Elections expense limits - Parliament
Elections expense limits - Parliament
Elections expense limits - Parliament
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Election <strong>expense</strong> <strong>limits</strong><br />
Standard Note: SN/PC/3413<br />
Last updated: 18 March 2005<br />
Author: Richard Kelly<br />
<strong>Parliament</strong> and Constitution Centre<br />
This note details the spending <strong>limits</strong> imposed on parties and candidates in general election<br />
campaigns<br />
Since the Corrupt and Illegal Practices Act 1883 there have been legal <strong>limits</strong> on how much<br />
individual candidates can spend on their general election campaign.<br />
The Political Parties, <strong>Elections</strong> and Referendums Act 2000 (PPERA) introduced <strong>limits</strong> on<br />
how much parties could spend at the national level, for the first time. These <strong>limits</strong> were first<br />
applied in the 2001 election, with some modifications. They will be applied again in the next<br />
general election campaign.<br />
The Electoral Commission pointed out that there were discrepancies in the periods of time in<br />
which <strong>expense</strong>s against these <strong>limits</strong> for national and constituency campaigns are calculated.<br />
It has recently proposed that the <strong>limits</strong> and their rules should be reviewed.<br />
Contents<br />
A. Candidates’ <strong>expense</strong>s <strong>limits</strong> 2<br />
1. The Electoral Commission’s recommendation 2<br />
2. The revised <strong>limits</strong> 3<br />
3. Calculation of <strong>expense</strong> <strong>limits</strong> 4<br />
4. Definition of <strong>expense</strong>s 5<br />
B. National campaign <strong>limits</strong> 6<br />
C. Recommendations for changes to the spending <strong>limits</strong> 7<br />
Appendix: Changes in candidates’ <strong>expense</strong>s <strong>limits</strong> 8<br />
Standard Notes are compiled for the benefit of Members of <strong>Parliament</strong> and their personal staff. Authors are<br />
available to discuss the contents of these papers with Members and their staff but cannot advise others.
A. Candidates’ <strong>expense</strong>s <strong>limits</strong><br />
Candidates’ <strong>expense</strong>s <strong>limits</strong> are set by the Representation of the People Act 1983 but the<br />
<strong>limits</strong> can be amended by Order of the Secretary of State. Until PPERA, <strong>expense</strong>s <strong>limits</strong><br />
were increased in line with inflation. The RPA 1983 specified the following conditions for<br />
increasing <strong>limits</strong>:<br />
(3) The Secretary of State may by order vary a maximum amount of candidates'<br />
election <strong>expense</strong>s specified in subsection (2) above where in his opinion there has<br />
been a change in the value of money since the last occasion on which that amount<br />
was varied by such an order, and the variation shall be such as in his opinion is<br />
justified by that change.<br />
An order under this subsection shall not be made unless a draft of the order has been<br />
laid before, and approved by resolution of, each House of <strong>Parliament</strong>; and the power<br />
to make the order is exercisable by statutory instrument. 1<br />
Since the passing of PPERA, the Secretary of State can take advice on revisions from the<br />
Electoral Commission. The above section has been repealed and section 76A added to the<br />
RPA 1983; it reads:<br />
[(1) The Secretary of State may by order made by statutory instrument vary any of<br />
the sums to which this section applies—<br />
(a) where he considers that the variation is expedient in consequence of<br />
changes in the value of money, or<br />
(b) in order to give effect to a recommendation of the Electoral Commission.<br />
[…]<br />
(3) An order under subsection (1)(b) above shall be subject to annulment in<br />
pursuance of a resolution of either House of <strong>Parliament</strong>.]<br />
In making its recommendations to the Secretary of State, the Electoral Commission is able to<br />
take into account factors other than inflation.<br />
1. The Electoral Commission’s recommendation<br />
In November 2004, the Electoral Commission was asked by the Secretary of State for<br />
Constitutional Affairs to make recommendations for revisions to the candidates’ <strong>expense</strong>s<br />
<strong>limits</strong>.<br />
On 14 January 2005, it published its recommendations, which are set out in the table below:<br />
1<br />
Representation of the People Act 1983, s76(3)<br />
2
Table 1: Recommended candidates’ <strong>expense</strong>s <strong>limits</strong><br />
Election Current <strong>expense</strong>s limit Recommended <strong>expense</strong>s limit<br />
Basic<br />
(£)<br />
Per elector<br />
(p)<br />
Basic<br />
(£)<br />
Per elector<br />
(p)<br />
UK <strong>Parliament</strong><br />
(borough<br />
5,483 4.6 7,150 5<br />
constituency)<br />
UK <strong>Parliament</strong><br />
(county<br />
5,483 6.2 7,150 7<br />
constituency)<br />
Source: Electoral Commission 2<br />
The Electoral Commission reported that it had taken into account both inflation, since the<br />
<strong>limits</strong> were last increased (based on the GDP deflator), and to reflect changes in the definition<br />
of election expenditure that was included in PPERA – most notably that notional expenditure<br />
has to be recorded in a candidate’s election <strong>expense</strong>s return.<br />
The Electoral Commission calculated that the basic limit (for both borough and county<br />
constituencies) needed to increase by £618 to take into account the effect of inflation and by a<br />
further £1,027, to allow for the change in definition of <strong>expense</strong>s (the latter figure was based<br />
on estimates of the average office rental costs of a candidate). It calculated that to allow for<br />
inflation the per elector <strong>limits</strong> would need to increase to 5.1p and 6.9p for borough and<br />
county constituencies, respectively. However, in reaching its final recommendations<br />
<strong>expense</strong>s <strong>limits</strong> were “rounded up to the nearest £50 for the basic rate element and the nearest<br />
pence for the per elector element, in order to ensure that <strong>limits</strong> are based on figures that are<br />
both easy to calculate and remember”. 3<br />
2. The revised <strong>limits</strong><br />
As shown in the two quotations above, PPERA also affected the way in which changes to<br />
<strong>expense</strong>s <strong>limits</strong> are implemented In order to give effect to these recommendations or<br />
alternative <strong>limits</strong>, the Secretary of State has to make an Order. Until the passing of PPERA,<br />
the Order was made under the affirmative procedure. Since the passing of PPERA, the Order<br />
is now made under the negative procedure.<br />
On 10 February 2005, the Government announced, by way of a Written Ministerial Statement<br />
that the Electoral Commission’s recommendations had been accepted:<br />
2<br />
3<br />
Electoral Commission, Variation of election <strong>expense</strong>s for candidates at UK <strong>Parliament</strong>ary and local<br />
government elections: Recommendations, January 2005,<br />
http://www.electoralcommission.org.uk/files/dms/Variations_15470-11493__E__N__S__W__.pdf<br />
Ibid, pp9-14<br />
3
The <strong>Parliament</strong>ary Under-Secretary of State, Department for Constitutional<br />
Affairs (Mr. Christopher Leslie): The Government have laid before <strong>Parliament</strong> the<br />
following instrument:<br />
The Representation of the People (Variation of Limits of Candidates' <strong>Elections</strong><br />
Expenses) Order 2005<br />
This order reflects The Electoral Commission's recommendations of 12 January 2005<br />
on the maximum amounts of candidates' election <strong>expense</strong>s at a parliamentary general<br />
election in the United Kingdom and at local government elections in England and<br />
Wales, as detailed in their report: "Variation of election <strong>expense</strong>s <strong>limits</strong> for candidates<br />
at UK parliamentary and local government elections".<br />
The recommendations have been agreed by both the Secretary of State for<br />
Constitutional Affairs and the First Secretary of State in respect of their separate and<br />
distinct responsibilities for electoral matters. The Department for Constitutional<br />
Affairs broadly takes responsibility for national issues, in particular parliamentary<br />
and European parliamentary elections. The Office of the Deputy Prime Minister<br />
broadly takes responsibility for local election matters. 4<br />
The Order was laid on the same day and came into force on 4 March 2005. The revised <strong>limits</strong><br />
were set, as per the Electoral Commission’s recommendation, at £7,150 in each constituency<br />
and a further 5 pence per elector in borough constituencies or a further 7 pence per elector in<br />
county constituencies.<br />
The Order also revised the <strong>limits</strong> for local elections to £600 per ward plus 5 pence per<br />
elector. 5<br />
3. Calculation of <strong>expense</strong> <strong>limits</strong><br />
Section 76 (4) of the Representation of the People Act 1983, as amended, states that the<br />
number of electors used in calculating the candidates’ <strong>expense</strong> limit is determined by the<br />
number of electors on the appropriate register on the “last day for publication of notice of<br />
election”:<br />
(4) In subsection (2) above “the register of electors” means the register of<br />
parliamentary electors, or (as the case may be) local government electors, for the<br />
constituency or electoral area in question as it has effect on the last day for<br />
publication of notice of the election.<br />
4<br />
5<br />
HC Deb 10 February 2005 c86WS<br />
The Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 2005 SI<br />
2005/269<br />
4
4. Definition of <strong>expense</strong>s<br />
Following an election, election agents are required to submit a return detailing the <strong>expense</strong>s<br />
incurred by a candidate. In the case of a general election, the return must be submitted within<br />
35 days of the day after the results were declared; it should be submitted to<br />
What constitutes an election <strong>expense</strong> is defined in the RPA 1983, as amended. The Electoral<br />
Commission provides the following summary of the definition of election <strong>expense</strong>s:<br />
Election <strong>expense</strong>s are any <strong>expense</strong>s incurred in promoting a candidate's election. All<br />
<strong>expense</strong>s incurred in relation to items used to promote a candidate during a specified<br />
period must be treated as the candidate's election <strong>expense</strong>s and count against the<br />
candidate's election <strong>expense</strong>s limit, regardless of when the expenditure was incurred.<br />
Examples of candidates' election <strong>expense</strong>s include items such as:<br />
• printing and distribution of leaflets or other promotional material;<br />
• advertising material (e.g. posters and rosettes);<br />
• <strong>expense</strong>s incurred in relation to various types of communications (e.g.<br />
telephone, fax, internet);<br />
• administrative costs (e.g. the maintenance of a campaign office);<br />
• postage;<br />
• <strong>expense</strong>s relating to holding public meetings (including payment of<br />
speakers);<br />
• fees paid to election agents, sub-agents, polling agents or to clerks and<br />
messengers during the election etc.;<br />
• <strong>expense</strong>s relating to the hire of committee rooms during an election;<br />
• miscellaneous items.<br />
Election <strong>expense</strong>s include any notional <strong>expense</strong>s, that is, the commercial value of any<br />
goods or services provided free of charge or at a discount from normal commercial<br />
prices. For example, if an individual who supported a candidate's campaign supplied<br />
the candidate with promotional leaflets at just 50% of the usual commercial price, the<br />
discount provided to the candidate should be treated as notional expenditure. 6<br />
Although the regulated period begins at the moment an individual becomes a candidate (now<br />
not before <strong>Parliament</strong> has been dissolved) and ends with the poll, <strong>expense</strong>s incurred before<br />
that time count against the limit if the goods and services procured are used for the purpose of<br />
the candidate’s election in the regulated period.<br />
The Electoral Commission has also produced Election expenditure and donations: guidance<br />
for candidates and election agents, which is available on the Commission’s website. 7<br />
6<br />
7<br />
Electoral Commission, Candidates’ election <strong>expense</strong>s,<br />
http://www.electoralcommission.org.uk/regulatory-issues/legcandidates.cfm<br />
Electoral Commission, Election expenditure and donations: guidance for candidates and election agents,<br />
September 2004,<br />
5
B. National campaign <strong>limits</strong><br />
For the first time, PPERA imposed <strong>limits</strong> on how much registered political parties could<br />
spend on campaigning in various circumstances. Schedule 9 imposes <strong>limits</strong> in parliamentary<br />
elections. It also specifies that expenditure in the 365 days up to the day of a general election<br />
is counted towards the limit. The national expenditure limit faced by a political party is<br />
based on the number seats it contests:<br />
3. - (1) This paragraph imposes <strong>limits</strong> in relation to campaign expenditure incurred by<br />
or on behalf of a registered party which contests one or more constituencies at a<br />
parliamentary general election.<br />
(2) Where a registered party contests one or more constituencies in England, Scotland<br />
or Wales, the limit applying to campaign expenditure which is incurred by or on<br />
behalf of the party in the relevant period in that part of Great Britain is-<br />
(a) £30,000 multiplied by the number of constituencies contested by the party in<br />
that part of Great Britain; or<br />
(b) if greater, the appropriate amount specified in sub-paragraph (3).<br />
(3) The appropriate amount is-<br />
(a) in relation to England, £810,000;<br />
(b) in relation to Scotland, £120,000; and<br />
(c) in relation to Wales, £60,000.<br />
(4) Where a registered party contests one or more constituencies in Northern<br />
Ireland, the limit applying to campaign expenditure which is incurred by or on<br />
behalf of the party in the relevant period in Northern Ireland is £30,000<br />
multiplied by the number of constituencies contested by the party there. 8<br />
Schedule 10 imposes <strong>limits</strong> on the expenditure of “recognised third parties”.<br />
The rules imposing <strong>limits</strong> on campaign expenditure in 2001 were modified because the<br />
relevant part of the Act did not come into force until 16 February 2001 (within the twelvemonth<br />
period leading up the 2001 General Election). The Political Parties, <strong>Elections</strong> and<br />
Referendums Act 2000 (Commencement No 1 and Transitional Provisions) Order 2001 made<br />
provisions for parties to spend the equivalent of up to £24,000 per constituency. 9 In its report<br />
on campaign spending in the 2001 General Election, the Electoral Commission summarised<br />
the expenditure <strong>limits</strong> for parties and reported how much the parties had spent on their<br />
campaigns. 10 The Electoral Commission’s information and details for the next General<br />
Election are set out below.<br />
8<br />
9<br />
10<br />
http://www.electoralcommission.org.uk/files/dms/Guidanceforelectionagents(final)_15449-<br />
10977__E__N__S__W__.pdf<br />
Political Parties, Eelctions and Referendums Act 2000, chapter 41, Schedule 9<br />
Political Parties, <strong>Elections</strong> and Referendums Act 2000 (Commencement No 1 and Transitional Provisions)<br />
Order 2001 SI 2001/222<br />
Electoral Commission, Election 2001 – Campaign spending, November 2002,<br />
6
Table 2: Limits on Campaign Expenditure – <strong>Parliament</strong>ary <strong>Elections</strong> (£)<br />
2001 Election* Next Election**<br />
Great Britain 15,360,000 18,810,000<br />
Scotland 1,728,000 1,770,000<br />
Wales 960,000 1,200,000<br />
Northern Ireland 432,000 540,000<br />
England 12,696,000 15,870,000<br />
* limit based on £24,000 per constituency (excludes Speaker’s constituency in Great Britain total)<br />
** limit based on £30,000 per constituency, allowing for 13 fewer Scottish constituencies (excludes Speaker’s<br />
constituency in Great Britain total)<br />
C. Recommendations for changes to the spending <strong>limits</strong><br />
In its report on The funding of political parties, the Electoral Commission noted that:<br />
• candidates’ <strong>expense</strong>s <strong>limits</strong> and national campaign <strong>limits</strong> were applied to different<br />
campaign periods; and<br />
• low <strong>limits</strong> for candidates limited their ability to campaign.<br />
Despite these <strong>limits</strong> having not yet been fully applied in full (transitional arrangements<br />
applied in 2001), the Commission formally recommended that following the next general<br />
election they should be reduced:<br />
We recommend that the financial <strong>limits</strong> on political parties’ campaign expenditure,<br />
together with those applying to individual candidates, be reviewed for all relevant<br />
elections, starting with a review of the spending <strong>limits</strong> for Westminster general<br />
elections.<br />
The national spending limit applying to Westminster general elections should be<br />
reduced following the next Westminster general election.<br />
We also recommend that candidates’ spending <strong>limits</strong> be raised to enable more activity<br />
at the local level. 11<br />
Elsewhere in its report, it acknowledged that there had not yet been a full 365-day regulated<br />
period. However, it outlined how it would like its recommendation to be implemented:<br />
… our preferred option would be to reduce the national spending limit from £20m to<br />
£15m – or from £30,000 to around £23,000 per constituency – and increase<br />
11<br />
http://www.electoralcommission.org.uk/files/dms/Election2001Campaignspendingfinalpdf_7546-<br />
6677__E__N__S__W__.pdf<br />
Electoral Commission, The funding of political parties, December 2004, p61,<br />
http://www.electoralcommission.org.uk/files/dms/partyfundingFINALproofs_15301-<br />
11394__E__N__S__W__.pdf<br />
7
candidate-spending <strong>limits</strong> by a proportionate amount. This would effectively almost<br />
double the limit for candidates’ election <strong>expense</strong>s. 12<br />
Appendix: Changes in candidates’ <strong>expense</strong>s <strong>limits</strong><br />
Effective date Borough constituency County constituency<br />
Basic (£) Per elector (p) Basic (£) Per elector (p)<br />
1983 (1) 2,700 2.3 2,700 3.1<br />
1986 (2) 3,240 2.8 3,240 3.7<br />
1987 (3) 3,370 2.9 3,370 3.8<br />
1989 (4) 3,648 3.1 3,648 4.1<br />
1991 (5) 4,144 3.5 4,144 4.7<br />
1992 (6) 4,330 3.7 4,330 4.9<br />
1994 (7) 4,642 3.9 4,642 5.2<br />
1997 (8) 4,965 4.2 4,965 5.6<br />
2001 (9) 5,483 4.6 5,483 6.2<br />
2005 (10) 7,150 5.0 7,150 7.0<br />
(1) Representation of the People Act 1983, s76<br />
(2) The Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 1986 (SI<br />
1986/383)<br />
(3) The Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 1987 (SI<br />
1987/903)<br />
(4) The Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 1989 (SI<br />
1989/634)<br />
(5) The Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 1991 (SI<br />
1991/951)<br />
(6) The Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 1992 (SI<br />
1992/706)<br />
(7) The Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 1994 (SI<br />
1994/747)<br />
(8) The Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 1997 (SI<br />
1997/879)<br />
(9) The Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 2001 (SI<br />
2001/535)<br />
(10) The Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 2005 (SI<br />
2005/269) 13<br />
12<br />
13<br />
Ibid, para 4.49<br />
Available on the Stationery Office’s website: http://www.legislation.hmso.gov.uk/si/si2005/20050269.htm<br />
8