New Sections 347A and 347B : Introductory provisions and exemptions
250.Section 347A establishes the general purpose of the sections on control of political donations and expenditure by companies, as set out above in relation to section 139 of this Act. In addition, it provides the following definitions in respect of the new Part XA (subject to the exemptions in section 347B):
“director” includes shadow director;
“donation” means anything that would constitute a donation for the purposes of sections 50 to 52 of this Act;
“EU political expenditure” means any expenditure incurred by a company-
in respect of the preparation, publication or dissemination of any advertising or other promotional material which could reasonably be regarded as intended to affect public support for any EU political organisation, or
in respect of any activities by the company itself which are capable of being reasonably regarded as intended to affect public support for a political party registered under this Act, any other EU political party or any independent candidates at elections, or to influence voters in relation to any national or regional referendum in any EU member state.
“EU political organisation” means:
a political party registered under the Act, or
a political party which carries on, or proposes to carry on, activities for the purpose of, or in connection with, the participation of the party in any election or elections to public office held in an EU member state other than the United Kingdom, or
an organisation which carries on, or proposes to carry on, activities which are capable of being reasonably regarded as intended to affect public support for-
any registered party,
any other political party within (ii) above, or
independent candidates at any election or elections to public office held in an EU member state, other than the UK, or
an organisation which carries on, or proposes to carry on, activities which are capable of being reasonably regarded as intended to influence voters in relation to any national or regional referendum held under the law of any EU member state.
251.Section 347B(1) to (3) provide for the following exemptions:
a subscription paid to an EU trade association for membership of the association is not to be regarded as a political donation for the purposes of the new Part XA;
an all-party parliamentary group composed of members of one or both of the Houses of Parliament (or of such members and other persons) is not an EU political organisation for the purposes of that Part.
252.Under section 347B(4) to (7), a company (including, where appropriate, a subsidiary company) does not need to seek prior shareholder consent for donations to EU political organisations except to the extent (if any) that the amount or aggregate amount of any such donation or donations made in a particular qualifying period exceeds £5,000.
253.A “qualifying period” is defined in subsection 347B(6) as a period of twelve months. The first such period will commence either on the date of the company’s first annual general meeting after this section has come into force or on the date immediately following the end of the 12-month period beginning with the date of the coming into force of this section, whichever is sooner.
254.Under section 347B(8), the Secretary of State may make an order by statutory instrument conferring an exemption on companies or expenditure of any description or category specified in the order. The Government has said that it intends to exempt business activities such as the publication of newspapers which, by their very nature, involve the publication or dissemination of material which seeks to influence the views of members of the public.
