Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Lord Hodgson of Astley Abbotts Excerpts

Wednesday 18th December 2013 Lords Chamber

[Baroness Pitkeathley (Lab)]

My Lords, there is little wonder that there is so much concern in the charitable and voluntary sectors about the idea of collaborative working being detrimentally affected by the Bill. That is because collaborative working coalitions are the most effective way of campaigning and bringing about policy change. They bring together large and small organisations, single-issue and multiple-issue organisations, service providers and self-help organisations, and charities and other types of organisation. As well as enabling a powerful voice, collaborative working moderates the kinds of demand that are made and makes them more realistic. You have to achieve some kind of consensus, if, for example, you are putting together a manifesto, as many coalitions do in the run-up to an election. This may mean moderating the demands of the more extreme and pushing along the demands of the more cautious. These coalitions are very effective and this is why it is important that we get this right. This issue requires much more detailed consideration. In the mean time, the amendment proposed by the noble and right reverend Lord, Lord Harries, gets us some way along that road. I very much support it.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I should like to emphasise the challenge posed to coalition working by the present PPERA rules. I have an amendment in a later group about the practical reporting requirements that flow from it.

My noble friend Lord Tyler laid out the challenges, but the noble and right reverend Lord, Lord Harries of Pentregarth, put his finger on the issue. Our big challenge is to come up with the answer. Charities, particularly smaller ones, will always work in coalitions and therefore we must find a way to facilitate that, for the reasons given by several previous speakers. The noble Baroness, Lady Tyler of Enfield, explained this clearly from her personal experience. I can see that we are not there yet, but I hope that the round-table conference taking place early in January, to which the noble and right reverend Lord, Lord Harries, referred, will produce something that will address the weaknesses of the present system. I also hope that my noble and learned friend on the Front Bench will be able to approach that with an open mind so that we can tease out the right solution to this undoubtedly difficult but fundamental challenge.

[The Earl of Sandwich (CB)]

My Lords, I have already expressed my concerns about the smaller charities and the noble Lord, Lord Tyler, has articulated this so much better than me. I think that the Minister has been waiting for this amendment to reply to me and to others.

I back up what my noble and right reverend friend Lord Harries has said about encouraging charities to work together. Let us look at the example of slavery, which is in the minds of the Conservatives at the moment. We are rather surprised about that because that campaign comes from the voluntary sector and the Liberal party and not the Conservatives. Why is that? It is because the ecumenical coalition against trafficking and Anti-Slavery International came up with legislation. They have been working on this subject for 20 years, not five or 10 years, and the Prime Minister has embraced it at the forefront of present legislation. I am delighted about that but the Government have a lot of difficulty in the voluntary sector at the moment. If they are proceeding along these lines, they are going to have to think of something else soon.

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[Lord Hodgson of Astley Abbotts (Con)]

My Lords, it is a pleasure to follow the noble and learned Lord, Lord Hardie. Amendment 175 picks up the early part of Amendment 170J and seeks, as a probing amendment, to require the production of joint guidance between the Electoral Commission and the Charity Commission. During all the debates on Part 2 of the Bill, the underlying theme has been the practical implications for individual charities, especially smaller ones, many of which—as has been pointed out on several occasions—were not yet aware of their responsibilities. As the noble Lord, Lord Phillips, pointed out on Monday, the overwhelming proportion are run by people of the utmost integrity. The challenge is how to do this so they can discharge their responsibilities at minimum commensurate cost and disruption.

As we have discussed, there is guidance. The oft referred to CC9 from the Charity Commission is 35 pages long but is commendably clearly written and laid out. There are two parts to the Electoral Commission’s guidance: one is entitled Overview of non-party campaign material and the other is on non-party campaigners. That runs to another 15 or 20 pages, so we are talking about something north of 50 pages in total. That is what it looks like for a small charity. I suspect my noble friend Lord Tyler would call it a very good aid to sleeping.

These are two separate sets of guidance which are not easy to integrate. For example, in section G of CC9, entitled, “Campaigning: getting it right”, it says:

“This section is aimed at charities that have already decided to campaign or work in the political arena. There are a range of detailed questions and issues that may arise, along with the need to comply with charity law, and other laws and regulations.”

Strangely, the Electoral Commission is not mentioned at all in the text that follows. What is mentioned is the Advertising Standards Authority, a body which has not hitherto featured large in our discussions. In the Electoral Commission guidance on non-party campaign material, the focus is on two tests: the purpose test and the publicity test. These form no part at all of the CC9 guidance and the overall impression is of two ships passing in the night. This will pose considerable challenges, especially to smaller charities, so the amendment is intended to require—force is perhaps an unattractive word—the Electoral Commission and the Charity Commission to produce an integrated set of guidance laying out how to comply with the new Act.

This is a challenge but not an insuperable one. It will, of course, be opposed by both commissions. Members of your Lordships’ House will already have had an opening salvo from the Electoral Commission:

“We think that a legal requirement for us and the charity regulators to produce joint documents is unnecessary and likely to be inflexible. It may also be counterproductive because it could hinder our ability to respond quickly to the needs of charities whose activities fall within our regulatory remit, especially as new questions will arise during the regulated period.”

I do not find these arguments persuasive at all. I see nothing in them that will be made more difficult by requiring a joint approach. Indeed, if the Electoral Commission is proposing to introduce new guidance during an election campaign without the agreement of or consultation with the Charity Commission, this has the potential to put charities in an extremely difficult position.

I do not underestimate the challenge this will pose to my noble and learned friend on the Front Bench. I have been trying for some three years to encourage greater co-operation between Companies House and the Charity Commission to save 30,000 charitable companies making two returns where one could and should suffice. That has never seemed an insuperable objective but progress to date has been glacial. The same applies to collaboration between HMRC and the Charity Commission. However, that issue of collaboration between the Charity Commission and the Electoral Commission is altogether more pressing because of the short timescales and the imperatives created by a general election campaign.

If the requirement to produce joint guidance is not made a statutory one, I confidently forecast that none will be produced. The two commissions will keep to their own separate turfs, and the affected charities will be left in no man’s land in the middle. I therefore hope that my noble friend will appreciate the importance of tackling this matter.

[Baroness Royall of Blaisdon (Lab)]

My Lords, I am grateful to the noble and learned Lord, Lord Hardie, for his amendments and I welcome the amendment tabled by the noble Lord, Lord Hodgson, who just pointed out the ghastly complexity and challenges that will be faced by charities as a result of the Bill. It is eminently sensible to have an integrated set of guidance, and I very much hope that the Minister will accept this amendment so that it will be clear that this House and the Government want there to be a requirement for an integrated set of guidance.

On Monday the Government made a great deal of how the guidance that would be issued after the Bill becomes law would clear up many of the apparent difficulties contained within it. The Minister—I do not know if it was the noble and learned Lord—said:

“The Government believe that it is essential that campaigners have clarity on how they are to comply with the third-party regulatory regime. The Electoral Commission has a power to produce guidance for third parties campaigning in elections, and indeed has exercised that power in previous elections”.—[Official Report, 16/12/13; col. 1040.]

Indeed, the Minister placed such a heavy emphasis on the guidance that would be given that the noble and right reverend Lord, Lord Harries of Pentregarth, was moved to say while speaking to his amendments:

“However, perhaps I may anticipate, rather too boldly, the response that the Government are likely to make: that these kinds of issues can be dealt with in guidance”.—[Official Report, 16/12/13; col. 1057.]

Charities and NGOs need to understand how the Bill will affect them as the Bill passes through the House. To place the amount of weight that the Government place on guidance is effectively another way of avoiding proper consultation.

The first amendment from the noble and learned Lord, Lord Hardie, would ensure that the Electoral Commission is able to give charities and NGOs guidance in good time before they are subject to the regulated period, and would reduce the spending limits in line with the reduced regulated period that would result. The second would ensure that the Electoral Commission is resourced to apply these changes. As the Electoral Commission has said itself,

“The current PPERA rules on non-party campaigning are relatively narrow in scope … and the definition of what is covered is relatively clear, so we are able to produce guidance that builds on the legislation”.

However, it goes on to say with regards to the Bill before us:

“This will be particularly challenging for campaigners because of the need to apply the definition of ‘election purposes’, which is new and untested in the context of non-party campaigning. In the limited time available we will aim to produce guidance to assist with this, and will offer advice on particular queries where possible, but our experience strongly suggests that it will not be straightforward to apply the new rules to many specific types of activities”.

I know that the Electoral Commission will do all in its power to produce the guidance, but it will need time because of the complexities.

I say to the Minister that of course the best way of ensuring that the Electoral Commission is able to issue clear guidance in time is to draft clear law—to draft a very clear Bill. These sensible amendments would therefore assist in that. However, notwithstanding the desired clarity, this is a complex Bill, and time will be needed to ensure the best possible guidance so that the voluntary and charitable sectors understand their new obligations and do not unintentionally fall foul of the law. Like the noble and learned Lord, Lord Hardie, I think that small charities and voluntary organisations that do not employ lawyers as a matter of course could well find themselves unintentionally in breach of the law. As in so many things we do in this House, the lawyers will gain the most, and we cannot allow that to happen. I therefore very much hope that the Minister will signal that the Government will accept these or similar amendments in due course.

[Lord Wallace of Tankerness]

My Lords, Amendment 170J, tabled by the noble and learned Lord, Lord Hardie, would require the Electoral Commission to produce guidance for third parties, so that they are clear what actions they must take to comply with the provisions of the Bill. The Bill, should it have received Royal Assent by the time that guidance is produced, would not be permitted to take effect for a further three months. The noble and learned Lord further proposes that the Electoral Commission be given the extra resources it might need to produce this guidance and to comply with its other obligations under this Bill.

My noble friend Lord Hodgson has tabled Amendment 175, which, similarly, would require the Electoral Commission to produce guidance, but jointly with the Charity Commission. This would be designed to address specifically the impact upon charities.

The debate surrounding this Bill has made clear just what a lack of awareness there was, not only among third parties but among the public at large, of the existing provisions of the Political Parties, Elections and Referendums Act 2000—PPERA. I have certainly heard from more than one of the organisations that I have spoken to that they had not been aware that they might just have been edging towards a registration threshold back in 2010. They had not appreciated that fact. This lack of awareness has highlighted the crucial importance of comprehensive and clear guidance for all third parties, not just charities, so that they understand whether they could be affected by the provisions of this Bill as it amends PPERA.

As I said in at least one of the debates on Monday, when the original Committee on Standards in Public Life was considering the architecture and proposing the idea of an Electoral Commission it accepted that in some ways we could never achieve an absolute definition, and that, as the noble and learned Lord, Lord Hardie, predicted, some cases may have to go to the courts. However, much of that uncertainty could be avoided through guidance. That was one of the functions and roles that the Committee on Standards in Public Life saw for the Electoral Commission that it proposed should be set up.

The Electoral Commission already has the power, under PPERA, to produce guidance for third parties. As I said on Monday,

“The Electoral Commission has a power to produce guidance for third parties campaigning in elections, and indeed has exercised that power in previous elections. Campaigners require clear guidance to support them and help them understand the revised regime, and I am reassured that the commission recognises this too”.—[Official Report, 16/12/13; col. 1040.]

I think that I went on to say that the sooner the guidance can be produced in draft, the better.

Although there is existing guidance on third parties and the PPERA rules, noble Lords will be aware that the commission has already indicated that it will indeed produce fresh and enhanced guidance in time for the 2015 UK general election. It did so in its briefing to members in the other place, as recently as 29 August. Both the Electoral Commission and the Charity Commission will be aware of the demand from campaigners for clear and detailed guidance of this sort. I have no doubt that today’s debate, and the amendments tabled by the noble and learned Lord, Lord Hardie, and by my noble friend will have reinforced that message.

As in previous elections, the Electoral Commission and the Charity Commission will work closely together to develop guidance that will assist campaigners and charities to have a clear understanding of how the provisions in Part 2 relate to them. Again, the Electoral Commission made this clear in its briefing of 4 November. The Government stand ready to support this work.

I hope that the fact that the Electoral Commission and the Charity Commission have indicated an awareness of the need for clear and comprehensive guidance is of some reassurance to the Committee. However, the Government are also keen to reassure campaigners and charities that the provisions of the Bill and the PPERA rules will, and should, be clearly communicated to them. It is our view that the Electoral Commission should produce guidance in consultation with the Charity Commission, and provide specific consideration of charities. I am not sure whether a particular statutory provision is needed, but the benefit of that is very evident.

The other point made by the noble and learned Lord, Lord Hardie, in his amendment, which was also spoken to and supported by the noble Baroness, Lady Royall, was about the funding of the Electoral Commission. It is important to be aware—

[Lord Hodgson of Astley Abbotts]

Before my noble and learned friend moves on, may I ask him a question? When he was speaking so encouragingly about the joint guidance, I was not quite clear whether, in his mind’s eye—I know that he will not wish to commit himself yet—this will be one document produced by the two commissions? I ask this because once the two bodies are able to produce two documents they will do just that and leave the charities to connect them. They should be doing the connecting. They are the regulators, and they really need to do that. Is that how my noble and learned friend sees it?

[Lord Wallace of Tankerness]

I am not sure that that is entirely how I see it; my point was that whatever is produced should be produced in collaboration. I certainly am wary of saying anything that might be seen as a direction to two independent bodies, which must act independently of Government. That is why I hesitate, as I am sure my noble friend will understand. Ministerial colleagues have had meetings with the Electoral Commission—I have not done so personally—and, I think I am right in saying, with the Charity Commission, and I am sure that the message conveyed by noble Lords here will also be conveyed by Ministers.

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[Lord Harries of Pentregarth]

My Lords, this amendment is about reporting requirements, and I shall speak also about the two clauses included in the grouping. I think that the Government are sympathetic to the idea that the regulatory burden, particularly on charities, should be reduced if at all possible. The Electoral Commission has noted that the current provision in the Bill appears to be onerous as far as reporting procedures are concerned. At the moment, charities and campaigning groups have to report every month, and every week during the post-Dissolution period. Amendment 170N provides that those organisations which register because they think that they will be above the registration threshold, but do not in fact go above it, will simply have to report that they have not spent above the limit. They would not have to submit detailed accounts, they would just note the fact that they had not spent above the limit. It is a simple way in which the regulatory burden on them could be lessened.

I have called for a debate on whether Clauses 32 and 33 should stand part of the Bill because we need to go way beyond that. Surely it must be possible for smaller organisations in particular, but even slightly larger ones, to make a single report of expenditure after the election period rather than having to submit monthly reports and, in the post-Dissolution period, weekly reports. I hope that the Government will be sympathetic to doing all they can to minimise the regulatory burden, particularly on charities. I beg to move.

[Lord Hodgson of Astley Abbotts]

My Lords, I have tabled a couple of amendments in this group. They follow the line of attack of the noble and right reverend Lord, Lord Harries of Pentregarth, and they deal with reporting requirements. They are quite simple and entirely deregulatory. As regards Amendment 173, if at present a body makes a donation which has to be reported under PPERA rules as part of the quarterly reporting procedure, that triggers a requirement to make returns in subsequent quarters even though the body may not have made any further donations; that is, the body has to make a nil return.

This situation becomes rather more pressing during an election campaign, where a single report of a donation may require a series of weekly nil returns during the rest of that campaign. That arrangement will apply to all charities and all non-party campaigners under the new regime. I have argued quite strongly that nil returns are superfluous—indeed, they may be worse than superfluous, in that a blizzard of nil returns may distract the Electoral Commission from its regulatory role. Amendment 178 seeks to achieve a position where, if a reportable donation is made, it must be reported, but if no further donations are made, then no further reports are required—we dispense with the requirements to make nil returns.

Amendment 174 takes us back to the challenge from a couple of groups ago about the reporting of coalition working, where groups and charities collaborate to work on a particular issue. I referred a moment or two ago to the quarterly and then weekly reporting requirements. Extraordinary though it may seem, as we heard in the earlier debate, every member of a coalition has to report the record of all the members, even of expenditure for which they have no responsibility. That of course is immensely time-consuming and duplicative.

I will give the Committee a quick example. A group of charities may wish to raise the issue, say, of the export of live animals. They establish an agreement and a budget of £200,000. One large charity puts up £150,000 and five smaller charities put up £10,000 each—all are therefore above the reporting requirement. The consequence is quarterly reporting, and weekly reporting during the general election, for all six organisations, which have to make the return to the Electoral Commission. This surely cannot be a sensible use of resources for any of the parties involved, not least the Electoral Commission itself.

Amendment 174 would permit a coalition of charities to nominate a lead charity, which will make the return on behalf of the group. My noble and learned friend may fear a loophole being created. Indeed, in his remarks when we were discussing coalition working an hour ago, he hinted at this particular concern and fear. However, I am not sure that he needs to be concerned, because the lead charity will have to take the responsibility —and all that implies under electoral law—for all the activities of all the members of the syndicate. It is unlikely to take on the leadership role unless it is satisfied that its fellow coalition members will behave properly and legally. Amendments 173 and 174 are supported by the NCVO and have the support, in principle, of the Electoral Commission. They are of course also in tune with the Government’s general deregulatory approach and policy. I hope the Government will study the amendments, which are in a purely probing form at the moment, and perhaps come back with some reaction on Report.

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Moved by

[Lord Hodgson of Astley Abbotts]

171: Clause 31, page 24, line 39, at end insert—
“( ) In subsection (2), after paragraph (c), insert—
“(ca) a body incorporated by Royal Charter, or”.”

[Lord Hodgson of Astley Abbotts]

My Lords, I shall speak also to Amendment 172. It is with some relief that I reassure the Committee that this is not, for the moment, about charities. It is about the position of royal chartered bodies. At present, royal chartered bodies cannot register with the Electoral Commission, but nor are they charities. They are floating in the electoral ether, so to speak. These amendments attempt to regularise their position.

Amendment 171 amends Section 88 of PPERA, which is concerned with recognised third parties, by adding royal chartered bodies to the list in subsection (2) of those who may make returns to the Electoral Commission. Amendment 172, which is consequential, adds the officers of the relevant chartered body to the list of relevant participators at the end of Clause 31(3). I have tabled these amendments on behalf of the Law Society. Sections 94(3) and 94(4) of PPERA set out that where a third party is not a recognised third party and exceeds the limit of expenditure, which under the Bill will be £5,000, it will be guilty of an offence if it knew or ought reasonably to have known that the expenditure would be incurred in excess of that limit.

The fact that the Law Society cannot register as a third party, together with the Electoral Commission’s clear guidance that campaigning on policy issues could be deemed to be controlled expenditure, leave the society vulnerable to possible criminal sanctions for any campaigning it does on issues which arguably have a political dimension. Without the ability to register, the Law Society may have to cease such activity to avoid such sanctions.

There is inevitably a human rights argument that the position of chartered corporations breaches Article 10 of the ECHR, which is on freedom of expression, combined with Article 14, which covers discrimination. As these bodies do not have the options available to other bodies to come under the Act’s system of proportionate control subject to transparency, their freedom of expression is stifled. This is nothing to do with party political activity. Chartered corporations such as charities must not be party political. The exclusion of chartered corporations from being donors in Part 4 of PPERA is right, and is not touched by the amendment.

Until now, the Law Society has been able to live with the low level of uncertainty as to its precise legal position. Two developments have altered this. The first is the provisions and implications of the Bill we are discussing today. The Electoral Commission noted in its briefing of 22 October 2013 that:

“The combination of lower registration thresholds and spending limits, new constituency limits, and the wider scope of regulated activity, is likely to create a much higher level of allegations of breaches of the rules by non-party campaigners than at previous elections”.

Further, the detailed guidance on the width of controlled expenditure given by the Electoral Commission at a 22 October briefing is new. Whether it is right or wrong, it represents the regulatory enforcement approach it proposes to take. The second issue is developments in public policy—for example, the already referred to European Convention on Human Rights—which have an increasingly political dimension. They bring organisations such as the Law Society, which represents a substantial body of membership, increasingly close to the complex line between policy research and campaigning.

The Electoral Commission is sympathetic to this. Its briefing states:

“We support the principle of this amendment and agree that this is an issue that should be considered and note that any organisation that does not fall within one of the categories listed in PPERA as having appropriate links to the UK will not be able to register. This effectively means that their spending on matters covered by this Bill is capped at the registration threshold”.

It goes on to make a further point, which I had not focused on and which is an issue the Government will have to consider:

“There are other organisations that are currently ineligible to register, including Charitable Incorporated Organisations (CIOs)”.

Of course, that came into force only in the past 18 months and was not in existence in a corporate form at the time when PPERA was passed. It will be an increasingly important corporate form, because of course it offers the trustees of charitable trusts limited liability. We will therefore need to address this issue at some point during the passage of the Bill, but I had not come across it until this moment.

I have tabled these amendments on behalf of the Law Society, but it will not just be the Law Society that is affected. Other relevant bodies which may or may not be aware of the fate that awaits them include the Chartered Institute of Taxation, the Institution of Civil Engineers, the Institute of Chartered Accountants in England and Wales and the Royal College of Surgeons. The full list of royal chartered bodies contains no fewer than 1,002 corporate bodies—whose names I shall not read out—but it may interest the Committee to know that the list of establishment, which is set out in date order, begins at No. 1 with the University of Cambridge, established in 1231, and ends with No. 1,002, the Marylebone Cricket Club, or MCC, established by royal charter on 12 December 2012. That is not a bad pair of bookends for this amendment, so I hope that the Government can be persuaded to look sympathetically at the plight of this important and widespread set of bodies. I beg to move.

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[Lord Gardiner of Kimble]

I tried to explain what would be the case with unincorporated associations but, given what the noble and right reverend Lord has said, I will certainly look into that.

[Lord Hodgson of Astley Abbotts]

It is the fate of those of us who scrutinise legislation to spend most of our time pushing against a door that remains firmly shut. When the door suddenly opens, one is inclined to stagger into the room slightly off balance. I am extremely grateful to my noble friend on the Front Bench for that very constructive reply. I invite him to confirm that charitable incorporated organisations will be on the list that is being considered. If he cannot tell us that now, perhaps he can write and let us know. For the charity sector, that is going to be an increasingly important corporate form because of the limited liability that it affords to trustees, who otherwise have unlimited liability. As the noble Lord, Lord Forsyth, would say, it will apply to Scottish CIOs as well. Can he give us any further reassurance?

[Lord Gardiner of Kimble]

I have a note that includes the CIOs. We will be looking into this issue, including the Scottish incorporated organisations, so I can give my noble friend as positive a reply as I am able.

[Lord Hodgson of Astley Abbotts]

It is therefore with great pleasure that I beg leave to withdraw the amendment.

Amendment 171 withdrawn.

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[Lord Finkelstein]

It is hardly to my surprise that I discover that in a group of people who are involved in politics, everybody thinks that political activity is very special and ought to be granted privileges not granted to other activities. It should not come as a surprise to any of us that we are all very keen on it and understand its importance. My question is whether we think that because we have an interest in politics and believe it to be a noble and important activity, we have a right to expect the electorate to grant us that privilege—an exemption from our other duties as taxpayers. I would argue that we do not.

[Lord Hodgson of Astley Abbotts]

My Lords, I wish to add a few words. This discussion shows that in the area of political funding, for every solution there is a problem. I take a more sympathetic view of the issue than my noble friend Lord Finkelstein because I think that it is dangerous for parties to depend for their existence on a few major donors, wherever those donors may come from. We therefore have to find a way to replace those donors either with the state or by encouraging more people to make their donations worth more: for example, by means of gift aid, thereby taking them into the charity arena.

At the moment, there is a disconnect between the general public and Parliament. There are a number of reasons for that but the noble Lord, Lord Campbell-Savours, put his finger on it: a large proportion of that disconnect is due to difficulties in the area of funding. Some reports are blown up by the newspapers but the public is left with the impression that everybody has their nose in the trough. Even when people are found not guilty of offences in this regard or libel suits are successful, that impression is nevertheless left behind.

I offer a personal view on this. I am on the Lord Speaker’s outreach panel, the members of which give talks in schools, mostly to sixth forms, but sometimes to members of luncheon clubs and so on. It is interesting to see the reaction of 17 and 18 year-olds to talks about Parliament. After you have told them a bit about what we do, you ask them what they think about Parliament and the subject of money always comes up. It is not a question of one party or the other but of a general “smell”. At the moment, we are not passing the “smell” test as far as 17 and 18 year-olds are concerned. I am not suggesting that this amendment is perfect, but it provides a way for us to begin to address the “smell” test and start to deal with some of the issues that so far we have failed to grasp. If we do not grasp them, I fear that the reputation of Parliament will continue to decline because the newspapers and the media will continue to make hay with our reputation.

Although my noble friend is absolutely right about his narrow point, he has to decide where the balance of advantage and disadvantage lies. We should tell our fellow citizens that this process should mean a lot to them as it is the means by which irreconcilable policy issues are reconciled, and that if we do not reconcile them inside this place, we literally fight it out in the streets; and that is not very attractive either. Although I do not think that the amendment is the answer to this problem, I am sympathetic to it because it is the beginning of the answer and deserves to be explored further.

[Lord Deben]

My Lords, I have always been an agnostic about this issue and it is rare that I agree with the noble Lord, Lord Campbell-Savours, but I thought that his speech was remarkably informed. However, the important point is that those who do not want this measure have to find an alternative; and that is the trouble. Every time you talk about party political funding, people do not like whatever you suggest, so you end up with a system which is clearly not acceptable.

This measure is the best solution I can think of for the very reason that the noble Lord who has just spoken put forward: that is, whenever you give a talk in schools, money is the universal and everlasting concern that is always raised. I am not sure that it is easy to answer it because I know perfectly well that, in all the cases I have ever known, donors to the Conservative Party did not get what the newspapers thought they got. I think of a specific occasion when I was a Minister when, because somebody dared to tell me that a particular person was a donor, I am afraid that the opposite happened to what would otherwise have happened. I am sure that the noble Baroness on the Front Bench opposite would agree that such things happen on the opposite side of the House as well. That is what decent people do but it is not what indecent newspapers pretend those people do.

If our whole body politic is being poisoned by the present system, it is incumbent on those who object to the measure being put forward to suggest a different, better solution. I hear none, so, although I do not particularly like this measure, I do not know of a better one. We need to think about this issue much more seriously. The political parties should not wander on saying, “Well, we cannot think of anything better so we will go on with this”, because it is damaging the whole system.

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Moved by

[Lord Hodgson of Astley Abbotts]

181: After Clause 41, insert the following new Clause—
“Operation of this Act
The Minister must before the end of the period of two years, beginning with the day on which this Act is passed, appoint a person to review generally the operation of this Act.”

[Lord Hodgson of Astley Abbotts]

My Lords, as we approach this last group for debate I shall be as brief as I can. This amendment inserts a new clause into the Bill and provides for the operation of the Act to be subject to a review. Whatever one’s views on the purpose of the Bill and whether it is sufficiently necessary, proportionate and effective, whatever one’s views are on the process of the Bill and whether it is too quick or perfectly adequate or whatever one’s views are on the implications of the Bill, one thing is certain: it has proved controversial. If this were not so, I am sure that the Government would not have agreed to the pause during the past few weeks. As the NCVO said in its briefing on this particular part of the Bill, three senior parliamentary committees have raised their concerns about it: the Political and Constitutional Reform Committee, the House of Lords Constitution Committee and the Joint Committee on Human Rights.

Yet at this stage, all our views and opinions are so far merely supposition. We have yet to meet my noble friend Lord Tyler’s unintended consequences. This probing amendment is designed to ensure that the operation of the Act, in particular Part 2, is reviewed once we have had some real-life experience on its operation. My amendment suggests a review within two years of it coming into force. This will, I presume, mean a review commencing in the spring of 2016—that is to say, about nine months after the next general election, close enough that the lessons learnt in that election will remain fresh, but not so close that those lessons are distorted by the passions inevitably aroused during the campaign itself.

This approach, which is supported by the NCVO, offers the Government the opportunity to say to the doubters, “Let us see what happens in the run-up to and during the general election in 2015, let us then have a formal review and then Government, Parliament and the parties affected, including the charity sector, can decide and lobby for whatever changes need to be made”. I beg to move.

[Lord Harries of Pentregarth]

My Lords, I wish to speak to Amendments 181A, 181B and 181C, which all move in the same direction as the noble Lord, Lord Hodgson, on reviewing the Act. We made it clear from the standpoint of the commission, from the word go, that our recommendations, as a result of only a fixed five weeks of consultation, were only provisional for the 2015 election and we were very glad to learn from the Minister that he thinks that it should be reviewed.

Amendment 181B, also in the names of the noble Baroness, Lady Mallalieu, and the noble Lords, Lord Cormack and Lord Ramsbotham, puts forward the recommendation that the review should be undertaken within six months of the next parliamentary election. Amendment 181C, also in the names of the noble Baronesses, Lady Mallalieu and Lady Williams of Crosby, provides that the review should be undertaken within one year. That one-year recommendation is closely linked to Amendment 181A, which provides a sunset clause so that the Act would cease to have effect on 31 May 2016, and therefore at the end of Amendment 181C we say that the committee set up by the House to review the Act should report on its conclusions and those should be debated in both Houses before 31 May 2016. There is a clear timetable for this, and I hope that the Government will accept it.

It has been borne in upon the Government that there are issues here which are far more difficult and complex than they first thought when this legislation was put before the other place in July. We have seen this in particular in relation to constituency working, in relation to coalition working, and in relation to what is the actual heart of this, which is the definition of controlled expenditure. These are major issues that will need to be reviewed after the 2015 election.

My final point is that it is clear that the Government have approached this legislation from the standpoint of how electoral law might be abused. It is the contention of those who are heavily engaged in the democratic process, charities and other campaigning groups, that in trying to clamp down on potential abusers, they have severely curtailed the legitimate activities of people who want to contribute during an election year. The Electoral Commission has said that much of the present Act would be a burden on charities and NGOs generally. When the Minister goes away and thinks about what has been said today, I hope very much that he will do all he can to give NGOs that want to contribute to the democratic process much greater freedom and the liberation to do so without fear of crossing registration thresholds and so on, as would happen if the present Bill goes through unamended. I hope that not only will he think about what has been said both today and on Monday, but that he will support the idea of a sunset clause and a review within a year.

--- Later in debate ---

[Lord Wallace of Tankerness]

My Lords, I will very briefly say that of course we need to be aware of the effects of any legislation and that often these effects do not become clear until after the legislation is in force. As far as Part 2 is concerned, the Electoral Commission already has, under PPERA, the statutory function of reporting on the conduct of elections. That report will include how third-party campaigning is carried out.

I reassure your Lordships that we agree that the impact of the provisions of Part 6 of PPERA, which would include, if it passes, the measures in Part 2 of this Bill, should be subject to a review after the 2015 UK parliamentary general election. The passage of the Bill has shown that the provisions of PPERA are not necessarily as widely known as they ought to be, and even less well understood. The 2015 election will provide an opportunity to review the effectiveness of the provisions of Part 6 of PPERA as enhanced by Part 2 of this Bill.

The Government are still considering the precise details of the review but we commit to laying the review before Parliament, and a government amendment to that effect will be tabled on Report. Such a review was recommended by the Commission on Civil Society and Democratic Engagement, led by the noble and right reverend Lord, Lord Harries, and we are grateful to him for that recommendation. When the review is carried out, it is only right that Parliament should have the opportunity to consider how to respond to its findings.

The reason I hesitate in agreeing to the sunset clause is that Amendment 181C calls for the report to be debated “before 31 May 2016”, whereas Amendment 181A would have the effect that Part 2 would expire “on 31 May 2016”. It is important that, if we have a review, it is a proper one. If there are things that need to be done, there should be an ample opportunity for Parliament to take steps and consider any amendments that are required. That would not necessarily give a proper opportunity for a full review and for Parliament to take any necessary legislative steps. The spirit is that there should be a review. It should be brought to Parliament. It is clear to all parties, regardless of who is in government after 2015, that the will to have a review and learn the lessons that any review might teach us is there. In these circumstances I hope that my noble friend Lord Hodgson, who set the ball rolling in this, will be prepared to withdraw his amendment.

I hope this will be the last time that I will be on my feet in this Committee stage. I thank noble Lords in all parts of the Chamber for their contributions. It is important that we have had them. I also thank noble Lords for the good nature in which, debating pretty complex matters, our deliberations have proceeded. The Government have been listening and will reflect over the Recess on the matters that have been raised in your Lordships’ House.

[Lord Hodgson of Astley Abbotts]

My Lords, for the second or maybe the third time this afternoon I can say how grateful I am to my noble and learned friend for his very positive response. It has been a long afternoon and I take this opportunity to thank him for the courteous way in which he has dealt with the extensive probing to which he has been subjected. In withdrawing my amendment I hope that it is not out of order if I wish him and all members of the Committee a very happy Christmas.

Amendment 181 withdrawn.