Donations to party constituency organisations or to regional organisations of political parties from one source which total £1,000 or more in one year must be publicly disclosed.
In an election period (a term to be defined in legislation) each political party should report to the Election Commission the best available information concerning donations received within seven days of receipt.
In any case of a failure to report to the Election Commission a disclosable donation (whether such failure is deliberate or inadvertent) the court should have power to order the defaulting political party to forfeit a sum not exceeding the unreported donation.
Any person or organisation transmitting to a political party any consolidated donation which consists of contributions received from two or more persons should supply a list of any individual donations received which are at or above the disclosure threshold.
The Government should consider in the context of the development of the peace process whether it would be expedient to introduce a short term and reviewable exemption from the reporting requirements in respect of donations made to political parties in Northern Ireland.
Blind trusts should be prohibited as a mechanism for funding political parties, party leaders or their offices, Members of Parliament or parliamentary candidates.
Open trusts designed to fund party leaders or their offices, Members of Parliament or parliamentary candidates should be permitted but on condition that the trustees are bound to report to the Election Commission any donations which would be disclosable if made to a political party. The recommendations made earlier in this chapter should apply with appropriate modifications.
The definition of a permissible source should cover: As to individuals: registered UK voters and those entitled to register as UK voters As to corporations: companies incorporated in the United Kingdom As to partnerships: partnerships based in and having their principal sphere of operations in the United Kingdom As to trade unions: trade unions registered here pursuant to statute As to other organisations: organisations, voluntary associations and trusts etc. genuinely based in and having their principal sphere of operations in the United Kingdom (but excluding branches of foreign organisations of whatever character). (p 74) Fifth Report of the Committee on Standards in Public Life 6 72858-COI-1-14 Party Funding 5/10/98 10:46 am Page 6 27. It should be made a criminal offence to attempt to evade or render nugatory the statutory provisions which confine political parties to donations received from a permissible source. A specific provision should be made to cover possible abuse by the utilisation of UK subsidiaries of foreign corporations.
The responsibility for ensuring that donations are received only from a permissible source should be placed on each political party. The designated responsible officer of the party would be required to certify the position to the Election Commission annually when reporting on the donations received.
In relation to donations to political parties in Northern Ireland, the definition of a permissible source should also include a citizen of the Republic of Ireland resident in the Republic subject to compliance with the Republic’s Electoral Act 1997.
The Election Commission should have wide powers to call for information and to institute investigations into any suspect foreign donations received by a political party or a sub-unit.
Tax relief by deduction at source should be introduced, limited to the basic rate, on donations of up to £500 a year to eligible registered political parties.
The political parties in the House of Commons should review the amount of Short money now made available to the opposition parties, with a view to increasing it substantially, perhaps by as much as three times.
The political parties in the House of Commons should review the allocation of Short money to ensure that the Official Opposition’s allocation is fixed and does not depend on the outcome of the previous general election and also to ensure that the allocation of Short money to all opposition parties is sufficient to enable them to perform their functions adequately.
The political parties in the House of Lords should review the amount of money now made available to the opposition parties under the Cranborne money scheme, with a view to increasing it.
The political parties in House of Commons should assess the reasonable cost of running the Leader of the Opposition’s Office and then, as part of the review of the Short money scheme, should specifically earmark a portion of the Short money, additional to that in recommendation 40 above, for funding that Office.
Power should be taken to set a higher maximum permitted limit for a parliamentary candidate’s expenditure at a by-election. A sum in the order of £100,000 seems appropriate to the Committee, but the Government should establish the figure after appropriate consultation.
The Government should undertake the revision of Schedule 3 to the Representation of the People Act 1983 so that it contains a full and up-to-date list of items of expenditure which should be declared by candidates at parliamentary elections. The contents of the schedule should be kept under review by the Election Commission.
A limit should be placed on the campaign spending of political parties in respect of elections to the House of Commons. The operation of this limit, both in principle and in practice, should be kept under review by the Election Commission.
On the assumption that a national spending limit is in place for the next general election, the limit for parties that contest more than 600 seats at that election should be set at £20 million. That limit should then be index-linked. It should not be varied in future except on the recommendation of the Election Commission.
The limits in a general election for parties that contest fewer than 600 seats should be lower and should be based on a formula taking account of the number of seats they are contesting.
Expenditure limits should continue to be set in terms of the purposes for which expenditure is incurred rather than in terms of any specified time period. Expenditure limits, at both national and local level, should be rigorously enforced.
The national expenditure limits should cover benefits in kind as well as cash expenditure. Parties’ accounts should itemise benefits in kind separately from cash expenditure and should indicate both the nature of each benefit in kind and its true market value.
Legislation governing national expenditure limits should include a schedule, analogous to our proposed revised Schedule 3 to the Representation of the People Act 1983, setting out a comprehensive list of items of relevant expenditure which should be declared by political parties at parliamentary elections. The contents of the schedule should be kept under review by the Election Commission.
‘Election expenses’ should be taken to include expenses that are clearly intended to promote or have the foreseeable effect of promoting one or more parties or to disparage other parties irrespective of whether such parties are mentioned by name in the individual’s or organisation’s advertising or other promotional material.
Registered third parties should be required, as a condition of continued registration, to set up a separate election fund. They should be required to disclose to the Election Commission (and the Election Commission should publish) the source and amount of any donation of £5,000 or more. They should also be barred from accepting any donations into their political fund from any source other than a permissible source (as defined in Chapter 5 of this report) and be required to make a formal declaration that they have used their best endeavours to determine that they have not accepted any donations from a non-permitted source. The Election Commission should have similar investigatory powers in respect of third parties as it has in respect of political parties.
Limits should be placed on the campaign spending of political parties in respect of elections to the Scottish Parliament and the National Assembly for Wales. How well these limits work, both in principle and in practice, should be kept under review by the Election Commission.
Candidates for the Scottish Parliament and the National Assembly for Wales who contest an election only as a constituency candidate under the first-past-the-post part of the system should be subject to the same expenditure limits, and the same arrangements for enforcing them, as House of Commons candidates.
Independent regional candidates for election to the Scottish Parliament and the National Assembly for Wales should be subject to an expenditure limit calculated by combining the total constituency limits of those constituencies contained within the region. The limit should be enforced in the same way as the limits for constituency candidates.
Limits should be placed on the campaign expenditures of political parties in respect of elections to the Scottish Parliament and the National Assembly for Wales. On the assumption that such spending limits are in place for the first elections to the Parliament and the Assembly, the limits should initially be set at £1.5 million in Scotland and £600,000 in Wales. The limits should then be index-linked. They should not otherwise be varied in future except on the recommendation of the Election Commission. (p 138) Fifth Report of the Committee on Standards in Public Life 10 72858-COI-1-14 Party Funding 5/10/98 10:46 am Page 10 63. Campaign expenditure by constituency candidates which also promotes their party’s Scottish or Welsh national campaign should be treated, for purposes of expenditure limits, only as constituency expenditure.
Limits on third-party campaign spending in connection with elections to the Scottish Parliament and the National Assembly for Wales should be along the same lines as the limits proposed for elections to the House of Commons. Third parties proposing to engage in significant campaign expenditure should, as in the United Kingdom case, be required to register.
A limit should be placed on the campaign expenditures of political parties in respect of elections to the Northern Ireland Assembly. The limit for the next elections to the Assembly should be set at £300,000. It should then be index-linked. It should not be varied in future except on the recommendation of the Election Commission.
A limit on third-party expenditure in respect of elections to the Northern Ireland Assembly should be along the same lines as the limits proposed for elections to the Scottish Parliament and the National Assembly for Wales. Third parties proposing to engage in significant campaign expenditure should, as in Scotland and Wales, be required to register.