Political Parties, Elections and Referendums Act 2000

Part VI : Controls relating to third party national election campaigns

Sections 85 to 87 : Controlled expenditure by third parties

184.The purpose of this Part is to apply restrictions upon election expenditure by third parties. Section 75 of the Representation of the People Act 1983 regulates the expenses which third parties may incur in promoting or procuring the election of a candidate in a particular constituency contest. This Part makes comparable provision in relation to national third party expenditure which is intended to generally promote or procure the election of a registered party and its candidates. Section 85(2) specifies the expenditure which is to be subject to the controls set out in this Part. “Controlled expenditure” is that incurred in connection with the production or publication of material which is made available to the public at large, or any section of the public, and which is designed to promote or procure the election of a particular registered party or a particular category of candidates, whether they be those standing in the name of a particular registered party or a group of candidates who, irrespective of party, share particular views.

185.Section 85(4) specifies that “controlled expenditure” includes expenses in relation to material designed to achieve its purpose by reducing support for other candidates or another party. It does not matter whether the material names the candidates or party which it is intended to benefit or disparage. In essence the test is whether the material can reasonably be regarded as intended to benefit a particular party’s electoral prospects. The cost of a poster campaign advocating a particular policy without explicitly supporting or attacking a named political party might nevertheless fall to be regarded as “controlled expenditure” if the policy in question was closely identified with a particular political party or group of candidates.

186.The controls set out in this Part apply to material affecting the electoral prospects of a political party or candidates in elections to the House of Commons, the European Parliament and the devolved legislatures. No limits are, as such, imposed on controlled expenditure by third parties in connection with local government elections, although any such expenditure incurred during the relevant campaign period for one of the above elections would count towards the expenditure limit for the election in question.

187.The expenditure controls would apply, under section 86(1), to expenditure in kind (that is to property, services or facilities provided for the use or benefit of the third party either free of charge or at a rate which is more than 10 per cent below their market value), where the market value of property etc. provided free of charge, or the difference between the rate charged and their true market value, is more than £200. When a third party incurs expenditure within the meaning of section 86(1), it will be required, under section 86(6), to make a declaration as to the value of the benefit for inclusion in a return as to controlled expenditure under section 96. Section 87 details certain types of expenditure which may be incurred by or on behalf of a third party, but which are not to be treated as controlled expenditure for the purposes of Part VI.

Sections 88 and 89 : Recognised third parties

188.Section 94(3) to (5) makes it an offence for a third party to incur controlled expenditure in excess of £10,000 in England or £5,000 in Scotland, Wales or Northern Ireland during a regulated period for an election, unless it is a recognised third party. The procedure whereby a third party can become a recognised third party is set out in section 88. The procedure involves submitting a notification to the Electoral Commission. By virtue of section 88(2) only the following may give a notification: an individual resident in the United Kingdom or registered as an overseas elector; a registered party; or a permissible donor falling within section 54(2)(b) or (d) to (h). The notification given by a third party must specify the name and address of the third party and, in the case of a company, trade union, building society, limited liability partnership, friendly or industrial and provident society or unincorporated association, the person who will be responsible for ensuring compliance with the accounting and disclosure provisions of this Part. (The ‘responsible person’ in the case of a third party that is a registered party will be the treasurer of the party and in the case of an individual, that individual.) Such a notification may be made at any time. A notification under section 88 will normally lapse unless renewed on an annual basis. Under section 88(5) a notification which would have lapsed during a regulated period continues in force until the end of that period. Section 89 requires the Commission to maintain a register of notifications.

Sections 90 to 93 : General restrictions relating to controlled expenditure by recognised third parties

189.In order to ensure proper observance of the limits on controlled expenditure by third parties, sections 90 and 91 require that all such expenditure, and any payment in respect of such expenditure, must be authorised or made by the responsible person or a person authorised in writing by him. Similarly, section 92 requires that any claim for payment in respect of campaign expenditure must be sent to the responsible person or other authorised person. These provisions (and section 93, which provides for disputed claims) are similar to the provisions in Part II of the Representation of the People Act 1983 concerning election expenditure by candidates and their agents.

Section 94 and Schedule 10 : Limits on controlled expenditure by third parties

190.Section 94(1) gives effect to Schedule 10 sets out financial limits on controlled expenditure by recognised third parties, and the periods to which those limits apply, in respect of elections to the House of Commons, the European Parliament and the devolved legislatures. Section 94 also ensures that non-recognised third parties which incur significant levels of controlled expenditure are brought within the regulatory remit of the Electoral Commission.

191.The scheme set out in Schedule 10 is similar to that in respect of national campaign expenditure by political parties as set out in Schedule 9. The periods to which the financial limits set out in Part II of Schedule 10 apply are the same as those which apply to expenditure by registered parties under Schedule 9. Part III of Schedule 10 makes equivalent provision for any overlapping of the relevant regulated periods and, where appropriate, the aggregation of the financial limits which apply. Part I of Schedule 10 also makes equivalent provision for third party expenditure to be apportioned between England, Scotland, Wales and Northern Ireland.

192.The financial limits on controlled expenditure on the part of recognised third parties represent 5% of the limit which would apply to a registered party if it contested all the seats in the election in question. The limits are set out in the table below:

Section 95 and Schedule 11 : Control of donations to recognised third parties

193.Section 95 gives effect to Schedule 11 which provides for controls on donations to recognised third parties for the purpose of meeting controlled expenditure. Part I of Schedule 11 defines donations to recognised third parties in terms equivalent to those in sections 50 to 53 in respect of donations to registered parties. Part II of Schedule 10 applies restrictions on the acceptance of donations equivalent to those in sections 54 to 61. Part III of Schedule 11 requires that the return as to controlled expenditure, required under section 96, must include a statement giving details of the source and amount of donations of more than £5,000 (including aggregate sums). The statement must also detail donations received, but rejected, from impermissible or unidentifiable donors. The requirements of this section and Schedule do not apply to registered parties (other than a minor party) given that they will be subject to the ongoing controls on donations set out in Part IV.

Sections 96 to 100: Returns

194.When a recognised third party incurs controlled expenditure during a regulated period, it will, at the end of that period, be required to submit a return specifying the election or elections taking place within the regulated period in question and containing a statement of all payments made in respect of controlled expenditure incurred during that period. This return must be accompanied by all related invoices or receipts and all declarations made, under section 86(6), in respect of property, services and facilities provided free of charge or at a substantial discount for the use or benefit of the third party. This requirement does not apply to any controlled expenditure incurred during a regulated period but before the time the third party became a recognised third party. It must also be accompanied by a declaration signed by the responsible person attesting to the accuracy of the return. It is made a criminal offence either to make a false declaration or to omit to provide such a declaration. When the controlled expenditure exceeds £250,000, the return must be independently examined by a qualified auditor and submitted to the Electoral Commission within six months. Returns not subject to the audit requirement must be submitted within three months. All returns received by the Commission are to be open to public inspection (although, under section 100 (2) the address of any individual donor to a recognised third party will be omitted from the copy of a return available for inspection).