Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Debate between Lord Bishop of Oxford and Lord Wallace of Tankerness

Tuesday 28th January 2014 Lords Chamber

[The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD)]

My Lords, the other place has passed a Motion to disagree with Lords Amendments 26 and 27. As noble Lords well know by now, these amendments would narrow the range of activities that would count towards constituency limits. I do not propose to take up time once again by making the case for why constituency limits are needed, but perhaps I could express my gratitude at the outset to the noble and right reverend Lord, Lord Harries of Pentregarth. We had a discussion about these amendments yesterday that I found very helpful both in respect of this Motion and the next one, which is on staffing costs. It was clear from our discussions that we have very much narrowed down the differences that there are between us, and I very much hope that we may be able to persuade the noble and right reverend Lord not to press his amendment in lieu.

The noble and right reverend Lord, Lord Harries, said at Third Reading last week that,

“there should be real restraints in place to stop large sums of money distorting an election result at constituency level. There is therefore no disagreement about the purpose of this clause”.—[Official Report, 21/1/14; col. 587.]

That was very welcome and I turn now to Amendment 26B, tabled by the noble and right reverend Lord, Lord Harries, in lieu of his Amendments 26 and 27. Perhaps I might observe that Amendment 27 was thought to have been a consequential amendment. I think that parliamentary counsel thought that it was unnecessary and might be confusing. Having discussed this with the noble and right reverend Lord, I know that he will no longer seek to insist on that amendment.

Debating Amendment 26B shows that there is little difference between us, or between the Bill as currently drafted and what the noble and right reverend Lord wishes to achieve. He is understandably concerned about the workability and enforceability of constituency limits, and that is what his new amendment now seeks to resolve. I believe that this amendment is also aimed at addressing the concerns of campaigners, who argue that they are for the most part organised on a national basis and that to split expenditure along constituency lines is not always straightforward. Those campaigners that are not arranged on a national basis but across a small area have similar concerns about appropriately allocating expenditure across a small number of constituencies. Very often in these debates, the example of the HS2 campaign has been cited.

Lords Amendments 26 and 27 were initially put forward last week with a view to making constituency limits more workable by narrowing the activities that they would apply to. The Government have listened to and recognise the concerns expressed but we believe that they are misplaced. While I am grateful for the efforts which the noble and right reverend Lord, Lord Harries, has gone to, he too now realises that those Amendments 26 and 27 were not addressing the issue at hand.

Amendment 26B seeks to make it clearer when expenditure should be attributed to a constituency. Most crucially, there is an omission from this amendment of something in the one which the House considered last week on Third Reading. His amendment now moves away from seeking to apply the constituency limit to just a narrowed range of activities. The House has already agreed that it is appropriate to make third parties account for their expenditure against an expanded range of activities. The House has also agreed that constituency limits are necessary. As I have raised before, narrowing the range of activities that would apply to the constituency limits in turn limits the very effectiveness of these constituency limits. The reason this Bill widens the range of activities that count towards controlled expenditure is to cover a potential gap in UK election rules. Therefore, the amendment in lieu in the name of the noble and right reverend Lord, Lord Harries, is very welcome in recognising that.

I do not agree, however, and I hope I can explain why. Some of the concerns, while I understand why they have been raised, are perhaps misplaced. I do not agree with the view that attributing expenditure to constituencies is as difficult as is sometimes being suggested, either for the commission to provide guidance on and enforce, or for campaigners to undertake. Of course there will inevitably be difficult cases, but that is always the case, and the Electoral Commission is there precisely to provide the guidance to campaigners that they may need.

I did take the point made by my noble friend Lord Cormack last week, and passed on to the Electoral Commission his very constructive suggestion that there be a round-table discussion where a number of these issues could be addressed with regard to guidance in this area.

Amendment 26B has been drafted so as to require that the “significant effect” of expenditure is taken into account and not its geographical location. This is exactly what is already provided for in the Bill in Clause 28. What Amendment 26B further seeks, however, is to introduce a second test to determine whether expenditure is incurred in a constituency or not. This second test asks whether it can also “reasonably be inferred” that electors or households have been specifically targeted in a constituency.

I am not sure whether that was a throwback to the earlier amendment which talked about leaflets being specifically targeted in a constituency, but we believe that it is an unnecessary additional test. I fear that it would not add to any greater clarity.

The Bill's provision on constituency limits has, after all, been drafted in line with current PPERA rules and Electoral Commission guidance. Although bringing constituency limits is new, noble Lords will recognise that under PPERA expenditure must currently be attributed between England, Scotland, Wales and Northern Ireland. That is why there are separate spending limits for each part. Expenditure must be attributed between each part of the constituent parts of the United Kingdom on the basis of where its “significant effect” is felt. The Electoral Commission has clear guidance on how to allocate expenditure in this way and the same process will apply to constituency limits.

If a third party holds a rally in one constituency with a view to influencing the electoral success of a party or candidates in another constituency, that is where the “significant effect” is likely to be felt. The expenditure will be attributed to that constituency where the effect of that activity is intended and felt. That may be one or other or conceivably both of those constituencies.

The other point that has been raised is in terms of some of the difficulty of calculation. Where a significant effect is felt in several constituencies, the expenditure will be equally split between those constituencies—that is in the noble and right reverend Lord’s amendment and is indeed already in the Bill. There is no requirement for a detailed calculation of the precise amount or proportion of expenditure in each constituency, as has sometimes been suggested.

Inevitably, there will be minor overlaps. Again, the Electoral Commission already has guidance to this effect. That guidance notes that where a third party’s spending in one part of the UK has a minor effect in another part, the spending should be allocated to the part of the UK the spending was aimed at.

I give an example from existing PPERA provisions that are reflected in the commission’s guidance. If there were a major issue in Wales and a third party advertised in a Welsh newspaper that is also distributed or spills over—a minor spillover—into part of, say, Shropshire, then the entire spending would be allocated to Wales because that is where the effect is intended. Of course, this exact same principle will apply to constituency limits. The areas are smaller, admittedly, but the principle is the same.

Third parties and the commission will be required to assess attribution of spending on a qualitative basis—as indeed they are required to do at present. I simply add that the constituency limits are also almost equal to the current £10,000 PPERA registration threshold for England. As the Electoral Commission already enforces this limit, I do not see that there is any merit in claims that the commission will have difficulty in enforcing £9,750. It is perhaps easier to identify £9,750 when it is spent in a single small area than £10,000 being spent across England.

The reason given why the Commons disagree with Amendment 26 is:

“Because a wider range of expenditure than it provides for should be included when attributing a third party’s expenditure to a particular constituency for the purposes of determining whether a limit on expenditure in that constituency has been exceeded”.

The amendment that we are debating today in the name of the noble and right reverend Lord, Lord Harries, addresses the reasons that the Commons have given. What we are left with are concerns about significant effect, which, as I have indicated, is in the Bill already, and an equal measure among the constituencies in which there has been a significant effect, which is also in the Bill. I also indicated that the extra part that the noble and right reverend Lord has added does not actually add to the clarity. This is appropriately a matter for the Electoral Commission to give guidance on. I do not think that there is then a huge amount between us. On the basis of that explanation, I ask the noble and right reverend Lord not to move his Motion and I beg to move.

Motion B1

Moved by Lord Harries of Pentregarth

As an amendment to Motion B, leave out from “House” to end and insert “do not insist on its Amendments 26 and 27 but do propose Amendment 26B in lieu.”

26B: Page 16, leave out lines 10 to 23 and insert—

“2A (1) For the purposes of this Schedule, “third party constituency expenditure” means controlled expenditure incurred by or on behalf of a third party.

(2) Third party constituency expenditure—

(a) shall be attributed to those constituencies in equal proportions, or

(b) shall be attributed solely to that constituency, as the case may be.

(3) For the purposes of sub-paragraph (1), the effects of third party constituency expenditure are wholly or substantially confined to any particular constituencies or constituency if—

(a) there is no significant effect in any other constituency or constituencies, and

(b) it can reasonably be inferred that the third party selected the relevant electors or households (or both) or otherwise distributed the material wholly or substantially to contact electors in the particular constituency or constituencies and not a wider section of the public.”

[Lord Harries of Pentregarth (CB)]

My Lords, as the noble and learned Lord has indicated, this amendment on constituency limits is a significant revision of the amendment passed by your Lordships but rejected by the Commons. It leaves out the first part of our previous amendment in order to meet the reasons for disagreement as stated on the Marshalled List—the Government’s wish to include a “wider range of expenditure” than was previously suggested.

As the noble and learned Lord said in the House at Report stage, he thought that public meetings and events should be brought within its scope. In leaving out the first part of our previous amendment, we have accepted, for the purposes of the Bill where it now is, that this is what the Government wish to do, without necessarily being fully persuaded by their arguments. We have therefore concentrated entirely in this revised amendment on trying to achieve greater clarity about how controlled expenditure could be attributed to a particular constituency.

Sub-paragraph (2) of the amendment states:

“Third party constituency expenditure … shall be attributed to those constituencies in equal proportions, or … shall be attributed solely to that constituency, as the case may be”.

I give as an example a campaign against a motorway extension that goes through three constituencies. On the basis of heading (a), the controlled expenditure would be split three ways in equal amounts. I give as another example a public meeting opposed to a new development. The development is taking place in a marginal constituency but the public meeting opposed to it is taking place just over the border in the next constituency. On the basis of heading (b), the controlled expenditure would be attributed to the marginal constituency because this is where the meeting was trying to influence voters. This amendment would in fact be a tightening up of the Bill. As the noble Baroness, Lady Mallalieu, pointed out on Report, the Bill as it now stands would enable the kind of public meeting that I have indicated to take place without being caught by the Bill, although the noble and learned Lord has now faced that one and suggested that it might. However, we believe that this part of the amendment would help the Government in trying to stop abuse.

The third part of our amendment states that,

“the effects of third party constituency expenditure are wholly or substantially confined to any particular constituencies or constituency if … there is no significant effect in any other constituency or constituencies, and … it can reasonably be inferred that the third party selected the relevant electors or households (or both) or otherwise distributed the material wholly or substantially to contact electors in the particular constituency or constituencies and not a wider section of the public”.

I take the noble and learned Lord’s point that if the House of Commons were able to accept this amendment, that sentence confining it simply to leaflets might need to be widened to other activities.

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[Lord Wallace of Tankerness]

My Lords, I thank noble Lords who have taken part in this debate. To those who mentioned that the House of Commons considered your Lordships’ amendments within 24 hours, I point out that it accepted 94 out of 97 amendments, which shows the considerable changes that this House made to the Bill. All bar three of the changes—or four, if you include the small technical one—were accepted by the other place.

My noble friend Lord Tyler spoke again on the constituency limit of £9,750. As I said last week—and I recognise his strength of feeling on this—a balance needed to be struck with attempts to remove some of the administrative burdens that the noble Baroness, Lady Hayter, talked about. That is why we decided to raise the limit to £9,750 for the period from dissolution to polling day. It was originally about £5,000. That was intended to help many groups.

I turn to the amendment spoken to by the noble and right reverend Lord, Lord Harries. First, I generously acknowledge that his amendment seeks to address the reasons that the Commons gave for not agreeing to the amendment carried at Third Reading last week. That is very important, because it means that we are now looking at some of the detail. In moving the Motion that proposes the amendment, the noble and right reverend Lord talked about the importance of trying to get greater clarity. First, he focused on the fact that proposed new paragraph 2A(2) in his amendment says:

“Third party constituency expenditure—(a) shall be attributed to those constituencies in equal proportions, or (b) shall be attributed solely to that constituency, as the case may be.

The Bill, as brought to your Lordships’ House, says at new paragraph 2A(2) in Clause 28(5):

“Controlled expenditure whose effects are wholly or substantially confined to any particular constituencies or constituency—(a) shall be attributed to those constituencies in equal proportions, or (b) shall be attributed solely to that constituency, as the case may be”.

With regard to (a) and (b), the words are exactly the same. They are already there in the Bill.

The noble and right reverend Lord then gave the good example of agriculture shows where leaflets of a generic nature on a particular campaigning issue are distributed. He said that that should not be attributed to a particular constituency just because the show field happened to be in that constituency, as the show brought in people from a wide area. I know exactly the kind of event that he is talking about and his example is a good one. I do not think that it is intended that that should be seen as a narrow constituency issue. He said that, to address that, Amendment 26B states:

“For the purposes of sub-paragraph (1), the effects of third party constituency expenditure are wholly or substantially confined to any particular constituencies or constituency if—(a) there is no significant effect in any other constituency or constituencies”.

The Bill as brought to your Lordships’ House says:

“For the purposes of sub-paragraph (2)”—

the numbering is different—

“the effects of controlled expenditure are wholly or substantially confined to any particular constituencies or constituency if they have no significant effects in any other constituency or constituencies”.

Again, the words are almost exactly the same. The only real difference between what the noble and right reverend Lord is proposing and what the Government already have in the Bill is in proposed new paragraph 2A(3)(b) in the amendment, which says that,

“it can reasonably be inferred that the third party selected the relevant electors or households”.

That might be relevant in terms of written material, but it is difficult to see its relevance in other things such as transport or media events—press conferences or rallies.

Therefore, the words are almost identical bar that one example and, like my noble friend Lord Tyler, I do not honestly believe that the noble and right reverend Lord’s amendment provides added clarity. In fact, I think it is less clear with that additional paragraph. The Electoral Commission is the body charged with giving guidance and it will seek to give guidance, as it has already had to do, in terms of the national distribution of expenditure. The difference in the wording is very small, but I fear that what the noble and right reverend Lord has put forward does not add clarity—it makes it less clear—and the other parts of his amendment are already in the Bill. On that basis, I ask him not to insist on the amendment.

[Lord Harries of Pentregarth]

My Lords, I thank the noble and learned Lord for his words and welcome the idea of a round-table conference where some of the issues raised by the noble Lord, Lord Tyler, can be addressed. There seems to be no substantial difference between us, except for the fact that it did not seem at all clear to charities and campaigning groups that what was involved in their campaigning at constituency level was already in the Bill. The noble and learned Lord suggested that a combination of what is already in the Bill and much more detailed and careful guidance from the Electoral Commission will meet the point. However, campaigning groups and the Electoral Commission would generally welcome something along the lines I have suggested being firmly in the Bill. This would make it absolutely clear what is allowable and what does or does not come within the scope of the Bill. I therefore feel I should test the opinion of the House.

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[Lord Harries of Pentregarth]

My Lords, as the noble and learned Lord has indicated, this is about the exclusion of background staff costs from regulated expenditure. First, let me emphasise that campaigning groups fully support the idea of a wider range of activities being brought within the scope of regulation than were originally in PPERA. They fully support this in the interests of greater transparency. This range of activities is set out in proposed Schedule 8A of PPERA, which refers to material being made available to the public, such as leaflets, canvassing and market research, press conferences and media events, transport costs, rallies and public events. The amendment before us reads:

“Nothing in sub-paragraphs (3) to (5) of paragraph 1 shall be taken as extending to any expenses incurred in respect of remuneration or allowances payable to any member of staff (whether permanent or otherwise) of the third party”.

The reference is only to sub-paragraphs (3) to (5) of the controlled activities referred to in Schedule 8A of PPERA—that is, to press conferences and media events, transport, rallies and public events. It would mean that background costs in relation to those events would not count as controlled expenditure. Let me stress that the cost of the events themselves would count—the cost of the hall, for example, or the cost of any canvassing, or the cost of transport or market research. What would not count would be the background costs, which are the occasional phone calls or e-mails in the course of a working day that might be connected with such events.

The Government gave no reason for their rejection of our original amendment, but just reiterated that all staff costs should be included. The amendment is not about the amount of money that could count towards controlled expenditure, it is about burdensome, unenforceable regulation. Indeed, the Electoral Commission has repeatedly emphasised that aspect and recommended that no staff costs should count towards controlled expenditure in 2015—after which, of course, the whole issue of controlled expenditure could be looked at again in the light of real experience rather than hypothetical threats.

The noble and learned Lord suggested that there had been no real problem in the previous two elections for campaigning groups or the Electoral Commission in trying to ascertain what those background staff costs were. I suggest that, in fact, people were not really aware of the regulations during the two previous elections; they have only just woken up to them. It is very dangerous to use the example of the two previous elections as a guide to what should happen at the next one.

The Government have indeed made some changes to the bad Bill that first came before this House, but these changes do not make the process of identifying and accounting for staff costs any easier. The Bill very significantly reduces total spending limits by 60% in England. Introducing a wide range of additional staff costs at the same time in effect makes the spending limits even tighter. That is not a problem for smaller charities or campaigning groups; they will not reach the registration threshold. We are grateful that the Government have raised the threshold so that they will not come into it.

However, in addition to those smaller groups there are the big groups, such as Hope not Hate, and coalitions of charities and campaigning groups, such as Stop Climate Chaos. They are very concerned about that aspect of the Bill. I remind the House that all that campaigning potentially comes within the scope of the Bill, even if it is not particularly directed towards any particular party or candidate, because of the subsections to Clause 26 which provide that you do not have to mention the name of the party and it does not have to be your first intention, but you can still be reasonably interpreted as being biased towards one party or another. Any campaigning by those big organisations becomes problematical under the Bill.

The Government recently announced proudly that they were doing away with about 800 regulations for small businesses, but here they are imposing a huge regulatory burden on campaigning groups, groups which are now so fundamental to the effective working of our democratic process. Do the Government seriously expect charities and other groups campaigning now to log every phone call and e-mail concerned with organising a particular public event separately from all other calls and e-mails and then try to calculate what they cost?

[Lord Wallace of Tankerness]

The noble and right reverend Lord asks whether the Government mean for every phone call to be logged. When I was moving the Motion, I said that we do not expect a five-minute timesheet to be ticked off. That is not what is anticipated—nor, indeed, what has happened among the number of organisations which indeed registered in 2005 and 2010.

[Lord Harries of Pentregarth]

I was aware of the noble and learned Lord’s point, and I was going to come to it. I take that point—he said quite unequivocally that he did not expect campaigning groups to log all those small items—but the fact is that they are expected under the Bill to take staff costs into account. That is what the Bill states. If they are expected under the Bill to take staff costs into account, presumably they are expected in some way to provide a note of what those costs are. They have to go about that in one way or another, and that involves a lot of scrutinising of the cost of what they do and adding it up.

This is a bureaucratic nightmare. It is no accident that the Electoral Commission is reluctant to support the Bill on this particular issue. It is no wonder that political parties have resisted taking staff costs into their accounts for this very reason of complexity.

This amendment does not have any bearing on the situation about which some politicians have expressed concern, in which a third party may want to second staff to work for a party or a candidate. That is not a situation regulated by third-party rules. Such costs would either count towards a party’s spending limit or a candidate’s spending limit, depending on the timing and nature of the secondment. Ensuring appropriate enforcement, rather than changing the rules, is the appropriate response to such concerns.

This amendment does nothing to frustrate the Government’s purpose of trying to prevent big spenders from distorting elections through third-party campaigns, and it is one that matters very much to charities and campaigning groups, because of the regulatory burden. I beg to move.

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[Lord Wallace of Tankerness]

My Lords, once again, I thank noble Lords for their contributions to this debate, which has raised a number of important issues, some of which we have been over many times during our exchanges on this Bill.

I thank the noble and right reverend Lord, Lord Harries of Pentregarth, for his amendment, which refers to “background staff costs”. If he had managed to find the elixir or the magic potion that defined background staff costs, he might well have found that we were much more amenable to accepting his amendment. Unfortunately, his amendment does not do what it says on the tin, because it would allow substantial staff costs to be excluded, not just background ones. For example, it could be that a campaigning organisation decides to employ someone for the regulated period to run rallies or press conferences. That would be their specific job, and if it fell within the definition of controlled expenditure under the amendment as it stands, it would not be caught. I do not think that is simply background staff costs.

There is not much difference between us. As we have indicated, we are not looking to have five-minute breakdowns of how time is spent. That is not what is intended. Let us go back to the origins of this. The noble Baroness, Lady Mallalieu, said it is the issue that perhaps came up more than any other in all the discussions—possibly coalitions was a close second or perhaps just slightly ahead. From meetings which I attended with my noble friend Lord Wallace of Saltaire, who attended a lot more than I did, I am certainly aware that the issue of staff costs came up.

It is worth reminding ourselves that, when we were conducting these discussions, the difficulties that many of these organisations expressed were about the extension of staff costs into areas such as press, media and transport costs, given that the threshold originally proposed was £5,000 in England and £2,000 in Wales, Scotland and Northern Ireland. There was genuine concern, not least among charities, that inadvertently some of the work they were doing could take them over the threshold. The Government recognised that. For those issues of canvassing and election material and so on, staff costs will now need to be accounted for, but that will be against a background of a £20,000 threshold in England and a £10,000 threshold in Scotland, Wales and Northern Ireland. Indeed, as my noble friend Lord Horam pertinently pointed out, we are also now looking at a regulated period of just over seven and a half months, rather than just under 12 months as was originally proposed in the Bill.

We did listen to charities and other organisations. About the biggest thing we have done is to raise these thresholds. If you are spending £20,000 to campaign on an issue that falls within the definition of controlled expenditure, I honestly do not believe that it is something that you inadvertently slide into. It must require quite serious thought to do that. That is the reassurance I would give to the noble Lord, Lord Walton, who expressed the views of the charities.

We had a debate on charities, and I am not going to go over all that ground again, but I think it was clear from that debate that it is thought that on only a very narrow band of activity could charities be subject to both Electoral Commission regulation and Charity Commission regulation. Indeed, most charities would not want to take up a position. Historically, they have not taken on positions where they would have been seen to be partial to a particular party or candidate. It is important that we put that in context.

The other thing that I want to put in context is that, in fact, there is nothing in this Bill that relates specifically to staff costs. What we have done is to use the architecture of the Political Parties, Elections and Referendums Act 2000, brought forward by the party opposite when it was in government, and that architecture applies to the additional range of activities. One cannot say that the whole idea of staff costs is new; it is not. When the party opposite was in government, it brought in a regime in which third parties had to account for their costs and expenditure, including staff costs in regard to election materials. The noble Baroness is shaking her head, but there is nothing more in terms of the definition of staff costs in this Bill than that. I accept that this extends to media events, press events, rallies and transport. However, as my noble friend Lord Horam said, the Electoral Commission would like to see all of these included for political parties.

It is a matter of judgment as to whether this should be done for the 2015 election. I argued earlier that, given there will be a review, it might be better to have a review based on some experience. However, the experience that we have had with the approach adopted by the Electoral Commission in two elections is that it appears not to have caused problems. It is the case that some 30 organisations were recognised third parties at the 2010 general election and those that incurred expenditure included their staff costs in their spending returns. We were not aware of any difficulties in calculating these costs. Hope not Hate, which was referred to in the debate, was one of these registered organisations. It is worth while to get some context: of these 30 organisations, only two were charities. As I have said already, we have also raised the threshold quite significantly.

My noble friend Lady Williams asked about volunteers. As I indicated, volunteers are excluded in the current legislation and I am advised that personal expenses are also. I hope that gives her reassurance.

We share a common objective in not wishing to have the additional burden of more administration, and we believe that the Electoral Commission has an important role there. It has done so until now, using the approach in its guidance of “an honest assessment”. While that is our common objective, I think that the difference between us is that the amendment which I, on behalf of the Commons, am seeking to reject is one that does not just deal with background staff but would drive a coach and horses through the whole idea of including staff costs. For example, in the case of a third party being able to employ someone to run a whole series of rallies over the regulatory period of seven and a half months, that would fall within the definition of controlled expenditure. That goes far further than what would simply be described as background staff costs.

I therefore urge the noble and right reverend Lord to withdraw his amendment.

[Lord Harries of Pentregarth]

I thank the noble and learned Lord and the other speakers who have spoken in this short debate. I was very glad to hear from the noble Lord, Lord Tyler, that he is more sympathetic to this amendment than he was to our previous one. I hold out hope that perhaps those who were convinced by the Government’s answer to the last amendment —that what we wanted was already in the Bill or could be dealt with by regulation—might be more sympathetic to what we are saying in this one, because this one matters very much to charities and campaigning groups.

The noble Lord, Lord Horam, pointed out that the Electoral Commission is very keen for the staff costs of political parties also to be taken into account. However, it is also true that it is very resistant to that because of this very issue of complexity. I am not aware that the Electoral Commission has rescinded its original advice, despite the shorter regulation period, that for the 2015 election staff costs for third-party campaigners should not be taken into account.

Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Debate between Lord Bishop of Oxford and Lord Wallace of Tankerness

Tuesday 21st January 2014 Lords Chamber

[Lord Wallace of Tankerness]

My Lords, it was probably at one of the consultation meetings that my noble friend Lord Wallace of Saltaire held when we were discussing these matters that we heard about one substantial organisation that spent a considerable amount of money at the last election—and, indeed, registered the fact that it had done so. It was made clear that one of its activities was to focus on individual constituencies. I do not criticise that organisation for doing that, but if people are going to do such things, there should be proper limits so that there is proper transparency.

With regard to the point made by my noble friend Lord Cormack, whether I speak personally or on behalf of Ministers and officials, I think that a conference with the Electoral Commission to ensure clarity of guidance on the constituency limits could be very worth while. I say “guidance” because interpretation is, ultimately, a matter for the courts, not the commission. I am not even sure—I am making this up as I go along—whether it should be restricted to Ministers, or whether it might also include the Opposition and other parties, and representatives of campaigning groups. Some sort of round table discussion might be very helpful before the final guidance is produced by the Electoral Commission. On the basis of what I have said, I again invite the noble and right reverend Lord to withdraw his amendment.

[Lord Harries of Pentregarth]

Before I focus on what the Minister has said about the amendment, may I thank him, and the noble Lord, Lord Wallace of Saltaire, for responding on a whole range of issues to the concerns that have been expressed in this House? The Government really have moved a significant way; there is no doubt about that. But I think we are all aware that the Bill as it came to us in the first place was an appalling piece of legislation. A parliamentarian of very many years’ experience said to me that it was the worst piece of legislation that they had ever seen in a long parliamentary career. “Not quite”, I am hearing, so there must be some other cases as bad.

Again, the value of this House has been shown, as has the willingness of Ministers in this House to listen, so I genuinely thank them. I also thank noble Lords on all sides of the House who have supported some of the amendments tabled in my name and in the names of others. Not least, I thank members of the Electoral Commission, whose expertise I have had the privilege to share. The people there have worked extraordinarily hard. When I look at my e-mails in the morning I find that, night after night, they were sent off in the small hours of the morning; that gives you some indication of how hard they have worked.

Focusing on the amendment, I am disappointed that the Government have not been able to respond more positively. We made a genuine attempt to meet the point that they made about distributing leaflets, and the need to define very carefully what was or was not meant by a constituency in which there was an attempt to affect people’s voting intentions. Rallies have just been mentioned, but as the noble Baroness, Lady Mallalieu, said, if people want to get round restrictions on rallies they could easily do so by having a rally just outside a constituency where there is a narrow majority. There are all sorts of ways round, even as the Bill now stands.

My final point is about the Electoral Commission. I reiterate that it supported the amendment that has been moved today in my name and in the names of others. It said that there were still some difficulties with monitoring, but those would be nothing like the difficulties that it will have if the Bill goes through with the provisions on constituency limits unchanged. That will be extremely difficult, if not impossible, for the Electoral Commission. It is slightly surprising that the Government have not listened more carefully to what it has said. I think that the strength of feeling in the House on this issue is such that I ought to test the opinion of the House.

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[Lord Wallace of Tankerness]

My Lords, as the noble and right reverend Lord, Lord Harries, has indicated, the Government brought forward at Report an amendment so that there will be a review. The Government are committed to appointing a person to undertake the review within 12 months of this Bill receiving Royal Assent. That came out of one of the meetings that we had with one of the campaign groups, which suggested that it might be useful to have someone in place during the election. We thought that that was a very sensible suggestion and one for which we have provided.

I have discussed with the noble and right reverend Lord, Lord Harries, the merits and demerits of perhaps putting more in the Bill about what the review might or might not do, and we concluded that the minute we start adding things it begs the question as to what has been left out. There is no intention to limit the review, and I take the point made by the noble Baroness, Lady Lister. If people wish to make representations on that point in terms of the review, we would not anticipate anything stopping it—certainly there is nothing in the Bill that would stop it. I emphasise, however, that we believe that freedom of association and expression are vital. They are not impinged by the Bill; rather, what we have is transparency. We are not trying to stop people campaigning, but if they are campaigning in a way that seeks to influence an election it is not unreasonable that that should be transparent.

The next scheduled general election will be the opportunity on which the Bill will operate, and will provide a timely opportunity to review the effectiveness of those controls. On completion the person conducting the review must produce a written report which must be published and laid before Parliament by the Minister. The noble and right reverend Lord, Lord Harries of Pentregarth, tabled the amendment proposing that the report must be laid before Parliament within 18 months of the general election. It is right that Parliament should have the opportunity to consider the outcomes of the review well before the following 2020 election. It is appropriate that the review is done to an established timetable, and the Government are therefore pleased to accept the amendment.

[Lord Harries of Pentregarth]

I thank the noble and learned Lord for accepting the amendment. I do not know whether he can give any kind of indication, or feels that he would like to at this stage, about the groups or constituencies of people who would be consulted as part of the review. Perhaps he is not yet in a position to do that.

[Lord Wallace of Tankerness]

My Lords, I do not want to pre-empt the person who is appointed to undertake the review or in any way constrain what he or she will do. It might be an opportunity to reiterate something, not just in the context of the review, but on the point made in the previous debate by my noble friend Lord Cormack. I accepted the point that he made on the constituency issues: there might be merit in having groups—not just parties, but campaigning groups—involved in any guidance that emerges from the Electoral Commission. I readily expect that any review would involve submissions from the political parties that have been involved in the election, from charities, non-charitable campaigning groups, and people who have something relevant to contribute. As I said yesterday, we can always bet our lives that some issue will emerge that none of us has thought about, in spite of our very exhaustive discussions and debates. That is why it is important not to be prescriptive.

[Lord Harries of Pentregarth]

I thank the Government for their willingness to accept the amendment.

--- Later in debate ---

[Lord Wallace of Tankerness]

My Lords, it is almost inevitable that concerns are expressed when an amendment of this nature comes forward. That is a quite proper function of the House, and the Government should be made to justify putting forward such an amendment.

First, I say to the noble Lord, Lord Campbell-Savours, that the proposed clause has nothing whatever to do with the fact that there will be Commons consideration of Lords amendments tomorrow. The concern is that because the agreement on the provisions relating to coalitions came so late in the day, we want to be certain that we can deliver the policy which we reassured the campaign groups that we would deliver, and that if things emerge at a later stage, not necessarily in the next 24 hours, there will be an ability to do so. I am reassured by the comments of my noble friend Lady Thomas that, as clauses of this nature go, this one is limited and consequential. Indeed, it has a sunset clause and I also welcome the fact that this was noted by my noble friend Lord Tyler.

My noble friend Lord Horam raised the Electoral Commission’s remit, which is being amended by Clause 38. The Government believe it is appropriate to emphasise the importance of the commission’s regulatory role and to remove any potential understanding of its responsibilities. Clause 38 requires the commission to,

“take all reasonable steps to secure”,

campaigners’ compliance with campaigning rules. The Bill further provides for transparency of the commission’s work by introducing a new requirement for it to set out in its annual report what steps it has taken to secure compliance with the relevant provisions of PPERA. By requiring an account of its activities, the Government are seeking to make clear that the commission’s work is vital and that its regulatory approach is being empowered by the Bill.

The point was made by my noble friend Lord Horam, and I have heard it mooted in other quarters, too, that every small, malicious or vexatious complaint or query would have to be investigated. We do not agree, as the provision in Clause 38 imposing a duty on the Commission to investigate complaints does not mean that the commission would have to investigate complaints that it knows to be unfounded, malicious or vexatious. However, I believe that any change to the Electoral Commission’s remit could and should form part of the review of Part VI of PPERA, to which your Lordships have already agreed and which was the subject of further discussion earlier today.

In relation to the Electoral Commission, perhaps I might also reassure the noble Baroness, Lady Hayter, of what I said in moving this amendment. We agree that it is important to consult the Electoral Commission before any use of the powers in Amendment 24. I assure the House that that is indeed what we would do before making an order under this power. My noble friend Lord Horam suggested that the power in this amendment might be used with regard to any changes in the Electoral Commission’s remit. In disappointing him, perhaps I might reassure the rest of your Lordships that we think it unlikely that any changes to the commission’s remit could be considered as consequential provisions under this power, and therefore would not be within its scope. However, it would be appropriate if the review we discussed were to look at the remit of the Electoral Commission.

Finally, I take this opportunity on this last amendment to say thanks to many people but particularly to your Lordships’ House for the scrutiny which the Bill has had here. I can say without doubt that the Bill returns to the House of Commons much improved, and in doing so we have shown evidence of the value and merit of the revising role that this House undertakes, which it does with great seriousness.

I acknowledge with thanks the kind words that have been said about my noble friend Lord Wallace of Saltaire and me. In turn, I thank the noble and right reverend Lord, Lord Harries of Pentregarth, and the noble Baroness, Lady Mallalieu, for their excellent work on the Commission on Civil Society and Democratic Engagement. They have made a valuable contribution to the work that we have done in this House. Along with them and other members of the commission, I thank the many organisations which have engaged with us and them: third-parties and campaigning groups, charities and non-charities, all of which have made an important contribution. We have not necessarily always agreed, but they have contributed to making the Bill better.

I also thank those who have contributed in other ways through amendments and speeches: the noble and learned Lords, Lord Morris of Aberavon and Lord Hardie, my noble friends Lord Hodgson, Lord Horam, Lord Tyler and Lord Cormack and the noble Baroness, Lady Hayter, as well as the noble Baroness, Lady Royall, and the noble Lord, Lord Stevenson, who have at times contributed to our debates. Although there are many people in your Lordships’ House who have had experience as Members of Parliament, the noble Lord, Lord Martin of Springburn, brought a welcome reminder in his contributions that these are practical provisions which affect people who actually fight elections.

I also thank my noble friends on the ministerial Bench, Lord Wallace, Lord Gardiner of Kimball and Lord Younger of Leckie. I also acknowledge the tribute paid by the noble Baroness, Lady Hayter, to the officials—some in the Box and some not. On their behalf—because, obviously, they cannot speak—I express appreciation of that and add mine. They have worked with considerable equanimity and good humour. At least one of them attended almost every meeting which we have had with groups and they have assisted my colleagues on the ministerial team greatly. I certainly very much value the work that they have done and the very long hours, including over Christmas and New Year—one sometimes noticed the times and dates when e-mails were sent. I express appreciation for that.

Having said that, I very much hope that your Lordships will agree to the amendment.

[Lord Harries of Pentregarth]

My Lords, before the noble and learned Lord sits down, I gave a range of thanks before and I shall not repeat them, but there is one group of people who have not been mentioned and thanked. For a person who is not a very experienced parliamentarian, such as me, those people been particularly helpful. They are the staff of the Public Bill Office. They have been very helpful in guiding me on what might be allowable and possible. I express my thanks on behalf of others to them.

Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Debate between Lord Bishop of Oxford and Lord Wallace of Tankerness

Wednesday 15th January 2014 Lords Chamber

[Lord Wallace of Tankerness]

My Lords, I always know it to be dangerous when the noble Lord stands up and says he has been thinking about something—and so it was.

I took the fixed-term Parliament legislation through your Lordships’ House and I do not recall—nor, indeed, have I seen at the present time—anything that suggests there is going to be any change. Of course, that means that there still will be a period during which Governments are not allowed to do this; but I have not seen any proposal to reflect the fact that there is a fixed-term Parliament. When that period will arise will become more apparent, or more foreseeable. If I have got that wrong, although I do not think I have, I will inform the noble Lord.

[Lord Harries of Pentregarth]

I thank all noble Lords who spoke in favour of my amendments and the other amendments to which my name has been attached and I thank the Minister for his response.

The noble Lord, Lord Horam, drew attention to some of the unfortunate consequences, as he understands it, of this legislation at constituency level. However, what I had in mind was primarily what happens at the national level. He suggested that political parties would be limited in what they can campaign; but the Government, in pursuing their legislation, are not limited in the amount of money they can spend in order to get legislation through Parliament, and nor are the Opposition.

Suppose you have two third parties: one, the Countryside Alliance, which wants to campaign against a new town, and the other the National Housing Federation, which wants to campaign in favour of more housing. Why should they be inhibited by the Bill in a way that the political parties would not be inhibited? As the noble Baroness, Lady Mallalieu, pointed out, we are not talking about the post-Dissolution period, so a lot of the ill effects that the noble Lord suggested might happen at constituency level would not be allowed by this amendment, because we are talking about only legislation going through Parliament and that ends when Parliament is prorogued. Therefore I believe that this is a crucial issue that goes to the heart of our democracy.

[Lord Wallace of Tankerness]

The noble and right reverend Lord indicated, when referring to what my noble friend Lord Horam had said, that it had not been his intention to engage in constituency expenditure. Does he accept that if this is not controlled expenditure, it could lead to expenditure in a constituency up until the time when the Representation of the People Act kicks in?

[Lord Harries of Pentregarth]

I accept that there are certainly implications for what might happen at local level. However, I ask the noble and learned Lord to continue to think about it because this issue goes to the very heart of the democratic process. I very much hope that, having talked to the Electoral Commission to see whether there might be a way forward, he might give the very clearest statement at Third Reading, which would then be translated into advice for the Electoral Commission. We need something here to safeguard the fundamental rights of campaigners to campaign during this period. With that, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Wallace of Tankerness]

My Lords, I thank the noble and right reverend Lord, Lord Harries, for his amendment, because I, too, recognise that this issue has been regularly raised in many of the meetings that we have had—as did my noble friend Lord Cormack and the noble Baroness, Lady Royall. The noble and right reverend Lord’s amendment seeks to exclude those staff costs associated with staff directly employed by a third party from the calculation of controlled expenditure for transport, press conferences and organised media events, and for public rallies and public events.

The starting point is to recognise that the PPERA Act 2000 has always required third parties to account for staff costs. I acknowledge that the Bill extends the range of activities that may incur controlled expenditure; these are the activities that the noble and right reverend Lord seeks by his amendment to remove from staff costs. The Bill seeks to retain the need for staff costs to be included. As I said, I recognise that there has been concern, first, over the unfairness of third parties having to account for these costs when political parties do not. I think that my noble friend Lord Tyler mentioned that. Secondly, there has been concern about the difficulty for third parties in calculating the staff time attributable to activities giving rise to controlled expenditure.

On the issue of third parties having to account for these costs while political parties do not, your Lordships will be aware that when Parliament passed the 2000 Act it felt that it would be transparent and proportionate for a third party to account for staff time. This was on the basis that a third party undertakes campaigning activities other than simply political campaigning, and where a third party enters into political campaigning its spending for those purposes should be fully transparent. I am sure that that was the underlying thinking behind the 2000 Act. I would at least hope that someone who is employed by the Liberal Democrats during an election is actually working for the Liberal Democrats. Indeed, I am sure that the other parties would hope the same on behalf of their staff. It is as transparent as it possibly can be.

Regarding the concerns of third parties over the difficulties associated with calculating staff time, this is an existing element of the regulatory regimes. Its operation in the last two general elections, alongside Electoral Commission guidance on this, highlighted that such costs can be accounted for without becoming overly burdensome. The Electoral Commission takes a proportionate approach in current guidance to the calculation of controlled expenditure, including staff costs, by clearly stating that third parties should make an honest assessment of the costs that need to be reported.

I have shared with a number of the groups which have come to see me since Committee the fact that we did examine whether it would be possible to put in a de minimis exemption. Quite frankly, having seen what its terms would be, it would give rise to more concern about legal definitions than it merited, particularly if we had a de minimis exemption in statute. That would make it much more difficult for the Electoral Commission to take that proportionate approach to the calculation of controlled expenditure which it has done through its guidance.

It should also be noted that with the increases in the registration threshold the smaller organisations to which my noble friend referred, be they charities or campaigning organisations, will not be subject to regulation and the need to calculate staff costs. The best way of addressing the de minimis question is by what we have done in raising the threshold and taking so many of these organisations outwith the scope of controlled expenditure altogether.

My noble friend quite properly paid tribute to the work done by volunteers, not only for charities but for so many campaigning organisations. In many respects, they are the people who make the wheels of campaigning and democracy go round. However, volunteer costs will continue to be excluded from the calculation of controlled expenditure. In Amendment 44, which the House has just agreed, volunteer costs are excluded from the calculation of staff costs by virtue of paragraph 1A(1)(c) of new Schedule 8A. They were excluded under the existing regime, but it is important to emphasise that volunteer costs will also be excluded under what we are proposing. There is a world of difference between volunteer costs, which will be excluded, and the great advantage that there can be to candidates or political parties of third parties putting paid staff into campaigning activity in constituencies, or into running media events, press conferences or rallies.

The result of the amendment proposed by the noble and right reverend Lord, Lord Harries, would be to exempt that kind of expenditure associated with paid staff being moved in at the time of an election to facilitate the electoral advantage of a particular party or candidate. It is for that reason that the Government do not feel able to accept the noble and right reverend Lord’s amendment, and I invite him to withdraw it.

[Lord Harries of Pentregarth]

I am disappointed with the noble and learned Lord’s reply. This was a very simple step that the Government could have taken to ease the regulatory burden on charities and campaigning groups. It is disappointing. He stressed the fact that staff costs were already in PPERA. With due respect, that is no good reason for continuing them, if we have an opportunity to improve that Act and make it not just workable but one which eases the burden on charities and campaigning groups.

The Minister stressed that the Electoral Commission had found it possible to regulate this, but the fact is, as he knows, that charities and campaigning groups find this whole area very burdensome. I really do not see how the Electoral Commission can possibly police this area and work out what percentage of the time has been allotted, let us say, to the mounting of a public rally. What kind of receipts or statements is it going to get from the charity concerned? I am afraid that I find it very disappointing and I would like to test the opinion of the House.

--- Later in debate ---

[Baroness Hayter of Kentish Town]

My Lords, we have Amendment 62A in this group. In order that the notes in reply can be thrown away, I give notice that I will not speak to it. Essentially, the issues were covered in the earlier group. Nevertheless, we retain our concerns about constituency limits and would very much like to have voted on the previous amendment, but there we are. However, we support the other amendment.

[Lord Wallace of Tankerness]

My Lords, the noble and right reverend Lord, Lord Harries of Pentregarth, has tabled an amendment which would raise the constituency limits from being the equivalent of 0.05% of the maximum campaign expenditure limit applied to political parties to 0.1013%. This would amount to almost £20,000—specifically, £19,753.50. As the noble Baroness indicated, we have already debated the issues on constituency limits. I have explained the necessity of constituency limits being in place. Without these limits in place, a third party could otherwise be able to focus the entirety of its spending power on a small part of the United Kingdom, outspending even candidates and parties in that location. That point was forcefully made by my noble friends Lord Cormack and Lord Tyler. It is important that those limits are set at an appropriate level and it is our view that the noble Lord’s amendment would not be appropriate.

I will not repeat the earlier points. We wish to promote accountability and transparency. Constituency limits relate to campaigning for or against a particular party and instances where a campaign is intended, or may reasonably be regarded as intended, to support groups of candidates who might hold particular views or support particular policies. Where such campaigning is subject to a national limit, it is also right that it is subject to a proposed constituency limit but we believe that that must be at a proportionate level. The comments we heard in earlier debates suggest that the limit we have set is too generous. Indeed, even my noble friend Lord Tyler might think it. However, we think that the limit we have set is proportionate, especially as we have removed the distinction between spending throughout the regulated period and spending during the period between the dissolution and election day. The limits are intended to remove undue influence, particularly by those campaigners who can afford to spend significant amounts of money. I do not believe that the noble and right reverend Lord’s proposal would be proportionate. It could allow substantial sums of money—sums, as we have heard, such as £12,000, which is the candidate’s limit. To have a third-party sum that is almost half as much again does not appear to be proportionate. I therefore urge the noble Lord to withdraw his amendment.

[Lord Harries of Pentregarth]

My Lords, I can well appreciate the noble and learned Lord’s answer to that. The issue that is continually raised by the commission I chair is the rationale for always linking third-party spending and regulation to political-party spending and regulation. That has never really been fully set out. I take the point that the noble and learned Lord has made but I hope that he will take on board the fact that there is continuing concern among charities and campaigning groups about constituency spending, and not just the spending but the regulation for campaigning in constituencies. As the noble and learned Lord knows, there is also great concern in the Electoral Commission. Even if he is not prepared to consider this amendment again, will he look seriously at Amendment 52 in the name of the noble Lord, Lord Tyler? That would help significantly. If he is not sympathetic to my amendment, I hope that he might be able to look again at Amendment 52 and bring something back in relation to it. With that, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Wallace of Tankerness]

My Lords, this is the final group of amendments. There has been much discussion about the regulated period for third parties and whether it is indeed of an appropriate length. Many have argued that 365 days is simply too long. The noble and right reverend Lord, Lord Harries of Pentregarth, proposed in Committee that the regulated period should be shortened to six months. As noble Lords know, there are different regulated periods for different elections. For the general election it is 365 days. For elections to the devolved Administrations and the European Parliament it is four months.

What is the purpose of a regulated period? It is the time before an election within which financial limits on expenditure apply and campaigning rules must be adhered to. It is the time during which expenditure incurred for campaigning purposes must be reported. Noble Lords will know that the Bill already reduces the regulated period for the next general election in 2015, so that it will commence on 23 May 2014, which is the day after the European elections. The reason for this is that the original regulated period would have been a combined period for the 2014 European parliamentary election and the 2015 general election and would have started on 23 January 2014.

However, as the Bill makes changes that would have affected third party campaigning in European parliamentary elections, it would not have been sensible to have those changes take effect in the midst of the regulated period. The two regulated periods are therefore separated by the Bill, so its changes will take effect for the first time only for the 2015 general election.

The Government have now tabled Amendment 128, and Amendments 131 to 134, to shorten further the regulated period for third parties. These amendments will shorten the regulated period so that it commences on 19 September 2014. That is the day after the Scottish independence referendum. Although this Bill does not affect campaigners in the referendum—it is important that we make that clear—for the avoidance of any doubt and to ensure that there is no confusion, the day after the referendum has been chosen as an appropriate start date for the regulated period.

This step has been taken in response to calls from third party campaigners that they will need further time to fully understand the implications of the Bill and to ensure that they know how to comply with its provisions in the run-up to the 2015 UK parliamentary general election. I should stress that we are not reducing the spending limits to take account of the shorter regulated period. Campaigners will still be able to spend up to £319,800 in England, up to £55,400 in Scotland, up to £44,000 in Wales and up to £30,800 in Northern Ireland on promoting the electoral success of parties or candidates.

However—and this is crucial, not least as a follow-on to the previous amendment—delaying the start of the regulated period will give campaigners crucial time. The move has been supported by the Electoral Commission, to give it and the Charity Commission sufficient time to produce clear and easy to follow guidance. As has already been said, we believe that it is essential that campaigners have the clarity they have been asking for, and shortening the regulated period will allow the Electoral Commission enough time to test the appropriateness and clarity of its guidance with the campaigners themselves.

I should make clear here that only the regulated period for third parties is being amended. The regulated period for political parties will still begin on 23 May 2014, as under the existing transitional provision in Clause 42. It is also the case that for future general elections the period of one year will apply—although, given that there is to be a review, no doubt people will wish to raise this then. I just make it clear that the reduced period is for the 2015 general election.

The Government have also tabled Amendments 126, 129 and 130. These are minor and technical amendments to improve the drafting of Clauses 41 and 42. I beg to move.

[Lord Harries of Pentregarth]

My Lords, I warmly welcome this shorter regulatory period for the 2015 election, for the reasons that the noble and learned Lord stated: it will enable the Electoral Commission to prepare the guidance to educate the people who will have to conform to it. However, I express the hope that in the review, the review body will look seriously at the recommendation of the commission which I chaired, that for third-party campaigners there should be a six-month period. This seven and a half-month period is absolutely right for this election but a six-month period should be reconsidered afterwards.

Perhaps I might end on one final point. We are all very much aware that this whole process has, towards the end, been extraordinarily compressed. Normally, the Government would listen first, bring forward amendments in Committee and then report those back on Report. We did not have any government amendments in Committee. The Government listened, and I am glad that they did, but this means that this Report stage has been a kind of compression of Committee and Report all in one. The implication of this is that I very much hope that the Minister will take seriously those amendments that we did not press to a vote, while hoping that he might come back at Third Reading having thought again. Because of this very compressed period, that would be a great help to the House.

Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Debate between Lord Bishop of Oxford and Lord Wallace of Tankerness

Wednesday 18th December 2013 Lords Chamber

[Lord Wallace of Tankerness]

My Lords, again we are grateful to the noble and leaned Lord, Lord Hardie, for introducing this part of the Bill and the consideration of the overall spending limits. As no doubt the Committee is aware, third parties are subject to limits on the amount of controlled expenditure that they may incur during the regulated period of a United Kingdom parliamentary general election. The initial figures set out in PPERA 2000 set the limit at £988,500 for the whole of the United Kingdom and this Bill, as has been heard, seeks to amend that limit to £390,000. The limit in either case is of course the aggregate of individual limits of each part of the United Kingdom. That means that expenditure is allocated in accordance with where its effect is most significantly felt. If a body has its head office in Scotland, for example, but undertakes and targets its campaign work only in England, then that spending will be allocated to the English limit and not the Scottish one.

The noble and learned Lord, Lord Hardie, has tabled amendments so that the spending limit for third parties remains as it is in PPERA 2000, and the noble and right reverend Lord, Lord Harries of Pentregarth, has proposed limits that would take the spending limit to £1,406,000 across the United Kingdom as a whole. This substantial increase, as I understand it, is to reflect inflation since the original limit was set 13 years ago. There has been considerable discussion, not just in this House but also in the other place, about third-party campaigners and the potential to incur significant amounts of expenditure in campaigns. This was spoken about very eloquently by my noble friend Lady Williams. The noble Baroness, Lady Hayter, indicated that her party has no desire to see the cost of politics increase, nor, indeed, do we want to see a disproportionate effect on elections by those who have lots of money to throw around.

There is also the potential, given that limits are imposed on political parties—let us remember that, if we look at this in its full context, there are limits on political parties—that we would undermine that regime if their supporters could still demonstrate their backing by diverting funding to a formally or informally aligned party. Allowing very large sums to be spent to the benefit of parties that are candidates in this way risks, I believe, undermining the basic rules that have evolved over the years in terms of restriction of political spending in elections. The nature of third parties means that controls on their spending are necessary. I do not believe that we have really debated limits, but I do not think that anyone has challenged the principle that there should be some control on substantial spending.

There is some evidence of third-party expenditure increasing. In 2010, eight third-party organisations spent more than £100,000, although, as I think my noble friend Lord Horam correctly pointed out, most who were registered—and only 30 were registered—spent considerably less than that. Indeed, some who were registered spent nothing at all. Although there were eight who spent more than £100,000 in 2010, in 2005 only two groups did so. I believe, and we have said all these things many times, that it is about trying to strike the right balance to ensure transparency. We believe that the figure in the Bill is a reasonable limit for national third-party campaigning. Most campaigns in the last election did not spend anywhere near either the total amount that was available then or the amount that is proposed in this Bill.

It has been argued that these previous campaigns did not require third parties to account for a much wider range of activities, but it is worth reflecting on the fact that the Green Party, a political party, spent £330,000 on its national campaign in the 2010 general election. That campaign activity included incurring expenses on advertising, unsolicited materials, manifestos, market research, transport, media events and rallies—all activities that third parties should also account for. No one can doubt that the Green Party had a very strong voice in that campaign and indeed succeeded in getting its first ever Member elected to the House of Commons. It was a voice within a national debate. In fact, only four out of well over 100 registered political parties spent more than £390,000 in 2010: the Conservative Party, the Labour Party, the Liberal Democrats and the UK Independence Party.

We are setting a limit which, as I said, only four political parties exceeded in 2010, and a party that was recognised as having played a full part, albeit without standing in every constituency, in a national election in all its activities spent less than £390,000. We do not believe that third parties should be dominating the electoral landscape—by “third parties” I do not mean political parties but such as we have discussed in this debate, as of course I think third parties have an important role to play in the party-political scene—and creating campaigning inequality among political parties. We believe that the spending limits are appropriate and proportionate.

The noble and learned Lord, Lord Hardie, drew attention to the differential that exists in Schedule 10 to the 2000 Act, and I accept that this Bill is looking at the UK limits. It will also recognise that while you might have a campaign to be undertaken on a pan-UK basis, it is not quite the same as if you were focusing solely on Scotland for a Scottish election and so I think that there is some scope for a differential.

We believe that, having reduced the limit to a sum that has not inhibited, or would not have caught, the Green Party at the last election or indeed the vast majority of third parties that were registered and campaigned, this is not an unreasonable balance to be struck. I invite the noble and learned Lord to withdraw his amendment.

[Lord Harries of Pentregarth]

Will the Minister not acknowledge, in relation to the spending by the Green Party, that of course it did not have to include staff costs in the figure that he quoted? As the Bill now stands, third-party campaigners have to include staff costs, so there is not an even playing field. Furthermore, will he acknowledge that the whole political landscape now is very different from what it was, say, 20 or 30 years ago, with a dramatic decline in political-party membership and the rise in membership of third-party campaigners? Does the apparent indifference of so many people, sadly, to political-party campaigns and their enthusiasm and commitment to third-party campaigns not indicate that third-party campaigns should be treated equally seriously as a fundamental feature of our democracy along with political parties, particularly at election time?

[Lord Wallace of Tankerness]

The noble and right reverend Lord, Lord Harries, makes a fair point that, as a party, the staff costs were not included, but I think one of the reasons was referred to by my noble friend Lord Gardiner on Monday. Political parties’ staff are fully committed and are very transparently fighting an election, whereas one might reasonably assume that, when larger organisations undertake political campaigning—and we accept that they are registered because they believe that their campaigning could reasonably be judged to give an electoral advantage, or disadvantage, to one party or another—their staff’s time is not entirely taken up with it. He makes a fair point, but there is also a distinction because it would not be the entire staffing costs of a particular organisation that would be taken into account.

I wholly accept the point that has been made about the richness of the debate, with groups contributing in ways they have not done before, much of which is made possible, I suspect, by electronic media. Those of us who have had to stuff envelopes in the past probably realise that there are easier ways of campaigning and getting the message across, as well as being cheaper than the printed material which the noble Earl, Lord Sandwich, mentioned in his earlier intervention. In some respects, campaigning costs themselves have gone down over the years because of the nature of much of modern campaigning.

Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Debate between Lord Bishop of Oxford and Lord Wallace of Tankerness

Wednesday 18th December 2013 Lords Chamber

[Lord Wallace of Tankerness]

My Lords, I am happy to explain that. The very nature of the expenditure that will fall to be covered by Part 2 will be expenditure that is very much geared towards an election, the same election in which the political parties will be fighting. It would seem rather odd if the political parties themselves are restricted in what they can spend over a period of one year. If, for example, we were to accept the amendment spoken to by the noble Lord, Lord Ramsbotham, for eight months of that year other third-party bodies, some of whom would be endorsing quite unashamedly the policies and perhaps the candidates of one of the political parties, would be able to spend freely without any restriction at all while the political parties themselves are campaigning with restrictions. That is why I make the comparison because it would create a sense of unfairness and imbalance if those who are actually fighting an election, those whose heads are on the block on polling day, as it were, were under restrictions but third parties did not have any such restrictions for a substantial part of that time.

[Lord Harries of Pentregarth]

My Lords, I thank the noble Lord, Lord Deben, for his support in principle for reducing the regulation period. Perhaps I may remind the Minister that the Electoral Commission, at least for the 2015 election, is supportive of a six-month period. It will be reviewed after 2015, but there is a great deal to be said, at least for the 2015 election, in support of testing the six-month period. With that, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Wallace of Tankerness]

My Lords, Amendment 170N would insert a new clause that would remove the requirement for recognised third parties to provide a spending return after the election if they had not incurred controlled expenditure above the registration threshold. Instead, a recognised third party would be required to submit a declaration that they had not spent in excess of the registration threshold.

Amendment 173, spoken to by my noble friend Lord Hodgson, would amend Clause 32 so that a recognised third party would not have to submit a nil report where it had not received a reportable or substantial donation. Amendment 174 would amend Clause 32 so that a recognised third party would be able to appoint a responsible person who had been a responsible person for another recognised third party.

I will give some background before addressing specific amendments. To improve transparency and to ensure that people can see who is funding a third party before the poll takes place, third parties will be required to report any large donations in advance of the poll. This will align the reporting requirements of third parties more closely with those of political parties, and will take two forms.

First, recognised third parties will be required to provide quarterly reports of donations for each reporting period that falls within the regulated period for a UK parliamentary general election. Secondly, between the dissolution of Parliament and polling day, recognised third parties will be required to provide weekly reports of any large donations.

I am not sure if I heard correctly whether the noble and right reverend Lord, Lord Harries, suggested that the quarterly and weekly reports also applied to spending. To clarify, the quarterly and weekly reports prior to the election apply only to donations—of more than £7,500—and the spending return will continue to be a requirement after the election.

Both the quarterly and weekly donation reports would be submitted to the Electoral Commission, which would publish the information. The quarterly reports must be accompanied by a signed declaration from the responsible person of the recognised third party, stating that all reportable donations accepted were from permissible donors. The Bill introduces measures that are necessary to achieve this increased transparency. The Bill proposes that third parties provide information about large donations in advance of the election, in quarterly and weekly donation reports.

At present, recognised third parties have to provide details of their campaign income and expenditure to the Electoral Commission after a UK parliamentary general election, and after the poll for certain other elections. To improve transparency by providing a clearer understanding of the finance of those involved in elections and to align the reporting requirements of third parties more closely with those of political parties, a statement of accounts would form part of the return third parties already provide to the Electoral Commission.

To ensure that this additional obligation is proportionate, individuals are excluded from this requirement. The Government believe that not to exclude individuals would result in an unwarranted intrusion into their personal financial matters, although they will still be required to provide details of their campaign income and expenditure, as is currently the case. Third parties, such as companies, charities and trade unions, which are required to prepare a statement of accounts under another legislative framework would be able to submit these accounts as part of their return to the Electoral Commission. I hope that this is an example of proportionality.

Turning to the amendments, I hope that noble Lords support the principle of providing information on reportable donations during the election period. However, the Government acknowledge that the correct balance has to be struck between increased transparency and overly burdensome requirements. With this in mind, the suggestions of the Electoral Commission in relation to nil reporting have provided a very useful starting point. The Government want to consider these matters very carefully and to revisit them on Report, to ensure that adequate and proportionate reporting requirements are included in the Bill.

Amendment 174, spoken to by my noble friend Lord Hodgson, concerns the role of the responsible person. When a recognised third party seeks registration with the Electoral Commission, they must nominate a responsible person who ensures compliance with the provisions of the Political Parties, Elections and Referendums Act 2000.

It is for the recognised third party or coalition to nominate a responsible person who they feel is best placed to ensure compliance with legislation. That could be a person who is already a responsible person for another third party. There are therefore no restrictions placed on who the recognised third party can nominate as a responsible person, except where an individual registers as a third party, where they will automatically become the responsible person.

In relation to Amendment 170N, the Electoral Commission made a similar suggestion in its June 2013 regulatory review. The Government see merit in the suggestion, which underpins our aim that smaller bodies should not be subject to overly burdensome reporting requirements. As a result, the Government will want to consider this issue carefully and revisit it on Report.

We have heard the—understandable—strictures from my noble friend Lord Deben. In that spirit, I ask the noble and right reverend Lord, Lord Harries, to withdraw his amendment.

[Lord Harries of Pentregarth]

I thank the Minister for his response. It is probably the most positive response we have had this afternoon—it must have been the intervention of the noble Lord, Lord Deben, which tipped the balance. He has been useful on one or two things on that side in recent years.

I accept the Minister’s assurance that the Government will do all they can to reduce the regulatory burden on both donations and expenditure. With that, I beg leave to withdraw the amendment.

Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Debate between Lord Bishop of Oxford and Lord Wallace of Tankerness

Monday 16th December 2013 Lords Chamber

[Lord Wallace of Tankerness]

My Lords, I apologise for overlooking my scribbled note. As part of the impact assessment at the time the Bill was published, we said that 30 third parties were recognised by the Electoral Commission for the 2010 general election and that there were no robust equalities data covering these groups. However, we did not believe that these proposals would have an adverse equalities impact because of the wide range of groups that were registered. There is nothing to suggest that there was a preponderance of gender equality organisations. We therefore do not believe there is particular impact in that regard.

In the 2010 election in Northern Ireland, 10 third parties spent a total of £26,773 while £27,000 could potentially have been spent by each third party. The total for 10 third parties was, therefore, less than what one could have spent. Only two incurred expenditure above the current £5,000 registration threshold.

[Lord Harries of Pentregarth]

The Minister said he did not think that the Human Rights Consortium would be captured by the present legislation because it could not reasonably be interpreted as wanting,

“to promote or procure electoral success”,

of a particular party or candidate. However, does he agree in principle that in an election year, such a human rights consortium, which might be opposed by one of the parties standing for election, could actually be caught? There are some very important subsections in the Bill. Clause 26(4)(c) says that,

“though it does not involve any express mention being made of the name of any party or candidate”,

and proposed new subsection (4A) says that,

“it is immaterial that it can reasonably be regarded as intended to achieve any other purpose as well”.

Therefore, there could be a human rights consortium, which as a result of those two subsections could possibly be interpreted as supporting a particular party or candidate. Real difficulties remain, even if that particular example would not be caught.

[Lord Wallace of Tankerness]

My Lords, I think this is at the heart of much of this debate. As the noble Baroness, Lady Royall said, if the activity being undertaken included extensive polling, the purpose of which was to get a Government to act in a particular way, and one applied a test of,

“reasonably be regarded as intended to promote or procure electoral success”,

of a party or candidates, I do not think that it could be interpreted in that way, unless one had a very vivid imagination. It is a leap to see activity that is clearly directed towards trying to address or change government policy as being intended to procure the election of a particular candidate.

As I said in my opening remarks, there is quite an onus on the Electoral Commission and the guidance it has given. It has given guidance on this in two previous elections without any apparent problems; I think we will return to this issue more fully in the next group of amendments. It is stretching things quite some distance to think that what is actually the perfectly legitimate purpose of an organisation, to campaign on issues relating to establishing provisions to be included in a Bill of Rights, can be seen as an intent,

“to promote or procure electoral success”,

of a particular party or candidate.

--- Later in debate ---

[Lord Harries of Pentregarth]

Is this not a fundamental threat to democracy? Let us take an English example. One party wants an extra runway at Heathrow. That is opposed by another party. If this is going through during an election year, surely campaigning groups should not be hindered in any way. They should have no curb on their election expenditure at all. It is a fundamental fact of democracy. They should be allowed to campaign.

[Lord Wallace of Tankerness]

My Lords, of course they will be allowed to campaign. I agree that it would be a travesty if they were not allowed to campaign. But if that campaign then crosses a line from campaigning on a perfectly legitimate issue to saying, “In our campaigning we advise you not to vote for A, B, C and D and to vote for F, G, H, J and K”, it is not that they are stopped from doing that; it is just that it becomes a regulated activity and they will have to account for the funds that they spend on promoting the election of particular candidates or the non-election of others—and there would be a top limit, just as political parties have limits on what they are allowed spend.

There is no question of them not being allowed to campaign. I fear that sometimes this debate has been unfortunate—as I say, we have all possibly been guilty of using loose language at times—because the impression has been given that we would not be allowed to campaign. It is not that we would not be allowed to campaign; it is just that if a campaign moves from a campaign on an issue to a campaign that seeks to promote or procure the election of a particular party or candidate, it becomes regulated expense.

[Lord Harries of Pentregarth]

I am sorry to delay the Minister further, but with due respect I do not think he is really facing up to the difficulty of the present definition of qualifying expenses. I agree with him that if a particular campaigning group says, “Therefore you must vote A, B or C”, of course that would need to be regulated. But it still might be liable to be regulated even if it did not do that, because the Bill is quite clear that you do not have to mention a particular party, and that it does not have to be your primary purpose. It could be reasonably interpreted that if one party is supporting an expansion at Heathrow and one is opposing it, by implication the campaigning group wants one party elected rather than another. There are fundamental difficulties here.

[Lord Wallace of Tankerness]

That reflects some of the amendments tabled by my noble friend Lord Tyler, to which the noble and right reverend Lord, Lord Harries, lent his support. We are grappling with real issues here as to the clarity or otherwise of when people will cross a line. I accept that there are some cases which are quite clearly on one side of the line and others that are nearer the margins. The noble Baroness, Lady Hayter, said that some people had been advised by the Electoral Commission that what they were proposing to do would be regulated. I would say to them, “Take the advice of the Electoral Commission. If it says you should be regulated, then register”. There is nothing stopping people campaigning. In fact, they might campaign with a lot more confidence if they know that they are doing the right thing because they have taken the advice of the Electoral Commission.