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Part 6: General and supplemental
157. Paragraph 22 limits the use of fixed monetary penalties, discretionary requirements and stop notices. It explains that a fixed monetary penalty may not be imposed on a person if they are already subject to a discretionary requirement or stop notice for a breach. Additionally, if a person has had a fixed monetary penalty imposed on them for a breach or has paid a sum to discharge liability for a fixed monetary penalty, they cannot be given a discretionary requirement or a stop notice in relation to the breach.
158. Paragraph 23 provides that, if someone is required under Schedule 19B to the 2000 Act to make a statement as part of an investigation by the Commission, the Commission must not take account of that statement when deciding whether to impose a civil sanction on the person. The only exception is for the offence of providing false information set out in paragraph 12(3) of Schedule 19B to the 2000 Act.
159. Paragraph 24 stipulates that any financial penalty imposed on an unincorporated association must be paid from its own funds.
160. Paragraph 25 requires the Commission to publish guidance about enforcement of the 2000 Act. The guidance must include details of the sanctions available (both civil and criminal), the circumstances in which civil sanctions may be used and the rights of appeal available. Sub-paragraph (7) requires the Commission to carry out consultations with persons that they consider appropriate prior to publishing guidance. Under sub-paragraph (8) the Commission is required to have regard to the guidance when exercising its functions.
161. Paragraph 26 stipulates that all monetary penalties paid to the Commission as a result of the imposition of the civil sanctions under the Schedule must be paid into the Consolidated Fund.
162. Paragraph 27 requires the Commission to include in their annual report a list of the cases (other than those where sanctions have been successfully appealed against) in which they have imposed fixed monetary penalties, discretionary notices or stop notices; cases in which liability for a fixed monetary penalty has been accepted through payment of a sum; and cases in which an enforcement undertaking has been accepted. Sub-paragraph (2) enables the Commission to exclude information if it might be unlawful for the report to include it (for example, because its inclusion might breach the right to respect for private and family life protected by Article 8 of the European Convention on Human Rights, or there is a statutory restriction on its disclosure). It also enables the Commission to exclude any information that might adversely affect ongoing investigations or proceedings.
163. Paragraph 28 lists the public bodies from which the Commission may request information when exercising the powers under the Schedule. It also precludes disclosures that would contravene certain other relevant legislation on data protection, and provides that powers of disclosure that are independent of this power are not affected by it.
Part 7: Interpretation
164. Paragraph 29 sets out definitions of words and expressions used in the Schedule.
Schedule 3: Declaration as to source of donation
165. Schedule 3 makes amendments in relation to donations to individuals and members associations, recognised third parties and permitted participants, which correspond to the amendments made in relation to donations to registered political parties by Clause 8. Paragraph 1 inserts new paragraph 6A into Schedule 7 to the 2000 Act (control of donations to individuals and members associations), and paragraphs 2 and 3 make consequential changes to that Schedule. Paragraph 4 inserts new paragraph 6A into Schedule 11 to the 2000 Act (control of donations to recognised third parties) and paragraphs 5 and 6 make consequential changes to that Schedule. Paragraph 7 inserts new paragraph 6A into Schedule 15 to the 2000 Act (control of donations to permitted participants) and paragraphs 8 and 9 make consequential changes to that Schedule.
166. Paragraph 10 amends Schedule 20 to the 2000 Act to specify the penalties which will be incurred for making a false declaration as to the source of a donation to individuals and members associations, recognised third parties and permitted participants.
Schedule 4: Reports of gifts received by unincorporated associations: Schedule to be inserted into the 2000 Act
167. Schedule 4 inserts in the 2000 Act a new Schedule 19A for the purpose of imposing reporting requirement in respect of gifts made to unincorporated association that make political donations of significant financial value.
168. Paragraph 1(1) and 1(2) of new Schedule 19A provide that where in any calendar year an unincorporated association makes a donation with a value of more than £25,000 to a registered party, a regulated donee, a recognised third party, or a permitted participant, or makes donations in that calendar year which in aggregate exceed £25,000, the association must notify the Electoral Commission accordingly within 30 days beginning with the date on which the donation was made. Paragraphs 1(3) to 1(5) make detailed provision about the matters that are to be regarded as a donation for these purposes. Paragraph 1(6) clarifies the status of a donation set on one day and received on another.
169. Paragraph 2 of new Schedule 19A sets out the detail of the reporting requirement in relation to unincorporated associations who make a notification under paragraph 1. The requirement is to report to the Commission certain details about gifts (both monetary or non-monetary) they have received with a value of over £7,500 within the reporting period. Paragraphs (2) and (3) together provide that the reporting period covers the calendar year in which relevant donations are made in excess of £25,000 and both the preceding and following calendar years.
170. Sub-paragraph (2) also sets out how, and to what timescale, the reporting requirement will apply to gifts that are required to be reported but which were made on or before the date on which the £25,000 limit was exceeded (“the donation date”). Paragraphs 2(3) and 2(4) go on to set out the position in relation to gifts that are received after the donation date and which are required to be reported. Such gifts will be reported on a quarterly basis until the reporting requirement comes to an end. A quarter in this respect means a period running for three months and ending with 31st March, 30th June, 30th September or 31st December.
171. Paragraph 2(5) provides for the aggregation of two or more gifts of more than £500 from the same person in the same calendar year. The result is that where those gifts exceed £7,500 in aggregate they fall to be reported in the same way as an individual gift exceeding that amount.
172. Paragraph 2(6) provides that where an unincorporated association has received a gift of over £7,500 in a calendar year from a single source and subsequently receives any gift of over £1,500 in the same year from that source, the subsequent gift is to be reported as if it were one of over £7,500.
173. Paragraph 2(8) makes provision to exclude from the reporting requirement any gift already reported under a requirement imposed by Schedule 19A or, where the unincorporated association is also a members association, in accordance with Part 3 of Schedule 7 to the 2000 Act.
174. Paragraph 3 of new Schedule 19A sets out the detail that must be contained in reports required to be made under paragraph 2.
175. Paragraph 4 of new Schedule 19A requires each notification and report made under paragraphs 1 and 2 respectively to include a declaration, made by a person authorised to do so, as to the content and accuracy of the notification or report.
176. Paragraph 5 of new Schedule 19A provides for additional detail that must be provided in each notification or report required to be made under the Schedule in respect of an unincorporated association and the person authorised for the purposes of paragraph 4.
177. Paragraph 6 of new Schedule 19A creates three offences which result from the obligations imposed by the Schedule. First, under sub-paragraph (1), an unincorporated association commits an offence if it fails, without reasonable excuse, to give a notification or report to the Commission within the time limits specified. Second, sub-paragraph (2) an offence for an unincorporated association to provide, without reasonable excuse, a notification or report that fails to comply with any requirement of this Schedule. Finally, sub-paragraph (3) makes it an offence for an individual to knowingly or recklessly make a false declaration under paragraph 3.
178. Paragraph 7 of new Schedule 19A imposes a requirement on the Electoral Commission to maintain a register of all notifications and reports given or made under paragraphs 1 and 2 respectively. Paragraph 7(2) sets out the details that are to be included in the register in the case of any such notification or report. Paragraph 7(3) requires the relevant detail to be added to the register as soon as reasonably practicable. Paragraph 7(4) mirrors existing provision in section 69(4) of the 2000 Act regarding non-publication of an individual’s home address in a register maintained by the Commission.
179. Paragraph 8 of new Schedule 19A makes provision in respect of a gift made within the reporting period but prior to inclusion in the register of the fact that a paragraph 1 notification has been made by the unincorporated association to which the relevant gift was made. Sub-paragraphs (2)(a) and (4) have the effect of requiring the Commission to give 45 days notice of it intention to include in the register details about the person who made the gift. If, within that time, the Commission receives any representations in response it shall take those into account before deciding whether to include the details in the register.
180. Paragraph 9 of new Schedule 19A makes provision in relation to the meaning of a gift for the purposes of this Schedule. In particular, sub-paragraph (3) enables the Secretary of State to make regulations about matters that may or may not constitute a gift and how gifts are to be valued.
Schedule 5: Minor and consequential amendments and Schedule 6: Repeals
181. Clause 25 gives effect to Schedules 5 and 6. Schedule 5 makes minor and consequential amendments. All of the amendments in question are consequential on other provisions in the Bill, except those at paragraphs 12 and 18, which make minor drafting changes. Schedule 6 makes a number of repeals.
FINANCIAL EFFECTS
182. The provisions that relate to European Parliament elections have no associated costs and are intended to make the administration of those elections simpler and easier to plan. The provisions that relate to the annual canvass are intended to assist with the registration of electors before an autumn poll. While they do create a new type of administrative burden in the event of an autumn poll being held, the Department does not envisage that this will give rise to increased costs if administrators follow Electoral Commission guidance in this respect; and a much larger burden may arise if no action is taken.
183. The additional costs incurred as a result of the provisions relating to the disposal of election documents are not expected to be significant and will be met by central government through the Fees and Charges Order for Returning Officers.
184. Electoral administrators may incur costs as a result of the provisions relating to the CORE scheme, but these should be partially if not wholly off-set by savings achieved through the reduction of burdens produced through other provisions of the CORE Scheme.
185. The Electoral Commission is directly financed by Parliament (paragraph 14 of Schedule 1 to the 2000 Act). The Commission submits annual estimates to the Speaker’s Committee and the Committee examines the estimates, considers advice from HM Treasury and the Comptroller and Auditor General, and lays the estimates before Parliament (explaining any modifications which it has made if relevant). Additional costs from this Bill will be financed in the same way. The Commission has already re-staffed its party and election finance team with a view to the forthcoming legislative changes. The Commission’s provisional estimate is that the additional costs arising to it as a result of the changes to its powers and governance in the Bill will amount to approximately £650,000 per annum. The Commission will consider the extent to which this can be met from within its existing settlement.
186. The provision relating to compliance officers is permissive and does not require a compliance officer to be appointed. As a voluntary measure there will be no call on public funds in terms of paying for compliance officers. We expect that, where office holders appoint compliance officers, they will pay them out of their own funds. In terms of registration, the Electoral Commission currently estimates an initial start-up cost of up to £20,000 for incorporating compliance officers into their database. Ongoing administrative costs will depend to some extent on take-up of the provision.
187. There will be associated costs for data matching schemes for both the participating public authority and registration officer in terms of IT and manpower. The Ministry of Justice, who will oversee the pilot schemes, will meet these costs.
188. There would be no cost to the National Loans Fund.
PUBLIC SECTOR MANPOWER
189. As indicated above, a small increase in the manpower of the Electoral Commission may be required in order for it to fulfil its expanded role. In relation to orders made in respect of data matching scheme pilots (Clauses 22 and 23) there may be an impact on manpower for those local authorities and data providers participating in such arrangements. However, the Ministry of Justice will meet any manpower costs attributed to the delivery of the pilots. The Department does not envisage that there would be any other impact on public manpower as a result of the provisions of the Bill.
SUMMARY OF IMPACT ASSESSMENTS
190. The completed impact assessments for the Bill analyse the costs and potential benefits of the proposals and assess their probable impact on race, gender and disability equality. These are available in the Vote Office.
191. The impact of the Bill will depend upon how the Electoral Commission decides to implement internal changes as a result of its changed role. The level of extra costs which the Commission might incur is estimated above, though this figure does not account for reprioritisation within the Commission and there is likely to be some scope for meeting some of the costs from within the Commission’s existing settlement.
192. Under the provision that relates to candidate spending, where a Parliament runs for over 55 months, candidates will have to report all expenses incurred and used for the purposes of promoting their electoral prospects against a ‘pre-candidacy’ spending limit, rather than just spending incurred and used between dissolution of Parliament and the poll. Whilst this will increase the administrative burden for some candidates and their agents in the case of certain Parliaments, the burden will be lower than it was under the pre-2000 triggering regime and this change to reporting requirements is considered to be a necessary consequence of effective regulation.
193. The provisions that relate to European Parliament elections have no associated costs and are intended to make the administration of those elections simpler and easier to plan. The provisions that relate to the annual canvass are intended to improve the registration of electors before any autumn poll. While they do create a new type of administrative burden in the event of an autumn poll being held, a much larger burden may arise if no action is taken.
194. No impact assessment has been carried out on the provisions relating to the disposal of election documents in Scotland. The additional costs incurred by Parliamentary Returning Officers in Scotland and their support staff as a result of the new policy will not exceed £5m and will be met by central government through the Fees and Charges Order for Returning Officers.
195. No impact assessment has been carried out on the provisions relating CORE scheme. There will be an impact on electoral administrators but this is expected to be less than £5m in total and should be partially if not wholly off-set by savings achieved through the reduction of burdens produced through other provisions of the CORE Scheme. These will be explored in detail through consultation on the CORE Scheme Order.
196. Under the arrangements for greater transparency of donations in Clause 8, donors will be required to make a declaration as to whether or not, to the best of their knowledge, a third party has given the donor to the political party, regulated donee, recognised third party or permitted participant more than £7,500 - or £1,500 with respect to donations to accounting units of registered parties - with a view to, or otherwise in connection with, the making of the donation. The main impact of this policy will be the extra administrative burden placed on donors in completing the declaration, and on recipients, who will have to process the declarations. The simplicity of completing and processing declarations should ensure that the administrative burden is not significant. It is considered that, the relatively small additional burden is justified. This is because the additional requirement applies to those whose donation income is already subject to regulation, and is outweighed by the benefits of the additional transparency this Clause will deliver.
197. The provision that relates to donations by unincorporated associations (unincorporated associations) will mean that unincorporated associations donating more than £25,000 in a calendar year to any recipient regulated by the 2000 Act (including political parties) would be subject to a new reporting regime. This requirement would include unincorporated associations who exceed the threshold as a result of aggregation of donations to different donees (e.g. an MP and a political party). Relevant unincorporated associations would be required to provide the Electoral Commission with details about the source of all donations to them over £7,500 in the calendar year in which the donation is mate, the year before, and the year following the donation. The main impact of this policy will be the extra administrative burden placed on unincorporated associations who would have to source and provide to the Electoral Commission information on donors who have given gifts of over £7,500 to the association over the three year period. Some individuals and organisations giving over £7,500 to unincorporated associations before the unincorporated association falls within the new regime will be required to consider whether they have any objection to their gifts being included in the Commission’s register of gifts to unincorporated associations.
198. There will also be an impact on the Electoral Commission who will have to publish a new register of unincorporated associations making significant political donations and the gifts to unincorporated associations that the unincorporated associations declare to the Commission. Additionally, for gifts prior to the unincorporated associations inclusion in the register, the Commission will be required to contact notify individuals and organisations to allow those people to raise any concerns at their inclusion in the register. Where concerns are raised, the Commission will have to consider them before determining the information to be included in the register. We estimate that the number of unincorporated associations making donations to regulated recipients in excess of £25,000 in a calendar year will be small in number, and as such the impact on unincorporated associations, recipients and the Electoral Commission will be small. We believe that the benefits to the public of additional transparency of the most significant political donations from unincorporated associations more than outweigh the small additional regulatory burden.
199. An impact assessment has been completed for the data matching provisions. In summary, as indicated above, it is intended that funding for each scheme will come from MoJ. It is envisaged that there will be in the region of 10-15 schemes, each of which could cost up to a maximum of £200k, although, given the information above, we think it is more likely that the schemes will each cost in the region of £50-100k each, and the likely total cost will therefore be in the region of £1-2 million. Each individual scheme will be subject to its own RIA and MoJ will want to consider the full costs of each scheme in order to ensure their proportionality before the Secretary of State approves them. The intention is to pilot the schemes and undertake a full analysis of their cost-effectiveness before considering whether such a programme should be rolled out more widely. However, MoJ are committed to piloting data matching schemes in order to enable us to better understand the potential benefits of enhanced data matching in improving the accuracy and completeness of the electoral register.
COMPATIBILITY WITH THE EUROPEAN CONVENTION OF HUMAN RIGHTS
200. Section 19 of the Human Rights Act 1998 (“HRA”) requires the Minister in charge of a Bill in either House of Parliament to make a statement before second reading about the compatibility of the provisions of the Bill with the Convention rights (as defined by section 1 of that Act).
201. Lord Bach, Parliamentary Under-Secretary for Justice, made the following statement of compatibility in accordance with section 19:
“In my view the provisions of the Political Parties and Elections Bill are compatible with the Convention rights.
202. In making the statement the Parliamentary Under-Secretary has given consideration to the fact that the following provisions of the Bill may raise issues in relation to convention rights. For the purposes of what follows the Electoral Commission is considered to be a public authority as defined in section 6(3) of the HRA.
Clause 16
203. Clause 16, which makes provision in relation to voter registration, may be said to engage Article 3 of Protocol 1 (the right to free elections by secret ballot). It is arguable whether this Article is even engaged. However, if it is engaged the provision made by this Bill is compatible as it seeks to ensure effective voter registration, rather than to restrict it.
Schedules 1 and 2
204. While compatible with Convention rights, Schedules 1 and 2 to the Bill provide powers which, when used, may give rise to issues relating to Convention rights. In each case it will be the duty of the Commission (and any other public authority able to exercise a power) to ensure that a power is exercised compatibly with Convention rights in accordance with section 6 of the HRA. The relevant powers have built into them some important safeguards to ensure that each power is capable of being exercised fully compatibly with Convention rights.
Schedule 1 (inserting Schedule 19B in the 2000 Act)
205. Paragraphs 1 and 3 of the Schedule contain various powers for the Commission acting on its own account to require the disclosure of documents and to make copies of, or inspect, those documents or related information. These powers raise a number of issues around Convention rights.
206. Where disclosure is sought under paragraphs 1 and 3 it is a criminal offence under paragraph 13 to refuse to comply with any requirement imposed by the Commission. Use of evidence provided under such a “compulsory” power in proceedings that may incriminate the person providing it could infringe the privilege against self-incrimination in certain cases, a key component of the procedural fairness guarantees provided by Article 6 (right to a fair trial). Paragraph 12 is designed to ensure that the privilege is protected by prohibiting the use of a self-incriminating statement against the person who provided it in criminal or civil proceedings, except where the proceedings relate to the making of false statements. This is supplemented by paragraph 24 of Schedule 19C, which ensures that this type of evidence may not be relied on by the Commission when deciding whether to impose a fixed monetary penalty or a discretionary requirement. An additional safeguard is the power in paragraph 11, which prevents disclosure of information that is subject to legal professional privilege.
207. Obtaining information under the various methods in paragraphs 1 and 3 (and as a result of entry under paragraph 2) may result in the production or inspection of personal information, with the result that Article 8 (right to respect for private and family life) may be engaged. In each case the powers feature appropriate safeguards relating to the nature of the documentation that may be required and the purpose for which it can be examined. In each case, these requirements should help to ensure that any use of the power to obtain disclosure is justified and proportionate in the pursuit of a legitimate aim of helping the Commission perform its monitoring functions. However, an individual judgement will need to be made in each case, and the Commission will have to consider justification and proportionality carefully each time it proposes to exercise the power.
208. The power of entry under paragraph 2 may raise a specific issue under Article 8 and Article 1 of Protocol 1 (protection of property). This paragraph features a safeguard designed to ensure that the powers will be exercised compatibly with Convention rights, by ensuring that entry may only be at a reasonable time. In addition the provision provides only a power to enter. On that basis it is entirely open to the Commission to ensure that that any issues as to Convention Rights are fully taken into account before deciding whether the power should be exercised or not.
209. The power for the Commission to seek a court order for disclosure of documents under paragraph 4 may raise similar issues relating to Article 8 as the power to request documents under paragraphs 1 and 3. The fact that under paragraph 4(2) a court order may not be issued unless the Commission can demonstrate to a court that they hold the same reasonable suspicion as to wrongdoing as under paragraph 3 will ensure that the legitimate aim of investigating a breach of the law is pursued by the granting of a court order. It will, of course, be a matter for the court in each case to ensure that a decision to issue such an order takes into account any issues as to Convention Rights. For these reasons the power should be capable of being used in a way that is fully compatible with Convention rights. Again, this will be matter for careful consideration by the Commission in each case.
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