The Digital, Culture, Media and Sport (DCMS) Committee has described the rules around political advertising and campaign funding as inadequate for the digital age.
MPs are calling for more thorough checks for online donations, clearer records on digital spending, and transparent information about who is responsible for adverts.
The UK Government has agreed there needs to be “robust safeguards” and a spokesman said it had already pledged to hold a consultation on the issues later this year.
The select committee issued its plea in a report as a response to the consultation on the Government’s online harm whitepaper – which closed on Monday.
The committee said the paper “has scant focus on electoral interference and online political advertising” or analysis about foreign players targeting voters, despite its recommendations.
Chair of the DCMS Committee, Damian Collins, said that he was aware that the current electoral laws are “not fit for purpose”.
He said: “Political campaigns are fought online, not through the letterbox, and our laws need to be brought up to date with the digital age. We’ve repeatedly highlighted threats to our electoral system and it’s essential that public confidence is restored.”
A spokesman for the Department for DCMS said: “The Government agrees we need robust safeguards against hostile states, foreign lobbyists and shadowy third parties in place for the digital age.
“We have already pledged to publish a consultation paper on electoral integrity – it is an important convention that the laws affecting political parties should not be changed by Governments without proper consultation and discussions with political parties.”
The call for action comes after a row over party funding in the European elections earlier this year.
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The Electoral Commission visited the offices of The Brexit Party to take a closer look at how it receives funding. The review came after it was accused by former Labour Prime Minister Gordon Brown of receiving a large amount of money via small “undeclared, untraceable payments” online.
The Commission later said the party’s funding system left it open to “a high and on-going risk” of impermissible donations.
However, Brexit Party leader Nigel Farage argued that no rules had been broken and accused Brown of conducting “a disgusting smear”. Under UK law, donations of £500 or above must be made by an individual who is listed on the electoral register or a company registered in the UK known as a “permissible donor”.
Although amounts below that do not have to be declared, some critics have said there is no way of telling whether those smaller amounts come from British or foreign sources. Consequently, the system may be being abused.
Furthermore, other political parties – including the Conservatives and Labour – also utilise PayPal to collect donations on their websites.