The Political Parties and Elections Bill

The appropriate funding of political parties has been the subject of debate for several years, as the major parties have struggled to finance national election campaigns. Major reforms in the Political Parties, Elections and Referendums Act 2000 (PPERA) introduced a system of national expenditure limits and disclosure of donations, overseen by an independent Electoral Commission. However, there have been renewed calls for reform, following the police investigation into the ‘cash for honours’ allegations in 2006. No charges were brought. Major parties had accepted loans during the 2005 election and subsequently, the Electoral Administration Act required all types of loans to be reported to the Commission regulated all types of loans above a certain threshold.

The former permanent secretary, Sir Hayden Phillips, conducted an inquiry, publishing a series of recommendations in March 2007. Inter-party talks were held following the Phillips review, but there was no agreement despite the publication by Sir Hayden of a draft set of recommendations in October 2007. The Conservatives argued for trade union funding of the Labour Party to be included within proposals to cap donations but the Labour Party did not agree with this approach and preferred to concentrate its focus on integrating national expenditure limits with local constituency limits.

In June 2008 the Lord Chancellor, Jack Straw, published a white paper, which noted that inter-party agreement on limiting donations was not possible at present and made a series of proposals to amend the regulatory regime, and to strengthen the powers of Electoral Commission.

This Bill is due to have its second reading on 8 October 2008. It takes forward the proposals for immediate legislation in the white paper, with some refinements. The following issues are dealt with:

Reforming the governance arrangements of the Electoral Commission. The minimum number of Electoral Commissioners is increased to nine and four of the Commissioners will be nominated by the political parties. The rules preventing staff with recent political experience from being employed by the Commission are relaxed so that these are reduced to five years for the Chief Executive and one year for all other staff.

• Strengthening the Electoral Commission’s investigatory powers and sanctions. In order to carry out its regulatory functions the Commission is given additional powers to require the disclosure of documents relating to the income and expenditure of a party or individual and increased powers to enter the premises of a party or individual to inspect documents. A wider range of civil sanctions is also made available to the Commission if there have been breaches of PPERA. These include fixed monetary penalties, discretionary requirements and stop notices.

• Amending the law on candidate spending limits to reintroduce the concept of triggering. Candidates are subject to individual expense limits in constituencies. Prior to PPERA, candidates who began campaigning before the dissolution of Parliament could find that this expenditure counted towards their limit. PPERA made modifications, with the result that, in practice, dissolution became the key point from which expenditure was incurred. The Bill is designed to broadly return the law to the position prior to PPERA, where campaigning by candidates before dissolution will trigger expenditure which will count towards the limit.

• Requiring greater transparency about donations through intermediaries and unincorporated associations. PPERA requires donation to political parties to be registered with the Electoral Commission and disclosed on the Commission’s website The Bill is designed to ensure that the original source of donations passed through intermediaries will also be recorded and disclosed to the Commission if required, and that parties will be required to certify that they have checked the source of donations.

• Allowing electors applying to vote on household canvass forms to be registered during the canvass period, so preventing disenfranchisement if an election is called. This provision is designed to clarify the law on registration of electors in respect of an election held in the autumn annual canvass period.

• Allowing for the administration of European Parliament elections by local authority (rather than Parliamentary) returning officers. This provision is designed to simplify electoral administration.