The European Union Referendum Bill - what potential campaigners should know

08 October 2015


In its manifesto for the 2015 general election, the Conservative Party promised to hold the second major referendum in recent years on a fundamental constitutional question - whether or not the UK should remain part of the EU.

Provision for the holding of the referendum is contained in the European Union Referendum Bill 2015-16 (the Bill), which had its third reading in the House of Commons on 7 September 2015 and its first reading in the House of Lords the next day. The second reading of the Bill by the Lords will take place on 13 October 2015.

No date has been set for the referendum, but the Bill provides that it must take place by 31 December 2017.

Here we demystify the law around referendums, highlight some of the controversial issues that have arisen with respect to the Bill and provide some practical pointers for those who may wish to become involved in campaigning during the lead up to the referendum.

Background

There are three different types of referendum:

  1. referendums held under the Political Parties, Elections and Referendums Act 2000 (PPERA);
  2. referendums held under other Acts of Parliament, such as the Scottish independence referendum in 2014; and
  3. local government referendums, such as the referendums on whether or not to have elected mayors for cities.

Different laws, rules and regulations apply to each of these types of referendum.

The EU referendum will be held under PPERA. PPERA sets out the high level legal framework for the conduct of referendums, and includes provision in respect of:

  • the determination of the referendum period;
  • the framing of the question to be put at the referendum;
  • requirements on individuals and organisations who campaign in the referendum - known as 'permitted participants' - including in regard to the amount that they may spend and the amount that they can accept in donations; and
  • the determination of lead campaign groups - known as 'designated organisations' - and the assistance that they may receive.

The framework provided by PPERA is supplemented in respect of each particular referendum through an Act of Parliament, which sets the date for the referendum, determines the question to be asked and makes provision in respect of entitlement to vote.

In relation to the specific referendum that it covers, each such Act may also adjust the framework set out in PPERA. So, for example, the Parliamentary Voting System and Constituencies Act 2011, which made specific provision for the referendum on the Alternative Vote, made amendments to PPERA in respect of that referendum.

Specific arrangements for the EU referendum will be made by the Bill, which will also adjust PPERA as necessary for the conduct of the referendum.

Controversial issues during the Bill's passage through the Commons

Given the fundamental importance of the question of the UK's membership of the EU, it is hardly surprising that the provision made for the referendum in the Bill has generated heated debate.

Two of the most important issues during the Bill's passage through the House of Commons were the wording of the question to be asked in the referendum and the constraints placed upon ministers and civil servants in the period immediately before the referendum.

The referendum question

For the result of a referendum to have legitimacy it is important that everyone agrees, insofar as possible, that the question put to voters is framed in a way which is easy to understand (and answer) and does not sway voters towards one answer or another. With this in mind, under section 104 of PPERA, the Electoral Commission (the Commission) is required to consider the wording of each proposed referendum question and publish a statement on its intelligibility.

As originally framed in the Bill, the question to be put in the EU referendum was: 'Should the United Kingdom remain a member of the European Union?' to which the response would be either 'yes' or 'no'.

In its statement, the Commission concluded that the question was written in plain language and was easy to both understand and answer. However, the Commission voiced concerns that the way in which the question was phrased in order to allow for a 'yes/no' was not neutral. This is because it only referred explicitly to the 'remain' option, and the 'yes' response was for the status quo (to which voters might instinctively feel more attracted). The Commission was therefore concerned that, although not a significantly leading question, its research uncovered a perception that this could encourage voters to consider one response more favourably than the other.

In view of these concerns, the Commission recommended changing the question to 'Should the United Kingdom remain a member of the European Union or leave the European Union?', the response to which would therefore be either 'Remain a member of the European Union' or 'Leave the European Union'.

The government accepted the Commission's recommendation and the Bill was amended accordingly. The final decision as to the wording of the question remains with Parliament, however, and there is still a chance - albeit very small - that it may change before the Bill is finally passed.

If the question remains in line with the Commission's recommendation, campaigners and the media will need to be careful not to fall into usage of 'yes' and 'no' as shorthand for the campaigns on either side. It will remain to be seen how campaigners for either side use the more cumbersome 'remain' and 'leave' in their publicity and branding.

Purdah

Section 125 of PPERA applies within the 28 days before a referendum and precludes the publication of any material giving general information: about the referendum or regarding the issues on which the referendum is held; putting forward any arguments for or against a possible answer to the questions asked in the referendum; or encouraging voting in the referendum. The restrictions apply to ministers, government departments, local authorities and 'any other person or body whose expenses are defrayed wholly or mainly out of public funds or by any local authority'.

This period is known as 'purdah' in reference to the political convention that there should be sensitivity on the part of ministers, civil servants and public bodies in the making and publicising of certain decisions during the run-up to an election. The idea is to remove any advantage that the incumbent government may have and to preserve the neutrality of the civil service.

In relation to the EU referendum, the government's initial position was that section 125 should be disapplied. This was because it would allegedly stop the government from publishing any material that deals with any issue raised by the referendum question, a restriction so broad that it would prevent ministers from conducting the ordinary day-to-day business of the UK's dealings with the EU and create legal risk and uncertainty in the final weeks before the referendum.

Critics of the government's position have argued that any disapplication of section 125 could mean that the pro-EU campaign would be able to use the 'machinery of government' to sway voters in favour of remaining within the EU.

The Public Administration and Constitutional Affairs Select Committee conducted a short inquiry in July 2015 into the operation of section 125 during the EU referendum and was likewise unconvinced by the government's position. The Minister of State for Europe had previously stated his intention to relax section 125 to allow ministers to use the machinery of government to make the government's case in respect of any renegotiation of the terms of the UK's membership of the EU during the purdah period. The Committee noted that was precisely the type of incumbent advantage that section 125 had been enacted to prevent.

In the face of opposition the government agreed an amendment during the Bill's report stage in the House of Commons, removing the clause which had disapplied section 125. However, although section 125 will continue to apply, the Bill contains a power (under current clause 6) for the Minister to make regulations removing from the prohibition in section 125 cases where material is published in a prescribed way or by a communication of a prescribed kind. The Minister must consult the Commission before making any such regulations and they may not be made more than four months before the date of the referendum.

The regulations must be approved by both Houses of Parliament under the affirmative resolution procedure. The debate on the application of section 125 is therefore far from over. However, it should be noted that, although Parliament may consider and debate the regulations, it cannot amend them. Both Houses will therefore be faced with a choice as to whether to approve the regulations in their entirety or reject them.

In the latter case, section 125 will apply without any amendment. Such a rejection is therefore a nuclear option and in practice the number of times that statutory instruments have been rejected by Parliament in the last 40 years can be counted on one hand.

Practical points on legal requirements for referendum campaigners

There are many legal requirements relating to the conduct of campaigners before a referendum. Below we outline in broad terms some of the main areas of which prospective campaigners should be aware, based on the current legal position as outlined in PPERA and the Bill in its current form. Once the Bill is passed, however, we would advise prospective campaigners to acquaint themselves fully with the legal requirements which attach to campaigning, as breach of those requirements can be an offence.

Certain rules apply to donations and loans to, and spending by, persons and organisations campaigning during the referendum period. These rules are set out in PPERA, but can be adjusted by the specific Act passed for each referendum.

Although permitted participants can spend more than £10,000 on referendum expenses during the referendum period, they are subject to a cap on such spending. For permitted participants other than political parties, this limit is £500,000 under PPERA. For the purposes of the EU referendum, the Bill proposes to increase this limit to £700,000. Campaigners should note that in some circumstances expenses incurred before the referendum period can count towards this total.

  1. The Referendum Period. In the run up to a referendum, there is a formal campaigning period called the 'referendum period' set by or under the specific Act in respect of that referendum. The Bill makes provision for that period to be set by regulations.
  2. Spending Limits. Under PPERA, anyone can spend up to £10,000 on certain activities - known as 'referendum expenses' - during the referendum period. This limit currently remains unchanged by the Bill. PPERA provides an exhaustive list of the types of activities which count as referendum expenses. These include expenses in relation to campaign broadcasts, advertising, public meetings and market research. However, for the purposes of the EU referendum, the Bill proposes to amend this list so as to exclude, among other things, expenses in respect of publications other than advertisements in newspapers or periodicals, or on certain television stations.
  3. Increasing Spending Limits. Those who want to, or think they may, spend more than £10,000 on referendum expenses during the referendum period must register with the Commission as 'permitted participants'. There are restrictions on the types of bodies that can register as 'permitted participants', although most types of organisation can do so, together with individuals resident in the UK or on the electoral register.
  4. Lead Campaigners. The Commission may designate two campaign groups as 'designated lead campaigners' to act as the lead campaign group on behalf of those campaigning for each outcome in the referendum. Designated lead campaigners are entitled to a number of additional benefits over other permitted participants that may include an increased spending limit, campaign broadcasts, a publicly funded grant, free mailing, and access to meeting rooms. The Bill provides that the Commission can designate lead campaigners under the approach set out in PPERA.
  5. Post-Referendum Audit. Following the referendum, permitted participants must file a report with the Commission providing details of their spending - together with loans and donations - during the campaign. The Commission takes the filing of such reports seriously and recently fined two political groups - Labour for Independence and the British Commonwealth Party - under similar provisions in the Scottish Independence Referendum Act 2013 for failing, respectively, to provide reports on spending during the Scottish independence referendum and to deliver reports of donations and loans on time. It should be noted that under the Bill, permitted participants who do not incur any referendum expenses will be required to declare this to the Commission.

Issues to watch out for

The second reading of the Bill in the House of Lords is due to take place on 13 October 2015. Prospective campaigners should watch out for any changes to the requirements on permitted participants in the referendum - including any changes to the spending threshold beyond which registration with the Commission is required, as well as any changes to spending limits once registered.

At a broader level, once the Bill has passed, it will be interesting to see the precise nature of the amendments to section 125 which the government puts forward in regulations - and whether these are accepted or rejected by Parliament. Following the experience of the Scottish independence referendum, the 'remain' camp should be astute to avoid the legitimacy of any 'remain' result being questioned on the basis that the government had relaxed the rules to allow it to use its resources to sway the electorate.


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