European Union Referendum Bill

Lord Collins of Highbury Excerpts

Wednesday 18th November 2015 Lords Chamber

[Lord Willoughby de Broke]

The noble Lord is absolutely right. I do not disagree with him, but it reinforces the point of the amendment of the noble Lord, Lord Forsyth, that we need equality of financing, however that may be achieved. That is up to the Government, I hope, in spite of the Electoral Commission’s worst efforts. We do not seem to be getting anywhere with the Electoral Commission so the Government ought to take this amendment seriously and look at how they can reallocate the financing arrangements so that both the ins and the outs have the same amount of money to spend. It is not, as they say, rocket science. It is actually quite simple to do. That will eliminate the concerns that the noble Lord, Lord Hamilton, expressed, that either side may have cause for complaint at the end of the referendum. There has to be equality of financing so I very much support the noble Lord’s amendment.

[Lord Collins of Highbury (Lab)]

I am going to repeat some of the arguments I made in Committee because I think that this amendment is basically doing the same thing.

There is an assumption behind the contributions we have heard so far that we are dealing with a pot of money. We are not. We are dealing with a spending limit. We are not dealing with an allocation of funds that should be distributed fairly. Perhaps we could do that. I have not heard many noble Lords opposite support state funding of political parties, but that is the only way to guarantee fairness.

I am really surprised by the noble Lord, Lord Willoughby de Broke. Let us say the leave campaign got all the money in, spent the upper limit and then it was discovered that UKIP spent more than the limit. UKIP would then have to give all its money back. That is the reality. You are trying to set a limit when you do not even know who is going to be participating in the campaign.

First, it is not a pot of money to be spent. Secondly, this referendum is not going to be fought by just two sides. Political parties, civil society, trade unions, churches and other groups that have an opinion will not keep their mouths shut simply because the Conservative Party is unsure of what position it will take as a whole. Perhaps the noble Lord, Lord Lawson, is correct that this whole thing about registration and the Conservative Party not registering is more to do with the state of the Conservative Party than the rights and wrongs of how the referendum campaign should be conducted.

[Lord Forsyth of Drumlean]

I do not know whether the noble Lord has had a chance to read my amendment, which is completely different from that which he made a speech about in Committee. But I am following his argument so would I be right in deducing that he would be quite happy to have no limits at all?

[Lord Collins of Highbury]

No, I would not because the Electoral Commission is trying to address quite a complex situation. A referendum is not a usual situation. Political activity in this country is predominantly, although not wholly, through political parties, and PPERA sets out all kinds of constraints and limitations on donations. It has created an environment of transparency, and spending limits.

My view is that spending limits are not particularly effective in establishing a level playing field, particularly when they are set so high and no one can ever reach them. That is why we have quite big imbalances in general elections. That is why the Conservative Party regularly outspends the Labour Party: it has at least 300 people who can give more than £50,000 a year to the party, which I suspect is why the party has in the past supported a cap of £50,000 on donations. Personally, I think the smaller the cap the fairer it becomes. You would then have to look at how to replace that money and what mechanisms to use to ensure that there is an allocation of public funds on a fair basis—hence, I suspect, why the Electoral Commission is using that methodology.

The fact is that spending limits are not the whole picture. What the Electoral Commission is trying to say to us is that the “remain” and “leave” campaigns are not the only participants. We are not going to silence everyone else in this referendum. We are not going to say to civil society, “You have no right to speak”, and we are certainly not going to say to UKIP, “By the way, you will have no right to spend money in this campaign unless it is through the official ‘leave’ campaign”. I do not think that it would tolerate that or accept it—I would not—but that would be the effect of the noble Lord’s amendment. We cannot be certain of what other people will be spending and we do not know the number of participants.

The rules should not be used to reduce the number of participants. That would be unfair and not democratic. I do not want to bang on too much about this, as I have given sufficient reasons why we will not be supporting this amendment, but it is clear that the amount of money available will not be determined by rules set out in the Bill. It will be determined by people donating and raising money. I do not think that even the Conservative Party, if it said that it would register, could put its hands on £20 million that easily. I certainly know that the Labour Party cannot put its hands on £9 million that easily. We have to understand that these are mechanisms to ensure transparency and accountability but they will not necessarily deliver fairness because the campaign is not designed that way.

[Lord Hamilton of Epsom]

The noble Lord says that the Labour Party cannot lay its hands on £9 million to fight the referendum. Why does he take this depressing view? Are there not a very large number of business people out there who are passionate to stay in the EU? They would be more than happy to finance the Labour Party, even if they are not Labour supporters. As long as the money goes into the “stay in” campaign, they would not care what label it comes under. Why is the noble Lord taking this despondent view that the Labour Party will not be able to raise the money?

[Lord Collins of Highbury]

I am not taking a despondent view. The Labour Party will no doubt raise a lot of money through a lot of individuals, as it does at every general election, and it will account for that. For me, the most important element of this referendum campaign is about who is donating—to have transparency on how much—not the idea that we should limit the campaign. This amendment would in effect limit the number of participants. I repeat the point about UKIP: if the “leave” campaign spends the limit laid out in this amendment, what is left for UKIP to spend? What if it has already spent it? Does it then have to hand all the money back?

The fact of the matter is that this campaign will be about a range of voices. The noble Lord, Lord Stoddart, talked about the 1975 campaign. I was a participant in that campaign and there were a lot of different voices in it. There were certainly voices that did not share the same platform; I think that will be true of this referendum campaign. The policy of the Labour Party and its views about the future of the European Union are not necessarily those of the Prime Minister and the Conservative Party. There will be different views and expressions of what they hope for the future, and we have to make sure that this referendum campaign is able to hear those different views. We should not have rules that limit it.

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[Lord Forsyth of Drumlean]

But my noble friend is the Government. It is not necessary to rely on the provisions in the PPERA legislation. It would be perfectly possible to put in place arrangements with regard to expenditure that ensured fairness. Once this legislation is in place, if it remains as it is, throughout the whole campaign I certainly will be arguing that it has been rigged in a way that gives an advantage to people who wish to stay in the European Union. I can understand why the Labour Party may feel at the moment that it may not be able to get lots of funding from people, but there will be people who will see this as an opportunity to provide more resource for what they believe to be an appropriate decision for the country. If we end up with limits that have the perverse effect of giving one side more funds than the other, it will be a source of grievance throughout the campaign—and if we end up with a close result, as has already been pointed out, people will argue that the result was bought and that it was unfair.

I understand the difficulties from the Government’s point of view, but to argue that legislation that was passed in 2000, which was thinking of referenda where, by their very nature, political parties would be divided, as opposed to this European issue where the first referendum was about sorting out the problems in a divided Labour Party—

[Lord Collins of Highbury]

Now it is your turn.

[Lord Forsyth of Drumlean]

I do not think the noble Lord is in a very good position to talk about divided political parties at the moment. If I were him, I would keep my head down on that subject.

It is very disappointing that my noble friend is not able to respond, and I hope that she may give further thought to this and that the vastly expensive Electoral Commission with its vast resources may be able to be a little more constructive than saying that it is all a political problem for which it has no responsibility. I will reluctantly withdraw the amendment because I do not think that if I divided the House at present it would be much appreciated by my noble friends or anyone else, but the response is very unsatisfactory and I think it will be a source of grievance unless it is addressed before this Bill reaches the statute book. I beg leave to withdraw the amendment.

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[Lord Wallace of Saltaire (LD)]

My Lords, I regret that some Members of this House appear to regard the European Commission as a malign force that is out to do down the United Kingdom. Jonathan Faull is head of the task force sent by the Commission to negotiate the renegotiation with the United Kingdom, which is an entirely legitimate and useful thing to do. I have no doubt that our free press will be very watchful if the Commission does anything in the referendum that is seen by the Telegraph or the Mail as overstepping the mark.

I want to say something that links this amendment with the one we will be coming to next, which is about impermissible external funds. I am very conscious that the Russian Government are supporting a number of right-wing parties in other countries in western Europe, and that Russia is the only major state which is thoroughly in favour of Britain’s leaving the European Union. I am not in any sense suggesting that funds have begun to pass in any direction to anyone. However, when I was in government and involved in the Transparency of Lobbying Bill, we were much concerned about funds from other countries—from right-wing sources in the United States, for example—coming to various campaigning bodies in this country. The amendment of the noble Lord, Lord Jay, touches on that issue.

Of course, we have to be concerned that this is a British debate and a British campaign, and that applies to all external actors. I think all of us agree that the Commission needs act extremely carefully. On the other hand, other Governments within the European Union will have their say, because they have national interests which they will wish to express. Therefore, the question of how we play this game—whether we would regard an intervention by the German Chancellor or the Dutch Prime Minister as untoward—is the sort of issue we will no doubt discuss. On the finances, we will wish to police this very carefully, but let us not go over the top. The noble Lord, Lord Hamilton, sometimes gives the impression that the enemy lies in Brussels and threatens to subvert our national sovereignty.

[Lord Collins of Highbury]

I think the noble Lord, Lord Wallace, hit the nail on the head when he said that transparency is key here. Obviously, the European Commission is acutely aware that any perception of interference in this referendum will have the opposite effect to what it intends.

[Lord Hamilton of Epsom]

The EU intervened on the Lisbon treaty referendum in Ireland, and the Irish passed it. The EU intervened for three years on trying to get Croatia into the EU, and Croatia came into the EU. It intervened in those two cases very successfully. Why should it change its spots and not intervene in this one?

[Lord Collins of Highbury]

Precisely because of the point that I make: I suspect that such intervention will have completely the opposite effect, whereas in Ireland perhaps it even encouraged people. I do not think that that will be the case here. If there is seen to be interference, people will see it that way and will not be very happy.

I am grateful to the Minister for circulating the correspondence on this, including the commitment by the Commission. Obviously, it states that it will carry out its treaty obligations, but in no way will it be involved in anything that could be perceived as interference in a matter that is strictly for the British people and the British Government—I agree with the noble Lord, Lord Wallace, on that.

Turning to the amendment in the name of the noble Lord, Lord Forsyth, I think that there is a legitimate point here that needs to be properly addressed—he should not look so surprised that I agree with him; I suspect that we agree on a lot of things. The point is that we have an offence where the sanction is in a way paid by the victim, which does not make sense. The Electoral Commission does not agree with the formulation because it does not want to accept such a responsibility. In Committee, I referred to sanctions other than judicial review that could be considered in relation to individuals. In all walks of life, people are subject to such sanctions. In the case of public office and civil servants, there is the Ministerial Code and the Civil Service Code. I would be keen to hear from the noble Baroness whether she has given any thought since Committee to how we can have a regime where, if an offence is committed, the perpetrator pays the cost and not the victim.

[Baroness Anelay of St Johns]

My Lords, Amendment 13, tabled by my noble friend Lord Hamilton, relates to the role of the EU institutions during the referendum. It follows the wording of a similar amendment that my noble friend tabled in Committee. The concern that he and other noble friends have expressed is that EU institutions may have an undue influence on the outcome of the referendum.

Although there are differing views on that, it is no doubt a legitimate concern and certainly one which the Government share. This is a referendum to be held on Britain’s membership of the European Union. It is therefore clear that the impression of outside interference or direct campaigning by overseas bodies with a vested interest would undermine public trust in the outcome. It would also be completely counterproductive; I think that people would see through it.

That is why the Government have ensured that sensible controls will apply on who can spend money to influence the referendum and how they can be funded. Some 44 of the Bill’s 62 pages relate to exactly these issues.

Campaigners at the referendum can accept money only from individuals or bodies who have a sufficient connection to the UK or to Gibraltar. In Committee, I went through in detail issues relating to permitted donors and permitted participants—I think that it would be wrong if I tried to go through that again on Report.

As the EU institutions are not eligible donors, a permitted participant would be committing an offence if they accepted money from the EU institutions to campaign. I should re-emphasise that permitted participants cannot accept donations of more than £500 from EU institutions. In part, therefore, my noble friend’s amendment is unnecessary.

The amendment has another arm to it, which applies directly to the EU institutions and would prevent them actively engaging in campaigning.

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[Lord Forsyth of Drumlean]

Because it seems to me that if it did not include the European Union and the European Commission, it would make something of a nonsense of the argument that he put forward. Perhaps my noble friend could indicate what the position is.

[Lord Collins of Highbury]

I have one brief question relating to Gibraltar. Political parties currently are not permitted to accept donations from Gibraltar, but when the Bill becomes enforceable they will be if it is for the purposes of the referendum. I want to understand how the amendment will impact in particular on the changes relating to Gibraltar.

[Baroness Anelay of St Johns]

My Lords, Amendment 14, tabled by the noble Lord, Lord Jay, relates to the controls that apply to donations received by campaigners. I was asked about the European Commission. As I explained in Committee, one of the technical issues is that permitted participants in these matters are individuals and bodies that intend to spend more than £10,000 on campaigning during the referendum period and so register with the Electoral Commission. The European Commission cannot be a permitted participant. If it were to spend money outside the campaign and in Europe, there are controls over where it can give that money and how it can give it. For example, there is a prohibition on accepting donations of more than £500 from an ineligible source, so people cannot accept money from it.

I was going to try to reduce the amount that I would read out at this late hour, but it looks as though I am being sucked back into doing exactly that. Perhaps I ought to try to address more closely Amendment 14 itself.

In considering the amendment, two questions have to be asked: is there a problem, and, if yes, does the amendment provide the solution? To the first question the answer is not straightforward, which is why the noble Lord tabled the amendment. He has done so after discussion with the Electoral Commission. It may come as a bit of a surprise to see this briefing from the Electoral Commission at such a late stage, particularly because I notice that my noble friend Lord Forsyth has been trying to get other information and has not been given the opportunity to obtain that. All I can say is that this briefing from the Electoral Commission that we have all seen arrived at about quarter to 12 in noble Lords’ in-boxes yesterday. The Electoral Commission has suggested that the rules are unclear. As I remarked earlier, it is 15 years since PPERA became an Act. Over that period, all the conditions which the Electoral Commission now calls into doubt have been operating. Therefore, it is rather a surprise that these matters have been raised at this stage, but there you go.

The conditions in PPERA applied for the AV referendum and were replicated, through an Act of the Scottish Parliament, for the Scottish independence referendum, and nobody called them into question then. Indeed, at that stage, guidance from the Electoral Commission itself clearly and accurately explained the rules to campaigners in Scotland. Furthermore, the commission’s own report on the Scottish independence referendum noted that it provided,

“a model that can be built on for any future referendums”.

Despite that, as noble Lords will note, the Electoral Commission’s briefing supports this amendment because the commission now has concerns about the rules. We have to take those concerns seriously because that is the whole point of trying to have rules upon which a fair referendum is to be based. The concerns relate to the fact that PPERA does not prevent campaigners accepting donations before they register as permitted participants, if the donation would have been impermissible after registration. If noble Lords consider that this is a problem, it must then be asked: is Amendment 14 the solution? Here the answer is clearly no for three reasons. First, it goes too far. The amendment would apply to donations received by any individual or organisation, regardless of whether or not they are, or later become, a permitted participant. At any point prior to the referendum, anyone, regardless of the size of the donation or the amount they will spend, could commit this new criminal offence. This really would be a sledgehammer to crack a nut.

Secondly, the amendment is unworkable. It would create an offence of allowing the use of money received from an impermissible source to meet referendum expenses. Currently, the rules do not require campaigners to track what each pound received is spent on. This is for a good reason, as attempting to do so would be a herculean task in administrative time. It would only ever create an arbitrary link between money in and money out. I find it difficult to imagine how that might be accurately assessed. How would anyone be able to prove that the £1,000 a campaigner received from a particular source was the exact same £1,000 spent on referendum expenses several months later? How could it work for charities and other organisations that receive donations from all over the world for different reasons? Clearly, that matter would have to be looked at if the amendment is to be put right but, as the amendment stands, it does not work.

The fundamental changes that Amendment 14 would introduce would begin to unstitch the fundamental principles that apply in PPERA, in particular the purposes of having a referendum period and permitted participants. These are all concepts which, to date, have been accepted by Parliament and endorsed by the Electoral Commission, and have provided the framework for well-controlled referendums in the UK.

The Government had questioned the whole issue of the potential for concern over donations received prior to registration. That is the kind of questioning one has to do. That is why we have required reporting ahead of the poll in the Bill, following the approach taken at the Scottish independence referendum. Where PPERA provides only for permitted participants to report on donations after the poll, the Bill also requires them to report publicly before the poll on donations received. That has two benefits. First, registered campaigners must be transparent about the sources of their funding before the vote takes place. More significantly in this context, the reports must detail reportable donations received during a set reporting period, even if received prior to that campaigner becoming a permitted participant—because you can change from being a campaigner to being a permitted participant—provided the donation was for the purposes of meeting referendum expenses during the referendum period.

This gives a flavour of how complicated this issue is. This approach works within the existing framework and maintains a proportionate approach to controlling campaign funding. Given the concern over the influence of overseas funding, we believe that having to report all these matters immediately prior to the referendum would act as a deterrent in most cases, even though the rules do not seek to regulate everybody at all times. It does mean that if you become a permitted participant, money received prior to that point from a source that would be impermissible once you had registered would have to be publicly declared before the referendum took place.

I come back to the underlying principle that it is important to ensure that there is transparency and that the transparency requirements imposed by pre-poll reporting are as effective as they can be. In the light of the noble Lord’s concerns, I give an undertaking that the Government will look again at how the controls on pre-poll reporting work to deliver the appropriate level of transparency, balanced with a sensible compliance burden. We will consider these matters but they are complicated and technical. I cannot promise to come back with something that actually works but we will do our best.

In coming up with its proposals, the Electoral Commission has diagnosed what it now sees to be a problem but has not found the solution in its amendment. I therefore hope that at this stage, with the commitment I have given to look at this very closely, the noble Lord, Lord Jay, will withdraw his amendment. Of course, I undertake to work with him between now and Third Reading to see what can be achieved on these matters.