Elections Bill

Lord Khan of Burnley Excerpts

Report stage
Monday 25th April 2022 Lords Chamber

[Baroness Noakes (Con)]

My Lords, in moving Amendment 51 I will also speak to Amendments 52 and 53 in this group, and I can be brief. The amendments are technical and, I hope, non-contentious, especially as my noble friend Lord True has added his name to them.

In Committee, when we were debating what is now Clause 22, I asked the Minister about the wording of the new subsections (3B) and (3C) in Section 28 of PPERA. This exempts small parties from the new requirement to make a declaration of assets and liabilities when they register. The threshold has been set at £500, which is in line with the recommendations of the Electoral Commission, which recommended it be set by reference to assets or liabilities. The Bill added another reference point: assets plus liabilities. Being a very old-fashioned accountant, adding assets and liabilities together did not make any sense to me.

Since Committee, I have had very constructive exchanges with my noble friend the Minister and his officials, and the outcome of that is the three amendments in this group. In effect, the amendments say that the small-parties threshold is now expressed as £500 for either assets or liabilities. It does this by saying that a small political party has to meet an assets/liabilities condition, which is defined in proposed new subsection (3C), in Amendment 53, as being met only if both assets and liabilities do not exceed £500.

I am grateful to the Government for facilitating this small change to the Bill in the interests of good accounting practice. I beg to move.

[Lord Khan of Burnley (Lab)]

My Lords, I welcome the amendments tabled by the noble Baroness, Lady Noakes, to highlight the importance that provisions relating to electoral law are consistent with accounting practice. I know that the noble Baroness speaks with great experience and expertise in this area, having served as the president of the Institute of Chartered Accountants in England and Wales, as well as holding various senior positions in the accounting and finance area.

Specifically, these amendments focus on the registration of parties and the declaration of assets in relation to this process. It is crucial that the individuals and groups participating in elections are fully transparent in their practices—a point which these Benches have consistently raised during debates on amendments in previous stages of the Bill.

I hope the Minister can provide assurances that PPERA and other legislation governing political activities are already consistent with accounting practice, but I would also appreciate if she could use this opportunity to provide a more general update on how the evolving governance of accountancy and reporting will relate to political finances.

Finally, the Minister will be aware that the Financial Reporting Council is preparing to transition to become the audit, reporting and governance authority. Can she confirm whether the Government expect the new authority to play any role in overseeing finances relating to elections? I look forward to assurances from the Minister.

[Baroness Scott of Bybrook (Con)]

My Lords, Amendments 51, 52 and 53 were tabled by my noble friend Lady Noakes, whom I thank for sharing her considerable expertise in and knowledge of this topic. Her constructive engagement with the Bill, particularly this clause, has been gratefully received in order to ensure that the law works effectively and as intended.

Asset declarations upon registration as a political party is an important matter. In answer to the question of the noble Baroness, Lady Hayman, in Committee, I say that this measure was recommended by the Electoral Commission in its 2013 and 2018 reports—A Regulatory Review of the UK’s Party and Election Finance Laws, and Digital Campaigning: Increasing Transparency for Voters. This led to the Committee on Standards in Public Life making the very same recommendation in its 2021 report Regulating Election Finance.

Clause 22 introduces provisions that will require new political parties to declare whether they have assets or liabilities in excess of £500 when they register with the Electoral Commission as a political party. Those with assets or liabilities in excess of £500 will be required to give a record of them as part of their registration. This will provide an increased level of transparency regarding a political party’s financial position at the point of registration. As part of the registration process, new political parties are not currently required to submit a declaration of the assets they own or liabilities they have. This information only becomes available in their first annual statement of accounts, published on the Electoral Commission’s website, which may be up to 18 months after registration.

The central policy aim of Clause 22 is to ensure greater transparency regarding the financial situation of new political parties. It is my and the Government’s view that my noble friend Lady Noakes’s technical amendments make this clearer and easier to understand for political parties registering with the Electoral Commission. These amendments will remove the requirement to add together the assets and liabilities, therefore bringing this clause into line with the more standard accounting practices that my noble friend has shared with us. I will read Hansard tomorrow and make sure that the noble Lord has a written answer to the questions that he asked. Therefore, I am pleased to say that the Government support this amendment, and I urge the noble Lords to do so too.