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Elections Act 2022

Contents

Part 4: Regulation of Expenditure

Notional expenditure of candidates and others

Section 20: Notional expenditure: use of property etc on behalf of candidates and others

  1. Section 20 subsection (1) (notional expenditure: use of property etc. on behalf of candidates and others) amends section 90C of the RPA 1983 in order to clarify that ‘on behalf of’ means where the candidate (or the candidate’s election agent) has directed, authorised or encouraged the use of benefits in kind by someone else. This clarifies that candidates only need to report benefits in kind which they have actually used, or directed or encouraged someone else to use and do not need to fear being responsible for benefits in kind of which they had no knowledge.
  2. Section 20 subsections (2)-(7) makes equivalent amendments to the rules on notional expenditure throughout electoral law, including in respect of other campaigners, including political parties. This ensures consistency across the various pieces of electoral legislation.
  3. This section applies only in relation to reserved and excepted elections. For subsection (1), relating to notional expenditure of candidates, this applies to all UK elections except local Government elections in Scotland and Wales. Subsections (2) to (4) apply the amendment to political parties and third parties during regulated periods for reserved and excepted elections. The relevant periods are set out in paragraphs 3, 7, 9, 10 and 11 of schedules 9 and 10 of PPERA. The regulated period before devolved elections fall within the devolved legislative competence of the Scottish Parliament or Welsh Senedd, except where regulated periods for UK Parliamentary elections overlap/are combined with those periods. It is possible that this combination of regulated periods could happen retrospectively, when a general election is called. In this scenario, the entire combined regulated period (as defined by paragraphs 9 to 11) is reserved, and as such reserved campaigning rules apply.

Section 21: Codes of practice on expenses

  1. Section 21 subsection (1) amends the provisions in the Representation of the People Act 1983 providing that the Electoral Commission may prepare guidance on election expenses for candidates. The amendments clarify that the guidance can cover the application of the rules in relation to expenses incurred. This is to ensure that the codes of practice are sufficiently broad so as to include an explanation of the rules on all forms of expenditure.
  2. Subsection (1)(b) and (2) amend the procedures to bring into force various codes of practice in respect of election expenses under PPERA and the RPA 1983. This is to ensure the procedures are consistent with each other and the codes are all brought into force by a statutory instrument with no further parliamentary procedure. This section only applies to any Codes of Practice prepared in relation to reserved legislative competence (and excepted, as it relates to Northern Ireland); it does not apply to an Order made by the Welsh or Scottish Ministers.

Section 22: Authorised persons not required to pay expenses through election agent

  1. Section 22 amends section 73 RPA 1983 (and equivalent provisions throughout electoral law) so that expenses incurred under section 75 by a third party do not have to be paid by the election agent. This is intended to provide clarity to third parties who have been authorised by a candidate or agent to promote them, under section 75 of the RPA 1983. This amendment ensures that third parties are able to both incur and pay for authorised expenses under section 75, rather than the expenses being paid through the agent of the candidate they are promoting.
  2. This section applies only in relation to reserved legislative competence (and excepted, as it relates to Northern Ireland), it does not apply to devolved elections in Scotland or Wales.

Registration of parties etc

Section 23: Declaration of assets and liabilities to be provided on application for registration

  1. Section 23 subsections (1) to (4) amend PPERA section 28 which deals with the registration of political parties by the Electoral Commission. The proposed treasurer of a political party will be required to confirm whether to the best of their knowledge and belief they have assets or liabilities that are either greater or less than £500. This declaration is made in reference to whether or not the party meets the assets/liabilities condition outlined in subsection (3). A political party meets the assets/liabilities condition if they do not have either assets or liabilities that exceed £500.
  2. Parties with assets or liabilities that do not exceed the £500 threshold (meet the condition) are required to make a declaration confirming that fact. Parties who do not meet the condition outlined in subsection (3) and therefore have assets or liabilities in excess of £500, are required to produce a record of their assets and liabilities to accompany their declaration. Under PPERA Schedule 4 paragraph 9, the responsible officers of the party are required to sign an application.
  3. Minor parties are excluded from this declaration requirement by virtue of subsection (3E). The declaration and record of assets and liabilities is incorporated into the registration process with the Commission and into the register maintained by the Commission (PPERA, s.23). The political party register, maintained by the Commission, will indicate whether the assets or liabilities of a party are in excess of £500 or not (subsection (8B)).

Section 24: Prohibition on entities being registered political parties and recognised third parties at same time

  1. Section 24 narrows the registration criteria for political parties so as to exclude third parties (new subsection (7A) inserted into section 28 PPERA) which means that recognised third-party campaigners are not able to register as a political party if their notification as a third-party campaigner remains in force. Registered parties are removed from the list of categories of third-party campaigners eligible to register with the Commission in PPERA 2000, section 88(2). Section 24 also makes a series of consequential amendments as a result.

Section 25: Section 24: transitional provisions

  1. Section 25 sets out a transitional provision to provide for any groups appearing on both registers when the provision in section 24 comes into force during a regulated period. In such a scenario, campaigners are only permitted to spend in one capacity (of their choice) during the regulated period and, following this, would need to either deregister as a political party or allow their third-party notification to lapse. It is an offence (new section 89A and section 79(2) of PPERA) for a party to spend in both capacities post commencement.

Controlled Expenditure etc

Section 26: Restriction on which third parties may incur controlled expenditure

  1. Section 26 subsection (1) inserts new section 89A(1) of PPERA. Subsection (1) of which prevents any third party from incurring controlled expenditure (including notional controlled expenditure) during a reserved regulated period, unless it is either eligible to register under section 88(2) of PPERA or an unincorporated association with the requisite UK connection. Subsections (4) and (5) of 89A make it an offence for a third party to incur controlled expenditure when not listed in section 88(2) or exempt. .
  2. Section 89A(6) of PPERA provides that unincorporated associations have the ‘requisite UK connection’ if they are composed solely of registered overseas electors (defined in new subsection (7)); these associations are a separate category of unincorporated associations that are not eligible to notify the Electoral Commission because they do not fall into the unincorporated association category in section 54(2)(h) of PPERA.
  3. Third-party campaigner controlled expenditure is only regulated during a regulated period. Therefore, the offence under new section 89A(4) or (5) will only apply during a regulated period. New section 89A(2) ensures that 89A(1) will not apply to third-party campaigners spending below £700 during a regulated period; this mirrors section 75(1ZZB)(a) and (1ZA) of the RPA 1983.
  4. Section 89A applies only to reserved regulated periods. Subsection (7) of that section defines reserved regulated periods by reference to paragraphs 3, 7,, 9, 10 and 11 of Schedule 10 of PPERA. The regulated period before devolved elections fall within the devolved legislative competence of the Scottish Parliament or Welsh Senedd, except where regulated periods for UK Parliamentary elections overlap/are combined with those periods. It is possible that this combination of regulated periods could happen retrospectively, if a general election is called before the expected end of a parliament. In this scenario, the entire combined regulated period (as defined by paragraphs 9 to 11 of the Schedule) is reserved. In these circumstances, spending by a third party could be captured, assuming it meets the controlled expenditure definition, after it has actually been incurred, and a third party spending in excess of permissible limits could be liable for a criminal offence.
  5. Third parties that are not eligible to register with the Electoral Commission under section 88(2) PPERA but incur controlled expenditure during a devolved regulated period are liable for an offence under new subsections (4) and (5) of section 89A PPERA if the regulated period is subsequently combined with a regulated period for a parliamentary general election.

Section 27: Third parties capable of giving notification for purposes of Part 6 of PPERA

  1. Section 27 makes provision for the amendment of the list of eligible categories of third-party campaigners in section 88(2) of PPERA 2000. This allows for the ability to add, remove or amend categories of third-party campaigners from the list in section 88(2) should that be necessary. Any change would have an impact on who is permitted to incur controlled expenditure during regulated periods under new section 89A. Any change under subsection (1) would only apply in relation to third-party campaigning during reserved regulated periods.
  2. It is possible, therefore, that in the future following any such order, different categories of third parties will be eligible (or not) to submit a notification to the Electoral Commission under section 88 of PPERA during the same regulated period. For example, a third party may be eligible to register with the Commission during a regulated period for a standalone Scottish Parliamentary or Welsh Senedd election, but not eligible to register where such a regulated period overlaps with a UK parliamentary general election regulated period. If the regulated period for the devolved election is overlapped retrospectively by a regulated period for a UK parliamentary election the third party could become ineligible for the entirety of the combined regulated period
  3. Subsection (10) specifies that any order to remove or amend the description of a category in section 88(2) can only be made on the recommendation of the Electoral Commission.

Section 28 Recognised Third parties: changes to existing limits etc

  1. Subsections (2) to (4) amend section 88 of PPERA to create, in effect, a two tier system of notification for third-party campaigners, by introducing the "lower-tier expenditure limit" set at £10,000. Subsection (1) defines the lower tier expenditure limits applicable to controlled expenditure by third parties during a regulated period as set out in section 94(5) of PPERA.
  2. By virtue of subsections (5) and (6), third-party campaigners registered on the ‘lower tier’, as part of any renewal notification, must confirm or withdraw their statement (as a third party subject to lower tier expenditure limit) with the Electoral Commission. If a third-party campaigner is registered on the lower tier and thinks that it will exceed the existing per country spending limit, the third party may send a "notification of alteration" to the Electoral Commission as is the case for any changes to an original notification under section 88(8) of PPERA. Failure to do so means the third party (or individual or responsible person) may be liable for an offence if their spending is in excess of those third party limits.
  3. Subsections (7), (8) and (9) incorporate this new ‘lower tier threshold’ as an expenditure limit for third parties alongside the existing spending limits for third-party campaigners in section 94 of PPERA. The lower tier for notification is set at those third parties intending to spend in excess of £10,000 on controlled expenditure across any combination of the constituent parts of the UK during a reserved regulated period before an election. It also acts as the upper expenditure limit for non-recognised third parties. New subsection (4ZA) of section 94 links the incurring of controlled expenditure to authorisation by a responsible person within the third party subject to the lower tier expenditure limits.
  4. Subsection (10) makes it an offence under section 94(4) of PPERA for a third party to incur controlled expenditure in excess of £10,000 across the UK during a regulated period without notifying/registering with the Electoral Commission. Recognised third-party campaigners subject to the lower tier expenditure limit that exceed their limit outlined in section 94(4) become subject to all of the existing Part 6 regulation for recognised third-parties, and the corresponding spending limit offence in section 94(2) (subsection (10A)).
  5. Under subsection (11), a "lower tier" third-party campaigner is excluded from acting as a lead campaigner in relation to any arrangement in which expenditure is incurred in pursuance of a common plan with one or more third parties. This is due to the fact that such parties are not subject to the reporting requirements of recognised third parties, and therefore the spending would be unreported.
  6. Subsection (12) ensures that third-party campaigners subject to the lower tier expenditure limit are not subject to some controls in PPERA namely sections 91, 92, 95A, 95B, 95D and 96 will not apply. They are not required to submit donations reports during a reserved regulated period, or subject to the internal reporting and recording requirements of sections 91, 92 and 93 of PPERA.
  7. Subsection (8) specifies that only third-party campaigners incurring controlled expenditure during a reserved regulated period are required to give a notification to the Electoral Commission subject to the ‘lower tier expenditure limit’. The section only applies to regulated periods (defined by section 94(10) of the 2000 Act) to which any limit is imposed by references to paragraphs 3, 7 and 9 to 11 of Schedule 10 PPERA. The regulated period before devolved elections fall within the devolved legislative competence of the Scottish Parliament or Welsh Senedd, except where regulated periods for UK Parliamentary elections overlap/are combined with those periods; this is also the case for any related offences under section 94 (2) and (4) of PPERA.
  8. That means that a third party campaigning for both Scottish parliamentary and Welsh Senedd elections can spend up £10,000 per regulated period (the existing per country thresholds under section 94(5) of PPERA) without registering with the Commission whereas section 25 makes the registration threshold £10,000 for spending anywhere in the UK during a reserved regulated period. For example, a third party spending £5,000 in both Northern Ireland and England will now be required to register (as they have reached the new ‘lower tier’ threshold), although they have not reached the per country thresholds of £10,000 and £20,000 respectively in those countries (which as contained in section 94(5) of PPERA). Failure to register will mean that a third party (or the person who authorised the expenditure) is potentially liable for the offence in section 94(4).
  9. It is possible that this combination of regulated periods could happen retrospectively, if a UK parliamentary general election is called and the regulated period of the devolved election is within 365 days leading up to the UK election for example. In this scenario, the entire combined period (as defined by paragraphs 9 to 11 of Schedule 10 of PPERA) would be reserved. In this situation, a non-registered third party spending in excess of £10,000 spread across the Scottish and Welsh regulated periods, without registering, could be liable for an offence if those regulated periods were combined with a regulated period for a UK parliamentary election.

Section 29 (code of practice on controls relating to third parties)

  1. Section 29 subsection (1) inserts new sections 100A and 100B into Part VI of PPERA placing a duty on the Electoral Commission to produce a statutory code of practice on the application of expenditure controls for third party campaigners contained within that Act; specifying the particular matters which must be included in the code; creating a defence for third parties charged with offences under Part VI of PPERA; and setting out a consultation process and procedural requirements relevant to the production of the code.
  2. Subsection (5) provides that compliance with any code issued under this section is a potential defence where the offence relates to expenditure incurred or treated as incurred by a third party during a reserved regulated period. This means where a ‘responsible person’, for example, is charged with an offence in relation to controlled expenditure (or where expenditure is treated as controlled expenditure) and they determine what is or is not controlled expenditure (or is to be treated as such) in accordance with an issued code then there is a defence open to them.
  3. The consultation process for the statutory code is set out in subparagraph (1)(c) of paragraph 100B stating that the Electoral Commission must consult with "other persons as… consider[ed] appropriate" on a draft code. This may include, for example, civil society organisations eligible to notify the Electoral Commission under section 88.

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