Clause 6-9 (Treatment of affiliation fees received from membership organisations)

Circumstances in which affiliation fees treated as made by individual members

6.—(1) In this section—

“affiliation fee”, in relation to a represented registered party, means a subscription or other fee paid for affiliation to the party or for membership of it;

“membership organisation” means—

(a)     a trade union entered in the list kept under the Trade Union and Labour Relations (Consolidation) Act 1992 or the Industrial Relations (Northern Ireland) Order 1992;

(b)     a society registered) or deemed to be registered under the Co-operative and Community Benefit Societies and Credit Unions Act 1965 or the Industrial and Provident Societies Act (Northern Ireland) 1969;

(c)     any other membership organisation which pays affiliation fees to any represented registered party.

(2) Subsection (3) applies where—

(a)     a notice issued under section 7 is for the time being in force in respect of a membership organisation; and

(b)     any of the members of the organisation (“the consenting members”) have given their written consent to the organisation for the organisation to pay an amount to the represented registered party on the member’s behalf by way of affiliation fees (see section 8(5)).

(3) Such amount as falls within subsection (4) which is received by a represented registered party from a membership organisation by way of affiliation fees in respect of any period is to be treated for the purposes of section 3 of this Act, and of Part 4 of the 2000 Act, as if it had been received directly from the consenting members.

(4) The amount falling within this subsection is the amount equal to the aggregate of the payments made by each consenting member for the purposes of affiliation to, or membership of, the party in respect of the period in question.

Procedure to establish whether section 6 applies to a membership organisation

7.—(1) On an application made to the Commission in accordance with this section, the Commission may issue a notice stating that it is satisfied that a membership organisation meets all of the conditions set out in section 8 (or will meet those conditions once the notice has been issued).

(2) In relation to affiliation fees received after 1st January 2014 but before 1st January 2023, subsection (1) is subject to the modifications set out in section 9.

(3) An application for a notice—

(a)     must be made to the Commission by the membership organisation in such manner as the Commission may direct; and

(b)     must contain, or be accompanied by, such other information as the Commission may reasonably require.

(4) At any time after receiving the application, and before determining it, the Commission may require the membership organisation to provide such further information as the Commission may reasonably require.

(5) The Commission must give the membership organisation written notice where the Commission decides to issue a notice.

(6) If the Commission considers that the conditions set out in section 8 are not met in respect of the membership organisation, the Commission must refuse the application under this section and must give the membership organisation written notice stating the reasons for its refusal.

(7) A notice expires at the end of the period of 12 months beginning with the day on which the notice is issued (but this does not prevent an application being made for a notice to take effect once that period has ended).

(8) An application referred to in subsection (7)—

(a)     must comply with the requirements of subsection (1); and

(b)     must also be accompanied by a declaration made by a person authorised by the organisation, which states that the conditions set out in section 8 continue to be met in respect of the organisation.

(9) A person who knowingly or recklessly makes a false declaration under subsection (8)(b) commits an offence.

(10) A person convicted of an offence under subsection (9) is liable—

(a)     on summary conviction, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum, or both;

(b)     on conviction on indictment, to imprisonment for a term not exceeding 1 year or a fine, or both.

Conditions to be met by membership organisation for purposes of section 6

8.—(1) For the purposes of section 7, the conditions to be met by a membership organisation are as follows.

(2) The first condition is that the arrangements for membership of the organisation, or for its administration, do not prevent any person from making a contribution to any political fund of the organisation where that person clearly indicates that no amount of the contribution is to be paid by way of affiliation fees to one or more parties registered under Part 2 of the 2000 Act.

(3) The second condition is that the information required by subsection (4)—

(a)     is provided directly to any person who seeks to become a member of the organisation or renew their membership; and

(b)     appears on the organisation’s website.

(4) The membership organisation must provide information which—

(a)     is in such form as may be specified by regulations made by the Commission;

(b)     states that each person is required to decide whether or not to pay an amount to the organisation for it to make a payment to the represented registered party by way of affiliation fees;

(c)     sets out the procedure to be followed in making that decision;

(d)     states the amount which a member (or any particular description of members) is to pay by way of affiliation fees;

(e)     states the aggregate amounts that would, respectively, be payable by a person on becoming a member or renewing their membership of the organisation—

(i)    if the amount referred to in paragraph (d) were included in that amount; and

(ii)    if that amount were not so included.

(5) The third condition is that—

(a)     where any person decides to pay to the organisation such amount as is referred to in subsection (4)(d), arrangements are in place to ensure that the payment can be accepted only if it is accompanied by the person’s written consent to the amount being used to pay affiliation fees; and

(b)     such consent is required—

(i)    when the person first becomes a member of the organisation, and

(ii)    on each occasion when the person’s membership is renewed.

(6) The fourth condition is that the membership organisation—

(a)     maintains up to date records of the names of all persons who have given their written consent and the amount paid by each person; and

(b)     has arrangements in place for the provision to the represented registered party to which affiliation fees are paid of—

(i)    the names of the persons on whose behalf the organisation is acting when paying such fees, and

(ii)    in any case where the amount paid by a person is £100 or more, a statement of the amount paid by that person.

(7) The fifth condition is that the membership organisation has arrangements in place to ensure that the payment it makes pays to the represented registered party is the full amount it has received from persons who have given their written consent.

(8) In subsection (2), “political fund”—

(a)     in relation to a trade union, means the fund from which payments by a trade union in the furtherance of political objects are required to be made by virtue of section 82(1)(a) of the Trade Union and Labour Relations (Consolidation) Act 1992 (“the 1992 Act”) or Article 57(2)(a) of the Industrial Relations (Northern Ireland) Order 1992;

(b)      in relation to any other body, means any separate fund maintained by that body which is applied by it in furtherance of political objects such as would, if the body were a trade union, be political objects to which Chapter 3 of Part 1 of the 1992 Act applies.

Application of certain conditions only before 1st January 2023

9. In the application of section 7 at any time before 1st January 2023, the reference in subsection (1) of that section to “all of the conditions set out in section 8” is to be read—(a)     in relation to affiliation fees received after 1st January 2014 but before 1st January 2017, as if it were a reference to “the first condition set out in section 8(2) and the second condition set out in section 8(3)”;

(b)     in relation to affiliation fees received on or after 1st January 2017 but before 1st January 2020, as if it were a reference to “the first, second and third conditions set out in section 8(2), (3) and (5)”; and

(c)     in relation to affiliation fees received on or after 1st January 2020 but before 1st January 2023, as if it were a reference to “all of the conditions set out in section 8 apart from the fifth condition set out in section 8(7)”.

Explanatory Notes  

Clause 6 sets out a framework under which funds collected as affiliation fees by trades’ unions and other membership organisations, and paid into a political fund, will be counted as coming from the individuals who have expressly consented to paying into the fund, instead of from the trades’ union or membership organisation itself.  Before this can happen the Electoral Commission must have issued a notice under Clause 7 stating that it is satisfied that the requirements set out in Clause 8 are met in relation to the trade union or membership organisation. Clause 9 provides for the phasing-in of these new arrangements.

Clause 7 provides that the Electoral Commission is to direct the application procedure for the notices referred to in Clause 6.  The Commission must judge whether or not a trade union or membership organisation meets certain conditions – set out in Clause 8 – before it can issue the notice. If a notice is issued, the amount of affiliation fees collected from members who have given their written consent will count as individual donations.  If the Commission approves the application, it will issue a notice to that effect, which will last for 12 months.

Clause 8 sets out the criteria which trade unions and membership organisations must meet before the Electoral Commission can issue a notice, effectively permitting affiliation fees to be counted as separate, individual donations.  The conditions, which would be introduced gradually over a period of ten years, under Clause 9, are that:

1.  there is nothing to prevent a person paying into a trade union or membership organisation’s political fund, but requiring it not to be transferred to a political party

2.  each person who seeks to become a member of a trade union or membership organisation, or renews their membership, must be directly provided with information (which must also appear on the organisation’s website) which:

a.  is in the form prescribed by the Commission in regulations

b.  states that it is their choice to pay or not pay an amount to the membership organisation by way of affiliation fees to a political party

c.  sets out the procedure to be followed in taking that decision

d.  specifies the amount of the member’s contribution to the affiliation fee

e.  compares the overall cost of joining the trade union or membership organisation, both with the affiliation fee included and without it

3.  the procedure for a member’s decision whether to pay affiliation fees involves obtaining their written consent, both on first becoming a member of the organisation and on renewal

4.  the trade union or membership organisation maintains up to date records of the names of all persons who have given their written consent, and the amount paid by each person, and has arrangements in place to provide to the political party a) the names of the person on whose behalf the organisation is acting when paying such fees and b) the exact amount paid by any person who has contributed more than £100

5.  the trade union or membership organisation can account for the total amount paid to a political party in affiliation fees, and that this amount matches the total amount collected in affiliation fees from members who have given their written consent

Clause 9 permits these conditions to be phased in, to try to provide some synergy with the gradual introduction of the donations cap.  This is part of the Bill’s objective to reform party political finance without disproportionately affecting any of the parties over the others either in the short or long-term.  The draft refers to Conditions 1 and 2 coming into effect in January 2014, when the first level of the donation cap (£50,000) is introduced, with Condition 3 (written consent) introduced when the donation cap falls to £25,000 in January 2017.  The accounting arrangements in Condition 4 would be in place by January 2020 and condition 5 would follow in January 2023, alongside the £10,000 donation cap.

2 thoughts on “Clause 6-9 (Treatment of affiliation fees received from membership organisations)

  1. Presumably “written consent” would include ‘electronically written consent’ (as used in many software licensing agreements), rather than needing to be in physical form? Many Societies are currently encouraging the use of online membership arrangements and direct debits; it should be relatively simple for them to require an explicit opt-in as part of the renewal process (or via separate subsequent contact, to draw more attention to it). Admittedly, I don’t know to what extent Trade Unions are following suit, but it seems a reasonable bit of ‘future-proofing’ nonetheless.

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