Democratic Political Activity (Funding and Expenditure) Bill [HL]

(Limited Text - Ministerial Extracts only)

2nd reading (Hansard): House of Lords
Friday 27th October 2017 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, I am grateful to the noble Lord, Lord Tyler, for the opportunity to discuss these important issues and to all noble Lords who have spoken in today’s debate, who have experience of fighting and funding elections and being involved in the electoral process. I commend his tireless energy in seeking to reform and improve the democratic process in this country. I have enjoyed working with him on these issues over many years, particularly when we were both in opposition and therefore operating under fewer constraints. Like other noble Lords, I have reread our proceedings from 10 March. I particularly liked the last line:

“House adjourned at 1.04 pm”.—[Official Report, 10/3/17; col. 1624.]


The noble Lord has raised the issue of party funding and expenditure a number of times in recent years and it is right to return to this subject. Many unresolved matters have been touched on during the debate. The rules on both the funding and expenditure of political parties are set out in the Political Parties, Elections and Referendums Act 2000. Both of us took an interest in that legislation in another place. Despite several attempts at reform no agreement has so far been reached on substantial changes to that system. I agree that it would be unusual to have major constitutional change introduced by a Private Member’s Bill.

There are two elements to the Bill: reforming the funding of political parties, and reforming the balance of spending of political parties and candidates at elections. Both of these are complex issues and the Bill proposes significant structural changes.

Party funding is an issue we have returned to many times in recent years. Since the current system was established by the PPER Act 2000 there have been several attempts at reform. Indeed, party funding has been the subject of talks for a decade. Examples of proposals for reform include the plans put forward by Sir Hayden Phillips in 2007 and the Committee on Standards in Public Life in 2011.

In 2012 and 2013, wide-ranging cross-party talks were held with representatives to discuss many of the issues raised today and which appear in the Bill. Unfortunately, as on previous occasions, the political parties were unable to reach a consensus and all the obstacles faced in those talks have not gone away. As has been obvious from our debate and from what my noble friend Lord True and the noble Lords, Lord Whitty and Lord Kennedy, said, there is still a lack of agreement on some of the key elements in the Bill. I agree with the noble Lord, Lord Kennedy: it would not be appropriate for the Government to impose major changes on political parties without cross-party consent. It is in everyone’s interest that the democratic process should continue for the moment to be funded in the way it is. We should not undermine the democratic process unless we are absolutely confident that there is a better way of funding in the future.

I am anxious to make progress with the noble Lord, Lord Tyler, so I met him in September to discuss particular clauses of the Bill where he felt progress could be made. He was good enough to recognise that the Bill as a whole was ambitious, but he hoped there might be some common ground. One subject he raised fell within the broad subject of party funding but was relatively self-contained and is found in Clauses 10 to 14, some of which the noble Lord, Lord Kennedy, just referred to on gift aid, tax relief and the rest. The Bill suggests replacing the delivery, at public expense, of one candidate’s election address leaflet to each elector or household with the provision of a single booklet for each constituency, to be produced by the returning officer, as part of the way of funding some of the elements in that clause. He also suggested the abolition of policy development grants as a further means of funding those clauses.

Following our meeting, I made some inquiries to see whether this was practicable. A booklet system already exists for the limited number of mayoral elections that have taken place, as the noble Lord, Lord Kennedy, mentioned, but there would be several complexities in introducing booklets for constituencies at general elections, not least the volume and number of different versions to be produced. Returning officers who cover several constituencies would need to manage the production and printing of booklets for each constituency, which would place significant additional pressures on them and their print suppliers at the time they are most busy printing ballot papers. Furthermore, political parties on all sides may have reservations at being tied to set timetables for the production and delivery of these booklets. At the moment, for example, parties can arrange for different members of the same household to get the election address on different dates; that flexibility would be lost.

There is also no certainty that moving to a booklet system would lead to an overall cost saving to the public purse. At present, while the postage costs for the delivery of one leaflet to each elector or household per candidate are funded by the state, the candidates and parties pay for their production. The Bill suggests that returning officers would manage the production of booklets, with candidates asked for a contribution towards the costs. While the aim may be for candidates to fully fund these booklets, in practice this is not what happens for the existing booklets at mayoral elections. In some cases, only a nominal amount is requested from candidates. It is possible that any savings to the taxpayer made by reducing postage costs could be offset by the production of the new booklets. The noble Lord may wish to reflect on those points and refine his proposals to take them into account.

The other source of money to fund those clauses was the abolition of policy development grants. These total about £2 million and help political parties develop proposals for their manifestos. I think there is a public interest in having credible, well-founded manifestos. If the grant were abolished, and the sum redistributed in the way the noble Lord suggests, it is not clear that there would be much difference in the relative distribution of those funds. Unless viable ways of funding the new schemes for supporting political parties set out in the Bill can be identified, they would all involve an additional cost to the taxpayer. I think the noble Lord has conceded, as the former Deputy Prime Minister Nick Clegg said, that,

“the case cannot be made for greater state funding of political parties at a time when budgets are being squeezed and economic recovery remains the highest priority”.—[Official Report, Commons, 23/11/11; col. 25WS.]


We also discussed the noble Lord’s proposals for varying the relative amounts of central party local candidate expenditure, something mentioned by the noble Lord, Lord Rennard, and others. On the subject of campaign spending, as noble Lords will know there are separate systems governing the spending of political parties on one hand and candidates on the other. This is another complex area that the Bill seeks to reform. There have been several recent examples of political parties being sanctioned by the Electoral Commission over their campaign spending. A case concerning candidate spending is also currently before the courts. Ensuring that the system operates effectively and is well understood is important for all of us—I agree with the noble Lord on that. Once all the cases are concluded, the Government can make a rational assessment of the effectiveness of the current legislation on election spending, as well as taking on board the many points that have been made in our debate this afternoon. The issue may be more one of timing than one of principle.

Reducing the spending limits of political parties and increasing those of candidates, as the Bill suggests, would not of itself necessarily deal with all the problems that have so far occurred. Any consideration of shortfalls in the current system would also need to look at other issues not mentioned in our debate, such as whether there is currently sufficient time for political parties to make accurate spending returns.

I mention in passing that one area not mentioned in our debate or in the debate in March is the abuse of candidates, an issue that the Government are seeking to address. It is important to our democratic process that no one is deterred from standing for office due to the fear of suffering abuse and intimidation. That is why the Prime Minister asked the Committee on Standards in Public Life to undertake a review of the intimidation of parliamentary candidates. The independent committee is considering the protections and measures in place for candidates and has gathered evidence, through a call for evidence and oral evidence sessions with the police, the Crown Prosecution Service and the political parties. A report of the recommendations to further tackle the issue will be provided by the committee to the Prime Minister in December.

I turn to some of the issues raised in the debate. I am grateful to my noble friend Lord True, who I think suggested that there should be some restriction on the ability to reintroduce in a subsequent Session a Private Member’s Bill introduced in a previous one. He said that this might save the noble Lord, Lord Kennedy, and myself from repetitive stress. I see some advantage in that; on the other hand, if I have to spend a Friday here I would rather spend it redoing a Bill on which I already knew something than having to tackle one from scratch. My noble friend was concerned with two issues. As I said in March, we are considering the issue of the donation he referred to alongside a number of others related to donation matters, although one would have to reflect on whether any legislation would be retrospective. Likewise, we need to reflect further on the issue with the Green Party. I endorse what the noble Lord, Lord Kennedy, said about my noble friend’s contribution to local government and we look forward to his contributions to the House.

The noble Lords, Lord Wrigglesworth and Lord Whitty, raised the very important issue of social media, which has added a new dimension to our campaigning. It simply was not there when the legislation was introduced and we need to ensure that the legislation is fit for purpose. At the moment, any spending on social media will generally be subject to existing spending limits and reportable after the poll. It will normally be reported under the categories of advertising or unsolicited campaign material, but the Electoral Commission is actively considering how the regulatory framework should adapt to the use of social media by political parties.

The right reverend Prelate the Bishop of Salisbury added a spiritual dimension to our discussions and quoted from Prayers. I have often wondered whether, if there was something offensive to the Church on the Order Paper, the Bishop who took Prayers could simply run through the psalm book at the beginning of our proceedings so that we would never actually sit. I wonder what the Whip on the Bench would do if those ingenious tactics were ever used. The right reverend Prelate mentioned expenditure by the main parties. Expenditure at elections by my party has gone down for each of the last three elections; the less we have spent, the better we seem to have done. In 2015, we spent £15.6 million and the Labour Party spent £12.2 million, so we were ahead but there was not a huge difference. I take very much what he said about good will. We will need good will from all sides if we are to make progress on this issue.

The noble Lord, Lord Kennedy, asked me about updating some of the limits in the PPER Act. Section 155 allows the Secretary of State to update certain figures using secondary legislation and to do so by inflation. The question of using the Moses Room for Committee stage of a Private Member’s Bill is something to be discussed through the usual channels.

On Northern Ireland, progress has been made. We believe in the importance of transparency to the political process, and in line with that aim, the Secretary of State intends to bring secondary legislation before Parliament that would provide for the publication of all donations and loans received by Northern Ireland parties. That would take effect in respect of donations and loans received on or after 1 July 2017. The order is at an advanced stage of drafting and we hope to lay it before Parliament very soon.

Reaching agreement on the areas raised in the Bill will be complex. Political parties have wide-ranging views and finally achieving consensus on this subject will not be an easy task. Investing significant time in cross-party talks and—even in the unlikely event that consensus could be reached—finding time in the legislative agenda to make complex changes to the system cannot be a priority. The legislative programme for this Session is already at full capacity and there is no scope for additional measures.

That is not to say that the Government do not take electoral issues seriously. We continue to consider issues as they arise and make appropriate and proportionate changes. Rather than embarking on another attempt at root-and-branch reform, we are identifying small ways in which the existing system can be improved—I have just referred to the question of Northern Ireland. When he appeared before the Constitution Committee in March this year, the Minister for the Constitution said that the Government would be open to considering small-scale measures in relation to party funding, such as looking at charitable payments and the changing role of technology. I am happy to repeat to the noble Lord the offer of a meeting that was made last time we spoke. I think one had been arranged, but it was disrupted by the general election.

However, as we have heard this afternoon, wholescale reform of the party funding and campaign spending regime does not currently have cross-party backing. Without consensus on these fundamental issues, it is only right for me to say that the Government have reservations on a Bill on such matters at this time.