Part 6 – Control of Loans etc to individuals and members associations
455.Paragraphs 97 – 102 apply the principles of the regulated transactions regime to individual party members, members associations and the holders of certain elective office on a broadly similar basis as regulated transactions to political parties are regulated. Distinctions are made where it is necessary to reflect differences between individual members of political parties and political parties themselves.
456.Paragraph 99 inserts a new Schedule 7A to the 2000 Act, which provides for the control of loans in this context.
457.Schedule 7A, paragraph 1 defines individual party members, members associations and holders of relevant elective office collectively as “regulated participants”. They are defined in the same terms as in Schedule 7, save that Schedule 7A does not have effect in relation to Members of the Scottish Parliament or members of local authorities in Scotland who are not members of a political party.
458.Schedule 7A, paragraph 2 defines the transactions to which the Schedule applies (“controlled transactions”), which are the regulated transactions defined in the new section 71F (as inserted by section 61 of this Act), when entered into with regulated participants. However, paragraph 2 draws a capacity based distinction to reflect the fact that whilst the activities of political parties are inherently political, the activities of individual members may not be. Accordingly, such transactions when entered into by regulated participants are only controlled transactions where the use condition is satisfied, namely that the regulated participant must intend at the time he enters into the transaction to use some part of any money or benefit obtained in connection with relevant political activities.
459.Relevant political activities are defined in Schedule 7A, paragraph 2(8).
460.Schedule 7A, paragraph 3 provides for how controlled transactions are to be valued, and adopts the same approach as in the regulated transactions regime for political parties.
461.Schedule 7A, paragraph 4 provides that regulated participants may only be party to a controlled transaction with individuals or organisations who are authorised participants, adopting the same approach to permissibility as in the regulated transactions regime for political parties. Similar provision is made to the regulated transactions regime rendering void controlled transactions with unauthorised participants (with Schedule 7A, paragraphs 5 and 6 corresponding to new sections 71I and 71J respectively (as inserted by section 61 of this Act)).
462.Schedule 7A, paragraph 8 provides for a range of criminal offences to enforce the permissibility requirement. The offences correspond with the offences set out in the regulated transaction regime as applied to political parties. Where the regulated participant is an individual, the offences are committed by that individual. Where a members association, by the “responsible person”, that is the treasurer or, if there is no treasurer, any person responsible for dealing with receipts from controlled transactions (Schedule 7A, paragraph 1(7)(d)).
463.Schedule 7A, paragraph 9 differs from the regulated transactions regime as applied to political parties, by not requiring individuals and members associations to make quarterly transaction reports. (In doing so, it follows the approach to the reporting of donations by individuals and members associations in Schedule 7.) Regulated participants are required to submit a report to the Electoral Commission each time a transaction exceeds the relevant reporting threshold, but only when this occurs. The reporting threshold is £,1000, or, in the case of members associations, £5,000. Provision is made for controlled transactions to be aggregated with other controlled transactions, controlled donations or both from the same person. The report must be made within 30 days of the date on which the transaction was entered into (or the date on which the aggregate amount exceeded the relevant reporting threshold). Similar particulars must be reported by an regulated participant in respect of a controlled transaction as must be reported by a political party in respect of a regulated transaction
464.A requirement to report controlled transactions with unauthorised participants and changes to recorded transactions is imposed in Schedule 7A, paragraphs 10 and 11.
465.Offences to support the reporting requirements are set out in Schedule 7A, paragraph 12 and the individual or responsible person (as the case may be) is required to make a declaration in respect of a report under Schedule 7A, paragraphs 9 and 10 by Schedule 7A, paragraph 13.
466.Schedule 7A, paragraph 14 requires existing transactions to be reported within 60 days of the coming into force of these provisions.
467.Schedule 7A, paragraph 15 obliges the Electoral Commission to maintain a register of transactions reported to them under Schedule 7A.
468.Schedule 7A, paragraph 16 together with paragraph 102 of Part 6 of Schedule 1 to this Act makes corresponding provision to that made in respect of the holders of relevant elective office by section 59 of this Act.
