European Union Referendum Bill

Baroness Ludford Excerpts

Tuesday 1st December 2015 Lords Chamber

[Lord Forsyth of Drumlean]

He has, indeed. If anyone wants to challenge that, I am very happy to give chapter and verse. Every single amendment that has been put forward has sought to improve the position of those who wish to stay in the European Union. Whichever side of the argument you are on, it is absolutely essential that, if we get a narrow result, people are able to say that it was a fair campaign and it was properly funded.

[Baroness Ludford (LD)]

Does the noble Lord accept that it is not about giving one side an advantage but about stopping the gaming of the system, which would prevent a fair exercise? That was the point made by the Minister in introducing her amendment, which I think is generally much welcomed.

[Lord Forsyth of Drumlean]

I am most grateful to the noble Baroness, who, with her great experience in the European Parliament, knows all about gaming the system. I am coming on to the point about gaming the system because we have already had examples. My friend and former colleague from the other place, Sir Eric Pickles, has already written to the Electoral Commission saying that the leave campaign should not be designated because it had upset the CBI at its conference and sought to expose that it was one-sided.

If we have those sorts of games being played, where people try to knock out one campaign in order to allow another campaign an advantage, that is gaming the system. This amendment makes it effective because it means that if people were able to persuade the Electoral Commission not to designate a campaign on one side, the other side would have considerable advantage, including even more expenses to spend on the campaign than are already provided in the Bill.

I am disappointed that my noble friend is not seeking to press his amendment. It is of course a matter for the House but I look forward to hearing from my noble friend the Minister how she believes it will be possible to deal with complaints if those who wish to stay win by a very narrow margin and people argue that it was an unfair campaign because one side was allowed to spend far more than the other.

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[Baroness Anelay of St Johns]

My Lords, I shall also speak to Amendments 9 to 25 inclusive, which are all in my name. Government Amendments 4 and 9 to 25 relate to the reporting requirements that apply to donations received by, and loans and certain other transactions involving, permitted participants other than non-minor registered parties.

One of the reasons why there are so many amendments in this group is that the Bill, like legislation for previous referendums, deals separately with donations and loans. Therefore, Amendment 4—along with Amendments 16, 17 and 18—is minor and technical. These amendments make it clear that different paragraphs in the schedules may be commenced at different times. Amendments 9 and 15 are also minor and technical, and would ensure that there is no conflict between two provisions in the Bill about the reporting of donations and loans that apply and modify the Political Parties, Elections and Referendums Act for different purposes.

I now turn to Amendments 10, 11, 12, 13, 19, 21, 22 and 23, which are the main focus of this group. The Government have tabled these amendments as a result of an undertaking I gave on Report to the noble Lord, Lord Jay. The noble Lord had tabled an amendment, following discussion with the Electoral Commission, to address concerns that the rules in the Political Parties, Elections and Referendums Act 2000 requiring campaigners to return donations from ineligible sources applied only to permitted participants. At the time, I set out clearly why the Government could not accept the noble Lord’s amendment as drafted, and I will not rehearse those arguments now, as they are on the record from Report stage in some detail.

However, I noted that the Government had already taken steps to address the concerns identified by the noble Lord’s amendment. These are provided by the introduction of pre-poll reporting requirements in relation to loans and donations. These provisions require permitted participants to be transparent about the sources of their funding before the vote takes place. In these pre-poll reports, campaigners are also required to detail certain donations received and loans entered into before they become a permitted participant. I gave an undertaking on Report to consider whether the level of transparency provided as part of the pre-poll reports was adequate. On that basis, the noble Lord, Lord Jay, withdrew his amendment at that stage. The government amendments I have brought forward today represent the result of consideration and discussions with the noble Lord. We believe they will provide for greater transparency, but without imposing an unnecessary burden on campaigners.

Government Amendments 10, 11, 13, 19, 21 and 23 establish that the first pre-poll reporting period for donations and loans will begin on commencement of the relevant provisions and end after the first week of the referendum period. I note that the Electoral Commission supports all the amendments in this sub-group. The actual length of the referendum period is as yet uncertain, as noble Lords are aware, simply because we do not know the date of the referendum itself, but noble Lords will recall that we agreed earlier to an amendment stating that the referendum period should be at least 10 weeks. Setting the first period through this amendment enables the starting of the first pre-poll reporting period without waiting for the regulations setting the subsequent reporting periods to be made.

Government Amendments 12 and 22 make further progress by increasing the scope of donations and loans that need to be reported. The Electoral Commission supports these amendments too. Under the Bill as it stands, the pre-poll reports need to include only donations or loans for the purpose of meeting referendum expenses that are to be incurred during the referendum period. This would be difficult to apply in practice, especially if the referendum period has not yet been set—as it cannot be, because the negotiations have not yet concluded and we are not yet able to bring to the House a statutory instrument inviting the House to consider a date for the referendum.

These amendments will require the reporting of donations and loans that were for the purpose of meeting referendum expenses generally. This approach means that, once these provisions are commenced, if campaigners are receiving funding from foreign sources to help meet any referendum expenses, they will have to declare this before the referendum. The campaigning rules that will apply to the EU referendum do not expect people to anticipate that they may seek at some future stage to become registered as a permitted participant and return money they receive. This is clearly the fair approach to regulation.

However, the pre-poll reporting rules recognise that there is a risk that, in certain circumstances, a campaigner might delay registering as a permitted participant so that they can receive otherwise ineligible funding. The pre-poll reports therefore seek to shine the light of transparency on the sources of funding campaigners seek to use. Through government Amendments 12 and 22, we have therefore increased the scope of the pre-poll loan and donation reporting requirements. I hope the House will recognise that the additional transparency the amendments provide is indeed a benefit, and that the Government have delivered on the commitment I gave at Report. I am very grateful indeed to the noble Lord, Lord Jay, for his constructive amendment at Report and his engagement on this point. It has helped us to arrive at this outcome.

I now turn briefly to government Amendments 14, 20, 24 and 25, which are all minor and technical. Amendments 14, 20 and 24 will correct a cross-reference, insert an additional definition and set out more clearly how existing reporting requirements under PPERA will function when applied to this referendum. Finally, Amendment 25 clarifies that the pre-poll loan reports must cover third-party security arrangements, referred to in the Bill as connected transactions, as well as loans and other regulated transactions to which the committed participant is a party. I beg to move.

[Baroness Ludford]

My Lords, I rise with some hesitation, because this is not an area that I know much about. I find the briefing from the Electoral Commission slightly confusing. It is probably a bit unfair to ask the Minister whether I should be confused, but is she satisfied that the concerns expressed by the Electoral Commission have been fully addressed? Its briefing states that it supports the amendments, which will increase transparency of information, but it is not clear from the last two paragraphs of the briefing whether those concerns applied before Report and have now been cleared up by the new amendments today. The last sentence states that,

“in addition to these amendments we will use our guidance for referendum campaigners to strongly encourage them to only accept donations from permissible sources prior to registering with us”.

Is it the Minister’s understanding that that has been overtaken by events and that her amendments now fully satisfy the concern that some donations would escape the permissibility requirements and post-poll reporting obligations? Do her amendments close all those loopholes? I apologise for asking her to clear up my confusion, but I would none the less be grateful.

[Lord Wigley (PC)]

My Lords, I follow that intervention with regard to the position of the Electoral Commission. I understand from what the noble Baroness said that it agrees with the content of what the Government are doing. Is it also entirely happy with the timing implications? If I understand it correctly, the commission has said that, in practice, it needs a minimum of 16 weeks’ notice after the last regulations have been approved. Is there an implication in the Minister’s statement for that timescale? If that is the case, is the Electoral Commission relaxed that it can work within those implications on the overall timescale arising from the amendments?