European Union Referendum Bill

John Penrose Excerpts

Tuesday 16th June 2015 Commons Chamber

[Sir William Cash]

I am going to speak to my amendment 9, which is a simple amendment with very important consequences and implications. It would ensure that the referendum period lasts for at least 16 weeks.

Under the Political Parties, Elections and Referendums Act 2000, there is a maximum six-week period for potential lead campaigners to apply and be appointed, followed by a minimum four-week period before the poll. However, the Electoral Commission, drawing on its experience of regulating the rules for the Scottish independence referendum in 2014, has concluded that an alternative approach is needed to the timetable for appointing lead campaigners. The amendment recommends that, should the legislative timetable allow for it, the appointment should take place shortly before rather than during the first six weeks of the referendum period.

The effect would be to provide clarity at an earlier stage for voters and campaigners, and to ensure that the lead campaigners were in place shortly before the majority of the regulatory controls come into force. I cannot think of anything much more important than people knowing who is running which organisations. That would therefore allow for a shorter total duration of the subsequent referendum period—for example, a designation period of six weeks—with a subsequent 10-week regulated campaign period.

This is a massively important referendum and it is pretty astonishing that there is a vacuum on this subject. This is an extremely important amendment. The Minister for Europe is not in his place, but one of the senior Whips is, which is no substitute—

[The Parliamentary Secretary, Cabinet Office (John Penrose)]

I am the Minister responsible for constitutional reform.

[Sir William Cash]

I do beg my hon. Friend’s pardon. He was a Whip a short time ago, but he has now been promoted, on which I congratulate him. I hope he will pass back the message that we really must have a substantive response to this question.

Furthermore, the amendment will extend the minimum referendum period to 16 weeks, thus providing for a minimum 10-week post-appointment period. I am glad to say that the Electoral Commission supports my amendment; indeed, it supports the majority of my amendments. It says that extending the period to 16 weeks

“would go some way to giving designated lead campaign groups the time needed to get their messages to voters, including to plan and effectively use free mailing and TV broadcasts.”

As a matter of fairness—that hallowed expression—I cannot think of anything more important.

--- Later in debate ---

[Chris Heaton-Harris]

I agree entirely. That is why I was attracted by amendment 10 in the name of my hon. Friend the Member for Stone (Sir William Cash). The British people are savvy enough to make their own decision in the referendum, based on the arguments presented to them about how their lives will be affected. The choice they make will be theirs and theirs alone. I do not believe that these organisations will have great influence.

However, now is a good time for us to discuss how we deal with some of the points that have been raised. I want the referendum to be seen to be free and fair, as I believe it will be. This is the ideal time in the process to do that as we have the Bill before us. I am keen for the Minister to be aware of the issues. Maybe there is no need to act. Maybe there is no need to go further than discussing them here today. Perhaps some tidying-up provision could be introduced on Report, though I have no idea what that might be. My hon. Friend the Member for Stone has consulted the Electoral Commission about foreign sources of funding. This is a grey area, with quite a large sum of money going to numerous organisations, NGOs and charities, and it would be nice for us all to know that that money will be spent fairly and not for political purposes in the referendum in the next couple of years.

[John Penrose]

We have heard an extensive set of contributions in this debate, including from my hon. Friend the Member for Gainsborough (Sir Edward Leigh), the hon. Member for North East Fife (Stephen Gethins), my hon. Friends the Members for Stone (Sir William Cash) and for Harwich and North Essex (Mr Jenkin), the right hon. Member for Gordon (Alex Salmond), the hon. Member for Glenrothes (Peter Grant), my hon. Friends the Members for Aldershot (Sir Gerald Howarth) and for North East Somerset (Mr Rees-Mogg)—he was kind enough to say nice things about the constitutional impact of Somerset—my right hon. Friend the Member for Wokingham (John Redwood) and my hon. Friend the Member for Daventry (Chris Heaton-Harris).

I will start by saying a few words about clause 3 in general. I will then speak to the Government amendments before endeavouring to respond to the various points that have been made by colleagues on both sides of the Committee. Clause 3 sets out that part VII of the Political Parties, Elections and Referendums Act 2000—PPERA—applies for the purposes of this referendum. It has been in place since 2000, so it provides a well-established and understood framework for regulating referendums in this country. For example, part VII sets the spending limits for campaigners during the referendum period and the rules on donations.

However, the legislation for two recent referendums—on the voting system in 2011 and on Scottish independence last year—although based on PPERA, also provided examples of how the controls on campaigning and the framework for conducting a referendum could be improved. Where those changes have improved the regulation of referendums, with the support of the Electoral Commission, we have sought to replicate them in the Bill.

[Alex Salmond]

The Minister is quite right about building on experience to try to augment the PPERA recommendations. If the Government have done that with regard to finance, why did they not do it with regard to purdah?

[John Penrose]

We have already discussed that, and I understand that promises were made from the Dispatch Box earlier this afternoon by my colleague the Minister for Europe. Further proposals will be brought back to the House in due course, and I hope that the right hon. Gentleman and other colleagues will be pleased by what is brought back at that point.

Clause 3 therefore introduces schedules 1 and 2, which make further provision, and it modifies PPERA in relation to the campaigning and financial controls that will apply for the referendum. It also introduces schedule 3, which makes further provision, and it modifies PPERA in relation to the framework for administering the referendum.

Rather than spending a great deal of time on the detail of those schedules, I will move on to the Government amendments and then try to respond to the other amendments in the group, particularly those tabled by colleagues on the Government side of the Committee. The Government have tabled two amendments, which I will briefly explain. Amendment 14 will increase the spending limits for permitted participants at the EU referendum. The limits will apply instead of those provided for by PPERA. The increase takes account of inflation since PPERA was passed in 2000 but goes no further. The changes will apply to the spending limits for all those campaigners who are eligible to become permitted participants on both sides of the debate, including the designated lead organisations and political parties. It should be fair for both sides.

Amendment 15 gives effect to a recommendation of the Electoral Commission. It provides that where campaigners register as permitted participants but do not incur regulated spending, the responsible person must submit to the Electoral Commission a declaration that no regulated expenses were incurred. It will apply only for the purposes of this referendum. It is a technical amendment. Under the current provisions, there is no provision for a nil return. Although that can perhaps be seen as a logical approach in the event of a campaigner not spending, it creates a challenge for the Electoral Commission in undertaking its statutory duties. When a registered campaigner does not submit a spending return after the poll, it is not always clear whether that is an act of non-compliance, or because they have not incurred regulated spending. The amendment will make the situation clearer. Every registered permitted participant will be required to submit a return or declaration of some sort. Failing to do so without reasonable excuse will be a criminal offence. That should help to ensure that the Electoral Commission can focus its attention on clear cases of non-compliance. Given that it applies only to people or organisations that have already registered as campaigning groups, it ensures that transparency will be paramount.

Let me move on to some of the other amendments in the group. I will begin with amendment 9, tabled by my hon. Friend the Member for Stone, which a number of colleagues have addressed. The amendment seeks to extend the referendum period from the currently envisaged 10 weeks to up to 16 weeks. Having listened to my hon. Friend’s speech, I think that he is particularly concerned because at the start of any campaign the Electoral Commission needs to go through a process of designating the lead campaigning groups, and in the past there have been great concerns. In fact, the designation process has occasionally lasted for five or six weeks. If that six-week period begins at the start of 10 weeks of referendum campaigning, we will effectively end up with lead campaigning organisations being designated as such, and getting the public funds to which they are entitled, with a period of only four weeks to go before polling day. My hon. Friend rightly pointed out that that might put a crimp in the way in which the campaign was run, for both sides, which would not leave enough time to air important issues or make preparations. His proposed solution is to extend the period from 10 weeks to 16 weeks. I suggest a slightly more flexible alternative, which I hope will achieve the same outcome.

The Bill states that Parliament must agree to an affirmative statutory instrument to fix the date of the referendum in law. As my hon. Friend knows, an affirmative SI takes about six weeks to go through Parliament. Therefore, after the announcement of the election date, the House will consider the SI for a period of about six weeks before it approves the date of the referendum, and only then can the 10-week period start. Clearly, that will not help unless the designation of lead campaigning organisations can be done in parallel.

As my right hon. Friend the Member for Wokingham and others have mentioned, stirrings of campaigns are already under way. Campaigns are already gearing up, and the organisations involved are already co-operating and co-ordinating with each other, although we are at an early stage. I encourage those on both sides of the debate to engage at an early stage with the Electoral Commission, because both sides will, in all probability, start campaigning unofficially long before the eventual official start of the referendum campaign. Because they will be able to start engaging with the Electoral Commission at an early stage, not only will we be able to begin designation six weeks before the beginning of the 10-week period, but we stand a decent chance—with the Electoral Commission’s blessing, of course—of getting through the designation process rather faster than we otherwise could.

[Mr Jenkin]

To assist the Committee, and indeed the whole House, in the scrutiny of the Bill, will my hon. Friend undertake to produce a d-minus chronology of events that details all the steps between the Government’s decision to proceed with the referendum and the referendum itself? Presumably, that chronology could include the latest possible date for the conclusion of negotiations. We are concerned because some of the Government’s statements suggest that negotiations will conclude after the Government have triggered the referendum process.

[John Penrose]

I will happily produce a d-minus election schedule. What I will not be able to do, because it has less to do with the Bill, is to say when negotiations might be complete. However, we will be able to work back and produce a schedule that indicates how the process could and should look.

[Sir William Cash]

The direction of travel is good, because we are interested entirely and exclusively in one thing: not the views of Members of Parliament, but that the choice before the voters is fair. As the Minister knows, the Electoral Commission has supported my proposal. Will he re-engage with me if he has discussions with the Electoral Commission on his new proposal, so that we know which track the commission is going down and what its response is?

[John Penrose]

I am happy to confirm that we have had discussions with the Electoral Commission—I am sure they will continue—about early or pre-designation, which will be an essential part of the alternative that I am suggesting to the hon. Gentleman. That will ensure that the 10-week official referendum period is not eaten into, leaving too short a time for a proper airing of the issues. I know that he is concerned about that.

While I am sure that the recent general election campaign was fascinating in all possible respects to everybody in this Chamber, it is possible, given that it started rather earlier than normal because of the Fixed-term Parliaments Act 2011, that in the minds of one or two of our constituents it might have dragged a bit by the end. I am sure we all had cases of knocking on doors when we were out canvassing during the campaign and people saying, “Oh God, I wish the whole thing was all over.” We need to take care not to go to the other extreme—I know that my hon. Friend is not suggesting this—of having an election campaign that is too long. We are already beginning the referendum campaign—it is clearly starting to gear up—and we need to be careful about going too far the other way.

--- Later in debate ---

[Sir William Cash]

The Electoral Commission’s view is that the European Union does not come within these parameters, but will my hon. Friend share with us the legal advice that the Foreign Office is getting? I think he can take it, though, that we shall be looking at this ourselves, because it is so important in terms of the volume and disproportionateness of the funds that will be available. As my right hon. Friend the Member for Wokingham (John Redwood) said, it is half our money anyway.

[John Penrose]

My hon. Friend is absolutely right—it is half our money.

I have here the schedule of those who are eligible to donate to the permitted participants under the Act. It is all about UK-based organisations of one kind or another, be they third sector or private sector. Nothing anywhere would allow an organisation like the EU to get involved. The established protections have applied to British elections for quite a few years, and relatively successfully. I do not think that people feel there has been undue influence from organisations abroad in previous elections. The only changes we are making to those protections are, in effect, to make sure that Gibraltarian organisations can, if necessary, be part of the campaign actively or through donations.

My hon. Friend is aware—he mentioned it, as did a number of other colleagues—that the amendment as currently drafted probably has some rather serious technical flaws. He acknowledged that when he was talking about its underlying principles. Those flaws would, in particular, prevent a number of legitimate potential participants in the campaign from participating. For example, any farmer who had received payments under the common agricultural policy would potentially be excluded, as would any firm that had done business on the basis of trading with the European Union Commission. Civil engineering firms that have built roads in France, or indeed in this country, that have been paid for, even in part, by our money routed via the EU, would find themselves caught. In addition, the amendment does not have a time limit, so it would not only apply to the past couple of years but could affect anybody who has ever had any of this money since the EU was first started. Of course, that would be incredibly wide-ranging and could count out some entirely legitimate campaigning organisations or people who wanted to be involved.

Strong protections are in place, and we would need to be careful about the issue raised by the amendment.

[Sir William Cash]

rose—

[John Penrose]

I was about to move on, but my hon. Friend wants to make one final point.

[Sir William Cash]

The BBC, of course, has been receiving money from the European Union, so my hon. Friend is right that I am concerned about that point.

[John Penrose]

My hon. Friend has confirmed my view, and I am sure that we will continue these discussions.

I move on to amendment 53, tabled by my hon. Friend the Member for Gainsborough. I think his intention is to ensure equal force of arms on both sides of the debate. I was starting from a slightly different presumption: I think that both sides will be pretty well funded—there are well funded and strong views on both sides. There is no tradition in this country of overall, global limits on total campaign spending. As colleagues, including my right hon. Friend the Member for Wokingham, have mentioned, there are individual limits on constituency spends and national limits on individual political party spends. However, there is no overall global limit on the total amount that can be put behind a movement or campaign because other third party campaigning organisations, even after the closer regulation following the Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Act 2014, can also contribute to the campaign behind a particular cause. As there is no limit to the number of organisations that can contribute, there is de facto no overall limit on the total that can be spent.

Opposition colleagues may dislike this example, but it may have resonance on the Government Benches. It is possible and entirely legal, under the right conditions, for trade unions to contribute to and campaign strongly in elections. There are constraints on what they can do, but it is entirely open to one union or 10 to contribute. If 10 contribute, the money that unions could spend goes up by a factor of 10. There is no overall global limit on the amount of money that traditionally can be spent in British elections, although there have been individual limits in specific constituencies.

I caution my hon. Friend a little. The hon. Member for Glenrothes rightly pointed out that people get enthused, excited and involved in political debate at different points and in different ways. If a campaign on either side captures the popular imagination and engages people, people who were not involved at the start can decide to become involved part of the way through. My hon. Friend’s amendment would limit the number of people to only those who were organised and enrolled at the start; once the maximum number had been reached, the gates would close and no one else could enrol.

It is an entirely unworthy thought, I know, but the Chief Whip and I suggest that one side could grab all the slots of eligible campaigners on the other side and then do absolutely nothing with those slots. That would effectively kibosh the other side. I understand my hon. Friend’s attempt to equalise force of arms, but I am afraid that things will not work as he has described. The amendment would also run counter to some deep-rooted, fundamental principles about how British democracy has worked.

[Sir Edward Leigh]

rose—

[John Penrose]

I give way very briefly, but then I must make progress and finish.

[Sir Edward Leigh]

Although my hon. Friend believes that my amendment is not the way forward, as it would limit the number of participants, he understands the general view that there should be some sort of equality of force of arms. I remind him of the point that I made: during the 1975 referendum, the yes campaign outspent the no campaign by 10:1. Given that the major parties generally have the funding and are allowed to spend it, if the yes campaign had £17 million to spend and the no campaign had only £8 million, would my hon. Friend agree that the Government would have to think about that, take it away and worry about it?

[John Penrose]

I understand my hon. Friend’s concerns. At the risk of quoting one of the Opposition Members, I notice that none of us was that concerned when there was a difference in the force of arms at the recent general election on a party political basis, but I appreciate my hon. Friend’s concerns. I do not think that the amounts of money raised on each side will be as unequal as he fears, but I may be underestimating either the yes or the no campaign.

Finally, my hon. Friend the Member for Harwich and North Essex tabled a number of amendments that would remove bodies incorporated by royal charter and charitable incorporated associations from the list of those eligible. He specifically asked me to give him this reassurance, and I am very happy to do so: nothing in this Bill will change anything to do with charity law. Charities are already subject to some very severe and thorough crimps on what they can do when it comes to political campaigning. There are only a very small number of occasions when they are allowed to get involved, and even then, they are very closely scrutinised by the Charity Commission. That will continue: nothing in the Bill will alter any of that.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

Schedule 1

Campaigning and financial controls

Amendments made: 14, page 12, line 4, at end insert—

“( ) Paragraph 1(2) of that Schedule (limit on expenses incurred by permitted participants during referendum period) has effect for the purposes of the referendum as if—

(a) in paragraph (a) (designated organisations) for ‘£5 million’ there were substituted ‘£7 million’,

(b) in paragraph (b) (registered parties that are not designated organisations)—

(i) in sub-paragraph (i) for ‘£5 million’ there were substituted ‘£7 million’,

(ii) in sub-paragraph (ii) for ‘£4 million’ there were substituted ‘£5.5 million’,

(iii) in sub-paragraph (iii) for ‘£3 million’ there were substituted ‘£4 million’,

(iv) in sub-paragraph (iv) for ‘£2 million’ there were substituted ‘£3 million’, and

(v) in sub-paragraph (v) for ‘£500,000’ there were substituted ‘£700,000’, and

(c) in paragraph (c) (certain other persons and bodies) for ‘£500,000’ there were substituted ‘£700,000’.”

This amendment modifies, for the purposes of the European Union referendum only, the spending limits for permitted participants in paragraph 1(2) of Schedule 14 to the Political Parties, Elections and Referendums Act 2000 to take account of inflation.

Amendment 15, page 14, line 38, at end insert—

“Declaration where no referendum expenses incurred in referendum period

21A For the purposes of the referendum, the following section is to be treated as inserted after section 124 of the 2000 Act—

‘124A Declaration where no expenses in referendum period

(1) Subsection (2) applies where, in relation to a referendum to which this Part applies—

(a) a permitted participant incurs no referendum expenses during the referendum period (and no such expenses are incurred on behalf of that participant during that period), and

(b) accordingly, the responsible person in relation to the permitted participant is not required to make a return under section 120 or a declaration under section 120A.

(2) The responsible person must, within 3 months beginning with the end of the referendum period—

(a) make a declaration under this section, and

(b) deliver that declaration to the Commission.

(3) A declaration under this section is a declaration that no referendum expenses were incurred by or on behalf of the permitted participant during the referendum period.

(4) The responsible person commits an offence if, without reasonable excuse, that person fails to comply with the requirements of subsection (2).

(5) If a person who is the responsible person in relation to a permitted participant knowingly or recklessly makes a false declaration in purported compliance with the requirement in subsection (2)(a), that person commits an offence.

(6) A person guilty of an offence under subsection (4) is liable—

(a) on summary conviction in England and Wales, to a fine;

(b) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale;

(c) on summary conviction in Gibraltar, to a fine not exceeding level 5 on the Gibraltar standard scale.

(7) A person guilty of an offence under subsection (5) is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding 12 months or to a fine, or to both;

(b) on summary conviction in England and Wales, to imprisonment for a term not exceeding 12 months or to a fine, or to both;

(c) on summary conviction in Scotland, to imprisonment for a term not exceeding 12 months or to a fine not exceeding the statutory maximum, or to both;

(d) on summary conviction in Northern Ireland, to imprisonment for a term not exceeding 6 months or to a fine not exceeding the statutory maximum, or to both;

(e) on summary conviction in Gibraltar, to imprisonment for a term not exceeding 12 months or to a fine not exceeding level 5 on the Gibraltar standard scale, or to both.

(8) The reference in subsection (7)(b) to 12 months is to be read as a reference to 6 months in relation to an offence committed before the commencement of section 154(1) of the Criminal Justice Act 2003.

(9) In this section “the Gibraltar standard scale” means the standard scale set out in Part A of Schedule 9 to the Criminal Procedure and Evidence Act.

(10) Schedule 19C (civil sanctions), and any order under Part 5 of that Schedule, have effect as if the offence under subsection (4) of this section were an offence prescribed in an order under that Part.’”—(John Penrose.)

This amendment requires permitted participants who do not incur referendum expenses to submit a declaration of that fact to the Electoral Commission within three months of the end of the referendum period.

Amendment proposed: 11, page 17, line 37, leave out paragraph 25 and insert—

“25 (1) Section 125 of the 2000 Act (restriction of publication etc of promotional material by central and local government etc) applies in relation to the referendum during the referendum period with the following modification.

(2) Section 125(2)(a) of the 2000 Act has effect for the purposes of the referendum as if, after ‘Crown’, there were inserted ‘including ministers in the Scottish Government, the Welsh Government, the Northern Ireland Executive and Her Majesty‘s Government of Gibraltar’.”—(Sir William Cash.)

The purpose of the amendment is to apply the “purdah” arrangements that govern ministerial and official announcements, visits and publicity during general elections to the campaign period before the referendum.

Question put, That the amendment be made.