Supplementary memorandum by the Electoral
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.
LIMITS (QQ 82 & 86)
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
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
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
Political PartiesThe 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 organisationsThe 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.
6 September 2002