Representation of the People (Election Expenses Exclusion) Order 2013

Debate between Baroness Brinton and Baroness Hayter of Kentish Town

Tuesday 12th March 2013 Grand Committee

[Baroness Brinton]

My Lords, together with some noble Lords present in Grand Committee today, I was present at the launch of this fund last year. Those of us who were there celebrating the work of the coalition Government, the Speaker’s Conference and, especially, my noble friend Lynne Featherstone MP, who led the work up to the launch of the fund, were horrified to discover that there might be a loophole whereby other candidates might be able to challenge any grant made by this fund as part of election expenses. That was certainly never intended, not least because the representation of disabled people is very low in elected office, whether at Westminster, on councils, in devolved Administrations or any other elected office—although I was glad to hear my noble friend saying that it did not apply for individual elections, such as those for police commissioners and, I presume, elected mayors.

I shall not repeat the points that the noble Lord, Lord Low, made, but my real anxiety is about the Electoral Commission’s concern about the phrase,

“barriers to seeking elected office”,

being wide and novel wording. It has to be, given how wide and novel varying disabilities are. We cannot legislate at this stage for every dot and comma of what is necessary. The point has already been made about Braille leaflets for checking before an ordinary leaflet is printed; about the need for British Sign Language interpreters; about having a palantypist at a conference where someone who may or may not be reliant on BSL but may be reliant on lip reading cannot keep turning around to see contributions from the back of a conference room. One young candidate whom I talked to a couple of weeks ago said that he had had to get a very expensive modification to his wheelchair. The first time when he stood for Parliament, he was invisible because his head was always too low; now he can come right up to shoulder height and have conversations with people. Suddenly, he has become visible. I am not suggesting that he would have made an application to the fund, but the fund needs to be able to think as flexibly as possible to overcome the barriers, and in this young man’s case a very physical barrier to having a dialogue with his electorate.

The other reason for the fund is that because candidates are not employed there is no other recourse to public funds for any costs associated with their disability. Just as an aside—this does not relate to this order—there is a problem for Members of the House of Lords with disabilities, because they, too, are not employed and there is no access to public funds for them if they need adaptations in their workplace here.

I end by saying that the Liberal Democrats have taken the issue of the under-representation of disabled candidates very seriously. We have launched a leadership programme for candidates from a range of under-represented groups, with 10% of places on the scheme reserved for those with disabilities. In the first 40 recruited, five have disabilities, some visible and some invisible. We hope that by the time we get to the other side of the general election, we will have some more disabled MPs in place to represent the wider country. In particular, I am looking forward to the first BSL first language MP, or, frankly, even Peer, to be able to work alongside us in creating legislation. It is a real disappointment that there has not been one to date.

I have two questions for the Minister. Given the Electoral Commission’s concerns about challenge and that some grants have already been awarded, will the order be retrospective? Secondly, Scope has raised an issue about the expenses repayment; the 35-day deadline may be very tight in some circumstances, particularly in relation to the short campaign of a general election, where deadlines are actually very important, and they may suddenly find that they have it. Is there any scope—I am sorry to use that word—to make it slightly more lenient or generous?

Finally, I hope that on the sunset clause of June 2014 the Government will ensure that there is no gap if they decide to move ahead. At that point, most candidates in key seats will have been selected and will be fighting the long campaign for election in the general election of 2015. It would be absolutely appalling if there were a gap in their ability to apply for grants.

[Baroness Hayter of Kentish Town]

My Lords, in responding to points from the noble Lord, Lord Low, and the noble Baroness, Lady Brinton, we hope that they are very successful in selecting their candidates. Noble Lords will not be surprised, however, if I do not necessarily wish them success in being elected. But it is a challenge to my party to make sure that we can similarly find some candidates. It will also come as no surprise to the Committee that we broadly and warmly welcome this draft order which, as the Minister says, will enable disabled candidates to apply for and use the fund specifically created to encourage them to be candidates by excluding those moneys from the schedule of election expenses. It is clearly a shame that it was not thought of when the fund was established, but we are pleased, as the noble Lord, Lord Low, said, that it will be done by 26 March, in time for this year’s election. Unsurprisingly, the charities representing people with disabilities, most notably Scope, are also supportive of the thrust of the measure.

The Minister will have read the discussions of the House of Commons committee on this. Perhaps it is a bit late to regret, along with it, that the fund does not cover parish council elections. Indeed, for many people, that is their first attempt at the ballot box, and it might have encouraged more disabled people to make that same first attempt. However, this is a pilot, and we hope that if it is successful it will be rolled out in a comprehensive way.

My questions, therefore, are not about what might have been but about this specific order, which allows the fund expenditure to be excluded. Will the Minister confirm that anything that the fund agrees to finance will then automatically be covered by the exclusion? In other words, there will be no additional formality to be gone through? We do not want the fund saying that it is covered and then being told afterwards that it is not. There needs to be just one lot of decision-takers, and I assume that it will be the fund decision-takers. It would be useful to have that confirmed.

What is being done to promote awareness of the fund? In preparation for today, I did the usual thing and tried to find out about it. I found it impossible to locate the fund through the Electoral Commission’s less-than-helpful website. Google was rather more helpful and got me on to the relevant site. Given that the Electoral Commission wants to be involved in this, I would have thought that it would do more to make knowledge of the fund better known, rather than simply being able to find out about this specific order, which is not of interest to disabled people once it is done.

Information on the fund itself was not brilliant. I could not get hold of the application form from the website although it has now been sent to me. It also was not clear how quickly a decision would be made, which I should have thought was also quite important for candidates to decide whether to go ahead. They need to know that before they start spending too much of their own money. Although we are keen for the Electoral Commission to be involved in encouraging and helping disabled people to be candidates, we hope that it will smarten up its own access via the web in time to do this.

We very much support the exclusion of fund expenditure but rather like the noble Baroness, Lady Brinton, we wonder whether this leaves a transparency gap. It would be useful to know what disclosure of such funds and their use will be made. Mention was made of a voluntary system, and I wonder whether that is sufficient or whether the fund should itself be transparent. It would be useful to know the Government’s thinking on that. Finally, can the Government assure us that if this pilot proves a success, it will be rolled out fully and with money following intent? As we know, the groups who will benefit from this are highly underrepresented at the moment. Indeed, I cannot believe that this Government would have so undermined the lives of so many disabled people as they have done both under the Welfare Reform Act and now the Welfare Benefits Up-rating Bill had we had more people as MPs, or indeed Peers, but especially MPs, from those particularly affected groups. We very much want this fund to be a success and we hope that its administrators, the Electoral Commission and the Government will play a very full part in helping disabled people to find out about the fund and then stand for and be elected to public office. I am sorry, but I hope that they will all be Labour if they get elected.

[Lord Wallace of Saltaire]

My Lords, I thank those who have spoken for their general welcome for this order. I stress that this is a pilot and an experiment in some ways. I also stress that it is absolutely an all-party initiative. We very much hope, as the noble Baroness has suggested, that all parties will want to take this up and make use of it, and that part of the way in which information will spread out is that all parties will wish to inform their local associations to look more actively for potential candidates for whom this would make the crucial difference.

In the disability world, the communications strategy is already a good deal better known than in the general outside world. I had not heard of it until a few weeks ago but I am told that the Government have a comprehensive communications strategy in place. There have been a number of news stories in the press, and in tweets, blogs and the like, targeted very much at the disability community. This will continue as the pilot rolls on.

As for the question of what happens in August 2014, this is a pilot over which we will want to consult as we go along, as well as seeing how many people come forward. Once the SI ends, we will ensure that there is a smooth transition to the new regime, if by then a decision is made that the fund is seen as worthwhile and is to be extended. So far there have been about 30 applications for the fund, and the average per application is between £4,000 and £6,000. We are not talking about enormous amounts. Noble Lords will recall that there is a £20,000 maximum per application under the fund at the moment. However, we hope that this will be shown to make a crucial difference in making it easier for people with different disabilities to put themselves forward for election.

In the pilot we decided not to include parish councils. A great many parish councils do not have elections. At my party’s spring conference, I talked to a local activist from West Yorkshire. He told me how deeply unpopular he has made himself with a number of other politicians in his ward, because he keeps insisting that there should be elections for the parish council. Others think that elections are an unnecessary expense and that co-option is much to be preferred, this being a predominantly Conservative parish council. Perhaps one of the questions that we will investigate and discuss further, and come to a different decision on as we move forwards from the pilot, is whether we include parish council elections, in which many people first cut their electoral teeth, as the noble Baroness rightly says.

The noble Baroness, Lady Brinton, asks whether it will be retrospective. The answer is that it will not, but those who have already approached the fund for support for this coming May’s elections will be able to roll their applications in and it will not go back further than that.

Enterprise and Regulatory Reform Bill

Debate between Baroness Brinton and Baroness Hayter of Kentish Town

Tuesday 26th February 2013 Lords Chamber

[Baroness Brinton]

My Lords, I rise briefly to thank the noble Viscount for the amendments that he has laid before the House today. I think they go a considerable way to allaying the concerns and fears I had.

[Baroness Hayter of Kentish Town]

My Lords, if it will not embarrass the Minister too much, this side must also add our thanks for these amendments which, to a certain extent, take account of the issues I raised about companies in formal insolvency which risked a penalty being made by a tribunal, given that companies in insolvency clearly have financial difficulties. This is partially dealt with by Amendment 24, and we are grateful for that.

However, there are two other issues on which I would like the Minister to respond because the amendment does not prevent a tribunal levying a penalty on a company in formal insolvency. One is that in formal insolvency, the old management is no longer there. It is not in charge; it is a new, quite separate, professional insolvency practitioner, who has been brought in to sort things out. Therefore, any penalty would not be levied on the people who had done wrong, if you like, and had caused the tribunal’s award. Nor could it act as a deterrent to repeating the breach because the company would now be in someone else’s hands. The only effect would be to deplete the assets available for the creditors, including the employees, as suggested by the Minister.

Enterprise and Regulatory Reform Bill

Debate between Baroness Brinton and Baroness Hayter of Kentish Town

Monday 10th December 2012 Grand Committee

[Baroness Hayter of Kentish Town]

My Lords, Clause 14 gives tribunals powers to impose a financial penalty on an employer who is in breach of their employment responsibilities where there have been aggravating features over and above any award. The intention is to provide a deterrent to employers from neglecting their responsibility towards employees and to discourage them from repeating the breach that has been identified by the tribunal. However, we wonder whether the impact of penalties against an insolvent company has been properly considered.

In most formal insolvencies the management of a company is no longer in place having been replaced by an insolvency officeholder, so any financial penalty would simply represent an additional claim on the assets of the already insolvent company. Needless to say, this would reduce the amount available for creditors, including the HMRC as well as employees. With a maximum penalty of £5,000 per worker, the impact could be significant where there is a large workforce. For example, in the recent insolvency of a retail company, tribunals made awards to 24,000 employees. Should penalties then be added to those awards, substantial amounts would be lost from the money available for distribution to staff or creditors.

Penalties on companies in formal insolvencies where the management is no longer in place would clearly have no deterrent effect as those responsible would no longer be around and not themselves liable for such penalties. Any penalty would therefore deliver no benefit to employees but would simply reduce returns to creditors. It is for this reason that Amendment 20L calls for an exemption from penalties for companies in formal insolvencies.

I am aware that R3 has been in contact with the Bill team on this and so I am sure that the Minister will be well briefed on the issue and on the intention behind the amendment. However, I hope he will not say that the amendment is not proportionate to the size of the issue. At a time of slow growth, which we all acknowledge is going to continue for some time, there will, sadly, be many insolvencies yet to come, and very often in the retail and other employee-rich sectors. I also hope that the Minister will not tell us that there is some magical alternative non-statutory solution, such as guidance to tribunal chairs or enforcement officers. That would be rather silly with a new Bill. It may often be sensible where something unplanned has happened after Royal Assent or when a new Act is bedding down and unforeseen problems occur, but here we could make the provision in the Bill right from its inception.

Furthermore, having this provision in the Bill would give clarity to insolvency practitioners and others dealing with insolvent estates and would remove the threat of such additional costs and all the extra time that is taken in arguing against them, which in itself adds even more to the costs of the insolvency procedure and has to be met out of funds that would otherwise go to creditors. We all know that once a power has been granted in legislation, any amount of non-statutory guidance often fails to prevent its exercise.

Even if enforcement officers are advised that the penalty should not be collected, that would not deal with the problem because the penalty will still exist as a claim against the estate. Also, an insolvency practitioner might have a legal duty to pay regardless of whether such payments are being pursued by the enforcement officer.

Perhaps the biggest disadvantage of relying on non-statutory means is the uncertainty that that creates. Whether or not financial penalties are actually awarded or collected in a formal insolvency does not change the fact that they could be under the Bill as it is currently worded. That uncertainty is particularly damaging in the case of a potential business rescue, where the insolvency practitioner has to be able to predict the liabilities and outgoings of a company that is in administration when deciding whether it is possible to trade it. Obviously, trading such administrations can increase the returns to creditors as well as reducing job losses. Therefore, the addition of potential liability could mean that fewer companies are saved from liquidation.

Our amendment, granting specific exemption for companies in formal insolvency—ie, where the management is no longer in place—would remove such uncertainty. It would not harm employees, who may still have an award made in their favour, and it would merely prevent the creditors of insolvent business having to pay a fine to the Secretary of State for a transgression for which they bore no responsibility.

It seems silly to send this Bill into the world unfit for purpose. The clause was meant to fine those who had transgressed and deter them from becoming repeat offenders, but an IP running an insolvent company is not the transgressor and any such fine would only be paid by blameless creditors.

To ensure that we can find a route to those who have transgressed, we have a second amendment in this group—Amendment 20PA. Because the present Clause 14 would fail to act as a deterrent to directors of companies in insolvency, as any penalty does not fall on them, there may be merit in meeting the Government’s quite correct desire to increase deterrence by introducing a different deterrent for these particular people via an amendment to the Company Directors Disqualification Act 1986. This would ensure that where a breach has occurred that has, or would have, attracted a financial penalty were the company not in formal insolvency this matter is taken into account when considering directors’ conduct.

In a formal insolvency, the insolvency practitioner, who is acting as the liquidator, administrator or administrative receiver, has a duty to report on any director whose conduct makes them unfit to be involved in the management of a company. The matters that IPs have to consider when deciding whether to make such a report are listed in Schedule 1 to the Company Directors Disqualification Act 1986. This amendment would add to that list the issues covered in Clause 14 of this Bill, so that the IP could still consider these matters when deciding whether to report on those whose behaviour has been found wanting but who would currently escape any penalty because they are no longer running the company. I beg to move.

[Baroness Brinton]

My Lords, I welcome Clause 14, which inserts new Section 12A, but would like to assert the importance of Amendment 20L. New Section 12A(1) allows an employment tribunal, having found that an employer has committed an aggravated breach of workers’ rights, to order penalty payments to the Secretary of State regardless of any previously established financial awards. While this is a just measure, we must not neglect the legal rights and needs of those who find themselves unemployed and faced with their former employer’s insolvency while still owed back pay, expenses or other reimbursements. Under subsection (1) as it stands, employees whose rights have been breached by their former employer would not necessarily receive compensation until after the Treasury, which as primary creditor would receive the penalty for the employer’s infringement before the employees got their redundancy pay. Thus the compensation of workers wronged by their former employers would be secondary to and potentially diminished or even eliminated by the amount paid to the Secretary of State when a company is insolvent and funding is finite. This would obviously be unfair to the former employees of an insolvent company who faced jarring transitions in their finances and everyday lives.

Amendment 20L would cancel subsection (1) where an insolvency officeholder had been appointed. This sensible measure would ensure that employees, as creditors, had primacy in receiving financial redress from an insolvent company. This is an important step to protect workers’ rights. When a company becomes insolvent, tens of thousands of people may become unemployed through no fault of their own, and these people are legally owed compensation, which could also provide much needed fiscal support. If we are genuinely to protect workers’ rights, we should support this Bill with Amendment 20L.

I also support the principles of Amendment 20PA, for the reasons that the noble Baroness, Lady Hayter of Kentish Town, has set out.