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These notes refer to the Political Parties and Elections Bill as introduced in the House of Commons on 4 December 2008 [Bill 4]
POLITICAL PARTIES AND ELECTIONS BILL
EXPLANATORY NOTES
INTRODUCTION
1. These explanatory notes relate to the Political Parties and Elections Bill as re-introduced in the House of Commons on 4 December 2008. The Political Parties and Elections Bill was initially introduced in the House of Commons on 17 July 2008 and has been carried over from the previous Parliamentary session under Standing Order No. 80A. The Bill and these explanatory notes contain amendments to clauses and schedules made in Public Bill Committee. They have been prepared by the Ministry of Justice in order to assist the reader of the Bill and to help inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament.
2. These notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause does not seem to require any explanation or comment, none is given.
SUMMARY AND BACKGROUND
3. On 16 June 2008, the Secretary of State for Justice announced the publication of a Government white paper on Party Finance and Expenditure in the United Kingdom. This set out the Government’s intention to bring forward immediate legislation to tighten controls on spending by political parties and candidates. The Bill is intended to fulfil that commitment.
4. The main purposes of the Bill:
- Strengthen the regulatory role of the Electoral Commission through making available to it a wider range of investigatory powers and sanctions, through clarifying its advisory role and through reform of its governance arrangements;
- Change the arrangements for regulating candidate expenditure before an election better to ensure that all relevant expenditure is caught;
- Put in place arrangements to improve the transparency of donations to political parties.
Bill 4-EN 54/4
The Bill also makes reforms to the current system for administering elections in the United Kingdom, which are designed better to ensure the successful delivery of elections in the future. These will:
- Enable electoral registration officers, in the event of an election, to make amendments to the electoral register in response to applications for registration made on annual canvass forms, before the register is republished at the conclusion of the canvass; and
- Provide for European Parliamentary elections in England, Wales and Scotland to be administered at a local level by local authority returning officers, rather than Parliamentary returning officers.
- Transfer responsibility for the retention and provision of copies of election documents produced at Parliamentary elections in Scotland from sheriff clerks to returning officers.
- Provide a power for the Secretary of State to make regulations allowing a vacant seat for Northern Ireland in the European Parliament to be filled without a by-election.
- Extend the Secretary of State’s power under Part 1 of the Electoral Administration Act 2006 to allow him to include additional provisions in an order establishing a CORE (Co-ordinated Online Record of Electors) scheme.
TERRITORIAL EXTENT AND APPLICATION
5. The Bill extends to the whole of the United Kingdom. The provisions contained in clause 8 (declaration as to source of donation) include a power enabling the Secretary of State to modify how these provisions (and the accompanying provisions in Schedule 3) apply to Northern Ireland. This is necessary to take account of the different arrangements that exist in Northern Ireland for the regulation of the funding of political parties.
6. Some of the amendments made by the Bill are to provisions in the Political Parties, Elections and Referendums Act 2000 (“the 2000 Act”) which extend to Gibraltar. The amendments made by subsections (1) and (3) of clause 1, clauses 4, 5, 6, 7 and 9 of the Bill, as well as paragraphs 4 to 6 and 19 of Schedule 4 and relevant entries in Schedule 5 to the Bill, will all extend automatically to Gibraltar. The other provisions of the Bill may be extended to Gibraltar in due course using the power contained in section 12 of the European Parliament (Representation) Act 2003.
7. Because the Sewel Convention provides that Westminster will not normally legislate with regard to devolved matters in Scotland without the consent of the Scottish
Parliament, if there are amendments relating to such matters which trigger the Convention, the consent of the Scottish Parliament will be sought for them.
8. The Bill does not have any special effect on Wales and does not affect the National Assembly for Wales.
COMMENTARY ON CLAUSES
Clause 1: Compliance with controls imposed by the 2000 Act etc
9. Subsections (1) and (2) of clause 1 amend section 145 of the 2000 Act to provide that, in addition to its existing function of monitoring compliance with various requirements (relating to registered party accounting, political donations, campaign and election expenditure, and referendums), the Commission shall have the function of taking such steps as it considers appropriate to secure compliance with those requirements. The purpose of this provision is to clarify that the Commission is required to both monitor and regulate compliance. Subsection (3) allows the Commission to publish guidance as to what conduct it considers to be necessary or sufficient in order to comply with the legislative requirements, and what conduct it considers to be desirable (best practice) in view of the purpose of those requirements.
Clause 2: Investigatory powers of the Commission
10. Subsection (1) of this clause substitutes a new section 146 of the 2000 Act (investigatory powers of the Commission). This new section gives effect to new Schedule 19A which is inserted into the 2000 Act by subsection (2) of the clause. Schedule 1 to the Bill contains new Schedule 19A (which is discussed in more detail at paragraphs 51 to 66 below). Schedule 19A provides the Commission with investigatory powers, designed to enable it to require access to financial records and information, and to enter premises to inspect and make copies of relevant documents. Subsection (3) makes provision as to the penalties for offences under the new Schedule (which largely mirror the penalties for existing offences).
Clause 3: Civil sanctions
11. Clause 3 gives the Electoral Commission new powers to apply a range of civil sanctions to offences and contraventions under the 2000 Act.
12. Subsection (1) substitutes a new section 147 of the 2000 Act (civil sanctions). This new section gives effect to new Schedule 19B, which is inserted into the 2000 Act by subsection (2). Schedule 2 to the Bill contains new Schedule 19B. It sets out the range of new civil penalties available to the Commission, including monetary penalties, discretionary requirements, stop notice and enforcement undertakings. The new Schedule also explains how and when the Commission is able to apply these sanctions, who they apply to and what appeal processes are available to an individual
or organisation subject to a sanction. Subsection (3) inserts a new entry into Schedule 20 of the 2000 Act which provides the penalty for commission of the offence, set out in new Schedule 19B, of failing to comply with a stop notice.
13. Subsection (4) inserts new subsection (4A) into section 156 of the 2000 Act. This specifies that an order made under paragraph 16 of new Schedule 19B relating to the following matters is subject to the affirmative resolution procedure:
- An order prescribing the offences or restrictions and requirements of the 2000 Act in respect of which the Commission can impose a fixed monetary penalty (see paragraph 1(1) to (4) of the new Schedule 19B);
- An order prescribing the offences or restrictions and requirements in respect of which the Commission can impose a discretionary requirement on a person (see paragraph 5(1) to (4) of Schedule 19B);
- An order prescribing the offences or restrictions and requirements the occurrence or likely occurrence of which the Commission must hold a reasonable suspicion about in order to consider imposing a stop notice (see paragraph 10(2)(b) and (3)(b) of Schedule 19B);
- An order prescribing the offences or restrictions and requirements the occurrence of which the Commission must hold a reasonable suspicion about in order to consider imposing enforcement undertakings (see paragraph 15 (1)(a) of Schedule 19B); and
- Any order amending an Act.
Clause 4: Selection of prospective Electoral Commissioners and Commission chairman
14. Clause 4 amends section 3 of the 2000 Act, which governs the appointment of Electoral Commissioners and the Commission chairman. Subsection (2) of the clause inserts a new subsection (2) into section 3, which expands the series of requirements which must be met in relation to the appointment procedures. Her Majesty will continue to appoint Commissioners on presentation of an Address from the House of Commons; but, in addition to the existing requirements set out in current subsection (2) that the Speaker agree to the making of the motion and that the leader of each party which has two or more members in the House of Commons be consulted on the motion, paragraph (c) of the substituted subsection (2) requires that each person proposed for appointment must have been selected in accordance with a procedure put in place and overseen by the Speaker’s Committee.
15. Subsection (3) inserts a subsection (5A) into section 3 of the 2000 Act, providing that a Commissioner may be re-appointed without undergoing a fresh selection procedure if recommended by the Speaker’s Committee.
Clause 5: Four Electoral Commissioners to be put forward by parties
16. Clause 5 makes provision facilitating the appointment to the Commission of four Commissioners with recent political experience (“nominated Commissioners”). Subsection (1) inserts new subsection (4A) into section 3 of the 2000 Act which disapplies, for the nominated Commissioner positions, the restrictions which would normally prevent a person who belongs to a political party or has been engaged in recent political activity from being appointed. Subsection (4A) does not affect the prohibition on appointing a serving officer or employee of a political party or the holder of a relevant elected office.
17. Subsection (2) inserts new section 3A into the 2000 Act, which makes provision about the appointment of nominated Commissioners. Subsections (1) and (2) of the new section provide that there shall be four nominated Commissioners, each of whom shall be nominated by the leader of a party with two or more representatives in the House of Commons (“a qualifying party”). Subsections (3) and (4) provide that, of those four Commissioners, three must be selected from the three largest parties (measured according to the criteria set out in subsection (7) of new section 3A) that have nominated more than one candidate for appointment or that have nominated an individual who was appointed and is expected to continue to hold office.
18. Subsection (5) of the new section prevents the appointment of two or more nominated Commissioners from the same political party. The effect of this provision is to ensure that the fourth nominated Commissioner must be nominated by the leader of a party which is not one of the three largest parties. Subsection (6) prevents a nominated Commissioner from being appointed as chair of the Electoral Commission. Subsection (8) provides that Members of the House of Commons who have not sworn the oath required by the Parliamentary Oaths Act 1866 (or the corresponding affirmation) or who have been disqualified from sitting and voting in the House are not counted for the purposes of the new section.
19. Subsection (3) of clause 5 amends section 14 of the 2000 Act, which sets out the Commission’s boundary functions, to prevent a nominated Commissioner from being appointed to a Boundary Committee.
Clause 6: Number of Electoral Commissioners
20. This clause amends section 1 of the 2000 Act to increase the minimum and maximum number of Electoral Commissioners that may be appointed. The effect of the clause is to increase the minimum from 5 to 9, and the maximum from 9 to 10. The increase in the minimum is intended to ensure that the nominated Commissioners will always be a minority of Commissioners.
Clause 7: Political restrictions on Electoral Commissioners and staff
21. Clause 7 relaxes the restrictions that apply to the political activities of Electoral Commissioners (other than nominated Commissioners) and Electoral Commission staff.
22. Subsection (1) of clause 7 amends section 3 of the 2000 Act so that a person will be prohibited from appointment as an Electoral Commissioner only if they have engaged in certain political activities within the past five years, rather than the past 10 years as is currently the case.
23. Subsection (2) inserts a new paragraph 11A in Schedule 1 to the 2000 Act which reduces the restrictions which currently apply to the political activities of Electoral Commission staff, both on appointment and while they hold office. Sub-paragraph (1) of paragraph 11A specifies that staff cannot be appointed to the Electoral Commission if they have been engaged in certain political activities within the “relevant period”. Sub-paragraph (2) defines this period (which was previously the last 10 years for all staff) as the last five years for the post of chief executive of the Commission and the last 12 months for all other members of staff.
24. Sub-paragraph (3) of the new paragraph 11A provides that the chief executive of the Commission cannot be a member of a registered party. Sub-paragraph (4) provides that the appointment of a member of staff shall be terminated if, after appointment, they become engaged in any of the types of political activity that would have prevented their appointment.
25. Some of the provisions of the new paragraph 11A restate sub-paragraphs (2) and (4) of paragraph 11 of Schedule 1 to the 2000 Act, and these sub-paragraphs are accordingly repealed (in Schedule 5).
Clause 8: Declaration as to source of donation
26. Clause 8 creates a new requirement for a person who causes money to be received by a registered party to make a written declaration in respect of a donation of over £5,000 - or £1,000 where the donation is made to an accounting unit of a registered party.
27. Subsection (1) inserts a new subsection 54(1)(aa) into the 2000 Act, which provides that a party cannot accept a donation exceeding £5,000, where the donation is to a party’s central organisation, or £1000, where the donation is made to an accounting unit of a party, if the party has not been given the declaration required by new section 54A of the 2000 Act.
28. Subsection (2) of this clause inserts new section 54A into the 2000 Act. Subsections (1) and (2) of new section 54A require a person who causes a donation of over £5,000 to be given to a registered party to make a written declaration as to whether someone other than that person has given or is expected to give them money or any other benefit worth over £5,000 with a view to or otherwise in connection with the making of the donation.
29. Subsection (3) of new section 54A provides that where a person makes a declaration that they have been given money or a benefit as described in subsection (2), then they must also declare whether or not they are acting as an agent for another person, or as the principal donor for several persons collectively, where they have each given over £5,000 with a view to or otherwise in connection with the making of the donation. The declaration requirement is designed to reveal whether the person apparently making the donation is the true donor or is acting on behalf of someone else. If the person states that they have received money or a benefit in connection with the making of the donation, but they are nonetheless the true donor, they must state why they believe this.
30. Subsection (4) of new section 54A provides that the declaration must provide the full name and address of the person who makes it. If the declaration is made by a person authorised to do so on behalf of a body it must also state that the person is authorised to make it and describe their role or position in the body in question.
31. Subsection (5) of new section 54A lowers the threshold at which a declaration must be made where the donation is made to an accounting unit of a registered party. This provision requires the person causing the donation to be received by the accounting unit to give a declaration if the donation is over £1,000 and requires the accounting unit to reject such a donation of a declaration is not made. This subsection also lowers to £1,000 the value of money or other benefit which, when given to the person causing a donation to be made with a view to or otherwise in connection with a donation, means that person must make a declaration that subsection (2) of the new clause applies.
32. Subsection (6) of new section 54A makes it a criminal offence for a person knowingly or recklessly to make a false declaration about a donation.
33. Subsection (7) provides that the Secretary of State may make provision in regulations as to how the value of a benefit is to be calculated for the purposes of subsection (2). By virtue of section 156 of the 2000 Act, the regulations must be made by statutory instrument, subject to the negative resolution procedure.
34. Subsection (3) of clause 8 makes changes to section 56 of the 2000 Act so that the donation, or an equivalent amount, must be returned to the person appearing to be the donor if a declaration under section 54A has not been received. Subsection (4) makes the party and the treasurer guilty of an offence if they fail to do so.
35. Subsection (5) inserts in Schedule 6 to the 2000 Act a new paragraph 1A requiring that where a donation report is required to be made in respect of donation to which section 54A applies, the report must include a statement from the party either confirming that the party has no reason to suspect that the declaration is untruthful or inaccurate, or giving details of any respects in which the declaration was found or suspected to be untruthful or inaccurate.
36. Subsection (6)) amends Schedule 6 so that where a donation is made without a declaration the party must report this to the Commission under paragraph 6 of the Schedule
37. Subsection (7) of the clause amends Schedule 20 to the 2000 Act to set out the sanctions for making a false declaration.
38. Subsection (8) gives effect to Schedule 3, which makes equivalent provision to the above in respect of individuals and members associations, recognised third parties and permitted participants as defined by the 2000 Act. Subsection (9) provides that, after consultation with the Electoral Commission, the Secretary of State may by order amend the insertions made by this clause or the related Schedule, in their application to Northern Ireland; and may make consequential or supplemental provision. Subsections (10) and (11) require orders made under this provision to be by way of a statutory instrument, which is subject to affirmative resolution of both Houses.
Clause 9: Defence to charge of failing to return donation to impermissible donor
39. Clause 9 amends section 56 of the 2000 Act by inserting a new subsection (3A). New subsection (3A) clarifies that if a party or a treasurer is charged with an offence of accepting an impermissible donation, the party or party treasurer will not be guilty if they can show that they took all reasonable steps to verify that the donation was from a permissible donor.
Clause 10: Person may not be “responsible person” for more than one third party
40. Clause 10 makes amendments to section 88 of the 2000 Act to change the notification requirements that third parties (that is campaigning entities which are not political parties or candidates seeking election) must comply with.
41. Third parties which spend above the limits set out in section 94(5) of the 2000 Act are required to submit a notification to the Electoral Commission in accordance with section 88 of the 2000 Act. Third parties that submit such a notification become recognised third parties for the purposes of Part 6 of the 2000 Act and are subject to additional regulation and a higher spending limit than those that are not recognised. The responsible person for each third party, as defined by section 85(7) of the 2000 Act, is responsible for compliance with the 2000 Act.
42. Subsection (2) of the clause amends subsection (2)(a) of Section 88 of the 2000 Act to provide that an individual who is the responsible person in relation to another recognised third party cannot become a recognised third party in their own right. .
43. Subsection (3) of the clause inserts new subsection (3A) into section 88 of the 2000 Act. This new subsection provides that a notification to the Commission in respect of a third party organisation does not comply with the requirement to name a responsible person, if the responsible person that it names is already the responsible person in relation to another third party (whether as an individual or for another organisation); or an individual who would become a responsible person by virtue of a notification given for another third party at the same time.
44. Subsection (4) of the new clause makes transitional provision. At present a third party’s status as a recognised third party lapses 15 months after the original notification is given to the Commission or where that falls within a regulated period before an election, at the end of that period. However, a recognised third party can give a renewal notification to the commission in advance of the notification lapsing. Subsection (4) of the clause makes transitional provision in respect of notifications made before clause 10 comes into force. If the notification named a responsible person who is a responsible person for another third party then the renewal notification must, when it is required to be made, name another responsible person.
Clause 11: Election spending for person not yet a candidate
45. Restrictions on candidates’ expenses are currently imposed by Part 2 of the Representation of the People Act 1983 (“the 1983 Act”). Clause 11 amends Part 2 of the 1983 Act to change the point from which expenditure limits set out in section 76(2) of that Act start to apply.
46. Subsection (2) of this clause amends subsection (1) of section 90ZA of the 1983 Act so that, in relation to parliamentary general elections, the definition of “election expenses” in that Act (i.e. matters listed in Schedule 4A to the Act) is capable of applying to expenses used by a person prior to the dissolution of Parliament or a person’s formal nomination or declaration as a candidate (as well as those used after then). Consequently, those expenses will be caught by the relevant expenditure limits provided that the expenses in question are incurred for the purposes of the candidate’s election.
47. Subsection (3) inserts new subsection (1A) into section 90ZA to make clear that whether election expenses that are incurred by a candidate at a parliamentary by-election or a local government election in England and Wales fall within the limit will continue to be determined by when the expenses are used: if they are used before the person becomes a candidate they will fall outside the limit, and if used after then they will fall within it.
48. Subsection (4) substitutes subsection (5) of section 90ZA to clarify that the expenditure limit will apply to expenses incurred by a person who becomes a candidate at a later date. Taken together, the effect of subsections (2) to (4) is that when determining whether election expenses are subject to the section 76 limits the key question will be whether the expenses in question are incurred for the purposes of the candidate’s election in a parliamentary general election. If they are incurred for this purpose, the time at which they are used, and whether or not at that time the person concerned is formally a candidate, will be immaterial.
49. Subsection (5) provides that the provisions in this clause will not apply to any expenses incurred before these provisions are commenced.
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