Grand Committee
(9 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Small Business, Enterprise and Employment Bill
(9 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text
The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
My Lords, I remind the Committee that, if there is a Division in the Chamber, the Committee will adjourn for 10 minutes from the sound of the Division Bell.
Clause 78: Register of people with significant control
Amendment 36A
Lord Flight
“( ) This section and Schedule 3 do not apply to small companies as defined in the Companies Act 2006.”
Lord Flight (Con)
My Lords, I declare my interests as set out in the register.
At Second Reading, I expressed some unhappiness and concern about the compulsory public register provisions. One of my main objections is to the inclusion of, and the impact on, small companies. Generally, I think that it is a wonderful thing that this country has had an explosion in entrepreneurship over the past five years, the likes of which I have not seen in my lifetime, with lots of young people happily getting on with setting up their own businesses—and, as I have said before, that is not just confined to London and the south-east. One of several reasons for that is that, compared to other countries, the Government have made it relatively easy to set up your own business: forming a company is extremely easy; the nature of the financial accounting returns has been made simpler for small businesses; and, whereas there are major hurdles in setting up a new SME in, for example, Italy, in this country it is pretty straightforward. That has been a huge success.
Prima facie, I am not happy with additional regulatory burdens, particularly on small businesses, unless they add some clear advantage. Here I cannot see that a small business, as defined in the Companies Act 2006, will have the resources to be engaged in terrorist funding, nor do I see much prospect for at least material avoidance or for a security risk. Therefore, my Amendment 37A calls for the exclusion of small companies as defined in the Companies Act from the application of compulsory public registers. One of my concerns is that there are huge numbers of new small companies—1 million last year, I think, and nearly 2 million over the past two and a half years—and they are almost invariably run and controlled by the entrepreneur who set them up, so he will almost certainly fall into the category of having control through owning 25% or more of the company. I think it extremely unlikely that small businesses will know about this legislation, as it is pretty unlikely that they will be employing lawyers who could warn them about it, so I also see the danger that large numbers of entrepreneurs will quite innocently not keep this register and thereby commit a criminal office. I do not think that any Members of this Committee would want to see entrepreneurs prosecuted for the criminal offence of not keeping their public register.
I believe that this is an unnecessary piece of additional bureaucracy on small businesses. I believe that it will be substantially ignored out of ignorance of the requirements. I really do not see that there is any need to include small businesses within the public registers legislation.
Lord Phillips of Sudbury (LD)
Can the noble Lord assure the Committee that taking small businesses out, as he requires under this amendment, will not take out shell companies, which are the major tool by which major international and, indeed, national frauds are effected?
Lord Flight
It depends on whether a shell company falls within the Companies Act definition, so it will depend on what funds there are—what the shell company is capitalised at—and the other issues in the Companies Act that determine what is a small business. There is not necessarily a black-and-white answer, but I would have thought that if the Government graciously accepted my amendment they could add to it significantly by carving out that shell companies are not excluded.
Lord Watson of Invergowrie (Lab)
My Lords, I am rather puzzled by one of the arguments that the noble Lord, Lord Flight, has advanced in favour of his amendment. As the noble Lord, Lord Phillips, has just said, it appears that the noble Lord, Lord Flight, has not read the impact assessment on this Bill. It was highlighted in the impact assessment that the majority of shell companies, which are often the vehicles of choice for money laundering and other criminality, would be classified as small businesses. To exclude them would, as the noble Lord, Lord Phillips, said, leave the door wide open and not solve one of the major problems that this legislation is looking to solve.
The noble Lord, Lord Flight, mentioned burdens on small companies. Of course I do not want to create burdens on any kind of company, but I believe that when a law is justified and has been implemented, small companies have a duty to keep on top of that legislation and make sure that they are not caught out by having failed to identify their person of significant control. As the noble Lord, Lord Flight, said, the vast majority of the companies are small companies owned by the people that run them, so they will have nothing to declare; they will have simply to say that the managing director or the chief executive is the person of significant control and that will be the end of it. The burdens on small companies, I suggest, are actually very slight and for that reason I would argue against this amendment and hope it will not be proceeded with.
Lord Cope of Berkeley (Con)
My Lords, I am in sympathy with my noble friend Lord Flight’s amendment, but maybe not with the details, for the reason that the noble Lord, Lord Phillips, indicated. I declare an interest in that I am the director of a small company. This is the company that manages the house in which I live, which is divided into four flats. We have four shareholders, who are those who live in the four flats, and it is convenient for us to organise the cleaning of the common parts and that sort of thing through a company. It is controlled by the four of us. It has very small sums of money, but we would still have to have a register saying that nobody else controlled the company —at least I suppose we would. There are numerous companies, both trading companies and those like the one that I refer to, which would be caught by this legislation and in my view should not be. It may be that my noble friend’s amendment requires refinement and elaboration, but he has a good point in principle.
Lord Mitchell (Lab)
My Lords, as a champion of small companies half of me has a lot of sympathy with this amendment but the other half is worried. We define a small company as one that has a turnover of less than £6.5 million, a balance sheet of less than £3.26 million and fewer than 50 employees. The questions that have been raised today are: what is to prevent such companies from getting up to the activities we are seeking to prevent, and is size really the sole determinant of illegal activities? Maybe we should have a definition of a micro-company—a small, start-up company that has criteria much below the numbers I have given. We need to keep bureaucracy and red tape out of it, but it is quite clear that in the right hands a coach and horses can be driven through this and we need to have some degree of protection.
Lord Phillips of Sudbury
My Lords, I reiterate what the noble Lord, Lord Mitchell, has said. I spent the best part of my very long legal career acting for small businesses and start-ups, and nobody could be more in favour of them from virtually every point of view. However, we absolutely cannot leave a gap through which coaches and horses will ride with impunity. I am sure that the noble Lord, Lord Flight, does not need reminding of the fact that shell companies are a vehicle of choice for huge fraud. It is reckoned now internationally that fraud amounts to £27 trillion to £35 trillion, while our own fraud figures are rising at a startling rate. The amount of tax evasion—I shall not use the word “avoidance”, because it is discredited—is staggering and rising exponentially. The principal vehicle by which fraud, evasion, irresponsibility and immorality are effected in our country is the shell company. I am sure that I do not need to tell your Lordships that Barclays, I think it was the year before last, paid some derisory proportion of tax on its profits by using over 100 shell companies, in a huge chain, switching through virtually every tax haven on the globe.
If there is one thing that we really must do, and which I believe everybody in this House is determined to try to do, it is to prevent the evasion of the intention of us as legislators over a whole raft of measures—particularly tax but not by any means confined to tax. At present, because of such companies largely using the considerable wits of thousands of lawyers and accountants in the City, with the aid of the tax havens throughout the globe that sit with open mouths looking for funds to pass through them, we are in a parlous state. The highly beneficent intention of this legislation is to do something about that, and I hope that we will not be engaged in yet another legislative self-delusion, of which I have sat through so many. I hope that the noble Lord, Lord Flight, does not misunderstand me—I totally go with his basic proposition—but we cannot leave this Bill in a state that facilitates the very thing that all of us are determined to try to deal with.
Even if we got the legislation right, for us to rely on the proper implementation of the law that leaves this place would be another self-delusion. Our implementation agencies are so terribly underresourced that it is not David and Goliath in this country—it is so often David without his sling and Goliath. To my mind that means that, when we are in doubt, we should screw the template tighter to the intention that we have for this legislation. I am afraid that that leads me to be unhappy with the amendment.
Lord Leigh of Hurley (Con)
My Lords, I draw your Lordships’ attention to my entry in the register of interests, which includes directorship and ownership of a number of small companies within the thresholds.
I agree with the noble Lord, Lord Phillips, that the measure’s intention is clear and its purpose very noble and needed. However, like the noble Lord, Lord Mitchell, I am keen to ensure that bureaucracy on small companies and SMEs is minimised. The case of a national bank, which I shall not append by name because I am sure that there are many others, using lots of subsidiary companies to avoid tax, is not caught here, because a subsidiary company would not be a small company.
My concern is the small family company where, perhaps by the second or third generation, there are multifarious ownerships, possibly through a trust or directly. Indeed, the Institute of Chartered Accountants in England and Wales, of which I am a fellow, helped clarify my thinking by giving the example of a number of family members who own a company but one of them habitually votes in accordance with the directions of his or her spouse. In such a case, would the spouse be a significant controller and what lengths would the company need to go to so as to establish that? This is just an extra layer of complication and administration that our SME companies should not have to face.
Lord Phillips of Sudbury
Is the noble Lord sure of what he just said? He said that a subsidiary company in a chain of subsidiaries would not be a small company. I would want to be absolutely certain of that. My impression is rather the reverse: if it has minimal paid-up capital, as indeed it could, how would it be caught?
Lord Leigh of Hurley
As I understand it, if it is a subsidiary of a much larger company then it is not a small company as defined in the Companies Act. I stand to be corrected but that is how I understand it.
Lord Borwick (Con)
My Lords, I also declare my interests in the register and take issue with the suggestions of the noble Lord, Lord Phillips. When it is said that HM Revenue & Customs does not have the resources to pursue these matters, is the suggestion that it does not have the powers to ask the question of a taxpayer or company, “Who controls the company?”. I am very nervous about requiring all the millions of honest small companies to do some extra work which is unnecessary because HMRC already has the powers to ask that question.
Lord Phillips of Sudbury
My Lords, I do not know whether it is for me to answer that question, but it is very germane. I fear that the truth is that the implementation of so many of our laws is just grotesquely inadequate. Large parts of many of the statutes we pass in this place are never implemented. Prosecutions under a plethora of criminal provisions have never been made. That is under implementation. Frankly, I do not know how to answer the noble Lord because it is an entirely fair question. All I know is that one without the other leaves us in a mess. I accept what he says: one does not want, because one has no implementation, to create such a barbaric forest of bureaucracy that it becomes counterproductive in another way.
The Deputy Chairman of Committees
My Lords, this is Committee and it is perfectly in order for noble Lords to speak as many times as they wish. I also remind noble Lords that it is customarily the case that they address the whole Committee and not merely the noble Lord who asked the question.
Lord Flight
My Lords, on the specific point, I just add the following. First, it would be perfectly possible to operate a non-UK shell company as the Bill stands so the Bill is completely avoidable for those intent on doing evil. Secondly, with regard to UK companies, it might be possible to include a definition. The point of a shell company is that it does not have a business. I am very clearly talking here about small companies that have an active business. Finally, anyone with evil intent will not register a small company, even if it is a UK company, for the reasons the noble Lord just pointed out: the chances of being discovered are very small.
Therefore, I beg to suggest that the Bill is ineffective in this area as it stands. What would be effective is a significant burden on the innocent—the runners of small family businesses. As my noble friend Lord Leigh pointed out, the issue of who has control is sometimes quite debateable because there may be more than one person holding 25% and the way family affairs are organised may be complicated.
For some reason, my Amendments 48 and 49 are also included within this group. I did not really want to combine them with Amendment 36A, which is very different in nature, but nor did I want them not to be aired by default. These two amendments, together with Amendment 51, are practical proposals which emanated essentially from the BVCA, which I believe has had some practical discussions with government about possible ways of handling the points raised.
Amendments 48 and 49 extend the provision in the Bill applying to English limited partnerships to include other limited partnerships without a legal personality which are comparable to an English limited partnership. Many overseas limited partnerships invest in UK companies and, unless there are arrangements along the lines of Amendments 48 and 49, the effect would be to require information on all limited partnership investors to be put into the register. This would create confusion about who was the controller of the English company the partnership was investing in as well as creating unnecessary and costly administration. The main relevant overseas companies to which this applies are Channel Islands limited partnerships which are frequently used by private equity firms to invest in UK companies. This is a practical issue which it is necessary to deal with, or where there are non-UK limited partnerships investing in UK companies we could end up with a wealth of unnecessary and quite confusing information.
Lord Leigh of Hurley
I, too, shall speak to Amendments 48 and 49, as they are grouped together, and express the same reservations as my noble friend Lord Flight about not wishing to have the two connected. The reason for my amendment is principally to ensure that the policy objectives of the Bill are met. I seek to manage and mitigate unintended consequences as much as possible, in this case by making sure that only individuals who meet the criteria set out are disclosed and not many others by dint of legislative accident.
It is worth noting here that the Bill has already been improved in this regard. The original draft would have missed out partnerships entirely, because they have no legal personality, and forced the disclosure of hundreds of investors, none of whom owned 25% of the business, but all of whom would have been deemed to have owned that amount through their investment vehicle.
A particular concern is private equity, as my noble friend Lord Flight said. Funds raise money from many investors of different types and different geographies, but normally none of their investments as individuals would be anywhere near 25% of the fund. The private equity fund, typically known as the general partner, takes responsibility for investing that fund in a portfolio of businesses and managing those businesses. It is the fund run by the general partner and not any individual investor who exercises significant control. It is right that the public and, indeed, Governments know who that is. It is not necessary for them to know who the individual investors are behind it.
The merits of this point were accepted in the other place and there is an exemption for English limited partnerships. This amendment seeks to apply that to other limited partnerships that are similar to English limited partnerships in structure but are governed by other laws. I am thinking in particular of partnerships structured in the Crown dependencies. It is very important that we offer a level playing field in this context. Funds structured particularly in the Channel Islands and elsewhere are direct drivers of inward investment into the UK. To be clear, we are not talking about tax avoidance or tax evasion. It is simply a mechanism for investment. It is typically used by pension funds, which would not pay tax in any circumstances. My amendment would allow any partnership deemed similar in structure to an English limited partnership to be treated the same as one and not have to disclose the hundreds of investors underneath it.
In his excellent Budget in 2013, the Chancellor commendably launched a new initiative to make our asset management industry as competitive as possible. It was about encouraging our financial services industry to be drivers and attractors of inward investment in the real economy. These partnerships are great channels for such investment and must be encouraged. That is why they should be treated the same as English limited partnerships. If the amendment in my name and that of my noble friend Lord Flight is accepted, investors in partnerships, which are of huge benefit to the UK economy, will be treated as if they had invested in an English limited partnership or one that is similar in spirit.
Lord Mitchell
My Lords, I shall speak to Amendments 37ZA, 37B, 37C, 47B and 50A.
I congratulate the Government on coming forward with these provisions that provide for a register of beneficial interests in companies that are not listed on the Stock Exchange. Transparency in the governance of companies is essential, as is fair taxation. They are essential for providing a level playing field on which all businesses are able to compete. Anything else undermines the kind of entrepreneurship and creativity that we want to see driving growth throughout our economy. However, transparency goes beyond the issue of business competition. It also matters from the point of view of knowing who owns a company. Who owns whom is vital to know and we will return to this issue as today’s discussions continue.
The Lough Erne declaration was signed in 2013 and reflects a good understanding of the importance of the above and I am glad to see some of the thoughts reaching fruition in the Bill. The third point from that declaration is perhaps the most relevant to our proceedings and I think it came from the Prime Minister. It reads:
“Companies should know who really owns them and tax collectors and law enforcers should be able to obtain this information easily”.
That is a sound principle with which I am sure the whole Committee will agree. Parts 7 and 8 of, and Schedule 3 to, the Bill reflect this. Today we will be testing the provisions within the Bill to try to ensure that its provisions match these principles and that they are drawn tightly enough to deliver them. I hope the Minister appreciates that our intention is to support the proposals and to contribute to their effective working.
The main mechanism through which the principles are to be put in place is the PSC register—that is, “people with significant control”—which has our backing. The briefing that Christian Aid has provided—I wish to place on record my thanks to it for having done so—points out that only 9% of the British public believe that company ownership should be allowed to remain a secret. Given the reputation this country has for respecting the value of fair play, I can readily believe that.
The Government have also helpfully published and concluded a consultation on the regulations which will be issued governing the PSC register, which will aid us as we scrutinise the provisions in Committee. As the preamble to that document makes clear, PSCs—individuals with more than 25% of the company’s shares or voting rights—will have to be on the register and there will be a statutory obligation to update that. I struggled to find a proper definition of PSC. I think I found it in the wording but it should be clearly defined and positioned in the Bill so that there is no ambiguity on this.
Turning to Amendment 37ZA, I am sure noble Lords will appreciate that what we are doing here is to test the boundaries of Schedule 3, specifically the exclusions. It is right that the Secretary of State should be able to leave out certain companies that may already have more comprehensive disclosure requirements like those that are publicly listed. However, that is the underlying principle. Only companies that already disclose the information that this part of the Bill requires should be subject to exclusion. Otherwise a Secretary of State could, by order, essentially produce a definition that excludes companies that should in the spirit of the legislation be covered. I welcome the fact that doing so would require the affirmative procedure, but the fact that it would still have to be limited in that way would be a useful instruction to put into primary legislation. It would also create the kind of certainty that the playing field will remain level, as it were, and that would be helpful to businesses.
On the subject of delegated legislation, noble Lords will see that I have two recommendations from the Delegated Powers Committee in this group. The first concerns guidance about the meaning of “significant influence or control”, which is obviously a core part of the provisions. The committee stated:
“There is no provision however for Parliamentary scrutiny of the guidance. The reasons given in paragraph 285 of the memorandum for not making the guidance subject to scrutiny are the fact that it will be worked up in consultation with stakeholders and the fact that it will not conflict with the statutory provisions in Part 21A. We do not find these reasons convincing. Section 790F of the Companies Act 2006 will make it an offence if a company fails to comply with the duty to gather information about persons who exercise significant control. It seems to us that the existence of the offence will give greater importance to the guidance, since those involved are likely to see compliance with the guidance as necessary in order to avoid the risk of committing an offence. Accordingly, the guidance is liable to play a significant role in determining the meaning of ‘significant influence or control’ and therefore the range of persons who fall within the scope of the new Part 21A of the 2006 Act. In the light of this, we consider that guidance under paragraph 24(2) of Schedule 1A should be subject to Parliamentary scrutiny”.
We agree, and hence we have tabled this amendment.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con)
My Lords, Clause 78 and Schedule 3, which it introduces, will fulfil the UK’s 2013 G8—now G7—commitment to implement a central register of the people who have significant control over UK companies. I am grateful to all those who have spoken on this vital reform. I concur with everything that my noble friend Lord Flight said about the amazing growth of small businesses in this country and the ease of company formation compared with elsewhere. I think that everyone in the Committee shares his wish to try to keep things that way.
Perhaps I may start by outlining what this reform seeks to achieve. The register of people with significant control will ensure that we know who ultimately owns and controls our companies. This will help us to tackle the criminal misuse of UK companies, and that includes shell companies. Perhaps I may also quote the Prime Minister:
“For too long a small minority have hidden their business dealings behind a complicated web of shell companies, and this cloak of secrecy has fuelled all manners of questionable practice and downright illegality”.
Therefore, my noble friend Lord Leigh rightly called this change one which has a noble purpose.
The Metropolitan Police force and other enforcers have highlighted this problem, providing numerous examples to us of fraud, corruption and tax evasion facilitated, I am afraid, by UK companies. The register will also ensure that we meet international standards that aim to prevent terrorist financing and money laundering. It will allow us to implement the soon-to-be-adopted EU fourth money laundering directive.
My noble friend Lord Flight asked whether non-UK shell companies would be caught. The Bill does not apply to non-UK companies, but UK companies owned by non-UK companies will be required to disclose PSCs.
I know some noble Lords will be keen to understand why the register has to be made public. There are a number of reasons for this. Allowing public access is entirely consistent with the way that other company data—such as that on shareholders and company directors—are made available. Public access also helps ensure the accuracy of the data not only because people can flag up inaccuracies and omissions but because the public nature of the data should in itself encourage people to ensure they file correct information first time round. Finally, a lack of corporate transparency does not just affect the UK and UK citizens. As the noble Lord, Lord Watson of Invergowrie, said at Second Reading, the cost to developing countries of companies’ illegal behaviour is “quite staggering”. A public register will support citizens in these countries easily and quickly to access information that will help them hold their own companies and Governments to account.
My noble friend Lord Flight expressed a concern that these new rules were coming in and small companies would not know about them. I understand that point. We are, therefore, setting up a working group to develop guidance on the PSC register. We will ensure—and I can promise this—that a representative of small business sits on that group. One of the group’s tasks will be to work out how best to communicate these reforms before they are implemented in 2016.
The noble Lord, Lord Mitchell, asked why there was not a clear definition of PSC. I think PSC is clearly defined in Schedule 1A and this will be supported by statutory guidance on the meaning of “significant influence or control” and wider guidance on the meaning of PSC more generally, which the working group will help us to develop.
I turn briefly to the amendments—which actually pull in both directions because of the way in which the grouping has been done. Amendment 36A would exempt small companies from maintaining a PSC register or filing the information at Companies House. Clearly, we must minimise burdens on business, and small business in particular, wherever we can. However, I have looked into this and it is not possible to exempt small businesses in this case. It has been widely identified, including by UK law enforcement agencies, that small companies, including shell companies and micro-companies, are frequently used for criminal purposes, as my noble friend Lord Phillips of Sudbury explained.
As the noble Lord, Lord Watson, helpfully pointed out, the burden of applying the rules in any individual case will not be great. It is the cumulative effect of the compliance costs of lots of different companies that leads to a big figure, but the amount of extra information that individual companies will have to supply is, in most cases, very small and we will see the benefits in terms, we hope, of reduced crime and wrongdoing generally. Exempting small companies or micro-companies would significantly risk undermining our intention to tackle the misuse of UK companies and would be contrary to our intention to ensure enhanced transparency, as set out in our G7 commitments.
My noble friend Lord Flight will doubtless also be aware that small companies will be in the scope of the fourth money laundering directive, once that is adopted. Even if we were to find a way of exempting them now, or wished to do so, we would need to re-include them when that directive was transposed.
My noble friend Lord Leigh asked about spouses. I can confirm that a spouse could be a PSC, so if one or more individuals meets the specified condition they will be a PSC whether or not they are married to another shareholder.
I turn now to Amendments 37ZA and 37B. As I have said, we are committed to reducing duplicative reporting and burdens on business. That is why companies listed on UK markets already subject to stringent disclosure and transparency requirements are not required to maintain a PSC register. We have also taken a power that would allow us to exempt other types of company, provided they are bound by similar requirements. For example, we might want to exempt UK companies listed on EU-regulated markets. The same principle applies in relation to those specified circumstances where a company may be listed on a PSC register in place of an individual—that company must also be subject to adequate disclosure and transparency requirements. In deciding to exempt a company, the Secretary of State must have regard to these disclosure requirements. Failure to take them into account would expose him to the risk of judicial review and run counter to our commitment to ensure transparency. The amendments tabled by the noble Lord, Lord Mitchell, are therefore unnecessary to ensure that the powers are used as we would wish.
Amendment 37C would prevent the Secretary of State from exempting a legal entity from needing to be noted in the PSC register except in exceptional circumstances. I confirm that this provision would only be used in exceptional circumstances. However, that fact is implicit in the current drafting of Section 790J(3).
Amendments 48 and 49 would extend provisions in Schedule 3 dealing with limited partnerships to foreign limited partnerships. I cannot add a lot to the very clear explanation given by my noble friend Lord Leigh. I agree that the PSC register should only contain information on individuals who exercise significant control over our companies. I am keen to ensure that we do not inhibit or hinder investment into UK companies or the good partnerships that have been developed. We could extend the limited partnership provision in a way that does not damage the efficacy of the register or, as my noble friend Lord Leigh said, open up risks, for example, in relation to loss of tax. I am therefore grateful to my noble friends Lord Leigh and Lord Flight for tabling these amendments and intend to consider their proposals further before Report.
Finally, on Amendments 47B and 50A and the PSC register, the noble Lord, Lord Mitchell, was right to probe us in this area. Having listened to the arguments, I see merit in requiring the statutory guidance on “significant influence or control” to be subject to the negative resolution procedure. I similarly see the benefit of requiring increased parliamentary scrutiny over regulations setting out exceptions to the ban on corporate directors. I therefore intend to consider both amendments and return to them on Report. In relation to the other amendments, I hope my explanations have provided reassurance and that noble Lords will feel content not to move them.
Lord Flight
My Lords, I think the issues have been well raised. I hope the Government are able to come up with some ideas to lessen the burden on small companies, but I beg leave to withdraw the amendment.
“Duty to keep register updated
(1) The Secretary of State may by regulations make provision prescribing the steps to be taken by the registrar of companies to ensure that the information on PSC registers or as the case may be the central register is as accurate, reliable and up to date as possible.
(2) Regulations under this section are subject to the affirmative resolution procedure.”
Lord Watson of Invergowrie
I start by echoing the comments of my noble friend Lord Mitchell that the Government are to be commended on making the UK the first country to introduce a register of people with significant control. I said that at Second Reading and am pleased that, although it is happening slower than I would like, developments are taking place in other countries. Significant work needs to be undertaken to make sure that that progress continues and speeds up.
I welcome the fact that the Minister recognised that much of the effect of shell companies and their activities impacts on developing countries. In fact, a staggering amount does so. It has been estimated that more than a quarter of the financial assets held in tax havens are in some way taken from developing countries—which lose far more in this way than the total global aid budget. That is a very worrying statistic.
The role of the British Overseas Territories and Crown dependencies is in some ways complicit in this. I use the example of the British Virgin Islands and the purchase of mining concessions in the Democratic Republic of Congo, which cost the DRC $1.36 billion—around twice that country’s annual education and health budget combined. That is an example of the extent of the problem. It is disappointing that, since the Prime Minister made his announcement at the summit in 2013, the Government have not yet followed through decisively enough. I was pleased to see that the shadow Chancellor gave a commitment that a Labour Government would require Overseas Territories and Crown dependencies to publish the names of beneficial owners of companies. That is very much to be welcomed.
Lord Phillips of Sudbury
My Lords, my name is on the amendments in this group, but I shall speak, if I may, to Amendment 37A in particular.
Amendment 37A defines “intermediaries”, which is the term used in Amendments 39, 41 and 43. As defined in Amendment 37A, “intermediaries” would catch, I think and hope, all the links in the chain of shell companies—as they usually are—that enable a fraudulent scheme to be effected. It may well be that the drafting of Amendment 37A is defective because, as I think we all know only too well, the combination of the details of the amendments in relation to this Bill and in relation to the Acts of Parliament that the Bill amends is pretty hair-raising even for a lawyer. Therefore, I apologise in advance if the Minister guns me down on the wording of Amendment 37A, but the purport of it is clear enough and I am convinced that it should be there.
It is no good allowing the many devices utilised by the people and corporations that use the very lax system of international control now prevailing, so we are trying here to do something really effective. I pay tribute to my noble friend the Minister and the Government for grappling with these issues at all, because, as the noble Lord, Lord Watson of Invergowrie, said, we are the first to try to get a grip on this. We all realise that we cannot effectively get a grip of the problem on our own, but at least we are in the field and showing our mettle. As the noble Lord, Lord Watson, mentioned, initiatives are being taken in consultation with some of these tax havens, but it is not a very happy tale: only one decision has been taken so far, by the Cayman Islands, which is to have nothing to do with all of this. I have a terrible suspicion that the others may come back with a similar response, because it is their bread and butter to be the handmaids of the world’s great fraudsters and shysters. But we are doing our best, and I hope that Amendment 37A will commend itself.
I will make just one more short point, on Amendment 37. As the noble Lord, Lord Watson, said, when a similar amendment was discussed in the other place, the Minister there said that the Bill includes a new power, amending the Companies Act, that will allow amendment of the frequency of the provision of the information, which is currently annual. Amendment 37 would allow ad-hoc inspections, so it would allow the person having the authority to make a lightning swoop, if you like, on the company or person concerned in order to extract up-to-date, current information on what they are up to. As I understand what the Minister in the other place said, it is not enough simply to have a general power to amend the timing of all this; we need an ad-hoc power to move against particular individual companies at any time. That would be one of the effects of Amendment 37.
Lord Mitchell
My Lords, I rise to speak to Amendment 37, to which I have put my name. I pay tribute to my noble friend Lord Watson of Invergowrie for the work he has done in this area and for that very clear exposition of the relevant issues. He has made the important points, so I shall try not to repeat what he said.
Amendment 37 would give the Secretary of State power to make regulations ensuring that the PSC register is current and accurate. My noble friend Lord Watson explained the importance of that, but I shall echo his arguments. It is vital that the register be up to date if it is to do the job we expect of it and shine a light on some of the murkier examples of using anonymous shell companies to obscure the true ownership of an asset. I believe the Government see the register as providing something of a snapshot of the beneficial owners of a company, but in this day and age where technology has made instant communication the norm, rather than the exception, there is no reason why the PSC should not be kept up to date.
In this context, it is worth considering the evidence put before the Committee in the other place by the Institute of Directors, which said that the PSC,
“will be updated once a year and a fair number of people said in our consultations, ‘It’s going to be out of date within minutes of being published.’”—[Official Report, Commons, Small Business, Enterprise and Employment Bill Committee, 14/10/14; col. 19]
In your Lordships’ House there is an obligation on each of us to maintain our register of interests, which is not allowed to be more than one month out of date. Why should companies have an annual requirement? It simply does not make sense in this electronic age. In their response to the consultation, the Government said that they will continue to work through the principle that information will be provided to the central registry to ensure that there are no loopholes or unintended consequences. My concern is that this could be a loophole, so I would like the Minister to address it.
My second point is about accountability. As my noble friend Lord Watson said, this amendment requires the Secretary of State to ensure that the right regulations are in place so that what is on the PSC register is accurate and complete. Parliament will be able to scrutinise these regulations to check that they are capable of delivering an accurate register.
I shall pick up a remaining point from the debate about this group, and I hope the Minister will be able to put our minds at rest. Too little progress has been made in encouraging Overseas Territories and Crown dependencies to have public registers. If we return to the original Lough Erne agreement, it is clear that making progress on this issue is an integral part of fulfilling its spirit. I hope the Minister can update us on whether the Government will consider making such registers obligatory.
Baroness Neville-Rolfe
My Lords, I share the sentiment expressed by the noble Lord, Lord Mitchell, about the contribution that the noble Lord, Lord Watson, has made to this debate. I thank other noble Lords for this group of amendments which are in the spirit of ensuring that the register is effective and informative, which is what we all want. I hope I have understood noble Lords’ various concerns correctly.
I fully support the objectives expressed. We must have a single source of easily accessible information on the individuals who exercise significant control over our companies. However, reform has to be proportionate. It should not come at the cost of imposing unnecessary burdens on business. We have heard very persuasively, particularly from the Government Benches, how important this is. As I will explain with concrete figures, some of these amendments would impose additional costs which I am not sure we could justify because I am not convinced that there would be corresponding additional benefits. I shall explain that.
The noble Lord, Lord Watson, asked about when the outcome of our consultation on corporate directors will be known. We will try to write to the noble Lord before Report with the key findings.
On Amendment 37, the Government agree that information in the PSC register must be accurate, but I do not think we need an extra regulation-making power to ensure that that is the case. I am confident that the existing measures we have in place, and those we will introduce through the Bill, can already deliver noble Lords’ intentions. These measures include: criminal penalties for the provision of false information; public scrutiny of the information; and multiple checks pre and post registration at Companies House. To give just one example, in 2013-14, 9 million submissions underwent multiple checks by Companies House, resulting in nearly 400,000 being rejected. If we were to go further—for example, by requiring companies to use third parties to verify data before their annual filings at Companies House—our provisional estimates for the first year would be in the region of £400 million to over £1 billion, with a further cost of £300 million to £900 million per year thereafter. It is potentially a big bill.
Lord Phillips of Sudbury
Surely my noble friend understands that one is not looking for every company to have to make intermediate or particular requirements on its register. We need a power for the registrar—although it could be someone else—to say to a company, “Show us your books”. That would have a huge deterrent effect. However, we are not suggesting the whole kaboosh should be responsible in that way.
Baroness Neville-Rolfe
My Lords, I am grateful for that clarification. I was hypothecating the use of third parties to verify data before the data went to Companies House. It seems there is agreement that this would not be desirable for the reasons I have stated.
I have listened carefully to the arguments on the benefits of requiring up-to-date information to be filed at Companies House and the Government have listened to similar arguments during the negotiations we have been having on the fourth money laundering directive. Noble Lords may, however, not be aware that we already have the power we need in the Bill to allow us to increase the frequency with which information is filed at Companies House. This was inserted in the event that the statutory review mandated by Clause 79 demonstrated a need for more up-to-date information. I will, however, in the light of the conversations we have had today, reflect further on whether there is a case to use that power once the register goes live and the new system has bedded in.
Turning to Amendments 37A, 39, 41 and 43, I understand the desire for more information on every layer of the ownership chain. However, we must keep in mind our fundamental objective, which is to know who ultimately owns and controls our companies. Requiring additional information risks confusing companies and users of the register. There will also be cost implications in asking a company to hold and keep up-to-date information on every company or individual in its ownership chain. We believe we will have the information we need for investigation and prosecution.
More importantly, this is not a requirement of international standards or the soon-to-be-adopted fourth money laundering directive, which I am glad will bring the major benefits of these reforms to other member states. Noble Lords will, I am sure, share my concern to avoid gold-plating.
The noble Lords, Lord Watson, Lord Mitchell and others, asked why we are not including the overseas territories and Crown dependencies in this legislation. The Prime Minister made clear that he would like a publicly accessible central registry of company beneficial ownership information to be the new international standard. We would therefore like the overseas territories and Crown dependencies to match our policy. We respect, however, the fact that the overseas territories and Crown dependencies are separate jurisdictions with their own elected Governments, under which they are responsible for fiscal matters. We are working closely with the overseas territories and Crown dependencies and keeping them informed of our policy as it develops so that our decisions can feed into their policy thinking. At the Joint Ministerial Council in December last year, the UK and territory leaders agreed to work together on raising international standards and to meet ahead of the G20 meeting of finance Ministers and central bank governors this February to agree a way forward on implementation of the G20 principles.
I hope my noble friend and other noble Lords have found some reassurance from my response and that the noble Lord will agree to withdraw the amendment.
Lord Watson of Invergowrie
I thank the noble Baroness for her response. I think it is fair to say that we are not a million miles apart on most of the issues covered by the amendments. However, in her response, the Minister mentioned Clause 79, inasmuch as the Government would have the power to increase the frequency of the updating of the register—I cannot quickly find the wording that refers to that—and it would be helpful if she could give me something in writing on that.
The amendment states that,
“the central register is as accurate, reliable and up to date as possible”.
I think that everybody would like that to be the case. As the noble Lord, Lord Phillips of Sudbury, said, we are not suggesting that every company should constantly be involved in that and it should not be updated more than once a year. I liked the analogy with our own register given by my noble friend Lord Mitchell. It is important that information is as current as we can possibly make it. However, I noted the Minister’s response and I think we will return to this matter on Report.
I mentioned earlier that the shadow Chancellor said that a Labour Government would require the Overseas Territories and Crown dependencies to produce a register. I do not know what the legal requirements are. I know the difference between the Crown dependencies and the Overseas Territories, but there must be a means of doing that and I hope that the Government will at least bring to bear whatever pressure they can behind the scenes on these dependencies and territories to move in this very important area.
We have covered some important issues in this debate and we may well return to some of them on Report. I welcome what the Minister has said on most of the points and I beg leave to withdraw the amendment.
Lord Mitchell
“(4) For the purposes of subsection (3) “special reasons” includes reasons related to the national security of the United Kingdom or reasons to the personal safety of an individual.
(5) Where the Secretary of State grants an exemption under this section the fact of the exemption must be included in the information contained in the PSC register of the relevant company or the central register.
(6) The decision of the Secretary of State to grant an exemption is subject to judicial review.”
Lord Mitchell
My Lords, in moving Amendment 37D, I shall speak also to Amendments 44HA, 47A and 44 and will be returning to the central themes that I marked out when speaking to the amendments in the previous two groups: the need to ensure that the boundaries and scope of the provisions that we are talking about are adequately drawn so as to ensure that no loopholes remain and the need for appropriate transparency to make sure that the register serves the purpose that it was intended to serve. As before, I will often be probing rather than criticising the measures, which have our support.
Our Amendment 37D, the first in this group, would provide for the explicit circumstances when it will be necessary to exclude otherwise necessary information from the register. Clearly, it is understandable that, where there is a danger either to an individual or to national security, companies can be exempted from providing information. However, it is important that those circumstances are explicitly in the Bill, otherwise there may be exemptions for less important reasons in the future. The amendment also provides for any such decision to be challengeable through judicial review. Despite the fact that this Government have recently set about attempting to damage and degrade judicial review, it remains an important mechanism for holding the Government to account—hence its provision here.
I have also added my name to Amendment 44. My noble friend Lord Watson will no doubt be able to give a more complete explanation of it in a moment, but the essential point is that the Bill as drafted appears to preclude the possibility of a journalist using the register to investigate a potential impropriety. New Section 790O(4)(d) says that any request for information should include whether or not the information is going to be passed on to another person. In an age where open data are providing insight in a variety of fields, appearing to want to prevent them being passed from one person to another seems—to me, at least—to be a rather odd decision. I am keen to hear the Minister’s explanation for that subsection.
Amendment 44A is a probing amendment. New Section 790P sets out the process through which a company, upon receiving a request for information, can either provide it or go to court. However, subsection (4), which sets out when a company does not have to comply with a request, appears to have no time limit attached. Our amendment requires it to be reviewed annually.
Amendment 47A follows on from Amendment 37D in marking out the extent of the exclusions. Circumstances where a person’s details could be suppressed from a register are to be laid out in regulations by the Secretary of State. Amendment 47A would make it possible to challenge any such decisions. Taken together, these amendments would improve the clarity of these provisions and improve their ability to increase transparency about ownership of companies. I beg to move.
Lord Flight
My Lords, I declare my interests as in the register. My various amendments in this group are all part of the same process and seek to change the proposed arrangements so that, although there would still be a register and companies would still need to know their shareholders, there would be no requirement to send details to Companies House. If the company in question did not wish to give access to the register, access would be by way of an application to the court, which would then be limited to security, taxation and law enforcement reasons—implicitly by those three categories of bodies. The Bill thus amended would comply with the G8 commitment, which I was pleased that the noble Lord, Lord Mitchell, read out. It specifically did not commit to a public register but committed to making the information on share ownership able to be accessed by security, taxation and law enforcement authorities.
As I argued at Second Reading, the Bill’s proposals for a public register as they stand are, in my view, flawed on several counts. I think we all agree on the need to address the issue of anonymously owned companies having connections with terrorist groups or evading tax—I might add that the same goes for charities, where the record of involvement is under some question. My amendment addresses this by allowing security, tax and criminal law enforcement bodies access. Indeed, the provisions in my amendments could be adapted to simply obliging companies to provide the information on controlling interests to those three bodies.
My point is that there is really no need for public access, which is potentially open to abuse. The Bill as it stands overturns 200 years of the right to privacy under UK company law without really debating it. Transparency of ownership relates to whether a company is public or private under British law. As has been pointed out, publicly listed companies have to make an announcement that goes right down to a 3% shareholder, but for a private, family business, privacy has generally been accepted.
The categories of privacy that are protected are contemplated in the BIS October 2014 consultation, and the Government have since responded further to that. Those categories relate to people who are at risk of intimidation or violence, but there are many other areas in which protection of ownership should be justly considered. The measures, as they are likely to evolve, would be expensive to operate and, at the end of the day, decisions about where people need protection are relatively subjective. The Government’s recent advice on secondary legislation suggested that they would confine protection to situations risking violence or intimidation. I suggest that that would be far too narrow to be just. There are a number of situations where families would be open to press vendetta, for example, should they be thus exposed.
Lord Watson of Invergowrie
My Lords, I rise to give a rather more upbeat reason for supporting Amendments 44 and 47. We have just heard the noble Lord, Lord Flight, in respect of his amendments. I open by saying that I am quite astonished to hear him say that public access is open to abuse. The whole thrust of this legislation is to deal with abuse of a very serious nature by companies in all sorts of activities. The number of such companies is small, certainly; none the less, it is a very important number and some of them are very influential.
Although I shall have something to say later specifically on the amendments tabled by the noble Lord, Lord Flight, I want to speak particularly to Amendments 44 and 47 because, the noble Lord, Lord Flight, notwithstanding, most people would agree that members of the public should be able to view and share information from a company’s PSC register. As the Minister said in another place, a principle of this legislation is that information should be publicly available so that businesses can identify who really owns the companies with which they do business. It is right that businesses should know whom they are dealing with and that civil society and the wider public can hold our companies to account. If the central register is to be updated only annually—or perhaps more frequently; we will see—it becomes important that people can access and share information from businesses’ registers as well.
The part of the legislation which concerns me—and which Amendment 44 would remove—requires people or organisations who intend sharing information from a company’s PSC register to say whom they would share it with, to give their names and addresses, and to state the purpose of sharing it. How can those questions, which appear in subsection (4)(d), be answered in advance? I do not believe it is possible. How would the person requesting the information know the individual or organisation to whom they might at some indeterminate point in the future wish to divulge any of the information that they receive? You would need to be a clairvoyant to know these answers.
The effect will be that the person requesting and subsequently receiving the information will be prevented from ever passing it on to anyone else. That will have a significant effect on the abilities of journalists and well respected organisations—such as Christian Aid and Global Witness, which have been assiduous in campaigning in this important area—to carry out the work that they do, including investigations, checking on company activities and publishing information about it. I do not quite sign up to the idea that if you have nothing to hide you have nothing to fear, because there can be cases where information can certainly be misappropriated, not least online. However, it is important that companies should be willing to defend what they do, and to do so as publicly as they reasonably can. However, I defend the concept of commercial confidentiality, although it should not be used as a cloak to enable companies to hide some of their activities, presumably those that they genuinely do not want aired publicly.
When I raised the issue at Second Reading, I was pleased that the Minister gave me an assurance that legitimate access to company registers would not be prevented. However, she did not say anything about publishing details from the companies register. I have been through the comments of her ministerial colleague in Committee in another place and, in my view, she justified paragraphs (a), (b) and (c) of new Clause 790O(4) on page 162 perfectly well. However, at no stage did she justify paragraph (d), and nor did our Minister at Second Reading. As my noble friend Lord Mitchell said, it requires to be justified because, unless lines 32 to 40 are removed from the Bill, reputable organisations will be prevented from exposing and potentially rooting out corruption through carrying out and sharing investigations properly. Without doubt the measure would be used by companies to prevent publication of parts of their registers, which surely goes against the spirit of the legislation. Therefore, in addition to the question that my noble friend Lord Mitchell asked of the Minister, I simply ask her whether she can reveal what she believes subsection (4)(d) adds to the Bill.
Amendment 47 tackles the issue of exemptions. As with the point I made in my remarks on Amendments 39, 41 and 43 in relation to corporate directors, we await the outcome of a government consultation on the question of exemptions. As the Minister said to me that she hoped to write to me before Report in respect of the other consultation, and given that the one on exemptions concluded a month ago, I hope she will be able to do the same with that. It is important that we should be aware of the outcome of the consultation before the Bill completes its passage in this House.
At Second Reading I was pleased to receive from the Minister an assurance that exemptions to publishing information in the register would be given only in exceptional circumstances, which is as it should be. I should like to probe a little with this amendment because exemptions should be open to challenge. The amendment would ensure that it was possible for a decision to grant or refuse a protection provision to be challenged and that it was clear on the register that a protection provision had been granted.
A similar amendment was tabled by the honourable Member for Hartlepool in Committee in another place, and the Minister’s argument there was that the court was not the best authority to determine the applications in the first instance. She argued that the registrar was best placed to do so. Therefore, Amendment 47 provides for the registrar to make that decision. I believe that a fundamental principle is at stake here. The public interest test must always enable an exemption to be challenged when new evidence comes to light. The decision to exempt an individual may be determined in a different way by the registrar on the presentation of new evidence specific to the company on why the public interest demands disclosure.
I hope that the Minister will accept this amendment, given that it appears that it complies with what her colleague said in another place. If not, I ask her to outline how she will ensure that exemptions can be challenged in the public interest when new information comes to light. It would also be useful if the Minister could outline the broad categories under which exemptions must be given.
Baroness Wheatcroft (Con)
My Lords, I speak in support of Amendment 44. It seems to me that this is an example of the Government getting slightly cold feet about their own proposals. If this Bill is supposed to create a public document—a public register—there is no going back. Surely it is public and saying “but only in certain circumstances” seems to display a lack of coherence. I am not merely worried about potentially trying to curtail the rights of journalists to expose just the sort of malfeasance that we might wish to expose. Once things are made public, surely they should be public documents that can be used for whatever purpose people wish. If there is a fear that, for instance, animal rights activists might put such a register to use, the answer is obviously that certain companies and individuals can claim exemption in the first place and will not appear on the register. However, once the register is there, a public document has, surely, to be accessible to the public.
Lord Borwick
I support my noble friend Lord Flight’s amendments. I declare my interest as before. I understand why my noble friend the Minister is proposing this, although I am not sure that I agree with it. The task is surely to design these rules so that they have the least impact on honest taxpayers. The tax legislation that we have is so enormous, and growing at such a vast rate every year, that I would be amazed if anybody knows of any human being who has actually said they have read all of it. There are not only enormous complexities in our tax legislation but vast powers for HMRC to enforce it. With this legislation, we are in danger of producing a group of citizen tax collectors who believe that it is possible—that it is their right—to go through the register and come out with an opportunity to accuse a company of paying insufficient tax. The effect of that would be that a newspaper or other media outlet, or an NGO, will pursue the case, and I am afraid that, as a result, the duties on HMRC to look into it will be rather greater than they are at present. Rather than reducing the burden on HMRC, as was mentioned earlier, I have a feeling that this legislation will increase it rather dramatically. This whole area of legislation is rife with unintended consequences.
My noble friend mentioned activists. An animal rights activist, for example, was convicted and sentenced to six years in prison last year, I think, for attacking people connected with Huntingdon Life Sciences—sending incendiary devices, hoax bombs and other such stuff. The anti-fracking demonstrators in Balcombe threatened similar activities. All of this legislation is open to abuse in a most remarkably comprehensive fashion, which is why I believe that this information should only be available to those people listed in my noble friend Lord Flight’s Amendment 44H.
Lord Phillips of Sudbury
My Lords, my name is on two of these amendments, Amendments 44 and 47. My noble friend Lord Watson has introduced them very fully, but I would like to add a few further points. As a first general point, some have commented—the noble Lord who has just spoken made the point that this is imposing a huge liability on limited companies—and asked why any member of the public should have access to the information on this register. The answer is simple but has not been referred to. Too often we overlook the fact that limited liability is an entirely state-provided privilege—and what a privilege it is. It protects those who own companies from the normal results of one’s own lack of success and, in some respects, even worse. Major conditions must surely be attached to the enjoyment of such a privilege. I believe that the Government are correct in the general purport of the provisions that we are now talking about. However, the way in which they have been constructed and, indeed, some of the drafting, leave a lot to be desired. I support some of the proposals made by my noble friend Lord Flight and the noble Lord, Lord Leigh of Hurley.
I want to concentrate on new Section 790O, from which Amendment 44 would remove the last lines. That removal is justified on the grounds that what is required by this subsection is unrealistic and, I would say, impractical. How does one provide information about the future which may not be in one’s control? I refer to new Section 790O(4)(d), which says that where a member of the public requests access to the company’s PSC register to see what is in it, they must say with that application,
“whether the information will be disclosed to any other person”.
How on earth can one do that? One could say, “I want it for this and that reason”, but one cannot tell whether in future it will be disclosed by someone else, or if one would want to disclose it for a purpose as yet unknown to a person as yet unknown.
It then it goes on to say that in making the application for access to the PSC register, one must give,
“the purpose for which the information is to be used by”,
any person to whom it is disclosed. Again, that is not realistic. For those reasons alone, it is entirely right that this part of the section be removed, as the amendment requests. There may be some residual need for something that is currently within that subsection and my noble friend the Minister may want to highlight that. Indeed, a lot of what we say today needs reflection and it may be that she will come back on Report and say, “Okay, we will remove sub-paragraphs (i) and (iii) but we need sub-paragraph (ii) and something else”.
Then, new Section 790P(3) says:
“If on an application under this section the court is satisfied that the inspection or copy is not sought for a proper purpose”—
without defining “proper purpose”, which is not good enough. These are important provisions. There are remedies and consequences for not complying with the law. Not to have a definition of a “proper purpose” must be wrong. Having said that, I am not entirely happy with the definition provided by my noble friends Lord Flight and Lord Leigh of Hurley, but I will not detain the Committee any longer. I just confine myself to those points. However, the drafting of this whole area of the Bill is extraordinarily opaque in places and lacking in proper clarity. I am concerned at the bureaucratic effects of some provisions while strongly in favour of the general purport of the Government in producing this part of the Bill.
Lord Leigh of Hurley
My Lords, I just make the point that this amendment is not in my name, as was previously suggested, although I rather wish it was. I thank my noble friend Lord Flight for that back-handed compliment.
It is worth recalling that the PSC register in the UK in fact relies on self-reporting information that is not subject to independent verification. My noble friend the Minister indicated that it will be accurate because it is public but I struggle to rationalise that. The important point is that it is not subject to independent verification and, as my noble friend Lord Flight mentioned, that does not comply with Financial Action Task Force recommendations 24 and 25. None the less, that is the chosen route of Her Majesty’s Government and one has to consider the ramifications of allowing full public access to this unverified data. It means that people will take as read information supplied by companies, which of course could be completely incorrect, and they will assume that, as it is on an official register, it has validation when it is not the case. While recognising that tax and law authorities must and should—
Lord Watson of Invergowrie
I do not see why the information might be inaccurate if the companies themselves provide it. Surely, they will provide accurate information.
Lord Leigh of Hurley
That is an important point. We are here worried about rogue companies. We are not worried about companies that are abiding by the law or those that inadvertently make mistakes. Here, we are trying to pursue rogue companies that attempt to mislead. That was my point.
Lord Watson of Invergowrie
Are not those precisely the companies that we need to catch with legislation like this?
Lord Leigh of Hurley
Indeed, that is my point. If we are going to do it, we should follow the recommendations of the Financial Action Task Force and have that information verified. However, it does not mean that the register needs to be public. The tax and law authorities not just must but should have all this necessary information to deter misuse. I am not clear why it should necessarily be public. The noble Lord, Lord Watson of Invergowrie, referred to the G7, I think, but the document containing the G20 high-level principles of beneficial ownership transparency, which was published after the meeting in Sydney last year, makes no requirement for any public transparency. It makes a requirement for beneficial ownership to be on a register but, in its carefully worded 10 points, it does not suggest that it should be made public. We are in danger of becoming the only country in the whole of the G20 to insist on public disclosure—and one has to ask why on earth we would do that.
Would not it therefore be advisable to defer the requirement to make the information public until after the report required from the Secretary of State in the Bill? That might permit a better assessment of the quality of data being submitted through the self-reporting mechanism and an assessment of the competitive implications for UK businesses once other countries have had an opportunity to decide how they are going to address their compliance with the G20 report.
It is clear, thanks to the long-term economic plan and the success of the coalition Government’s policies, that the UK is an extremely attractive country to invest in. I declare an interest in my professional capacity. I talk to overseas investors all the time who seek to acquire and invest in UK companies. There is unparalleled interest in seeking to invest in the UK. Likewise, I declare that I went on the UKTI trade trip with the Prime Minister to China, where there is an enormous amount of interest from Chinese companies that wish to invest in the UK. We seem to be obsessing over disclosure of their potential investment in UK companies when, should they choose to invest in a limited partnership or directly into real estate, there will not be any disclosure. These investors will simply be deterred from investing in the UK because this transparency of ownership is an alien culture to them. I wonder whether the concerns over privacy will leave them not just dissuaded but unhappy with the actual cost and regulation that it will require, which is not the case for Delaware companies, for example. I fail to understand why a company should have to bear the onus of a request that might be flippant or irrelevant or just unnecessarily nosy.
Baroness Neville-Rolfe
I thank my noble friends for their amendments and for the wide-ranging debate. It is good that the noble Baroness, Lady Wheatcroft, and the noble Lord, Lord Borwick, added their voices to the Committee’s discussions, which I found very interesting and illuminating. Of course, the common thread in this group is that of access to information in the PSC register, albeit from very different perspectives.
I start by responding on a couple of general points. The noble Lord, Lord Watson, asked about the response to our discussion paper on PSC rights. Last week, I laid a Statement before the House setting out how we will take the policies and discussion paper forward. We intend to publish draft regulations this summer. This sort of consultation, which we have applied throughout the Bill, helps to limit unintended consequences. The noble Lord also asked why a person needs to tell the company how they are using the information. This is essential to ensure that data are used for a proper purpose. It is important to remember that the full date of birth will be publicly available from the company, even though this will not usually be on the public register at Companies House, and we do not want people passing these data on to fraudsters or identity thieves, for example.
There was also a question about the inspection provisions. Concern was expressed that the PSC register would not necessarily be available for use by journalists and NGOs. Any person may inspect the PSC register for a proper purpose. The purpose of the PSC register is to provide transparency of company ownership and control, so a person may inspect the register in the interests of finding out that information, including in the context of journalism, for example. Someone working with a journalist could pass on the information, provided that they had stated the purpose. I agree with my noble friend Lady Wheatcroft that, once things are made public, they are public, but I think that we will reflect on the debate that we have had this afternoon on this point.
My noble friend Lord Flight said that he felt that the protection regime needed extending and that the current proposals were too limited. We are building on the existing directors’ protection regime, which we believe works well—that is, the current one for companies, to which there have been a number of references and of which I have had experience in my company life. It has improved over the years and generally works well. However, as I set out last week, we are considering whether we need to extend it further. The ultimate objective is transparency, so purely commercial reasons, for example, would not be valid.
I now turn to the amendments, starting with Amendment 37D. The noble Lord clearly appreciates the need for the Secretary of State to be able to grant exemptions from the PSC register in genuinely exceptional circumstances. The amendment provides some examples of such circumstances, such as in relation to national security, with which I agree. In these rare cases it would be damaging to require the fact of that exemption to be publicly stated. This could cause people to try to obtain the information in question by other means, which is not what we would want.
Turning to Amendment 44, I know that the noble Lord will want to ensure that civil society is able to obtain PSC information. As my honourable friend Jo Swinson made clear during Committee in the other place, these provisions will not prevent them doing so. The Bill already allows companies to apply to the court to refuse inspection when information is not sought for a proper purpose. This provision will help to prevent misuse of information in the register by fraudsters and those who simply wish to send people junk mail—whoever they are. If the company’s application were upheld by the court, access to the information would be denied.
In Amendments 44A to 44H and 44J, my noble friend Lord Flight obviously comes to the group from a different perspective, seeking to severely restrict the ability of people to inspect a company’s PSC register. I recognise the concerns raised around allowing public access to this information, including the points that my noble friend mentioned—notably the impact on UK competitiveness and personal privacy. However, I remind him that the Government consulted on the question of public access to PSC information and acted on the basis of the responses that we received. I do not think we will be able to agree to an entirely different approach today. It is not our policy to respond to any lobby but to make real and important changes to tackle the criminal use of UK companies, which is a significant problem, made worse in the international digital world. We want to lead in this area, as the Prime Minister has made clear. I hope that the sketch made by my noble friend Lord Leigh proves to be wrong.
Again on privacy, we have carefully considered the impact that this policy has on the privacy of individuals through the conduct of a full privacy impact assessment. That document has been published and is on the GOV.UK website. The assessments indicated that the proposed measures are necessary and proportionate. In reflecting further, it is important that we also revisit that assessment. We firmly believe that a central, public register is the most appropriate option for the UK, and allowing people to access the company’s own PSC register is an important part of that. I will not repeat what I said in opening today, but increased trust is good for business. Making sure that the UK maintains its reputation as a clean and reliable place to do business and invest is very important. We have taken clear steps to protect personal information wherever appropriate.
On effectiveness, which my noble friend Lord Flight raised, we are looking closely at how Companies House and law enforcement agencies can work together to enforce the regime. The criminal sanctions and public nature of the register will also help to deter criminal activity.
On the issue of compliance costs, a final stage impact assessment estimates a net cost to business per year of £97.5 million, which over 10 years is around £1 billion. Those costs are spread over a population of 3 million companies. Of course, some small businesses are not companies and are not covered by this particular provision. In addition, for companies with simple ownership structures that already know their PSCs—that is, the vast majority of companies—the costs will be minimal. For example, the final impact assessment found that there would be a cost of £10 to small, simple companies in updating beneficial ownership information annually, and a cost of £10 in providing information to a central register annually.
On Amendments 47 and 47A, I would have serious concerns about allowing third parties to ask the registrar of companies to review a person’s right to protection. It is important to remember that applications will only be granted in very limited circumstances, for example when someone is placed at serious risk of violence or intimidation as a result of a company’s activities. On that basis, I do not think it would ever be in the public interest to override that decision.
I hope that I have responded to the key questions raised. I have said that we are happy to reflect on the detail of the debate on Amendment 44. I am not sure what the conclusion of that will be, but I listened to what was said today. I hope my noble friend and noble Lords are reassured by this discussion and will agree to withdraw or not move their amendments.
Lord Mitchell
I thank the Minister for her reply. In general, we are reassured. Many things have been discussed today and we will all go away and reflect before Report. There was one moment when the noble Lord opposite mentioned Huntingdon Life Sciences, which made my spine run cold. There was an occasion when a private company in which I was involved, of which I guess I was the PSC, was dealing with Huntingdon. We were leasing computers to it and the animal rights brigade suddenly parked outside my house. That lasted for only a day or two, but it was quite unnerving. However, that is by the by. I thank the Minister for what she said and I beg leave to withdraw the amendment.
Lord Popat
Lord Popat (Con)
My Lords, the amendments in this group are minor and technical ones to the measures in the Bill concerning director disqualification and the register of people with significant control, or the PSC register.
Amendments 61 and 102 would ensure that there was reciprocal recognition of certain bankruptcy restrictions between Great Britain and Northern Ireland. The amendments provide consistency to put it beyond doubt that a person made bankrupt by a court in Northern Ireland will be committing an offence if they act as a director of a company in Great Britain.
Amendments 38, 40 and 42 in respect of the PSC register will ensure that we have sufficient flexibility to amend the regulations setting out the nature of a person’s control over a company. They will allow us to describe the nature of control by reference to any interest held in the company and not just to the specified conditions.
Amendment 50 amends paragraph 26(2) of new Schedule 1A to ensure that, if changes are made by way of regulations to Part 1 of Schedule 1A, consequential changes can also be made to Part 2. This will ensure that the legislation, if amended, can remain coherent and consistent. I hope that noble Lords will support these amendments. I beg to move.
Baroness Neville-Rolfe
Baroness Neville-Rolfe
Baroness Neville-Rolfe
Baroness Neville-Rolfe
“( ) in consequence of any provision made by virtue of paragraph (b), to change or supplement Part 2 of this Schedule so that circumstances specified in that Part in which a person is to be regarded as holding an interest in a company correspond to any of the specified conditions, or would do so but for the extent of the interest.”
Lord Flight
Lord Flight
My Lords, Amendment 51 seeks to address the issue of the duties of shadow directors and to limit the extension of their duties to what is fair, reasonable and appropriate. The current wording in the Bill goes too far in making the condition that the duties apply,
“where … they are capable of so applying”,
whatever that actually means. The territory relates to the doctrine of avoiding conflicts of interest and, in particular, the situation for full directors, but unfortunately the ground rules there do not apply to shadow directors who sometimes may not even be aware, subjectively, that they are shadow directors. This amendment seeks to tie the conditionality of the duties of shadow directors to what is reasonable, just and equitable. I understand that the Government are sympathetic to these issues but may prefer to address the territory via regulations. As the Bill stands, I suggest that the position of shadow directors is not reasonable. I beg to move.
Lord Leigh of Hurley
My Lords, Amendment 51, which is tabled in my name and that of my noble friend Lord Flight, is to Clause 86 and concerns shadow directors. Shadow directors are individuals who influence a company without actually being a director. I do not think I have to declare an interest as being a shadow director of any company, as far as I am aware, but—
Lord Leigh of Hurley
That is the point. Shadow directors can be significant shareholders who have chosen not to sit on the board—in particular, a lender who has become active in the affairs of a business—or simply someone in whose interests and according to whose instructions the directors act, without the person actually being a director. The Bill seeks to clarify the rules governing shadow directors so that people do not deliberately assume that status in order to avoid a lighter touch corporate governance regime. Indeed, the definition of shadow director is not changed by the Bill, only the extent to which they should enjoy the same duties as directors.
At present, the duties of directors apply to shadow directors to the extent permitted by common law rules and equitable principles. These are set out in Section 170 to 177 of the Companies Act and offer up a code of conduct. Clause 86(3) would enable the Secretary of State to make regulations to apply any duties of directors to such shadow directors. The Bill makes provision for the duties of directors to apply to shadow directors,
“where … they are capable of so applying”,
as my noble friend said. This wording, quite apart from adding certainty, will do the opposite and leave the courts little discretion to allow them to apply said duties in a proportionate manner. This wording, “capable of so applying”, amounts to some sort of blanket application of duties from one to the other since it is difficult to conceive of a situation where the duty would be incapable of applying.
Of particular interest is the duty to avoid conflicts of interest. It is not often possible to prevent a conflict from arising, and therefore the prima facie duty to avoid conflicts is typically addressed by having some mechanics: for example, one frequently sees a director excusing himself from any meetings considering such matters which might present a conflict and thus being prevented from voting. The Companies Act specifically considers these mechanisms but, of course, it will not be possible to apply them to shadow directors, who may not seek to be shadow directors and may not even be aware that they are. This could result in an automatic breach of the duty by entirely innocent shadow directors, so I would argue that more flexibility is required.
This is why the amendment offers up an alternative wording, which says that duties will apply,
“to the extent it is reasonable, just and equitable for any such general duty to apply”—
it certainly sounds reasonable to me—and caters for examples such as conflicts of interest. It still allows for the Secretary of State to make an intervention, as well as giving the courts the requisite discretion, but it will prevent the inherent unfairness in the situation that I have just described.
Baroness Neville-Rolfe
My Lords, in responding to Amendment 51, I thank my noble friends Lord Flight and Lord Leigh. Like my noble friend Lord Leigh, I have been a director in the past, but never a shadow director. It may be helpful if I set out how directors’ general duties currently apply to shadow directors and how Clause 86 will improve this position.
The current provision in Section 170(5) of the Companies Act 2006 states that the directors’ general duties apply to shadow directors to the extent that the,
“common law rules or equitable principles so apply”.
This makes it confusing for anyone who may be acting as a shadow director to know whether any duties apply to them and the extent to which those duties apply. Clause 86 clarifies that the same standards of behaviour are expected of shadow directors as of appointed directors, wherever possible.
I am sympathetic to the intention behind this amendment that shadow directors should not be put in a disadvantaged position compared to appointed directors. The Government recognise that there may be circumstances where the directors’ general duties may not be capable of applying to shadow directors in the same way as appointed directors. One example could arise in the context of the duty to avoid conflicts of interest, as set out in Section 175 of the Companies Act 2006. In principle, we would expect any director to avoid a conflict of interest wherever possible. However, Section 175 of the Companies Act also recognises that there are cases in which a director should be able to act in cases of conflict. It therefore allows for authorisation by the company for a director to continue acting on a matter where they have a known conflict in certain circumstances. A shadow director may not be able to seek authorisation in this way.
Clause 86 does not introduce a blanket application of the duties to shadow directors. A shadow director will be able to rely on Clause 86 to demonstrate that, in their circumstances, a duty or part of a duty is incapable of applying to them. Officials have discussed this with the British Private Equity & Venture Capital Association, and in light of the points that have been made, I now wish to consider the issue more fully and reflect on whether there is a need to adapt the way the general duties of directors apply to shadow directors so that they do not find themselves in a worse position than directors. This would be achieved by using the power already included in Clause 86(3). I will write to noble Lords before Report to give an update on my conclusions. I hope that my noble friends are reassured by this explanation and that, on this basis, my noble friend Lord Flight will withdraw his amendment.
Lord Flight
I thank the Minister for what she has said and beg leave to withdraw the amendment.
Lord Flight
Lord Flight
My Lords, the amendments here in my name—as I made clear when I was speaking to Amendments 44A to 44F—go together. They are all really part of the same argument that the register should not be public but should be available to the police, and the taxation and security authorities. Therefore, it would be redundant to repeat the points that I have already made. I beg to move.
Lord Mendelsohn (Lab)
I draw attention to my interests recorded in the register and my connection to small businesses. This section of the Bill has our broad support. We welcome any attempt to reduce the burdens of reporting while maintaining the integrity and transparency required to make such registration effective. Clause 89 provides for a new filing requirement instead of the annual return. The new confirmation statement is outlined in some detail in the Bill. I am bound to say that I did not find the old annual return such a hardship, and I hope that I will feel the same with the new statement.
Amendment 54B is a probing amendment. It ensures that sanctions would be the same for companies that do not have and maintain a record of their PSCs and those that did not provide information to the public register. The intention of the amendment is to help to probe and to ensure that the information makes it to the register and can be used meaningfully. We would be grateful if the Minister will set out the thinking behind the difference between these two and why the enforcement is slightly different and provide us with an understanding of how the Government see the mechanisms for enforcement and how they will work over time.
Baroness Neville-Rolfe
My Lords, I am grateful to my noble friend for so graciously moving his amendment and to the noble Lord, Lord Mendelsohn, for his remarks. The confirmation statement in Clause 89 is a replacement for our friend the annual return to Companies House. It will contain important information about the company, in particular about the register of people with significant control, which we have just been debating.
Amendment 54B would increase the criminal penalties we provide for not filing a confirmation statement at Companies House. It is important that penalties should be sufficient to deter and sanction those who do not provide Companies House with a confirmation statement. However, I do not believe that increasing the penalty is necessary in this case, which I think is what the noble Lord may be seeking. Enforcement activity by Companies House is focused on ensuring that information is delivered to it and put on the public register in a timely way. Companies House sends reminders to the company in good time before the company is due to file the current annual return. If a company fails to deliver information, the first aim of Companies House is to seek compliance. In the event of continued non-compliance, Companies House prosecutes the company and its directors. Last year, Companies House prosecuted almost 2,000 companies for failing to file the annual return. This approach to enforcement works. Compliance rates for the annual return are currently running at 98%.
The penalties in Parts 7 and 8 are designed to be consistent with the level and approach of existing Companies Act penalties. The penalty for failing to deliver a confirmation statement to Companies House is equivalent to the existing penalty for failing to deliver an annual return. The Government do not consider that there is a case to increase these penalties. Of course, we take the failure to file information at Companies House extremely seriously. It is important that people should be able to obtain up-to-date information about companies with which they may wish to do business. A continuing failure to deliver a confirmation statement could incur a daily default fine of £500. This would quickly add up to a significant amount. I understand concern that there should be sufficient incentives to ensure that information about people with significant control is put onto the public register. In practice, however, we judge a prison sentence to be highly unlikely to be proportionate to failing to deliver a confirmation statement, even were the law to permit the judiciary to impose such a penalty. It is, of course, important that people should have confidence in the public register. When necessary, enforcement includes the prosecution of criminal activity. Consequently, we consider that the sanctions set out Clause 89 are sufficient. I hope that explanation helps to clarify issues and that my noble friend feels able to withdraw his amendment.
Baroness Neville-Rolfe
“( ) Until section 85(2) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 comes into force, in subsection (4)(b)(i), “a fine” is to be read as “a fine not exceeding level 5 on the standard scale”.”
Baroness Neville-Rolfe
“Annual returns
(1) This section applies where the company is a charitable company.
(2) The Registrar must agree with the Charity Commission a common form of annual return for both organisations.”
Lord Hodgson of Astley Abbotts (Con)
My Lords, I am sorry that I am on the wrong side of the Moses Room this afternoon, but all the chairs were full when I arrived earlier, but never mind.
The amendment inserts a new clause after Clause 89 and is born of long frustration at the Government’s failure to force through a simple deregulatory change. If someone sets up a charity, it will normally be the case that it will be set up as a charitable trust; trustees will be appointed who will operate in a normal way under the supervision of the Charity Commission. The drawback of this is that the trustees have unlimited liability, which is not always particularly attractive. Therefore, to avoid that you can change from being a charitable trust to being a charitable company, which gives you the advantage of limited liability. However, that has a drawback because you then come under two regulators: the Charity Commission for your charitable activities and Companies House for your limited company activities. Both regulators require annual returns to be made to them and require largely overlapping information. If one was to draw a Venn diagram, one would find that there was relatively little space not covered by both regulators’ requirements.
In 2012, a report that I did for the Government recommended that the two forms could and should easily be merged. The Government accepted that recommendation, but I have to say that since that date progress has been glacial. In fact, that would be altogether too rapid a description of the progress that is being made. There has been lots of stuff about overlapping jurisdictions and incompatible IT systems, all of which to my mind smells of the long grass, if the long grass does smell. So I tabled this amendment to suggest that the Minister should be required to ensure that a common form is agreed between the two regulators, the Charity Commission and Companies House. I do not suppose for a moment that the Minister will accept it, but it is an attempt to draw attention to very slow progress in one part of her department.
How many companies the measure would cover is not exactly known, but the estimate is between 20,000 and 30,000 companies, which means about the same number of forms, if we could make this change. Deregulation requires a scalpel, not a meat axe, and this is a scalpel which I am offering to my noble friend on the Front Bench, as it would make a significant difference to 20,000 to 30,000 charitable companies, a difference to which the Government have been committed for some little time but which so far seems to be entirely stillborn as an idea. I beg to move.
Lord Cope of Berkeley
My Lords, I support this amendment but must declare an interest. I happen to be a trustee and director of just such a charitable company and charity as my noble friend suggests. I cannot pretend that it is a huge burden to fill in both separate forms but this is exactly the sort of deregulation that we should be looking for—and so do the Government, or at least I thought they did. How are we getting on with the glacial process, as my noble friend described it, of trying to harmonise these two forms?
Lord Deben (Con)
I declare the same kind of interest as my noble friend who last spoke. There is sometimes confusion in Government about regulation. Many regulations are extremely good and opposition to regulation as a kind of mantra is peculiarly boring. Unfortunately, we have just gone through a Bill in which some of the bits of deregulation were of no importance whatever, yet we still have bits of regulation like this, which could make a difference and could easily be improved. The sort of regulation that people most dislike is when they have to do the same thing at least twice. This is one example of that. My noble friend is to be congratulated on raising it on this occasion. I hope that my noble friend the Minister will be prepared to go a little further than he suggested that she might, because this is what annoys people. I know it does not matter very much, but it is one of a whole lot of things that annoys people that add up to something that does matter. If we could just get rid of this, it would also suggest that the Government and authorities were competent, whereas this glacial movement possibly suggests the opposite.
Lord Popat
My Lords, I welcome the input of my noble friends Lord Cope, Lord Deben and Lord Hodgson, on this deregulation issue. Clause 89 replaces the current annual return for companies with a new requirement for companies to confirm that the information held on the register of companies is up to date. Companies will no longer have to restate information if there has been no change. They will have more flexibility about when they confirm that their company information is up to date.
Charitable companies are currently required to file a separate annual return with the Charity Commission. Clause 89 does not change that position. The information required by the Charity Commission in its role as a charity regulator is not the same as that required by the Registrar of Companies. Therefore, the information required in the two returns differs. For example, a charity’s annual return to the Charity Commission contains financial information taken from the charity’s accounts and narrative information on the charity’s aims and activities. Charities with an income of more than £25,000 also need to enclose copies of their accounts with the annual return. That is not to say, of course, that nothing can be done to reduce the reporting burden on charities.
In December 2012, the Charity Commission began registering charities under a new legal form—the charitable incorporated organisation, or CIO. The aim of the CIO structure is to give charities the advantages of incorporation without all the administrative burdens associated with being a company. For example, CIOs do not need to register with Companies House but need send only an annual return to the Charity Commission. In 2013-14, the Charity Commission registered 1,331 CIOs. We expect the number of charities choosing this structure to increase in future. As the Government said in our response to the noble Lord’s review of the Charities Act, the Charity Commission has accepted his recommendation that we should continue work on creating a single reporting system for charitable companies.
Lord Hodgson of Astley Abbotts
I am extremely grateful to my noble friend and I congratulate his officials on drafting a speaking note of brilliant obfuscation, which manages to avoid most of the issues. The one point that he did make, which was about the public benefit, obviously occurs only in charities’ accounts; it does not occur in an ordinary company’s accounts. That is the one difference, and that surely can be accommodated in a common form and does not represent an insuperable difficulty.
The second red herring concerned the charitable incorporated organisation—the CIO—which has now been in existence for just over 12 months. There is, of course, a problem for companies. At present the Charity Commission will not accept conversion because of the volume of work; it simply cannot take on more than a certain number of CIO applications at a time. Indeed, there is no reason why we should force people who have set up charitable companies to become CIOs. It is looking at the problem through the wrong end of the telescope to say that they have to change their arrangements when, quite simply, a regulatory action by my noble friend would solve the problem.
Finally, my noble friend said that he was going to invite the two regulators to write to me setting out how they would take this forward. However, it is now 18 months since the Government accepted the recommendation that I made a year before that. Do we not yet have a plan from Companies House, after 18 months? Surely, we could find a way of acting with a little more urgency. I urge my noble friend to act as the Dyno-Rod man on this matter to ensure that we move the whole issue forward; otherwise, in two or three years’ time, we will still be discussing how difficult it is, and we will be talking about all the problems that he has been informed about by his officials.
I would like my noble friend to take a personal interest rather than merely ask the organisations to write to me, which means that the issue will certainly be put in the long grass. However, I am grateful for his reply and I beg leave to withdraw the amendment.
Baroness Neville-Rolfe
Lord Mendelsohn
“Director’s duties: factors to be considered in takeovers and mergers
In applying the City Code on Takeovers and Mergers, the offeree board circular must set out the opinion of the board on the offer (including any alternative offers) and the board’s reasons for forming its opinion which must include its views on—(a) the likely consequences of any decision in the long term,(b) the interests of the company’s employees,(c) the need to foster the company’s business relationships with suppliers, customers and others,(d) the impact of the company’s operations on the community and the environment,(e) the desirability of the company maintaining a reputation for high standards of business conduct, and(f) the need to act fairly as between members of the company.”
Lord Mendelsohn
I shall speak also to Amendment 60B. The Bill offers us a tremendous opportunity to look at directors’ duties. It is a useful time to examine some of the areas which have been a matter of public debate and which have a bearing on our deliberations. We have tabled two probing amendments for consideration.
At Second Reading in the other place, the Secretary of State raised concerns about whether in mergers and takeovers there are the correct provisions in the code under which companies act. Indeed, public concern over the takeover of Cadburys by Kraft and the AstraZeneca/Pfizer situation led the Secretary of State at that time to say that this Bill would address those matters.
Since that time, the Takeover Panel has been hard at work bringing forward a tightening of directors’ duties in respect of takeovers and of undertakings made during takeovers. The Takeover Panel has long said that a target company’s directors may take factors other than price into account. We are all aware that very often the commentary has been that there is always pressure to focus on price alone. The Takeover Panel has now amended the code to make that point explicit and to allow boards not to consider the offer price as the determining factor. This is progress, but we retain concerns that are not assuaged. This offers boards partial protection when the price alone does not meet all the considerations for the long-term interests of the company or its shareholders.
In relation to binding undertakings, the Takeover Panel’s suggestions are to be welcomed. We agree with a distinction being drawn between post-offer undertakings, which are binding, and intention statements, which are not. Intention statements are required to be accurate statements of the parties’ intentions at the time they are made and to be based on reasonable grounds. The panel will require clarity by companies making an offer, which should help boards to consider their duties properly when evaluating bids made by those companies.
It would be useful if the Minister could provide us with her assessment of whether the changes made by the Takeover Panel are suitable and adequate and whether they meet all the action planned within the context of the ambition set out by the Secretary of State in his comments at Second Reading. It would be interesting to have the Minister’s assessment of the extent to which the Government consider that if such additions were in place at the time they would have dealt with AstraZeneca/Pfizer and Kraft/Cadbury situations and what impact they would have had on them.
Amendment 60A probes these matters further. The current position is governed by note 1 to Rule 25(2) of the takeover code. Our amendments suggest an alternative framework on which we seek the Government’s views. As it is currently defined in negative terms, the code does not limit the factors or provide a framework under which the board may consider these matters. While not limiting them, we propose factors that should be positively taken into account. We are keen to hear the Government’s views on such a formulation.
Amendment 60B takes forward an existing arrangement that incentive payments should be identified. As the shadow Secretary of State said in another place, there are clear cases and concerns that the lucrative nature of advising on such arrangements creates incentives which may not be desirable and lead to poor outcomes. Our change would amend the current situation, which is that they are identified in the offer document. That is in the code under Rule 24(16). We make clear the need to disclose in full payments which are contingent on the outcome. This will provide for an accurate reflection of what is paid, as opposed to the current arrangements, which relate only to fees and expenses.
I would be grateful to know whether the Government would be minded to change the current rules to ensure proper transparency. In addition, although this is not in the amendment we have proposed, we would be interested in whether the Government would be sympathetic to finding the right place for the reporting of such payments—the actual payments made, that is the fees, expenses and incentive payments—to be made in the context of a transaction. I beg to move.
Lord Leigh of Hurley
I am not sure that it is in the register of interests but I further disclose that I used to sit on the Takeover Panel appeal committee some eight years ago, as the alternate to the president of the Institute of Chartered Accountants and in my capacity as the chairman of the Corporate Finance Faculty—finally, I stand up in your Lordships’ House to speak on my one area of expertise. Having said that, the vast majority of my time is spent working with private companies rather than public companies, but I thank the noble Lord, Lord Mendelsohn, most sincerely for raising a matter on which I can speak.
I take this moment to commend the Takeover Panel on the role it undertakes in City life and in the UK economy. It is an extraordinary organisation, which works extremely effectively and well, and which is genuinely the envy of the world. When overseas—in particular, American—potential purchasers of UK companies come to these shores, and the nature and working of the Takeover Panel is explained to them, they are absolutely amazed. They cannot understand how it is we can have such a system, where an organisation exists without any real power and without any real teeth but simply survives through the ability to cold-shoulder an adviser. It is a phenomenon which defies real explanation. Many people would be extremely reluctant to see the good workings of the Takeover Panel interrupted by legislation in any way.
In particular, Rule 24.16(a) provides that an offer document must contain an estimate of, first,
“the aggregate fees and expenses expected to be incurred”—
as has been suggested—and then, separately, a breakdown of those fees and expenses by category, including,
“financial and corporate broking advice”.
Rule 24.16(b) provides that:
“Where any fee is variable between defined limits, a range must be given in respect of the aggregate fees and expenses … setting out the expected maximum and minimum amounts”.
The takeover code already requires the matters specified in Amendment 60B and covers all situations where the payment of such fees would be contingent on the outcome of the offer. It specifies the conditions under which they are payable and the estimated value or range of those payments. We have taken the trouble to look at the last 10 documents that were live in respect of such takeovers, and they all included the fees, costs and expenses—some of those seem high, but contingent fees will be high. They are all there, in the documentation. It may be that Amendment 60P is not required as envisaged.
Baroness Neville-Rolfe
My Lords, I thank the noble Lord for his amendments, the clarity of his introduction and the opportunity to briefly debate the matter of company takeovers. First, in view of his wider points, I will reflect on the changes that the Takeover Panel has made, both recently in response to AstraZeneca/Pfizer, and in response to Cadbury/Kraft earlier in the Parliament, a deal which, as a businesswoman at the time, rather shocked me. I share my noble friend Lord Leigh’s warm words about the strength of the Takeover Panel—we are lucky to have it in this country.
Lord Mendelsohn
My Lords, I thank the noble Lord, Lord Leigh of Hurley, for his very useful intervention. As someone who is a doyen of the corporate finance industry and whose business office is just round the corner from my own, I am aware that his reputation is very distinguished in these matters.
Indeed, I thank the noble Lord for what he had to say in relation to incentive payments and their provision in the code as overseen by the Takeover Panel. As I said, this takes forward an existing arrangement that incentive payments be identified and I hope there was some genius in our crafting that allowed it to extend slightly further than just the situation, if there was to be a situation, with an offer where payments were to be considered during the course of a transaction, as is sometimes the case, that they would also have to be disclosed in some format. It is also why I referred to whether there should be some reason to report after the fact as well.
I am very grateful to the Minister for her responses to this, which were very helpful. I want to make a couple of things very clear. We will consider her comments much more carefully. It is certainly true that one wants to make sure that any disclosure is meaningful and that there is very limited boilerplating—as we have both been in business we know an awful lot of boilerplating takes place. Currently, I would say from this side we see that the argument could be applied to both situations equally but we will take that back and consider it further.
In relation to the incentive payments, that is an invitation that will be very hard to resist and over time I am sure that we will come forward with that. In general, the advisory market is probably one—even though this may well be a case of poacher-cum-gamekeeper too much—where the whole market requires some broader assessment and elements of competition and transparency in that would be not unopportune. However, this is not the time for that and these are matters that we may return to in due course. In the current circumstances I beg leave to withdraw the amendment.
Lord Mendelsohn
Lord Mendelsohn
My Lords, I will speak also to Amendment 60D. First, I want to set out our support for the introduction of this clause. I will then briefly set out our amendments and raise some of the recommendations of the Delegated Powers and Regulatory Reform Committee that we support.
The Government are to be congratulated on bringing these matters forward. They address a number of weaknesses that have been identified as individuals have used ever more sophisticated ways either to continue to operate while in breach of the intent of the current law or to operate in ways that avoid it. There are some very difficult drafting challenges in these clauses and we may wish to return to these matters later with some more considered amendments. Today, we would like to raise a number of issues and get the Government’s view and a temperature check.
During our examination of the clauses for this Committee and in our discussions with small businesses, we were struck by the concern expressed by some about the problems of rogue traders. While this affects some sectors more than others, there was a much stronger feeling than we expected that this matter required strong legislative action. This does not mean that there is any appreciation of the scale of the problem or much evidence that the situation is acute or even getting progressively worse. Yet small businesses expressed the view, based on the risks that consumers take, that consumer confidence would be higher if the regime against rogue traders was seen and understood to be stronger than it currently is. In other words, small businesses sometimes feel the impact of rogue traders to be far greater than the actual consequences of them; they cast a shadow over some small businesses. If there was much greater and stronger consumer confidence that the regime available would deal with rogue traders, small businesses would be better off.
It was only when my attention was drawn to the Mail on Sunday this Sunday that this matter became very live. It is interesting from this side to say the “Mail on Sunday”, but anyway. There is a piece in the financial part of the paper written by Tony Hetherington, who is,
“Financial Mail on Sunday’s ace investigator”.
He covers a number of important matters. This Sunday, he identified a number of issues relating to rogue traders. I draw noble Lords’ attention to two stories. In one particular case, an individual ran a company,
“whose proper title was Palm Oil Investments Limited, but in June last year he changed its name to Quick Payroll Solutions. It still appears to be in business, but for how long is anyone’s guess”.
He,
“failed to file accounts that were legally due in 2013, let alone accounts due more recently for 2014. These are offences and it will be no surprise if Companies House strikes off his business”.
Tony Hetherington writes:
“I do not suppose this will bother”,
him.
“He was a director of a rip-off diamond investment company, Elite Gems Limited, which went bust in 2013. And he was also a director of scam carbon credit company Charles Stratton Limited, which has not filed any accounts since it was set up in 2011. It is about to be struck off”.
He writes:
“It would be nice to think that at some point the authorities will catch up with,
him,
“and either disrupt his activities or ban him from running future businesses, however I am not holding my breath”.
In relation to another series of companies—this is an important point—he identifies:
“Four companies involved in selling investment land with false claims about its development prospects”.
These companies,
“wound up in the High Court after they cheated investors out of £3.3 million. Complete Building Systems Limited, Rawtenstall CBS Limited, Evesham CBS Limited, and Hounslow West London Limited were linked to an earlier business, The Property Partnership”.
Hetherington had previously warned that this was,
“part of a network scam land firms that included Nationwide Land Developments, Burnhill Land, Portfolio Land Acquisitions, and Elite Land Developments. All have ceased trading and five bosses have been disqualified from acting as company directors.”
The four companies were able to cheat investors out of £3.3 million, but a lot of that money went into commission payments to sales staff, including a number of central figures behind a scam carbon credits investment company, Carbon Green Capital. These individuals were also behind a wine investment business, DS Vintners. The registered director of all four of the latest scam companies is another individual, who also pocketed a large sum. He was the named director when the others were unable to be, based on their previous conduct. Current measures do not seem to be effective or to deal with some of the ways in which people get round them.
Baroness Neville-Rolfe
I thank the noble Lord for the amendments in this group. He will perhaps be interested to know that we had a sweepstake to try to work out what he was getting at with these amendments. I am afraid we were not particularly successful, so I will make two or three comments on the amendments, which we looked at objectively in terms of the way that they had been drafted, and may take the opportunity to write to him afterwards to pick up some of the points, including the good points he made about rogue trading, which is a concern. The examples he drew our attention to were new to me. He asked what the Government are doing about repeat offenders in this area. The short answer is lots, including taking account of previous failures. The effect of Clause 103 will be to require the court to take misconduct and previous failures into account when deciding whether a director is unfit, especially where it demonstrates a pattern of unfit conduct through a number of companies.
Amendment 60C is in line with the recommendations made by the Delegated Powers and Regulatory Reform Committee, to which I would like to express my gratitude for the consideration it has given this long and complex Bill in a timely manner. We must thank it for the great work it does in aiding scrutiny in this House. I will consider this amendment and will return to it on Report.
Amendment 60D would restrict the consideration a court must give to the loss or harm that a person’s conduct has caused to a company solely to non-executive directors when deciding whether to disqualify a director. The concept of non-executive director is not recognised within the Companies Act 2006 or the Company Directors Disqualification Act. The noble Lord, Lord Mendelsohn, will know only too well that for the purposes of companies legislation, all de jure directors are considered equally, whatever their role on the board may be. Any individual who acts as a director of a company, in whatever capacity, owes duties in respect of the running of the company to, for example, shareholders, employees and creditors. Accordingly, if the actions of any director, executive or not, have caused demonstrable loss for which they are culpable, it is right that they should be liable to be disqualified and that the period for which they are disqualified should take account of the resulting loss to creditors.
To try to change the law on directors fundamentally and to bring in a new definition of non-executive director without extensive consultation would be quite a big ask. I am not sure whether that is being sought in this probing amendment, but perhaps we can discuss the matter further. In the mean time, I commit to study the points that have been raised and to write to the noble Lord, and I ask him to withdraw his amendment.
Lord Mendelsohn
I thank the Minister for her helpful reply. We, too, had a sweepstake on what her responses were likely to be. I have not done badly on some and lost quite badly on others. We also had a sweepstake on what the further replies might be, although I shall not reveal them for fear of putting anyone in a difficult position. In view of the current circumstances and the very helpful replies, we look forward to discussing these matters further. I beg leave to withdraw the amendment.
Baroness Neville-Rolfe
“(2) In section 24 of that Act (extent), for subsection (2) substitute—
“(2) Subsections (1) to (2A) of section 11 also extend to Northern Ireland.””
House of Lords
Imperial War Museum
Lord Faulkner of Worcester
To ask Her Majesty’s Government what representations they have received about the future of the Imperial War Museum’s library and Explain History service.
Lord Faulkner of Worcester (Lab)
I beg leave to declare an interest as chair of the All-Party Group on War Heritage.
Lord Gardiner of Kimble (Con)
My Lords, the Government have received a number of representations about the future of the Imperial War Museum’s library. The museum is considering changes to its library service provision and the future of the Explore History centre as part of its forward review. The department is in discussions with the museum about the review. The museum’s programme of digitisation of core collections is well in hand.
Lord Faulkner of Worcester
My Lords, I know that the Minister appreciates what a very special place the Imperial War Museum is and how anxious people are that it should not lose its worldwide reputation as the authority on conflict. That is why around 19,000 people have signed a petition asking that the proposed £4 million cuts be reconsidered. Can he give an assurance that scholars will continue to have access to the material in the library in the Imperial War Museum? Is there any hope that the walk-in centre can be retained for public access as well?
Lord Gardiner of Kimble
My Lords, the Imperial War Museum and the new galleries are an exceptional place. I would very much encourage noble Lords to go to the galleries: they are extraordinary. This is part of the modernisation approach; I spoke to the director-general of the museum about the library and the Explore History service. There is going to be much more digitisation. The core collection is all going to be put in digitised form so that many more people, without having to come into the museum, can look at it. I can assure noble Lords that scholarship is very important. The service will remain open for scholars to come and undertake research, but this is very much about a modernisation.
Lord Cormack (Con)
My Lords, we hear too much about modernisation. Does my noble friend not agree that a national museum without a readily accessible library containing books that people can consult is like a university without a research department?
Lord Gardiner of Kimble
My Lords, I have some sympathy with what the noble Lord has said, not being very proficient with the modern techniques myself, but this is about ensuring that scholarship can be undertaken by young people of many generations, who are increasingly using digitalised form. But of course books, which are part of the core collection, will remain and will be accessible.
Lord West of Spithead (Lab)
My Lords, I declare an interest as a former trustee of the Imperial War Museum. Does the Minister think that these cuts will have an impact on the viability of Imperial War Museum North, which is the one footprint that that museum has in the northern part of our nation?
Lord Gardiner of Kimble
My Lords, I can assure your Lordships that although tough decisions have had to be taken, there are no plans at all to close any of the five sites. I am surprised that the noble Lord did not mention HMS “Caroline” in Belfast. All five sites will remain open.
Baroness Brinton (LD)
My Lords, on the theme of modernisation, I know that all parts of the armed services are providing, for the Imperial War Museum online by the end of this calendar year, details of their soldiers who lost their lives in World War I. I understand that some of them are even cross-linking with National Archives information, including census, to provide as wide a picture as possible of the individual soldiers. I ask my noble friend, first, whether this excellent practice will help the public find out information about their family members, not least online, and, secondly, whether there might be other projects in the future, for example on World War II.
Lord Gardiner of Kimble
My Lords, what has come about with the commemorations of the First World War is an extraordinary interest in localities and for people. Indeed, the Imperial War Museum has only recently launched its “Lives of the First World War” online programme precisely to help people around the country find their own connection with the First World War.
Baroness Thornton (Lab)
My Lords, about 10 years ago I took my children to the Imperial War Museum, where, through the digital records, we could see that their grandfathers and a great-grandfather had served in the Armed Forces in World War II. Alongside the World War II exhibitions, this had a great impact. In 15 years’ time will I be able to take my granddaughter to the Imperial War Museum to do the same, for what will be her great and great-great-grandfathers? I know that all this might be able to be found online but, as the noble Lord has just said, the greater, lasting impact is being able to do this in the setting of the Imperial War Museum.
Lord Gardiner of Kimble
I very much hope that we are going to get the best of both worlds: that the core collection will of course remain accessible but that there is a greater opportunity for future generations who are not able, perhaps, to come to London or attend the other museum sites. I should say, however, that with regard to the educational services, £8 million has been found through the LIBOR fines fund, which will enable the Imperial War Museum to ensure that throughout the commemoration period its formal education services are retained.
Lord Elton (Con)
My noble friend started by adumbrating the new services that will be available. Will he tell us whether the old services, or the contemporary services, will be curtailed as a result, or whether they will be maintained at the present level.
Lord Gardiner of Kimble
My Lords, it is fair to say that the changes will reflect a number of changes in the library and Explore History service. That is the whole purpose of what the Imperial War Museum is seeking to do, which is to cut its costs and provide a modern service. As I say, there will be access, but it will also be undertaking a review and consulting, and that is what is currently taking place with the unions and staff.
Lord Lexden (Con)
Does my noble friend agree that we really should commend the Imperial War Museum most warmly for its very significant contribution to the commemoration of the First World War, not least through its partnership scheme linking it to galleries and museums throughout the country?
Lord Gardiner of Kimble
My Lords, the Imperial War Museum must be congratulated. It has been the catalyst to the partnerships, which have enabled us to broaden our links not only within the United Kingdom but across the world, so that both enemies and allies can work together in commemoration of four dreadful years.
Armed Forces: Family Life
Baroness Benjamin
To ask Her Majesty’s Government what measures are in place to ensure that servicemen and women are given the opportunity and support to spend sufficient time with their children and families.
Baroness Jolly (LD)
My Lords, service personnel are aware that the nature of their job is such that their family life could be different from that experienced by civilians. Harmony guidelines are set to ensure that there is a balance between the competing aspects of the lives of service personnel. These are: time with families; operations; time recuperating after operational tours; personal and professional development; and unit formation training.
Baroness Benjamin (LD)
I thank my noble friend for that Answer. The charity Give Us Time is working hard to help service men and women reconnect and engage with their families after a tour of duty. Yet they are coming up against hurdles and inequalities; for example, leave time does not always coincide with school holidays and a soldier was fined £500 for taking his children on holiday during the school term. I ask my noble friend: given the difficulties of tour cycles and not always being able to give advance notice, will the Government encourage schools to show leniency towards military families by allowing their children short periods of absence from school during term time, and perhaps even amending the law to include these cases as exceptional circumstances?
Baroness Jolly
My Lords, head teachers already have the discretion to grant absence from school in exceptional circumstances and, in this instance, they have been given NAHT guidance. The MoD has been in discussion with the Department for Education in England on leave of absence from school, including on the operational needs of the Armed Forces preventing families taking leave during school holidays and relating to before, during and after deployment. Similar guidance is well established within the devolved Administrations.
Lord Rosser (Lab)
My Lords, if members of the Armed Forces feel that they are not being given the opportunity and support to spend sufficient time with their children and families, they can lodge a complaint. The Bill to replace the existing Service Complaints Commissioner with a Service Complaints Ombudsman, with greater powers and more independence, completed its passage through this House three months ago and was sent to the other place. If my information is correct, it has not been heard of since. Why has the Bill been delayed, since such a delay would not appear compatible with a commitment to the military covenant? Can the Government give an undertaking today that the Bill will be given the required time to complete all its parliamentary processes and become law by the time both Houses finish prior to the general election?
Lord West of Spithead (Lab)
My Lords, would the Minister not agree that one of the main reasons for pressure on servicemen and service families is the ever increasing rate of rotation in ships or whatever, because we have too few ships and there are huge pressures on manpower anyway? Some easement in resources to allow more money for recruiting and retention, plus some more ships and aircraft, might help dramatically.
Baroness Jolly
More ships and aircraft are not in my brief, but families are. Long operational deployments attract additional leave, allowing servicepeople to spend time with their families.
Lord Harris of Haringey (Lab)
Could the Minister tell us whether the same provisions apply to commissioned officers as apply to ordinary soldiers?
Baroness Knight of Collingtree (Con)
Can my noble friend tell the House roughly how many children have to be sent to boarding school because of the commitments of their parents?
Baroness Jolly
I do not have the figure, but it is considerably less than it was 10 or 15 years ago. Service personnel are now encouraged to buy their own homes, giving family stability, so that children can stay at home and stay at the same school.
Lord Palmer of Childs Hill (LD)
My Lords, the noble Lord asked about the legislation that seems to have disappeared. When that comes into sight again, will the Government take on board the points made by my noble friend Lady Benjamin about school holidays, which did not appear in the original Bill?
Baroness Jolly
I have a meeting tomorrow with the Secretary of State and, when we discuss the Bill, I shall mention the issue.
Higher Education: Overseas Students
(9 years, 10 months ago)
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Baroness Hamwee
To ask Her Majesty’s Government what assessment they have made of the impact on students, universities and international relations of requiring overseas students to leave the United Kingdom immediately upon graduating.
The Parliamentary Under-Secretary of State, Home Office (Lord Bates) (Con)
My Lords, our reforms have clamped down on the student migration abuse allowed under the last Government, while ensuring that our excellent universities continue to attract the brightest and best students. Ensuring that immigrants leave at the end of their visa is just as important as controlling who comes here to study in the first place.
Baroness Hamwee (LD)
My Lords, I am sorry that the Minister used the term “abuse” in this context. There has been much criticism, including by eminent businesspeople and economists, about,
“shutting the door on some of the very individuals who help the UK’s unique global service economy to thrive”,
to use the words of the British Chambers of Commerce. I tabled the Question in the Recess, when the proposal referred to appeared from the Home Office—I am glad that it seems not to be making progress—but can the Minister tell us what current Conservative thinking is on visas for new graduates?
Lord Bates
I can certainly inform my noble friend what government thinking is on the position. In the same spirit, I reflect that it seemed to be the position of her party that we ought to count people in and count them out. Last year we counted 121,000 students in and 51,000 out. That leaves 70,000 people who were here without an appropriate visa, and we think that that is wrong. If you are here on a study visa, you should be studying. You should not be working. If you want to come here to work, you are very welcome but you ought to apply for the right visa to uphold that.
Lord McConnell of Glenscorrodale (Lab)
My Lords, it is of course entirely appropriate to ensure that the administration of student visas is being carried out effectively, but that should not diminish the contribution that overseas students make to this country culturally, academically and financially. There are examples all over the world of economies that benefit from overseas students not just when they are studying but from the contribution that they can make following graduation. Will the Government drop this plan to limit the access of overseas students to the United Kingdom after they complete their studies, and will they look at proper examples elsewhere in the world where people stay on, contribute to entrepreneurial activity and eventually return home to help to develop the economies of the countries they came from in the first place?
Lord Bates
Let me underscore that absolute commitment. When people are coming here to study, they are coming to invest in the UK and they will be welcome. There is no cap on students coming to the UK, provided that they are bona fide students in bona fide universities and they have the funds necessary to complete their studies. We are talking about tier 4, which is the student visa, and whether people ought to be able to stay on. There are some examples of abuse of that system under the previous Government, and we are trying to tighten up on that by simply saying that they ought to have an appropriate visa. We have opened up new routes through tier 2 and tier 1 particularly to entrepreneurs and those in high-skilled occupations. They will continue to be welcome in this country, as in others around the world.
Baroness Valentine (CB)
My Lords, as a member of the UCL Council, may I say how delighted I am that the Chancellor scotched the rumours before Christmas about further curtailment of the post-study work route? At London First, we have again issued a report showing how important the relationship with emerging economies is. Is the Minister aware of a study by Loughborough University which showed that nearly half of international students thought that the post-study work route was an important or the most important factor in deciding whether to study in the UK? Will he consider reinstating the two-year post-study work route for postgraduates and STEM graduates?
Lord Bates
STEM graduates—graduates in science, technology, engineering and mathematics—are certainly in demand. They will have no problem, if they have a bona fide employer, in meeting the criteria for tier 2, so there is no problem in ensuring that that opportunity will remain open. We want to welcome them. The question is whether 100,000 people ought to be able to stay on, as was the case before, without any limitations, doing jobs as baristas or making pizza deliveries. That is in no way to diminish the value of those jobs, but simply to say that that is not making best use of their degree and that they are jobs which could be provided to people who are here legally in the domestic market.
Baroness Williams of Crosby (LD)
Does the Minister agree that there are two areas where the ability to stay on for two years after completing one’s graduation is of great significance? One is adding to scientific teams, where the addition of a graduate who stays on for the time being to work on a team in an area such as cancer research is vital. The other vital area is that in the past students studying medicine have stayed on and worked in A&E before they returned to their own countries. That does them well because they gain experience; it does us well because it makes it easier to get a quick response in A&E.
Lord Bates
I totally agree with my noble friend. Those are exactly the types of profession where we want to see more places occupied by highly skilled and qualified graduates in this country. They would have no problem securing employment and meeting the criteria under the tier 2 provisions in either of those examples. Information released last week on the number of students in the past academic year showed that the number of postgraduate students staying on for research had risen by 9%, which we should all welcome.
Baroness Smith of Basildon (Lab)
My Lords, the noble Lord has tried hard to reassure your Lordships’ House on the Government’s policy here. Obviously, no one wants there to be abuse of the system, but the noble Lord must understand that there is a great deal of doubt whether the Home Secretary even tries to understand the benefit and the value of overseas students to the UK for both universities and the economy. The plan to require all students to return immediately would, as the noble Lord has heard, lose the talents of doctors, engineers and entrepreneurs to the UK economy and UK society. If the Home Secretary cannot even convince her Conservative colleagues in the Cabinet of that policy, surely it is time to think again. I ask the noble Lord to take a message back to the Home Secretary: can we have less rhetoric and more practical common sense?
Lord Bates
My right honourable friend the Home Secretary is absolutely committed to opening the doors to genuine students, but not to the bogus students that we were talking about before. When she spoke, it was about a policy that was in the Conservative Party manifesto on page 21, which is that the best way to ensure that we keep a grip on the fact that people are here on the appropriate visas is through them returning to their country once they have completed their study visa and then reapplying for a work visa. That is not the position now. The position now is that they can do that in country. We encourage people to do so where they have high-skill jobs or they want to stay here to set up a business.
Lord Hannay of Chiswick (CB)
My Lords, will the Minister explain how he can be so sure how many students return when we have no proper border controls on people leaving this country? Does he not agree that forcing students who have completed their studies to go back to their home—at very considerable expense to themselves—before reapplying to come here is an astonishing way to try to fill that lacuna?
Lord Bates
The noble Lord is sharp, as ever, in spotting the issue. We will have exit checks in place by the end of this Parliament, as was promised. Of the figure which I gave—about 70,000 people going missing—some of those will have reapplied to go onto the tier 4 system. Some of them will be here and working illegally. The point is that at the moment we do not know. If we counted them in and counted them out and made sure they were on the appropriate visa, we would be able to know.
Lord Howarth of Newport (Lab)
In his first Answer the Minister spoke of a policy to attract “the brightest and best” to study in our higher education institutions. Does that mean that the policy is to attract academic high fliers and people of outstanding personal virtue? I do not think that is the limit of the policy, is it? What does he mean by the phrase “the brightest and best”, which Home Office Ministers invariably use when talking about this subject?
Lord Bates
It simply reflects that such is the quality of education institutions in this country that they attract some of “the brightest and best” academic and skilled people from around the world. We want to continue to ensure that they do that and, in so doing, contribute to the success of the growing British economy.
Baroness Sharp of Guildford (LD)
Given the Government’s ambition to make this country the best place in which to practise science, will the Minister tell us whether they have heeded the warning from Sir Paul Nurse, the president of the Royal Society, that the present anti-immigration rhetoric coming from some Members is damaging the ability of this country to recruit leading scientists?
Lord Bates
That is all the more reason why we need to ensure that we give a warm welcome and send out a very clear message to those people that we want to come to this country to study and to contribute to the economy that we will not stand by and see our system abused by people who do not want to come here and study but instead want to come here to work.
Baroness Afshar (CB)
My Lords, is it possible to distinguish among non-scientists—people like me—who come to this country to study and then stay on? Non-scientists may not find immediate access to jobs but very often, in areas like post-war reconstruction, they have a great deal to contribute. I would have been very sorry if I had been sent home and not allowed to sit in your Lordships’ House.
Lord Bates
Exactly, and that is another fine example of how the system works. We want to encourage people. The system is far wider than students of science and technology. We simply give an example of those as people who we particularly want to stay on and contribute to the workforce and the economy, but of course there is a wider cultural benefit and value in having that interchange between people of different nationalities more widely in the arts and other subjects across our universities.
Meals on Wheels
(9 years, 10 months ago)
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Lord Touhig
To ask Her Majesty’s Government what estimate they have made of the number of elderly people who have received meals on wheels in the past year.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, the Health & Social Care Information Centre does not collect comprehensive data on numbers receiving meals; it only collects a subset of this group: those receiving meals as part of a formal package of care. I understand from the information centre that in 2013-14, 31,950 people received meals from councils with adult social services responsibilities as part of a formal care package. Some 29,605 were older people aged 65 or over.
Lord Touhig (Lab)
My Lords, 220,000 fewer elderly people received meals on wheels last year than in 2010, when this Government came into office. Why?
Earl Howe
My Lords, as I have indicated, there are a variety of reasons for this. The data collected by the information centre include only people who receive meals in their homes as part of a council-arranged formal package. They do not include informal arrangements such as the provision of meals at day centres or via daycare, or indeed those who pay the council for their meals, as many do.
Baroness Greengross (CB)
My Lords, I declare an interest as patron of the National Association of Care Catering. The association recently did some research that showed that, over 10 years, the numbers of people receiving meals on wheels has gone down from 40 million to half that number. That is really very worrying. Can the Government explain whether it would be better to have a statutory requirement for someone to provide these services to the huge numbers of older and vulnerable people within the community?
Earl Howe
My Lords, I do not recognise the figure of 40 million that the noble Baroness mentioned; perhaps she and I could confer after this Question. I think that what matters here is that those with eligible needs receive the service they require. It is up to local authorities to determine eligibility criteria, but the latest available data from ADASS show that all local authorities are setting their eligibility criteria to ensure that they meet at least critical and substantial levels of need.
Baroness Gardner of Parkes (Con)
My Lords, some years ago I was a chairman of social services, and many elderly people did not like the meals that came. I wonder whether that is still the position. I also wonder whether the position in hospitals is similar, as we have found that more people suffered from malnutrition after they had been in hospital than before. That happened because people could not feed themselves adequately and the maid or carer who delivered the food to them would come in and say, “Oh, you didn’t like your lunch, dear”, and take it away. Of course, they have found ways round that, but have they found ways to ensure that people are getting meals that they like, and is someone seeing that they actually eat them?
Earl Howe
My noble friend makes a series of important points. I do not have information on how many people dislike their meals on wheels, but the fact that many purchase them must indicate that the quality of those meals in many areas is of a high standard. There is also charitable provision, which I should have mentioned as well. The context here is surely the new regime that will be ushered in by the advent of the Care Act, which builds support around the individual and their needs and preferences.
Lord Kinnock (Lab)
My Lords, the figures used by my noble friend Lord Touhig were obtained by freedom of information means from local authorities in England. Those figures cover years in which there was a substantial rise in the number of over-65s in the United Kingdom, yet they show a decline of about a quarter of a million in the number of people receiving meals on wheels. I repeat my noble friend’s question: why?
Earl Howe
My Lords, I was not seeking to doubt the figures obtained through a freedom of information request; they just do not happen to be available to my department. However, it is worth noting that the data on the numbers using services also reflect longer-term trends. For example, the proportion of older people in receipt of local authority-supported social care has been declining steadily for the last 10 years. Among those receiving meals on wheels, the numbers have also been declining steadily over 10 years.
Baroness Barker (LD)
My Lords, Age UK County Durham runs an innovative scheme called “Come Eat Together”, which addresses not only the issue of older people having the right food but matters such as loneliness as well. Does the noble Earl consider that that is the sort of innovation that local authorities should bring to social care under the Care Act?
Earl Howe
My noble friend makes an important point—that it is not only the value of the meal that is important to elderly people; it is the relief from isolation and loneliness. Many of the solutions to that lie with local authorities. However, what the Government centrally have been able to do is to raise awareness of the impact of isolation and loneliness and encourage local commissioners to tackle that. To that end we have funded a digital toolkit for local commissioners, which has been supporting them in understanding and mapping commissioning for loneliness and social isolation in their communities.
Lord Foulkes of Cumnock (Lab)
My Lords, I declare an interest as a trustee of Age Scotland. May I try to answer my noble friend’s question for the Minister? The reason why there has been such a dramatic reduction in the number of meals on wheels is the swingeing cuts imposed by the coalition Government—and, indeed, the Government of Scotland—on local authorities and voluntary organisations, and it is about time they were reversed.
Earl Howe
My Lords, local authorities’ funding through central revenue support has indeed reduced, but spending on adult social care has been relatively protected compared with nearly all other local authority services. In cash terms, councils have reported only a small reduction in money spent on adult social care since 2010, despite the tough public funding climate. It is up to the party opposite to explain where the money would come from—if it will increase local authority spending—given that the shadow Chancellor has ruled out increasing local government spending if Labour is elected at the general election.
Lord Touhig
Perhaps I may help the Minister. Could it be due to the fact that the average cost of a single meal has gone up 22% since this Government have been in office? How do the Government justify that?
Earl Howe
My Lords, local councils do not have to charge for meals; they may provide them free of charge or at subsidised rates if they want to. If they charge, they must—as is the case for any non-residential social care service—follow the statutory guidance. That guidance ensures that, where they do charge, the charge is consistent and fair.
Local Government (Religious etc. Observances) Bill
Control of Horses Bill
Transfer of Tribunal Functions (Transport Tribunal) Order 2014
(9 years, 10 months ago)
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Lord Faulks
That the draft Orders laid before the House on 10 and 27 November 2014 be approved.
Relevant documents: 13th and 16th Reports from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 13 January.
Olympic Lottery Distribution Fund (Winding Up) Order 2014
Lord Gardiner of Kimble
That the draft Order laid before the House on 17 November 2014 be approved.
Relevant document: 14th Report from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 13 January.
Recall of MPs Bill
(9 years, 10 months ago)
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Baroness Hayter of Kentish Town (Lab)
My Lords, the enthusiasm for this Bill is perhaps clear from the movement around the Chamber; we could be discussing the Recall of Lords Bill, but I do not think that is what it is meant to be. I shall speak also to Amendment 66 in this group.
Our major question is to ask the Government why they chose the figure four for the number of signing places, and after what consultation with the Association of Electoral Administrators and the Electoral Commission, given that they have totally failed to respond to what either of these two organisations recommended. If we are to have a recall petition, surely in the interests of fairness it should be equally easy for any constituents to sign, whether or not they live in the centre of an urban environment or in the country, whether or not they have a car and whether or not they have the time to make a two-hour round journey for the privilege.
The exact number of signing places required to meet the needs of individual constituencies, as well as the practical considerations surrounding staffing levels and availability, will surely depend on each constituency and should be left to someone who knows that geography and demography. Our amendment to Clause 7 would simply mean that where at present the number of signing places is limited to four, the petition officer would not be able to allocate fewer than four. The very fact that the Electoral Commission categorises the constituencies into boroughs and counties indicates that the demography of each varies enormously.
The largest constituency, Ross, Skye and Lochaber—I hope I have pronounced the latter correctly—is some 12,000 square kilometres, while Islington North, the smallest, is just 735 hectares. I therefore ask the Minister why it would not be better, as advocated by the Electoral Commission, to leave the responsibility for determining the number of venues to the petition officer, who will have far better knowledge of the area than either he or indeed I. The Electoral Commission states:
“We have previously highlighted its concern that 4 signing locations may not be enough to allow reasonable access for voters in every constituency given the diverse geographical nature of some constituencies … Petition Officers should be given the power to determine the appropriate number of signing places based on the characteristics of their constituency in order to provide more reasonable access for voters to sign a recall petition”.
The example of my home constituency of Brecon and Radnor that I used at Second Reading highlights this point exactly. As a county constituency, it has more than 90 polling stations at a general election. Having only four during the petition process will leave some electors facing the prospect of a round trip of an hour or more—and that is for people with a car. Those who have to rely on rural public transport could spend half a day out and about in the Welsh countryside—something that I would recommend, particularly to older people with pensioner passes, but hardly conducive for a busy parent with three children.
Having so few signing places will then tend to lead to a higher demand for postal votes, with consideration needed not just for the logistics of this but to provide safeguards to protect against fraud and double signing. Amendment 66 in this group would require the staffing requirements and opening hours of the locations to be set out in regulation. The Government’s memorandum states that in order,
“to keep costs low and to make use of convenient locations a petition officer may wish to use council owned buildings,”
and that they,
“anticipate that signing places will be open throughout the usual business opening hours of the premises used”.
Given that such timings will not suit everyone, the memorandum goes on to say that other options for some out-of-hours signing will be looked at. I therefore ask the Minister to set out the form that these considerations will take, whether stakeholders will be consulted, how frequently the Government anticipate out-of-hours options being available, and what the effect will be on costs of such extra hours. Furthermore, because no final decisions have been taken regarding the availability of signing venues, the Government admit that they will not be able to include provisions in regulations allowing for the emergency proxy of applications. Does the Minister recognise that that could have been avoided had the delay in bringing forward this legislation been used to give greater consideration to the logistic considerations? If the regulations will not cover emergency proxies, we need to know what provisions and guidance will be given.
Lord Tyler (LD)
My Lords, I support Amendment 37. I am very well aware of this issue from my own experience in north Cornwall, where we have very large, scattered communities with inadequate public transport, and of course in the holiday season there is the additional problem of getting to any centres of population. That is replicated, as it happens, in a number of the Highlands and Islands constituencies, of which I am very well aware because they are represented by honourable colleagues, as well as of course in rural mid-Wales, as the noble Baroness said.
The number of signing venues is a serious issue. By this comparatively small change to the Bill, which would give more responsibility to those who are on the ground and can take the appropriate decision, we could make a huge improvement. A minimum of four places would give that flexibility. It may be that only a couple of dozen constituencies in the whole country would wish to go beyond four, or substantially beyond four, but they happen to be ones that have, as I say, the additional problems of inadequate public transport, difficult road links and, very often, the complexity of additional traffic during the holiday period. I very warmly support Amendment 37.
Baroness Quin (Lab)
My Lords, I did not speak at Second Reading, although I attended much of the debate and followed closely last week’s first day in Committee. I share many of the concerns that have been expressed so far about this legislation.
At Second Reading, my noble friend on the Front Bench flagged up in her excellent and detailed speech a number of practical difficulties with the Bill, and she seeks to address some of them with these amendments. I support what she said in moving the amendment. In its report on this legislation the Delegated Powers and Regulatory Reform Committee expressed concern about the many unanswered questions and gaps in the Bill and said that the Government do not explain,
“why they have not ensured that the provisions about petitions in the Bill itself are complete”.
Those comments are relevant to a number of amendments that we will consider in the course of this debate.
In my few remarks this afternoon I wish to address in particular the provisions in the Bill about the number of signing places. Like the noble Lord, Lord Tyler, who just spoke, I am influenced both by the area where I live now and by the constituency where I lived and which I represented in another place for a number of years. The constituency in which I now live, Berwick-upon-Tweed, is England’s most northerly constituency and the second largest in area. It is a sparsely populated area, and certainly to limit the number of signing places to four places in such an area seems unrealistic, particularly if you are talking about people who do not have access to a car—to their own private transport. I note that the noble Lord, Lord Tyler, said that he felt that probably a small number of constituencies would be concerned with the amendment, most of which are in rural areas. The urban area that I used to represent, although compact, would also have faced challenges under the four-place limit in this Bill and I shall explain why.
The constituency that I used to represent had the title of Gateshead East and Washington West. If you think about it, that already sounds as though it covered two local authority areas, which it did. It also represented an area that had no obvious town centre. In fact, the most convenient signing places for the people of that constituency were either the Sunderland civic centre, which was not in the constituency, or the Gateshead civic centre, which was not in the constituency either. Although the constituency was small and compact, it did not have a public transport system that would have given access to one signing place in the centre: there was no central point in either of the two parts of the constituency.
For that reason, if I was trying to work out where it would be convenient for people to sign a petition, I would probably think of about three places in the Gateshead area and four in the Washington area in order to have reasonable coverage and allow people to use public transport and get to the signing place in a reasonable time and in a reasonable way.
I do think, therefore, that the Government should very much think again about the proposed provision. A standard solution simply does not work in this situation, as is so often the case, so I endorse very strongly my noble friend’s suggestion that this should be left up to the responsible officers in the different areas to work out what suits people in their area.
However, the Government should say more about the types of premises that would be suitable. Presumably the Government are thinking of council offices, but what would be the alternative in constituencies, like the one I was talking about, where there are no council offices? It could be public libraries, if there were enough that had not already been closed, or schools, but it would be unthinkable to have schools snarled up for eight weeks for a signing process of this kind. It simply would not be feasible and would not work. It could be community centres. What exactly do the Government have in mind for signing centres under this legislation?
I certainly accept that this small change, which says that the minimum number of signing places should be four, is a much more sensible way forward. I hope that the Government will look at that sympathetically, give the system some flexibility, and avoid the situation where we have a postcode lottery and some constituencies are far better served with signing places than others.
Lord Forsyth of Drumlean (Con)
My Lords, I apologise to the Committee: I have to go to the Joint Committee on the National Security Strategy later this afternoon. No doubt, the Minister will be disappointed that I am not here to support him. I very much support the amendment tabled by the noble Baroness, Lady Hayter. During the last session in Committee the Minister appeared to be telling us that we should really mind our own business and that this was a matter for the House of Commons.
The thing that I find remarkable about this Bill is that if it has been designed and put forward by the House of Commons, it shows an extraordinary ignorance of what it is like being a Member of Parliament and how the process is carried out. Extraordinarily in my old constituency of Stirling, for example—I cannot do square metres, but know that it was 800 square miles—it took me from 6.30 in the morning to 8 at night just to drive to every polling station to thank the people standing there. Even then, people had difficult journeys and it was quite an expensive operation to do this. Quite what the cost, which is not accounted for, would be if one had to provide that kind of coverage over a longer period, I know not.
The noble Baroness is absolutely right: if this is an exercise in democracy and is to be carried out fairly, you have to make it possible for people to cast their votes in secrecy at a reasonably convenient opportunity and near where they live, whether they work or whether they do not. I guess I am with the noble Baroness, Lady Quin, in thinking that this needs to be at the discretion of the local authority. The local authority will have to find the money and the people to do all this, and to train them—and, of course, none of this is costed, so if the Minister is not prepared to accept the amendment on cost grounds, I have an elegant solution, which is that he abandons the Bill altogether.
Lord Howarth of Newport (Lab)
My Lords, the noble Lord, Lord Tyler, was probably wrong to suggest that such a small number of constituencies—perhaps a couple of dozen—would find it impossible to cope if there were only one to four signing places. The constituency that I had the honour to represent for a number of years—Stratford-upon-Avon—was some 450 square miles in size and had 116 parishes. It is simply unimaginable that people would have been able to use the public transport available to get to one, two, three or four signing places. It is a very scattered constituency, so that is unrealistic.
I strongly echo the point just made by my noble friend Lady Quin. If the Government’s proposals in this regard are to have any credibility, they owe it to us to say what premises would be used. Clearly, public libraries, which are disappearing as we speak, will not provide the solution, nor can it be acceptable for schools to be disrupted for a period of eight weeks. That is one good factor to bear in mind when we come to the next amendment in the name of my noble friend Lord Foulkes.
Finally, it would be helpful to the Committee if the Minister would give us a fairly detailed breakdown of costs. The impact assessment tells us that the best estimate the Government have made for the total cost of conducting a recall petition process in a constituency would be of the order of £55,000. I do not think that figure is remotely credible. It would therefore be very helpful if the Minister could give us his analysis of the costs of operating this aspect of the process.
I support the amendment in the name of my noble friend Lady Hayter, although I think there is also much wisdom in simply leaving it to the discretion of the petition officers to determine what is appropriate.
Lord Crickhowell (Con)
My Lords, like the noble Baroness, Lady Quin, I have not spoken previously on the Bill although I followed the proceedings closely. Like my noble friend Lord Forsyth, I have read the debates, and listened to them this afternoon, with a sense of incredulity that such an extraordinarily ill prepared and ill considered Bill should have come from the elected Chamber. I find that bizarre.
I agreed with almost every single word that was said by the noble Baroness who moved this amendment, not least because until comparatively recently my home was in Powys. It was literally at the very edge of Powys, yards from its border. I can vouch for everything that she said about the distances involved and the impossibility of complying with this measure. Similar difficulties would have applied in my former constituency of Pembroke, which in those days covered the entire county of Pembroke. It would have been perfectly impossible to implement this measure there. Indeed, I am impressed by what my noble friend Lord Forsyth said about getting round all the polling stations to thank the people involved. I divided my constituency in two and my wife undertook to go round half of it and I did the other half, as it was an impossible task for me to cover the whole constituency adequately.
Lord Forsyth of Drumlean
My noble friend did have a rather larger majority than I had and, of course, I had an easy task compared to, say, the Member of Argyll, who would have had to get to several different islands in order to do the same task.
Lord Crickhowell
There was one election at which my majority was only 700 and something. It was therefore all the more necessary to cover every polling station and get to know the constituency. It was only by doing so that I increased my majority to a much more secure one.
Putting history to one side, the simple fact I wish to emphasise is that everything that the two noble Baronesses have said, particularly on the other side of the House, seems to be absolutely unchallengeable. If the Bill is not amended in the kind of way that they have suggested, the whole thing will be a total disaster.
Baroness Corston (Lab)
My Lords, I referred briefly to this issue at Second Reading. I confirm my support for the amendment in the name of my noble friends and I agree with my noble friend Lady Quin, who is drawing on her considerable experience as a Member of the other place. I said at Second Reading that four signing places in my former constituency of Bristol East, an inner-city constituency, would have given many people a challenge, because of its geography. It is banana shaped, to the east of the city, and many people would have needed at least two bus rides to get to a signing place. I cannot understand, for the life of me, why the Bill, which is going to cost a huge amount of money, cannot provide for discretion to be given to returning officers—who, after all, know far more about their constituencies than any of us on these Benches—as to how many signing places there should be in order for the Bill, dismal as it is, to have any effect at all.
Lord Snape (Lab)
My Lords, it is a remarkable fact that in the course of debate on the Bill not a single former Member of the other place has said a word in its support. That might be because some of us spent too long down there; it might purely be that we are prejudiced against Mr Nick Clegg, whose name appears as the main promoter of the Bill; or it might just be, as I hope the Minister will accept, that years of experience down the Corridor make us scrutinise proposals such as this, to try to put our fingers on fundamental weaknesses.
Unlike the noble Lord, Lord Forsyth, I represented a borough constituency. I am speaking from memory, but I think that there were nine or 10 different places for people to vote in that constituency, and even then, there were complaints from some parts of West Bromwich, during the time I had the honour to represent part of that town, that getting to the polling station was a problem. We are to have a maximum of four places to sign a petition under the proposals in the Bill, and a minimum of four if my noble friends’ very sensible amendment is accepted. How would the Minister define a suitable place for this petition? I am aware that the memorandum says that this is a matter for the petitioning officer, but as my noble friends and the noble Lord, Lord Forsyth, have said, there are not always convenient local government offices where these petitions can be signed. Would licensed premises, for example, be regarded as suitable places? After all, some local authority buildings are licensed for the sale of alcohol. Would that disqualify that building, in the Minister’s view?
Let us not stop at local authority premises. There are a number of working men’s clubs in the constituency that I represented. Would they be regarded as suitable premises under the terms of the Bill? What about political clubs? The last Conservative club in West Bromwich fell by the wayside some years ago—there were probably not enough patrons—but when it was open, would that have been regarded as a suitable place for a petition? Are politically affiliated clubs specifically disqualified under the terms of the Bill? I cannot find any mention of that in the memorandum, if it is the case, but I would be interested to hear the Minister’s view. After all, if a Conservative club, for example, were regarded as a suitable place, it might be possible to advertise the sophisticated humour of Mr Jim Davidson—“Come along and listen to Jim Davidson and sign a petition to get rid of your local Labour MP while you are there”. There are endless possibilities regarding the premises to be used.
What about staffing, of which mention has been made? Look at the likely procedures for signing a petition. We are all aware that when one goes to a polling station, one’s name is ticked off and one is given a ballot paper. In the privacy and secrecy of a polling booth, one puts a cross against the candidate of one’s choice. What happens regarding a petition? How is it laid out? Is it at the reception desk when one goes in? Is it possible to see who else has signed it? I ask that question because, like other noble friends, I am concerned about the number of staff who may be needed—first, to check the address and so on in order to establish that that person who is anxious to sign the petition is bona fide. Then, depending on the procedures, do we need other staff to ensure that the person signs only once? Over the years, we have all become familiar with petitions with false names that have received lots of publicity. Is it not possible, if there were only one member of staff there, for a would-be signatory to sign more than once? These are all valid questions in relation to the amendment, and I hope that the Minister will look sympathetically at it.
I started by saying that I had not heard any former Member of the other House speak in favour of the Bill. Indeed, the only person I have heard speak in favour of it is the noble Lord, Lord Finkelstein, who is in his place. As far as I am aware, he has never been elected to anything himself, although I understand that he tried to stand on behalf of the SDP many years ago. He writes an entertaining column in the Times; perhaps he will devote some of his future articles to pointing out—although I appreciate that he supports the Bill—some of the problems that those of us who have been involved in electoral processes over the years can see arising from the way in which it has been drafted.
I hope that the Minister, when he replies, will take these concerns seriously and carefully consider accepting the amendment.
Lord Swinfen (Con)
My Lords, the noble Baroness, Lady Corston, mentioned that in her erstwhile constituency some people might have to take two buses to get to the polling station. In many rural areas and hamlets there is often only one bus out and one back. In some places, there are only a couple of buses a week in each direction. I am therefore a strong supporter of the amendment.
Lord Tyler
In my village there is one bus every week—in the wrong direction.
Baroness Maddock (LD)
My Lords, like many others who have spoken this afternoon, I have not taken part in the Bill so far but I have followed it closely. I wish to support part of the comments of the noble Baroness, Lady Quin, because, like her, I live in the Berwick-upon-Tweed constituency—and I declare an interest in that I am married to the local MP. I have spent many a long hour driving him around the constituency as he tries to visit every corner of it.
I should like to back up those comments by mentioning what has happened to the democratic process in the county of Northumberland. Under the previous Government, we had imposed upon us reorganisation, which meant that we reduced the number of principal councillors in the area from more than 300 to 67. I have seen what that has done to the operation of local democracy, and I therefore hope that my noble friend Lord Wallace will look seriously at the democratic issues in areas such as Berwick-upon-Tweed.
Lord Foulkes of Cumnock (Lab)
My Lords, not long after I came into this place, the Labour Whip approached me and asked me to support a “panic” amendment. I thought, “That’s unlike my noble friend Lord McAvoy”, to ask me to support something that had been drafted in haste because of some emergency that had arisen. To my relief, I found out that it was an amendment proposed by the noble Lord, Lord Pannick, so I was very happy to support it.
However, this is a panic Bill. The one to blame for it is not the noble Lord, Lord Pannick, but the Deputy Prime Minister. It is one of the many crazy things that he has come up with. This proposal is so crazy that even the noble Lord, Lord Tyler, cannot accept it. I thank that that shows noble Lords how daft it really is. This particular part has been opposed by everyone who has spoken so far. We are all waiting for the noble Lord, Lord Finkelstein, to get up; he has been the only advocate of any part of this Bill, apart from the Ministers themselves. The noble Lord, Lord Crickhowell, who has tremendous experience as a Minister and a Member of Parliament, spoke against it, as did the noble Lord, Lord Forsyth, who again has great experience from his constituency.
I want to do the same from my experience in my constituency of Carrick, Cumnock and Doon Valley, which was 800 square miles in size. I held surgeries in 25 different centres throughout that constituency; there were even more polling places. No buses went from Cumnock, in the north, to Girvan in the south. There was a long distance beyond Cumnock, right up to Muirkirk and Glenbuck, which was home of the famous Cherrypickers, that wonderful football team that the Shankly brothers originally played for. The constituency stretched down to Ballantrae in the south, which was the home of Lord Ballantrae, who some noble Lords will remember, and where his title came from. It was a big constituency.
My noble friend Lady Kennedy of The Shaws knows Scotland well, and she knows that the difficulties faced in my constituency by having a maximum of four places would be even worse in others. Let us take the Western Isles, for example. Let us suppose that that wonderful Scottish Nationalist Angus MacNeil was subject to a recall petition—that is, if he continues; I doubt whether he will, but let us imagine. It would be possible to have a place to sign a petition on Lewis, one on Harris, one on North Uist and one on South Uist, but what about the other islands? What about Benbecula? What about Rum, Eigg, Muck, Barra and all the other islands? We have heard talk about areas having only one bus: I can tell noble Lords that no buses go between these islands. There are ferries, but think about all the difficulties that this would create for all the people who, understandably, wanted to sign the petition to get rid of Angus MacNeil.
Lord Howarth of Newport
Will my noble friend tell us what it costs to ride on those ferries?
Lord Foulkes of Cumnock
It costs more and more each time, although to be fair costs may go down soon because the cost of oil is going down. That has not worked its way through yet.
There are similar problems on Orkney and Shetland. Everyone thinks that they are just two islands: Orkney is one island and Shetland the other. That is far from the truth. Orkney and Shetland both have huge numbers of islands. It is just impossible. That is why it is so sensible to give the discretion to the petition officer. This is such a sensible amendment.
Lord Forsyth of Drumlean
When the noble Lord says that it is sensible to give discretion to the person in charge, is not the difficulty that none of us can think how on earth he could possibly achieve this?
Lord Foulkes of Cumnock
That is true; we are giving him an impossible task. I hope that the noble Lord is not blaming me for this. This is all part of the Bill. Even the noble Lord, Lord Wallace, will have some difficulty explaining this. I was going to say he is just the Bill’s representative on Earth, but he is just the representative in this place of the Bill’s real architect. We know who is to blame.
Lord Wallace of Saltaire (LD)
My Lords, I hesitate again to interrupt the noble Lord in his wonderfully nostalgic speech ranging across the entire United Kingdom. I do not have a copy of the Labour Party’s manifesto for the last election with me but I think it committed the Labour Party to a recall Bill. I am sure that the noble Lord, as a good, strong, Labour loyalist, stands 100% behind that. Does he?
Lord Foulkes of Cumnock
There have been terrible things over the past five years but we lost that general election. I do not think that we necessarily are committed to manifestos for elections that we lost. Even if we had brought forward a recall Bill, I can guarantee noble Lords one thing: it would not have been as daft, stupid, unworkable, unreconstructed and difficult-to-operate as the recall Bill we have today. This is the recall Bill of the right honourable gentleman the Deputy Prime Minister.
Lord Tyler
This is getting somewhat absurd, even for the noble Lord. The Bill is in the hands of Mr Greg Clark. He is the Minister responsible and he has had broad support from the Labour Front Bench in the other place. Perhaps the noble Lord might like to talk about the merits of this part of the Bill, rather than go off on his ludicrous tangents.
Lord Foulkes of Cumnock
I used to be a junior Minister as well. I know that the Secretary of State, or in this case the Deputy Prime Minister, and the Cabinet work these things out. As a junior Minister I was a foot-soldier. I know exactly what it is like. Sometimes even I had to argue things that were not all that easy to argue on the Front Bench. I may have gone a little over the top.
Lord Foulkes of Cumnock
These are the merits of the Bill. I thought the noble Lord, Lord Tyler, made very good points in relation to his former constituency. I have made the same points in relation to mine and they apply a fortiori—ad absurdum, if you like—to Orkney and Shetland, and to the Western Isles. I was merely making that point. I do not need to repeat the comments about what kind of buildings there should be in each of these areas or what provision there should be, for example, for blind and disabled people. There is a whole range of unanswered questions and, with great expectation, we look forward to the answers from the noble Lord, Lord Wallace.
Lord Norton of Louth (Con)
My Lords, I rise briefly to support the amendment, which should be read in conjunction with Amendment 39 in the name of the noble Lord, Lord Foulkes. It strikes me that the problem is that there are too few signing places but they are open for too long a time. If the period is shortened, that would presumably free up resources that might help to cover the cost of having more places open within a short period. If the two were put together, it could be cost-neutral but very beneficial to all those who want to take part in the process.
Lord Wallace of Saltaire
My Lords, the noble Lord, Lord Foulkes, managed to entertain us for more than an hour during the first day in Committee. I fear that he may be hoping to do the same on the second.
Lord Wallace of Saltaire
Absolutely, it was absolutely not—it was repetitive. This Bill has been considered by a number of committees. The Government’s proposals for “a maximum of 4” took on board the proposals of the Political and Constitutional Reform Committee in the other place. That is where this proposal comes from. I have listened with interest and I have been thinking about constituencies in which I have worked. Indeed, in the first by-election in which I worked, as a student, I recall that the constituency of Cambridgeshire had 103 villages and no towns. Without question, there was one very convenient place where everyone might gather to sign a petition, which was outside the constituency in the city of Cambridge. We recognise that that is part of the problem we have with constituencies and their boundaries.
When I was the candidate in Shipley, one of my duties was to hold a house meeting in a place where it was a considerable surprise to those who attended the meeting to discover that they were in the Shipley constituency. They thought that they lived in a different place. I am sure that there are also problems that others here have faced in their turn. Again, I stress that this issue has been considered at some length not only in the other place but by a number of committees. This has not been sprung on the House by a wicked Deputy Prime Minister, as the noble Lord, Lord Foulkes, would like us all to believe. I am sure that he has looked at the committee report in some detail. It has been suggested that giving people an eight-week period will allow for a trade-off between those who wish to use postal votes and those who will take the opportunity to sign when they come into the centres in the constituency. That is the flexibility of the trade-off, and we will discuss further the question of whether the period should be of eight weeks or two.
I am conscious of the differences between constituencies in this country. We talked about what is called the Brecon and Radnor question in our earlier discussions, and I am certainly willing to look at whether there is an appetite for a degree more flexibility in all of this. As to the provision of premises, let me stress that traditionally the management of elections in this country is a local matter. It is in the hands of experienced members of local authorities, who look at the provision of appropriate premises. Perhaps I may say to the noble Lord, Lord Snape, that I think licensed premises are extremely unlikely to be used. As I listened to him, I wondered whether we would allow premises that sell liqueur chocolates to be used, since those of us who are also involved in the Deregulation Bill have struggled with that deep and vital matter.
Lord Wallace of Saltaire
Let us discuss it off the Floor of the House rather than detain the Committee further.
Of course, we will be relying on the discretion of the petition officers, who will be the local election officers, on the use of public premises around each constituency. I note the strength of feeling that has been expressed about four centres not being enough in a number of constituencies, although I also note the section of the Electoral Commission’s report which the noble Baroness, Lady Hayter, did not quote, which states that, equally, four signing locations may be more than is required in some constituencies. There is, perhaps, a greater degree of flexibility and I am willing to take this away and discuss whether a degree more flexibility is desirable.
Let me touch on a number of other issues that have been raised. The noble Lord, Lord Howarth, discussed the impact assessment. I can assure him that, under the Bill when passed, the costs of each recall process will be reimbursed to the local authority. The impact assessment covers the fact that the direct and indirect costs, including training, will be reimbursed.
Lord Howarth of Newport
Will the Minister write to us before Report with a detailed analysis of the costings that led the Government to come to the conclusion that they expressed in the impact assessment? It was:
“The cost attributed to one recall petition in the United Kingdom is estimated to be in the region of £55,000”.
It would be very helpful if he would explain how those costs are made up.
Lord Wallace of Saltaire
I will be happy to promise that we will reconsider that and I will write. Perhaps it is also worth talking at this point a little about regulations. A number of the amendments before us today consider how much should be in the Bill and how much should be in regulations. We have placed in the Library of the House a draft sketch of the regulations, but I should stress that it will not be possible to lay the regulations before either House between now and 7 May. The exact regulations will be the responsibility of the next Government and will come before the two Houses within the first year of the new Parliament.
Lord Forsyth of Drumlean
I am most grateful to my noble friend. If all this has been so carefully thought through, why are the Government not in a position to lay these regulations? I have listened carefully and I am grateful to him for saying that he will look at this again. However, while it is invidious to choose a particular constituency, if you take Argyll, which consists of a number of islands, the idea that this can be done for £55,000 is pie in the sky. Is the Minister basing the costing on discounting it over a long period? Where did the figure come from?
Lord Wallace of Saltaire
My Lords, since I have not looked in detail at the assessment, I cannot directly answer that. I assure him that I will go back and get that. I am quite familiar with parts of the Argyll constituency; I recall the Daily Mail writing a bitterly critical article on MPs’ expenses the year before last, in which it attacked the current MP for Argyll, who is a friend of mine, for claiming overnight hotel expenses within his own constituency—which merely demonstrated that the Daily Mail had not looked at the atlas.
Lord Foulkes of Cumnock
This is a very serious matter. The Minister said that none of the regulations will be ready before this Parliament finishes. That means that it will be up to the next Government to lay these regulations before Parliament. I am expecting that there will be a different Government. How is it that he, and this Government, can bind a successor Government and Parliament to put these regulations before Parliament?
Lord Wallace of Saltaire
My Lords, I was not aware that I had said “none” of them. A sketch of the regulations—which I am sure that the noble Lord has looked at—has been placed in the Library of the House, but the final form of the regulations have not been entirely agreed. As the noble Lord well knows—although he is looking in puzzlement at me—things like this have to be agreed closely through consultation with the Association of Electoral Administrators, the Electoral Commission and others. These things need to be done well and they take time, after one has agreed the overall shape of the Bill. That is the process through which we are now going.
Lord Howarth of Newport
The Minister says that these things take time and have to be done carefully, but it is some four years since the Government produced their draft Bill. What have they been doing?
Lord Wallace of Saltaire
My Lords, the Government have been fairly busy with a range of issues. We have perhaps taken longer on this than we should have done, and I note that the House is currently enjoying itself. The question of adequate training is, I suggest, a matter for regulations rather than for inclusion in Bill. I am happy to discuss that with the Opposition Front Bench between Committee and Report. Having said that we will discuss these issues further, I hope that the noble Baroness—
Lord Snape
With respect to the Minister, I am afraid that we are discussing the Bill because of discussions between the two Front Benches. They are the cause of the trouble in the first place. Therefore, I do not think the House will be too mollified by the thought of more such discussions taking place. Surely, if the Minister is going to reply properly to Amendment 66 in particular, he ought to be able to tell us how many staff he envisages at these particular places and what training—if any—they are going to get. What guarantees can he and the Government give about security, as far as people wishing to sign a petition are concerned, and what assurances will he be able to give the rest of us that people are signing only once? He has answered none of the questions relevant to Amendment 66. Whether or not the Government have had the regulations drafted after four years is their problem: the House is entitled to a slightly more comprehensive answer from the Minister than it has had so far.
Lord Wallace of Saltaire
My Lords, I have stressed several things. The details of premises used, and other arrangements, are matters for local election administrators. I have spent some time over the past three years talking to local election officers, and I have the highest respect for those whom I met, both in Yorkshire and in London. That is the way we manage elections; those people understand the local area, including its geography and the sort of premises that are the most valuable. Moreover, facilities for training are a matter for discussion between the Association of Electoral Administrators, the Electoral Commission and the Government. Those discussions have already begun and are well under way, but the final details await the completion of the Bill.
Lord Forsyth of Drumlean
Would it not have been sensible to have had the discussions with the local authorities about how this proposal could work in advance of drafting the primary legislation and in advance of this very late stage, when the Bill has been through the House of Commons and is in Committee in the House of Lords, and we are at the fag end of a Parliament? Surely, this is putting the cart before the horse, which is why the Minister—and I sympathise with him—is in the very embarrassing position of not being able to explain how, practically, this legislation can be made to work.
He is simply saying, “We are going to pass it on to other people and we will make regulations when we have had discussions with them”. But what happens if the other people who have experience in this area come to the same conclusion as every speaker in this debate who has represented a parliamentary constituency: namely, that this is not practical and doable? By that time, this will be an Act of Parliament. Surely it is our duty not to put rubbish on the statute book.
Lord Wallace of Saltaire
My Lords, the noble Lord is being a little mischievous. There have of course been extensive discussions with the Association of Electoral Administrators and others throughout on these matters. They have not come to a conclusion because the details will need to be worked out as we move forward. For example, this detailed amendment concerns the question of how many places one will have open for signing over an eight-week period. I have just offered to take that back and consider whether we could be a little more flexible. I have also explained that our proposals came as a response to a report from the Political and Constitutional Reform Committee, to which evidence was given by a number of these people—so we are not simply starting from the beginning. There has been quite extensive consultation, with which I am sure the noble Lord is familiar, and on that basis—
Lord Howarth of Newport
Does the Minister recollect that the Political and Constitutional Reform Committee advised the Government to drop the Bill?
Lord Wallace of Saltaire
My Lords, I do not recollect that. I recognise that all those in this House who have been MPs are deeply unhappy about the Bill. I also recognise that outside the Palace of Westminster there are many who would like the Bill to be a lot rougher and tougher than it is.
Lord Snape
The Minister will have to do a bit better than that. Outside the Houses of Parliament there are those who will not be satisfied until Members of Parliament live in a tent on the Thames and pay to come to work. He will have to find a slightly better argument than that to convince the House.
Lord Wallace of Saltaire
My Lords, as I walked down the main street in Saltaire on Saturday, I saw on the noticeboard outside the hairdresser a scribbled note that said, “Kill politicians, not trees”—we are currently culling some of the trees in Saltaire. I went in and had a minor altercation with the hairdresser about whether or not he would have been equally open to putting “policemen” or “Muslims” on his “Kill politicians” thing. It was a long altercation, and my wife did her best to calm me down. Let us recognise that we are in a situation in which politicians are not among the most popular or respected people in Britain, and the Bill is in part a response to that—and I stress that it was in the manifestos of the three political parties last time. Noble Lords do not like that response, but that is the situation which we are in.
Lord Snape
Having had the courage to say that to the hairdresser, did the Minister have the courage to stay for a haircut?
Lord Finkelstein (Con)
I have heard all these suggestions from various noble Lords that this is completely impossible and impractical. Perhaps my noble friend the Minister might reflect on the United States of America and whether in all the places that are very large—larger even than my noble friend’s former constituency—which have had these petitions, they have all collapsed due to it being completely impractical to organise them, or has it proven in fact that many recall petitions have taken place perfectly simply and not at great expense?
Lord Wallace of Saltaire
My Lords, the recall process takes place in a number of other democratic countries. It is an established part of democratic institutions in a number of other established democracies.
Baroness Hayter of Kentish Town
My Lords, the noble Lord, Lord Forsyth, asked whether we were putting the cart before the horse. At least now I understand the Bill that we gave a First Reading to earlier, which was about the control of horses, which I had failed to understand thus far.
It is interesting that everyone who has spoken in this very interesting and geographically spread debate has supported the amendment tabled by me and my noble friend Lord Kennedy. We now hope that we will enjoy the same degree of support for our other amendments and will look forward to it as we proceed.
My noble friend Lord Howarth pointed out, as I was about to do, that if the best evidence that the Minister could have was from the Political and Constitutional Reform Committee report in the other House, it was on the basis that this measure should not proceed at all, so the case for four days really has to be better than that. However, I shall not labour that point because the Minister has agreed to take it away and look at whether the provision should state “minimum” or whether we simply leave it to the petition officer, as the Electoral Commission says. We would be content with either as long as there was that increased flexibility.
I am not a former Member of the other place, so I do not come with any of that, but it seems to me that the provisions relating to how you develop the petition, how you set up signing places and the training of the staff will be crucial. As someone who has been a teller at polling stations, I will want to know whether I will be allowed in, how many feet away I will be able to be from someone going to the polling station and whether I will be able to ask where they live—which effectively gives me knowledge of who they are and therefore who they are voting for. These are big issues, and we will need the staff at the signing places to have absolute clarity on that when they are challenged about how close I might be able to go wearing my rosette or my “Vote No to Wallace” badge. Would we be treated as we are at general elections? I can find none of that, even in the draft regulations. Therefore, the training, its length and the type of staff are absolutely key, which is why we wanted it spelt out more.
I thank all those who have given their support to the amendment. I hope that we can look forward to the Government tabling their own amendment on Report. For the moment, I beg leave to withdraw the amendment.
Lord Foulkes of Cumnock
Lord Foulkes of Cumnock
My Lords, I move this amendment with some concern and some disappointment, having heard the Minister’s response to the previous amendment. I would have thought that, if we were dealing with any of these amendments properly, the Minister might say in response to at least some of them, “The Opposition or the mover of the amendment from the Back Bench has made a good point. I’ll have a look at it. I’ll take it away. I’ll discuss it with colleagues and I’ll come back”.
Lord Wallace of Saltaire
My Lords, I hope that the noble Lord was listening to the response that I gave to the previous amendment, where I said precisely that.
Lord Foulkes of Cumnock
That was not what I took from it, but I am glad that he has confirmed that that is the case. I hope that we will hear the same kind of response to other amendments and that, when he comes back, we will see some changes, otherwise this would be a completely cosmetic exercise.
As I said earlier, the whole Bill seems to me to be a panic exercise. The Minister gave this away when he was talking about walking down the street in Saltaire and being incensed by the note that he saw in the barber’s window. The Bill seems to be a panic response to some of the comments made by people who write in the Daily Mail, the Daily Telegraph and even the Times from time to time. I am reminded of someone once asking, “Why are all the people best able to run the country either cutting hair or driving taxis?”, which seemed to me to be a very good question, but I added to that, “Why are all the people best able to run the country cutting hair, driving taxis or writing columns in newspapers?”. If these people know better than us how to run the country, if they can draft better legislation, if they can come with better ideas, why on earth do they not stand for Parliament?
Lord Foulkes of Cumnock
Well, one of them has come in, but the noble Lord, Lord Finkelstein, was not elected: he got in on a free ticket.
Lord Snape
In fairness to the noble Lord, Lord Finkelstein, he does write jokes for the Prime Minister.
Lord Foulkes of Cumnock
That surprises me. They are not very good jokes, are they? They are not as good as mine anyway, that is for sure.
Amendments 38 and 39 are very serious amendments. As I said, I hope that we will get some response from the Minister. I was very pleased that the noble Lord, Lord Norton, for whom I have the greatest respect—he is a great expert on the constitution and these matters— saw the link between those amendments, particularly Amendment 39, and the ones we have just been discussing.
Amendment 38 would change the day on which a recall petition will be available to sign from the 10th working day after the petition officer receives the Speaker’s notice to the 21st working day. The petition officer has other responsibilities. He is usually the chief executive or a senior officer of the local council and has lots of other things to do. The amendment gives him time to start looking for places that could be used for signing the petition and for getting staff organised and everything prepared for the petition signing. I think that 10 working days is asking too much of those hard-pressed individuals and is pushing ahead far too quickly with the procedure. He or she should be given more time.
I then propose reducing the length of the petition signing period from eight weeks to two weeks. In a general election, of course, we have only one day to cast our vote—the postal vote provision gives us other opportunities, but it is very limited. To provide eight weeks for the petition to be signed seems to me to be designed to make life really difficult for the MP. There is an opportunity for a bandwagon to be built up. Later, we will be discussing expenditure and the various organisations that may spend money—political organisations, religious organisations, pressure groups of one kind or another—which could build up their campaign against a Member of Parliament that has nothing to do with the reason why the Member of Parliament has been subject to a recall petition. Again, we will be discussing this later, but it would be possible under the present proposals.
Let us say that when the noble Lord, Lord Tyler, was a Member of Parliament for his constituency, he, sadly, suffered a recall petition. It would have been open for other people who did not like his views on the environment or any other aspect to try to get rid of him for those reasons, not for the reasons of the recall petition. Eight weeks gives opportunity for such campaigns to be got up. It would also be possible for people to oppose the Member of Parliament for things that he had done, such as votes that he had taken for or against changing the abortion limit. They might not like his religion or his views on any other aspect. Eight weeks gives the opportunity for that bandwagon effect to take place. Two weeks seems to me to be quite long enough for anyone who pays some attention to why the recall petition has been instituted to think about it and to sign it. Even in the islands, they could get from Canna to Lewis in two weeks to sign the petition. It certainly would not need eight weeks.
The noble Lord, Lord Norton, raised the issue of the cost of this whole process, which will be huge. I will be interested to see the reply and the information that the Minister gives to my noble friend Lord Howarth. The Minister said that he would provide the basis on which the £50,000 forecast was based. I must say that I am very sceptical about this, particularly the aim to keep the signing places open for eight weeks. It was originally proposed that the signing places were to be open from 7 in the morning until 10 at night—the whole time when people are normally able to vote. Now it looks as if it will be 9 am until 5 pm. That is still a full day for eight weeks. That is a very substantial amount.
Lord Tyler
My Lords, I shall speak to Amendment 39. As my noble friend Lord Norton of Louth put it a few minutes ago, with admirable and characteristic brevity—in contrast to one or two other noble Lords—this is very much linked to the amendment that my noble friend the Minister has said he is prepared to take away and think about again. If we are going to have, in some constituencies, just two or three signing places and only two weeks for the signing, then the pressure on those places will be considerable. To succeed in a recall petition in an average-sized constituency, 7,500 people will have to descend upon those one or two places. So there is a direct relationship. If my noble friend the Minister is able to say that in geographically larger constituencies, where it is more difficult to obtain satisfactory locations in so few places, there will be an increase, perhaps to eight or nine places—or whatever it may be in the islands; I take the point made by the noble Lord, Lord Foulkes—or, for example, in my old constituency in Cornwall, to six or seven places, then reducing the number of weeks to two weeks is much easier. Otherwise there will be enormous pressure.
I hope that my noble friend will accept, having generously and sensibly said that he is prepared to go away and think about the issue of the maximum and the minimum numbers of signing venues, that this also applies to the number of weeks that they are active. The numbers otherwise could be extremely difficult to manage.
Lord Hughes of Woodside (Lab)
My Lords, perhaps the Minister can explain to us why eight weeks is thought to be a suitable term. It cannot be to make sure that people know that the recall petition has to be signed, because that will be no secret. Once the Bill becomes law, the very first MP who is referred to the Standards Committee for some misdemeanour will be fastened upon. From day one of the Standards Committee discussions, the press will be going on about demanding a recall. We do not know how long the Standards Committee will take; it could be five, six, seven, eight, nine or 10 weeks, or three or four months. Some discussions have gone on for six months. Everyone will know about it, and once the petitions officer is informed, there are 10 days for him to take action on it. In those 10 days, there will be fierce discussion in the media. What is going to happen in eight weeks? For what logical or logistical reason can eight weeks be satisfactory?
We manage to do a general election by voting on one single day. I am not necessarily suggesting that that would be the right thing—I support the term being reduced to two weeks—but if we vote in those numbers on one day, why has this been stretched out to eight weeks? Again, we are not told why that is the case. I suspect that this is one of those things where somebody had a good idea and said, “We will all look good if we have a recall Bill on the statute book”. This is a limited recall Bill, as I shall hope to discuss in greater detail on a later amendment, but they were saying, “Let us get it on to the statute book”.
The Minister said in a previous debate that we will not have the regulations in time for the general election and they will be sorted out afterwards. Why not leave the whole thing until after the general election and do it properly? It would make much more sense if the Bill were withdrawn and started again. That could be done and would not take up any more time. It might go through much quicker. This is the kind of provision that does not bring any real sense to democracy. What is going to happen during the eight weeks of the signing period? On a later amendment, I will argue what might happen during those eight weeks, but I ask the Minister to have some sense. For goodness’ sake, accept this amendment.
Lord Finkelstein
My Lords, there has often been a wonderful use of the words “with due respect” in this Chamber on this Bill, in lieu of actually showing any. The suggestion that people who drive taxis or cut hair are not those who run the country will come as very sad news to the voters, particularly those who cut hair or drive taxis. To suggest that one cannot comment on the recall Bill without being a Member of Parliament would be like suggesting that the noble Lord, Lord Foulkes, cannot comment on the Deputy Prime Minister’s proposals without having been Deputy Prime Minister, which he was never able to be. I do not think that ad hominem points really help.
This is about handing a simple power to voters. Most people viewing this debate would be perplexed as to why we would wish to deny such a power being handed to the voters to remove people who had gone to jail or—
Lord Hughes of Woodside
The noble Lord, Lord Finkelstein, really should use his words carefully. No one in this Committee has denied that the Bill is necessary; no one in this Committee denies that it should go on to the statute book.
Lord Hughes of Woodside
All right, we can see that noble Lords think that it is funny, but I do not think that it is funny at all. The fact is that we are arguing for a sensible Bill which will do the job properly; not the hash and mishmash which has been put before us.
Lord Finkelstein
If it is genuinely the case that nobody has questioned the need for the Bill then I have not been paying proper attention. I think that it has been questioned several times. I am glad to see that the noble Lord is not among those who question it, but I am afraid that many of his colleagues—not the Front Bench of the Labour Party—do question it.
This provision gives a limited power to voters in certain, very limited circumstances. I hope that those circumstances will not arise very often. If they were to do so, it would certainly be worth all the money that the Bill is supposed to cost to deal with the problem. If we in fact had large numbers of Members of Parliament who were being suspended for long periods, going to jail or fiddling their expenses, the cost of recall would be worth while. If it is small numbers, the cost will not be very large. This amendment is designed—I am sure that the noble Lord, Lord Foulkes, knows this—to make it impractical for people to collect the signatures, and to make it more difficult. There is a reason why, I should say to the noble Lord, Lord Snape: the noble Lords who are not in favour of the Bill are all former Members of Parliament. Obviously they will feel that a power to remove Members of Parliament ought to be resisted. I am simply arguing that that power is being given in extremely limited circumstances.
Lord Crickhowell
My noble friend has just commented on ad hominem remarks and so on, but I regard that as rather an offensive remark from him. Just because one is a former Member of Parliament and is critical of the Bill, it does not suggest that we are criticising it simply because we think it is wrong that Members of Parliament should ever be removed. I do not believe that for a moment.
Lord Finkelstein
The last thing that I would want to do is to offend my noble friend. However, the point was made directly, and by more than one noble Lord, that Members of Parliament understood why this Bill was impractical whereas others did not. Therefore, I am simply arguing that there is a reason why Members of Parliament should feel that way.
Baroness Corston (Lab)
My Lords, having taken part in the Second Reading and then read it in Hansard, my recollection is that pretty well everyone who spoke in that debate, particularly former Members of Parliament, said they agreed with the principle of recall but were opposed to this Bill. The noble Lord, Lord Finkelstein, has not been paying attention.
Lord Finkelstein
Well, I would be delighted to hear the proposals for recall that are not the ones included in the Bill. I believe that noble Lords have opposed almost every practical measure that could be considered for recall, but I would be delighted to be told differently.
Lord Foulkes of Cumnock
I wonder if the noble Lord, Lord Finkelstein, could help me—he is know -ledgeable about these things. Are there more journalists than Members of Parliament in prison at the moment; and what is the mechanism for recalling those journalists who hack telephones?
Lord Finkelstein
That is an excellent question. Somebody who breaks the law and does not sit in the House of Commons can be removed from their job by their employer. I am arguing that that power should be extended to the hairdressers and taxi drivers who constitute the employers of Members of Parliament. When I made the argument that they employed Members of Parliament, I was told that that was a novel constitutional doctrine. I stick to it none the less. This is a simple power that will be used only in certain, very limited circumstances. Those limited circumstances are set out in the Bill. If others have proposals for recall, the Bill is simply amendable with those conditions, since it is a very simple Bill and very simply structured. I can only translate the fact that no alternative proposals for recall have been put forward except for the one from the noble Lord, Lord Tyler—which, again, opponents of many of the Bill’s central proposals have found even more complicated and therefore did not like. I know of no other proposals that have seriously suggested that this principle of recall should be advanced.
Baroness Quin
The noble Lord is talking about hostility to the Bill, but the amendment that we were discussing a few minutes ago was simply to make a modest improvement regarding the number of signing places. Did he support that amendment or not?
Lord Finkelstein
Yes, I was glad to hear the Minister suggest that he will pay attention to the debate, and I look forward to seeing his proposals. Many very practical arguments were made in its favour. The argument that no practical arrangements can be made to make recall work at fairly limited expense is ludicrous. I am sure that it is not beyond the Government’s ingenuity to come up with those proposals. However, the amendment that we are discussing now is designed to make it almost impossible for anybody to file for recall within a reasonable period. Although the principle of recall has been given apparent support, we have been given no practical alternatives to those of the Government, except for those of the noble Lord, Lord Tyler. I would certainly welcome the chance to hear some. I believe that the reason we have not is that people do not wish the electorate to be given this limited power, and I think that that is wrong.
Lord Grocott (Lab)
My Lords, perhaps I can claim a level of expertise about the recall of MPs because I myself have been recalled as an MP. I think I am right in saying that it is only the noble Lord, Lord Tyler, and myself who have had this happen—oh no, I see from looking round that there are three of us, so I had better be careful. The electorate decided that they did not want us as their MPs. I am totally in favour of the recall of MPs.
We have a system that works extraordinarily well; it is called a general election. Sadly, and I am repeating myself now, this Government have decided that we should have fewer general elections and that they should be once every five years instead of once every three years and 10 months, which has been the average period between elections since the Second World War. There is going to be a mass recall of MPs on 7 May, eight or nine weeks from now. Very much in keeping with my noble friend Lord Hughes’s remarks, we know that, so far, at least 80 of those MPs will not be there in the next Parliament. I am referring to those who have announced that they will be standing down, who may have very different views about the merits of a Bill like this than those in the current Parliament, which is well past its sell-by date. There will probably be—I never make firm predictions but I am speaking hopefully—a substantial number of other MPs, in addition to those who are voluntarily standing down, who will be asked by the electorate to spend more time with their families, just as happened to me, the noble Lord, Lord Tyler, and others.
Surely the democrat’s view of this, if we are going to trade democracy across the Chamber, would be to say, given that the Bill has been five years in gestation, with the Government clearly not wanting it but finally feeling that they have to produce some sort of measure: “Look, we’ve waited five years; let’s wait another six or seven months and if necessary, if the mood of the next democratically elected, newly enfranchised and sustained MPs is that we really do want this dog’s breakfast of a Bill, it should be for the new democracy that we will have after 7 May, when the composition of the House of Commons may be very different, to judge, not us in this fag-end Parliament”.
I do not have any difficulty on the grounds of democracy saying that this is a bad Bill that should not be brought in at this time. I have a specific reason, too: the more that you discuss the Bill, the more you realise that no MP in their right mind would subject themselves to this recall procedure. That is why I very much support my noble friend Lord Foulkes’s Amendment 39; at least he is acknowledging the inevitable truth, which is that if there is a period of eight weeks while people sign a petition, why on earth would any sitting MP voluntarily submit himself or herself to that form of torture? If the Procedure Committee and the Standards and Privileges Committees in the other House decide on a 10-week suspension, the MP knows at that point that the overwhelming likelihood is that a by-election will occur in due course because there will be so much negative publicity followed by an eight-week period when people in his or her constituency will have been persuaded by the media at all levels, local and national, that the right thing to do is for this MP to submit themselves to re-election. I would strongly recommend—this is certainly what I would do, heaven forfend, but no longer do I have to worry to the same extent about these things—that the moment they are subject to a disciplinary procedure that will result in recall, they should resign their seat. That is the obvious thing to do.
In a sense, the discussion that we are having is entirely academic because I cannot imagine anyone going through the inevitability of this long procedure and period of negative publicity, when at least a by-election is likely to take a maximum of four or five weeks—
Lord Finkelstein
May I just clarify something? Is the noble Lord suggesting that if the Bill is introduced, it will imperil MPs who have come under any of these conditions to resign their seats, whereas otherwise they might have remained in Parliament until the end of the period? That would be a very interesting clarification for us to have.
Lord Grocott
It would not impel anyone to do anything; but if this unnecessary Bill was on the statute book it would be a sensible decision for a Member of Parliament to make. I do not want to see that provision in the Bill—let there be no misunderstanding about that. I have already explained that I am in favour of general elections, not of frequent elections, as the noble Lord is.
Lord Finkelstein
Just for further clarification, the noble Lord suggests that one of the advantages of passing this legislation is that it will encourage people to understand that their position is no longer tenable, and therefore it would be an encouragement to those people to recognise the condition in which they find themselves and resign.
Lord Grocott
I am saying that they would be dealing with the ludicrous situation of an eight-week period—but I am repeating myself. What I am saying is obvious to pretty much everybody else in the Chamber; I am sorry that is not obvious to the noble Lord. Clearly, if that system was in operation—and to repeat myself, I do not think that it should be; it should be up to the electorate in a general election—yes, the least expensive case and, if you like, the more democratic mechanism would be for the electorate to make the decision swiftly in a by-election. However, I hope that this provision does not come into operation.
Lord Teverson (LD)
My Lords, perhaps I can intervene in what seems at the moment like a Second Reading debate. The noble Lord, Lord Grocott, mentioned my noble friend Lord Tyler. I point out that although the electorate recalled him, I am pleased to say that they changed their mind a few years later and sent him back, and he served a number of Parliaments before he decided to stand down from the House. That is just for clarification.
Lord Grocott
Perhaps I need to further clarify that exactly the same procedure happened in my own case.
Lord Norton of Louth
My Lords, I will get in eventually. I outlined my alternative to the Bill on Second Reading. Addressing the amendments before us, I reiterate my support for Amendment 39 in particular. I cannot see the logic of eight weeks because I cannot see who benefits from that. Obviously, you can argue that it is unfair on the Member over whom this sword of Damocles would hang for that length of time, but I cannot see any benefit to electors. If there is that demand to recall a Member, they will want the by-election as quickly as possible, and this will just delay matters. If they feel that strongly, they would not want that length of time in which to do it. It would make far more sense to provide a much shorter period but with greater opportunities for those who want to go and sign. Therefore there should be a correlation: the more you narrow the period, the more opportunities you provide for those who want to go and sign, and it benefits everybody involved to do it as quickly as possible.
Baroness Corston
My Lords, I support Amendment 39. I will follow on from the comment made by my noble friend Lord Grocott against the eight-week signing period. In every election I fought I was preached against from pulpits on the issue of abortion. A general election takes about three or four weeks. I can imagine what would happen to a Member of Parliament in a constituency when an issue such as that moulders on for eight weeks, and the degree to which that single issue could influence the outcome of an election. However, to return more specifically to the issues raised by my noble friend Lord Foulkes on the necessity for returning officers to become petition officers and oversee the recall mechanism, can the Minister tell us in his response what discussions the Government have had with the Local Government Association about the way in which it sees this legislation working—and, if there have been such discussions, what was its response?
Lord Snape
My Lords, I support Amendments 38 and 39. I will ask the Minister a couple of genuine questions. He talked about the consultations that have taken place and will take place with local government officials about the administration of the Bill. I presume that the petition officer is more than likely to be the chief executive of the local authority—that is a reasonable assumption to make. Bearing in mind the numerous duties that chief executives have, it would be perfectly sensible for the Minister to look again at Amendment 38.
He has already said that among the matters to be resolved is the suitability of premises in which the petition is to be signed. Obviously, that cannot be done in a matter of hours; presumably it would take up a substantial chunk of the chief executive’s time. I do not want to go over the previous amendment again, but in his reply the Minister indicated the number of matters that are still subject to discussion between the Government and local authorities before the Bill is implemented. So I put it to him that surely, for those reasons, it would make sense for the number of working days to be increased from 10 to 21.
On Amendment 39, I agree very much with the noble Lord, Lord Norton. My noble friend mentioned abortion and the difficulties she had in her former constituency. Some years ago I was asked to speak about capital punishment on a television programme called “Central Weekend”, which might be familiar to at least one of my noble friends on this side of the House. Shortly before the programme went out there was a particularly brutal murder in the West Midlands. The question of capital punishment was raised—and understandably so—by local and national newspapers, in particular the newspaper covering my own constituency. I received a considerable amount of correspondence and some degree of odium because of the stance that I took. I would hate to think of someone in a similar position facing eight weeks of this sort of barrage, as well as whatever he or she had been charged with in the first place. An eight-week period would allow the media in effect to make the decision for the electorate, by putting on the sort of pressure that my noble friend faced on the subject she has just mentioned, which I faced some years ago and which many of us face. So both the amendments are sensible and I commend them to the Minister.
Baroness Hayter of Kentish Town
My Lords, the discussion about the role of different professions is interesting. I hope that the noble Lord, Lord Finkelstein, will help me. One of the little pieces of doggerel that I have remembered for years—I am sure that he will know the source of it—is about a journalist:
“I am the daily mentor who
Tells the Premier what to do:
And when he’s done it, I go on
To tell him what he should have done”.
Perhaps by the end of this he will let me know the source of that, which I learnt as a little girl.
The major amendment in this group is of course Amendment 39, which, as has been said, reduces the petition period from eight to two weeks. I have some sympathy with this as a probing amendment, simply to get the Government to spell out why they chose eight weeks rather than two, four, six or, indeed, even 10 weeks. Why was this thought to be the appropriate period? I assume that it was not chosen in the way that the Government chose the figure 500 as the number of seats they wanted in the House of Commons—by plucking the number from the air. I assume that there was more to it than that, but I have failed so far to find out what it was.
As an actual amendment, I am less sure that the two-week period per se would work. Let us think of this as more akin to an election. Before it we have that long run-in, or phoney war, which I am afraid we know too much about at the moment and which alerts people that the election is coming. If there were just two weeks to actually sign in that situation, that would be one thing. As noble Lords have said, the amendment has great attractions in terms of costs. However, as a realistic time for the whole process of alerting people to the issue, their right to sign, where the venues are—whether there are very few or more than few—and, importantly, to get postal votes if they cannot get there, two weeks is not the answer.
Lord Hughes of Woodside
My noble friend referred to the long period of time leading up to a general election. However, the moment a Member is referred to the Standards Committee, the whole thing will be under discussion in the constituency. Therefore, there is no need for eight weeks. People do not need eight weeks to make up their minds; two weeks is surely long enough.
Baroness Hayter of Kentish Town
There are two different issues here: making up your mind on the matter and the procedures involved. The questions I am asking the Minister are: why did the Government decide on this measure, and what is the appropriate period? Two weeks seems too short to get the whole thing set up and the registers ready. Indeed, we are talking about 12 weeks with a couple in between, given the eight weeks that have been mentioned, added on to a possible by-election lasting another four weeks.
I think that the noble Lord, Lord Finkelstein, now appreciates what my noble friend Lord Grocott said. The best thing would be to resign straightaway and call the by-election yourself, as the MP concerned, and go straight into a by-election, saying, “Yes, it is true that I have been kept out of the House of Commons for 10 days”—or whatever it is—“but that was because I felt very strongly about a matter; there was a Bill going through that I did not like”, or whatever the issue was. In that case, you are on the front foot. That is the point that my noble friend Lord Grocott was making. That would be a much more attractive proposition and might be the right way to tackle the matter—that is, by putting the MP in the control seat. Sadly, we have not discussed these issues fully and I do not think that the Government thought about adding the time for a by-election when they chose the eight-week period. They have some explaining to do about the choice of this period, particularly with regard to the discussions they have had with the electoral officers and the Electoral Commission on the eight-week period. We look forward to clarification on that.
Lord Wallace of Saltaire
This debate has ranged a great deal wider than the two amendments before us. I again remind the Committee that a commitment to bring forward a recall Bill was in the manifestos of all three parties in 2010. The draft Bill was published for pre-legislative scrutiny in 2011. The Political and Constitutional Reform Committee considered the proposed architecture and did not recommend changes, and it has also been approved by the other place.
I hear noble Lords around the Committee saying, “This is appalling. We have not thought of this before. This must be a last-minute proposal. Why has it not been thought through?”. This is not the case. We have consulted throughout, not with the Local Government Association, but with the society of chief executive officers and the Association of Electoral Administrators, the representative bodies for returning officers. They have not raised particularly difficult issues on this. I stress that the rationale for this measure was that the petition period would be parallel to, and part of, the process of discussion.
Lord Grocott
As the Minister is praying in aid the committee that gave the Bill pre-legislative scrutiny, he needs to put it on record that it recommended that the Bill should be dropped—I cannot remember another example of this happening—and that the Government should find alternative, sensible ways of using valuable parliamentary time. Can we have it on the record that that was the professional view of the specialist committee which looked at the Bill in its pre-legislative form? I cannot think of any other example of a Select Committee making a judgment of that sort.
Lord Wallace of Saltaire
I am fully prepared to accept that, but I also note that this Bill passed through the other place in spite of that recommendation. We need to at least start from that assumption when looking at the Bill rather than suggest that it has not been properly considered and ought to be entirely rejected, which I think is the undertone of a number of the contributions being made to this Committee stage debate.
Baroness Hayter of Kentish Town
Does the Minister accept that we on the Front Bench have endorsed the Bill and are trying to make it work?
Lord Wallace of Saltaire
I entirely accept that the Front-Benchers are committed to that and I wish that noble Lords elsewhere were. We have already, in effect, extended the process of elections. The fact that postal voting starts at a much earlier stage is a problem that we now all face in elections. Indeed, we have extended the period, in regulations that I have taken through the House over the past two years, rightly, between sending out postal votes and the election, in order to provide more time for people overseas, people who are going abroad on holiday, or whatever. So the process of elections has now been extended and we have the severe problem, as I felt working at the last election, that by the last week of the election a substantial number of the electorate have already voted. The conversation takes place early. The intention stated in putting the Bill forward for pre-legislative scrutiny was that the dialogue would take place as the petition was opened.
Lord Hughes of Woodside
I ask the Minister, since I am no longer involved in the question of postal voting, what is now the time between polling day and the granting of postal votes?
Lord Wallace of Saltaire
Since I have taken the regulations through I should know the answer to that, but I do not now recall it; I merely recall that we have extended the period.
Lord Hughes of Woodside
I am sorry, but the Minister just told us how he brought all this legislation through the House and now he cannot even remember what it was about.
Lord Wallace of Saltaire
I certainly remember what it is about. I do not remember the exact period. I think we have extended it from three weeks to four and a half or five, but I will write to the noble Lord about that.
On the question of the preparatory period, I note that these two issues are, of course, linked and that the noble Lord, Lord Foulkes, is proposing that there should be a longer time for preparation and a shorter time for signing the petition. I assume that he regards these as intrinsically linked to the provision of a larger number of places at which to sign, so that, in a sense, it all goes together as a package. The proposal which the Government have put forward in the Bill is that, since the electoral officers have not asked for a longer preparatory period than that suggested in the draft Bill and which is therefore provided for here, we therefore open the petition-signing process after 10 days. That gives a considerable period during which people who are on holiday can return, et cetera, in order to provide the maximum amount of time for a campaign which goes in parallel with the petition-signing process and gives the maximum amount of time for those who wish to sign the petition.
Lord Foulkes of Cumnock
I find it difficult to understand what the Minister is saying sometimes. Is he going to accept, if not my proposition, the proposition of the noble Lord, Lord Norton, that eight weeks to two weeks is linked to the number of polling places? Since he has taken away the number of polling places and will come back, is he also agreeing to take away the question of the eight-week period being reduced and look at that as well? I do not know whether he said that.
Lord Wallace of Saltaire
I did not say that. The other place has passed this legislation and I am not yet persuaded. The eight-week period ensures that there is enough time for electors to sign in a manner that is convenient for them. I am certainly prepared to raise the questions of how far we wish to go and the cost involved, but I doubt whether I can give the noble Lord the open suggestion at this late stage, four years after the draft Bill was published, that we will look again at something which has actually had very considerable consultation since it was proposed and has not received a negative comment from most of those who were consulted. On that basis, I ask the noble Lord to withdraw the amendment.
Lord Foulkes of Cumnock
I wish the noble Lord, Lord Gardiner, were here because I can understand what he is saying. I find it very difficult to understand what the Minister has just said. If I cannot make a case, the noble Lord, Lord Norton—Professor of Government at Hull University—made a perfect case. If the Minister is taking away the issue to look at the number of polling places, it surely goes without saying that the question of the time for which those places are open is linked to it, in terms of not just cost but the availability for people to sign. I am quite astonished that he is unable to consider this matter. To be honest, it shows that Ministers in the House of Lords need to be exceptional and say—like the noble Lord, Lord Newby, sometimes does—“I’ll have another look at that and will go back and argue with the Ministers in the House of Commons because a good argument has been made. Perhaps I can convince those Ministers that it should be taken account of”.
The Minister said, in a sort of gratuitous compliment to my noble friend on the Front Bench, that of course the Government think that the Opposition Front Bench is trying to improve the Bill. The implication is that none of us on the Back Benches is trying to improve the Bill, but this is genuinely an attempt to do so. The compadre of the noble Lord, Lord Finkelstein—the Sancho Panza to Don Quixote over there—was shaking his head. If Sancho Panza reads the Second Reading debate, he will find again and again that Back-Bench Members on this side of the House said, “We agree with the principle of recall but do not agree with a number of the provisions of the Bill”. We are trying what one might call a twin-track approach. We are saying, “We don’t like this Bill at all; it is badly drafted and thought out. But it is there and we will do our best to try to improve it”. That is what we have been genuinely trying to do with these amendments—on the Back Benches as well as on the Front Benches.
I have been listening carefully to the Minister’s reply for a reason why the period should be eight weeks. Why not seven, six, 10 or 12 weeks? There was no explanation whatever as to why eight weeks has been arrived at. If the amendment is tabled again on Report, I would be minded to test the opinion of the House.
I am really disappointed in the response from the Front Bench. In future, perhaps on my next amendment, I shall encourage someone else to move it to see whether they have any greater ability to convince the Minister of the argument. I feel totally inadequate in my ability to argue a case.
Lord Foulkes of Cumnock
The logic behind the amendment is impeccable—nevertheless, I beg leave to withdraw it.
Baroness Hayter of Kentish Town
My Lords, we have given notice or our intention to oppose the Question that Clause 8 stand part of the Bill. It is an opportunity to raise a fundamental issue about the whole Bill.
The Minister will recall that we discussed at Second Reading whether signing a recall petition was to be a secret or public act. As we noted then, if it was to be public, people must be aware that their identity will become known in due course before they decide to sign it. We gave given notice of our intention to oppose the Question that Clause 8 stand part of the Bill to ascertain from the Government what their present thinking is as to whether a recall will be by a secret vote or by a public petition. At the moment, the Government seem to have come to no conclusion. We would like to suggest a way forward. The Government have had nearly five years to decide on this issue, which is fairly key to the working of the Bill, but have failed to come up with a conclusion. They are therefore in need of some help, which I hope the Chamber will provide.
The Constitution Committee noted that,
“signing a recall petition is a public act”.
Indeed, the Government conceded that,
“whereas at an election the way in which the person has voted remains secret, this secrecy cannot be maintained absolutely through the process of signing a petition as there is only one way in which a person may sign”.
Unlike elections or referendums, on which a large amount of the Bill has been drafted, there will not be an “against” box on the petition signing sheet. Furthermore, if the Government intend for a marked register to be available, the list of “for a recall” will become public, moving away from the notion of secrecy. There is nothing to stop organisations filming who goes into the signing venues or, as I mentioned earlier, stop those of us who lobby for one side or another and mark who goes in and who comes out. Indeed, we would ask for polling cards, as voters will be given polling cards in the same way as normal. I do not need to explain to the House how quickly videos or images can be circulated on a variety of different platforms, digital or otherwise.
It is crucial that a clear decision is taken as to whether this will be, in effect, a public petition or a secret act, which could be done not dissimilarly from the way suggested by the noble Lord, Lord Hamilton, who is not currently in his place, in Amendment 51, by having separate “for” and “against” forms. Whatever the final decision, it must be clear in the Bill and voters must be informed of it well in advance.
This is a complex issue, about which I, for one, have yet to decide. There are strong arguments on both sides. However, my concern is that this has not been fully discussed and the Government have not, to the best of our knowledge, engaged stakeholders, such as the political parties, the Electoral Commission, the Electoral Reform Society, the Association of Electoral Administrators, or anyone else. Indeed, when we met the Electoral Commission, it seemed unaware of this as an issue and had not really paid any attention to it.
We really must have a greater sense of this—of the arguments on both sides and of the views of others—before Report. We simply cannot afford to leave it to the next Parliament—or, even worse, to the triggering of the first ever recall—to take a decision on this. Everyone needs to be clear about the process before the first such petition happens. Therefore, as a Parliament, we need to decide now, but informed by research and consultation, which sadly has yet to take place. After that, we can see the regulations, the information to be given to electors and agree the exact procedures in the light of whether this is an open or closed petition. My suggestion to the Government is that they undertake that consultation before this comes back to the House. They should come back with a clear view based on the evidence of that consultation. That should be in the Bill and the relevant regulations could be so drafted afterwards.
Lord Soley (Lab)
My Lords, I share the concerns expressed. The Government need to think long and hard about the privacy issue. If this Bill had been put before the House in the 1970s or 1980s, there would have had to be a clause making it clear that it did not apply to Northern Ireland. Fortunately, I think we are over the worst of that but, as the Minister knows, it is still a sensitive area and I am not sure whether this will apply to Northern Ireland. I must admit that I meant to check that point but I did not. I also think that there could be real problems as regards the privacy issue in areas where there are ethnic or religious tensions. I am not sure what thinking the Government have had about that.
In view of all the battles, literally, over the centuries to get the secret vote, you can see why people might be worried about signing a petition in public or, worse still, signing without realising that it would be made public after the event. At that stage, people may want to take their name off the petition, to change their mind or whatever. I do not have any confident feeling that the Government have thought this part through. I look forward to the Minister explaining how he will deal with this, particularly in those areas where there are tensions and as regards expecting people to sign a petition but not to change their mind later and desperately try to get their name off.
Lord Wallace of Saltaire
My Lords, I recognise that this is a very important point. The Government take on board that they have not entirely spelled out the degree of secrecy and publicity that comes with this. Unavoidably, signing a petition is, to some extent, a public act. We all know that someone going into a polling station often can be observed and checked, although those who make postal votes preserve a great deal more anonymity. The mere fact of going to the signing place to sign the petition clearly indicates in which direction you are moving, which makes this unavoidably a less secret activity than the secret ballot.
We recognise that the balance between the public nature of signing a petition and the need to preserve a degree of privacy for those who wish to sign it is one on which we have to give particular care and attention to strike the right balance. On attending the signing place, the elector will have their entry checked on the electoral register to check that they are eligible to sign the petition. They can then be handed a signing sheet and will be able to read the information et cetera. In Northern Ireland, electors will have to produce ID according to the existing arrangements for elections in that country, as the noble Lord, Lord Soley, will recall.
Postal signing raises questions about access to the marked register, which will tell you who has and who has not signed the petition. The Government are considering what limitations there should be on access to the marked register. While some of this will have to be left to regulations, I will do my best to come back on Report with a clearer statement on the marked register issue in particular.
We are all of course concerned about intimidation. As the noble Lord, Lord Soley, remarked, it is not purely limited to Northern Ireland. We are all aware of some other areas in the United Kingdom where that has happened or might easily happen. Therefore, when there is only one way in which you are likely to express your opinion in signing a petition, the question of intimidation, as well as privacy, should be fully addressed. Some of that will have to be left to the details of the regulations but I will do my utmost to come back on Report stage with as clear a statement as possible of the Government’s view, taken in consultation with the appropriate authorities.
Lord Soley
Will the Minister also tell us whether he has taken or will take advice from the law officers? What would the situation be if someone who suffered harassment or worse as a result of their name being made public when they did not expect it to be took a legal action, whether in the UK or in the European court, under their right to privacy?
Lord Wallace of Saltaire
I will certainly take action on that. The question of how far the right to privacy extends in this thing is something on which I am not myself an expert. However, I will take advice.
Baroness Hayter of Kentish Town
My Lords, clearly the Government have still not made up their mind about this. What I most regret is the suggestion that this could be left to regulations. What we probably need is an amendment to the Bill at the Report stage because the question of whether this is going to be a public or a private act has to be clear before the Bill leaves Parliament. That is for us to decide if the Government really are not going to make it clear beforehand.
I think I heard the Minister say that consultations would take place with others outside before they come to a view on this.
Lord Soley
Perhaps I may draw attention to the fact that Clause 23 does actually extend to Northern Ireland. I ask the noble Lord to check that the Northern Ireland Secretary of State is aware of this, and whether she has any views on it.
Lord Wallace of Saltaire
My Lords, I understand that this is a serious matter which we need to get right. On that basis, I hope that the noble Baroness will be able to withdraw her opposition to the question that the clause stand part.
Lord Foulkes of Cumnock
I am still not very clear about how the petition will be signed or how a voter can indicate their support for it. What, for example, would be sent to me as a postal voter? I think that pairs are being excluded, so what would be sent?
Lord Wallace of Saltaire
My understanding is that the postal voter will be sent a form with the words as stated on the face of the Bill and will be invited to sign it or not to sign it. That would then go in and be submitted.
Lord Martin of Springburn (CB)
In all my experience of petitions, they are public documents. The other place is famous for petitions being laid before Parliament. This is a public record, but now we are discussing the introduction of an element of secrecy about it. The recall of a Member of Parliament is a very serious matter. We are working through a process to remove a democratically elected Member of Parliament and we are considering that some of the petitioners shall be secret. There is an old saying in the trade union movement: you should put your courage where your mouth is. Well, you should put your courage and signature in the one place as well. We are overturning a petition, a procedure which was in place before people had the vote—before we had suffrage. That is a very serious matter.
Lord Wallace of Saltaire
My Lords, I recognise that, but on the other hand the secrecy of the ballot is also a very serious matter. As I said earlier, it is a question of striking the right balance between the unavoidably public nature of a petition and the principle of the secrecy of the ballot. It is a matter that we will consider further and come back on.
Lord Hughes of Woodside
If there is a petition with only one question on it and you sign the petition, everyone must know how you have voted. The idea of secrecy is nonsense. If people sign the petition, it must be known that they have done so, and then we know how they will vote. Again, the idea of secrecy is a lot of nonsense and I have no idea what the Minister is talking about.
Lord Wallace of Saltaire
My Lords, the question of intimidation has been raised by the noble Lord, Lord Soley, and others, and that is a matter which we also have to take seriously. We will consider the issues. That is why balance comes into the question. The noble Lord, Lord Soley, and others have some sad experience of the problems of intimidation in issues like this. I have promised to take this back and I will do my utmost to return with a clearer statement of the Government’s view of how we can strike what is an extremely difficult balance, as the noble Lord, Lord Martin, and others have observed. On that basis, I hope that the noble Baroness will feel able to withdraw her opposition at this stage.
Lord Foulkes of Cumnock
The Minister has said that he is going to come back: will he tell us when he is going to come back and explain this to us?
Lord Wallace of Saltaire
I suspect that the noble Lord may be surprised if I am not here at Report: that was what I was referring to. I said, “Report stage”.
Lord Kennedy of Southwark
Lord Kennedy of Southwark (Lab)
My Lords, this amendment deletes from the Bill the wording on the petition that will be used when the recall provisions have been triggered. Along with Amendment 44, this amendment enables the wording to be agreed by regulation. The reason for these two amendments is to enable the wording of the petition to be properly tested before it is agreed. Our amendment also ensures that the Electoral Commission is involved in that process. It is the one organisation in the UK that I believe has the experience to test the proposed wording and it has a good track record in this respect.
Noble Lords might be aware that I was an Electoral Commissioner. I served in the group of commissioners appointed by political parties. I saw at first hand how the commission tested the question for the referendum in Wales on additional powers. It then tested the question for the referendum in Scotland. There were concerns that the original question proposed by the Scottish Government was unbalanced and led you in a particular direction. When we did our research and published our report, its recommendations were accepted fully by the Scottish Government and, after that point, the question itself was never an issue during the campaign.
Our Amendment 44 gives a role to the Welsh Language Commissioner. It is important that, in constituencies in Wales, Welsh speakers be given a translation of the question that both they and we are confident about. That shows proper respect for the Welsh language and Welsh speakers. Amendment 43 in the name of the noble Lord, Lord Wallace of Saltaire, just changes the order of the wording, and we are happy to support it.
In previous debates, the Minister has said that the testing of the question will be undertaken by a professional supplier and completed by the 2015 general election. If they do not plan to use the Electoral Commission for this, will he clearly tell the House why not and whom they are proposing to use? It has the experience and expertise for the job: why would they go elsewhere? If the Government choose to go elsewhere, will there be additional costs to the taxpayer? Why are the Government not following the procedure adopted to test the question in the Scottish referendum, which involved getting the question right, with the result that it never became an issue: people focused on the actual question itself, rather than on the wording of the question? I beg to move.
The Deputy Chairman of Committees (Lord Colwyn) (Con)
If Amendment 40 is agreed to, I will be unable to call Amendments 41 to 43 because of pre-emption.
Lord Hughes of Woodside
My Lords, I have been thinking very carefully about this idea of the wording in the Bill. As the wording is in the Bill, someone who gets the petition has the choice either to sign it or not to take part in the petition process. In other words, it is a one-way process. There is no opportunity for someone who is against the recall of the MP to say, “No”. Why can we not have a straight yes/no question? That is what democracy is about.
The issues surrounding the recall of an MP will generate much excitement—if that is the right word to use—about the behaviour of the MP, sticking strictly to the three triggers, whichever one is to be used. There will be a tremendous bandwagon: there will be no possibility of the MP defending himself or herself. How is that feeling to be translated? The MP who is faced with this petition may well be extremely popular. There is no possibility of that popularity being translated in any shape or form in the petition—and, as we come to in a further amendment, with the proportion of the electorate that is to take part. But it is all one-sided. I cannot see how this can in all senses be fair or sensible. I hope that the Minister will accept the amendment so at least there will be further discussion about how the process might go.
Lord Elystan-Morgan (CB)
My Lords, I respectfully suggest to the House that the suggestion and proposal made by the noble Lord, Lord Hughes, is an excellent one. I was thinking about the problem raised earlier by the noble Lord, Lord Martin, in that there were two principles that were diametrically opposed to each other. One was the principle of the innate secrecy of the ballot; the other was the principle of the innate public nature of the petition. The answer and the compromise may very well be in the sort of suggestion made by the noble Lord, Lord Hughes. What would be wrong in having two questions—yes or no? You would have a hybrid; it would be something of a ballot and something of a petition, but you would be free from many of the disadvantages that would attend a situation where the fact of having voted would mean that you had voted only one way.
Lord Howarth of Newport
When the Minister replies, will he explain to the Committee why the Government have not, apparently, involved the Electoral Commission in this process? It is so obviously the organisation equipped and tasked to deal with matters of this sort and it is a mystery why it is not more fully involved here and in other aspects of the procedure. The commissioners are not normally shrinking violets. I even wonder whether the Electoral Commission, in taking the view that this is a thoroughly ill founded measure, has declined to play a part. I do not know, but in any event is it not really reckless to put the definitive wording of the petition in the Bill before it has ever been tried? If it turns out in practice to be inadequate, everybody will be in very great difficulty and primary legislation will be needed to change it.
Lord Wallace of Saltaire
My Lords, I hesitate to suggest that the noble Lord, Lord Howarth, has come to the debate a little less well prepared than he sometimes is. I have here the Electoral Commission’s briefing of 13 January for Committee, which does indeed remark on the consultations that it has had with the Government on the Bill. It says:
“Whilst the Commission has given informal advice on the current wording of the petition card and signing sheet based on our experience of testing referendum questions, we have not undertaken any user-testing of the wording. We understand that the Government plans”—
as has already been said—
“to user-test both the petition card and signing sheet with members of the public”.
It goes on to say:
“We are not persuaded that this amendment is necessary, given that the wording of the petition signing sheet can already be amended by regulations”.
The Electoral Commission has not been left out of the process, as one would naturally expect.
Lord Howarth of Newport
That is just what I said. It has been only informally consulted. I do not understand why it has not been given a formal role in this process.
Lord Wallace of Saltaire
My Lords, the Electoral Commission unavoidably has a formal role throughout this process and has been consulted throughout. Informal consultations are part of the formal process. We need not batter about words too much. I say to the noble Lord, Lord Hughes of Woodside, that an election or a petition process that generates such excitement would be a joy to many of us. Part of the pleasure, in a sense, of the Scottish referendum was that it did indeed generate a great deal of excitement.
It is the nature of a petition that a petition is one-sided. The noble Lord, Lord Martin, remarked that petitions are petitions—they are not elections. I hesitate to suggest that some wish to turn the recall petition process itself into the by-election that may or may not follow.
I will speak first to government Amendment 43, which would make a small change to the final sentence of the wording to appear on the petition signing sheet that is set out in Clause 9(4). The signing sheet must include this specified wording, as it explains to the eligible constituent that they are signing the petition for their MP to lose their seat and for a by-election to be held.
During debates in the other place, it was suggested that the wording could be improved in relation to explaining when a by-election would not take place. The Government agree and therefore this amendment responds to the debate in the other place by making it easier for the elector to understand that the MP will not lose his or her seat and a by-election will not be held if less than 10% of the registered electors in the constituency sign the petition.
The wording of the petition signing sheet was developed with input from the Electoral Commission before the Bill was introduced, but we have a power to amend the formulation in regulations if that proves necessary after undertaking user testing of the signing sheet and notice of petition with members of the public. In doing this, it will be possible to confirm whether the formulation that we have best serves constituents’ understanding. I repeat that the Electoral Commission was happy with the proposals as set out in the Bill.
Amendments 40 and 44 in the name of the noble Baroness, Lady Hayter, would remove the specified wording of the signing sheet from Clause 9 and replace the power to amend that wording through regulations with a power to set the wording in regulations following further consultation with the Electoral Commission and the Welsh Language Commissioner. The signing sheet must include wording specified in Clause 9, which explains to the eligible constituent that they are signing the petition for their MP to lose their seat and for a by-election thereafter to be held.
There is value in the appearance of the wording in the Bill, as it has allowed MPs to express their views on it. This mirrors the position for UK parliamentary elections, where the form of the ballot paper appears in primary legislation, the Representation of the People Act 1983, but may be amended through regulations that must be approved by a resolution of both Houses. No amendments were tabled in the other place to remove the wording outright, but an amendment was tabled to improve it, so I think we should be mindful of that when considering this issue.
A further modest but worthwhile advantage of the appearance of the signing sheet’s wording in the Bill is that future changes made to it would then be reflected in the text of the parent Act, which helps to make the law as clear as possible for petition administrators, parties and campaigners.
On consultation with the Welsh Language Commissioner, I can assure the Committee that the Government will prepare a Welsh translation of the wording in secondary legislation, as is the practice at other statutory polls, using a power and following a principle established in the Welsh Language Act 1993. This translation will be subject to user testing in the same way as the English version. I hope noble Lords are aware that, throughout this Bill, we are following as closely as possible comparable regulations and comparable legislation in other Acts concerned with our democratic process.
As is usual practice, we will consult the Electoral Commission’s Welsh language experts to ensure that the translation is accurate and will accommodate any changes identified through user testing. One of the amendments suggests that, in addition to consulting the Electoral Commission, the Minister should consult the Welsh Language Commissioner. The Welsh Language Commissioner has an important role in promoting and facilitating the use of the Welsh language, but it has not been standard practice at elections to consult the commissioner directly on Welsh translations of voter-facing forms and notices.
In summary, I believe that it is important that the wording of the petition appears on the Bill but that it is user tested and commented on to ensure that any improvements that are identified can be made. For these reasons, I hope that I have persuaded the noble Baroness not to press her amendments.
Lord Kennedy of Southwark
I asked the Minister who would do the testing if was not to be the commission. He has not answered that point.
Lord Wallace of Saltaire
My Lords, I apologise. I do not have that detailed information at my fingertips, but I will write to the noble Lord as soon as I can.
Lord Foulkes of Cumnock
Will the Minister make something clear? If it is in the Bill and the Bill is enacted, it is too late for the Electoral Commission to use a test and find out that it is not a good question, is it not?
Lord Wallace of Saltaire
My Lords, I am sure that the noble Lord was listening carefully. I apologise if I did not speak clearly enough for him to follow my argument. The process for the ballot form—and now for the petition form—is that it appears in the Bill so that MPs can reflect on it, but that it is open to amendment by regulation. In the Bill, we are following what already exists in the Representation of the People Act.
Lord Kennedy of Southwark
I thank the noble Lord for his response. I look forward to receiving his letter on the matter that I raised. At this stage, I beg leave to withdraw the amendment.
Lord Hamilton of Epsom
Lord Hamilton of Epsom (Con)
My Lords, I beg to move Amendment 41 in the names of the noble Lords, Lord Foulkes and Lord Hughes, and myself, and I am grateful to the noble Lord, Lord Foulkes, for allowing me to move it.
I have always taken the view that this Bill is a lot more about organisation than it is about indignation. I believe that with a bit of organisation, it would be very easy to get 10% of an electorate to sign a petition. The only way that we can illustrate this is by taking a particular constituency and going through the process. If your Lordships will forgive me, we will have to consider a rather hypothetical situation. The constituency is not hypothetical; it is Richmond Park.
As your Lordships will know, Richmond Park was won at the last election off the Liberal Democrats by my honourable friend Zac Goldsmith. As it happens, Zac Goldsmith thinks that the Bill is a little mouse of a Bill. He thinks that it is a pathetic attempt at recall. He wants recall of MPs on demand. Perhaps when he has read the Official Report of this debate, he may have second thoughts. In the 2010 election, he won the Richmond Park constituency with a majority of just over 4,000, with just under 50% of the vote. The Labour Party polled 5% and UKIP just over 1%.
I shall hypothesise—please do not challenge me on the hypothesis; I am just trying to create a scenario on which we can pin the recall process. Let us say that in the 2015 election, Mr Goldsmith’s majority improves, the Liberal position declines, Labour comes up a little bit and UKIP comes up substantially. I will not go any further than that. Oh, and by the way, there is a Conservative minority Government in power. In two years’ time, the Conservative minority Government are having very serious problems. They are wrestling with renegotiation with Europe and they have the new tranche of austerity measures to push through, and that is not making them in any way popular in the country. They have already lost two by-elections and done badly in another one.
Then the whole question of recall for Mr Goldsmith comes up. I apologise to him; there is no question of him being recalled; we just have to hypothesise that he is. Then comes the question of the petition. Of course, those who believe passionately in the Bill, such as my noble friend Lord Finkelstein, think that it is all about the indignation of the people who live in Richmond Park. It is nothing of the sort. The people who will decide whether there is a by-election are down the other end of the corridor. They will make that decision on the basis of whether they think that there is a good chance of winning the by-election.
They will all get together. I suspect that it will be a clandestine meeting in some room either in the Palace of Westminster or outside. It will be made up of what I shall refer to from here on as the unholy alliance.
The Liberal Democrats will not be part of a coalition, because there is a minority Conservative Government. They think that it is about time that they started winning by-elections again, and of course they came second in the constituency. I see my noble friend Lord Rennard in his place. Is this moment not made for him? This will be the moment when he is rehabilitated in the Liberal Democrats, because this is a wonderful situation for him.
UKIP is also very keen on having by-elections, because it thinks that it has a very good chance of winning them as well. I am not sure that Labour will have much of a dog in this fight—it may have—but it would be wonderful for Labour if the Tory lost his seat, whoever won it. So there will be an unholy alliance sitting around that table. They will say, “What we want in this constituency is 100 volunteers to come in”. I go back to our previous discussion: we need only two weeks for this, we do not need eight weeks; two weeks is quite enough.
I apologise at this moment to the noble Baroness, Lady Hayter. I rather rubbished the idea that money would play a role in this. I take it all back: money will be very important. Let us hypothesise again that the decision has not yet been taken on the third runway at Heathrow and that the people who are very keen on it have found Mr Goldsmith quite a pain on all this, because he opposes it vociferously. So they come trotting along and say, “Would you like some financial help with this by-election?”. “Oh, yes please”, says the unholy alliance, “I tell you what we would really like. We would like 25 upmarket chauffeur-driven cars for the fortnight of this campaign. We want to have them on call at any time so that our canvassers can ring up and call them to any house or anywhere else”. Actually, it also might be a good idea if they hung around outside schools when the mothers were coming out, with two cars already sitting there. Canvassers could say to the mothers, “Look, if you sign this petition, you can go for a lovely trip with your children in this car”. You would pile two or three of them in. You would get six names there without any trouble at all.
The electorate of Richmond Park in the 2010 election was just under 78,000. I shall hypothesise, without any justification at all, that that rises to 80,000. The only reason why I do that is that I believe in round numbers because they make life a little simpler. So we need 8,000 names in Richmond Park. We have 100 volunteers. That is 80 signatures from each volunteer. They are on the scene for a fortnight, so that is 40 signatures a week per volunteer. Heavens, if they are going to operate for 40 hours, that is only one signature an hour. Come on, I am sure that any one of us could get one signature per hour for that petition.
So that comes back to the point that if this ever happens, it will be nothing to do with constituents in a state of revolt; it will reflect the degree to which people outside the constituency organise them into deciding on the by-election and signing up to the petition.
Let me speak also to my amendment, Amendment 51, which says that if we believe in any fairness whatever, it should be possible to counterpetition. That would also, incidentally, answer all the problems raised by the noble Lord, Lord Soley, about the confidentiality of the vote. If it became possible to have both the counterpetition and the petition for a by-election on the ballot paper, when someone walks into the signing centre, or whatever it is called, you would not know which way they had signed. That would cover that whole problem.
It would also, let us face it, be much fairer if a Member of Parliament was allowed to counterpetition. It might mean in certain circumstances that the by-election never happened, in which case it would save everybody money anyway. I hope that my noble friend will seriously consider those proposals.
Lord Snape
Has the noble Lord reflected on the fact that he has just undermined the very good case that he has just made? If the second amendment, Amendment 51, is accepted and if, as he said, it is all about money, Mr Goldsmith would have no difficulty in retaining the seat, because there would be far more people signing the petition to keep him than to get rid of him.
Lord Hamilton of Epsom
Mr Goldsmith would be in a very strong position to hire his own fleet of cars, absolutely. I must confess that the other weakness that the amendment raises is that on the pathetic threshold of 10%, both sides may get 10%, in which case there would be an interesting stalemate to which I do not know the answer.
Lord Hughes of Woodside
My Lords, the percentage of people required to trigger the by-election is certainly a very serious matter. As the noble Lord, Lord Hamilton, has said, the issue of recall will probably not be decided by the constituents themselves, although they are the ones who will sign the petition. It will be decided, first, in the Procedure Committee. Weaning the Procedure Committee away from a quasi-judicial function will be sorely tempting but we do not want that to happen. Secondly, not even they by themselves will decide which particular trigger will be invoked. The decision will largely be governed in the boardrooms which the noble Lord, Lord Finkelstein, probably attends quite frequently. The editors of the national press will latch on to this as a good idea, as something which the public have been anxious for.
The noble Lord, Lord Wallace, who is temporarily not in his place, seemed quite taken by the fact that I said that a recall petition would generate great excitement. I perhaps chose my words badly—I should perhaps have said great activity, rather than excitement. By and large the discussions in your Lordships’ House have been sober, serious, not entirely dispassionate but, in the tradition of your Lordships’ House, have looked at matters carefully and seriously. Alas, the real world outside is not like this place—it is going to be governed by people’s particular prejudices.
I do not want to rehearse the speech that I am going to make later about the debate but, in relation to the way in which MPs are perhaps no longer free from the scrutiny as they once were, I remember one Friday in the other place when we were discussing a repeal of the Steel abortion Bill. It was a very difficult subject. Whichever side of the argument one was on, it was controversial. In some constituencies it is hugely important.
I was in the Lobby with a colleague who was unhappy about voting against the amendments to the Steel Bill. He said that he believed that the amendments should not be passed and the Bill should be left more or less as it was, but he was concerned about what might happen back home. I said, “Well, don’t vote. Stay out of the Lobby”. He said he would have to vote because it was the right thing to do. So we went through the Lobby and we voted. When we passed the Tellers, he almost turned to jelly. He said, “I’ve lost my seat. What am I going to do? It’s dreadful—I’ll be hounded out of the constituency”. I told him to nip into the other Lobby and cancel his vote out.
How did I know that that was possible? I knew because my then pair, the late Iain Sproat, had asked me if I would time-pair with him so he could take his wife out to dinner and I agreed. I was in the Library reading—a euphemism for having a snooze—and the Division Bell went off in the Library. My wife says that even now after I have been out of the Commons for 17 years, when the alarm clock goes off in the morning, I throw the blankets off, shout, “Division!” and start running down the stairs. I got up and automatically went through the Lobby and then realised on that occasion I was time-paired. All of us who are former Members of the House of Commons know perfectly well that the greatest sin one can commit in the House of Commons is to break a pair. I asked what I could do and they said, “Nip in and cancel it”. I was in mortal terror for two or three days that the local press would discover it and make a fool of me, but they did not notice. So I had good cause to tell this colleague to cancel his vote out and he did. That much I can vouch for. In those days, we were not under the same scrutiny.
What has been said—and I cannot vouch for this—is that if someone in favour of abortion wrote to that colleague and asked how he voted, he could send them the page of Hansard which showed that he voted the way that they wanted. If someone was against abortion, he could send them the other page of Hansard. It was a wonderful strategy, except that nowadays, within five minutes of a vote being declared in this place or in the House of Commons, it is published on the internet. That sort of strategy would not work now.
Lord Finkelstein
I thank my noble friend Lord Hamilton of Epsom for his serious and persuasive speech, and the noble Lord, Lord Hughes, for his support for this amendment. However, in both cases they passed over the critical part of the scenario, which was otherwise very plausible. It is that the Member of Parliament concerned has to have triggered the clauses in the Bill before any of these processes could take place. In other words, they have to have been sent to jail, found guilty of breaking the expenses laws or been suspended by the Standards Committee for more than 10 days. In those very limited circumstances, the trigger would be operated.
When the trigger is operated, it is certainly true that politics will take place. People will make arguments, spend money and try to persuade other people to sign a petition. The choice that we have in this Bill is whether to have an extremely low trigger where it is easy to trigger recall but very difficult to gather the signatures in the petition, or, what has been chosen by the Government against the wishes of the MP for Richmond Park, to have an extremely high barrier before recall could happen but then a reasonably low barrier in terms of signatures. It is naturally a subjective matter, but I think that is the correct balance. I am sure this House would have a greater objection were it to be the other way round and we had followed the advice of the Member for Richmond Park. As we have gone through various amendments, we have often had the discussion as if the triggers did not exist and this was to be aimed at people merely on the grounds of their opinion. However, this will happen in an extremely limited number of cases where very serious wrongdoing has taken place and where the electorate are being given a chance to think about it.
There then comes the question of the counterpetition. The by-election constitutes the counterpetition and if the recall mechanisms—a very high bar—are triggered and a petition is gathered, at that point people who are against the MP being recalled would have the ability to pitch themselves against those who were in favour. At the end, we could add up who had more. A by-election is a much better procedure for doing that than what would otherwise be a sort of Heath Robinson mechanism of counterpetition. While I can see that this is a serious proposal and I understand that any figure could be picked, the balance between this very high barrier, which I think the House would prefer, when coupled with a relatively low number of signatures, is better than the other way round.
Lord Hamilton of Epsom
Does my noble friend not accept my noble friend Lord Forsyth’s argument that by that time, the Member of Parliament would probably have been deselected by his party anyway?
Lord Finkelstein
It may be that he or she would be deselected by their party but I did not really understand the relevance of the argument, even though I comprehended what my noble friend was trying to say. A Member of Parliament can stand in the by-election caused by this trigger. I cannot, nor can any noble Lord, compel a political party or anybody else to support them in that by-election. If they have a good case and feel that they want to put it to a by-election, they can. It is not the business of the Bill, or indeed the mechanism, to consider whether they might hypothetically have the support of a political party in that by-election appeal.
Lord Rennard (LD)
Will my noble friend not consider that a by-election cannot be an anti-recall petition in the 85% of constituencies where a majority of votes are cast against the sitting Member? It can hardly be an anti-recall petition when it is assumed that the number of opponents of the MP at the previous election normally greatly outweighs the number of their supporters.
Lord Finkelstein
I understand the point that the noble Lord is making. It is not a pure mechanism, merely on recall; that point has been made by other Members. But it is a better mechanism for testing the broad support for the Member than a counterpetition which, under this proposal, has only to reach 10% before it cancels the petition in favour of having the by-election at all. The by-election is a better mechanism for the Member of Parliament’s attributes to be debated and considered by the electorate than a counterpetition, which would not even have the merits of constituting the whole of the constituency.
Lord Howarth of Newport
My Lords, Amendments 41 and 51, as proposed by the noble Lord, Lord Hamilton of Epsom, both seem good amendments and I hope that the House will accept them. Amendment 41 deals with moving the petitioners’ threshold of more than 10% being in favour of a by-election up to 20% before the by-election will occur. That 10% threshold is nugatory. As the noble Lord, Lord Hamilton, made clear to us in what I agree with the noble Lord, Lord Finkelstein, to have been a plausible scenario, it could be all too easy for a well organised campaign to secure that 10% of votes to precipitate the by-election. Indeed, if we raised that threshold to 20% the team that the noble Lord, Lord Hamilton, envisaged would need to secure only two signatures an hour. That is hardly very hard work or a really difficult threshold to cross either, so raising the threshold to 20% is the very minimum upward movement that would be needed.
I very much like Amendment 51, tabled by the noble Lord, Lord Hamilton, because he would even the scales of justice. That seems sorely needed in this situation. With the procedure that the Bill proposes, we would otherwise see a Member of Parliament hung out to dry for a period of eight weeks, during which the media would engage in political blood sports and an animus against the sitting Member of Parliament would be all too easy for his critics and enemies to beat up. On the other hand, the noble Lord, Lord Finkelstein, argues that the Bill is tightly drawn and that only three triggers could precipitate this process. In every one of those cases, the MP would have had to have been judged guilty by his peers in the House of Commons of serious wrongdoing. I take that point but the noble Lord has asked us on a number of occasions to draw comfort from the fact that the Bill is thus tightly drawn.
I suggest that the Bill, without any of the Front Benches intending it to be so, will be a battering ram that will beat down doors through which Mr Goldsmith and those who think as he does—many people outside in the country will be egging them on—will seek to advance in the next Parliament so that they can introduce at least one more trigger, a fourth. That would transform the model of recall that we may be about to legislate into something much more like the American model, in which people who do not like the politics of the sitting Member will have the opportunity to use this procedure to unseat a Member of Parliament of whom they do not approve and whom they resent. That seems massively dangerous. If we are to establish in this legislation a model which could then be used in a much more wide-ranging set of opportunities, that is very dangerous.
The noble Lord, Lord Finkelstein, said that the by-election would itself be the counterpetition. The noble Lord, Lord Rennard, offered some words of caution on that, drawn from all his enormous experience in the way that elections actually operate. As I think the noble Lord, Lord Finkelstein, indicated in his response to his noble friend, such a by-election will not be fought on the narrow issue of what the MP charged with serious wrongdoing has done. It will be fought, as all by-elections are, on a large range of issues so that the MP will be liable to be scapegoated for all the unpopularity of his Government—the brave Government doing the unpopular things that the noble Lord, Lord Hamilton, described. That seems to be a formula for injustice and I hope that we will accept both these amendments.
Lord Foulkes of Cumnock
My Lords, I do not intend to go through all the arguments as I have dealt with them on previous amendments and they have been dealt with eloquently by my noble friend Lord Howarth and particularly by the noble Lord, Lord Hamilton, who did a splendid job in moving the amendment. I am not sure which Minister is going to reply. It will be good if it is the noble Lord, Lord Gardiner, as we might get a straight answer. Perhaps, in his reply, the Minister could say why it is 10%. That is all I want to know. Why is it not 5% or 20%? My amendment has it as 20% because I do not want to make it too easy to unseat Members of Parliament, but it could be any figure. Why did the Government alight on 10%?
The Lord Bishop of Chester
My Lords, I think that only these Benches could participate in these petitions since we have a right to vote in general elections, although there is a convention among us that we do not. I think that the last person who did so was Archbishop Runcie, who simply could not resist voting against Mrs Thatcher. He was found out and promised not to do it again, so there is a convention that we do not do it but we could.
As I have listened to the debates and read the previous transcripts, I have thought that there is a difference between the theory and the reality of what we are talking about. The theory that an MP would be subject to this petition, which would have reached the 10% or 20%, and that he or she would stand in the subsequent by-election backed by his or her party is pure make-believe. That is simply not going to happen but that is the theory and it is why a by-election would not be a counterpetition. It simply seems unreal that that is going to happen and, for that reason, there is therefore an argument for increasing the threshold from 10% to a higher figure. It corresponds to the reality of what we are talking about, rather than the theory.
Lord Norton of Louth
My Lords, I argued at Second Reading that this Bill would not achieve its purpose, which is to restore trust in politics. The Political and Constitutional Reform Committee in the other place made exactly the same point. In fact, in some respects, the Bill could be quite dangerous. By focusing on sanctions to deploy in response to bad behaviour, it detracts from the need to encourage strong and positive leadership.
I developed the point at Second Reading that if it is a true recall, electors would be in the driving seat. By that, however, I meant electors—not just a small proportion of electors. I take the diametrically opposed view to that of my noble friend Lord Finkelstein. I would argue for low triggers but a high percentage of electors who would have to trigger a recall. I take the point that it should not be a small number of electors, who could be the opponents of the Member, just being able to sign up and trigger recall.
If someone is elected in a general election and gets 40% or 50% of the vote, I do not see why a further election should then be triggered by 10%, who, as my noble friend Lord Hamilton was arguing, could be comprised of supporters of the opposing parties. There is a compelling case for a very high threshold. To some extent, Amendment 41 might be rather generous in being as low as it is. I can see a stronger case for a much higher percentage. If electors in a constituency really want to remove a Member, I think there should be a much higher threshold. I would move in that direction. It would not achieve what I was arguing at Second Reading in terms of a proper recall vote, but at least it would make a bad Bill less bad.
I support the amendment of my noble friend Lord Hamilton because there is a lack of equity in the arrangements embodied in the Bill. Although I do not think that allowing a counterpetition would necessarily restore trust in politics, it would probably increase interest in politics. It would allow voters who have a view one way or the other to get engaged. If we got that far, that would be the preferable way to go. But, as I say, what we are debating is amendments designed to render what is a fairly bad Bill somewhat less bad.
Lord Grocott
My Lords, this is a heroic attempt to create, as my noble friend said, a level playing field. I am sure the noble Lord, Lord Hamilton, would acknowledge that Amendment 51 could be tidied up but the objective or principle behind the amendment of trying to make some provision for fairness is an important one in a very extended procedure. We know about the time between the Speaker and the petition officer and then the eight weeks that is in the Bill which will all have been preceded by lengthy considerations in perhaps a court or in the committee of the House of Commons, during which time the only case that will be heard is the specific case against the Member of Parliament. During the eight weeks, if the Bill stays as it is at present, the drama, at least at constituency level, will be all about how many have signed so far, “Have enough signed so far? Roll up! Sign up! We’re nearly there”. What is the defence against that? There is no defence.
The principle behind Amendment 51 in the name of the noble Lord, Lord Hamilton, is an impeccable principle. I hope that the Minister, even if he does not like the particular wording of the amendment, will at least acknowledge the importance of the principle.
Baroness Hayter of Kentish Town (Lab)
My Lords, I found the travels of the noble Lord, Lord Hamilton, around the highways and byways of Richmond Park interesting. When this Bill was first thought of, we were thinking it was going to be a Sheffield Hallam one with the NUS bussing in its students. So we have come further south from that early discussion.
Amendment 51 is interesting. As I said earlier, although I think the noble Lord, Lord Hamilton, was not in his place at the time, the amendment could answer the queries that I had raised about whether the process is secret or effectively open. It is another way of dealing with that by allowing people to vote against and not just in favour of a recall by-election. It would certainly be a clearer option for electors who know that they have a choice. They can express that choice, having thought about the issue.
It is not, of course, what the Bill proposes so I am not able to offer support for it, particularly as it would negate a by-election simply if 10% voted against. You could have 30% wanting a by-election and 10% against. Under the amendment as drafted, the 10% would trump the 30%, which I am sure would not be a desirable outcome.
With regard to the increase to 20%, what the right reverend Prelate the Bishop of Chester was saying was interesting. From that, I might take the other view; if you get the 20% you have lost a fifth of your electorate. Effectively there will be no by-election. After having 20% against them, no one will possibly contest the by-election; so there would be a by-election, but not with the MP there. The purpose of the Bill, as it has been drafted, was that there should be the possibility of a by-election at which the MP refights that seat and tests the issue as to whether, despite whatever they have been found guilty of, they are nevertheless able to represent their constituents. My concern about the 20% is that it undermines the difference between a by-election and a recall petition.
I acknowledge that the Political and Constitutional Reform Committee recommended 20% but I do not think that we should pray that in aid given that it wanted no sight of this Bill whatever. I look forward to the Minister’s comments. The interesting thing is why on earth 10% was chosen and not 5% or 15%. The problem of 20% is that it effectively gets rid of the idea of having a by-election that the MP would fight. In that sense, it goes against the spirit of the Bill.
Lord Gardiner of Kimble (Con)
My Lords, this has been an interesting debate and I have listened carefully and seriously to all the points that have been made. I know I am repeating this point, but it should not be forgotten that for a recall petition to be opened in the first place a Member of Parliament would have had to have committed serious wrongdoing and to have met one of the three conditions in the Bill. All of your Lordships know very well what those three triggers are.
The noble Lord, Lord Howarth of Newport, raised the concern that a future Parliament might do this or that with other triggers. We obviously cannot bind what another Parliament might wish to do. This Bill before us is about three triggers which involve serious wrongdoing. That is the right balance. That is the point which the other place had come to as well. We believe that reaching the figure of 10% of constituents signing the petition would show a significant level of support for a recall and would trigger a by-election in which the sitting MP could stand.
Lord Howarth of Newport
The noble Lord is invariably fair-minded. Is he really relaxed about and content with arrangements whereby someone could be subject to a petition by 10% of their electors precipitating this trial by ordeal, which would then take the process beyond the eight week period through to a by-election, while it is entirely possible that 90% of their constituents thought that there should not be a by-election and that recall was the wrong thing to do but have no opportunity under the Government’s proposals to express that view?
Lord Gardiner of Kimble
I understand that, of course, but the whole purpose of the legislation is for the three triggers to be for serious wrongdoing. If a Member of Parliament has been found guilty, convicted or suspended up to the level, it is a view that there should be an opportunity for constituents to decide whether there should be a recall and then, if a certain threshold is reached—noble Lords have made different points about the level of that threshold—there will be a by-election. It will then be for 100% of the electorate to come to a view about what they want to do for their future representation.
Lord Howarth of Newport
Does the Minister accept the very powerful point made by the right reverend Prelate the Bishop of Chester that in reality it is hardly likely that an MP who had been subject to everything that will have occurred in the run-up to the result of the petition would actually want to contest a by-election? Is he not actually being drummed out of Parliament through this process in a way that must leave the Minister deeply uneasy?
The Lord Bishop of Chester
My Lords, perhaps I may just add to my point. I take what the noble Baroness, Lady Hayter, said, and I can see the argument both ways. I do not think that any political party would support a candidate in those circumstances. Maybe I am misreading this but, given the dynamics of the media, I simply cannot see the reality of a political party supporting the MP in those circumstances.
Lord Gardiner of Kimble
My Lords, I think this goes to the heart of the issue. If one believes that the three serious triggers for serious wrongdoing that have been set and agreed in the other place are to be adhered to, there would be this opportunity for the electorate in that constituency to have another opportunity. We are obviously at the heart of whether or not there should be legislation. The Government believe, as I think do the opposition Front Bench, that for certain conduct there should be an opportunity for the electorate of that constituency to have their say again on who represents them.
We have almost got to a point where I know that there are noble Lords who are very unhappy about the Bill, but the point is that the Government and the other place feel that there should be triggers whereby recall should take place. It is perfectly respectable for noble Lords to oppose this, but I am afraid that I disagree with the view that there should be no opportunities for recall—hence this Bill.
Lord Hughes of Woodside
I am afraid that the Minister misunderstood what I said. The recall provision can be triggered only if one of the three things is invoked—there is no question about that. It then goes to the petitions commissioner—no question about that. However, the Minister and I, and indeed all noble Lords in this place, know that the discussion that takes place during the 20 days or however long it is will not be about the trigger at all. It will not be a discussion about how well or badly the MP has behaved; it will be entirely about political matters not connected in any way with the triggers. That is the dilemma that we are in. I am afraid that the 10% level makes it all too easy for that to take place. It is not a case of saying that there has not been wrongdoing, or that it has not been triggered. The question is: what will be discussed during the 20 days? If there are 20 days from the moment when the matter is referred to the petitions commissioner, the debate will take place entirely outside the Member’s individual behaviour.
Lord Gardiner of Kimble
I understand that. That is why I say that it comes to a different view and a different impression of whether there should not be a recall because of the issues that the noble Lord outlines. However, I think that there should be opportunities, where there has been serious wrongdoing, for there to be recall. That was in the manifesto pledges of the three main political parties and in the coalition programme. We are getting into a discussion—which I respect entirely—with noble Lords who do not like this Bill, but the point is that the other place, the Government and the Official Opposition are of the view that there should be certain opportunities, with safeguards so that representative democracy is not thwarted; of course we should defend that very strongly.
Lord Howarth of Newport
I am most grateful to the Minister, who is long-suffering. Even if we accept that there should be scope for recall, how does he, speaking on behalf of the Government, justify that a by-election should be precipitated on the say-so of just 10% of the MP’s constituents?
Lord Gardiner of Kimble
My Lords, I will continue and I hope that it will then unfold. Obviously there can be moot discussion as to whether it should be 5%, 30% or 40%; all sorts of figures could be suggested. However, if I may outline a bit more, the by-election itself would determine who was the MP; the petition would simply trigger the by-election. So while it could be argued that 10% of constituents signing the petition could mean that 90% of them wanted to keep the MP, if that were indeed the case, they would have a chance to show that at the subsequent by-election.
On average—I think this goes to the point that the noble Lord, Lord Foulkes, was seeking to wrestle with me about why 10% was chosen and not 15%, 20% or 5%—a constituency has around 70,000 to 75,000 constituents. With a threshold of 10%, around 7,000 to 7,500 signatures would be required to trigger a by-election. That is one of the reasons why the Government came to the view that that was about the right number; it was a serious number of people. Increasing the threshold to 20% would obviously require between 14,000 and 15,000 constituents to sign in order to trigger a by-election. Again, this is a matter of balance, but there was a feeling that raising the level to 20% would make it more onerous for constituents worried about an MP after serious wrongdoing to hold that MP to account.
One can have all sorts of interesting discussions about what the right percentage would be. The Government set out 10% in the coalition programme for government, and that was the figure contained in the draft Bill and which the other place was content with as the correct level at which to set the threshold. The noble Lord, Lord Foulkes, asked me for a straight answer. Those are the sorts of considerations that came into it.
Lord Forsyth of Drumlean
My Lords, I apologise that I was not here for the earlier part of the debate; I was attending the Joint Committee on the National Security Strategy. I do not think my noble friend really understands the practical point being made, which is not about the merits of the Bill; it is that if someone finds themselves in a position where they are subject to a petition, they are already dead and their political party will no longer adopt them as a candidate. In those circumstances, they are not going to get elected. So, as was pointed out at an earlier stage in our proceedings, the sensible thing for any Member of Parliament in those circumstances to do, if they still have the support of their party, would be to create a by-election and stand as a by-election candidate.
By creating this procedure, if a Member of Parliament is subject to this procedure and they still have the support of their party, then if the threshold is set at the lower level of 10%, all the people who do not like the Member of Parliament because he is a Tory or whatever will be able to campaign and undermine him. So this does not actually deliver what the Government say they want, which is a procedure that allows the electorate to decide, rather than the party machine or the House of Commons, whether someone should be deprived of their seat in the Commons. It just does not work.
Lord Gardiner of Kimble
My noble friend is of course entitled to his opinion and has made the point a number of times about whether a party would reselect the candidate. I do not think that any of us can say, and it would depend on every circumstance that came forward. As I say, this is the Bill that is before us, and I think that the three triggers are reasonable. If they were not reasonable I would feel very uncomfortable, but serious wrongdoing is a point—
Lord Martin of Springburn
One point of clarification would help me. The noble Lord, Lord Hamilton, put the case that cars—and quite luxurious ones for that matter—could be used during the course of seeking petitioners. Can the Minister say whether there will be a financial limit on the amount spent for that petitioning purpose? In every other democratic system there is a limit, and a very strict one at that.
Lord Gardiner of Kimble
I thank the noble Lord for that point. We will come to amendments on precisely those sorts of matters, so I am grateful to him for raising that.
Those are the points on the 10%. I turn to the new clause proposed by my noble friend Lord Hamilton about the counter-recall petition, which would be available for signing alongside the recall petition. That would allow constituents to indicate that they did not want the MP to be recalled from the House of Commons, and for a by-election to be held. The proposed new clause provides that, if the counter-recall petition were to be signed by at least 10% of the constituents, regardless of how many people had signed the recall petition the MP would not be recalled and a by-election would not be held.
The noble Baroness, Lady Hayter, raised the figure of 30%, but I will take it further. If up to 90% of the constituents signed the petition calling for recall, yet only 10% signed the counter-recall petition, despite a much higher percentage and overwhelming public support for the MP’s recall in this case—and I use a hypothetical case to show our concern—a by-election could not be held.
The proposals in the Bill are not for recall on any grounds. Although it is fully understood what those triggers are, a number of noble Lords have brought forward concerns about whether it was on the case of any grounds. These provisions in the Bill are for recall in cases of proven serious wrongdoing; I emphasise that deliberately because those are the triggers that would have to be met. Such is the seriousness of them that all those three triggers—
Lord Foulkes of Cumnock
For the last hour or so, led by the noble Lord, Lord Finkelstein, everyone has gone on about serious wrongdoing. We are talking about any period of imprisonment. When one appears before a magistrate, they can decide either to say, “Seven days in prison” or “A fine of £500”. It is entirely in the magistrates’ gift to do that. Some magistrates have political views as well, by the way. Someone could be put in prison for seven days instead of being fined £500, and this trigger would take effect. Is that not correct?
Lord Gardiner of Kimble
The legislation is very clear that if a Member of Parliament were convicted and sent to prison for seven days, they would be deemed to be in breach of criminal law. The point of the legislation is to enable a constituency or the electorate of that constituency to decide by the recall trigger and then by the by-election. The noble Lord is absolutely right: whether the figure is seven days or 11 months, as one knows, after 12 months there would be a disqualification under the Representation of the People Act.
Lord Foulkes of Cumnock
That is an automatic disqualification—I understand and accept that. However, the situation is that the magistrate has discretion as to whether to fine someone or send them to prison. I do not know if the noble Lord, Lord Finkelstein, has been a magistrate; I have. That could be a political decision, which could decide whether to trigger the recall petition. Therefore if I was sitting in the court and a Conservative Member of Parliament appeared before me, I could say, “I’m not going to fine him £500—that would be pointless. I’m going to send him to prison for seven days and immediately trigger that recall petition”. Is that not correct?
Lord Gardiner of Kimble
My Lords, I would be surprised if any magistrate did that—I think of the requirements to be a magistrate. The noble Lord was a magistrate. I would be very troubled if a magistrate put themselves in a position where they could be accused of taking a political decision. That would be a very serious accusation of the magistracy to think that it would take a political decision of that sort. I am also concerned about the suggestions about the Standards Committee that we heard. Those are very serious matters.
Lord Gardiner of Kimble
I will finish this—I am sorry. It would be a very serious accusation to suggest that people in public office who have very serious responsibilities, or those in the courts, were taking political decisions. I would be extremely worried by that. The Bill deals with the situation in which someone is imprisoned for up to 12 months when there is a trigger if someone is convicted. That would be a trigger, but it would not remove the Member of Parliament. If such a case arose, it would be very interesting to think what the nation thought. If it was suggested that a political decision had been taken by a magistrate, that would be a very serious matter.
Lord Foulkes of Cumnock
I have great respect for the Minister, but I am afraid that he is exhibiting a little bit of naivety with regard to that. If he thinks back to some cases in the past, he will see that on occasions decisions have been challenged as being made for less than dispassionate and objective reasons, so that can arise. I am saying that it is very easy for that trigger to be pulled in that kind of instance: a seven-day sentence would initiate it. That is not—as other noble Lords, such as the noble Lord, Lord Finkelstein, have described it—a very serious wrongdoing. It could happen because of a series of parking or speeding offences, or some other matter. All sorts of things could trigger that—such as getting your wife to say that she was driving your car.
The Lord Bishop of Chester
My Lords, I am sure that the Government do not wish to prolong this debate unduly, but that is a very important point. In our society a dumbing-down effect happens because of a lot of legal provisions. I am thinking of suffragettes, who were sent to prison, or people who protested against nuclear weapons in certain circumstances. Alternatively, it may be about ethical issues where we have changed the law, such as same-sex relationships. One can think of all sorts of situations in which a limited period of imprisonment might well have arisen. If an MP thought that if that happened there would be a petition process and you would need only 10%, I fear that it would result in a certain dumbing down. Some issues here need to be carefully teased out.
Lord Elystan-Morgan
With the greatest respect, both to the Minister and the noble Lord, Lord Foulkes—and I have great admiration for both of them—is not the real problem that a person of unimpeachable character could be sentenced to 14 days’ imprisonment for a motoring offence with regard to a momentary lapse of concentration over a span of two or three seconds? That is the reality—it happens every day.
I do not believe that the danger of judges or magistrates acting in a cynically political way is at all a real one. If Mandy Rice-Davies were alive she might say, “He would say that, wouldn’t he?”. But be that as it may, that is the real point. One is assuming that even a short period of imprisonment is of necessity to be regarded as a serious matter even if it does not involve moral turpitude at all, given that it is a serious matter from the viewpoint of the law, perhaps because of serious injury done.
Lord Gardiner of Kimble
My Lords, I am grateful to the noble Lord for that further contribution. The Bill is about these three triggers. The Government believe that they are the correct triggers for recall. Whether they are for serious wrongdoing or wrongdoing obviously is a matter of opinion; but the Government’s view is that these are three triggers that the other place viewed as being examples and the three triggers for recall.
I ought to make some progress on this. The intention of establishing the recall petition is to allow constituents to hold their Member of Parliament to account. We believe that 10% of constituents is the correct figure. In most cases that would be over 7,000 constituents. Under this Bill, the level of popular support that the Member of Parliament has would be properly tested at the by-election, not through a counter-recall petition.
I am most grateful to noble Lords for this debate. The Government remain of the view that the 10% threshold is the appropriate level, and therefore I ask the noble Lord to withdraw his amendment.
Lord Hamilton of Epsom
I am very disappointed with my noble friend, because I think that we proved very conclusively how very easy it is to reach this threshold. My other worry is that I suspect that this Bill is just a start for more recall Bills, given that—let us face it—people who believe in the recall of MPs are not remotely satisfied by the Bill and will be coming back with additional ideas of circumstances in which Members of Parliament can be recalled. In the mean time, we will have the 10% threshold locked into the Bill, which will be virtually unchangeable and, as I hope we have proved pretty conclusively, very easy to reach. However, although I am very disappointed with my noble friend, I will of course withdraw the amendment.
Lord Wallace of Saltaire
Lord Foulkes of Cumnock
Lord Foulkes of Cumnock
My Lords, Amendments 45, 46 and 48 are further attempts to try to improve the Bill, not to challenge it—although, as noble Lords will realise, I have some fundamental questions about it. I say to the Minister that, although I have tabled about a dozen amendments, I could have tabled 100 amendments that would have helped to improve the Bill. It really is a terrible Bill; it has been badly drafted and needs huge scrutiny, but we do not have time to do that.
My first amendment relates to 16 and 17 year-olds. Given that both the Liberal Democrats and the Labour Party are in favour of allowing 16 and 17 year-olds to vote in general elections, Scottish Parliament elections, local elections and others—just as they did in the Scottish referendum—and to sign the recall petition if they wish, the amendment is anticipating that that legislation will take place.
Amendment 48 would change the position about withdrawing a signature from the petition. Under the Bill, it would be impossible for someone who signs the petition to withdraw their signature. If someone signs it at the beginning of what is still going to be an eight-week period, and during the course of that eight weeks realises that the MP is not as heinous and awful after all—because all he did was incur a motoring offence and get sent to prison for 14 days, as we heard from a former judge might be the case—and changes their mind, they cannot withdraw their signature. I do not understand why: there is no explanation.
The amendment suggests that people should be able to withdraw their signature from the petition on giving a reason. How that reason was taken account of, who agreed to it and so on, would need to be looked at. But given that we are going to have weeks, months or perhaps years to look at the regulations anyway—from what the noble Lord, Lord Wallace, said earlier—there is no reason why this cannot be looked at as well. It seems strange that if someone changes their mind about the petition they cannot withdraw their signature.
Amendment 56 was drafted by my noble friend Lord Hughes, with his long experience and wisdom, so I am sure that he will be able to speak to it himself.
Lord Hughes of Woodside
My Lords, I speak to Amendment 56. It states:
“After Clause 13, insert the following new Clause … ‘Early publication of number of signatories … (1) Petition officers shall not make public a running total of signatories to a recall petition until the final result is announced … (2) Any breach of subsection (1), or any publication purporting to reveal a running tally, shall render the recall petition null and void.’”.
Having reread the amendment, I admit that saying the recall petition would be rendered null and void may be a bit severe. On the other hand, it is probably necessary.
Throughout this debate it has been repeated that the recall petition can take place only if one of three triggers is pulled. That is the beginning and end of the matter. We have tried to say to the Government and to our own Front Bench that whatever cold print is in the Bill, what it describes is not going to be happening in the real world outside. That is because—I am sorry to repeat this—as soon as the matter goes to the Procedure Committee, the question of recall will be raised. If that trigger is agreed to by the Procedure Committee, a notice goes out to the petition officer that the debate will immediately start. Some 90% of the time the discussion will not be about the actual offence that has triggered the recall petition. The argument will be about other things entirely.
Therefore, as we have said, the dice are loaded entirely against the MP who is the subject of the recall petition. As we know, on the day of a general election, agents for the candidate can go to the polling station and get the numbers who have voted, every hour or whatever the agreement is. Of course, that is the precise purpose of making sure that one gets one’s core vote out before the closing of the poll. That is a perfectly legitimate and normal thing to do, because people will not be convinced to go and vote by the numbers who voted at 10 o’clock; they will be convinced to go and vote if they think it is the right thing to do. However, if there is a running tally, on day one the petition officer might say, “Ten people voted today”, and the next day might say, “This is ridiculous. Get more out; do your job as citizens; get rid of the MP; get the recall”.
If the recall threshold is 10%, the figure may start at 5%. The hysteria of getting more and more people will mount up. As we approach day 19 or 20, there may still be 2% to get, so this huge momentum may be built up to get people to sign the recall petition. Huge pressure builds up for that to be done. In this, the Member of Parliament subject to the recall is totally powerless. He is like a rabbit in the middle of the road with the lights of a car approaching—totally impotent in these matters.
It has been said that former Members of Parliament have a vested interest in the sense that we are overprotective of existing Members of Parliament. However, it is not a question of being overprotective. No one—certainly not me—has suggested that triggers are wrong and should not be discussed, or that there should never be a recall petition. That is not the case at all. We suggest that there should be a level playing field and the possibility of a fair trial, if you like. I fear that it is the other way round, given the way the Bill is drafted. It will not give the MP concerned a reasonable possibility of keeping his or her seat.
As the noble Lord, Lord Forsyth, said, if an MP loses a recall petition, there will be no prospect at all of him being re-elected, or reselected by his party to stand. We are discussing not so much the cold print on the paper as the realities. So I hope that—
Lord Forsyth of Drumlean
I am grateful to the noble Lord—what he said is absolutely right. If someone found themselves in a position where this whole procedure was initiated, it is unlikely that a political party would retain them as a candidate. Even at the first stage there would be great difficulty getting a signature from their party, so their career would be over.
Lord Hughes of Woodside
I accept that entirely. Of course, the decision will be made by the constituency party, not so much on the basis of the seriousness of the offence but of whether they think they can win the by-election. I despair at the way in which the Bill is drafted and at the lack of any respect for the MP concerned.
I do not wish to divert down difficult roads, but there has been a lot of discussion in the press recently about the right of a person to return to his or her chosen profession. That has been intensified in the debate about a certain footballer who committed a very serious offence. I will not enter the argument at all about the rights and wrongs of that. However, throughout that debate, rehabilitation has gone out of the window in many respects. I fear that MPs will be subject to the same kind of attack and that, if they commit an offence, they will beyond the pale for ever. So some safeguards have to be built in. I understand that the Minister may not be able to accept the amendment in its present form. However, I hope that he understands its seriousness, and that something can be done to prevent a bandwagon building up not on the merits of a case but simply on getting the numbers out.
Lord Tyler
My Lords, I sympathise with the argument put forward so eloquently by the noble Lord, Lord Hughes, but I wish to return to Amendments 45 and 46, to which the noble Lord, Lord Foulkes, just referred. As he said, I and my party have been committed to extending the franchise to 16 and 17 year-olds for a very long time. I am delighted that the Labour Party now supports that position. He will know that I had a Bill before your Lordships’ House to extend the franchise to that age group for all elections, which would apply also in the case we are discussing. That Bill received a Second Reading. I had cross-party support from the noble Lord, Lord Lucas, who had advanced a similar Bill previously from the Conservative Benches, and from the noble Lord, Lord Adonis, and the noble Baroness, Lady Young of Hornsey.
However, I worry that we are now in a position of complete ad hocery on this issue. The franchise was successfully extended to 16 and 17 year-olds in the Scottish referendum. They registered in far greater numbers than anybody anticipated and took a very lively and constructive approach to the issues raised by that campaign. I think there was a general acknowledgement that in some ways they were rather more realistic, down to earth and sensible about the issues raised than some of their elders. It was noticeable that middle-aged men in Scotland—not the 16 and 17 year-olds—seemed to fall for the blandishments of the separatists. That was a classic and very effective demonstration that some of the concerns that Members on all sides of your Lordships’ House had about extending the franchise were actually ill founded because those young people took a very active role and responsible attitude to the decision they had to take. As Members of your Lordships’ House who followed the proceedings on the then Wales Bill will know, since then we have managed—with the Government’s help and encouragement in the end—to extend the franchise to 16 and 17 year-olds, subject to the Welsh Assembly agreeing to any future referendum in Wales. Those were the first and second steps in this regard.
The third step is that the Prime Minister has apparently agreed with the new First Minister of Scotland that at the next Holyrood elections the franchise should be extended to 16 and 17 year-olds. For me, the franchise is an absolute basic foundation stone of our representative democracy. I find it difficult to accept that we should have this process of attrition. I accept that each step forward is a step in the right direction, but surely we should have a comprehensive approach to this. Following these three important steps forward, I very much hope that the Government will now acknowledge that there is an absolutely irrefutable case for extending the franchise to 16 and 17 year-olds for all elections, all referendums—or referenda, depending on your pronunciation and syntax—and, indeed, for petitions of this sort. It would surely be absolutely ludicrous to say to the young people of Scotland—and, in future, of Wales—who have experienced taking a full adult role in our democracy, when it comes, for example, to a referendum on the future membership of the EU, “Sorry, you’re not in on this one”, which is, of course, just as important in terms of the future governance of our country.
It is time to step back from this ad hoc, piecemeal approach to the franchise. It is too important to be treated in this way. I hope that a holistic approach will be taken in the future. That may have to await the outcome of the general election, but at the very least I hope that Ministers will acknowledge that, given the three important steps that have already taken place in this direction, they cannot ignore this issue with regard to this Bill. I hope they will at least be prepared to indicate that they have an open mind on the issue and acknowledge that at some point or other we will have to address it.
Lord Forsyth of Drumlean
My Lords, I take a contrary view. Indeed, I strongly opposed the idea of giving 16 year-olds a vote in the Scottish referendum, not because it was necessarily a bad idea in itself—although I thought it so—but because it was the thin end of a wedge and people like the noble Lord would argue that we have already done it in Scotland, so we have to do it in Wales and at the general election.
The Government presented the issue as being solely about referenda. I agree with the noble Lord that the position we are now in is rather inconsistent. However, the inconsistency that I am concerned about is that, although it is apparently okay for these young people to have a say in whether a Member of Parliament should be dismissed, and okay for them to have a say in who should form the Government of our country, they cannot buy a packet of cigarettes or a pint of beer. It seems to me the most extraordinary distortion. If one takes the view that 16 year-olds are perfectly mature and adult and able to decide these issues, why should they not be able to decide whether they want to have a drink in a pub or buy a packet of cigarettes? What I find very galling, certainly in terms of the Scottish Parliament, is that the people who argued for the franchise to be extended to 16 year-olds were the very same ones who prevented them being able to buy a packet of cigarettes. I think that we all understand what was behind that. For once, in the consideration of these amendments, I find myself in disagreement with the noble Lord, Lord Foulkes, on Amendment 45, but I am very strongly in agreement with him on Amendment 48. This is another example of how the Bill has not been thought through and is a complete muddle.
Why should someone not be able to withdraw their name? They may have read in the newspaper about the circumstances that merited a particular Member of Parliament being subject to recall and then found out that the facts were not quite as they thought. The Member of Parliament may have had the chance to make his case to the voters; they may have already signed, why should they not be able to change their mind and withdraw their signature?
That brings me to Amendment 56, in the name of the noble Lord, Lord Hughes. I do not know what I think about this. I can see his point, that we will get people who are campaigning to get rid of the Member of Parliament for political reasons, or because they feel strongly about whatever the issue is that is being raised. The point was made earlier that it may be a minor road traffic offence and it may be road safety campaigners, or whatever. They will want to know how many signatures there are; they will want to get to the threshold; and I can see that, if there is a running total, that would turn it into something of a campaign. Of course, if one is not able to withdraw one’s signature, then those who are campaigning on behalf of the Member of Parliament, or perhaps the Member of Parliament on his own, would not be able to influence people who had already committed themselves.
The reason I am doubtful about the noble Lord’s amendment is that the Government themselves are schizophrenic on this matter. It seems to me that if one is going to sign a petition with these consequences, one’s name should be public and there should be an opportunity for the Member of Parliament to write to the person concerned to say, “I see you have signed this petition; you ought to be aware that these are the facts”. On the other hand, I can see why people might want to do it in secret and to retain that. I missed the earlier part of the discussion, but I gather there was some idea that one should be able to consult the register. I think that this is unclear. If people are taking the view that someone should be subject to a by-election, which in practice means ending their career, they ought to be seen to take the stand in public and there ought to be an opportunity for the person concerned to make his case to them directly, in the way that we have always done. We knock on doors and make our case directly to the voters. It is for them to decide.
I can see that there might be concerns about intimidation and the rest, but all these concerns arise from this process and procedure which I think is fundamentally ill considered. I know that my noble friend will get irritated at me making this point again, but I do not see how this is actually going to work in practice at all. If there is a decision to set up a petition, I do not believe, in those circumstances, that any serious political party would stand by the Member concerned. Therefore, the Member concerned is not going to go through this whole procedure. If the Member has the support of his political party, then the sensible thing for him to do—and, indeed, for the political party—is to cut the whole thing short, a point which was made by the noble Lord some days ago, create a by-election and not go through this extended death by a thousand cuts. The process is lengthy and it would be an expensive campaign both in terms of resources and reputation.
I very strongly support Amendment 48, put forward by the noble Lords, Lord Foulkes and Lord Hughes, and I am absolutely fascinated to hear the Government’s response on Amendment 56, which I hope will clarify the position of those who sign the petition. Will their names be known? Will their names be made known to the person who is the subject of the petition? Will their names be made known more publicly? Will their names be made known to the local newspaper, or will it just be the numbers? Will there be a running total? We need to have clarity on this.
Before I sit down, I say to my noble friends on the Front Bench, please do not say that this has all been discussed and considered carefully in the House of Commons, because this kind of practical detail has not actually been discussed very carefully in the House of Commons, and it goes to the whole efficacy of the legislation and to the justice of the legislation from the point of view of the individuals concerned.
Lord Grocott
My Lords, the Government obviously do not want any change to the Bill at all, if they can achieve that, other than the amendments that the Minister himself has put down. However, I urge them to look at Amendment 56, if no other. We cannot simply treat this in isolation from all the other normal electoral practices of our democracy.
Lord Wallace of Saltaire
My Lords, I have said, I think three times now, that the Bill follows existing electoral law and regulation as closely as possible. We have not started off on something entirely new.
Lord Grocott
Can the Minister point to me anywhere in existing electoral law where, during a general election, for example, there is a running release of the state of the voting—after the postal vote had taken place, for example—and that is made known? Unless Amendment 56 is passed, that will be the likely situation in respect of these petitions. If the Minister disagrees, please intervene and tell me. I will stop speaking.
Lord Foulkes of Cumnock
Is it not the case that if anyone goes to the opening of a postal ballot and then reveals the result of that postal ballot, it is a serious offence?
Lord Grocott
Yes, it is a very serious offence. But we have been assured by the noble Lord, Lord Wallace, that the Bill as it stands is entirely in accordance with existing practice. I just cannot imagine the situation in any other election whereby this kind of running total would be available.
I vote Labour; that is what I do. It is in the DNA; it is inherited; it is passed on to future generations—that is how it works. It is like supporting Stoke City; it is what rational people do. I simply put it to the Minister that, even with that pedigree, if I could see the tally in a particular constituency’s voting after the postal votes had been handed in and could see a very close result coming out between two parties which I disliked intensely, but one of which I disliked marginally more than the other, and, sadly, my dear old party was nowhere, clearly there is a possibility that that might affect my judgment. I do not think that it would, actually, but I am putting a hypothetical case here.
Surely the same is true of any kind of running commentary on the numbers of people who have signed the petition. Surely, as my noble friend Lord Hughes has said, it must really render the process void if the returning officer, or whatever he is called, or anyone else, is telling the press, “Oh, it is up to 8% now, and 9%; we only need a few more and there we go”. If, as the noble Lord, Lord Wallace, has said, this is entirely in line with previous electoral law in the way we hold elections, fine; but if it is not, I do not understand the point.
Lord Kennedy of Southwark
My Lords, this has been an interesting debate. I should say straightaway that I am a supporter of voting at 16, and if my party wins the general election in May then it will be introduced. I do not believe, however, that we can have a situation whereby people cannot vote until they are 18 but are able to sign a recall petition at 16. They have to go together, in my opinion, and as soon as legislation is brought forward to give young people the vote, consequential amendments will have to be introduced about such things as the age at which they can sign a recall petition. I hope that my noble friend Lord Foulkes of Cumnock will appreciate my position on this issue, though I do agree with the noble Lord, Lord Tyler, that the ad hoc, piecemeal approach is not the right way to go about these things.
Lord Forsyth of Drumlean
Will the noble Lord indicate which side of the argument he is on regarding whether the names of the people who sign the petition should be made public or made known to the Member of Parliament?
Lord Kennedy of Southwark
I think that the Government are going to consult on that and will come back on it. They have not made the position clear at present.
Lord Hughes of Woodside
I should make it clear that my amendment does not say that the names should be published but simply that the numbers should be published. The two issues are not therefore connected.
Lord Wallace of Saltaire
My Lords, I was sorry to hear my noble friend Lord Tyler talk about a holistic approach. I criticised the noble Lord, Lord Foulkes, the other week for using what I regard as a managerial phrase that was inappropriate for someone of his background.
Lord Wallace of Saltaire
The noble Lord has not yet used it since. I stress again that we are following the existing law and regulations as closely as we can, and not attempting to take through major electoral changes. The first two amendments in the group are, after all, an attempt to take through a major change, whereby 16 year-olds would be able to vote for a recall, even though they would not yet vote in the subsequent by-election. There are differing opinions among the three parties; indeed, there are differing opinions within the current coalition Government on this issue. This is not the place to address it. It is an issue on which we need to build consensus. I am personally in favour but as a government Minister I am not prepared to accept that we move towards it. We need to discuss the whole question of the franchise at some point in the not-too-distant future.
The amendment to allow a signatory to withdraw their signature also would introduce a major innovation. There is no precedent for returning officers withdrawing ballot papers on the request of electors who change their minds prior to the beginning of the counting of votes.
Lord Howarth of Newport
The noble Lord is talking about two entirely different situations. If one is voting in a conventional election, one is doing so at a single opportunity on one day, and of course one cannot scratch that vote once one has cast it. It is entirely different when there is an eight-week rolling period, during which campaigning is taking place. What argument does he have as to why people should not be allowed to be influenced by these campaigns?
Lord Wallace of Saltaire
My Lords, I have already said that we have now extended the period for postal voting. Indeed, postal votes may be delivered nearly three weeks before the election. If the principle in the amendment were to be accepted, the question would come up as to whether postal voters might be allowed to change their minds in the light of events they learnt about in the final two weeks of the campaign. That would be a major innovation also. With postal votes, we have slipped from a vote on one day to a vote that takes place over a period. Perhaps the noble Lord has not yet recognised that, but that is the position we are in and the current law is that when one votes one does not have a chance to change one’s mind.
Lord Foulkes of Cumnock
The Minister has already said he will look at the issue of whether the names will be public or secret. There is clearly not a parallel with an election, otherwise the names would all be secret. A petition is different from an election. He has to accept that. He accepts it in terms of public versus private; he ought to accept it in terms of whether the signature can be withdrawn.
Lord Wallace of Saltaire
My Lords, I am not persuaded by that. There are questions of intimidation regarding giving the name of someone who has already voted to the MP so that the MP can write and tell them not to. I can recall fighting a heavily Labour seat in the middle of Manchester in the 1970s, when Labour councillors were going round to voters saying, “I see you have a Liberal poster up. We have just checked the housing transfer list and you are on it. Are you sure that you want to keep it up?”. There are difficult questions here. I see no reason to change existing electoral regulations in this area.
Lord Hughes of Woodside
The Minister keeps saying that he is following general practice as far as possible. This is an entirely new practice. Will he please tell me where, either in my amendment or at any place in the Bill, it is stated that during the eight weeks when people vote the petition officer will make known the names of those people who have voted?
Lord Wallace of Saltaire
I will come to the noble Lord’s other amendment. I was talking about the amendment on the right to change one’s vote or attitude to the petition after one had voted. I will come to his amendment on disclosure of the number of signatories. The Bill—rightly, as he noted—does not specify whether a running total of the number of signatories should be published. That we intend to be a matter for the conduct regulations. As is the case at elections, petition officers and their staff will be bound by their official duty, and penalties will apply if information is released without proper authority. Again, I stand on regular practice. It is not allowed for those concerned with the conduct of elections—and, by extension, petitions—to release information of that sort. There will be many occasions on election day when releasing figures at one o’clock on how many people had voted would be helpful. That is not the case, and it is similarly not the case here.
Lord Forsyth of Drumlean
Is the Minister then saying, if we are following existing practice, that that would mean it is a secret ballot and nothing is disclosed, and that after the event a marked register may be available to show who has voted? That is the existing practice that applies to normal, conventional general elections. Will that be the position in this respect? It is no good saying that this is a matter for regulations; it is a very important point in terms of the operation of the Bill.
Lord Wallace of Saltaire
The noble Lord, sadly, was absent at his committee when we were discussing the question of secrecy. I am sure that he will enjoy reading the Hansard of the debate. We will come back to the issue on Report. We have been around the question of the problem of secrecy and I am not going to repeat our position for those who, unfortunately, were away.
Lord Forsyth of Drumlean
I am not asking my noble friend to repeat an earlier debate. What I am asking is very simple: when he says that it is the same procedure, does that mean that it is a secret ballot and that the names will not be made available to people? Yes or no?
Lord Wallace of Saltaire
My Lords, we spent some considerable time on this issue. When you sign a petition you do so with a clear aim. It is a complicated issue and I am happy to discuss it with the noble Lord off the Floor, but I do not wish to repeat all the arguments that we made at an earlier stage in a fairly extensive discussion.
The noble Baroness, Lady Hayter, and the noble Lord, Lord Kennedy, raised the offence of double signing. Clause 12 mirrors the offence of double voting in electoral law regarding the maximum penalties that apply on conviction: a person guilty of the offence is liable on summary conviction to a fine not exceeding level 5 on the standard scale, and so on. Again, we see no reason to change existing law and regulation for the petition, given that existing regulation is clear and is regularly applied. The Government are clear that convictions for electoral offences must result in the appropriate punishment to act as a deterrent for electoral fraud. We have seen courts deal robustly with proven, albeit isolated, instances of electoral fraud in recent years and the current offences framework has enabled significant penalties to be imposed where appropriate. That seems to us to be the basis on which the Bill should extend to the current petition process.
I hope that that provides constructive answers to those with amendments in this group. On that basis, I hope that the noble Lord is able to withdraw his amendment.
Lord Foulkes of Cumnock
My Lords, this has become a farce. Where it suits the Government’s aims they stick to electoral law; where it does not suit their purposes they go on to something completely new. We are wasting our time, the Government are wasting their time, it is making a farce of the whole debate and it is making the House of Lords look ridiculous. I hope that the noble Lord, Lord Wallace, will at some point recognise his part in that. I withdraw my amendment.
Lord Hughes of Woodside
My Lords, in relation to my amendment, may I make clear that on the day of the general election—I am sorry, am I in the wrong?
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
The noble Lord, Lord Foulkes, has withdrawn his amendment.
Lord Kennedy of Southwark
“( ) Any persons wishing to apply to vote by post, who are not registered to do so before the Speaker’s notice is given or before the cut-off day, must do so no later than the end of the fifth week of the signing period.”
Lord Kennedy of Southwark
My Lords, this amendment is proposed by myself and my noble friend Lady Hayter of Kentish Town. It puts a strict time limit in the Bill on when electors can apply to sign a recall petition by post. The amendment gives the right balance between allowing people to decide whether they want to sign a petition by post and ensuring that measures and enough time are in place to check that everything is correct to prevent fraudulent activity regarding the timing of the petition. It is very possible, with so few signing places available, that many more electors will choose to sign by post, rather than travel to an appointed signing point. I remember from our debates last week and earlier today my noble friend Lord Foulkes of Cumnock telling your Lordships’ House that, in his former constituency, four signing places to cover a seat of hundreds of square miles is totally inadequate. If the Government are not prepared to move on this it is very likely that many more people will want to sign by post.
We are all aware of the concerns that have been raised about postal voting in recent years. Additional safeguards have been brought in to improve security. The amendment would put a clear cut-off point as part of the tools to manage the risk. The political parties have all signed up to a code of conduct respecting elections and postal votes. However, this is not postal voting as such: it is the signing of a petition. There is no code in place, with lots of different campaigners out and about trying to get people to sign, or not sign, a petition. This whole area is very loose and the potential for fraud is very widespread.
I hope that when the Minister responds to the debate he can tell the Committee what role he sees for the Electoral Commission in all of this. As I am sure he will be aware, the commission proposed, and got the agreement of the political parties to sign, the postal vote code of conduct. If he is not minded to accept the amendment, can he tell the Committee how he sees the security of postal vote signing of the recall petition being ensured if there is not a clear cut-off period for the application to sign by post? I beg to move.
Lord Wallace of Saltaire
My Lords, Clause 10 provides for regulations to specify the detail of how constituents may sign by post or proxy. The detail about how postal and proxy signing will operate will be dealt with in regulations made under Clause 18. The noble Lord, Lord Foulkes, laughs. He accused me of not taking seriously his attempt to drive a change in the voting age into the Bill on the grounds that it made it a farce. I suggest—with the greatest respect, as he might say—that that was going considerably over the top.
The approach to regulations on postal voting mirrors that of UK parliamentary elections, where the rules for absent voting appear in secondary legislation. At an election, this is usually the 11th working day before the poll, which allows applications received in the days just before and up to the deadline to be processed and postal ballot packs issued to electors for them to complete and return in time for the close of the poll.
For a petition, it is possible to set a deadline during the petition-signing period itself. The last day of the period is, in effect, analogous to polling day at an election, so there needs to be a cut-off point. As noted in the memorandum prepared by the Cabinet Office and placed in the House Libraries before this debate, the Government accept that deadlines will need to be set within the eight-week period for absent vote applications to be made. In doing so, we recognise the additional need to check that the petition has not already been signed in person at the signing place, and to ensure that registers are properly updated to show that an absent vote application has been approved, thus guarding against the risk of double signing.
Lord Forsyth of Drumlean
Will the principle that my noble friend has enunciated—that we will follow the normal conventions on electoral law—be applied in this case? Therefore, as with postal votes, will the number of people who have voted by post be made public?
Lord Wallace of Saltaire
I need to confirm that, but I have no reason to assume that we will not follow normal and regular procedures, and that numbers—but, of course, not names—would be made public. At which point they would be made public is a question that I will also refer back to. I see the noble Lord’s mischievous argument, but I will make sure that we answer it.
Lord Forsyth of Drumlean
I must say to my noble friend that it is not mischievous. We are not being mischievous; we are trying to find out how this will work in practice and what the consequences are. If there is a large number of postal votes, that has implications, as the noble Lord, Lord Hughes, said. If it is to be made public, when in the campaign it is made public will have consequences for the Member concerned.
Lord Wallace of Saltaire
On the question of the deadline for the applications for postal votes, it is normal in an election for the numbers of postal votes cast to be announced after polls have closed.
Lord Kennedy of Southwark
In my contribution I talked about the code of conduct regarding postal voting that the Electoral Commission brokered to all the political parties. Of course, when it is a petition it is not postal voting; other campaigners can be involved. What does the Minister envision for a code of conduct for the campaigners?
Lord Wallace of Saltaire
That is a very good and detailed question on which I need to take some advice. I will ensure that I do so and I will write to the noble Lord. On that basis, I hope that he is able to withdraw his amendment.
Lord Kennedy of Southwark
I thank the noble Lord and at this stage I beg leave to withdraw the amendment.
Lord Wallace of Saltaire
“( ) The fourth condition is that, in a case in which the third recall condition was met in relation to the MP, the conviction in question is overturned on appeal.”
Lord Hughes of Woodside
“Restriction on prejudicial comments
From the time that a recall petition is authorised, any material written, spoken or broadcast on any media with the intention of being detrimental to the MP in question, other than comments directly related to the reason for the recall petition, shall render the recall petition null and void.”
Lord Hughes of Woodside
My Lords, I appreciate that the tabling of this amendment leaves me open to the possibility of being accused of censorship by refusing people the right to free speech. I understand that point but I believe that this amendment brings us to the heart of the difficulties and problems we have with the Bill. Throughout our discussions, both Ministers have repeatedly referred to the three triggers that can start a petition. They have dealt with the matter not as though we are dealing with a general election or a recall Bill. I am sorry to repeat what I have said on a previous occasion but this Bill is wrongly named. It is a recall limited Bill and not a recall Bill. We know that the aim of the people whose driving goes behind the recall is a total recall on grounds of policy.
As much as we may like to believe that in general discussions in a constituency the atmosphere of rational debate will be followed—I agree that, much as in this place, there may be the occasional flash of annoyance—that is living in cloud-cuckoo-land. As soon as the notice goes out to the petition officer that a recall petition is to be held, there will be open season. This Bill will become a de facto recall Bill because under its terms everything that has been said or done by an MP can be called into account.
I believe that no one could have been an MP for any period of time without annoying some constituents or groups of constituents. For example, in my constituency in north Aberdeen, there were boundary changes and we took into the west of the city a new, privately owned housing estate. The traffic from Aberdeen airport and the surrounding industrial estate into Aberdeen and south of Aberdeen caused horrendous problems. The city council decided to do something about it. It proposed a spur road to join the ring road, which would have involved some impingement on the private housing estate, although not a great deal but certainly a significant amount. Of course, the noise generated by the traffic would be significant.
I was invited, or perhaps I should say summoned, to a meeting of 150 absolutely furious people. They said that the value of their property and their quality of life would be destroyed, all for the sake of a few minutes of traffic problems. They proposed an alternative, which was that the spur road, as I call it, should be moved to the east of where they were and run through a local authority housing estate. I accept that this local authority housing estate was not the most salubrious estate in the city of Aberdeen. I am very proud of the housing estates in the city but this one was not the best. These people thought that because they were owner-occupiers they had a better right than council house tenants. I had to disagree with them.
I fully understood their concerns and I said that I would do what I could to alleviate them but I would not agree simply to shift the problem from one part of the constituency to another. I suggested that the road should go to the north of the city, over a flyover in order to avoid a notorious roundabout and then go on from there. I was accused of copping out of the difficulty. I was told in no uncertain terms that I was considering my council house tenant constituents above them. I was told in very menacing terms, “You will pay for this at the general election”. As most noble Lords will know, I was very fortunate. I never had a majority of less than 10,500 and never more than 18,500. I must admit that I was not frightened by the prospect. However, I seriously and honestly ask myself whether I would have been so steely had I been in a marginal constituency. Obviously, I cannot answer that question.
It is very easy to fall out, not with groups of constituents but with individual constituents. I tell a story against myself. In the good old days, when business in the House of Commons on a Friday was taken very seriously, I was a junior Minister and I had a very fraught and difficult Friday on the Floor of the House. I finally got away and managed to catch the late evening plane to Aberdeen where I had an advice centre on the Saturday morning. I would have happily taken the weekend off and not gone, but it was published so I went. At 8.15 pm, I went to the office to make sure that there were no sudden cases needing urgent attention. The phone rang and I picked it up. A voice that I knew well said, “Oh, it’s you, is it?”. I said, “Why?”. He said, “No one’s ever here by that phone”. I said, “My secretary works from nine to five and, on a Friday night especially, I would not expect her to be here. Do you always phone at this time of night?”. “Oh yes”, he said, “But no one ever answers”. I said, “With respect, how are your broken legs and your broken wrists?”. He said, “What do you mean?”. I said, “Well, you know I hold a regular advice centre on a Saturday morning that is advertised in the press. You must be severely incapacitated if you can’t come down to the office with this problem. How long have you been trying to get hold of me?”. He said, “At least six to eight weeks”. I said, “I am very sorry about that. How are your broken wrists?”. He said, “What do you mean, my broken wrists?”. I said, “Well, if it is so serious, you could have put pen to paper. You know the address”. He mumbled something and I said, with some asperity if you like, “Look, it can’t be a serious problem. You are wasting my time, so bog off”, and I slammed the phone down.
After I had done that, I realised that I had made an enemy for life. Although I met the man frequently after that and the issue never came up between us, he went around saying that I was impolite, did not care for my constituents and so on. That could be multiplied by two or three, plus the 150 disgruntled people at the meeting about the road. Surely everyone knows that as soon as the recall petition is announced, the media and press in every shape or form will descend on the constituency like a swarm of locusts. That is not to mention the cybertrolls whom we cannot control.
As for an MP who is put before the Procedure Committee and his recall petition is announced, you cannot stop the press saying that the guilty, disgraced MP is facing a recall. In fact, even if an MP were to succeed in overturning a recall petition and to continue in his seat, he would always be described as, “The MP found guilty, put to a recall petition, and succeeded”. We cannot stop that, but we have to find some way of controlling the huge influx of publicity and rhetoric, some of which will arise from outside the constituency itself. It will not be generated so much by the constituents as by the press and the media, who will be determined to make the recall a success from their point of view.
We must find a way of controlling that. There is a balance and I am sure that the Minister will see it as a balance between free speech and fair play. From what was said on the previous day in Committee we can see that there is no possibility of an MP in trouble getting a square deal in this matter. The dice are totally loaded against him. He will not get the chance to campaign with a counterpetition. He will not get a chance with the media. He will not get a chance because he is dead in the water. I am and always have been all in favour of MPs who transgress being properly dealt with. This country of ours has had a high reputation for its standards of democracy and the standards of its politicians. Sadly, the expenses scandal has almost wiped that out, which is a sad thing to say. The activities of a very few have destroyed our reputation, but that does not mean that we should not seek to defend our reputation and our democracy.
It is my view that this proposed new clause will go some way towards striking the balance. It will stop campaigns being paid for by people on the outside and carried out by those with no real interest in democracy. They are interested solely in proving a political point. They are demanding the total recall of MPs for any reason whatever and sadly this whole process is leading us towards that. I beg to move.
Lord Howarth of Newport
My Lords, I shall be very brief because I know that noble Lords are waiting for the next debate. My noble friend has evoked vividly some of the realities of life as a Member of Parliament and some of the pressures that could be brought to bear on an MP in a recall petition situation. I know that he will also reflect carefully on the difficulties and dangers of limiting the freedom of the press in such a situation, notwithstanding the fact that we have reason to fear that the press may be very virulent and determined to create an even more charged atmosphere in which it is even less likely that the Member of Parliament will get, as it were, a fair hearing.
However, I want to ask my noble friend about one particular point, which is whether Amendment 55 would cover the publication of opinion polls undertaken in the individual constituency during the period of the recall petition. We are becoming increasingly accustomed to tactical opinion polling being commissioned and published for tactical purposes so as possibly to manipulate opinion and thus affect the outcome of the election. It seems that the same considerations that apply to limiting the freedom of the press more broadly may not necessarily apply to the regulation of opinion polling during such periods. One of the dangers we have to anticipate is that there could be manipulative polling to exacerbate the situation. I wonder whether my noble friend has that in mind in part in his amendment and what his view is on the issue.
Lord Forsyth of Drumlean
My Lords, I am afraid that I cannot support the noble Lord’s amendment because it would be almost impossible to enforce, even if it was desirable in the age of blogs, the internet and everything else. I understand where he is coming from and, at the risk of repeating myself, I think that any Member of Parliament who finds himself subject to a petition is already dead in the water.
I was rather intrigued by our earlier discussion. If someone was present at the count of postal votes in any election and then inadvertently told someone else what the position was, they could very well find themselves facing a prison sentence and a recall petition of this kind. That is a good example of something which might be regarded as a matter where one could win the argument, but in practice it would be very difficult to stop the kind of comments that are made.
However, the noble Lord has done the Committee a service by underlining the key point in all this: once you get to the point of a petition being launched, it will not be about the issues surrounding the Member of Parliament; it will be about 1,001 grievances, political views or whatever. That is why I think that the Bill is fundamentally ill conceived. The House of Commons may think that where the committee has decided that someone should be sent away from the House for more than 10 days, that should start the procedure. However, it would have been better simply to have gone to the point of creating the by-election that would inevitably follow. It would save a lot of time, bureaucracy and cost, as well as a lot of grief and further damage to the standing of the House of Commons and the status of Parliament.
Lord Kennedy of Southwark
My Lords, the probing amendment proposed by my noble friend Lord Hughes of Woodside raises the important matter of what is said about an MP in a campaign in connection with a recall petition. Many noble Lords who have spoken in our debates on the Bill have expressed concern that MPs who take up causes that are unpopular and then find themselves subject to a recall petition could find that opponents use campaigns or issues that have nothing to do with the issue in question to try to take advantage of the situation. That raises a very important point for your Lordships’ Committee.
My noble friend Lord Hughes was for many years the chair of the Anti-Apartheid Movement, but not so long ago not everyone was so well disposed towards that organisation and its aims. My noble friend made a point by giving examples of issues in his constituency, and I noted his comments about our reputation in the world with regard to the state of our democracy. He went on to make the particular point that there needs to be fairness in the process so that MPs are not allowed to be judged or abused on the positions they take as part of their job of being an MP and which have nothing to do with the actual issue in question. They should be judged on the subject of the recall petition itself. I hope that the noble Lord will respond carefully to the issues that my noble friend raised.
Lord Gardiner of Kimble
My Lords, I am most grateful to the noble Lord, Lord Hughes, for his amendment, which intends that in the event of any material being written, spoken or broadcast that is unrelated to the wrongdoing which initiated the recall petition and which is detrimental to the MP, the petition will become null and void.
The Government believe that there are three significant concerns as to why this amendment presents difficulties. Indeed the noble Lord, Lord Hughes, referred to the first, which is the principle of free speech—an issue which of course all of us in this House prize very strongly. I do not think that we should, in effect, severely restrict what individuals, including MPs, constituents and the media, may say or write for a period of eight weeks.
My second concern is the appearance that this amendment gives of particular and special treatment for a Member of Parliament. The noble Lord’s amendment states that it is only material unrelated to the wrongdoing and which is detrimental to the MP that will cause the petition to become null and void. That leaves the clear interpretation that there will be no such consequences to publishing material unrelated to the wrongdoing that is beneficial to the Member of Parliament facing recall. Indeed, while I realise the view of my noble friend Lord Forsyth on the Bill, here he is absolutely right. The third concern is that the proposals would make recall unworkable. Indeed, who would determine whether something is detrimental—and is that even possible?
I say by way of example that it would be impossible to conceive of an eight-minute period, let alone an eight-week period, which could pass without even one example of detrimental material being put into the public domain. The noble Lord’s proposals would make it very difficult for any recall petition to reach its conclusion because it would be quite simple for the supporters of a Member of Parliament to put out negative comments just to secure that outcome. I hope that the noble Lord will accept that I entirely understand and accept his good intentions, but, for the reasons I have outlined, I hope he will feel able to withdraw the amendment.
Lord Hughes of Woodside
Someone once said that the road to hell was paved with good intentions. In my initial remarks, I referred to the fact that this might well be seen as an attack on free speech. I appreciate that point very much indeed. Of course, it has been pointed out that people who use beneficial comments might also be struck out. The difficulty I have is that the recall petition is a kind of trial. If you are on trial for a road traffic offence, for example, extraneous behaviour such as that you got drunk the night before or were drunk during the trial would not be allowed in court because it could influence the result of the trial. Therefore, I am deeply unhappy because that is what, in fact, will happen. However, I do understand the problems.
My noble friend Lord Howarth raised an intriguing point about opinion polls. I had thought of that and was not quite sure how to proceed, but I had in mind that an amendment along the lines of banning opinion polls during the eight-week period might well be an amendment for Report. I am glad he has reminded me of that, and I hope it will be taken up, if not necessarily by me, then by others.
We are in extremely difficult times with this Bill. We are torn between trying to see justice for MPs and giving constituents the opportunity to exercise their rights in relation to their MP. In all the circumstances, I believe that the best thing to do is to withdraw the amendment.
Government Support for Artists
The Earl of Clancarty
To ask Her Majesty’s Government what support they are giving to individual artists, including visual artists, writers and composers.
The Earl of Clancarty (CB)
My Lords, I am grateful for the opportunity to discuss the concerns of artists this evening, and look forward to the speeches of other noble Lords. We have never had an arts policy in this country that has properly prioritised the makers and the production of art, although, of course, in the support that the Arts Council and local authorities have given over a long period, production has been a significant part of the mix. However, the overriding considerations—especially recently—have been largely instrumentalist ones. For this Government, it is a justification in terms of the economy; for the previous Administration, it was access and social regeneration as well as the economy. Now, of course, the new weapon in the instrumentalists' armoury is well-being.
Yet the bedrock of the arts in Britain since the war has been, in large measure, the work of the individual artist, whether visual artist, film-maker, novelist, poet, composer, singer-songwriter or others, including many whose true influence is yet to be felt because of the long gestation period of much innovative work. Notwithstanding the importance of teamwork in the arts, it is the individual creative vision which, to a large extent, has determined the artistic and cultural landscape of this country. Without the fine artist, there would be no Tate Modern; without the playwright, there would be no contemporary theatre; without composers and musicians, there would be no concert halls. Therefore, this comparative neglect, in terms of an overall arts policy, is wrong, and there are specific issues that the Government should address. My emphasis will be on the concerns of visual artists, although some of these concerns are common to those working in other media.
The first of these, and possibly the most crucial, is pay. Most artists, indeed many working within the arts as a whole, have a low income—often less than half of the national average. The 2010 survey from the Design and Artists Copyright Society found that the median rate of annual income for a fine artist was around £10,000; for a photographer, it was £15,000. For a writer, according to the Authors’ Licensing and Collecting Society, it is now just £11,000, a drop of 29% since 2005. A theme that emerges is the extent to which, in our current climate of cuts and greater commercialisation, many artists occupy a position at the bottom of a food chain, and are, as a result, being increasingly exploited. Fine artists, musicians and others are, more and more often, being asked to offer their services for free.
The “Paying Artists” campaign, launched last year by the Artist Information Company, demands that artists are paid fairly by publicly funded galleries. “Don't Work for Free” is another similarly minded campaign supported by journalists, photographers and artists. The Artist Information Company estimates that 63% of artists have to turn down requests from galleries to exhibit their work because they cannot afford to do so without pay. I can see that a standard retort to this might be: “What are artists thinking about in turning down exhibitions at all?”; but artists, writers and musicians are frankly weary of being treated in this way. There is no other industry in the world that is expected to live in such a culture of perpetual loss leaders. Shonagh Manson of the Jerwood Charitable Foundation says:
“Paying artists creates value; it doesn't simply ‘cost’ it. Not paying artists limits the potential of the work they can create and the value audiences derive from it. We know that talented artistic voices are lost as the challenge of making ends meet increases”.
This is an area that the Government need to look into. An important point to make here is that the artist being concerned about pay is not the same thing as becoming more commercialised in the work being done. That is the current pressure coming from the Government, which may lead to doing a different kind of work—the pressure, for example, that has already been exerted on arts centres and theatres in the regions. Artists need to be remunerated properly for the work that they do.
Another concern about exploitation is exemplified by the dispute between DACS and the Copyright Licensing Agency. DACS maintains that the publishers who control the CLA are, in its own words, “bullying” artists, photographers and illustrators—and, indeed, writers too—into accepting unreasonable conditions for publication by signing away copyright regarding the distribution of secondary rights. This needs to be sorted out, and one partial solution—I just suggest this as an idea—might be that the CLA should be owned equally by DACS and the ALCS, with publishers having reduced powers in the decision-making process. However, fair contract terms covering intellectual property might also be addressed through legislation. What is the Minister’s response to these concerns?
Writers are having a particularly tough time. Cuts to libraries must be reversed, and while the ALCS is grateful that the public lending right has been extended to non-print formats, it rightly believes that it should also cover remote lending e-books, e-audio books and voluntary administered libraries.
Something that will affect many artists is the projected changes to the regulations for the self-employed on universal credit, because of the lower cut-off point for consideration of tax credits as well as the way that income is calculated on a monthly basis, as artists’ incomes may vary greatly from month to month. One of the problems is the change in our culture towards one that refuses to recognise that those on low pay might be engaged in a vocational pursuit that might need a long time to develop financially, rather than a business that is seeking to make a profit as quickly as possible. I ask the Minister whether serious thought can be given to this.
A measure that affects visual artists is the artists’ resale right, which since 2012 has been a benefit for those who have started to gain a toehold in the marketplace. The cap of £10,000 placed on the maximum level of royalty per artwork and the fact that ARR payments represent only 0.1% of the revenues of the art trade mean that they are no threat to it. Will the Government be an active supporter of ARR in Europe, and can the Government ensure that the ARR regulations are properly complied with, as there is no dedicated enforcement measure in place?
A particular problem that fine artists face is the shortage of studio space and, with rising rents, particularly in London, this is an increasing problem, with spaces being sold off. The GLA estimates that there will be a 30% loss of studio space within the next five years. Artists need reasonably permanent cheap spaces. The success story in London is the charity Acme, one of a number of organisations that provide studio space and which for more than 40 years has been supported by the Arts Council, although that support finishes this year—which founder Jonathan Harvey sees as a success as the charity is now self-sufficient. The keys to that success are the long-term support and the fact that Acme has managed to buy its own buildings. But where that is not possible Section 106 agreements might be used by local authorities in areas where studio space is required, enabling continued employment use in buildings and a guaranteed 100% occupancy. This is something that the Government ought to be encouraging where it is appropriate to do so.
My question today is of course directed towards the Government but it would be unrealistic to deny that everyone within the arts world is now concerned with what will appear in all the parties’ manifestos in terms of their arts policies. The response to that now infamous tweet from the Labour press team is telling because it is clear that there is an increasing belief among many in the arts world, especially artists, that an incoming Government should be seriously considering reversing the cuts.
In the past year, there has been a mobilisation of artists themselves: the formation of Artists’ Union England, and the creation of the Artists’ Assembly against Austerity, a group including the artist Peter Kennard, whose demands in a letter to the Guardian on 27 August last year I certainly support. His demands are also those for a better society and include, for example, the capping of rents—one reason, incidentally, why so many British artists now live in Berlin. Production needs to be enabled from the bottom up, which means that local authority cuts in particular really do need to be reversed. But sooner rather than later, cities need to be allowed tax-raising powers to help generate their own production. There has been talk in recent times of statutory provision of the arts. If such a provision is brought in, the artist must be a part of that.
We need a policy that puts the artist before the audience because logically the art comes first and an audience for a new work may take a long time to develop. That audience should not be socially engineered—I think it is patronising to do so. More consideration should also be given to longer-term support. If you do not achieve in financial terms immediately, you cannot afford to be a successful artist and have a family; this discriminates against women in particular.
Everything that is making going into the arts more difficult—primarily the cuts but also tuition fees and a school education that undervalues the arts—will make being an artist, a musician, a writer or an actor increasingly the preserve of the rich. Nevertheless, there are still many working on very little or no income who contribute significantly through the work they do as artists to a necessary cultural debate held within the wider society, even as that work is under threat. Public funding is and ought to be an important part of maintaining this debate, and support for the artist is the litmus test of how truly a Government, and by implication a society, value it.
Lord Patten (Con)
Of course, taxpayers and the Government have had a role in helping individual artists since the setting up of the Arts Council back in 1946. Increasingly, big corporations and the financial world have also developed a role in sponsorship, which I think is generally valued. Then there is the long-running, historic role of individuals in commissioning work de novo from artists. I have done a tiny bit of that myself —not yet, I have to admit, from a Nick Trench or a Cally Trench, but perhaps that may come in due course.
It is worth looking around the world to see how approaches differ in the funding of individuals. In the USA there is much less federal and state subsidy of the arts using taxpayers’ funds, and much more from individuals given pretty big tax breaks to fund directly, which they often do, or via the constituent members of the GIA—Grantmakers in the Arts—all closely monitored by the Internal Revenue Service, the IRS, of the United States.
In Germany the approach is very different. There are of course government arts and performing arts funds to apply to but the very possession of, say, a degree from an art school in Germany creates in law a professional artist by that act, and thereafter the simple act of applying for a grant or a scholarship counts as a job application and automatically becomes a passport to benefits and subsidised social insurance of various kinds.
Australia is particularly interesting. There is support in Australia for everything from art resale royalty schemes—which, I agree with the noble Earl, are extremely important—to art business start-up assistance via the ArtStart scheme, which I applaud. Perhaps a little more surreally—my chosen interest, as it happens—is the consideration being given by the current Australian Government to adding arts activities to the criteria for their “Work for the Dole” scheme. I must remember to draw this idea to the attention of my right honourable friend Mr Duncan Smith down there at the Department for Work and Pensions.
So there is a wide range of different approaches in Europe and the western world. We see a cocktail of mixed economies, with individual, state and corporate ingredients, and I do not think we would ever want to decry any one of those. I certainly hope not. For myself, I am cautious about anything that smacks of a subsidy from the poor to the privileged—I do not like that as a concept—or where subsidy for the arts crowds out unsubsidised artists, or where there is too much centralised picking of winners, which I disapprove of strongly, whether in industrial or artistic policy.
I believe three things very strongly. First, any increase in funding from taxpayers, rich and poor alike, must be cautiously considered only when economic circumstances allow. Secondly, too much noise about the cuts from arts bureaucrats, who generally get a pretty good salary, is both unattractive and generally counterproductive. Thirdly, the one thing I would like to ask my noble friend the Minister is: what consideration is being given in the mean time to new tax breaks for donations to the arts being increased—for example, including a system based on gift aid, which is well established, and which, carefully monitored, will allow for giving to artistic individuals directly? That is something that I hope may have all-party support.
Baroness Warwick of Undercliffe (Lab)
My Lords, when I have spoken before in this House about the hugely positive role of the creative industries, I have focused on the crucial role of our higher education institutions in producing the creative artists and innovators who can contribute so much, both to the future success and well-being of the UK and to shaping the way in which other countries perceive us.
The UK is a world leader in this area, and universities and the smaller specialist institutions are the engine which generates the powerhouse of artists, musicians and wordsmiths to maintain that leadership. But the impressive 2014 strategy document of the Creative Industries Council, a body which has done a great deal to reinforce the importance of this sector, finds that access to finance has been one of the major challenges to future growth and maturity in the UK creative industries. It is ironic that we have hugely creative enterprises in this sector, but they are invariably small; employment and continuing funding are precarious; and many young artists or businesses struggle to grow and expand to make their work sustainable.
I know that a number of universities with creative industries or arts degree programmes have introduced employability programmes to equip graduates to set up in business on their own or handle freelance or portfolio working, recognising that this is a likely career path. One example will show how higher education institutions prepare their graduates for this exciting but uncertain world. Artquest, the principal intervention in career support at the University of the Arts London, is a project that supports all artists, not just its graduates, particularly in the first years of their careers. It connects them to the resources, opportunities and networks they need to develop their practices and careers. It supports them to keep making work as the pressures of day-to-day survival grow. It shares the experiences of artists and industry professionals.
That work is informed by ground-breaking research across 26 art and design universities, looking at early career patterns of their graduates. It is titled Creative Graduates Creative Futures, and a telling section in Will Hutton’s introduction reads:
“Many found the only entry into the industry was via unpaid internships, requiring parental support and middle class backgrounds. The relationship is close to exploitative, even though the young men and women trying to win a foothold in the industry do not see it that way. The creative industries should offer more paid internships, and take more care of its enthusiastic workforce”.
I would welcome the Minister’s views on this.
NESTA’s 2008 research on fine artists as innovators, still one of the best insights in this area, emphasises the desire of fine arts graduates to take up occupations where they can identify themselves as artists. It states that they have many of the skills needed for wider innovation, and see themselves as brokers across disciplines, taking insights and techniques from one field and translating them creatively into another. However, as I know from my past role at Universities UK, those transferable skills and aptitude for team working, creativity and independent learning are often dismissed.
NESTA’s work, and that more recently of the CBI, along with the work of the Creative Industries Council as well as the universities, shows unequivocally that the sector is a leading global hub for the creative industries but that for success to be sustained, all players must work together to support the sector and the individual artists in it. I hope that the Minister can tell us what the Government are doing to work in partnership with the industry to put creative industries at the heart of the growth agenda and build on what is already a true UK success story.
Baroness Bonham-Carter of Yarnbury (LD)
My Lords, I thank the noble Earl, Lord Clancarty, for this debate. He keeps this House talking about the arts and culture, which is so important.
Last week, the DCMS published the latest figures for the creative industries. They demonstrate what the noble Earl, I and, I think, all who are taking part in this debate know and have been saying for so long about the importance of the cultural sector. It grew by nearly 10% in 2013, three times the rate of the wider UK economy.
The noble Earl asked about support for the individual artist. I want to concentrate on when and where it starts. It is essential that the status of the arts in the classroom is properly recognised. There is a lot of debate at the moment—at the time of the Oscars, the BAFTAs and everything else—about how many of our top-flight actors are from public schools. Surely a key factor is that they were fortunate enough to have experienced dedicated time to study the arts at school, and they had inspirational teachers. Does my noble friend the Minister agree that this must be extended beyond the private sector?
To quote Grayson Perry:
“For so many children, doing art … isn’t something they come across until they are taught it at school. Not everyone’s mother sits down with scissors and paper and makes collages with them … The idea that art will somehow look after itself—that society will breed untaught geniuses—is rubbish”.
Darren Henley—now, I am glad to say, chief executive of the Arts Council—agrees with Grayson Perry. In his review of cultural education, he noted that,
“this area of education is no longer valued as much as it once was”,
despite the fact that the schools that provide high-quality cultural education get better academic results. Does my noble friend agree that Darren Henley’s national plan should finally be fully implemented?
I turn to what happens when you emerge from the educational system. The coalition has overseen a record number of apprenticeships in the creative industries funded by government. Eighty-one per cent of those who have gone through such apprenticeships take up jobs in the creative industries, so this is obviously something to build on. I declare an interest here as a trustee of the Lowry. We are involved through our future leaders programme in organising placements and mentoring for those who leave education. And then there is the Lowry Studio, which among other things provides space for new and emerging artistic companies to work. I agree strongly with the noble Earl, Lord Clancarty, on the issue of space—therein lies a problem. My sister, who is an artist, was part of an artistic co-operative back in the 1980s. A graphic design company—it was called Cubitt; I do not know whether your Lordships know about that—donated a space that was temporarily empty and artists were allowed to occupy it. They could both pursue their art and learn business skills. They learnt about how to run a space. As we know, many empty buildings across the UK could be used in this way. They are not necessarily spaces that could be turned into places for people to live, but they could be turned into spaces for artists.
Have you noticed that whenever an important person visits a school—a Prime Minister or a President—the first things that they are shown are the paintings of the children? The next thing they are invited to do is to listen to the singing of the children. I rest our case.
Viscount Falkland (CB)
My Lords, I, too, am grateful to my noble friend Lord Clancarty. As the noble Baroness said, he keeps the arts alive in your Lordships’ Chamber and I am glad that that is so. I say that rather ruefully because when I was a member of the Liberal Democrats, which was by and large a very enjoyable time, it was not easy to deal with the arts in the way that I should have liked—as a spokesman I was mostly talking about gambling, drink and other matters. As a Cross-Bencher, I hope that I may be able to be freer in my remarks.
I shall not follow the noble Earl down the road of individual support for artists. He was admirably answered by the noble Lord, Lord Patten, who gave us some very constructive views and interesting comparisons with other countries.
I say to the noble Earl that it is true and obvious that the arts win no votes in elections. I do not think that there will be many debates on the doorsteps of England and Scotland on the arts policy of the particular party which is at the front door talking to them—it is just a fact of life. People take for granted the excellence of our arts in this country. We perform enormously well with all the hurdles—in fact, one could argue that artists do terribly well because of the hard road that they follow in whichever field that it may be, be it the world of music, ballet, opera, dance or film, so it is something that we can be very proud of.
Returning to the Liberal Democrats—I am not trying to get back or anything—I think that Mr Clegg, the Deputy Prime Minister, was terribly good yesterday on “The Andrew Marr Show”, not least because he managed to fight his way through the constant interruptions, which certainly his predecessors on that programme and the other leaders failed to do. That may augur well for the television debates, if they should take place—it may be why the Prime Minister does not want to be wiped off the floor again by Mr Clegg. Mr Clegg said one thing yesterday which interests me, and that is the party’s commitment to literacy—which is vital, and the uses of literacy, of course, to use the title of Hoggart’s book—but it does not go far enough. If you think about it and you go to museums in London, you will find that they are always full—our museums and galleries are terrific—but you do not see many of our indigenous people there; they are mostly tourists and people who come here to go to them. This suggests to me that something is wrong with our education, and it is on education that I want to concentrate in the short time available to me.
We are closing avenues into the creative arts to young people. It is scandalous that we have exclusions from school at the current level. It is not the business of state education or the academies to decide that disruptive students and students who come from poor backgrounds and are troublesome—although one sympathises with the teachers—should be excluded. A lot of troublesome people become very good artists, as everyone in the Chamber knows. In my youth, I worked as a theatrical agent. Every day of my life, I worked with troublesome people, clever people and talented people. My children are mostly in the arts. My daughter teaches excluded children. She teaches them to think up stories and then to make a four to five-minute film. Some of those children had been in detention and in terrible trouble. The results have been remarkable.
That is my message tonight for the noble Earl: it is education that we need to attack first of all, because we are cutting out the chances for a lot of talented people to emerge.
Lord Maclennan of Rogart (LD)
My Lords, I, too, am grateful to the noble Earl, Lord Clancarty, for raising another issue which is central to the success of our creative industries, which are growing and are increasingly recognised by those who may not have been involved in the arts. I should like to speak about the intellectual property aspects of the arts. We have made some progress in this area, but not enough. The Police Intellectual Property Crime Unit has now been set up, and could be a means of enforcement of the rights of artists.
Copyright is the mechanism through which writers, composers and music creators are paid for their work. Royalties provide essential income for creators so that they can grow and invest in themselves and their businesses. Therefore, it is essential that the copyright framework remains strong so that composers, creativity and innovation can continue to be supported.
The role of government in helping to set the framework in both the United Kingdom and the EU remains crucial in that respect, but government also has an important role to play in the field of copyright education. I commend the importance of educating people at school and subsequently to understand intellectual property, which will help to reinforce greater respect for it. We are all creators today, and individuals should appreciate how copyright positively relates to value creation. Education and consumer awareness programmes that seek to change current behaviour or influence future action are essential to nurture a greater culture of respect and value for the United Kingdom’s creative economy and to negate the impact of infringement.
In October 2014, the Conservative Member of Parliament, Mr Mike Weatherley, produced a paper on copyright education. It was a comprehensive report which sets out where we are and what more could be done. The report provides a series of sensible recommendations for different stakeholders—government, industry and academia—to consider. One chapter of the report focuses on the curriculum. Formal education through schools and colleges is an essential element in developing in every new generation the attitudes, skills, knowledge and culture of society. Although schools teach creative writing, et cetera, the school curriculum does not adequately provide for copyright education, a tool that is important to a career in the creative industries. Perhaps it should.
It is vital that intellectual property education begins at a young age, as early appreciation of the value of creation and innovation can serve to support a positive association with the concept. What exists within schools tends to be sector specific and devised and promoted on modest budgets. As a result, it can be lacking in audience understanding and delivered without clear evaluation. High-quality educational materials are needed, but not enough exist or are well known about.
I commend the concept of education in intellectual property to the Government.
Lord Berkeley of Knighton (CB)
My Lords, I am grateful to my noble friend Lord Clancarty for focusing our attention on artists. I was pleased to hear my noble friend Lord Falkland mention education, because that is the most important aspect of what I want to say—indeed, of what many of us have to say—but I must take him to task for just one moment for flying a very dangerous balloon. That is the idea that better art comes from poverty. Try telling that to a composer friend of mine who lives in a basement flat in Balham and cannot currently pay the heating bill.
There is a problem at the grass-roots level. There is a crisis affecting composers in particular. As the Government know, the Arts Council has had its budget slashed by £83 million. This has fed into the commissions to composers being cut. The Arts Council principle that individual artists should be financed through its clients is breaking down. Cash to festivals and for innovative programmers to commission is ceasing. The noble Lord, Lord Patten, will be pleased to hear that I am not talking about the Royal Opera House or the Royal Shakespeare Company. I am talking about grass-roots level. These are the artists and the provincial theatre productions that feed into regions and schools. At that level, artists are working on an incredibly tiny budget.
As a result of the Arts Council budget being cut, the BBC has become even more important to composers, for it is giving almost more commissions than any other body. I must declare an interest here. In 2013, some 35 works were commissioned. Before the BBC is slashed, the charter reviewed and the licence fee cut, bear in mind that it is part of the cultural infrastructure.
The composer in Balham whom I mentioned earns about £1,200 for three to four months’ work, if he gets a commission. You try getting a plumber, an electrician or a carpenter, let alone a doctor or a lawyer, for that amount. It really is scraping the bottom of the barrel and yet, as the Government are generous enough to accept, songwriters and composers bring to the national economy some £1.7 billion GVA. People may think that does not come from classical composers, but many musicals and pop musicians rely on classical players—think of George Martin and the Beatles—to bring about what they produce. I worked with Kate Bush on her “Hounds of Love” album, an album that brought millions into the Exchequer. She had the idea—I must not take that away from her—but she did not know how to write it down and to get it off the page with professional musicians. I was very happy and honoured to do that for her.
This is where education comes in. We often say, “How can we give more money to the arts when funding for education and the NHS has been cut?”. My answer is that art feeds in to the well-being of society. Young children who can express themselves through music and art become better citizens. In the National Health Service, we know that using the ability to paint and to express oneself through the use of music therapy works.
Let us think back, finally, to the Olympics and how marvellous and successful our athletes were. It was because we cherished talent. That is what we need to do for the arts—cherish talent.
Baroness Kidron (CB)
My Lords, I would like to raise three points that have to do specifically with non-commercial arts funding: the impact of top-down funding structures on the individual artist, the rise of instrumentalism in judging art and the tyranny of excellence. I am grateful to my noble friend Lord Clancarty for his tireless work in this area and I refer noble Lords to my interests in the register.
Most current funding structures conform to the top-down principle of trickle-down theory, with the effect that the total amount of money reaching individual artists is incommensurate to their contribution to the arts ecosystem, and the gatekeepers of art funding garner too much power. In this funding model, money, whether public or private, flows from a central distributor to arts organisations that in turn offer the opportunity for individual artists to make or show work. However, as in many similar trickle-down structures, by the time the funds have trickled down, there is very little left for those at the bottom of the pile, in this case the individual artist. Meanwhile, organisations, particularly those which distribute public funds, have a duty to maximise the benefits of the funds they administer and invariably develop criteria against which success can be measured. Funding transactions routinely have to navigate the personal taste of the gatekeeper, their interpretation of public value, and the success criteria of the organisation that they are representing. This is a system that makes funding institutions complex and risk-averse and, for many individual artists, unapproachable.
Being slaves to the metrics of success is counter to the very purpose of art and the artist. Their role is not to fulfil criteria nor to follow fashion but to disrupt and reinvent the world as they imagine it. I suggest that when considering arts funding, the artist should be at the top of the pile and we should aim to support art that is intrinsically, rather than instrumentally, valuable.
That leads me to the second point, which is the harm in believing that art and artists have to be useful. Since I came to the House, I have argued that art contributes to our GDP, benefits social mobility and education, that we ought to use art in health settings, and so on and so forth. While I do support all of these uses of creativity, it must not be at the expense of supporting artists to make art. Whatever our tastes, we value art because it is provocative, reflective, beautiful, satirical, and it helps us make sense of the world. The discoveries we make have value in all sorts of other arenas, but societies protect their artists and foster creative cultures that sustain and produce art because it is the essential space in which we imagine ourselves without the straitjacket of utility, beyond the metrics of instrumentality. It is that which makes us human. If the demand is that art should deliver a predetermined outcome, then it is not art.
Finally, on the tyranny of excellence, in his Reith lectures of 1949 Bertrand Russell said:
“In the ages in which there were great poets, there were also large numbers of little poets, and when there were great painters there were large numbers of little painters. The great German composers arose in a milieu where music was valued, and where numbers of lesser men found opportunities. In those days poetry, painting, and music were a vital part of the daily life of ordinary men, as only sport is now”.
One cannot create a great artist but we can and must support a culture in which many individuals make art and in which excellence may happily flourish. It is counterintuitive, perhaps, but imperative that we do not prevent excellence by insisting upon it.
Baroness Thornton (Lab)
My Lords, I join others in congratulating the noble Earl, Lord Clancarty, on initiating this debate and all other noble Lords who have spoken in it. Many pertinent questions have been raised, so I do not envy the Minister who is going to answer them. I also want to say thank you for the briefings that I received from the BBC, the Arts Council and even the Mayor of London. They were very impressive and I am grateful for them, as I feel much better informed. What I looked for in those briefings was evidence and an assessment of the impact of the organisations’ support on hard-to-reach groups, underrepresented people and those with talent but disadvantaged by their background, geographical location or lack of support. This was alluded to by the noble Baroness, Lady Bonham-Carter.
The Arts Council tells us in its briefing us that it is increasing its investment to £210 million from 2015, which will mean an increase from £63 million to £70 million to support important work that artists do across all art forms. It says:
“Grants are available from £1,000 to £100,000 to help artists in England carry out their work and split into two categories”,
those above £15,000 and those below £15,000. The council goes on to say:
“We are developing an advice framework which will provide support to underrepresented applicants (key groups include individuals, first time applicants, BME and disabled artists)”.
I would like to know the timetable for this initiative, which, to be blunt, I was surprised to see was not already happening as an integral part of the Arts Council’s work. When will it be rolled out and how will its effectiveness be monitored? As the noble Baroness, Lady Kidron, said, knowing the effectiveness of the support that is given is extremely important. We all know that the existence of small galleries, for instance, is a crucial part in the support and development of artists. Since we also know that, due to the lack of commissions and sales, small galleries face increasing overheads, has the Arts Council taken into account the increased challenges faced by young artists starting out?
Noble Lords will be aware that the Rebalancing our Cultural Capital report and the PLACE Report have recently pointed out big postcode disparities in the spending per head on arts provision. They found that Londoners benefited from £69 per head, compared with £4.50 in the rest of England. As my honourable friend Chris Bryant MP said recently, making sure the English regions have enough funding for culture is “the direction of travel” for Labour, as indeed we are certainly linking education and arts in our current policy development.
Without doubt, one of the challenges is the London and south-east bias of the institutions that historically received direct grants in aid or money through the Arts Council, along with the dependence of regions outside London on support from local authorities, which of course have seen dramatic cuts in their funding from central government. Since the support for arts is discretionary in this matter, there is a terrible knock-on effect on regional and local arts in the creative industries. It is not good enough that DCMS Ministers fail to engage with local councils and councillors, a matter that I raised in Questions to the Minister a little while ago when a CMS Select Committee report said that it was “staggering” to learn that DCMS Ministers were having no conversations with local councillors. I hope that the Minister can say that that has been remedied. We need to think about the pivotal role of the leaders of the core cities, including Bristol, Sheffield, Newcastle, Birmingham and Manchester.
Noble Lords have raised some pertinent questions on a wide range of issues. I congratulate them on that and look forward to the Government’s response to them.
Baroness Jolly (LD)
My Lords, I declare my interest as a trustee of the charity Help Musicians UK. I am pleased to answer this Question for Short Debate in regard to which everyone has paid tribute to the tenacity of the noble Earl, Lord Clancarty. There has been a fascinating and broad collection of responses. I confess that I will have trouble responding to all of them within the time that I have available, so I think that I will be writing a substantial letter to all those who have contributed to ensure that all the queries are replied to.
The Government are committed to supporting the arts to provide culture for all, ensuring that the economic, social and intrinsic benefits are available to everyone. During the life of this Parliament, almost £3 billion will have been provided to Arts Council England by the Government in grant in aid and National Lottery money. Supporting individual artists is central to the Arts Council’s 10-year strategy, Great Art and Culture for Everyone.
The Arts Council supports individual artists to develop their careers at various stages through three main funding strands: Grants for the Arts, the Artists’ International Development Fund and national portfolio organisations funding. The noble Earl, Lord Clancarty, asked me about the Paying Artists campaign. Arts Council policy states that workers must in accordance with the law be paid at least the minimum wage. Arts Council guidance to organisations hoping to be portfolio organisations says that they must pay interns and other workers fairly. Arts Council England requires all portfolio organisations to operate “bridges” in which artists’ fees are in line with relevant codes of practice from all the sector organisations. These Arts Council national portfolio organisations take a proactive role in supporting contemporary artists and makers, enabling their artwork to reach a wider audience, and will be supported over the next three years to implement fair pay to all artists.
The aim of the Arts Council is to nurture artistic excellence by investing in organisations that develop and showcase talent. It provides support to individual artists through various funding partner organisations, such as the 111 national portfolio organisations that work in visual arts nationwide.
One issue that the noble Earl was concerned about was space to work. The Arts Council is working to make the arts and the wider culture of museums and libraries an integral part of everyday public life. As part of that, it has a number of studio providers among its national portfolio organisations, such as Bow Arts, Islington Mill, ACAVA and ACME, which advocate for access to good-quality, affordable space and facilities. ACME is a good example of a studio organisation that has achieved self-sustainability, in part due to public investment as an Arts Council portfolio organisation over many years, but also due to its sound financial and commercial planning. The Arts Council also has partnerships with studio organisations including the Essex Network of Artists’ Studios and the Greater London Authority.
There are new artist-focused partnership programmes and networks in the national portfolio for 2015 onwards. These include support for the Syllabus, a partnership with Wysing Arts Centre to enable it to deliver an initiative to support individual artists. It will work with New Contemporaries, S1 Artspace and Studio Voltaire to support early-career artists who cannot afford the costs of higher education. Many of the Arts Council’s portfolio organisations devote their resources to supporting artists and the production of new work. I give a name check to a few: Artangel, Forma, the Crafts Council, Artsadmin, and Arts Catalyst.
The Arts Council supports the Contemporary Visual Arts Network so that visual arts organisations across all the regions, including the BALTIC in Newcastle and the Arnolfini arts centre and gallery in Bristol, can work together to adapt to develop resilient business models and ensure sustainability. The Arts Council also works with galleries, including the South London Gallery, to ensure consistent provision of arts opportunities for children and young people, so that all can benefit from the excellent practice that currently exists in the visual arts.
I turn to literature. Poetry and literary translation are championed. The Arts Council provides funding for writers at various stages in their careers, working in new forms and connecting with readers through live and digital events. Nearly £20 million is being invested between 2015 and 2018 to fund organisations nationwide offering high-quality creative and professional training to writers; 46 literature organisations are involved in this as part of their national portfolio, including Comma Press in the north-west, New Writing North in the north-east and the Poetry Archive in the south-west.
Creative writing opportunities are funded by the Arts Council—for example, through the Ministry of Stories, SLAMbassadors and the National Literacy Trust’s 21st Century Author scheme. The Grants for the Arts funding supports a wide range of literature organisations to develop their work, including independent publishers, literature festivals, writers’ networks, spoken word events and community reading projects. Recent examples include Brighton and Hove City Reads, the shared reading of one novel across the city each year; Mouthy Poets, a young poetry collective of up-and-coming talent; West Midlands Readers’ Network, a project bringing together 14 public libraries, readers’ groups and writers across the region; the Creative Future Literary Awards, promoting the work of disabled and marginalised writers; and festivals as far apart as Huddersfield, Kirklees, Much Wenlock, Maryport and Swindon. Grants for the Arts also funds a range of writing projects, including research and development, mentoring, residencies and opportunities to collaborate and to work creatively with new technology.
We must not forget musicians. The Arts Council champions new music and the work of British composers and artists, seeking to ensure that they are at the heart of cultural life and enjoyed by many. It currently funds 93 music national portfolio organisations, including the big names such as the Hallé in Manchester, the Birmingham Contemporary Music Group, London’s Philharmonia Orchestra and the London Symphony Orchestra, whose Discovery programme hosts the Panufnik Young Composers scheme as well as the LSO Soundhub, a platform for emerging composers.
The Government’s work on cultural education continues to make good progress. The DCMS, the DfE and the Arts Council have worked together to increase the opportunities and support for any young person who wants to get involved with the arts. The Government are making a substantial investment in music education, including £246 million for music education hubs, which are managed by the Arts Council. These aim to improve access to music education for all, especially those from disadvantaged backgrounds.
I shall pick up on the points made by noble Lords during the debate. The noble Earl, Lord Clancarty, asked a number of questions about the artist’s resale right. One of the advantages of the royalties generated by the artist’s resale right is that artists or their estates are able to benefit whenever their work is resold by a dealer or auctioneer. ARR is an EU competence that is relatively new to UK law. The European Commission has a commitment periodically to review the implementation and effects of the directive governing the resale right. In formulating any contribution to the Commission’s review, the Government will take due account of a range of available evidence from artists, their representatives and art market professionals. I have more in my brief, but I shall write to the noble Earl, giving him full details. He also raised issues about the dispute between DACS and CLA. Again, we note the suggestions, although we see this as essentially a private commercial matter between the relevant parties. Again, I have a level of detail in my brief that time prevents me from going into, but I shall write.
My noble friend Lord Patten queried government support and asked about the possibility of an equivalent of Gift Aid. The Government are boosting philanthropy through the introduction of tax incentives and Arts Council England is supporting the professionalism of fundraising through the Catalyst scheme. Again, I will put the detail in the letter.
I thank the noble Lord for giving me advance notice of a question about the Town and Country Planning Act, because I was able to get detail on that. The Arts Council has taken three initiatives in that regard. It supports local authorities in using Section 106 by publishing guidance on developing a standard charge approach for levying developer contributions for the arts. It has also published guidance on the community infrastructure levy for culture on the Town and Country Planning Association’s culture and sport planning toolkit website. The toolkit was developed in 2009-10 with support from the non-departmental public bodies for culture and sport. In 2013 the Arts Council provided a small grant to refresh the toolkit.
My noble friend Lady Bonham-Carter asked about increasing access to the arts beyond the private sector. The Arts Council firmly believes that careers in the arts should not be limited to the privileged few and advises all portfolio organisations to pay artists in line with best practice to enable the fairest rates for people across the sector.
During this Parliament, the Government have worked to support individual artists and to help everyone in the UK achieve access to great art and culture and they will continue to do so.
Recall of MPs Bill
(9 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
“( ) The petition officer will make public, before the signing period begins, the number of eligible registered electors on the day of the Speaker’s notification that a recall condition has been met.”
Baroness Hayter of Kentish Town (Lab)
My Lords, Amendment 58A stands in my name and in the name of my noble friend Lord Kennedy of Southwark. There will be a key number—a target—in any recall. It is not like a normal election where, regardless of the number of promises that we manage to get, we still have to have more than the other guy in order to win. However, a recall is not the same issue. Once a specified number—10% of the registered electorate—is reached, a by-election is automatically triggered. Therefore it is vital that everyone knows what this figure is well in advance, so that it is not being argued about at the same time that signatures are being scrutinised, verified and counted. The amendment therefore requires the petition officer to publish the number of people who are on the electoral register the day that the Speaker announces that a recall condition has been met—in other words, the number at the point at which the 10% is to be counted. That is vital in order to have absolute clarity about the precise number of potential voters that constitute 10% of the constituency. The petition officer will need to know this number anyway, so everyone else should know it.
Lord Wallace of Saltaire (LD)
I thank the noble Baroness for her amendment. She is rightly teasing at various issues that are significant. I am aware that we need to make sure that we get the Bill and the regulations correct.
As I understand it, the last day on which an eligible elector can make an application to register to vote in order to be able to participate in a recall petition is on or before the day of the Speaker’s notice. This enables the petition officer to produce, in advance of the petition opening, a register of electors who are entitled to sign the petition. That register will include existing electors and eligible electors who applied to register on or before the day of the Speaker’s notice. It will also be used to ensure that only those entitled to sign the petition do so. It is not irrelevant that we have now introduced online registration so the reference here to,
“on the day of the Speaker’s notification”,
is a live and important one because it would be possible for a number of people to register on that day. As the noble Baroness knows, the take-up of online registration has been particularly high among younger voters.
Applications to be added to the register will not be processed immediately. The last date on which a person may be added to, or removed from, the register is three working days before the petition opens, except as a result of a court order or the correction of a clerical error. I stress that court orders and clerical errors represent extremely small numbers of cases. Until that date, the publication of the number registered would not give an accurate indication of the number of signatures that would be needed for a recall petition to be successful.
In some cases, it is possible that there will be a small change in the number of electors who are eligible to sign the petition because, for example, of the correction of clerical errors, which may result in the addition or removal of a small number of names, as sometimes happens ahead of elections. At the end of the signing period, these changes will be included in the total number of electors who have been eligible to sign the petition, and this figure will be used to calculate whether the 10% threshold for the removal of the MP has been met.
I see some merit in the noble Baroness’s proposal. It would give constituents and campaigners an indication of the number of electors who would need to sign the petition in order for the 10% threshold to be reached. However, a more appropriate date on which to refer to the register is the “cut-off day”, which is three working days before the petition opens. Even then, this figure would not reflect any additions to, or removals from, the register before the end of the petition signing period, although I acknowledge that it is unlikely the figure will change significantly.
Noble Lords will be pleased to hear that regulations to be made under Clause 18 will set out further provision about the conduct of a recall petition, including the use of the electoral register and how the public will be informed about the result of the petition. Along with arrangements for elections, we envisage that the formal declaration of the result would include details of the number of electors who successfully signed the petition, the number of spoilt signing sheets and, in answer to the point made earlier by the noble Lord, Lord Forsyth, details of the number who signed by post.
In designing the regulations, we will need to give consideration as to whether it would be helpful to make it a requirement for the petition officer to make public the number of electors registered in the constituency at the beginning of the signing period and eligible to sign the petition, although, as I have said, I see merit in the arguments advanced. However, I do not believe that there is a special case to include this level of detail in the Bill. Therefore, while recognising that this is a significant matter to be included within the regulations, I urge the noble Baroness to withdraw this amendment.
Lord Hughes of Woodside (Lab)
I agree wholly with the Minister that those who wish to promote a recall should know at the start of the signing period what the total number is so that they can calculate how many people they have to get to sign. However, will he give an undertaking that there will be no announcing on a daily basis the number of people who have voted?
Lord Wallace of Saltaire
It is my understanding that that is the case, but I will make sure that I can confirm by Report exactly what the position is intended to be.
Baroness Hayter of Kentish Town
I thank the Minister. I accept that three working days before the petition opens would be a better date for the number to be published. However, I am slightly uneasy that he is going to leave it to regulations which will not appear before the next Parliament to make it clear that the number should be published well before the count takes place. There is a real concern that, if the result is very close, we should not have a debate about what the correct number is at that point, given that there are bound to be difficulties about the signatures. For example, some people will have signed in the wrong place and there will be difficulties around verification. We have all been there. That is not the right time to argue also about whether the relevant figure is 7,300 or 7,400.
In a moment I shall ask leave to withdraw the amendment, but I ask the Minister to think about whether, at Report, the Government will either suggest making it clearer that it would be published, say, within three working days, or at least writing it into the record that the Government’s intention is that the regulations are likely to specify that the number could be given well in advance. I shall leave that thought with the Minister. I think that he concurs. I beg leave to withdraw the amendment.
Baroness Hayter of Kentish Town
My Lords, I shall also speak to Amendment 72.
Amendment 60 would ensure that all campaigners spending more than £50 were covered by the recall rules. Amendment 72 would ensure that all campaigners were covered by PPERA. The purpose of these is the same, in a way, albeit the former is by way of a probe, to ascertain from the Government why they chose the figure of £500 and also what thought was given to five or six campaigns in a constituency all being able to spend £500—technically, I think it is £499—without any sort of regulation. We want to see all but very small, local petitioning campaigning done in compliance with rules of fairness and transparency, particularly in relation to donations and expenses.
Just 10 days ago, on 9 January, we read a Cabinet Office spokesman saying:
“We want to make the political system more accountable and prevent a situation where opaque and unaccountable groups spend large sums of money attempting to influence the political system”.
We say amen to that, but the Bill as it is written allows unregistered people, indeed, non-UK nationals, to give or to receive foreign donations—in other words, not simply donations from permitted donors—and it would allow them to campaign in a recall petition provided that they did not spend more than £500. However, three, four or even more such campaigns could all be at work in the same constituency, which is, surely, exactly,
“a situation where opaque and unaccountable groups spend large sums of money attempting to influence the political system”,
but, in the case of recall, the Cabinet Office appears strangely unconcerned.
Some such groups may be working in complete innocence, but also in ignorance of the normal PPERA and Representation of the People Act rules, as they will not be registered parties, with all the expertise and experience that that implies. So while we welcome the parity of campaigners when it comes to rules on printed literature, if all campaigners are to be held to the same standards of election law, they should also all have access to the same advice and guidance as registered parties.
Schedule 6 makes provisions for how the Bill affects existing legislation, including the Representation of the People Act 1983 and the Political Parties, Elections and Referendums Act 2000. It is the latter that our amendment concerns. At present paragraph 3(7) requires that only accredited campaigners be offered advice and assistance from the Electoral Commission, whereas we think that the commission should also be on hand to support non-accredited campaigners. Does the Minister agree that such access to advice is essential to help this be fair and transparent in the way we want? Will he, therefore, agree to correct this anomaly? Will he also confirm that all spending and donations should fall under PPERA, which, at the moment, they do not?
I return to Amendment 60, which relates to the amount of money that non-accredited campaigners can spend. There is nothing in the impact assessment as to how the figure of £500 was chosen; and why is the figure the same for all constituencies, regardless of the number of electors? At election time, the amount that one can spend varies, depending on the number of constituents. Can the Minister set out the thinking behind the choice of £500?
We are concerned about the lack of parity between non-accredited and accredited campaigners in terms of the scrutiny to which they will be subject and the guidance they will receive. Our understanding is that non-accredited groups, which could between them outspend the MP, will not otherwise be covered by PPERA; but, again, perhaps the Minister can confirm that our reading of that is correct and whether he is happy that so much money can be spent in one constituency with no rules at all. I beg to move.
Lord Howarth of Newport (Lab)
My Lords, this legislation is intended to help promote and restore confidence in the political system. Yet the absence of transparency, clarity and regularity in campaign financing in the politics of this country is one of the principal causes of cynicism and disaffection from politics. It therefore seems contradictory and strange that apparently so little thought has gone into the provisions of the Bill regarding campaign financing. It is singularly important that the provisions be clear and universally acceptable. I look forward to the Minister explaining what he believes the justification can be for the vagueness and looseness of the current arrangements, the manner in which they will permit outside intervention from people whose intervention we would have thought was not legitimate, and how he proposes in the light of those considerations to strengthen and improve the legislation.
Lord Gardiner of Kimble (Con)
My Lords, I thank the noble Baroness for her amendment. Concern has rightly been expressed by noble Lords and in the other place over the impact of “big money” on the recall process.
Amendment 60, however, focuses on the opposite end of the scale—namely, the lower limit above which campaigners will have to become accredited. The noble Baroness’s amendment will lower this from £500, as currently proposed, to £50. She rightly asked about the justification for £500. It is based on the previous spending limit for third-party campaigning for or against a candidate at the election. Indeed, the current limit is £700. This will, we believe, therefore permit local groups to carry out a certain amount of campaigning, such as printing and distributing leaflets. That is the reason for that number.
However, all campaigners will be subject to rules on the content of their literature, including imprints, as well as the rules on acting in concert, notional petition expenses and pre-election expenses. Once a campaigner becomes accredited, a significant number of additional registration and reporting rules kick in. We believe that these will deliver transparency over what is being spent and who is providing the financial backing.
Lord Foulkes of Cumnock (Lab)
The noble Lord has moved on a little. Who is going to keep an eye on the non-accredited campaigners’ expenditure and how will that be done?
Lord Gardiner of Kimble
If the noble Lord could be a little patient, I will be developing the points on non-accredited campaigners as well.
Under these rules, the accredited campaigner must register with the petition officer and appoint a “responsible person” who acts in a similar role to an election agent. At the end of the recall petition period, a recall petition return must be provided to the petition officer containing details of payments made during the recall petition process and claims for expenses that have not yet been paid. Evidence must be provided for all payments of more than £20. The return must also contain a declaration on expenses incurred under the provisions relating to acting in concert, notional petition expenses and pre-election expenses. Accredited campaigners, except registered parties that are not minor parties, must also detail in the return the value of each accepted relevant donation, the date it was accepted and information about the donor.
In drafting the Bill, the Government have taken the approach that it would not be proportionate to require those wishing to spend relatively modest sums during the recall process to be subject to an onerous compliance burden. This approach has been supported by the Electoral Commission. In its briefing for today’s proceedings, it notes that a low registration threshold,
“may deter constituents from participating in local campaigns and would be overly bureaucratic for campaigners”.
The commission therefore opposes the amendment. The £500 lower limit proposed in the Bill will permit local groups to carry out a certain amount of campaigning, such as printing and distributing leaflets, without subjecting them to registration and reporting requirements required of accredited campaigners. A revised lower limit of £50 would not allow campaigners to do very much without becoming accredited. Indeed, it is hard to see that many campaigners would come in under this limit at all. Noble Lords may recall that during the passing of the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 this House, and, indeed, the Opposition, supported measures to ensure that the burden on small campaigners at elections was proportionate.
Turning to Amendment 72—
Lord Foulkes of Cumnock
The Minister said that if I waited he would answer my question. He has not. Who will monitor the expenditure of non-accredited campaigners? There could be three dozen little groups, all spending £450, undermining the local Member of Parliament. Suppose it was a Labour Member of Parliament: there could be four dozen Tories, each spending £450, undermining the Labour MP who was up for consideration. Whose responsibility is it to keep an eye on this expenditure?
Lord Gardiner of Kimble
My Lords, I asked for the noble Lord’s patience so that I might give him a full reply beyond, “It would be the local electoral officer”. I am now in a position to do so. I hope that the noble Lord will understand that I was waiting for some assistance, which I now have. I had not forgotten and I certainly would not forget. Responsibility for the administration and conduct of the recall petition falls to the petition officer, whose role in that process will be analogous to that of a returning officer at an election in ensuring that relevant information is open to public scrutiny. I am looking for the point on unaccredited campaigners. Just so I am absolutely clear, all this will come before the local electoral officer, but I was waiting on a piece of information to give the noble Lord the answer that he requires. If he will allow me, while I carry on we might get something that gives further clarity.
Lord Foulkes of Cumnock
I think I know the answer: it will be this poor petition officer. Otherwise, who will do it? Who will carry out the monitoring of all these non-accredited groups or individuals? It will be very difficult to do that. First, you have to identify who they are, then you have to ask them to produce receipts, then you have to check them and add them up. It is a huge responsibility and I am not clear who will do this.
Lord Gardiner of Kimble
My Lords, it will be the same process as for an election. Who will be keeping an eye on non-accredited campaigners? It would be for the police and the courts if anyone had a problem with non-accredited campaigners and there was a feeling that they were not behaving appropriately. If there are any further clarifications for the noble Lord I will make sure that he gets them, but I have answered as best as I am able.
Turning to the noble Baroness’s other amendment, I clearly understand her point about extending the provision allowing the Electoral Commission to give advice and assistance to petition officers and accredited campaigners to all other campaigners. We recognise that understanding and complying with the rules can sometimes be challenging, particularly for those who seek to participate in electoral events for the first time. With this in mind, Schedule 6 amends the Political Parties, Elections and Referendums Act 2000 to allow the Electoral Commission to give advice and assistance to petition officers and accredited campaigners. PPERA already allows the Electoral Commission to give advice and assistances to other persons, such as returning officers and recognised third parties at elections.
In tabling this amendment, the noble Baroness rightly notes that the provision in the recall Bill does not explicitly state that this advice and assistance can also be provided to non-accredited campaigners. Non-accredited campaigners are likely to require advice and assistance in determining what the rules are and whether or not they are required to become accredited. I therefore appreciate the noble Baroness’s concern. The Government also want to ensure that non-accredited campaigners are able to access advice from the Electoral Commission in the same way as accredited campaigners. We consider that this will be the case as Section 10(3)(b) of PPERA allows the commission to,
“provide advice and assistance to other persons which is … otherwise connected with, the discharge by the Commission of their functions”.
I believe, therefore, that the point that the noble Baroness has raised is covered. The Government have given considerable thought to the matters to which she referred in terms of the level of £500 and have sought what we believe is an appropriate balance to transparency and participation. On that basis, I ask the noble Baroness to withdraw her amendment.
Lord Hughes of Woodside
Listening to the Minister’s explanation raises a number of questions. The answer to this may be in the Bill and, if it is, I apologise: what happens if, after the results have been declared, it is discovered that there has been a serious breach of conditions and that money has been irresponsibly or illegally spent? Is there the possibility of the MP going to court to have the result of the petition struck out or would it be automatically struck out? What happens next? Will there be a further recall petition?
Lord Gardiner of Kimble
I will take advice on precisely the answer to that so that I am most helpful to the noble Lord. I do not think that there is any point in me flannelling on when there may be a distinct reply to help the noble Lord.
Baroness Hayter of Kentish Town
I have to say that I have never heard the Minister flannelling on. I thank him for his reply. However, I have some problems with it. I think that the answer to my noble friend’s question about who keeps an eye on the non-accredited campaigners is clear: there is no one to do it. I understand the intention was that people should be able to spend up to £500 below the radar. He has called in aid, I think, the Electoral Commission. I really have to take issue with the Electoral Commission’s full submission for today. It keeps on saying, and has said it on this amendment, that these are intended to be localised events. I worry about the Electoral Commission if it really thinks that that is what a recall will be. It has to get real. Particularly as regards the first of these, it will not be a localised event. They will be extremely high profile. Michael Crick will be there and all of us will be there working for or against. There will be an enormous amount of scrutiny. The Electoral Commission has to get real about the fact that they will not be very localised. I am worried particularly about those that are under £500. As I have said, the £50 figure was probing but I wonder whether £150 or £200 is not a better figure.
I think that the Minister used the word “content”, and I have to correct him. The content of the material will not be scrutinised, it will only have to have the imprimatur, “printed and published by”, on it. That is the only requirement. More than that, those spending less than £500 are absolutely free of any requirements about donations. They can be taking money from Hong Kong or anywhere else without having to declare it. Even if there was someone to look over them, it would still be completely legal for them to do this. If I have understood this right, they can spend up to £500 with donations coming from anyone because they do not come under the PPERA rules at all. Therefore they break all our normal rules on this.
Lord Howarth of Newport
I am inspired with confidence when I listen to my noble friend expounding the Bill. Perhaps she can correct me if I am wrong, but am I right in thinking that in effect there can be any number of these non-accredited groups operating in parallel, but there is provision that where expenses are incurred by persons acting in concert, the total value of those expenses is to be regarded as having been incurred by each of the persons in question? It seems to me that the protections, if there are any, are very flimsy indeed. As my noble friend Lord Foulkes suggested, we have the very dangerous possibility of a great proliferation of many organisations campaigning to unseat a Member of Parliament with no control over their number, no control over their aggregate of expenditure, and with the freedom for them to solicit and receive expenditure from anywhere in the world. Is that not deeply unsatisfactory?
Baroness Hayter of Kentish Town
It is interesting to note that when we were dealing with the transparency of lobbying Bill, which has been mentioned, we could see that as soon as charities work together they all have to take account of each other’s expenditure. But as long as these groups do different things, with one of them responsible for the literature and another one doing something completely different, there can be any number of them. As I say, there can be any number of non-accredited campaigns and any number of accredited campaigns. Ten of them could all spend £500 and another 10 could all spend less than £500. The cumulative amounts could be very large. However, that is for the Government to answer rather than me. For the moment, I beg leave to withdraw the amendment.
“(A1) The Electoral Commission will, in relation to each of the two possible outcomes of the recall petition, designate under this paragraph one accredited campaigner as representing those campaigning for the outcome in question.”
Baroness Hayter of Kentish Town
Amendment 61 stands in the names of my noble friend Lord Kennedy of Southwark and myself. We tabled it partly because of the matters covered in the discussion that we have just been having: its intent is to limit the number of accredited campaigners to two. We believe that that would bring greater fairness to the recall petition. I shall also speak to Amendment 65.
As I said on Second Reading, and have just said again, the problem is that the Bill contains no restrictions on the number of pro-recall accredited campaign groups, all of which can spend up to £10,000. The groups could therefore include the three political parties that were defeated at the last election, and each of those could spend £10,000. So the other political parties could spend £30,000, whereas the MP or their party—if they were still supported by their party—would be capped at £10,000.
The Electoral Commission, in its response on this, said that it did not think it should be given responsibility for what was essentially going to be a local matter. As I said on the previous amendment, a recall will not be a local matter: Michael Crick will be there; it will be on prime-time television; there will be a lot of publicity; there will probably be a few stunts, and campaigners will certainly be bussed in from other constituencies, particularly if the Government have a slender majority or the seat is very marginal.
The Committee will know that we support a recall petition where an MP has been involved in serious wrongdoing, as has been agreed in the other place. Once this provision starts, however, it will not be about behaviour. Our worry, as my noble friends said earlier, is that it will turn into a debate over the MP’s voting record or beliefs. The current expenditure guidelines do not appear to recognise that logic. They are not sufficiently clear to ensure that the debate is not on those issues. If there was something going on in the big political world at the same time, the ballot could almost become a vote of confidence in the Government on that issue. Well funded vested interests could—they should not, but they will—play a part in the recall ballot. We therefore need rules governing the financing of the recall campaign to ensure that it is not hijacked by politically motivated groups out to deselect sitting MPs for something that is unrelated to their behaviour. In fact, it could be motivated simply by the desire to get a by-election, which might suit UKIP, for example, at the time. Will the Minister—who I think shares some of these objectives—outline the safeguards to prevent that?
Amendment 61 would prevent multiple organisations from campaigning on the same side, whether that is the “for” side or the “against” side. It would therefore limit the number of accredited campaigners to two: they would be either the MP or the anti-recall campaign and one organisation or group seeking to deselect the MP—the pro-recall campaign. In so doing, it would ensure an equality of arms between the two sides. There will be those who believe that, whatever wrongdoing the MP has been found guilty of, he or she should nevertheless stay and represent the constituency. There will be many cases where the constituents would want that to happen. There will also be those who feel that the MP has simply lost the confidence of the constituency and a by-election should be held. It seems to me that there are two options and that there should be two campaigns.
Amendment 65 would ensure that the campaign literature of all those involved is subject to scrutiny in order to deter campaigners from focusing on issues that are unrelated to the misdemeanour or criminal activity proven against the MP. This would not be a complete ban, as was mentioned earlier, but it at least ought to be sent in to the petition officer to be checked.
We want the recall debate to focus on the conduct of the MP and their consequent ability to represent the constituency, rather than the causes that he or she supports or their voting record on contentious issues. While we welcome the commitment by the Government in their memorandum on the draft regulation that it will be a requirement for campaign material published by both accredited and non-accredited campaigners to contain the name and address of the printer and promoter, we think there needs to be rather more guidance on this, particularly pertaining to the content of the material. I beg to move.
Lord Wallace of Saltaire
My Lords, I thank the noble Baroness for the very useful and constructive way in which she has presented these amendments.
Amendment 61 draws inspiration from the approach taken to national referendums, where the Electoral Commission designates a lead campaigner. Each designated organisation then receives a grant from the Electoral Commission of up to £600,000 to spend on referendum expenses across the UK. The amendment is not supported by any further amendments to provide grants to the lead campaigners in the event of a recall petition. We are, of course, concerned about the impact of big money and outside money on recall events.
I repeat: a recall petition will not be launched until one of the triggers has been pulled. That provides the defence against the idea that recall can be bought by wealthy campaigners, as it was argued would have been the case under the proposals tabled in the other place by the Member for Richmond Park, which are no longer in the Bill. Under the Government’s proposals, the only person responsible for a recall petition being triggered is an MP himself or herself for committing a defined offence. Wealthy campaigners cannot cause a recall petition to be initiated—
Lord Foulkes of Cumnock
Did the Minister not hear earlier when the noble Lord, Lord Elystan-Morgan, made it absolutely clear from his judicial experience that an MP could appear before a court and the options would be to send him to prison for 14 days or to fine him a few hundred pounds? If he was fined a few hundred pounds for the offence, this would not be triggered; if he was sent to prison, it would be. That is entirely outwith his control. It is within the control of the magistrate or the judge making that decision.
Lord Wallace of Saltaire
My Lords, I am talking at the moment about the power of wealth intervening. I am not sure whether the noble Lord is trying to suggest that wealth would come into the question of affecting the judgment made by the magistrate or judge.
Lord Foulkes of Cumnock
With respect, the Minister said he had gone off wealth; he had gone back on to his familiar track of saying that the only person responsible for pulling the trigger is the MP himself. I am contesting that and I have given him an example, which the noble Lord, Lord Elystan-Morgan, gave earlier on, and it is about time that the Minister listened to some of these examples.
Lord Wallace of Saltaire
My Lords, the noble Lord’s track is also rather familiar to the rest of us, if we are going to trade comments of that sort.
Of course, when it comes to the recall process, campaigners can use their financial capacity—subject to the £10,000 limit—during the regulated period. Then we come to the question of whether, if several campaigners agree to work together, the sum of all expenses incurred as part of this common plan would count towards the spending limit of each campaigner—an issue that some of us battled over in the transparency of lobbying Bill. This does not prevent a number of groups campaigning for the recall of an MP and each spending £10,000, provided that they do not co-ordinate their plans.
This would not necessarily always be on one side. In the event of an MP being convicted of an offence on what may be considered a point of principle, there would no doubt be many others who would rally to his or her support in a recall petition—I have to say that it would be a very exciting experience to watch at that point. We do not therefore see that a lead campaigner is desirable or practicable. We wish to encourage local, grass-roots campaigners to be actively engaged in deciding on who should be their representative.
Lord Howarth of Newport
The noble Lord emphasised that the Government are anxious to limit the influence of big money and outside money, and he quite rightly made the point that neither big money nor outside money can trigger the recall process. However, he gave no explanation as to how the provisions of the Bill would in practice limit the power of either big money or outside money to influence such local campaigns. It would be helpful, because it is very important, if he could explain what the safeguards are; and if he cannot, if he could undertake to go away and invent some.
Lord Wallace of Saltaire
My Lords, the distinction between local and national money, as all of us currently preparing to fight a range of local campaigns at the next general election know, has become increasingly blurred over the years. As we know well, NGOs and civil society organisations have local branches of national organisations, so of course there is not a rigid distinction between local money and national money. We understand that one cannot entirely build a wall around a particular constituency in terms of funding. However, the limits proposed are intended to limit the amount of money that can be spent, and thus to limit the role of outside funds.
Lord Howarth of Newport
But there are no limits to the number of organisations that are able to mount such campaigns. The Minister is rejecting the amendment that my noble friend has proposed, but he does not seem to have any other safeguards.
Lord Grocott
I put the question in a slightly different way. If the Minister is confirming what I think that he has been saying, it is really alarming. I was most interested in the earlier parts of the Bill. Whereas we all know that in a local election campaign for a particular Member in a particular constituency, there are controls over what each candidate can spend which have been there since about the 1870s, I think that that—not the figure, but the principle—is understandable, because a number of different choices are available: Labour, et cetera. In the case of whether there is or is not to be a recall, there are only two possible positions: you are for it or against it. You may be for it or against it for a variety of different reasons, but the decision to be made is binary, there are two choices.
It seems to me so fundamental as to be hardly worth stating that there must be a balance between the expenditure on the two sides of that simple argument. Is the Government’s position that there is no need to worry about that and that, on a range of different issues, one side in what I repeat is a binary decision can spend vastly greater sums of money than the other? Are the Government comfortable with that?
Lord Wallace of Saltaire
I am saying on behalf of the Government that there can be more than one registered campaign group on either side or on both sides of the recall petition.
Lord Grocott
I just wanted to hear from the Government Front Bench that in this choice there could be vastly bigger sums of money spent on whether there should be a recall—or on whether there should not. As the Minister knows, I am not at all keen on the Bill, but I am keen that if that decision is made, there must be some equality of expenditure between the two sides of the argument. I find it incomprehensible if that is not the Government’s position.
Lord Wallace of Saltaire
My Lords, I have some experience of fighting elections in which I was fighting with an infinitely smaller budget than the other candidates. We are content that there should be more than one registered campaigner on either or both sides. In one recall petition, one side may have several groups and the other may not; in another, it may be the contrary side. That is the Government’s position.
Lord Grocott
So the answer to my question—the Minister can either confirm this or not—is that under the Bill, one side of the argument could spend vastly more than the other. Is the answer that yes, that is the Government’s position?
Lord Wallace of Saltaire
My Lords, there is a precedent in electoral law for limiting the number of people who can be involved. Even at a referendum, where a lead campaigner is appointed, multiple campaigners can also separately campaign for one side or other, subject to the spending limits. So even in a referendum, others can come alongside for the game. We are not persuaded that the tighter limits and much tighter controls proposed are desirable or necessary on this occasion.
Baroness Hayter of Kentish Town
As the Minister said, in a referendum, they are subject to spending limits, which they will not be here.
I do not know whether I disagree most with the Electoral Commission or the Minister. The Electoral Commission keeps saying that these will be essentially local electoral events. If this happens, there will come a time when it will discover that that is not the case. The idea that it does not want to choose and set up one campaign on either side seems to me to be not facing up to its responsibilities.
The major issue is that of the Government, as my noble friend has just been saying. I am not sure that there will even be local campaign groups. I do not know whether in Kentish Town tenants’ groups or local businesses—the groups that we know more—would campaign on this issue. What I do know is that the other political parties would. Unlike some of the noble Lords who spoke earlier, I think the party will sometimes rally round its MP because it will not want a by-election. I hope that it is not as the noble Lord, Lord Hamilton, said earlier—that it is going to be a minority Tory Government—but if it is I can imagine that we would be very keen to have a by-election from the Opposition, if we could make that choice. Even with an MP who had been out of the House for 10 days, we might well campaign for him and the other political parties would want to vote against. We on one side would be able to spend £10,000 and the four other parties could all spend £10,000 the other way, and the debate would be about whether there should be a by-election. It will not be about what the MP has done. It will be about whether there should be a by-election. There could be £40,000 spent on one side and £10,000 on the other side. The answer to my noble friend Lord Grocott’s question is that the Government are content with that. I think it is clear that we have our doubts about this, but for the moment I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
Lord Kennedy of Southwark (Lab)
My Lords, the amendments in the group proposed by myself and my noble friend Lady Hayter of Kentish Town concern the work done after the petition process is over and the MP has either been recalled or not. The Electoral Commission in recent years has reported on election returns and highlighted both good practice and areas where things have not gone so well, or highlighted minor infringements or inconsistencies in what has been sent back by election agents. This has been a good, helpful process and has enabled better advice and guidance to be produced that has been helpful to everyone involved.
Whoever the campaigners are in a recall petition, we can definitely say that they will be new to the process and may be new to any sort of campaigning. If people break the rules, there are processes to be followed and action to be taken as appropriate, but I think it is right that the Electoral Commission should look at the returns submitted by campaigners.
We all hope that this Bill when it becomes law will never have to be used. I think we can confidently agree that if it is used it will be very infrequently. Because of that, we have to ensure that asking the Electoral Commission to look at the returns is a sensible and proportionate move. The problem with the wording in the Bill at present is, on page 55, line 41, the words “on request” and, on page 57, line 32, the word “may”. That for me is too loose and leaves an air of doubt. For such an important matter, the Electoral Commission must be sent a copy of all the petition returns and accompanying documentation and should produce a report on the actions taken or not taken in respect of the recall petition. This is far too important a matter to be left to the vagaries of “on request”, “may” and other similar words.
In conclusion, as my noble friend Lady Hayter of Kentish Town, has said, I am disappointed with some of the responses by the Electoral Commission to this Bill. I say that as a former member of the commission; I was a member only a few months ago. I am getting quite cross now, particularly with the comment that these are local events with a local feel. I live in south London, and in our times of 24-hour news, to suggest that the only people who will be interested in a recall by-election in south London will be the South London Press, published every Tuesday and Friday, is ridiculous. I really think we have to get rid of this idea. I beg to move.
Lord Gardiner of Kimble
My Lords, I thank the noble Lord for moving his amendment. Taken together, Amendments 62 and 71 would require the petition officer to provide copies of every recall petition return to the Electoral Commission, and the Electoral Commission to produce a report after every recall petition process. Under the Bill as drafted, when a petition officer receives a copy of a recall petition return from an accredited campaigner, they are bound to make this available publicly for two years. This will ensure that, as for a candidate campaigning in a constituency, spending and donations are transparent.
In addition, the petition officer must supply a copy of any return upon request to the Electoral Commission if made within these two years. This provision complements the approach followed in Schedule 6, which amends the Political Parties, Elections and Referendums Act 2000. This will permit the Electoral Commission to produce, at its own initiation,
“a report on the actions taken, or not taken, under or by virtue of that Act”—
the recall Bill—
“in relation to the recall petition in question after the giving of the Speaker’s notice”.
In drafting the Bill we have, where appropriate, followed existing electoral law. A particular focus has been placed on creating a regulatory approach consistent with that applied to any subsequent by-election. This is very much the case in this situation.
The noble Lord, Lord Kennedy, is proposing an amendment which would require the Electoral Commission to produce a report after every recall petition. To support this, a further amendment would require the petition officer to transfer automatically all recall petitions to the Electoral Commission. The approach suggested by these amendments would create an inconsistency whereby the commission would be required to produce a report on a recall petition, while it would be for the commission to decide whether to produce a report on any subsequent by-election. The Electoral Commission does not have sanctioning and investigatory powers over campaigners at a recall petition or at the subsequent by-election. The Government therefore do not consider it appropriate to introduce a requirement for the commission to produce a report on the recall petition process. The Government believe that it is best left to the commission to decide whether to produce a report. Were the Electoral Commission to have a stronger role at recall petitions, it would introduce a regulatory approach significantly different from its current role at elections. This includes a by-election which would follow a successful recall petition.
I certainly do not want to irritate the noble Lord, Lord Kennedy, but the Electoral Commission’s view on this amendment is to note that,
“the discretionary power currently provided in the Bill for the Commission to produce a report on a recall of MPs petition, which is consistent with the Commission’s power to report on the administration of UK Parliamentary by-elections, is sufficient”.
I hope that the noble Lord will understand the Government’s reservations and feel able to withdraw his amendment.
Lord Kennedy of Southwark
My Lords, I thank the Minister for his response. However, I do not know whether he is aware that the Electoral Commission has in the past produced reports on every single local election, whether it be for the whole of London or of Derbyshire or Nottinghamshire. That is hundreds and hundreds of returns, while we are probably talking about one or two returns over a number of years—a very small amount in comparison, so it would not be a big or onerous task. He made the point that the commission has no investigatory powers but, if it looked at returns and found wrongdoing, it could refer that matter to the police. That is what it should do but, with that, I beg leave to withdraw the amendment.
Lord Foulkes of Cumnock
Lord Foulkes of Cumnock
My Lords, Amendments 63 and 67 have been drafted by the Law Society of Scotland. They would remove the power of the Minister to question the outcome of the petition. Instead, any suspected irregularities would be subject to judicial review, so they would take it out of the political arena and put it into the legal framework. I beg to move.
Lord Kennedy of Southwark
My Lords, Amendments 63 and 67 relate to issues raised by the Law Society of Scotland as referred to by my noble friend Lord Foulkes of Cumnock and concern matters raised by the Constitution Committee of your Lordships’ House. My noble friend makes a powerful point about the questioning of the petition and the powers this Bill gives to Ministers to make regulations.
These are very serious matters and I have some concerns about things not being very clear in the Bill. Can the Minister explain carefully why the Government are not being more specific about their intention? Can he also confirm by what process these regulations will be approved by Parliament? Am I right in saying that if anyone were unhappy they could seek the intervention of the court through the judicial review process anyway and that nothing here proposed would stop that? Amendments 64 and 73 in this group tabled by myself and my noble friend Lady Hayter of Kentish Town seek to address concerns expressed by committees of your Lordships’ House in respect of excessive powers being placed in the hands of Ministers. In particular, we have concerns as to why the Government think it necessary to give a Minister powers to create new criminal offences by statutory instrument. There is, for what in effect is quite a small Bill, far too much left in the hands of the Government to make decisions through the use of statutory instruments.
We support the principle of recall, but it is very disappointing that the Government have waited until the last few months of this Parliament to bring forward a Bill that was in the coalition agreement. As noble Lords have said before, a paper was due in 2011 and here we are in 2015. Leaving so much unresolved is not good enough. Will the noble Lord tell the Committee why so little preparatory work has been done in advance of this Bill coming forward? Will the noble Lord give us some indication where or what these new offences might be that he may have to regulate on?
Amendment 73 would remove the words “(including this Act)” from the Bill. The Delegated Powers and Regulatory Reform Committee thought these words could permit the infiltration of quite substantial and significant additional provisions into the Bill, and we agree. Can the noble Lord explain clearly why the Government think it is necessary to take such wide-ranging powers with little or no explanation?
Lord Wallace of Saltaire
My Lords, Clause 18(1)(b), which Amendment 63 would remove from the Bill, allows for regulations to detail the process for questioning the outcome of the petition to be made. It does not say that Ministers shall decide but allows for regulations to detail the process. Amendment 67 would amend subsection (5) to make it a requirement for the judicial review process to be followed.
Judicial review, as noble Lords will be aware, is a type of court proceeding in which a judge reviews the lawfulness of a decision or action made by a public body. In other words, judicial reviews are a challenge to the way in which a decision has been made, rather than the rights and wrongs of the conclusion reached. The process for challenging the result of an election requires an eligible person to lodge a petition with the relevant election court.
The role of the election court is to establish whether procedural irregularities have occurred, whether an election result should be declared void, and whether any individual or individuals are guilty of offences in relation to the election. As the grounds for challenging the result of a recall petition are also likely to concern irregularities of a type that an election court will be familiar with, this body may be the most appropriate to hear such challenges.
The method for questioning a petition will be set out in regulations, as is the case at other polls where legislation has been made in recent years—for example, European parliamentary elections. The Government do not anticipate the method varying substantially from the established process for challenging the outcome of elections and therefore we do not see a special need to specify the process in primary legislation.
The Government will need to consider the details of the regulations further, but our approach will need to have regard to achieving an appropriate degree of consistency with the established process. We would see it as very much being in line with that.
Amendment 64 on the power to create criminal offences would again affect Clause 18(2)(d). Clause 18 provides:
“The Minister may by regulations … make further provision about the conduct of a recall petition”.
Subsection (2)(d) provides that such regulations may,
“make provision creating a criminal offence”.
Such regulations are to be made by statutory instrument —subject, I say to the noble Lord, Lord Kennedy, to the affirmative resolution procedure.
In its report of 15 December, the Constitution Committee stated:
“The House may wish to scrutinise why the Government consider it necessary to empower Ministers to create new election law offences by statutory instrument”.
The Government have not yet responded to the committee’s report but will do so as soon as possible. However, I say here that the power is in the Bill to enable Ministers to apply the existing electoral law on offences to the recall petition process, with suitable modifications. Again, this is a matter of adapting existing legislation, not extending or creating new offences.
In order to ensure the integrity of the recall petition process, a number of criminal offences will be required. However, the Government do not consider these to be new offences as they will mirror, with appropriate modifications, well established offences that apply at elections and referendums. The intention is to use the power only to replicate or apply criminal offences that already exist in relation to elections, adapted as necessary for the recall petition process. Examples of the kinds of offence that we anticipate are that it is an offence to impersonate another constituent and sign as them, known as “personation” at elections, as set out in Section 60 of the Representation of the People Act 1983; that it is illegal to tamper with signature sheets, which will be based on Section 65 of the 1983 Act; and that the details of the printer and promoter of petition campaign literature must be included on the literature itself or else an offence is committed, based on Section 110 of the same Act. The Government consider that it would be inappropriate to include in the Bill full details of all the criminal offences, as each offence will be attached to a breach of the detailed rules that will themselves be set out in regulations.
The noble Baroness has tabled Amendment 73, which would amend Clause 21(4) of the Bill to remove the power for regulations in relation to the conduct of the petition to be able to amend this Act itself. The Delegated Powers and Regulatory Reform Committee, in turn, questioned this. Again, the Government will respond to the committee’s report as soon as possible. Ahead of that, I will provide an answer to that point here. Clause 21(4) enables regulations relating to the conduct of the recall petition process to amend primary legislation, including the recall Bill when it is an Act. This power was included in the original draft Bill that was published for pre-legislative scrutiny in 2011.
The power in question refers only to the conduct of the petition, as it relates solely to regulations made under Clause 18 and can be used only to make amendments that are consequential, supplementary or incidental to the regulations made under that power. It does not, for example, enable the amendment of the three triggers, or conditions, for initiating a recall petition in the first place. The power was originally included to allow for amendments to be made to the Act to allow for amendments made in other areas of electoral legislation, such as the introduction of individual electoral registration. Since the publication of the draft Bill, the legislation for individual electoral registration has now been put in place.
The Government are considering the committee’s recommendation on this point. As a general point, it is important that we take such powers with care, and only when it is reasonable to assume they will be needed. The Government will continue to consider the recommendation of the Delegated Powers and Regulatory Reform Committee and reflect on the views expressed in this House, and I am sure that we will return to this issue on Report. On that basis, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Foulkes of Cumnock
In view of that comprehensive explanation by the Minister, I beg leave to withdraw the amendment.
Lord Wallace of Saltaire
“( ) If a relevant circumstance arises, the functions of the Speaker under or by virtue of this Act (“the Speaker’s functions”) are to be performed by the Chairman of Ways and Means or a Deputy Chairman of Ways and Means.”
“( ) the first, second or third recall condition has been met in relation to the Speaker,”
Lord Soley
“Expiry
The provisions of this Act expire at the end of the period of 5 years beginning with the day on which this Act is passed.”
Lord Soley (Lab)
My Lords, this amendment would create a sunset clause; that is, it would bring the Bill to an end five years after the date when it became law. I came to the conclusion quite a few years ago that sunset clauses were useful in a couple of situations. That was originally drawn to my attention in the Prevention of Terrorism (Temporary Provisions) Act 1984, in which we had a sunset clause because the Government accepted that the powers in it were very serious and we needed to consider the idea of letting the Bill lapse if it did not need to be renewed. In fact those powers had to be renewed, and we did that. The other case in which it is useful, which is much more relevant to this one, is where the outcome in the Bill as regards becoming a law and its effect is very uncertain, and it contains constitutional implications. That is the case for reviewing it at the end of a certain period. The Minister may want to say that the Government do not like the idea of a sunset clause—I know some of the arguments against sunset clauses—but if they would like to consider just reviewing it at that stage, that might be another option.
I have two fears about the Bill. I will start with the simple one that does not keep me awake at night much: that it would be largely ineffective and might not even reach the statute book intact. There are so many uncertainties in the Bill, many of which we have heard about this evening, that it is quite hard to see how it would be in good enough shape to become a complete law before the general election. It will not surprise me if it does not quite achieve that. You could say, “Well, that could be the end of the matter”. The second and much more worrying fear, which causes me concern and which has come up a number of times on both days of Committee, is that there are possibly quite serious implications here. Indeed, the Constitution Committee picked out one of them, which we have referred to on a number of occasions. If the offence that a Member of Parliament commits is a political one, the committee indicates that the outcome of that is a very serious matter.
The noble Lord, Lord Hamilton, who has gone now, used the example of Zac Goldsmith and Heathrow Airport, of which I have some knowledge. I have no doubt that in due course the Conservative Party will change its position on the third runway and conclude that it was its idea to expand the airport all along and that I had nothing to do with it despite the last 20 years of campaigning. However, the important point about Zac Goldsmith is that, to his credit, he has indicated that he will resign from the Tory party if it changes its position. Let us assume that the party changes its position—which I think it will, whether it is in government or not—and Zac Goldsmith resigns from it. That would not trigger an election. However, he feels very strongly about this issue, and if he feels so strongly that he does some form of demonstration in the Chamber of the House of Commons and gets himself excluded from the House for more than 10 days, we will enter into this process. You have to ask, “Do you really want to create that sort of condition?”. The last few debates have been about how important it is to debate the issue of the MP’s wrongdoing. In this case, I suggest that if Zac Goldsmith behaved so badly—I am not saying that he would—that would be the effect, but the election would be all about the third runway at Heathrow, and all the campaigners on both sides would pour in on it. There are many examples of that; my noble friend Lord Hughes gave some, and I gave others. There is a danger of politicising elections.
The other thing that troubles me about this, and the other reason why some form of review or sunset clause is necessary, is because there are umpteen opportunities in the Bill for pulling in the judiciary. The last few amendments we have discussed are all replete with opportunities for legal challenges, which would go either to an electoral court or—which would be less likely, but is conceivable—to a conventional court. All that seems to be opening up an area where we pull the judiciary more and more into the political process, which I am very strongly against. The case of Phil Woolas that I quoted at Second Reading is a dramatic example of why we should not get the judiciary muddled up with political process, and of how right the 18th-century political philosopher was—his name escapes me—who said that the electorate are sovereign in the British political system. The electorate must decide. That is very real and we should stick to it, so keeping the judiciary out of politics is a good idea.
All that suggests to me that the case for having some review system at the end of the Bill would be useful. We need to remember that the sunset clause is an advantage. If the Bill is not used at all, which is quite possible, it will just die. It will come off the statute book and we will not have to bother about it again. On the other hand, if it requires reform, we can reform it at that stage. That was done with the prevention of terrorism Acts. The alternative is that it works fine and we can renew it. That is not a bad safety valve to have in a Bill of this nature, which has constitutional implications and, as I have indicated, certain serious provisions.
I looked through the Constitution Committee’s report and it contains a number of important issues. I will not repeat them all now because we dealt with some of them earlier. It is not just a matter of politicisation. As has come up recently, if the Electoral Commission is not to be heavily involved in this—and clearly it is not, from what has been said in Committee this evening—then there are all sorts of opportunities for challenges for the proper running of a recall election. What will happen then? Are we going to have to have another recall election, just as we would if an MP or someone else challenged the validity of a conventional election for that MP? There is an opportunity here for all sorts of applications to court, particularly on the expenses issue. Incidentally, Edmund Burke was the philosopher that I was trying to remember at this late hour.
We really need some way of ensuring that we can review this Bill. My best guess is that it might not be used much if at all, in which case it could die after five years. If it is used, frankly there could be very real dangers in it. It is very important, as the Constitution Committee pointed out, that there are ways of removing MPs. The expenses scandal was a classic example of that: several MPs were removed. Indeed, one of the saddest things about the Bill is that every MP in the House of Commons now has been re-elected by the electorate, who are sovereign in our system. None of them has done anything wrong. However, this Bill is about flagellation. As I think I said before, flagellation is a bad idea at the best of times but do-it-yourself flagellation when you are not even guilty of anything is ridiculous. No MP need be sitting at the moment thinking, “I have done something wrong”.
As the Constitution Committee points out, if the Bill is designed just to reassure the electorate, it is unlikely to have any effect. The most we can hope for is some sort of publicity of this sort of event and the hope that people notice it. The chances of people taking much notice of what is happening on this right now are very limited. If an MP did something, they would almost certainly be disciplined by the procedures that operated effectively even in the last Parliament. As I say, at best this Bill is unlikely to be used and therefore should die after a five-year period; at worst, we could have situations where very heavily political cases had to be fought on that basis. That is bad news for democracy and I ask the Government to look at a way of reviewing the effectiveness of this Bill after a five-year period and then to let it lie, to amend it and bring it back, to get rid of it or, if I am wrong and it works, to just accept that it works.
Lord Norton of Louth (Con)
My Lords, the noble Lord, Lord Soley, made a persuasive case. However, I am particularly drawn to the alternative that he identified, which is to provide for a review of the Act after, say, five years. The precedent already exists in the Fixed-term Parliaments Act. We have already written into that Act that it will be subject to review.
The Minister may say that this Act will in any case be subject to post-legislative review by the relevant department three to five years after enactment, but I think there may be a case with such a significant constitutional measure for the review to be post-legislative scrutiny and for it to be included in the measure. I commend that review proposal as an alternative to what the noble Lord is putting forward. It is something to which we may wish to return on Report.
Lord Tyler (LD)
My Lords, not for the first time I entirely agree with my noble friend Lord Norton of Louth. However, I want to make one more substantial point about the Bill and say why I think that some form of review is necessary, whether it is a sunset clause or a review of the kind that my noble friend has suggested.
I have followed the course of these proposals from the very early days of the draft Bill in the other place. I have attended debates there and have watched and listened and have been involved in a number of discussions with Members of both Houses. We should recognise that a feature of this Bill which has been very evident from our discussions in your Lordships’ House is that Members of the other place were for understandable reasons very inhibited when they examined the details of the Bill. They felt that it was self-serving to some extent and they were embarrassed at looking at it in great detail and finding fault with it because they felt that, in so doing, they were somehow putting themselves in an invidious position. Indeed, some were also influenced by pressures from outside not to say anything, not to question, not to challenge and not to query. For that reason, the Bill, as it now stands, will satisfy no one.
In those circumstances, we should bear in mind very carefully what was said by noble Lords on all sides of your Lordships’ House—that they hope that the Bill will never be used. It was said most recently by the noble Lord, Lord Kennedy. He said that he hoped it would never be used or used very infrequently. In those circumstances, it would be irresponsible of Parliament not to set out some sort of review procedure to determine the timescale for looking at the Bill again. The proof of the pudding will be in its eating. If nobody eats it, is satisfied with it or finds it digestible in any form whatever, Parliament has a responsibility to go back and look at it again.
We have all discussed in various fora the advantages of post-legislative scrutiny, and I know that my noble friend is a protagonist for that. Of course, we should do that more often but in this particular case it is important that Ministers think very carefully between now and Report about what mechanism they would prefer for doing that. I do not mind which it is, whether it is a review or a sunset clause. This is an unusual Bill in the way it has been treated in the other place and the considerable concerns and anxieties that have been expressed throughout the House. I make no bones about it: I think it is still capable of being improved. Some think that it is beyond improvement. I have put forward some proposals and am still hopeful that Ministers will meet me and other colleagues from all sides of the House to look at the concerns and criticisms of the Constitution Committee to see whether we can meet them in a more effective way. However, as things stand, I believe that it would be simply irresponsible for Parliament to leave this Bill in its current state without including some mechanism for proper review in a prescribed way and at a prescribed time.
Lord Gardiner of Kimble
My Lords, I thank the noble Lord for his amendment. I understand his intention in bringing it forward. In making such a key constitutional change as introducing a power of recall, we must proceed with caution. In this sense, I appreciate the cautious intent behind the amendment. However, I question whether a sunset provision can be justified where the Bill relies on defined tests of serious wrongdoing. Having given the public the right of recall, it would be very hard to remove that right after a period without a very good reason. It seems to me that, should there be a wish to change the system of recall, the onus should be on future Governments to bring such arguments to Parliament to amend or repeal the provisions in the Bill through primary legislation. It does not seem right that the power of recall would simply cease to operate after five years with no examination of how effective it had been and no possibility of extending it, except by introducing primary legislation again. It is for those reasons that the Government are not persuaded that a sunset clause is the appropriate way forward and I ask the noble Lord to withdraw his amendment.
Lord Tyler
Before my noble friend sits down, will he respond to the alternative that my noble friend Lord Norton and I have put before him?
Lord Gardiner of Kimble
My Lords, obviously one cannot commit a future Government, but I am sure that a review in some form will take place and is interesting. However, I am dealing with the amendment that is before me, which proposes a sunset clause, and the Government do not think that a sunset clause is the appropriate way forward.
Lord Norton of Louth
My noble friend made the point that the Government wish to avoid a situation that would require the introduction of primary legislation should a sunset clause be effective. The advantage of putting a review into the Bill would be that it would avoid that, so that this would be a preferable way of dealing with the situation.
Lord Soley
I am grateful to the Minister. I said in my opening remarks that the alternative was a review system and I think that the Government ought to think about that. It was interesting that in his summing-up the Minister used the phrase “defined tests”. He was obviously referring to the three tests that are used to trigger this process. It is not the tests that worry me so much, with the exception of the third one, which could become highly political. What worries me are the processes, which are so ill thought out and ill spelled out in the Bill. Ministers have again and again today been standing up and saying, “We are not sure how this will work. We are going to look at election law and bring it in”. There are so many uncertainties there. I can tell noble Lords that it is going to be a gift to lawyers if we do not get that bit right. We have not done it in the House. The process of this House as a reviewing Chamber has led, time and again, to the Government Front Bench saying, “Well, we will look at this further down the line”, or, “We hope to get regulations about it” or, “We will think about it”. Such uncertainty with regard to a constitutional Bill is almost an invitation for the courts to get involved, sooner or later, in some way. Either that or the Bill will not work as it is meant to. Indeed, the fallacy in the Bill is the lack of a clearly-defined process at a number of stages, and that is why I think that the Government should think about a review or a sunset clause. However, in view of what the Minister said—perhaps he will go away and think about it—I beg leave to withdraw the amendment.
Lord Wallace of Saltaire