Draft Transparency of Donations and Loans etc. (Northern Ireland political parties) order 2018
(Limited Text - Ministerial Extracts only)
Read Full debateThe Committee divided: - Ayes: 9 / Noes: 8 - Question accordingly agreed to.
The Parliamentary Under-Secretary of State for Northern Ireland (Chloe Smith)
I beg to move,
That the Committee has considered the draft Transparency of Donations and Loans etc. (Northern Ireland Political Parties) Order 2018.
It is a pleasure to serve under your chairmanship, Mr Hosie. The draft order will provide for the full publication of donations and loans received on or after 1 July 2017 by Northern Ireland political parties and other regulated donees or participants. The current regulatory framework provides for information on political donations and loans to Northern Ireland recipients above relevant thresholds to be reported to the Electoral Commission. However, the commission is forbidden by law from publishing that information except in very limited circumstances. Hon. Members will be aware that that contrasts with the position in the rest of the United Kingdom, where information on donations and loans to political parties is published quarterly.
Party funding regulations were introduced across the UK by the Political Parties, Elections and Referendums Act 2000. At the outset, however, those arrangements did not apply to Northern Ireland, because the risk of intimidation of donors was a major concern at the time. The Northern Ireland (Miscellaneous Provisions) Act 2006 extended the 2000 Act to Northern Ireland, with provisions in place to prohibit the publication of Northern Ireland political donations. The Electoral Administration Act 2006 made UK-wide provision for the reporting and publication of loans to political parties, similar to the provision already in place for donations. The Electoral Administration Act 2006 (Regulation of Loans etc: Northern Ireland) Order 2008—forgive me for all the long titles, Mr Hosie—extended the provisions of its parent Act to Northern Ireland, with modifications to prohibit the publication of details relating to loans made for political purposes. The donations and loans confidentiality provisions were always considered to be temporary. Public support for transparency has remained strong and consistent since the provisions have been in force.
The Government have made increasingly clear our desire for increased transparency with regard to Northern Ireland political donations and loans. In January, my right hon. Friend the Secretary of State wrote to the Northern Ireland political parties to seek their views on moving to full transparency. For the first time, all the parties that responded agreed that the time was right to introduce transparency to Northern Ireland. He also asked the Northern Ireland parties for their views on the date from which transparency should take effect. Of the parties that responded, only the Alliance party suggested that publication should be backdated. The issue was further discussed in the political talks that followed the Assembly election in March. Again, there was consensus that transparency should be introduced, and again only the Alliance party suggested that publication of donations and loans should be backdated.
The Secretary of State subsequently announced to the House that the Government would bring forward secondary legislation to introduce transparency, and I am pleased to present this important legislation to the Committee. In the light of the responses received from the political parties in Northern Ireland about the date from which transparency should take effect, and to ensure consistency with the Electoral Commission’s quarterly reporting schedule, the draft order will provide for the publication of details relating to all donations and loans received on or after 1 July 2017.
Let me take the Committee through the draft order in detail. Although its primary objective is to provide for the publication of donations and loans in the way I have described, it also contains provisions to address a range of related issues, particularly in relation to the operation of the Political Parties, Elections and Referendums Act. That Act provides for details of donations and loans received over the calendar year by a recipient from the same source to be published when their aggregate total exceeds the reporting threshold. Articles 2 and 3 of the draft order therefore provide for the publication of details about a donation or loan received before 1 July 2017 if it is aggregated with a donation or loan received on or after that date.
Hon. Members will be aware that the Northern Ireland (Miscellaneous Provisions) Act 2014 does not permit the draft order to make provision that would allow for any information on donations or loans made or entered into before 1 January 2014 to be published in a form in which it would be possible to identify the donor or lender.
Loans or donations may not be one-off events, and changes to a loan may be made over time. Certain changes to a loan—such as a change in value or rate, a change of repayment term, a change of parties or the loan coming to an end—must be reported to the Electoral Commission. Article 3 provides for reportable changes taking effect on or after 1 July 2017 to be published if the loan was entered into on or after 1 January 2014. The effect will be that a change to such a loan that takes effect on or after 1 July 2017 will result in the publication of all details relating to that loan, including from the pre-1 July 2017 period. However, the draft order provides that such publication will not take place if the change to the loan is simply the repayment of the whole of the debt, or all the remaining debt, under the loan.
The prohibition on commission officials disclosing information relating to Northern Ireland political donations and loans is supported by a criminal offence. That will remain the case for donations and loans received before 1 July 2017, unless the disclosure relates to aggregation or a reportable change to a loan, as provided for elsewhere in the draft order. Articles 2 and 3 further provide that the commission will not be acting contrary to the prohibition on disclosure if commission officials publish information relating to a donation or loan received after 1 January 2014 and before 1 July 2017, so long as the relevant donation or transaction report does not state that the donation or loan was received before 1 July 2017 and commission officials believe that it was received on or after 1 July 2017 and were reasonably entitled to hold that belief. I think that was the longest single sentence I have ever spoken in a Delegated Legislation Committee, Mr Hosie, but there may be more like it coming up.
Hon. Members may be aware that the Political Parties, Elections and Referendums Act permits donations and loans from certain Irish citizens and bodies to Northern Ireland recipients. Additional information must be provided in donation reports to the Electoral Commission in respect of those donors in order to confirm their identity. Article 5 provides that such information, which includes passports and statements of naturalisation, will not be published by the commission; clearly it would be inappropriate to publish such sensitive personal information. However, I assure the Committee that all other information that relates to Irish donations and loans received from 1 July onwards will be published in the normal way.
Articles 6, 7, 8 and 9 will require political parties and regulated donees or participants to provide dates on which donations or loans are received, particularly for those received before 1 July 2017. This will minimise the risk of pre-1 July 2017 donations and loans being published in error.
Articles 10 and 11 will ensure that the current verification steps undertaken by the commission to verify Northern Ireland donations and loans will continue to apply to Northern Ireland donations and loans received on or after 1 July 2017.
The Political Parties, Elections and Referendums Act provides for reports to the commission to be submitted and published at different times, depending on whether the recipient is a political party or a regulated donee or participant. Article 12 provides that the first publication of regulated donee information can take place only at the same time as, or after, political party information has been published.
I hope that the Committee has found that summary of the provisions helpful. As hon. Members know, the Electoral Commission will be responsible for implementing the arrangements set out in the draft order. The Government have fulfilled our statutory obligation to consult the commission about the draft order; I place on the record my thanks to the commission and its staff for their close co-operation and constructive input into the drafting process.
In summary, there remains widespread support among the people of Northern Ireland for full transparency. There has been a welcome recognition by the political parties of the importance of transparency to the broader political process.
While there is still much work to be done in re-establishing an Executive in Northern Ireland, I have no doubt that the order before us today is an important milestone that will strengthen confidence in and support for the democratic process in Northern Ireland more generally. For this reason, I hope that hon. Members will support the order.
Owen Smith
I will give way in a moment; the hon. Gentleman has made his intervention.
Chloe Smith
The right hon. Member for Exeter is precisely on the point. My right hon. Friend the Secretary of State began this action in January. Can the hon. Member for Pontypridd explain why we have not received any further communication from the parties about changing their view, as he claims they have done? Did they not see that we were having a fully open process for the whole of 2017 in which they could have communicated that? They have not done that. I tell him that they have not. We have not received any such communication. There has been no change, and he is dancing on a pin.
Owen Smith
Let me read out to the Minister some of the responses that I have received from the political parties in Northern Ireland, and I will also read out the view of the Electoral Commission in Northern Ireland. I will start with the commission, as it is the only statutory consultee that the Government are meant to consult as a result of the Northern Ireland (Miscellaneous Provisions) Act 2014. It is profoundly disappointed that the Government have chosen not to backdate the donations to 2014, it welcomes the transparency that is going to be introduced prospectively—
Owen Smith
Not unlike the hon. Gentleman because those were my opening words to the Committee today, so the Minister really ought to listen. But the Electoral Commission is profoundly disappointed that the provision will not be retrospective, which is also my view. Ann Watt, the head of the Northern Ireland Electoral Commission, said:
“While all reportable donations and loans received from 1 July 2017 will now be published by the commission, we would also like to see the necessary legislation put in place, as soon as possible, to allow us to publish details of donations and loans received since January 2014.”
Her predecessor, Séamus Magee, who retired in 2014, said:
“The deal on party donations and loans must be part of the DUP/Conservative deal. No other explanation…Every party in Northern Ireland understood that the publication of political donations over £7,500 was to be retrospective to Jan 2014.”
I put it to the Minister that part of the reason that some of the political parties did not respond saying that they wanted it to be retrospective is that they naturally understood that that would be the case, given that that was what the legislation allowed for. When the Minister responds, I am sure she will tell us why she has arbitrarily picked the date of 1 July 2017. There is no reason that I can see, either in statute or in ministerial comments, for coming up with that date.
Let me read some of the views of the parties. Conor Murphy, a Member of the Legislative Assembly for Newry and Armagh, said on behalf of Sinn Féin:
“The British Government’s refusal to backdate new laws on political donations is aimed at covering-up so-called Brexit ‘dark money’ that was paid to the DUP”.
He also said:
“If the DUP and the British Government were serious about transparency in government then they would support the retrospective publication from January 2014 of all donations over the reportable threshold.”
Robin Swann, the leader of the Ulster Unionist party, has told me in writing today that his party would not oppose retrospective introduction of the legislation, and a similar view is now held by the Social Democratic and Labour party. In addition, the view of the Alliance party, which was clear back in January, was that it, too, wanted publication. The truth is that the views of the political parties in Northern Ireland and those of the Labour party have changed as a result of growing concern about the DUP donation.
Mr Bradshaw
My right hon. Friend is absolutely right. I hope the Minister will explain why the Government have changed their mind when she responds to the debate.
If the Government will not change their mind again, to their original position, and backdate transparency to 2014, I invite the Minister to publish the full details of this unprecedented £435,000 donation, regardless of the scope of the measure, so that the public interest and confidence in the referendum result can be protected. Will she also explain the reasons for the fine imposed by the Electoral Commission on the CRC, and exactly which law was broken? I would be amazed if she were not aware of that and did not know. It is her job as a Northern Ireland Minister to find out.
Chloe Smith
I am afraid I must stop the right hon. Gentleman on this line of argument now. I do not think he has been listening or has understood the gravity of the situation. There is a criminal offence prohibiting disclosure of details. I do not have those details; the Electoral Commission is not permitted to pass them to me. I cannot answer his question. He appears to be inciting me to do something very foolish that, even if it were not foolish, I cannot do. Perhaps he could improve the quality of his arguments.
Mr Bradshaw
The simple answer is to backdate this measure to 2014. The Minister would be able to do whatever she likes then and we would have full transparency, which she claims she wants.
Will the Minister also explain why she is ignoring the representations of the Electoral Commission, of civil society in Northern Ireland and of all the political parties except the DUP? Has she satisfied herself that the donation to the DUP for the Brexit campaign was from a permissible donor, and has she satisfied herself that it was legally sourced? I am not asking to her publish it without the order, but has she satisfied herself of that?
Mr Bradshaw
It is her job. If not, what is she doing about it? [Interruption.] The Minister should listen to me. Has she asked the relevant ministerial colleagues to satisfy themselves of that, and has she asked them to investigate the allegations of illegal collusion involving the DUP, Vote Leave, Leave.EU, BeLeave, Labour Leave and Veterans for Britain? [Interruption.]
Mr Bradshaw
It is not a laughing matter; it is a very serious issue about public political transparency, honesty and tackling corruption.
Chloe Smith
For the sake of the record, I repeat that I cannot do the things that the right hon. Gentleman is asking of me, and nor can other Ministers. We do not have access to that information by matter of law. It is a criminal offence to share the details he is asking for. It is not a matter for jollity in the Committee that he is asking frankly asinine questions about something that I cannot do.
Mr Bradshaw
The Minister is telling us that she is a helpless victim in this whole affair. There is nothing to prevent her from writing to the Electoral Commission, asking it to investigate the matters that I have just asked to have investigate. We have done it, and other people have done it too. What is stopping her? She is hiding behind secrecy to protect the true source of the donation, and it is totally unacceptable.
If she cannot answer these questions satisfactorily, the only conclusion that anyone can draw is that the Government’s sole priority is to protect their deal with the DUP, rather than honour the letter and the spirit of the legislation, and do what is right and in the public interest. I hope the Committee rejects this shabby little order.
Chloe Smith
I thank my hon. Friend the Member for North Dorset for his comments and support. I will deal with a few of the remarks made in the debate and then, in wrapping up, I will emphasise why the Committee should vote for this order.
In chronological order, I will begin with the arguments of the hon. Member for Pontypridd. Frankly, I find it amazing that he is opposing transparency. He will no doubt say that his first words were to support transparency, but his second words were to say that he would vote against it. That is a shabby state of affairs. Our words should echo our deeds. The Government are committed to transparency, which is why we have introduced this order; the parties are committed to transparency; the public are committed to transparency; and the Electoral Commission is committed to transparency. He cannot bring himself to vote for it. He is not committed to transparency.
Chloe Smith
Yes, perhaps the hon. Gentleman will say that he is committed to transparency.
Owen Smith
I am, as I said at the beginning of my remarks. I hope the Minister will explain to the Committee why she is not in favour of transparency in line with the original legislation that her Government passed in 2014. That offered more transparency than is currently on offer—Labour wants more transparency, not less. All she needs to do is tell the Committee that she will take this measure away, rethink it in the light of changed views in Northern Ireland and in this House, and adopt what was originally intended by her Government, backdated to 2014.
Chloe Smith
That was a lovely long intervention, so that is the hon. Gentleman’s lot—I will not take another one from him. I will explain exactly those points.
I remind the House that the Conservative manifesto for the 2017 election in Northern Ireland pledged to increase transparency. We are delivering on that. The Labour party is choosing not to. That is amazing.
We wrote to the parties in January. This year, Northern Ireland parties have engaged in two elections and in sustained political talks, so to offer the position in January, to seek views and then to take action from July is a reasonable approach. My right hon. Friend the Secretary of State has already explained that he thinks that it is not right or fair to impose retrospective regulations or conditions on people who donated in good faith with the rules as they were set at the time.
Ian Paisley
Will the Minister confirm that this vote is take it or leave it—that if the Government lose, there will be no publication?
Chloe Smith
Indeed, that is the case. If Members were to vote against tonight’s order, they would vote against transparency. It is as simple as that. That is what we are dealing with here. Let us not forget what we have been through to get here.
Jess Phillips
I would like to remind the Minister, when she uses words such as that we are “voting against transparency”, of how words matter. Actually, I ask the Minister to think about how people get treated because of the poor words used by people in this building, or used to represent people in this building, in newspapers. I ask to her to consider what seems like a total pantomime: saying that asking for more transparency is to vote against transparency. The Minister is probably a bit better than that.
Chloe Smith
I have great respect for the hon. Lady and I have great and serious respect for her tone of voice. However, she has deployed it unnecessarily twice in this Committee. She is trying to say something that her vote will not say. She needs to hear her own advice. She needs to take her own point: that words and actions matter. In fact, I think that actions probably matter the most, which is why Conservative Members will vote for the order.
Chloe Smith
I am afraid that I will not take an intervention from the Opposition Whip. I need to move on and respond to some of the arguments that have been made.
As I mentioned briefly, there has been a history of intimidation in this particular context. Confidentiality has been important up to this point. I find it astounding that the Opposition are playing fast and loose—words that have already been used in this Committee—perhaps with that delicate history, I do not know, but certainly fast and loose with the sensitivity of this time, when we need to get politicians back around the table. This is not about playing politics; this should be about getting on with something that has been important to Parliament. I am afraid to say that the party of the hon. Member for Pontypridd is inconsistent, rather incoherent and perhaps even incredible.
Mr Clarke
We are dancing on the head of a pin. I feel that the argument has been driven by motives other than those on the face of the order. The speech by the right hon. Member for Exeter goes to the point on that. It is about trying in some way to stop or to undermine Brexit rather than being about the real sensitivities and the political history of the most troubled part of our country. Does the Minister agree that the tone that has been struck is almost wholly unhelpful?
Chloe Smith
I agree with my hon. Friend and I think that it is rather a shame that we have had to have this discussion. Let us take the point of Brexit: in the time that we have been working hard to deliver transparency, since January 2014, the hon. Member for Pontypridd and his party have taken seven different positions on Brexit alone. We need to do a little better than that.
Chloe Smith
No, I will take no more interventions as I need to make progress.
Chloe Smith
I am just about to come to the hon. Lady’s comments—I thought she might like it if I did that. She said that the 2014 Act obliged us to publish from then, but I am afraid that it does not. It is an option and not a requirement under that 2014 legislation. She is also of the view that we should not leave anything in the dark, that we should not delay and that we should not set yet another date. Again, why is she is voting against today’s transparency? It is a very unwise thing to do. It would leave donations now in the dark. It would leave us without a date and with no transparency.
Deidre Brock
Will the Minister explain why MLAs currently declare their donations on their register of interests on the Northern Ireland Assembly website? She is attempting to block publication of donations, which all parties accept is likely to happen, as she has generally recognised since at least 1 January 2014.
Chloe Smith
I will put this quite bluntly: the Government propose transparency; those who vote against the order are reducing the amount of transparency that will stand on the statute. That is the fact.
Chloe Smith
No, I will not.
Let me deal with the point from the right hon. Member for Exeter. As I said when I intervened on him, I cannot confirm any of his questions; I explained why, and he should know why. He still seems to want me, for example, to have written to the Electoral Commission, and to have asked it to commit an offence by replying to such a letter. He says he has done so; I really hope he has not, because to do so before passing a draft order such as this is to incite the commission to commit a criminal offence. That would be very unwise indeed.
Mr Bradshaw
On a point of order, Mr Hosie. The Minister is specifically referring to something I said in my speech. Would it not be courteous of her, in your view, to give way on that specific point?
The Chair
Chloe Smith
If the right hon. Gentleman can do better than he did the first time, I will be happy to hear it.
Mr Bradshaw
Why is the Minister ignoring the advice of the Electoral Commission on this matter?
Chloe Smith
The right hon. Gentleman allows me to move on to my next, rather important point.
Chloe Smith
The answer is that we are a responsible Government who are introducing the draft order on transparency, and while we have no intention of providing for the publication of pre-2017 donations, we intend to work with the Electoral Commission to review the operation of the broader framework for donations and loans in Northern Ireland when these transparency arrangements have bedded in. That is rather important, because it reminds us that what we have today is the beginning of obtaining an important amount of data; from today, we will be able to better see the full situation.
On that, I turn briefly to the comments from the hon. Member for East Antrim, although he is not a voting member of the Committee. I welcome his affirmation that parties wants to move to full transparency. He also reminded us that only one party proposed backdating, and I reiterate that we have not received any communications from parties indicating that their positions have changed since January.
I also say to the hon. Gentleman that I understand his argument regarding Irish donations. The draft order will provide transparency and will be the beginning of our having some valuable data. When that transparency has bedded in and there is a fuller understanding of how Northern Irish parties are funded, my officials and I intend to work with the Electoral Commission to look at other aspects of the operation of the donation and loan systems in Northern Ireland, to review whether there might be a case for further reforms.
The Government welcome the Electoral Commission’s support for the draft order. We think we should get on with it; to delay will lead to even greater secrecy. Those Members who vote against the draft order are voting to delay transparency and to avoid the normalisation of Northern Ireland’s politics, and they are voting against the ability of anybody to hold politicians to account. Funnily enough, we are talking today about the standards of politicians and the clarity of our conduct. Our votes should mirror our views. If we believe in having transparency henceforth, let us vote for it.
Question put.