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POLITICAL PARTIES AND ELECTIONS BILL
EXPLANATORY NOTES
INTRODUCTION
1. These explanatory notes relate to the Political Parties and Elections Bill as brought from the House of Commons on 3rd March 2009. 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 16th 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 are to:
- 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;
- Add a ‘pre-candidacy’ spending limit to regulate candidate spending when a Parliament runs for over 55 months; and
- Put in place arrangements to improve the transparency of donations to political parties and other entities subject to the controls on donations put in place by the Political Parties, Elections and Referendums Act 2000 (“the 2000 Act”).
The Bill also makes several other reforms, including 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 include:
- Enabling holders of relevant elective office to appoint a person to act as a compliance officer, who will share responsibility for compliance with the controls on donations with the office holder;
- Enabling 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;
- Providing 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;
- Transferring responsibility for the retention and provision of copies of election documents produced at Parliamentary elections in Scotland from sheriff clerks to returning officers;
- Providing 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;
- Extending 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;
- Enabling the Secretary of State to make an order to require a public authority or other persons carrying out functions on behalf of a public authority to provide a specific Electoral Registration Officer with specific information from their databases, in order to ensure that the electoral register is as accurate and complete as possible; and
- Providing for candidates at a parliamentary election to choose that their home address does not appear on election documents which are open to the public.
TERRITORIAL EXTENT AND APPLICATION
5. All of the provisions of the Bill extend 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. Similar provisions are also contained in Clause 12 (Reports of gifts received by unincorporated associations).
6. Clauses 22 (Schemes for provision of data to registration officers) and 23 (Schemes under section 22: proposals, consultation and evaluation) will not apply to Northern Ireland, because of the definition of “registration officer” adopted by that Clause.
7. 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 (Compliance with controls imposed by the 2000 Act etc), Clauses 4 (Selection of prospective Electoral Commissioners and Commission chairman), 5 (Four Electoral Commissioners to be put forward by parties), 6 (Number of Electoral Commissioners), 7 (Political restrictions on Electoral Commissioners and staff) and 9 (Defence to charge of failing to return donation from permissible donor) of the Bill, as well as paragraphs 9 to 11 and 26 of Schedule 5 (Minor and consequential amendments) and the relevant entry in Schedule 6 (Repeals) 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.
8. 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.
9. 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
10. 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 (i.e. best practice) in view of the purpose of those requirements.
Clause 2: Investigatory powers of the Commission
11. 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 19B which is inserted into the 2000 Act by subsection (2) of the Clause. Schedule 1 to the Bill contains new Schedule 19B. Schedule 19B provides the Commission with powers to enable it to require access to information for certain purposes (including where it is conducting an investigation into a potential criminal offence) and, in relation to limited categories of individual or body, to enter premises to inspect and make copies of relevant documents in circumstances where it is not conducting any criminal investigation. Subsection (3) makes provision as to the penalties for offences under the new Schedule.
Clause 3: Civil sanctions
12. Clause 3 gives the Electoral Commission new powers to apply a range of civil sanctions to offences and contraventions under the 2000 Act.
13. Subsection (1) substitutes a new section 147 of the 2000 Act (civil sanctions). This new section gives effect to new Schedule 19C, which is inserted into the 2000 Act by subsection (2). Schedule 2 to the Bill contains new Schedule 19C. 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) of Clause 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 19C, of failing to comply with a stop notice.
14. 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 19C 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 paragraphs 1(1) to (4) of the new Schedule 19C);
- An order prescribing the offences or restrictions and requirements in respect of which the Commission can impose a discretionary requirement (see paragraphs 5(1) to (4) of Schedule 19C);
- 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 paragraphs 10(2)(b) and (3)(b) of Schedule 19C);
- 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 accepting enforcement undertakings (see paragraphs 15 (1)(a) of Schedule 19C); and
- Any order amending an Act.
Clause 4: Selection of prospective Electoral Commissioners and Commission chairman
15. 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.
16. 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
17. 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.
18. 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 (8) of new section 3A) that have nominated at least one candidate for appointment or that have nominated an individual who was appointed and is expected to continue to hold office.
19. 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 (7) prevents a nominated Commissioner from being appointed as Chair of the Electoral Commission. Subsection (9) 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.
20. 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
21. 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
22. Clause 7 relaxes the restrictions that apply to the political activities of Electoral Commissioners (other than nominated Commissioners) and Electoral Commission staff.
23. Subsection (1) of Clause 7 amends section 3 of the 2000 Act so that a person will only be prohibited from appointment as an Electoral Commissioner if they have engaged in certain political activities within the past five years, rather than the past 10 years as is currently the case.
24. 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.
25. Sub-paragraph (3) of the new paragraph 11A makes clear 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.
26. 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 6).
Clause 8: Declaration as to source of donation
27. 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 £7,500 or of over £1,500 where the donation is made to an accounting unit of a registered party.
28. Subsection (1) inserts a new subsection 54(1)(aa) into the 2000 Act, which provides that a party cannot accept a donation exceeding £7,500, where the donation is to a party’s central organisation, or £1,500, 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.
29. 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 £7,500 to be given to a registered party to make a written declaration as to whether someone other than that person has provided or is expected to provide them with money or any other benefit worth over £7,500 with a view to or otherwise in connection with the making of the donation.
30. Subsection (3) of the 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 £7,500 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.
31. 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.
32. 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 of over £1,500. This subsection also means that in respect of an accounting unit a declaration is required for the purposes of subsection (2) where the money or benefit provided to it for the purposes of the donation or otherwise in connection with it is worth more than £1,500.
33. 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.
34. 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.
35. 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.
36. 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 inaccurate or, give details of any respects in which the declaration was found or suspected to be untruthful or inaccurate.
37. 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.
38. Subsection (7) of the Clause amends Schedule 20 to the 2000 Act to set out the sanctions for making a false declaration.
39. 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 from impermissible donor
40. 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: Control of donations to holders of elective office: compliance officers
41. Clause 10 amends the 2000 Act to permit the appointment of compliance officers to assist holders of relevant elective office with their obligations under that Act.
42. Subsection (1) inserts a new Part 7 into Schedule 7 to the 2000 Act, which is the Schedule concerned with the control of donations to regulated donees (being certain individuals and members associations). Part 7 contains new paragraphs 17, 18 and 19.
43. New paragraph 17(1) allows, but does not oblige, the holder of a relevant elective office to appoint a ‘compliance officer’. Holders of relevant elective office are defined in paragraph 1(8) of Schedule 7 to the 2000 Act.
44. Paragraph 17(2) sets out the duties that a compliance officer may discharge on behalf of the officer holder and the offences for which they will be held liable if provisions in the 2000 Act are breached. Specifically:
a) New paragraph 17(2)(a) allows the compliance officer (in addition to the office holder) to take responsibility for reporting permissible donations (paragraph 10) and impermissible donations (paragraph 11) to the Electoral Commission. As part of this, the compliance officer may make the declaration that must be made in any donation report regarding its accuracy under paragraph 13 of Schedule 7.
b) New paragraph 17(2)(b) sets out the offences in the 2000 Act with which the compliance officer, the office holder, or both may be charged. Specifically, this applies the offences in section 56(3), (3B) and (4) of the 2000 Act (failure to return a donation from an impermissible donor or to take steps to verify whether the donation is from a permissible donor). It also applies to the offences in paragraph 12(1) and 12(2) of Schedule 7 (failing to report to the Commission permissible or impermissible donations within the time limits or failing to report in accordance with the requirements).
c) New paragraph 17(2)(c) provides that where a compliance officer makes the statutory declaration on a donation report in accordance with paragraph 13 of Schedule 7, the compliance officer instead of the office holder will be liable for the offence in paragraph 13(4) if he or she knowingly or recklessly makes a false declaration. Where it was the office holder who made the declaration, he or she will remain liable.
45. Paragraph 17(3) protects the compliance officer from liability for offences under paragraphs 12(1) and (2) of Schedule 7 relating to the late or incomplete reporting of any controlled donation received by the office holder before he or she was appointed. Therefore the office holder cannot seek to share liability for a particular error by appointing the compliance officer after the error has occurred. This protection does not extend to the offence of making a false declaration under paragraph 13 of the same Schedule.
46. Paragraph 17(4) provides that anybody giving false information to a compliance officer relating to the amount of a donation or its source is guilty of an offence. This mirrors the offences of giving false information to a political party or regulated donee.
47. Paragraphs 18 (1), (2) and (3) set out the details that a notice appointing a compliance officer must contain. To ensure that both parties have agreed to the appointment, sub-paragraph (1) states that the office holder must sign the notice and that it must contain a signed statement by the person to be appointed as compliance officer. Sub-paragraphs (2) and (3) ensure that there is no doubt as to the persons in respect of whom the notice has effect and ensures that the Commission will be able to contact both parties. Subparagraph (2) requires the notice to contain the details of the office holder including their name, position held, address and party affiliation. Sub-paragraph (3) requires the notice to contain details of the person to be appointed as a compliance officer, including their name, address and party affiliation.
48. Paragraph 18(4) provides that the notice will be in force from the date on which it is received by the Commission and will remain in force for 12 months, unless the office-holder or compliance officer gives notice that they both wish the original notice to remain in force. A renewal notice to this effect can be given under paragraph 18(5), confirming that all the statements in the original notice remain accurate, or detailing any information that has changed. Both the office holder and compliance officer must sign this renewal notice. Paragraph 18(6) provides that a renewal notice must be received by the Commission within one month of the expiry of the original 12-month period for which a compliance officer was appointed.
49. Paragraph 18(7) allows the office holder and compliance officer to give a “notice of alteration” to the Commission at any time, making alterations to the information provided in an original notice where circumstances have changed.
50. Paragraph 18(8) allows either the compliance officer or the office holder to provide a signed “notice of termination” to the Commission at any time. To ensure that the appointment of a compliance officer remains consensual, this notice can be signed by both parties or by just one party to the original notice. However, to ensure that both parties know if an appointment is terminated, where it is signed by only one party, sub-paragraph (9) requires the Commission to inform the other party that the termination notice has been received as soon as reasonably practicable.
51. Paragraph 19(1) requires the Commission to maintain a register of the notices of appointment of compliance officers which are currently in force. Paragraph 19(2) and (3) require the Commission to maintain a register of all compliance officer notices, in a form for them to determine and with any new information to be included as soon as is practicable. However, paragraph 19(4) provides that the information entered onto the register shall not include the home addresses of individuals.
52. Subsection (2) of the Clause inserts provision into Schedule 20 of the 2000 Act, setting out the relevant sanctions available for the new offence contained in new paragraph 17(4) of Schedule 7 to the 2000 Act.
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