was a major step forward when compared with the unregulated and opaque approach that came before, so it’s hard to view it as anything other than a successful reform. As we close in on its twenty-fifth anniversary, the case for a new model is compelling. Political campaigning is radically different and parties reach voters in more complex ways than ever before, which makes it even harder to follow the money. Surely now is the time for PPERA 2.0.  

James Sweetland.

James Sweetland is a freelance researcher, writer and consultant who works on government reform, policing and tech policy. 

The Constitution Society is committed to the promotion of informed debate and is politically impartial. Any views expressed in this article are the personal views of the author and not those of The Constitution Society.


[1] Committee on Standards in Public Life, Political Party Finance: Ending Big Donor Culture (November, 2011). Available at < https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/336913/13th_Report___Political_party_finance_FINAL_PDF_VERSION_18_11_11.pdf>, last accessed: 28 February 2024.

[2] Survey of public attitudes towards conduct in public life 2010 (September 2011), p. 40. Available at < https://assets.publishing.service.gov.uk/media/5a7edac1e5274a2e8ab48a04/Public_Attitude_Survey_2010.pdf >, last accessed:28 February 2024.