Third-party Election Campaigning

Lord Wallace of Saltaire Excerpts

Thursday 13th September 2018 Lords Chamber

[Lord Wallace of Saltaire (LD)]

My Lords, in view of the strictures of the noble Lord, Lord Judd, on those of us who may not understand charities, perhaps I should start by declaring that I have been a trustee of one musical charity for some considerable time and have been the chair of a musical charity that concerns not just musical performance but education and some campaigning for improved musical education. When I was chair of the trustees I did my best to observe the rules for which, as a Minister, I had been responsible; namely, that one should not serve for too long as chair of trustees. I made speeches on the sad decline of music teaching in schools and the need to reverse it. That is advocacy; that is one side of the line between advocacy and party-political campaigning. I think that actually the line is not too difficult to see.

This is familiar territory for me. I recall many long discussions with the noble and right reverend Lord, Lord Harries, and the Commission on Civil Society and Democratic Engagement when, as a Minister, I piloted the transparency of lobbying Bill through the Lords five years ago. We argued then that they were misinterpreting the purposes and potential impact of the Bill, which was concerned to protect the integrity of the electoral process from incursions of money from outside, and from single-issue groups targeting specific candidates and parties on the scale that we were already observing in other countries, most evidently in the United States. We had witnessed that in previous British elections, after all; for example, I remember the fox-hunting lobby vigorously working to unseat a particular Liberal Democrat MP several elections ago, which contributed to her defeat.

The Act was not aimed primarily at charities. It was aimed at all third-party campaigners from all political perspectives and social and economic interests. Reviewing comments from the NCVO, the Electoral Commission and others on the impact of the Act so far, I am struck by the frequency of references to “misplaced” or “erroneous” perceptions, “exaggerated” fears, or even—from the review by the noble Lord, Lord Hodgson—“fundamental misunderstandings” from the charitable sector. The NCVO reiterates in a comment from 2017 that:

“The growing potential for third parties to improperly influence elections by spending lots of money on advertising means that we do have to regulate non-party campaigning”.


The noble Lord, Lord Hodgson, noted in his review—I hope he will not mind my quoting it—that,

“a number of third parties appeared not to have appreciated that Part 2 of the 2014 Act was not a ‘new’ piece of legislation, rather an expansion and tightening of the rules already existing under Part 6 of PPERA. In meetings held in the course of this review, more than one organisation recognised that they probably should have done more to consider their legal obligations at the time of the 2010 General Election under the pre-existing regime”.

During the lengthy discussions on what became the 2014 Act, I became increasingly sceptical about the motivations of some of those resisting the legislation. I recall being told in a meeting with staff from several leading development charities that they did not want to have to register because, “That would tell the little old ladies who give us money that we are a campaigning organisation as well as working for the poor in the third world”. I did not yet know that some development charities were also bending the rules in pursuing those little old ladies for funding. If they are campaigning organisations, they should be transparent about that and not attempt to hide it from those whom they pursue so hard for funds. I also remember charity executives admitting then that they had never bothered to read the Political Parties, Elections and Referendums Act 2000 or to understand what obligations they had under it.

My conviction that large charities need careful regulation—however benevolent their underlying objectives may be—was sharpened further when I served on the inquiry into charitable fundraising two years later. We listened to the head of one major charity explain to us why his charity ignored the Telephone Preference Service—because the need is so great, we were told—and another admit that he had never looked into how the commercial telephone agency that his charity employed to fundraise operated. As the House of Lords Select Committee on Charities declared:

“Accountability and transparency are essential for charities to ensure they function properly”.


I welcome the proposals in the review of the noble Lord, Lord Hodgson, and regret that the Government have not found time to introduce some amendments to the legislation. I hope that the Minister will be able to tell us that the Government will do their utmost to find time for the modest amending Bill required during the next Session. Here, as in so many other policy areas, all other measures are currently consumed by Brexit.

It is clear that we need to revisit and adjust the regulations covering political campaigning on a regular basis to keep abreast of what the Russians call “new political technologies”, which are transforming campaigns, such as data mining, as the noble Lord, Lord Hodgson, suggested, the use of targeted social media and other forms of online campaigning and advertising. We saw the use of those techniques in the 2016 referendum and the difficulties that the regulators face in keeping up with what is going on. We also saw in that referendum a classic example of a regulated campaign organisation getting around the rules by transferring surplus money to a third-party campaign.

We have not yet resolved the issues raised by questionable behaviour during the 2016 referendum campaign, including the use of data mining and social media. That demonstrates the weaknesses of the UK’s regulatory structure for campaigning. Continuing changes in political technologies and the exploitation of new media make it clear that we will have to revise and tighten the rules further.

There are other changes in charities and electoral regulation that we need to consider. The absence of a legal obligation for transparency in reporting significant sources of income allows foreign donors, companies with strong economic interests and others to fund think tanks and educational and religious charities that promote their vested interests without the British public understanding what is happening. That has been an issue with some Muslim charities in the past. It is still a live issue with libertarian think tanks.

I recall an article on funding for the Conservative Party that remarked that non-British sympathisers who wished to donate to the party were frequently advised to give their money to right-wing think tanks instead. That way, they could gain influence and credit with influential insiders without having to declare their donations. But many of these think tanks in effect act as third-party campaigners in British politics or even as lobbyists for the multinational companies and foreign billionaires who fund them. The Institute of Economic Affairs, for example, does not publish its sources of income, but publishes papers against further restrictions on tobacco and in favour of cuts in corporate taxation.

I would love to know where the funding for the TaxPayers’ Alliance and the Global Warming Policy Foundation has come from, and in particular how much of their funding has come from wealthy right-wingers across the Atlantic. I note that the Global Warming Policy Foundation has an affiliated US funding foundation, while the Koch brothers, who are politically engaged American billionaires, are reported as having funded at least some of the activities of the TaxPayers’ Alliance. However, their websites and annual reports do not tell me more. Transparency in funding should be required of them, too, as influential players in the British political debate. This calls for legislative changes the next time Parliament addresses charity regulation and third-party campaigning.

The register of third-party campaigners for the 2015 election campaign is a useful indicator of the case for regulation. It includes bodies that campaign for right-wing and for left-wing causes; Conservative Supporters Ltd and the Conservative Muslim Forum are classic third-party bodies, with the Independent Schools Council, Hope Not Hate and various animal rights groups on different sides of that impassioned debate. These and many other groups contribute constructively to our public debate, but there is a line between advocacy in the public sphere and the targeting of particular candidates and parties that is not too difficult to identify and which the Electoral Commission should rightly police.

I accept and regret the fact that both the Electoral Commission and the Charities Commission are underfunded for the regulatory tasks they are asked to fulfil. I note that innovation in campaigning techniques is running ahead of regulation and needs to be revisited regularly to keep up, perhaps through a parliamentary inquiry after every general election. I hope that the Minister will take that back to the Cabinet Office to consider. I also accept that some elements of the transparency of lobbying Act would benefit from amendment, in the light of experience so far and in the light of the helpful review by the noble Lord, Lord Hodgson, in particular on the reduction in the regulated period from 12 to four months. But I also contend that the chilling effect which the commission chaired by the noble and right reverend Lord, Lord Harries, warned of has not emerged and that the case for transparency and regulation of third-party campaigning by right-wing and left-wing bodies and from both domestic and foreign sources remains strong.