House of Lords - Explanatory Note
Political Parties, Elections And Referendums Bill - continued          House of Lords

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Combination of limit under paragraph 9 and other limits

158.     Paragraph 10 of Schedule 8 determines the campaign expenditure limits in circumstances where a combination of elections that would fall within the ambit of paragraph 9 is in turn combined with one or more other elections to the European Parliament or to a devolved legislature that would fall within the ambit of any of paragraphs 4 to 8. An example of such a combination would be:

9 June 2009

European Parliamentary election takes place.

14 September 2009

Her Majesty's intention to dissolve Parliament is announced.

5 October 2009

The Presiding Officer of the Scottish Parliament sets a date for an extraordinary general election.

12 November 2009

The parliamentary general election takes place and, at the same time, the extraordinary general election to the Scottish Parliament.

159.     In such a scenario, paragraph 10(3) provides that a party contesting all three elections would attract an expenditure limit in Scotland which is the aggregate of the limits that would apply for each of the three elections. The limits to apply in England, Wales and Northern Ireland would be the aggregate of the limits that would apply to the parliamentary and European Parliamentary elections.

160.     The combined period (as defined in paragraph 10(4)) in the case of the above example would begin on 13 November 2008 (that is, 365 days before the date of the parliamentary general election) and end on 12 November 2009 (the date of the combined poll). By virtue of paragraph 10(5) the limits on campaign expenditure for the European Parliamentary election on 9 June 2009, as determined in accordance with paragraph 4 of Schedule 6, would continue to apply to the relevant period for that election (10 February 2009 to 9 June 2009).

Combination of parliamentary general election and other election, or elections, falling within paragraphs 4 to 8

161.     Paragraph 11 of Schedule 8 determines the limit on campaign expenditure where the relevant period for a parliamentary general election (as defined in paragraph 3) overlaps with the relevant period for another election, or elections (as defined in any of paragraphs 4 to 8) and paragraph 9 does not apply. An example would be:

4 January 2007

Four month period before Scottish ordinary election begins.

3 May 2007

Scottish ordinary election.

3 September 2007

Presiding Officer sets date for an extraordinary election to the Scottish Parliament.

11 October 2007

Scottish extraordinary election.

3 March 2008

Her Majesty announces her intention to dissolve Parliament.

10 April 2008

Parliamentary election.

162.     Under this example the limit applying to a party which contested all three elections in Scotland would be the aggregate of the limits provided for in paragraphs 3 and 5 in respect of each election. The aggregate would apply for "the combined period" (as defined in paragraph 11(5)), namely the period beginning on 4 January 2007 (that is, four months before the Scottish ordinary election) and ending on 10 April 2008 (the date of the parliamentary election).

163.     By virtue of paragraph 11(6), the limits provided for in paragraph 5 would continue to apply to the relevant periods for the two Scottish Parliamentary elections (namely, the periods 4 January to 3 May 2007 and 3 September to 11 October 2007).

Expenditure notionally incurred during period when limits apply

164.     Paragraph 12 of Schedule 8 is intended to avoid parties circumventing the expenditure limits by incurring campaign expenditure in advance of the period during which restrictions apply. Any expenditure on property, services or facilities (for example billboard advertisements) purchased in advance of a relevant period, but for use during that period, will nonetheless count towards the limit on campaign expenditure for that period.

Clauses 75 to 79 : Returns

165.     Clauses 75 to 79 are concerned with the preparation, auditing and submission of returns as to campaign expenditure. The registered treasurer of a party is required to prepare a return after each relevant campaign period and it is made a criminal offence for the treasurer to fail to submit a return or to submit a false return. The return must be accompanied by a declaration by the treasurer as to its accuracy. A party must submit its return to the Electoral Commission within three months of the end of the relevant campaign period to which the return relates, unless the party's expenditure exceeds £250,000, in which case the return must be independently examined by a qualified auditor and submitted within six months. All returns received by the Electoral Commission are to be open to public inspection.

Part VI : Controls relating to third party national election campaigns

Clauses 80 to 82 : Controlled expenditure by third parties

166.     The purpose of this Part is to apply restrictions upon election expenditure by third parties. Section 75 of the Representation of the People Act 1983 regulates the expenses which third parties may incur in promoting or procuring the election of a candidate in a particular constituency contest. This Part makes comparable provision in relation to national third party expenditure which is intended to generally promote or procure the election of a registered party and its candidates. Clause 80(2) specifies the expenditure which is to be subject to the controls set out in this Part. "Controlled expenditure" is that incurred in connection with the production and publication of material which is addressed to the public at large, or any section of the public, and which is designed to promote or procure the election of a particular registered party or a particular category of candidates, whether they be those standing in the name of a particular registered party or a group of candidates who, irrespective of party, share particular views.

167.     Clause 80(3) specifies that "controlled expenditure" includes expenses in relation to material designed to achieve its purpose by reducing support for other candidates or another party. It does not matter whether the material names the candidates or party which it is intended to benefit or disparage. The test is whether the material can reasonably be regarded as intended to benefit a particular party's electoral prospects. The cost of a poster campaign advocating a particular policy without explicitly supporting or attacking a named political party might nevertheless fall to be regarded as "controlled expenditure" if the policy in question was closely identified with a particular political party or group of candidates.

168.     The controls set out in this Part apply to material affecting the electoral prospects of a political party or candidates in elections to the House of Commons, the European Parliament and the devolved legislatures. No limits are, as such, imposed on controlled expenditure by third parties in connection with local government elections, although any such expenditure incurred during the relevant campaign period for one of the above elections would count towards the expenditure limit for the election in question.

169.     The expenditure controls would apply, under clause 81(1), to expenditure in kind, that is to property, services or facilities provided for the use or benefit of the third party either free of charge or at a rate 10 per cent or more below their market value, where the market value of services provided free of charge, or the difference between the rate charged and their true market value, is £200 or more. Where a third party incurs expenditure within the meaning of clause 81(1), it will be required, under clause 81(4), to make a declaration as to the value of the benefit for inclusion in a return as to controlled expenditure under clause 91. Clause 82 details certain types of expenditure which may be incurred by or on behalf of a third party, but which are not to be treated as controlled expenditure for the purposes of Part VI.

Clauses 83 and 84 : Recognised third parties

170.     Clause 89(3) to (5) makes it an offence for a third party to incur controlled expenditure in excess of £10,000 in England or £5,000 in Scotland, Wales or Northern Ireland during a regulated period for an election, unless it is a recognised third party. The procedure whereby a third party can become a recognised third party is set out in clause 83. The procedure involves submitting a notification to the Electoral Commission. By virtue of clause 83(2) only the following may give a notification: an individual; a registered company incorporated in the European Union and which carries on business in the United Kingdom; or an unincorporated association which carries on business or other activities wholly or mainly in the United Kingdom whose main office is there. The notification given by a third party must specify the name and address of the third party and, in the case of a company or unincorporated association, the person who will be responsible for ensuring compliance with the accounting and disclosure provisions of this Part. Such a notification may be made at any time. A notification under clause 83 will normally lapse unless renewed on an annual basis. Under clause 83(5) a notification which would have lapsed during a regulated period continues in force until the end of that period. Clause 84 requires the Commission to maintain a register of notifications.

Clauses 85 to 88 : General restrictions relating to controlled expenditure by recognised third parties

171.     In order to ensure proper observance of the limits on controlled expenditure by third parties, clauses 85 and 86 require that all such expenditure, and any payment in respect of such expenditure, must be authorised or made by the responsible person or a person authorised in writing by him. Similarly, clause 87 requires that any claim for payment in respect of campaign expenditure must be sent to the responsible person or other authorised person. These provisions (and clause 88, which provides for disputed claims) are similar to the provisions in Part II of the Representation of the People Act 1983 concerning election expenditure by candidates and their agents.

Clause 89 and Schedule 9 : Limits on controlled expenditure by third parties

172.     Clause 89(1) applies Schedule 9 which has the effect of setting out financial limits on controlled expenditure by third parties, and the periods to which those limits apply, in respect of elections to the House of Commons, the European Parliament and the devolved legislatures. Clause 89 also ensures that third parties which incur significant levels of controlled expenditure are brought within the regulatory remit of the Electoral Commission.

173.     The scheme set out in Schedule 9 is similar to that in respect of national campaign expenditure by political parties as set out in Schedule 8. The periods to which the financial limits set out in Part II of Schedule 9 apply are the same as those which apply to expenditure by registered parties under Schedule 8. Part III of Schedule 9 makes equivalent provision for any overlapping of the relevant regulated periods and, where appropriate, the aggregation of the financial limits which apply. Part I of Schedule 9 also makes equivalent provision for third party expenditure to be apportioned between England, Scotland, Wales and Northern Ireland and Part IV makes equivalent provision for expenditure notionally incurred during the period when the limits apply.

174.     The financial limits on controlled expenditure on the part of third parties which have given a notification to the Commission under clause 83 (ie. a "recognised third party") represent 5 per cent of the limit which would apply to a registered party if it contested all the seats in the election in question. The limits are set out in the table below:

 

Parliamentary general election

Election to the European Parliament

Election to the Scottish Parliament

Election to the Welsh Assembly

Election to the Northern Ireland Assembly

England

£793,500

£159,750

-

-

-

Scotland

£108,000

£18,000

£75,800

-

-

Wales

£60,000

£11,259

-

£30,000

-

Northern Ireland

£27,000

£6,750

-

-

£15,300

UK TOTAL

£ 988,500

£ 195,759

-

-

-

Clause 90 and Schedule 10 : Control of donations to recognised third parties

175.     Clause 90 gives effect to Schedule 10 which provides for controls on donations to recognised third parties for the purpose of meeting controlled expenditure. Part I of Schedule 10 defines donations to recognised third parties in terms equivalent to those in clauses 46 to 48 in respect of donations to registered parties. Part II of Schedule 10 applies restrictions on the acceptance of donations equivalent to those in clauses 49 to 56. Part III of Schedule 10 requires that the return as to controlled expenditure, required under clause 91, must include a statement giving details of the source and amount of donations of £5,000 or more (including aggregate sums). The statement must also detail donations received, but rejected, from impermissible or unidentifiable donors. The requirements of this clause and Schedule do not apply to registered parties given that they will be subject to the ongoing controls on donations set out in Part IV.

Clauses 91 to 95: Returns

176.     Where a recognised third party incurs controlled expenditure during a regulated period, it will, at the end of that period, be required to submit a return specifying the election or elections taking place within the regulated period in question and containing a statement of all payments made in respect of controlled expenditure incurred during that period. This return must be accompanied by all related invoices and receipts and all declarations made, under clause 81(4), in respect of property, services and facilities provided free of charge or at a discount for the use or benefit of the third party. This requirement does not apply to any controlled expenditure incurred during a regulated period but before the time the third party became a recognised third party. It must also be accompanied by a declaration signed by the person included in the notification made under clause 83, attesting to the accuracy of the return. It is made a criminal offence either to make a false declaration or to omit to provide such a declaration. Where the controlled expenditure exceeds £250,000, the return must be independently examined by a qualified auditor and submitted to the Electoral Commission within six months. Returns not subject to the audit requirement must be submitted within three months. All returns received by the Commission are to be open to public inspection (although, under clause 95(2) the address of any individual donor to a recognised third party will be omitted from the copy of a return available for inspection).

Clause 96 : Publications promoting groups of candidates etc. to contain details of printer and publisher

177.     Clause 96 makes provision equivalent to section 110 of the Representation of the People Act 1983 and requires that advertisements or other documents addressed to the public at large and designed to promote or procure the election of a party or of its candidates must carry the name and address of both the publisher and printer of the document and of the person or body on whose behalf it has been published.

Part VII : Referendums

178.     The purpose of this Part is to make generic provision for the conduct of major referendums held in the United Kingdom. There does not presently exist any standing statutory authority, other than under Schedule 1 of the Northern Ireland Act 1998, enabling referendums to be held in the United Kingdom (nor is it the purpose of this legislation to make such provision). Consequently, dedicated primary legislation will normally continue to be required in order to provide for the holding of any particular major referendum.

Clause 97 : Referendums to which this Part applies

179.     Clause 97 provides that the controls on the conduct of referendums set out in Part VII apply to any referendum held throughout the United Kingdom, one or more of England, Scotland, Wales or Northern Ireland, or any English region. The provisions do not apply to referendums held under section 36 of the Government of Wales Act 1998 (subsection (3)). There have been eight referendums to which the provisions of Part VII would have applied had they been in force at the time. The statutory authority for these referendums, the questions asked and the dates of the polls are set out in the table below:

UNITED KINGDOM REFERENDUMS 1973 - 1998

Statutory authority

Question

Date of poll

Northern Ireland (Border Poll) Act 1972

(I) Do you want NI to remain part of the UK?;

or

(ii) Do you want NI to be joined with the Republic of Ireland, outside of the UK?

8 March 1973

Referendum Act 1975

Do you think that the UK should stay in the European Community (The Common Market)?

5 June 1973

Scotland Act 1978 (Section 85 and Schedule 17)

Do you want the provisions of the Scotland Act to be put into effect?

1 March 1979

Wales Act 1978 (Section 80 and Schedule 12)

Do you want the provisions of the Wales Act 1978 to be put into effect?

1 March 1979

Referendums (Scotland and Wales) Act 1997

    (i) I agree that there should be a Scottish Parliament; or

    (ii) I do not agree that there should be a Scottish Parliament

11 September 1997

 

    (i) I agree that a Scottish Parliament should have tax-varying powers; or

    (ii) I do not agree that a Scottish Parliament should have tax-varying powers.

 

Referendums (Scotland and Wales) Act 1997

    (i) I agree that there should be a Welsh Assembly; or

    (ii) I do not agree that there should be a Welsh Assembly

18 September 1997

Greater London Authority (Referendum) Act 1998

Are you in favour of the Government's proposals for a Greater London Authority, made up of an elected mayor and a separately elected assembly?

7 May 1998

Northern Ireland Negotiations (Referendum) Order 1998 (SI 1998/1126) (made under section 4(1) of the Northern Ireland (Entry to Negotiations, etc) Act 1996).

Do you support the agreement reached at the multi-party talks on Northern Ireland and set out in Command Paper 3883?

22 May 1998

180.     Subsection (2) defines a referendum as a referendum or poll held by or under an Act of Parliament on one or more specified questions. Subsection (4) provides that the Secretary of State may, by order, apply the arrangements for the conduct of referendums contained in this Part from the date of introduction of a Bill providing for a particular referendum.

Clause 98 : Referendum period

181.     Clause 98 defines the referendum period for any referendum to which Part VII applies. The period is relevant, in particular, to the restrictions on incurring expenses as provided for in clauses 108, 109 and 113 and Schedule 13. The relevant period for any particular referendum will normally be expected to begin on the day the Bill providing for the referendum is introduced in Parliament, and it will end with the date of the poll. Under these provisions, the referendum period for the 1997 devolution referendum in Scotland would have commenced on 15 May 1997 (the date the Scotland and Wales (Referendum) Bill was introduced) and would have ended on 11 September 1997 (the date of the poll) - a total of 119 days.

Clause 99 : Date of poll

182.     This clause provides that, where the date of a referendum poll is determined under any provision made by or under the Act providing for the referendum to be held (ie. when a Minister fixes the date), there must be a period of at least 28 days from the date on which the Electoral Commission designates campaign organisations to the date of the poll. This minimum period is intended to ensure that a designated campaign is afforded sufficient opportunity to mount an effective campaign and to make full use of the benefits afforded to it under clause 105. This clause does not apply to a referendum where the date of the poll is specified on the face of the Act providing for the referendum to be held. Nonetheless, the expectation in such cases will similarly be that there will be at least 28 days for campaigning following the designation of campaign organisations. By virtue of this clause, together with the timetable for designation of umbrella campaign organisations under clause 104, the minimum referendum period for any particular referendum would normally be ten weeks.

Clause 100 : Permitted participants

183.     Subsection (1) defines a "permitted participant" in a particular referendum campaign. A permitted participant may be:

    a)     a registered party which has made a declaration to the Commission under clause 101; or

    b) any of the following which has given a notification to the Commission under clause 101:

    • an individual;

    • a registered company incorporated in the European Union and which carried on business in the United Kingdom; or

    • an unincorporated association which carries on business or other activities wholly or mainly in the United Kingdom and whose main office is there.

184.     Subsection (2) defines a "responsible person" in relation to a permitted participant. The responsible person will discharge similar responsibilities in respect of the financial affairs of a permitted participant as the registered treasurer does in respect to a political party.

 
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Prepared: 17 March 2000