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

Lord Hodgson of Astley Abbotts Excerpts

Wednesday 15th January 2014 Lords Chamber

[Lord Phillips of Sudbury]

My Lords, I am in a cleft stick; I have indeed got 15 minutes on the Clock, but my noble friend will accept that I have been interrupted five times now, which takes a wee bit out of one’s available argument time. I will keep this as short as I can. It is unfortunate—let us put it that way—that we have a letter at the 59th minute of the 11th hour which is, at best, unclear.

I know that a number of my colleagues have different points to make. It has been said, time and again, that there should be a level playing field between non-charitable NGOs and charitable NGOs. Well, yes and no. First, we have a whole lot of improvements for the non-charity NGOs. Secondly, however, the reason we persist in seeking this important change is precisely because charities are basically different in kind, not just because they have a separate branch of law and a separate regulator.

The bureaucratic consequences for charities having to meet the demands of two regulators will be significant. Although the thresholds have been raised, which is important, the number of charities that will still be swept up by this legislation is far greater than many Members of this House may think. It will be many thousands. It does not take a great deal to rack up £20,000 if you are a charity with a few branches around the country.

Secondly, given that the vast majority of charities have no paid staff, the people who will have to implement this complex bureaucratic stuff are not professionals but volunteers. Simply tooling up a charity that is wholly run by volunteers to cope with this new regime and all that it means will be a massive and demoralising task for so many of them. Frankly, volunteers do not want to spend their precious hours getting to understand the legislation that we are in the process of putting on the statute book and then trying to get to grips with it in practical terms, filling in the forms and all the rest of it. The consequences, I put it to the House, will still be huge, despite the number of charities that are, on the face of it, taken out of the purview of these provisions by the raising of thresholds and the rest of it. I cannot emphasise that too strongly.

Let us suppose that you are a trustee of a charity. You will not have a paid chief executive, so it may be a senior volunteer who comes to you and says, “Look, Mr Phillips, we have this new legislation. We do not think we are touched by it because we do not think we will reach the threshold, but what do you want us to do?”. I am afraid an awful lot of trustees will say—

[Lord Hodgson of Astley Abbotts (Con)]

Not only the Charity Commission opposes this amendment; the Electoral Commission does, too. Also, we have a situation where the Government have given way on the review period. We argue there is going to be a review of this piece of legislation, so if the matters that the noble Lord is so concerned about come to pass, the review will pick them up. We are now in supposition territory. I hope that the noble Lord will reflect on that before deciding what to do with his amendment.

[Lord Phillips of Sudbury]

I certainly will. I am grateful for that point, because I was going to say that a review of this will be essential in light of what happens at the next general election. Indeed, the noble Lord, Lord Hodgson, tabled an amendment that I think—

[Lord Hodgson of Astley Abbotts]

It is a government amendment.

[Lord Phillips of Sudbury]

It is now a government amendment, so we are going to get it—and that is vital because we will learn a great deal after that. I will just finish the point that volunteer trustees, perfectly understandably, are going to be cautious about this new legislation. The last thing in the world they will take a risk with is the prospect that things may get a bit out of hand or may not be perfectly understood, and that they, the trustees, will end up being personally liable. As I am sure everybody hearing this debate knows, they are personally liable. It does not matter if they are a limited-liability charity.

All in all, therefore, these are some of the reasons—I think other contributors to the debate will add others—that we should avoid the huge confusion that will follow if we subject charities to both charity law and electoral law. For good reason, I will not detain the House now beyond saying that this is still a very important issue that touches a hugely important part of our civic society—the very part of our civic society that does so much to uphold and vivify election campaigns. I beg to move.

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My particular concern is that this will have a cramping effect on charities and campaigning groups, even with the government amendment and even if the amendment of the noble Lord, Lord Tyler, is accepted. I beg the noble and learned Lord, if not now, before Third Reading, or at least as part of the examination of how the legislation works afterwards, to try to engage in some lateral thinking. We have not been able to come up with anything satisfactory so far; neither have the Government. We must be able to engage in some lateral thinking to stop what we and the Government want to stop without at the same time cramping the co-ordinated coalition campaign which is so important to charities.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I intervene very briefly. I tabled an amendment on coalition working and I am very grateful to the Government for adopting this way forward.

The other issue that charities raised frequently was the question of nil returns. I know that we shall come to nil returns later under government Amendments 81 and 89, but that, I hope, will cross-ruff into this amendment. In other words, we will make sure that when the new rules for coalition working come in charities will be able to take advantage of the nil return provisions, which the Government properly propose in Amendments 81 and 89. I should be grateful for the Minister’s clarification on that.

[Lord Ramsbotham (CB)]

I, too, welcome the government amendments and repeat something that I have said on earlier occasions about the importance of getting the issues about coalitions right in relation to the criminal justice system. If you look at the transforming rehabilitation revolution, you will find that the Government are trying to encourage coalitions to take on the supervision of offenders. They consist of a large number of different organisations, private and voluntary, and it is important that they are crystal clear on anything to do with coalitions before they are formed to take on that very important public work.

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[Lord Hodgson of Astley Abbotts]

My Lords, I will detain the House only for a moment to thank my noble friend and the Government very much for having listened to the persuasive arguments put forward by the Law Society and others and for providing a way forward for CIOs, a new corporate form that has emerged since PPERA was passed. There are more than 1,000 royal charter bodies. This is a very helpful and beneficial result and I thank the Government for it.

Amendment 68 agreed.

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[Lord Tyler]

My Lords, I welcome this group of amendments. I said at Second Reading that the Government and, indeed, the House, have a very difficult task in getting exactly the right balance between improving transparency and accountability on one hand and the inevitable potential for more bureaucracy. These amendments are a real improvement on where we were and I commend my noble and learned friend for them. The irony is, however, that we have the complexity of the number of amendments—I have not counted them—that have been necessary to remove complexity. It is a bit alarming, but I particularly welcome the amendment concerning the nil return, which is Amendment 98 if I have got it right.

It is particularly helpful because there really was rather an absurd situation when the organisations with which Members on all sides of your Lordships’ House have been in contact thought that they might be caught up in some elaborate new accountancy exercise when they did not anticipate that they would be engaged in the kind of activities that are caught by the Bill. This is a good balance and we are achieving the right threshold for transparency and accountability, but I just forewarn my noble and learned friend that it will take some time for the organisations that we have all been in contact with to understand the full significance of this battery of complex amendments.

[Lord Hodgson of Astley Abbotts]

My Lords, I add my thanks to those of my noble friend Lord Tyler, particularly for Amendments 81 and 89, which concern nil returns. It was extraordinarily difficult to justify to people why nil returns should be made. I am also very grateful to my noble and learned friend on the Front Bench for his reassurance about the interaction with the coalition working returns that we discussed earlier.

[Lord Harries of Pentregarth]

My Lords, while I welcome the government amendments, I draw the attention of the House to the report of the Electoral Commission on Amendments 74 to 81, 83 to 97 and 99 to 106. It says that it supports the amendments,

“which go some way to simplify the donation reporting requirements”,

but it goes on to say:

“We regret that the Government has not adopted other recommendations we have made to reduce burdens on registered campaigners further without affecting transparency”.

It indicates what these are and ends:

“We continue to recommend these changes … we now recommend two further changes to reduce burdens further”.

Will the Minister, even in the short time between now and Third Reading, have further conversations with the Electoral Commission to see whether some of its recommendations could be accepted by the Government? From the point of view of the charities and campaigning groups there is still a huge amount of regulation to be carried with the Bill.

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[Lord Gardiner of Kimble]

My Lords, government Amendment 118 requires that within 12 months of the Bill receiving Royal Assent, the Minister must appoint a person to review the operation of Part 6 of PPERA as it is amended by Part 2 of the Bill. Noble Lords will recall that in Committee there was some debate about the need for a post-legislative review of the provisions of Part 2.

I am most grateful to the noble and right reverend Lord, Lord Harries, and my noble friend Lord Hodgson of Astley Abbotts, who tabled amendments in Committee to ensure that this important matter was discussed. As was explained during Committee, it is right that an assessment should be made of the entire system of rules governing third-party campaign expenditure. That assessment should of course extend to the changes made by the Bill. The entire range of existing and newly introduced rules should be carefully reviewed after their first operation, which is expected to be at the 2015 UK parliamentary general election. A commitment was given by my noble and learned friend that an amendment would therefore be brought forward at Report to require a review of the operation of Part 6 of PPERA as it is amended by Part 2 of this Bill. That is indeed what the Government have now done. The next scheduled general election presents the first opportunity at which all the third-party campaigning rules will be in operation, and it is a timely opportunity to review the effectiveness of those rules.

The Minister must appoint a person within 12 months of Royal Assent to allow the reviewer to start work during the general election campaign. The Government believe that it is particularly important that a reviewer should be appointed sufficiently ahead of the general election to allow him or her to fully assess the operation of the rules. The amendment requires that on completion, the person carrying out the review must produce a written report. That report must then be laid before Parliament by the Minister. I am sure that noble Lords will agree that it is only right that Parliament should have the opportunity to consider how to respond to the findings in the report. Noble Lords will also have noted that in its most recent parliamentary briefing, the Electoral Commission gave its support to the amendment.

Government Amendment 135 is a related but minor amendment, which clarifies that government Amendment 118 extends to the United Kingdom only. I beg to move.

[Lord Hodgson of Astley Abbotts]

I congratulate the Government on having brought this forward. It is really important, because so much of what we have been discussing is supposition. We are peering into the fog of the future concerning how things will work out. This will be a chance to see what the reality is. I have just one question. The amendment talks about the person—the lucky person—who will presumably be imposed for about a year, if they start in March 2015. There will be the aftermath of the general election, and the returns required after that will be six to nine months later, so they will have to be in post for a year.

The amendment refers to remuneration and expenses. One issue when people undertake such reviews is access to skilled manpower and a team who can help them. No matter what he or she is paid, if they are trying to do it on their own, they will undoubtedly be in a much weakened position. I assume, but I want to have it confirmed, that the amendment implies that adequate manpower resources will be available to the reviewer to ensure that he or she can carry out their work and appropriate investigations. I think it is an excellent proposal.

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[Lord Cormack]

I was just about to sit down anyhow.

[Lord Hodgson of Astley Abbotts]

My reason for having supported the noble Lord in Committee and again tonight is that if, like me, noble Lords participate in the Lord Speaker’s outreach programme, they will know that when you go to schools up and down the country the issue that comes up again and again and again is that of money. We have a generation of schoolchildren about to go to university who have grown up with the idea that this is a dishonourable place where rich men and influential groups have a power because of their ability to fund.

The noble Lord, Lord Campbell-Savours, has put forward some incremental steps, which I support. I can only believe that the Front Benches cannot support them because they believe somehow, or they fear, that the comparative advantage, or competitive advantage, will be lost forever. They cannot think what it is, but something might come out of the woodwork that leaves one party at a disadvantage forever.

Sometimes, somewhere, we have to be brave, because against the £2 million to £3 million that the noble Lord, Lord Campbell-Savours, has said that it was going to cost, is the drip, drip, drip of damaging information about the behaviour and performance of this Parliament. That cannot be right for our country, whatever your political beliefs. Someone, sometime, somewhere has to be brave, and we need to give them a nod tonight to get on and be brave as soon as possible.

[Baroness Corston (Lab)]

My Lords, I rise very briefly to support the amendment in the name of my noble friend Lord Campbell-Savours. It takes me back 40 years to the Houghton committee on state aid for political parties. Both political parties ran away from the idea at the time—and there were only two major parties at that time, it has to be said. The campaign itself for the Houghton committee was under the slogan of “A penny from the workers to support our politics”. It was said that we had our politics on the cheap. The amount of money that is now required to mount a political campaign or to support a political party in a constituency is eye-watering compared with what was considered to be normal in 1974. Now, we are all more and more dependent on very large donations from a very small pool of people. Whether or not those people seek personal advantage from it, the public think that that is what will happen.

The noble Lord, Lord Hodgson, is entirely right about the attitude of young people towards politics. We find a great deal of apathy and disgust, as well as a decline in participation in politics and certainly a decline in turnout in local and general elections. It is never the right time to introduce a measure such as this. I have been active as an organiser and a parliamentarian for well over 40 years and I have never, ever heard anybody from a Front Bench say, “Perhaps this is the time”; it is always, “Well, this is a really good idea, but not yet”.

The person whom I think of as my noble friend, the noble Lord, Lord Elystan-Morgan, has just referred to President Obama. He was wise enough and smart enough to see that this issue was poisoning politics in the United States. What did he do? He had a deliberate strategy of asking for $20 from millions of people. Can any of us remember—I certainly can—what Washington looked like on the day of his inauguration? Washington had never seen so many people turning up for an inauguration, and I do not think that that was an accident.

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Moved by

[Lord Hodgson of Astley Abbotts]

119ZA: After Clause 35, insert the following new Clause—
“Electoral Commission and Charity Commissions: joint guidance
Before the commencement of this Act, the Minister shall require the Electoral Commission and the Charity Commissions to produce co-ordinated guidance on the requirements of Part 2 as they apply to charities.”

[Lord Hodgson of Astley Abbotts]

My Lords, after the fireworks, we return to the meat and potatoes. This amendment returns us to an issue we discussed in Committee: how to ensure that the work of the two relevant regulators—the Electoral Commission and the Charity Commission—is truly joined up.

As I explained in Committee, both commissions have produced guidance. Both sets are clearly written and well signposted but they are not yet joined up. As I also explained, CC9—the Charity Commission guidance—is 35 pages long. There is a section titled “Campaigning: getting it right”, in which the Electoral Commission’s role and purpose are not mentioned at all, although the Advertising Standards Authority is. Meanwhile, in the Electoral Commission’s guidance, no reference is made to charity law; it confines itself to the two tests of the purpose test and the publicity test.

Of course, as both commissions have pointed out to me—and, indeed, in guidance to Members of your Lordships’ House—both have their individual, separate procedures for updating their guidance from time to time as the months go by. Therefore, any and all joining up has to be done by the individual charity and this is quite a challenge for a charity, especially smaller ones with limited financial and operational resources. Indeed, there must be, as some noble Lords have said, a real danger that many smaller charities will merely throw up their hands in horror and give up.

I explained to my noble and learned friend that without some ministerial pressure I was convinced that the two organisations would likely continue to plough their own individual furrows. My noble and learned friend gave the Committee some pretty honeyed words, I thought, when he said:

“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 … 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”.—[Official Report, 18/12/13; cols. 1348-9.]

However, he could not quite bring himself to commit specifically to joining up the two sets of guidance. I have retabled this amendment tonight because I remain convinced that without this statutory pressure the two regulatory silos will remain intact.

The two commissions were very kind and courteous and they agreed to meet to discuss how to address this issue. Following that meeting, I have retabled my Committee stage amendments, but I have made two significant wording changes. I have replaced the phrase that I originally used, “joint guidance”, with the phrase, “co-ordinated guidance” and replaced “Commission” with “Commissions”. It was explained to me, of course, that the Charity Commission does not regulate charities in Scotland and Northern Ireland. OSCR, the Office of the Scottish Charity Regulator, and a new body recently set up in Northern Ireland will do that. By contrast, of course, the Electoral Commission regulates the whole of the United Kingdom.

So the vision I have and the vision I shared with them of co-ordinated guidance, which we discussed and they felt was a possibility, was for a homepage, prepared and signed up by the commissions, with links to policy issues or subjects that might be of more specific and important concern. This will offer two great advantages. The first is simplicity. Any charity of any size has just one place to go to look for guidance on this quite complex topic. We know it is complex because of the discussions we have been having over these past few hours. The second advantage is consistency. No regulator can introduce new policies or approaches without the other regulatory bodies knowing about it and being able to have their own specialist input. This avoids charities being caught in the crossfire of the regulators acting independently and quickly—maybe too hastily—in the heat of an election campaign.

To conclude, this amendment has, at least in principle, the support of the Electoral Commission and the Charity Commission. It certainly has the support of the NCVO and the commission of the noble and right reverend Lord, Lord Harries. I believe that it will be warmly welcomed by the sector as it grapples with the undoubted challenges of the Bill, so I hope that on this occasion my noble and learned friend can go further than honeyed words and accept this amendment. I beg to move.

[Lord Horam]

My Lords, the noble Lord, Lord Hodgson, certainly raises a very important point, which I am glad we are discussing, even though it is rather a late hour to do so. We should have some reassurance from the horse’s mouth: he mentioned that the Government have made various points, he has made various points and he has talked to the Charity Commission—presumably the Charity Commission for England and Wales—and the Electoral Commission. However, I remind the House and read into the record that our briefing from the Electoral Commission says specifically, under the heading, “A joint introductory guide for charities”:

“We are committed to working with the UK’s three charity regulators”—

that is, the one for England and Wales, the one for Scotland and the one for Northern Ireland—

“to ensure that charities have clear and reliable guidance about how to comply with the rules. The Electoral Commission and Charity Commission for England and Wales will produce a joint introductory guide for charities that need to understand if their activities are covered by non-party campaigning rules”.

It goes on to make various sensible points about testing its guidance, about taking campaigners’ views into account and about supporting and advising campaigners. That is all part of a process of being available in a sensible and practical way to charities and to campaigners who are not charities—which is equally important.

Given that the Electoral Commission and the Charity Commission are, I believe, working along the same lines and intend to produce joint guidance for charities and non-charity campaigners, and given the clear commitments being made, I think that it would be unnecessary to put this provision in the Bill. Neither the Charity Commission nor the Electoral Commission has the slightest doubt that it has to produce something sensible in this area. As a result of the amendments that have now been made by my noble and learned friend, there is time to do that before September, before the new arrangements kick in. While I support the spirit of my noble friend’s amendment, I think that it is unnecessary in the light of the clear commitments which have been made.

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[Lord Wallace of Tankerness]

My Lords, my noble friend Lord Hodgson tabled a similar amendment in Committee and brings forward this amendment to require the Electoral Commission to produce guidance for third parties and for that guidance to be co-ordinated with the Charity Commission, particularly to consider the impact of Part 2. As has been said, the issue was discussed at length in Committee, and it is clear to the Government that there is a lack of understanding among third parties and charities as to exactly what are their responsibilities under existing PPERA provisions—the point made by my noble friend Lord Tyler. That the Bill amends those provisions reinforces the need for clarity. The Government made clear in Committee that the issue of guidance and whether a duty should be imposed on the Electoral Commission would be revisited at Report.

Those are not just honeyed words, because since our debates in Committee, the Government have discussed with the Electoral Commission the importance of its producing clear guidance. It is essential that such guidance take into account the impact on charities in particular. Although charities do not campaign in support of political parties at elections and only two have ever registered as third parties to date, there is still an obvious need to ensure that they fully understand the workings of the new regime—that has been made very apparent during our many debates today—and whether they might be held to account by the new provisions as a result of their activities.

As the independent regulator, it is of course for the commission to provide this guidance, but the Government agree that the views of the charities regulator, the Charity Commission, must also be taken into account. Indeed, this involves not just the Charity Commission but its equivalent in Scotland, OSCR, and the Charity Commission for Northern Ireland. Suitable guidance, particularly aimed at charities, can come only if it is jointly produced.

I am pleased to note what the Electoral Commission stated in its briefing to Parliament. If your Lordships will allow me, I shall repeat the words already cited by my noble friend Lord Horam, because they are important. That is why this is substance, not just words. The commission’s precise words are:

“We are committed to working with the UK’s three charity regulators to ensure that charities have clear and reliable guidance about how to comply with the rules. The Electoral Commission and Charity Commission for England and Wales will produce a joint introductory guide for charities that need to understand if their activities are covered by non-party campaigning rules ... Our guidance will explain key areas of the rules such as deciding what counts as regulated spending, how to manage regulated spending, and how the rules cover co-ordinated campaigning in coalitions”.

The Government welcome that clear commitment. At the big risk of quoting again from the e-mail from the Charity Commission, sent at 18.08 yesterday evening, in that e-mail, under the heading, “Co-ordinated guidance for charities that need to understand if they are covered by the rules”, Mr Rowley states:

“The Charity Commission and the Electoral Commission have committed to producing co-ordinated guidance along with a joint introductory guide for charities ahead of the regulated period for the 2015 General Election should charities not be exempted. We are sensitive to the particular help that some charities may need to comply with both electoral and charity law. In the past we have worked closely with the Electoral Commission to ensure their advice for charities on complying with electoral law and our guidance on charities and political campaigning in an election period is aligned and have continued to work closely together throughout the passage of this Bill”.

The Government will continue in our discussions with the Electoral Commission. We will follow them up, and I am sure that our brief debate this evening will have further reinforced to the Electoral Commission the need for it to provide clarity to campaigners. It is the Government’s view that the Electoral Commission must produce guidance in consultation or co-ordination with the Charity Commission and the other charity regulators in the United Kingdom, particularly with regard to how charities might be required to comply with the regime.

I can see why noble Lords say that there is nothing to be lost by having the provision in the Bill, but when a clear and unequivocal commitment has been made by the Electoral Commission, and by the Charity Commission in the quote I have just read, as my noble friend Lord Horam said, it is unnecessary to put this in the Bill. In the light of these commitments, which I think go further than honeyed words, I ask my noble friend to withdraw his amendment.

[Lord Hodgson of Astley Abbotts]

My Lords, as it is 10.05 pm I shall be brief. I am very grateful to all those who have spoken in support of this amendment—the noble and right reverend Lord, Lord Harries, my noble friends Lord Cormack, Lord Horam and Lord Tyler, and the noble Baroness, Lady Hayter of Kentish Town.

I tabled the amendment with the Hippocratic oath in mind—first, do no harm. I could not see that this could do any harm. It could only do good, because it is either superfluous—in which case, it does not matter—or, if things started slipping, it could be brought into play. Therefore, I cannot say that I am pleased with the outcome. The “too difficult” tray, in which I always thought this would end up, probably has been pushed a bit further round the desk by the words that we managed to extricate from the two commissions. However, it is late. I hope that my noble and learned friend will continue to look at this.

Another amendment that I was keen on, which the Government have accepted—namely, the review—will be an issue for the reviewer to look at. I think that there will be issues, unless we really join this up tight; charities will find things complex and difficult. However, given that it is 10.05 pm, I beg leave to withdraw the amendment.

Amendment 119ZA withdrawn.