Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Supplementary memorandum by the Electoral Commission


  It is expected that the Commission's examination of the cap on party election campaign expenditure will form part of the review of the funding of political parties. This review will start later this year and is expected to be completed in late 2003 or early 2004.


  Section 117 of the Political Parties, Elections and Referendums Act 2000 (PPERA) states that the total referendum expenses incurred by or on behalf of any individual or body during the referendum period cannot exceed £10,000 unless the individual or body is registered as a permitted participant.

  Referendum expenses are defined by section 111 of PPERA as expenses incurred in connection with the conduct or management of any campaign conducted with a view to promoting or procuring a particular outcome in relation to any question asked in the referendum, or otherwise in connection with promoting or procuring any such outcome.

  PPERA also defines the types of bodies that may register as permitted participants. These are:

    —  A registered party which has made a declaration to the Electoral Commission;

    —  An individual resident in the United Kingdom or registered in a UK electoral register;

    —  A company which carries on business in the UK and is registered under the Companies Act 1985 or the Companies (Northern Ireland) Order 1986 and incorporated within the United Kingdom or another state;

    —  A trade union entered in the list kept under the Trade Union and Labour Relations (Consolidation) Act 1992 or the Industrial Relations (Northern Ireland) Order 1992;

    —  A building society (within the meaning of the Building Societies Act 1986);

    —  A limited liability partnership registered under the Limited Liability Partnerships Act 2000, or any corresponding enactment in force in Northern Ireland, which carries on business in the UK;

    —  A friendly society registered under the Friendly Societies Act 1974 or a society registered (or deemed to be registered) under the Industrial and Provident Societies Act 1965 or the Industrial and Provident Societies Act (Northern Ireland) 1969;

    —  Any unincorporated association of two or more persons which does not fall within any of the preceding paragraphs but which carries on business or other activities wholly or mainly in the United Kingdom and whose main office is there.

  The following spending limits apply to registered permitted participants:

    —  Political Parties—The limit on expenses for registered political parties is as follows, and is based on the percentage of the total number of votes cast for that party at the last election:
Percentage of the Vote Limit on Expenditure (£m)
Less that 5%0.5
Between 5% to 10%2
Between 10% to 20%3
Between 20% to 30%4
More than 30%5

    —  Designated organisations—The Electoral Commission may designate one permitted participant in relation to each potential referendum outcome as a "designated organisation". Assistance is available to the "designated organisations" in the form of financial assistance up to £600,000 each, a referendum campaign broadcast, a free mailing and the use of public rooms free of charge. The designated umbrella organisations can each spend up to £5 million.

    —  Other permitted participants may spend up to £500,000.

  There is no limit to the number of third parties (or political parties) who can register for a general election. The situation in relation to permitted participants in a referendum is no different. The Electoral Commission has no control over the number of individuals or organisations that wish to register as permitted participants. Consequently, there can be no predetermined overall spending cap on the "yes" and "no" campaigns.

  The Committee enquired as to whether the European Commission could campaign in a national referendum on membership of the European single currency. The Electoral Commission does not regard the European Commission as falling into any of the above categories. Accordingly, we take the view that the European Commission could not register and campaign as a "permitted participant".

  It would, however, be possible for the European Commission to spend up to £10,000 on referendum expenses without the need to register as a permitted participant and to issue material which could not be regarded as being for a "referendum purpose"—that is, in connection with promoting or procuring a particular outcome in relation to any question asked in the referendum.

Sam Younger


Electoral Commission

Roger Creedon

Chief Executive

Electoral Commission

6 September 2002

previous page contents

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 10 October 2002