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

Lord Phillips of Sudbury Excerpts

Tuesday 22nd October 2013 Lords Chamber

[Lord Harries of Pentregarth]

That is a valuable point and I thank the noble Lord, Lord Judd.

There is a whole range of other problems. If groups campaign on a particular issue, the total costs involved will be attributed to each charity. Some of the most effective campaigns in recent years have come about because charities have combined. There are particular problems in relation to Northern Ireland, Scotland and Wales, where the sum has now been reduced to a paltry £2,000 in the year. I am not going to deal with that now, but it might emerge in subsequent days.

Time and again we have heard the phrase “chilling effect” being used. Some people say that they cannot understand why charities are worried about it because there will be no curtailing of their freedom. It is the combination of these elements, the lower limits and the increased range of activities that count towards them, together with a continuing fundamental uncertainty about the definition of an electoral activity in practice that is making so many charities feel that their freedom to engage is in fact being threatened. The Government are worried about a large fish across the Atlantic called Citizens United and fear that it might swim over here, but instead of waiting for it to come, they have sent out a deep sea trawler which has thrown up a huge amount of sand and confusion from the bottom of the sea and put a net over charities which have been swimming quite legitimately in the waters of democracy. It seems quite absurd.

There is a case for including a number of activities in what counts for electoral purposes. I think that we can agree on that, although the question of staff time raises all sorts of difficulties, particularly in the case of voluntary time and whether it is workable at all. But what is strange is that all these activities are being brought together—the lowering of the threshold and an increase in the activities that count towards it. Will the Minister explain what the problem is that has given rise to this severe curtailment? It is rather like offering someone a sum of money for a piece of work and then telling them that the amount is being halved while at the same time they will have to complete a number of other tasks in order to earn the money at all. Surely if there were no reported problems before, and the number of activities is to be increased, the thresholds should in fact be raised, not lowered, in order to account for the ordinary activities that charities regard as part of their core duties.

As I have said, there is a logical case for including a lot of these activities, but will the Minister say something about how these charities are to assess volunteer time? The National Trust, for example, has thousands of volunteers. Are they to be taken into account?

[Lord Phillips of Sudbury (LD)]

I am sorry to interrupt the noble and right reverend Lord, because I agree with every word that he is saying. May I just shoot one canard? It has been raised more than once. Section 87(2)(c) of the 2000 Act says,

“the provision by any individual of his own services which he provides voluntarily in his own time and free of charge”,

shall not be controlled expenditure.

[Lord Harries of Pentregarth]

I thank the noble Lord, Lord Phillips. I hope very much that the Minister will agree with that.

There is just one other point I would like to make. The noble Lord, Lord Tyler, has suggested that the present definition of an electoral activity promoting or procuring electoral success at any relevant election is accepted by virtually everyone concerned. I think that charities have not in fact been quite so happy about that as he suggests. There is still genuine uncertainty because this is a genuinely difficult area. If, for instance, a campaigning group on climate change looks at the policies of the different parties and assesses them according to whether it thinks that their policies are desirable as far as climate change is concerned, does that count as an activity for promoting or procuring electoral success at any general election? It seems to me that people of good will could argue that either way. Therefore, is there not a need for government lawyers, Charity Commission lawyers and the lawyers of charities to get together to see whether this really is the best definition or whether we can come up with something better?

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[Baroness Mallalieu (Lab)]

My Lords, I shall speak only on Part 2. I must first declare some non-pecuniary interests. I am a member of the Commission on Civil Society and Democratic Engagement, which was set up under the chairmanship of the noble and right reverend Lord, Lord Harries of Pentregarth, who spoke earlier. We will produce our report next Tuesday in time for the Committee stage of the Bill. I very much hope that all noble Lords will make a little time to have a look at it because during the past few weeks we have listened to a vast amount of evidence, including from the noble Lord, Lord Tyler, and we have taken, as it were, views from all parts of the United Kingdom.

What I am going to say tonight is a personal view because the report is not yet finalised. However, having listened to and read all the evidence, there have been times when my reaction was very much that of Victor Meldrew in “One Foot in the Grave”: that is, “I don’t believe it!”. How could a Government, any Government, make such a hash of an issue on which we are almost entirely united—that of transparency at election time? None of us wants money to be able to buy votes. We agree that there should be clear limits on spending and the public should be told who spends what. If anything, we should be looking tonight at a short Bill with all-party support, which makes some amendments to the Political Parties Act to improve its clarity. That would have all-party support. Instead, undue haste has produced a quite dreadful piece of legislation which has managed not only to divide the political parties but has united charities and organisations of every kind against it. How do you manage to alienate the Women’s Institute, Mumsnet, the National Trust, Greenpeace, the British Legion, the Countryside Alliance, the nurses, the RSPB and so on against you so that they combine together? You could not do it if you tried, but this coalition has managed it. When listening to the evidence, I did at times wonder whether someone with a sense of humour had slipped Part 2 into this Bill to test whether anyone in this House was awake, but the 40-strong speakers list shows that we are. If there are notably few Back-Bench coalition speakers, I can attribute it only to a number of those who normally stand up for free speech having adopted the maxim, “If you can’t say anything good, then say nothing at all”.

Part 2 is not wholly useless. It could serve a professor of politics very well as an example to his students of how not to legislate. It contains just about every error that a Government could make. There is not time tonight to detail them all, so I will take a selection of the major ones. The first thing you do is legislate in haste. Part 2 seems to have its origins in a meeting between the Prime Minister and his deputy in July, when they realised that unless something was done pretty quickly this autumn, a Bill would not reach the statute book a year before the fixed date of the next general election. There was no real urgency whatever about Part 2. We have been told by Members in the other place that Members of Parliament were not clamouring for it, and neither was anybody else.

Although the Political Parties, Elections and Referendums Act 2000 had its critics, and various improvements could have been made to it, it has worked reasonably well in two general elections. We were told that there has been no raft of complaints about it. There has been no formal investigation or inquiry and no prosecutions. It is not perfect: there is some lack of clarity and the Electoral Commission’s review has suggested improvements, but it is workable. Nevertheless, Part 2 was shoved into this Bill and, as we have heard, it was put before the Commons just as the House rose for the Summer Recess—indeed, the very day before.

The second error the Government made was not to consult those directly affected. They did not consult charities or campaigning organisations. Indeed, they did not consult properly those with responsibility for setting up and policing the new legislation. The Electoral Commission were, it seems, told what to do, not asked. Of the 50 recommendations it made in its review, only one was put into the Bill, and that was done in the opposite way to that which it had suggested. The Electoral Commission advised that staff costs should come into the equation, but suggested that if it were done, the limits should be raised. The Government have, indeed, included staff costs but are now trying to lower the limits.

Others have commented on the next error, which is particularly strange coming from a coalition which speaks of making “a bonfire of regulation”: that is, a massive increase in the regulatory burden and, by lowering the limits, an increase in the number of those to whom it applies. We should not forget that criminal sanctions will be applied, which are wholly disproportionate given the sums involved in many cases.

A further error is to try to push through a Bill which is so badly drafted that a specialist lawyer giving evidence to us told us that she could not conceive that it had ever been seen by a parliamentary draftsman. Lack of clarity and the sheer incomprehensibility of its wording mean that any organisation without an in-house specialist will have to seek expensive legal advice simply to understand what it means. The noble Lord, Lord Greaves, referred to that issue. I treat your Lordships to a few lines by way of a sample. Clause 28 on constituency limits at page 17, line 5 of the Bill, says:

“Subject to sub-paragraphs (5) to (7), the limit applying to controlled expenditure which is incurred by or on behalf of the recognised third party in the relevant period in any particular parliamentary constituency is the relevant proportion of the limit mentioned in paragraph 3(2A) … For this purpose “the relevant proportion” means— A/B where— A is the number of days in the relevant period; B is the number of days in the period which is the relevant period for the purposes of paragraph 3”.

How is somebody sitting in a small charity to make head or tail of that? The result, of course, is that they will be frightened off—they will be terrified of doing anything that puts them over the limit—

[Lord Phillips of Sudbury]

Does the noble Baroness not realise as a lawyer that this is a goldmine for lawyers?

[Baroness Mallalieu]

That is the other possibility, which I had not considered. It will undoubtedly increase the work of people who advise charities, such as the noble Lord.

Where are we on the rest of the so called clarification brought about by the amendment to Clause 26 in the Commons? I am the president of the Countryside Alliance. We have no idea what we might or might not be able to do as the Bill is currently worded. At the previous election we produced a rural manifesto that outlined our policies. It was widely distributed and not aimed at a particular party. We are told by the Electoral Commission we could not do that. It is clear that we could not organise a march, but could we organise hustings or have pledge cards? What of all the other public events where campaigning organisations put forward their views and express their wishes to their elected representatives? Who can tell? It is not only badly drafted; it is not readily understandable by those who need to know.

Yet another error was mentioned by the noble Lord, Lord Rooker—putting forward legislation which is bound to increase the number of complaints made to the Electoral Commission during an election period but providing no extra resources to enable the commission to investigate or deal with them. The Electoral Commission has had something to say on that and has asked the question and, as far as I am aware, has not received a satisfactory answer.

I could go on but I will not. I will just turn to the Government’s biggest mistake of all, one which the right reverend Prelate the Bishop of Derby mentioned. At a time when there is a deep mistrust of politics and political party membership is falling, trying to scare off the political involvement of the public who in their millions—literally in the case of some charities such as the National Trust and the RSPB—have turned to supporting extra-parliamentary campaigns is an affront to democracy. The voluntary sector’s involvement in public debate is to be encouraged, not stifled. It informs MPs and candidates. It informs the electorate. It enriches debate and very often, and perhaps most importantly of all, it provides a voice for groups that are otherwise powerless. Campaigns can at times, I have no doubt, be irksome to Governments but they are positive for democracy. Freedom of expression should be protected, not gagged.

This is a bad Bill, which I suspect in its present form is incapable of being corrected properly by amendment. We are, of course, giving it a Second Reading tonight. It misses the point. It is a wasted opportunity. It does not even begin to deal with modern ways of campaigning such as Facebook and Twitter, because nobody has consulted the people using those tools now. The Government, or whoever drafted this Bill, have not taken them into account. In common with others who have already asked for it, I hope very much that the Government will see the sense of taking this Bill away, consulting and then returning with a Bill which we could all support. After all, that is the way in which constitutional changes should properly be made. If they do not do so, I hope that Peers from all parts of this House will raise their voices and, if necessary, walk through the Division Lobby to make sure it happens.

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[Lord Phillips of Sudbury]

My Lords, I declare an interest as a charity lawyer of long standing and founder of the firm Bates Wells and Braithwaite, which does as much charity work as any firm in the country.

I hope that the Minister will not be too dismayed by what I have to say. I do not view this as a partisan Bill; it is a Bill that all sides should, classically, deal with as they best think fit, as they are doing. However, the problem of dealing with this as Back-Bench Peers is as intense in relation to this Bill, more or less, as to any that I have come across. It is not so much the length—it is a mere 62 pages—but that it is mostly written by reference to the 2000 Act, and there is no Keeling schedule. How on earth are we Back-Benchers, with no assistance whatever, supposed to get to grips with the fine print of a main Bill of 201 pages and a supplementary and amending Bill of 62 pages? It is outrageous: I wanted to say that. I hope that in Committee the Minister will put in hand a Keeling schedule right away because without it we cannot do our job.

I note also that as we got in this morning there were three documents, totalling another 94 pages. One was the excellent Library note, one was the report of the Joint Committee on Human Rights and the third was the Constitution Committee’s report. They were available only this morning. Again, how on earth are we supposed to do our jobs and take into full account the very careful work done by those various bodies? That merely emphasises the fact that a Bill of this importance should not be dealt with in this helter-skelter way, whether or not it comes out of the wash in time for the 2015 election. In my view, that is of secondary importance to the need to get this Bill as right as we can. It is difficult enough if we do that in the right way.

I happen to agree with much of what has been said in criticism of Part 1, although I want to concentrate on Part 2. I do not want to see Part 2 wholly scrapped, because with regard to non-charitable entities—particularly commercial third parties seeking to influence the outcome of an election by plugging, sometimes with huge resources, a particular line or point of view—we need Part 2 although, again, it should be heavily amended. I am wholly unpersuaded that we need charities in Part 2 at all. They should be exempt from Part 2 and from the 2000 Act. I shall come to that in a little detail in a minute.

A number of Peers have mentioned the importance of the charity sector, but there are one-third of a million charities in this country, 95% of which are run entirely by volunteers. It is no good the Minister saying, “They will not be caught by this Act”. Lots and lots of them jolly well will because we have the provision about coalitions. I am damned if I fully understand the coalition arrangements, but certainly they will catch tens of thousands of small charities in their tentacles because so many of them are part of a national body, albeit that they are independently and separately registered as charities, and we know all the rest.

There has been a good deal of exaggeration and quite a lot of charities, frankly, were not even aware of the 2000 Act where a lot of this stuff resides. None the less, the charity sector as a whole is up in arms about this Bill. Broadly, the charities are absolutely right. The noble Baroness, Lady Hayter, used the rather nice expression that this is a solution without a problem, which is right. We have no evidence from anywhere or anyone that the last election or the one before was subverted by charities. When have we ever in this House had a Bill like this which deals with a problem that does not exist? It is bonkers. It is not even as if, if we take charities out of this Bill, there is nothing that contains and controls them: they have the Charity Commission, as my noble friend Lord Hodgson and others have said.

The Charity Commission is not a pushover. I have grappled with it for the past 45 years. Sometimes, it is pretty tough going. It has a job to do.

[Lord Judd]

Very few people know more about charities and their activities than the noble Lord, but is he not being a little naive? Even if he can sustain his argument that there is no evidence from previous elections, is not the point that there could be—for example, in Sheffield—in the next?

[Lord Phillips of Sudbury]

My Lords, I think that the Charity Commission can do the job. Perhaps I may read a couple of passages from CC9, which was mentioned by my noble friend Lord Ramsbotham and others. It is a long and detailed guidance for charities which has evolved over 40 or 50 years. I have been quite closely involved with it. It gives an absolutely well thought through, pragmatically based series of yardsticks. The summary of campaigning and political activity by charities states that,

“political campaigning, or political activity, as defined in this guidance, must be undertaken by a charity only in the context of supporting the delivery of its charitable purposes”.

There is no equivocation. It can engage only in activities pursuing its “charitable purposes”. It continues:

“However, a charity cannot exist for a political purpose, which is any purpose directed at furthering the interests of any political party, or securing or opposing a change in the law, policy or decisions either in this country or abroad. In the political arena, a charity must stress its independence and ensure that any involvement it has with political parties is balanced. A charity must not give support or funding to a political party, nor to a candidate or politician”.

That is as clear as clear can be. They are not empty words, and there are a lot more to go with them. The Charity Commission enforces this, and the charity world is remarkably free of any abuse of these guidelines.

The noble Lord, Lord Judd, may remember that when he was director of Oxfam we had a major battle with a statutory inquiry instigated by the Charity Commission into Oxfam having had activities outside the range of what was permissible under charity law. Fortunately we ended up convincing it that we had not, but these are not empty words. If the Minister says that they are not quite strong enough then give the Charity Commission more resources. It has had a great deal of its people power taken from it. If we remove it from this Act, it would be a big load off the back of the Electoral Commission. It would be a saving of manpower, not a waste of manpower. It would be an economic measure to give the Charity Commission a little more assistance and not to put the burden on the Electoral Commission.

Others have said it, but the charity world as it is is the jewel in the crown of our culture. More than half the adult population is engaged in charity in one way or another. Charities are the engine of civic engagement at a time when in other respects we are in dead trouble. They exemplify organic life, volunteerism, communalism, philanthropy and trust. They are cherished. Can we claim those characteristics for the body politic? I fear not. Can big business claim any of those virtues? I fear not. Yet we are on the brink of putting into force an Act which will damage the sector, particularly the smaller part of it. It will demoralise charities, it will cause bureaucratic overload and it will waste money that is hard obtained and can be used better elsewhere. I do not see that we have anything remotely approaching a justification for shackling the charity sector in the way we are when there is no proven evidence of abuse and when the Charity Commission is there to do a job which it is already doing.

I have probably said more than enough, but I hope that when we get to Committee I will not have to put down 100 amendments because it would be a waste of time compared to a much more fundamental review. My last word is to remind the Minister that charity law is severe. A charity can exist for charitable purposes only. It can act only to pursue those charitable purposes. It can act only in the public benefit. We do not need this.

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[Lord Wallace of Saltaire]

I hesitate to go into a definition of politics as the noble Lord, Lord Norton, will immediately correct me. The promotion of particular policies, particularly broad policy areas, is a natural and accepted part of what charities and faith bodies do. That is a normal part of civil society. Part of my puzzlement, in listening to one or two of the speeches tonight, is that civil society is itself broader than the charitable sector. There are campaigning bodies in civil society which are not, and should not be, charities. Charities promote particular ideas, developments and social objectives which are also unavoidably political objectives, but they are not necessarily partisan objectives. That again is the line that we need to draw. I note that the noble and right reverend Lord, Lord Harries, said that charities are already unhappy about PPERA. Having looked at it, there are a number of difficult questions that we need—

[Lord Phillips of Sudbury]

It might be beneficial for all of us if the Minister and his advisers were to say how far the Charity Commission guidelines fall short of what the Bill is intending to do. If there is no significant air between the two, we might all need to know that.

[Lord Wallace of Saltaire]

I accept—and have also had it said to me in the Corridors—that we need to make sure that the guidance from the Electoral Commission, the Charity Commission and the Government are all in very close harmony. That is another area that we are, of course, now looking at.

The time is late. I will come very briefly to Part 3. Again, I recognise what has been said powerfully by a number of noble Lords here with trade union experience. We will come back to this in Committee, so I will say simply that unions are a major and extremely valuable aspect of our economy and our society. They have changed through a number of amalgamations over recent years and the Government consider the question of how accurate the membership lists of major unions are—we are talking about unions with 1 million or more members—is an appropriate point to be regulated. However, I take all the points—