Transparency of Donations and Loans etc. (Northern Ireland Political Parties) Order 2018

Lord Duncan of Springbank Excerpts

Tuesday 27th February 2018 Lords Chamber

Moved by

[Lord Duncan of Springbank]

That the draft Order laid before the House on 23 November 2017 be approved.

[The Parliamentary Under-Secretary of State, Northern Ireland Office and Scotland Office (Lord Duncan of Springbank) (Con)]

My Lords, this statutory instrument, the Transparency of Donations and Loans etc. (Northern Ireland Political Parties) Order 2018, will provide for the full publication of donations and loans received by Northern Ireland political parties and other regulated donees or participants on or after 1 July 2017.

The current regulatory framework already provides for information on political donations and loans to Northern Ireland recipients above relevant thresholds to be reported to the Electoral Commission. However, the commission is forbidden by law from publishing or revealing this information to anyone, other than in very limited circumstances. This contrasts with the position in the rest of the United Kingdom, where information on donations and loans to political parties is published quarterly.

Party funding regulations were introduced across the United Kingdom by the Political Parties, Elections and Referendums Act 2000. However, these arrangements did not apply to Northern Ireland at the outset due to concern about the risk of intimidation of donors, which remained a major concern at the time. The Northern Ireland (Miscellaneous Provisions) Act 2006 provided for the 2000 Act requirement to report donations to the Electoral Commission to extend to Northern Ireland, but with provisions in place to prohibit their publication. The Electoral Administration Act 2006 made UK-wide provision for the reporting and publication of loans to political parties, similar to that already in place for donations. The Electoral Administration Act 2006 (Regulation of Loans etc. Northern Ireland) Order 2008 extended the 2006 Act provisions to Northern Ireland—but again with modifications to prohibit publication of details relating to loans for political purposes.

The donations and loans confidentiality provisions were always considered to be temporary, and public support for transparency has remained strong and consistent throughout the period that the provisions have been in force—and this Government have consistently made clear their desire to increase the transparency of Northern Ireland political loans and donations.

In January 2017, the then Secretary of State for Northern Ireland wrote to the Northern Ireland political parties to seek their views on moving to full transparency. For the first time—I stress—all parties that responded agreed that the time was right to introduce transparency to Northern Ireland. The Secretary of State also asked the Northern Ireland parties for views on a date from which transparency should take effect. Of the parties that responded at the time, the Alliance Party was alone in suggesting that publication should be backdated.

The issue was further discussed as part of the political talks that followed the Assembly election in March 2017. Again there was consensus that transparency should be introduced, and again only the Alliance Party suggested that publication of donations and loans should be backdated. The Secretary of State subsequently announced that the Government would bring forward secondary legislation to introduce transparency, and I am pleased to bring this important legislation before noble Lords today.

In light of the responses received from the political parties in Northern Ireland on the date from which transparency should take effect, and to ensure consistency with the Electoral Commission’s quarterly reporting schedule, the order will provide for the publication of details relating to all donations and loans received on or after 1 July 2017. I am aware there has been some criticism of the fact that the order does not provide for backdating of transparency to January 2014. However, the important point to note here is that when the decision was made, it was made on the basis of broad support among the Northern Ireland political parties. With the exception of the Alliance Party, the parties did not suggest backdating. Indeed, the opposition spokesperson on Northern Ireland in the other place was quoted as actively welcoming the decision not to backdate transparency to 2014 as the best decision because it had the support of the majority of the Northern Ireland parties.

In addition, much has been made of the position of the Electoral Commission. I hope that all noble Lords have had an opportunity to see the latest briefing note issued by the commission last week. The briefing made it clear that the commission fully supports this piece of legislation. It recommended that the Government bring forward a second, additional order that would see the provisions backdated to 2014—but again I stress that the commission continues to press for this order to be brought into force and implemented as soon as possible.

Although the primary objective of the order is to provide for publication of donations and loans from 1 July 2017 onwards, it also contains provisions to address a range of related issues, particularly in relation to the operation of the Political Parties, Elections and Referendums Act 2000. It may be useful if I now summarise these technical provisions.

Noble Lords will wish to be aware that the Northern Ireland (Miscellaneous Provisions) Act 2014 does not permit provision to be made in this or any other order allowing for information on donations or loans made or entered into before 1 January 2014 to be published. The Political Parties, Elections and Referendums Act 2000 provides for details of donations and loans received over the calendar year by a recipient from the same source to be published when their aggregated total exceeds the reporting threshold. Articles 2 and 3 of the order therefore provide for the publication of details about a donation or loan received before 1 July 2017 if it is aggregated with a donation or loan received on or after 1 July 2017, provided it is within the same reporting year.

Loans, unlike donations, may not be one-off events, and changes to a loan may be made over time. Certain changes to a loan, such as a change in the value or rate of a loan, a change of the repayment term, a change to the parties to a loan or the loan coming to an end, must be reported to the Electoral Commission. Article 3 provides for reportable changes taking effect on or after 1 July 2017 to be published if the loan was entered into on or after 1 January 2014. The effect will be that a change to such a loan which takes effect on or after 1 July 2017 will result in the publication of all details relating to that loan, including from the pre-1 July 2017 period. However, the order provides that such publication will not take place if the change to the loan is simply the repayment of the whole of the debt, or all of the remaining debt under the loan.

The prohibition on commission officials disclosing information relating to Northern Ireland political donations and loans is supported by a criminal offence. This will remain the case in relation to information about donations and loans unless that information is permitted to be disclosed by this order.

Articles 2 and 3 also provide that the commission will not act contrary to the prohibition on disclosure if commission officials publish information relating to a donation or loan received after 1 January 2014 and before 1 July 2017 if the relevant donation or transaction report does not state that the donation or loan was received before 1 July 2017 and commission officials believed that the donation or loan was received on or after 1 July 2017 and were reasonably entitled to hold that belief.

Your Lordships may be aware that the Political Parties, Elections and Referendums Act 2000 permits donations and loans from certain Irish citizens and bodies to Northern Ireland recipients. In such cases, additional information must be provided to the Electoral Commission in respect of these donors in order for them to confirm their identity. This includes passports and statements of naturalisation. It would clearly be inappropriate for the commission to publish sensitive personal information such as passport and naturalisation documentation, so Article 5 provides that such sensitive personal information will not be published by the commission. However, I can assure the House that all other information, such as names and addresses, relating to Irish donations and loans received from 1 July onwards will be published in the normal way.

Articles 6, 7, 8 and 9 of the order require political parties and regulated donees or participants to provide the dates on which donations or loans are received, particularly those received before 1 July 2017. This will minimise the risk of pre-1 July 2017 donations and loans being published in error.

Articles 10 and 11 ensure that the current verification steps undertaken by the commission to verify Northern Ireland donations and loans will continue to apply to Northern Ireland donations and loans received on or after 1 July 2017.

The Political Parties, Elections and Referendums Act 2000 provides for reports to the commission to be submitted and published at different times, depending on whether the recipient is a political party or a regulated donee or participant. Article 12 provides that the first publication of regulated donee information can take place only at the same time or after political party information has been published.

I hope that this brief summary of the provisions of the order has been helpful and not too confusing.

The Electoral Commission will have responsibility for implementing the arrangements set out in the order. Your Lordships will want to be assured that the Government have fulfilled their statutory obligation to consult the commission in respect of the order, and I would like to place on record my thanks to the commission for its close co-operation and constructive input into the drafting process. Once again I emphasise that the Electoral Commission has made it perfectly clear in its public statements that it fully supports the order and is keen to see it in force as soon as possible.

In summary, there remains widespread support for full transparency among the people of Northern Ireland. There has been a welcome recognition by the political parties of the importance of transparency to the broader political process, and the Electoral Commission has placed on record its support for this order. While there is much work to be done in re-establishing the Executive in Northern Ireland, I hope that this order will help strengthen confidence in and support for the democratic process of Northern Ireland more generally. I hope that noble Lords will support the order. I commend it to the House and I beg to move.

Amendment to the Motion

Moved by

--- Later in debate ---

[Lord Duncan of Springbank]

My Lords, I thank your Lordships for their wide-ranging contributions to the discussion this afternoon. I begin by thanking noble Lords for the support for the order before us, which will establish transparency from 1 July 2017. I believe we all welcome that particular feature—we can agree on that part.

I will address the question of backdating head-on. When the then Secretary of State consulted the political parties in Northern Ireland, he asked them when they wished the order to commence. In response, the parties themselves were quite explicit. The Alliance Party, as we have heard, wished to see the order backdated to 1 January. The DUP and the UUP both explicitly wanted it to be a forward order from the point at which it was agreed in 2017. The SDLP and Sinn Fein did not address this specific question in their responses. It is important also to stress that since that consultation, we have received no further update from those main political parties on the backdating question. I put that as a matter of record.

On the issue raised by the noble Lord, Lord Tyler, many of these questions cannot have been germane to the decisions of last year, for one very simple reason. Although the Electoral Commission was gathering the data at the point, it was not able—indeed, it would have been illegal—to release that data to the United Kingdom Government, whichever party held office. It could not therefore have been part of those ongoing discussions. We have heard at least one noble Lord today make reference to the details of that donation, and that is now a matter of public record. But it is a matter of public record as a consequence of other elements, not of its registration during the electoral gathering of data. It is important to stress that. That is why many of the questions raised by the noble Lord, Lord Tyler, fall at that point.

It is important again to recognise that we have an opportunity here in looking at establishing transparency. Right now, we are not ruling out the re-examination of the period that precedes 1 July 2017. Indeed, the draft order will allow consideration of it, once we have had an opportunity both to bed in the transparency order and to examine the details reflected therein. We will not rule anything in or out on that point. I stress that. It is important that we recognise it.

It is also important to recognise that the data has been gathered from that period in 2014—the data exists. Those who believe that it will be for ever concealed need fear nothing; there is nothing to be seen here and we can move along. In truth, that data will remain there. If it is determined that we should examine that in greater detail going forward, there is an opportunity for us to revisit this item. We should not lose sight of that fact.

As for the donations and loans that come into Northern Ireland from outside, from the southern part of the island of Ireland, I assure both the noble Lords, Lord Browne and Lord Bew, that there will be full transparency of those donations and loans. There must be—there can be nothing but that. That is why, again in relation to Irish citizens, the prescribed condition is that at the time of making a donation to a Northern Ireland recipient, the individual must be eligible to obtain one of the following documents: an Irish passport, a certificate of nationality or a certificate of naturalisation. There will be a full gathering of all the data of moneys coming into the electoral process in Northern Ireland. It is important that we recognise what that means.

[Lord Kilclooney (CB)]

We just heard a definition of “certain Irish citizens”. Does that definition apply to Irish citizens in the United States of America? Let us be fair, when the IRA was active, it was not the southern Irish who gave it the most finance; Irish citizens in the United States of America were the major financers of the IRA terrorist regime. I hope that such people in the United States will not be able to finance elections in Northern Ireland.

[Lord Duncan of Springbank]

I thank the noble Lord, Lord Kilclooney, for his intervention. Again, I stress this point. As a frequent visitor to North America, I have discovered many people who invoke their affinity to the homeland. I have met many Scots—who may indeed be fourth or fifth-generation Scots—who proudly wear their tartan as frequently as they possibly can. I do not fault that; I celebrate it. That is true for citizens of whichever homeland might be in question.

However, in terms of their rights and abilities to donate money to Northern Ireland, they must hold a valid Irish passport—not an Irish passport held by their grandparents, which might entitle them to play for Ireland—or a certificate of nationality or naturalisation. The order does not allow someone simply to invoke Irish heritage to be able to donate. One would hope that the transparency revealed by the order will help us to be attentive to the risks raised by the noble Lord, Lord Kilclooney. If any failings become apparent as the data is gathered, the Electoral Commission will be able to draw those to our attention and they can be examined in the cold, hard light of day. That will be very important.

The noble Lord, Lord Murphy, made a number of important context-setting remarks, which I endorse. We are at a delicate time and there is no better time for transparency than right now. There should be no escape from that transparency. As many noble Lords have heard me say more than once, we need to establish a sustainable Executive in Northern Ireland. I believe that the order will go some way to ensuring that the people of Northern Ireland have the utmost confidence in the electoral process. The order is right and timely.

I recognise that the issue of backdating will remain sensitive. If, on consideration of the data as it is gathered, ascertained and seen, there are deemed to be issues that need to be examined further, the Government will consider them at that point. We are ruling nothing in and nothing out. On that basis, I commend the order to the House.

[Baroness Suttie]

My Lords, I thank all noble Lords who have taken part in this short, but extremely important and valuable, debate. I also thank the Minister for his characteristically courteous, detailed and open response.

I stress that we on these Benches will continue to press the Government to live up to their earlier commitment on backdating these provisions to 2014—I welcome some of the Minister’s comments in that regard—and to follow the advice of the Electoral Commission in bringing forward another order at the earliest convenience to make this possible. I also agree with the suggestion of the noble Lord, Lord Murphy, that, at the very least, following changes in circumstance, we should discuss again with the political parties in Northern Ireland and hear their views on backdating to 2014.

On this occasion, however, it would be inappropriate to test the opinion of the House. We do not want to see further delays to the order. I therefore beg leave to withdraw the amendment.