Elections Bill

Lord Rennard Excerpts

Lords Hansard - Part 1 & Committee stage
Tuesday 15th March 2022 Lords Chamber

Debate on whether Clause 18 should stand part of the Bill.

[Lord Rennard (LD)]

My Lords, the reason for the Clause 18 stand part debate is that we should not let this important change in legislation pass without some significant scrutiny. The principle of notional expenditure might appear at first to be simple, but it is not quite so simple in the era of massive national party spending.

The original intention of election law concerning notional expenditure was always about making sure that spending limits were not circumvented by donations in kind. Before the Political Parties, Elections and Referendums Act 2000, there were limits only on expenditure by appointed election agents, or those they authorise, on behalf of their candidates. These people knew that money might not change hands for notional expenditure, covering things such as the use of a donated office for the campaign HQ or office equipment such as a photocopier, or significant discounts might be applied for their provision.

The value of the notional expenditure—what is effectively donated to the campaign—must be included in the candidate’s expenditure limit. If this was not the case, people supporting candidates could provide offices, staff, leaflets, posters and advertising free of charge to the campaign of their choice, and these materials would not be subject to the limits on candidate expenditure.

The legislation passed in 2000 brought in the concept of national party spending limits to try to create a more level playing field at national level. Before then, the parties understood that spending on a national campaign had to be just that: national spending spread evenly across the whole country, covering things such as newspaper advertising, billboards and party election broadcasts.

However, with a national party spending limit of £19.5 million, the parties no longer feel obliged to spend what they can evenly across the whole country. They have increasingly decided to target their national party spending at marginal seats. This might have brought them into conflict with the law. We have seen what was supposed to be national advertising on billboards and in local newspapers targeted largely at marginal consistencies. The 2000 legislation intended to cap unfair financial advantage nationally, but inadvertently it might have had the opposite effect and accelerated the arms race in party expenditure at elections. Parties have since decided that their national campaigns can produce direct mail, leaflets, Facebook adverts et cetera, targeted largely at marginal constituencies.

The supposed clarification of notional expenditure in Clause 18 is there to say that, from now on, the candidate or the election agent is not responsible for such expenditure if they have not specifically authorised it. This might seem a reasonable principle at first glance, but it means that the costs of materials that might benefit their campaign do not have to be included in the tightly restricted spending limits for candidates in constituencies. National parties can now target their direct mail at specific voters in specific marginal seats. They pay for leaflets for those constituencies, and they pay for their distribution either commercially or by paid volunteers. National campaigns can swamp the efforts of individual candidates to make their case.

When the Conservative Party went over the top in 2015 by paying for the bussing in of hundreds of party workers in marginal seats, employing them to canvass and deliver leaflets, putting them up in hotels and paying for their meals, there was a national outcry, led by “Channel 4 News” and the Daily Mirror, among others. It appeared that the marginal seats that might have brought the Conservative victory had actually been bought.

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[Baroness Scott of Bybrook (Con)]

No, what I am saying is that it will clarify for candidates and agents what is required and what was not very clear at the time of that case.

We have sought input on these measures from the Parliamentary Parties Panel and we are confident that they will bring important clarity to the rules and support compliance. Indeed, Craig Mackinlay, the Member of Parliament for South Thanet, whom we have talked about a number of times, knows better than anyone the deficient nature of the current rules, and he welcomed and praised the clarity which this Bill brings to notional expenditure.

In this clause, we are also making an equivalent amendment to the notional expenditure rules for other types of campaigners, such as political parties and third-party campaigners, to ensure that all the rules are consistent. Together, these changes will bring much-needed reassurance and clarity to candidates and their agents on the rules that apply to notional expenditure for reserved elections. Alongside guidance from the Electoral Commission, with which we are working closely, this measure will support compliance with the rules and ensure that those wishing to participate in public life can feel safe doing so, clear in their legal obligations. It is for this reason that I urge that this clause should stand part of the Bill.

[Lord Rennard (LD)]

My Lords, I am grateful to the Minister for that reply. She mentioned the PACAC report into some of these issues, but without quoting the crucial recommendation, in paragraph 16, which says that

“reform should only be taken forwards on the basis of clear consensus.”

This debate, at the very least, has shown that there is not that consensus. It seems to me that the debate is not about how to account for notional spending but whether to account for some of it at all. We have not really been satisfied that, if there were busloads of people from one party, the costs of the coaches, their hotels, their meals and the leaflets they deliver—all spent in a constituency with the clear intention of promoting a candidate—will appear in the constituency limit for that candidate, which is their proper place. The Bill does not seem to make that plain.

I am very grateful to the noble Lord, Lord Collins, and the noble Baroness, Lady Bennett, for confirming on behalf of the Labour Party and the Green Party that they do not see this clause as necessary. It seems to add significant confusion, and in my view it is particularly important not to add to confusion about what should be included at the same time as you may increase spending totals nationally. As the noble Baroness said, they may have to rise, but the Government said yesterday, in answer to a Written Question I tabled on 28 February, HL6502, that they may increase in line with inflation. That is inflation since 2000, which is 79% and would take a £19.5 million limit to nearly £36 million. There are more issues to debate on this in the next group of amendments.

Clause 18, as amended, agreed.

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[The Deputy Chairman of Committees (Lord McNicol of West Kilbride) (Lab)]

My Lords, Amendments 25 and 25A appear to be alternatives.

[Lord Rennard (LD)]

My Lords, this debate has shown that the noble Baroness, Lady Hayman, is definitely right that we need guidance on this crucial issue of notional expenditure. Many of us think that we do not necessarily need a change in the law, given that the courts have clarified the existing position and we need further guidance about what those decisions by the Supreme Court and Southwark Crown Court mean in practice for candidates and agents.

I believe that the appropriate body to provide such guidance is the Electoral Commission. That is partly because it can obtain legal advice independent from that of the Government; the commission can obtain advice about the meaning of the law that may be different from the interpretation of the Government of the day. It can advise all parties impartially and fairly. The Government’s view is most likely to coincide entirely with how the party presently in power would like the law to be interpreted, and that is not a good thing in a democracy.