| The Funding of Political Parties in the United Kingdom | ||||
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ANNEX 2 DRAFT BILL AND NOTES DRAFT BILL (pdf format) NOTES INTRODUCTION 1. These notes are intended to assist the reader of the draft Bill in understanding its structure and provisions. They are not intended as, and are not, an authoritative legal guide. 2. The draft Bill covers the great bulk of the material needed to give effect to the responses set out in this White Paper to the report of the Neill Committee. As explained in the White Paper, however, there are some points on which the Government intends to include provisions in the legislation as introduced into Parliament but which are not included at this stage in the draft Bill. 3. The further material which the Government expects to include in the Bill for introduction consists of:
The draft Bill will also need some minor and technical additions and refinements. SUMMARY OF THE DRAFT BILL 4. Part I of the draft Bill provides for the establishment of an Electoral Commission and sets out its main functions, other than those functions relating to scrutiny of political parties' income and expenditure and the administration of referendums which are covered in Parts II to VI. The functions suggested for the Commission include reporting on particular elections and referendums, a broad responsibility in relation to the review of electoral law, the provision of guidance in relation to party political and referendum broadcasts and a role in promoting understanding of electoral and political matters. Part I also provides for the transfer to the Electoral Commission of the functions of the Parliamentary Boundary Commissions and of the Local Government Commission for England and the Local Government Boundary Commission for Wales. 5. Parts II to IV of the draft Bill are concerned with the funding of political parties. Part II would re-enact the Registration of Political Parties Act 1998, which would be repealed, but with substantial modifications. The modifications are for the purpose of establishing a scheme of registration which brings political parties within the controls on funding set out in Parts III and IV and the controls on campaign expenditure set out in Part V of the draft Bill. (Some of the original transitional provisions of the 1998 Act are now redundant.) Part III would require registered parties to maintain accounts of income and expenditure and to submit an annual statement of their accounts to the Electoral Commission. Part IV would impose restrictions on the sources of donations so as to prohibit foreign donations to political parties and make registered parties subject to reporting requirements in respect of donations above a certain value. 6. Part V would apply restrictions on national campaign expenditure in respect of elections to Westminster and European Parliamentary Elections and elections to the devolved assemblies. These limits would be distinct from the separate restrictions under the Representation of the People Act 1983 and related subordinate legislation which would continue to apply to candidates' election expenses. 7. Part VI of the draft Bill would introduce generic provisions relating to the conduct of referendums intended to ensure their fair conduct. It provides for the designation of campaign bodies which will be entitled to particular forms of assistance, including the free mailing of referendum addresses and referendum campaign broadcasts, and which may be allocated grants out of public funds. Part VI also provides for restrictions on the publication and distribution of promotional material by central and local government prior to the holding of a referendum and restrictions on referendum campaign expenditure by political parties and by campaigning individuals and groups.
COMMENTARY ON CLAUSES PART I : THE ELECTORAL COMMISSION Clauses 1 to 3 and Schedules 1 and 2 : The Electoral Commission 8. Clauses 1 to 3, together with Schedules 1 and 2, make provision for the establishment and the constitution of the Electoral Commission and the Speaker's Committee. The Electoral Commission will be a body which exists independently of any government department and which will report directly to Parliament. The National Audit Office is an example of a body which has a similar relationship to government and Parliament. The arrangements for the appointment of Commissioners are modelled upon those for the appointment of the Comptroller and Auditor General under the National Audit Act 1983. Clause 2 establishes a Speaker's Committee which will have general oversight of the exercise of the Commission's functions and, in particular, responsibility for approving its budget. Its role will be similar to that of the Public Accounts Commission in relation to the National Audit Office. 9. Electoral Commissioners will be appointed by Her Majesty on the presentation of an Address from the House of Commons moved by the Prime Minister. The procedure for their appointment will also require consultation with the leaders of each registered political party with two or more Members of the House of Commons. It is envisaged that five Commissioners will be appointed initially, with the Commission's membership rising to nine when the functions of the Parliamentary Boundary Commissions are transferred to the Commission. They will enjoy substantial security of tenure. Appointments will be for up to ten years with the possibility of re-appointment. 10. The membership of the Speaker's Committee will include two Government ministers, the Home Secretary and the Minister for Local Government. The other members will be the Chairman of the Home Affairs Select Committee and six Members of the House of Commons appointed by the Speaker. 11. The Electoral Commission will be funded by means of a non-departmental vote. The provisions are intended to balance the need to place the setting of its budget outside the spending round for government departments with some mechanisms for ensuring proper financial control. The Commission will be required to produce both an annual estimate of its income and expenditure and, each year, a five-year plan covering its aims, objectives and resource requirements over that period. Both will be subject to the approval of the Speaker's Committee which, in turn, will be required to have regard to the views of the Treasury. Both the estimate and the five-year plan will be laid before Parliament. The Electoral Commission will also be required to prepare annual accounts which will be examined and certified by the Comptroller and Auditor General before being laid before Parliament. 12. Parliament's scrutiny of the work of the Commission will also be facilitated by the requirement that the Commission must lay before Parliament an annual report on the performance of its functions. The Speaker's Committee will also be under an obligation from time to time to present a report to the House of Commons on the exercise of its functions. Clauses 4 to 11 : Commission's general functions 13. Clauses 4 to 11 provide the Electoral Commission with a broad range of functions in relation to the oversight of electoral matters in the United Kingdom. While legislation on electoral matters will remain the responsibility of the government it will be for the Commission, under clause 5, to keep both electoral law and related issues, such as the funding of political parties and political advertising, under review and to report on them. While the Commission will be expected to exercise its own initiative in reviewing electoral law, there may also be particular issues which the Government considers should be examined as a matter of priority. The draft Bill therefore provides the Secretary of State with a power to require the Electoral Commission to review and report upon any such matter within a prescribed timescale. Clauses 6 and 7 identify a number of instrument-making powers under existing electoral law which would no longer be exercised by the Secretary of State without consulting the Electoral Commission or, in particular cases (for example, the giving of directions as to registration duties under section 52(1) of the Representation of the People Act 1983), would be exercised only upon the recommendation of the Commission. 14. The Commission would also, as the Neill Committee recommended, prepare and publish reports on the administration of elections to the United Kingdom, European and Scottish Parliaments and to the Welsh and Northern Ireland Assemblies and of referendums held throughout the United Kingdom, one or more of its constituent parts, or in one or more of the nine English regions. 15. The Bill provides that the Commission's broad oversight of the way elections are conducted should extend to providing guidance to broadcasters on political broadcasts. Clause 9 would require the Independent Television Commission and the Radio Authority, in determining those rules which are to be observed in respect to party political broadcasts, and the British Broadcasting Corporation and Sianel Pedwar Cymru, in including any party political broadcast in their broadcast services, to have regard to the views of the Electoral Commission. It is not the purpose of these provisions to give the Commission a prescriptive role in relation to editorial and broadcasting decisions, which are properly a matter for the broadcasters themselves. 16. The Commission's functions under this Part provide it with additional means to support the democratic process. Clause 10 provides for the Commission to develop and, with the approval of the Secretary of State, administer a scheme for the payment of policy development grants to political parties. The purpose of such grants will be restricted to the development of policies which are to form part of individual parties' political platforms it is not intended that they be used for the development of parties' internal policies or in respect of their organisation and administration. Clause 11 of the draft Bill also provides for the Commission to have a key role to play in encouraging voters' participation in the democratic process by enabling it to carry out programmes of education or information. The scope of this clause is intended to ensure that such voter education is not restricted to addressing the mechanics of exercising the vote but is also able to address, through attention to the role of government and representative bodies both at national and European level, the purpose and importance of exercising the vote. Clause 8, in addition, provides for the Commission to give advice and non-financial assistance, including the secondment of staff, to assemblies, governments and other bodies both in the United Kingdom and overseas. Clauses 12 to 17 : Commission's electoral boundary functions 17. Clause 14 provides for the transfer of the functions of the four existing Parliamentary Boundary Commissions to the Electoral Commission. It will be for the Secretary of State to direct that a particular Parliamentary Boundary Commission will cease to exist and this power will be exercised when it is decided that the Boundary Commission in question has no further functions to perform. It is not envisaged that this power will be exercised in respect of any of the Parliamentary Boundary Commissions until each has completed its next periodic review. It is therefore unlikely that the functions of all of the Boundary Commissions will be transferred to the Commission before the year 2005. 18. The Electoral Commission will make arrangements for the functions of the four Parliamentary Boundary Commissions to be exercised by four separate Boundary Committees established by clause 12. Each Boundary Committee will be chaired by an Electoral Commissioner (and it is intended, as noted in paragraph 9 above, that the membership of the Commission will increase to nine to take account of these additional responsibilities). Clause 13 provides for the membership of the Boundary Committees to be supplemented by the appointment of Deputy Commissioners, whose function will be restricted to serving as members of a Boundary Committee. It will be for the Electoral Commission, with the agreement of the Speaker's Committee, to decide how many Deputy Electoral Commissioners need to be appointed. 19. Clauses 16 and 17 create powers under which the functions (and the staff) of the Local Government Commission for England and the Local Government Boundary Commissions for Wales may be transferred to the Commission, which would in turn arrange for these functions to be exercised by the relevant Boundary Committee. PART II : REGISTRATION OF POLITICAL PARTIES Clause 19 : Requirement for registration 20. The purpose of Part II of the draft Bill is to put in place arrangements for bringing political parties within the scheme of control set out in Parts III to V for regulating their income and expenditure. These arrangements take the form of a scheme of registration, building upon the existing registration arrangements established under the Registration of Political Parties Act 1998. This Bill would repeal much of that Act (see Schedule 10), and this Part of the draft Bill re-enacts its provisions but with substantial modifications. Parties registered in accordance with this Part will be subject to the controls set out in Parts III to V. 21. If the controls on income and expenditure set out in this draft Bill are to be effective, then the means by which parties are brought within the ambit of those controls must, to all intents and purposes, be binding upon those parties which it is intended should be subject to those controls. The registration scheme established by the Registration of Political Parties Act 1998 is only voluntary. The purpose of clause 19 is to provide the mechanism by which political parties are brought within the registration scheme. Its effect is to require that a political party wishing to put up candidates at a relevant election, as defined by clause 19(3), must be registered with the Electoral Commission. It does so by providing that a person may only stand as a candidate at a relevant election if his nomination paper is accompanied by a certificate authorising his candidature issued by, or on behalf of, the nominating officer of a registered party or if his nomination paper either gives the description "Independent" or gives no description whatsoever. In the case of elections to the Scottish Parliament or the National Assembly for Wales under the additional member system, a party will only be able to be nominated to stand if it is a registered party; this rule also applies to elections to the European Parliament in Great Britain under the regional list system of election. Clause 20 : The register 22. Responsibility for maintaining the register will transfer from the Registrar of Companies (as currently provided for under the Registration of Political Parties Act 1998) to the Electoral Commission. But an existing entry in the register made under the 1998 Act will continue to have effect as if made under this Part of the Bill (clause 20(2)). Clauses 21 to 23 : Preliminary requirements 23. The registration scheme will require that, in respect of each political party registered with the Electoral Commission, there be a person registered as its leader, as its nominating officer and as its treasurer. The person registered as a party's treasurer will have substantial responsibility for compliance with the controls on party's income and expenditure under the provisions of this Bill. A person registered as the party's treasurer for this purpose need not necessarily hold that specific office within the party, but the person so registered must have overall responsibility for the financial affairs of the party and for compliance with Parts IV to VI of this Bill. It is made an offence to register as the treasurer of a party a person who, within the past five years, has been convicted of an offence under the provisions of this Bill or in connection with a relevant election. 24. The purpose of clause 22 is to enable the Electoral Commission to pin down those constituent parts of a registered party's organisation which are required to comply, whether separately or through the party's central organisation, with the controls set out in this Bill. Each registered party must propose a scheme setting out the arrangements for regulating the financial affairs of the party and the scheme must be approved by the Electoral Commission. 25. Under clause 22(7) certain organisations (ie. trade unions, friendly societies and other bodies which may be specified by order) are not to be regarded as forming a constituent part of a party for the purposes of a scheme adopted under this clause. 26. Clause 22(2) provides for a distinction to be drawn between parties which are to be regarded for the purposes of the Bill as a single unitary organisation and parties which are to be regarded as consisting both of a central organisation and of other units (for example local, regional or affiliated branches) or organisations (ie. "accounting units") which will have separate responsibility for their accounts. If a party falls into the latter category it will be required to adopt a scheme clearly identifying which parts of its organisation constitute its central organisation and which constitute its accounting units and will also be required to register a person as the treasurer for each separate accounting unit (see clause 23(3)). Clause 24 to 28 : Registration 27. Clauses 24 to 26 re-enact, with necessary modifications, sections 2, 3, 4, 5 and 6(1) to (4) of the Registration of Political Parties Act 1998. Together with Schedule 3 Parts I and II, they set out the procedure for applying for the registration of parties and their emblems. They also require the Commission to include the particulars given in a party's application in the register, and provide for the amendment of entries in the register. Clause 27 requires the treasurer of a party to provide the Electoral Commission with an annual notification that the particulars of a party's entry in the register remain accurate and complete, including any changes to the party's constitution. 28. It is possible, under the provisions of clause 28, for a party to apply to be removed from the register. But removal is conditional upon the party declaring that it does not intend to have any candidates at any relevant election, as defined by clause 19(3), and there is the additional safeguard that a party which is removed from the register in accordance with this clause will nevertheless remain subject to the requirements of this Bill in relation to its accounts and donations until the end of the financial year following the removal of the party's entry in the register. Clauses 29 to 30 : Access to the register 29. The Electoral Commission will be required by clause 29 to make the register of political parties available for public inspection at all reasonable times and, in addition, may make other arrangements for access to its contents (for example, it might make a copy of the register available on the Internet). The Commission will also be required to supply a copy of the register to any person on request. Clause 30 re-enacts section 12 of the Registration of Political Parties Act 1998. Clause 31 : Transitional arrangements 30. The purpose of clause 31 is to ensure that parties already registered under the Registration of Political Parties Act 1998 make the necessary arrangements to comply with the registration scheme established under the provisions of this Bill. Clauses 32 to 35 : Supplemental 31. Clauses 32 and 34 re-enact sections 14 and 19 of the Registration of Political Parties Act 1998. They prevent broadcasters from transmitting a party political broadcast on behalf of a party which is not registered, and make it a criminal offence knowingly or recklessly to provide the Electoral Commission with false information for the purpose of this Part of this Bill. Clause 33 sets out consequential amendments to the rules set out in Schedule 1 to the Representation of the People Act 1983. Clause 35 defines terms used in Part II (and limits its scope in respect of parties contesting only parish or community council elections). PART III : ACCOUNTING REQUIREMENTS Clauses 36 - 46 32. In paragraph 4.42 of their report, the Neill Committee recommended that the public should be entitled to have access to the annual accounts of income and expenditure of every political party and that this should be put on a statutory basis. These clauses of the draft Bill set up a statutory scheme for achieving the results sought. Political parties already prepare, and some of them publish, annual accounts. A statutory scheme has, however, to start from scratch and quite detailed provisions are therefore required. Elements of the proposed scheme are drawn from provisions of the Charities Act 1993, which in turn are partly modelled on the Companies Act 1989. 33. Clause 36 requires the treasurer of a registered party to keep the necessary accounting records, as a basis for the preparation of an annual statement of accounts. Where a party has agreed with the Electoral Commission a scheme based on separate accounting units, under clause 22, this and the other responsibilities contained in these clauses will fall on the treasurers of the accounting units see clause 45. 34. The records must cover both the transactions which the party enters into and its assets and liabilities. They must be preserved for at least six years from the end of the financial year in which they are made, or until the Electoral Commission has consented to their disposal following de-registration of the party. 35. The requirement to prepare an annual statement of accounts is in clause 37, which also empowers the Electoral Commission to make regulations specifying the form and contents of a statement of accounts. The intention is that, over time, the Commission should be able to require best practice to be followed and ensure that the parties' accounts can be fairly compared with each other. 36. The Commission may prescribe different requirements according to whether the income or expenditure of a party falls into one of three bands (up to £1,000, between £1,000 and £250,000; over £250,000). The intention is that, where a party has only a small turnover, a simple annual statement should suffice, but that the larger parties should be required to produce more detailed accounts as a basis for any investigation which may be required. 37. Clauses 38 and 39 deal with auditing. A party which has an annual income or expenditure exceeding £250,000 in any financial year must have its accounts audited within six months of the end of the financial year. The Electoral Commission may also require the accounts of any other party to be similarly audited. If a party fails to comply with an auditing requirement, the Commission may appoint a qualified auditor to audit the party's accounts and the cost will be recoverable by the Commission from the party concerned. Subsection (6) of clause 38 enables the Secretary of State, on the recommendation of the Electoral Commission, to make regulations specifying the duties of an auditor carrying out an audit in accordance with this clause. Clause 39 provides for an auditor to have access to the party's records and to be entitled to require the party's treasurer or other party officers to provide necessary information and explanations. If access or information is denied, the Electoral Commission may give written directions requiring a person to provide an auditor with access or information and, if those directions are not complied with, the Commission can in the last resort apply to the High Court for an order. 38. Clause 40 requires the treasurer of a registered party or accounting unit to submit its statement of accounts (and, if appropriate, the auditor's report) to the Electoral Commission. The proposed time-limit is three months or, where the party's accounts are required to be audited, six months from when the requirement commenced. Subsection (3) allows the Commission to extend the period for submission of these documents in particular cases for any special reason. 39. Clause 41 requires the Electoral Commission to make parties' statements of accounts available for public inspection as soon as practicable following their receipt and enables the Commission to make other arrangements for access to their contents. The Commission will also be required to supply any person with a copy on request. Subsection (2) also allows the Commission to make "other arrangements" for public access. This might include, for example, posting on the Internet. 40. Clauses 42 and 43 back up the requirements by providing both criminal and civil penalties, along the lines of those provided for in the Companies Act 1985. The criminal provision contains a "due diligence" defence. 41. Clause 44 makes provision, again along the lines of the Companies Act provisions, for the revision of statements of accounts which do not comply with the regulations. 42. Clause 45 (and Schedule 4) provide for distinct accounting units to be dealt with separately. Under paragraph 6(1) of Schedule 4 the requirement to submit an annual statement of accounts to the Electoral Commission will only apply automatically to accounting units which have an income or expenditure exceeding £25,000. However, paragraph 6(2) enables the Electoral Commission to require any other accounting unit to provide these documents. PART IV : CONTROL OF DONATIONS TO REGISTERED PARTIES Chapter I (Clauses 47 to 49) : Donations 43. These clauses define what constitutes a "donation", as a preliminary to the restrictions on receipt imposed under Chapter II and the reporting requirements imposed by Chapter III. "Donation" is defined in clause 47 as gifts of money and property (including money or property transferred to a party for consideration which is less than its value); subscriptions and affiliation fees; money spent (other than by the party) to meet expenses incurred by the party; loans, property, services and other facilities provided to the party on other than commercial terms; and the provision of any sponsorship in relation to the party. The definition applies to anything given or transferred to the party either directly or indirectly (through a third person). Anything given or transferred to an officer, agent or member of the party in that capacity will be regarded as having been given or transferred to the party, unless it is given solely for his own use or benefit (clause 47(4)). As the draft Bill stands, therefore, a donation to a member or officer of a party for use otherwise than on the business of the party as such- for example, in assisting him or her in standing for an internal election will not be included (but see paragraphs 3.37 to 3.39 of this White Paper). 44. Clause 48 specifies payments etc. to a party which are not to be regarded as a "donation". Any donation whose value is less than £50 (see paragraph 3.12 for comments on this figure) is to be disregarded (clause 49(2)(b)). Also to be disregarded are policy development grants made to parties (under the provisions of clause 10) and grants for security costs at party conferences. In addition, the definition of "donation" excludes the notional benefit to parties of airtime for political party broadcasts, the use of public rooms at elections and the distribution of election addresses to electors, all of which facilities are provided free of charge. The definition also excludes the provision by an individual of his own services free of charge. The force of the words "of his own services" is that, to be exempt from being regarded as having made a donation, the person must freely give their own time and not be paid for the services by their employer. It is not intended that, for example, a voluntary officer of the party should be regarded as making a donation if they contribute professional services (such as accountancy) within their personal sphere of expertise. 45. Subsection (2) also excludes donations made for the purpose of meeting a candidate's election expenses (which will continue to be the subject of a separate statutory return). 46. Clause 49 deals with donations which take the form of property, loans, services or facilities provided on other than commercial terms. Gifts or property will be valued at their market value. Where money or property is transferred to a party for a consideration less than the market value of the property, the value of the donation is the difference between the value of the money or the market value of the property and the consideration provided by the party. Similarly, where loans, property, services and other facilities are provided on other than commercial terms, their value will be taken to be the difference between their actual cost to the party and the cost which the party would have incurred if they had been provided on commercial terms. Chapter II (Clauses 50 to 55) : Restrictions on Donations 47. These clauses introduce the notion of a "permissible donation", along the lines of Chapter 5 of the Neill Committee's report. 48. Clause 50 provides that a party may accept a donation only from a permissible donor and where the identity of the donor is known. Subsection (2) specifies those sources which are to be regarded as permissible donors. They include individuals registered in an electoral register; a registered company incorporated in the United Kingdom or elsewhere in the European Union and which carries on business in the United Kingdom; a registered political party; a trade union; and any other unincorporated association which is carrying on business or other activities and has its main office in the United Kingdom. 49. A donation is to be regarded as having been accepted by the party if it has been retained for the use and benefit of the party, but liability will be avoided if within thirty days of receipt the donation or an equivalent sum is sent back to the donor (clause 50(5)(b)). Subsection (8) provides that where a person makes a donation on behalf of one or more other persons the individual contribution of each will be treated as a separate donation for the purposes of controls on donations under this Part. 50. Clause 51 enables the Electoral Commission to apply to a court to order the forfeiture of a donation from an impermissible source which a party has accepted. Clause 52 provides for appeals against such an order. Clause 53 enables rules of court to be made in respect of applications or appeals under clauses 51 and 52. It also provides that any sums forfeited under these provisions shall be paid into the Consolidated Fund. Subsection (5) specifies that, where a registered party is not a body corporate, forfeiture proceedings will be brought against the party in its own name and not in that of any of its members and that any sums forfeited will be paid out of the funds of the party. 51. Clause 54 creates offences to enforce these restrictions. 52. Where it is not possible to establish the identity of the donor, Clause 55 requires the donation either to be returned to the person who transmitted it (if known) or to the bank or, in the last resort, to be surrendered to the Electoral Commission for payment into the Consolidated Fund. Chapter III (Clauses 56 to 63) : Reporting of Donations 53. These clauses set up the scheme for reporting large donations to the Electoral Commission and for publishing them. 54. Clause 56 requires a party to prepare a donation report in respect of each quarter of a calendar year. A quarterly donation report will record any donation of £5,000 or more (or £1,000 or more in the case of a donation made to an accounting unit of a registered party) received and accepted during that quarter or any donation which, when added to other donations from the same source during that calendar year, brings the amount up to £5,000 or more. It must also record any further donations of £1,000 or more from a source which, during the same calendar year, has already been recorded in a donation report. 55. A quarterly donation report will also record all anonymous donations received by the party during that period. Where a party has received no donations which fall to be recorded, it will be required to prepare a report to that effect. 56. Subsection (11) gives effect to Schedule 5 which makes additional provision as to the information to be included in a quarterly donation report. In particular, the treasurer is required to record, in respect of each recordable donation, the identity of the donor (including his name and address), the value of the donation and the circumstances in which the donation was made. 57. During a parliamentary general election period, Clause 57 requires donation reports to be sent to the Electoral Commission in respect of each seven-day period (and any final period of less than seven days). Weekly donation reports differ from the quarterly donation reports in that they will include disclosable donations received whether or not they are eventually accepted. The general election period is defined for this purpose as the period commencing with the date of the announcement of Her Majesty's intention to dissolve Parliament and ending with the date of the poll. Clause 58 enables any registered party which does not intend to field candidates at a particular general election to be exempted from the requirement to submit weekly donation reports. Clause 59 requires the submission of quarterly donation reports within thirty days and of weekly donation reports within seven days of the end of the period to which they relate, and makes it an offence for the treasurer to fail to submit donation reports which do not comply with the requirements. Clause 60 requires reports to be accompanied by a declaration made by the treasurer to the effect that all the donation recorded in the report are from a permissible source and that during the reporting period no other disclosable donations have been received and no donation from other than a permissible source has been received and accepted. It is an offence to make a false declaration. 58. Clause 61 enables the requirement to submit weekly donation reports to be applied by order to elections to the European Parliament, the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly. 59. The Electoral Commission is required by Clause 62 to maintain a register of all reported donations, and to make arrangements for public inspection equivalent to those for the register of political parties. 60. Clause 63 enables the Secretary of State by order to exempt donations to Northern Ireland parties from being included on the public register, and to extend the list of permissible sources so far as they are concerned. PART V : CONTROL OF CAMPAIGN EXPENDITURE Clauses 64 and 65 : Preliminary 61. Clause 64 defines "campaign expenditure" for the purposes of the controls on registered political parties' election expenditure as provided for in this Part of the draft Bill. The definition is cast in broad terms so as to capture all expenditure by a party that is incurred in order to enhance its electoral prospects. However, excluded from the definition is any expenditure incurred with a view to enhancing the prospects of a particular candidate. Such expenditure is already subject to separate controls under the provisions of the Representation of the People Act 1983 and other legislation relating to relevant elections. The definition not only includes direct expenditure by a registered party but also benefits in kind conferred on a party by a third person. The registered treasurer of a party is responsible for accounting for the party's campaign expenditure, and he therefore performs a similar function to a candidate's election agent under the 1983 Act. In the same way as an election agent may, in a county constituency, delegate his functions to a deputy election agent, clause 65 provides for the appointment of up to twelve deputy treasurers. Such number would enable a United Kingdom-wide party to appoint a deputy to cover each of Scotland, Wales, Northern Ireland and the nine English regions, although whether the remit of the deputy is confined to a particular geographical area is a matter for the registered treasurer. Clauses 66 to 69 : General restrictions relating to election expenditure 62. In order to ensure proper observance of the limits on campaign expenditure by parties, clauses 66 to 69 require that all such expenditure, and any payment in respect of such expenditure, must be authorised or made by the registered treasurer, a deputy treasurer or a person authorised in writing by either the treasurer or a deputy treasurer. Similarly, any claim for payment in respect of campaign expenditure must be sent to the treasurer or a deputy treasurer or other authorised person. These provisions replicate, with modifications, similar provisions in the 1983 Act in respect of election expenditure by candidates. Clause 70 : Financial limits 63. Clause 70 and Schedule 6 set out the financial limits on campaign expenditure. The scheme provides for expenditure to be apportioned between England, Scotland, Wales and Northern Ireland. In the case of a Parliamentary general election the limits on expenditure by a registered party would normally apply to the period of 365 days ending with the date of the election. For elections to the European and Scottish Parliaments and the Welsh and Northern Ireland Assemblies the limits normally apply to the period of four months before the date of the poll. In all cases, the maximum amount a party may spend is determined by the number of constituencies and/or regions contested in the relevant election. The limits for individual elections are aggregated where the relevant periods during which they would otherwise apply overlap. To avoid parties circumventing the expenditure limits by incurring campaign expenditure in advance of the period during which restrictions apply, paragraph 11 of Schedule 6 provides that where the benefits of campaign expenditure (for example, billboard advertisements) are received during the period when restrictions apply, the expenditure is deemed also to have been incurred in that period. Clauses 71 to 75 : Returns 64. Clauses 71 to 75 are concerned with the preparation, auditing and submission of returns as to campaign expenditure. The registered treasurer of a party is required to prepare a return after each relevant election. The return must be accompanied by a declaration by the treasurer as to its accuracy. A party must submit its return to the Electoral Commission within three months of the date of the election to which the return relates, unless the party's expenditure exceeds £250,000, in which case the return must be audited and submitted within six months. All returns received by the Electoral Commission are open to public inspection. Clause 76 : Evasion of restrictions on campaign expenditure 65. This clause makes it a criminal offence to alter documents in order to conceal any campaign expenditure incurred, or the true amount of such expenditure. PART VI : REFERENDUMS Clauses 77 and 78 : Preliminary 66. Clause 77 provides that the controls on the conduct of referendums set out in Part VI apply to any referendum held throughout the United Kingdom, one or more of England, Scotland, Wales or Northern Ireland, or any English region. The provisions do not apply to referendums held on devolved matters. Clause 78 defines the referendum period for any referendum. The period is relevant, in particular, to the restrictions on incurring referendum expenditure as provided for in clauses 82 and 85. The relevant period for any particular referendum will normally be expected to begin shortly after the Bill providing for the referendum is introduced in Parliament and ending with the date of the poll. But the period may not in any event exceed six months. Clauses 79 to 81 : Restrictions as to publication etc. of promotional material 67. Clause 79 prohibits the government of the day, a local authority or any other publicly funded body from publishing, displaying or distributing promotional material in relation to a referendum in the 28 days prior to the date of the poll. The prohibition applies to material addressed or made available to the public at large but not to material specifically requested by a member of the public. The provisions of this clause do not apply to the Electoral Commission, which could therefore, for example, publish material designed to encourage voting in a referendum. 68. To assist the Electoral Commission to identify who is behind referendum publications, and therefore who has incurred referendum expenditure, clause 80 requires advertisements or other documents relating to a referendum to include the name and address of the printer and publisher, together with the name of any person or body on whose behalf the advertisements are published. This mirrors an existing provision in section 110 of the Representation of the People Act 1983 in respect of election publications. 69. Clause 81 requires that broadcasters may only include a referendum campaign broadcast in their broadcast services if it is made on behalf of an organisation designated by the Electoral Commission under the provisions of clause 86. This requirement on broadcasters ensures that in any referendum each side of the campaign will have equal access to free airtime for referendum broadcasts. Clauses 82 to 85 : Restrictions on referendum expenditure 70. Clauses 82 to 85 impose restrictions on incurring referendum expenses. Clause 82 makes it an offence for a person to incur referendum expenses in excess of £10,000 unless notice has been given to the Electoral Commission. In the case of a registered party the notice to the Commission takes the form of a declaration; in the case of an individual, company or an unincorporated association, it takes the form of a notification (clause 84). Individuals, non-party groups and parties are referred to collectively as "permitted participants". The Commission is required to maintain a register of declarations and notifications which is open to public inspection (clause 85). 71. Clause 83 places limits on expenditure in a referendum campaign. Designated organisations, and political parties with two or more Members of Parliament, may incur expenditure of up to £5 million, whilst other political parties and any other individual or organisation may spend up to £500,000. Clauses 86 to 88 : Assistance for designated organisations 72. Clause 86 to 88 and Schedule 7 provide for the designation, by the Electoral Commission, of one organisation on each side of a referendum campaign for the purpose of receiving certain benefits. These benefits are: a grant of up to £600,000; the distribution at public expense of a referendum address to every household or elector; the use of schools and other public premises for holding public meetings; and free airtime for referendum campaign broadcasts. (With the exception of the grant, these are similar benefits to those available to political parties and/or candidates at elections.) Clause 87 sets out the timetable for applications for designation and the determination by the Commission of such applications. The whole process, which commences at the start of the referendum period as defined under clause 78, takes a maximum of six weeks although there is a power to vary the timetable by order. Clause 89 : Supplementary 73. This clause provides that, in the case of a referendum where the date of the poll is determined under any provision made by or under the Act providing for the referendum to be held, there must be a period of at least 28 days from the date on which the Electoral Commission designates campaign organisations to the date of the poll. This minimum period is intended to ensure that a designated campaign is afforded sufficient opportunity to mount an effective campaign. This clause does not apply to a referendum where the date of the poll is specified on the face of the Act providing for the referendum to be held. Nonetheless, the expectation in such cases will similarly be that there will be at least 28 days for campaigning following the designation of campaign organisations. PART VII : ELECTION EXPENSES 74. Clauses 90 and 91 make amendments to the 1983 Act. Clause 90 increases the limit, in section 75 of the 1983 Act, on third party expenditure in support of, or in opposition to, a candidate. This is to give effect to the change in the law required by the judgement of the European Court of Human Rights in the Bowman case. In the case of a parliamentary election the limit is increased from £5 to £500. Clause 91 increases to £100,000 the maximum amount a candidate may spend at a parliamentary by-election. PART VIII : GENERAL 75. Clauses 92 to 103 deal with various general matters. Clause 92 empowers the Electoral Commission to require registered political parties and referendum campaign organisations to provide information to the Commission relating to their financial affairs. A person authorised by the Commission may also enter the premises of a registered party or referendum campaign organisation to inspect their financial records. 76. Clause 93 and Schedule 8 set out the penalties for all the criminal offences created by the draft Bill. Clauses 94 to 96 are concerned with summary proceedings and offences committed by bodies corporate and unincorporated associations. 77. Clause 97 requires the courts to notify the Electoral Commission of the conviction of any person under the provisions of the draft Bill or under any enactment relating to elections. Such notifications will enable the Commission to check whether a person registered as a party's treasurer or as the treasurer of an accounting unit, or as a deputy treasurer, is disbarred from holding such office by virtue of clauses 21(7), 23(3) and 65(3) respectively. 78. Clause 98 confers a power on the Secretary of State (for these purposes the Home Secretary) to vary any sums set out in the draft Bill. Save where any sum is simply being uprated to allow for inflation, any variation must be on the recommendation of the Electoral Commission. 79. Clause 99 provides for the Secretary of State's powers to make orders and regulations. Clause 100 sets out requirements in respect of documents. Clause 101 and Schedules 9 and 10 deal with minor and consequential amendments and repeals. Clause 102 is the interpretation clause. Clause 103 provides that the provisions of the Bill providing for the establishment of the Electoral Commission and the Speaker's Committee will come into force on Royal Assent; this will enable the setting up of the Commission to proceed quickly. Other provisions of the Bill will be brought into force by means of commencement orders. The clause also provides that the provisions of the Bill extend throughout the United Kingdom.
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