CHAPTER EIGHT

REFERENDUMS

8.1 Although referendums have become more frequent in recent years, there is no standing body of legislation covering their conduct in the same way as there is for elections. Each of the major referendums held so far has been provided for in a separate Act of Parliament¹, and there has been only a short period between Royal Assent being given to the Act and the date of the poll.

8.2 The question of general provisions of law covering the conduct of referendums was comprehensively examined in the report of a Commission chaired by Sir Patrick Nairne². The Neill Committee, with terms of reference confined to party funding issues, naturally did not cover the whole of the subject in the same way. But in Chapter 12 of their report, the Neill Committee considered whether rules were needed to ensure transparency in the funding of referendum campaigns and adequate opportunities for each side to lay their views before the public. They also considered what the role of the government of the day should be in referendum campaigns. The Committee's report contains a set of recommendations on these matters which the Government accepts.

8.3 The Neill Committee's recommendations on these points relate principally to national or regional referendums, and the draft Bill so provides (clause 77). General questions concerning local referendums³ will be within the purview of the Electoral Commission. The precise role of the Commission in the conduct of local referendums will need to take account of the particular different circumstances of local referendums. For example, it is not considered necessary for organisations taking part in such referendums to register with the Commission etc. (In most cases, they will not incur expenditure at a level greater than the minimum.)

Donations to referendum campaigns

8.4 In order to ensure transparency in the funding of referendum campaigns, the Committee took the view that campaigning individuals and organisations should be subject to the same rules concerning the receipt of donations from permissible sources and the disclosure of large donations as were to apply to the political parties (and third parties) in connection with election campaigns. The Government agrees with these recommendations and Part VI of the draft Bill provides accordingly. Clause 82 requires campaigners proposing to spend more than £10,000 in a referendum campaign to notify the Electoral Commission (R91). The reason why the draft Bill sets the threshold for notification etc. at £10,000 is to maintain parity with the threshold adopted for third parties in connection with elections (see Chapter 7 above). The Bill as introduced will require campaigning organisations and individuals to disclose donations of £5,000 or more (R90), and will prohibit them from accepting donations from non-permissible sources (R92). This set of requirements does not need to apply separately to political parties because they will already be subject to them under the provisions of Part IV of the Bill.

The period during which the restrictions are to apply

8.5 If there are to be restrictions of this kind, additional to those imposed on political parties as a matter of course, it is necessary to provide a way of establishing the date from which they should apply. It would be unreasonable, and impractical, to restrict the ability of individuals and organisations to promote their views on questions of moment, simply on the ground that they might eventually be the subject of a referendum. The solution provided for in the draft Bill (clause 78) is to enable the Secretary of State to provide by Order for the campaign period for a referendum to begin at any time after the introduction into Parliament of a Bill which provides for a referendum to be held. The expectation will be that, where such a Bill clearly has a good chance of becoming law, the Order will be made so as to come into effect at the earliest possible date. In relation to a referendum on Northern Ireland's position within the United Kingdom, however, it is possible to make specific provision (clause 78(2)) because the enabling legislation is already on the statute book.

Spending limits in referendum campaigns

8.6 The Neill Committee recognised that the only way of ensuring a level playing field in financial terms between the two sides in a referendum campaign would be to oblige anyone who wished to campaign to do so under the auspices of a single group, which would then be subject to an overall spending limit. They considered that any such arrangement would be wrong in principle and virtually impossible to operate fairly. The Government agrees with that view.

8.7 The Neill Committee nevertheless accepted that there remained a case in principle for imposing spending limits on political parties and other organisations taking part in referendum campaigns, in the same way as they proposed for election campaigns. They recommended against doing so, largely on practical grounds (especially given the transient nature of some campaign organisations, compared with the longevity of the main political parties). The Government acknowledges this point, but is not persuaded that limits on spending (provided they do not attempt to do too much) need be ineffective or would raise fresh issues of principle. The detailed provisions needed to implement the Committee's recommendations on donations in referendum campaigns (registration of campaign organisations, the submission of accounts) would serve equally well as a basis for spending restrictions.

8.8 The Government therefore takes the view that there should be limits on expenditure by parties and other organisations campaigning in a referendum of the same general character as in election campaigns. Clause 83 of the draft Bill provides accordingly. It is proposed that, for a United Kingdom-wide referendum, the limits should be £5 million for each of the two umbrella groups and for those political parties with two or more Members of the House of Commons and £500,000 for any other political party and other persons and organisations. The restrictions would apply for the duration of the referendum period as defined under the Bill.

8.9 The Government is however open to comment on the figures proposed.

Support for umbrella groups

8.10 The Neill Committee was concerned that a lack of finance should not prevent the case for or against the proposition in a referendum from being properly put, and made a series of recommendations designed to overcome this problem wherever possible. They noted a number of difficulties. A referendum campaign is different from an election because it is not in the hands only of the political parties. Other organisations will also be active and a referendum may well be fought on non-party or cross-party lines. A level playing field cannot, therefore, be secured simply by giving equal facilities to (and imposing equal restrictions on) political parties. It is this difficulty, coupled with the problem of deciding which organisations are truly representative of each side of the argument, which has, since the devolution referendums of 1979, prevented referendum broadcasts, akin to election broadcasts, being made available⁴. Similar difficulties could well apply to the question of who should receive state funding to support their campaigns.

8.11 The Committee's solution to this problem, based on what happened in the 1975 referendum on membership of the European Communities, was to suggest that the Electoral Commission should wherever possible designate an organisation on each side which would then receive core funding (R85), free mailing for an address and use of premises for public meetings (R88) and referendum broadcasts (paragraph 12.39).

8.12 The draft Bill implements these recommendations in clauses 86 to 88. The Electoral Commission will receive applications for designation and will designate one organisation on each side provided that it is reasonably representative of opinion on that side. The expectation is that, where there is more than one organisation in the field on one side of the argument, they will join with each other in an 'umbrella' group which will qualify for designation. Whether parties and other organisations collaborate with each other in this way is of course a matter for them, and the outcome cannot be guaranteed. There may be some cases in which two organisations have the same view on a referendum question but on nothing else, and can scarcely be expected to speak with one voice. The benefits available to a designated organisation will constitute a powerful inducement. In the last resort, however, it may be impossible to designate a campaign organisation on one side of the argument, and in that case (in the interest of as level a playing field as possible) none will be designated on the other side, either.

8.13 Schedule 7 to the draft Bill provides for designated organisations to receive free mailing and use of rooms for public meetings, in the same way as political parties in election campaigns. Clause 88 provides for core funding for designated organisations. The proposal is that equal grants should be made to organisations on both sides, even if one is already more comfortably funded from private sources than the other. The draft Bill proposes that the figure of £600,000, which the Neill Committee put forward as a minimum, should be the maximum grant. In the Government's view, given that each side is to receive an equal amount, it would be difficult to justify any larger provision from public funds than the minimum necessary to mount an effective campaign. It will be open to the Electoral Commission to award smaller sums, as a token contribution to each side, if they are manifestly well enough funded from other sources. Where a referendum is held in only a part of the United Kingdom, here too the Commission might be expected to award a smaller grant.

8.14 The Government agrees with the Neill Committee (paragraph 12.39) that the broadcasters could follow the lead of the Electoral Commission by allocating free referendum broadcasts only to designated referendum campaign organisations (clause 81).

The part played by the government of the day in referendum campaigns

8.15 The Neill Committee was of the opinion that it was perfectly appropriate for the government of the day to state its views and for members of the government to campaign vigorously in referendum campaigns, just as in general election campaigns, but that neither taxpayers' money nor the permanent government machine should be used to promote the interests of the Government side of the argument. In particular, they recommended (R89) that the government of the day should not distribute literature, even purportedly 'factual' literature, setting out or otherwise promoting its cause.

8.16 These recommendations raise some difficult issues. The government of the day may well have a position on a referendum issue which, whilst yielding the same answer as one favoured by one or more political parties and other organisations, is nevertheless distinctive. In most of the cases in which referendums have been held so far, the purpose of the referendum has been to obtain the endorsement of the electorate for a policy which the government of the day has developed and adopted, and the view has traditionally been that a government has not only a right but a duty to explain and promote its policies. It will clearly be appropriate for it to do so, and to have the assistance of the Civil Service, during the period when a Bill to provide for a referendum is being taken through Parliament. This period, at any rate, cannot reasonably be equated with a general election campaign period. Nevertheless, the Government accepts that there ought to be a period leading up to the referendum poll in which the government of the day, as a government, stands aside and the campaigning is left to the political parties and other organisations, with Ministers taking part in their political capacity if they wish. The draft Bill thus provides, in clause 79, that the government of the day is not to publish material relating to the referendum issue within the period of 28 days leading up to the poll. This will ensure that, in the crucial period when the electors are weighing up the referendum issue, the campaign is not skewed by the expenditure of large sums of taxpayers' money.

8.17 This legislative provision will be backed by the long-standing, non-statutory guidance on conduct customarily issued to civil servants during general elections and referendum campaigns. This guidance sets out the framework for civil service support to Ministers during such campaigns

8.18 The Government believes that these proposals constitute a fair and practical response to the Neill Committee's comments and recommendations on this point.

1 The arrangements for referendums on whether Northern Ireland should remain part of the United Kingdom are the exception to this rule.

2 Report of the Commission on the Conduct of Referendums, November 1996, Electoral Reform Society and the Constitution Unit.

3 The draft Local Government (Organisation and Standards) Bill, published in March 1999 (Cmnd 4298), provides for local referendums on whether there should be a directly elected mayor.

4 The two umbrella organisations in the 1975 referendum each received four ten-minute television broadcasts in the last fortnight of the campaign.

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