Political Parties (Funding and Expenditure) Bill [HL]

Lord Tyler Excerpts

2nd reading (Hansard): House of Lords
Friday 10th March 2017 Lords Chamber

Moved by

[Lord Tyler]

That the Bill be now read a second time.

[Lord Tyler (LD)]

My Lords, I must confess that I am very surprised—pleasantly surprised, of course—to be in a position to move the Second Reading of the Bill. Had there not been a filibuster in the other place two weeks ago, I would have had no chance to set out the merits of our proposals today, and that would have been the last opportunity in this Session.

I say “our proposals” because the Bill is based on the cross-party draft published in April 2013 by a small group comprising Andrew Tyrie, the very distinguished Member of the other place who has worked so hard on this issue, Alan Whitehead, a very well-respected Labour MP, and me. I am hugely grateful for their time and commitment, but the current Bill has, for obvious reasons, been updated since then, so they cannot be held responsible for all its detail.

I should also record that the really hard work for the original draft was undertaken by a professional parliamentary draftsperson, under the supervision of our principal adviser Alex Davies, with the support of the Joseph Rowntree Reform Trust. Alex’s contribution to the whole process has been invaluable, and I can truly say that the Bill is as much his as it is mine.

I should also record that the Bill seeks to fulfil the objectives of the report of the Committee on Standards in Public Life published in November 2011. I am delighted that the noble Lord who is the current chairman of the CSPL, and who has done so much to clarify the problems and possible solutions, intends to speak today. The current Bill, drafted nearly a year ago, updates the previous proposals to reflect the various manifesto commitments of all the main parties to take big money out of British politics and to regularise the constraints on both donations and campaign expenditure.

The delay in obtaining this debate has two fortuitous, huge benefits. First, I am delighted that the noble Lord, Lord Young of Cookham, is to respond, as he and I have debated together, and often worked together, over some 55 years. He may not care to be reminded of that and I hope that it is too late to affect his career, but it has been a very happy co-operation on several occasions. If this debate had taken place earlier in the Session, he might still have been enjoying a well-earned retirement on the Back Benches, but he is here today and I am delighted. Moreover, unlike many of his colleagues, the noble Lord comes to the Government Dispatch Box with a great deal of experience of election contests—several more than mine and very many of them more successful than mine. He is admirably and uniquely placed to respond positively to this debate.

Secondly, in the last few weeks there have been several developments that add to the urgency of a review of the law relating to political funding, in relation to both the extent to which millionaires dominate the income of all parties and the way in which opportunities are found to circumnavigate the long-established constraints of campaign funding. This debate is all the more timely and topical for that. For example, I immediately concede that, as it was prepared over a year ago, the Bill does not adequately cover the special circumstances of referendums—or referenda, if you prefer.

Members of your Lordships’ House will be aware of the recent revelations in the Observer newspaper examining the role of the American billionaire Robert Mercer and his interest in the company Cambridge Analytica during the Vote Leave campaign last year. Despite attempted explanations that this company, which also assisted the Trump campaign with intimate psychometric profiles to target swing voters—at a cost of more than $6 million—did not work in British politics, Mr Arron Banks suggests otherwise. He said last month that Cambridge Analytica was “world class” and had helped the leave campaign with “unprecedented levels of engagement”, and he claimed that its artificial intelligence “won it for Leave”.

One of the employees of this company had previously appeared at a Leave.EU press conference to explain the technology employed in its campaign. The Observer reports that Cambridge Analytica,

“declined to comment last week on whether it had donated services to Leave.eu”.

As Members here will know, all donations of services in kind worth more than £7,500 must be reported to the Electoral Commission. No such submission was made. Here is a clear case for the commission to be empowered to examine again the issue of valuable benefits in kind and to act to prevent abuse.

I come to a second example of potential abuse. The Guardian of 24 February reported on the curious case of the DUP’s referendum campaign expenditure, which was wholly and completely spent on the mainland of Great Britain. We now know that the DUP channelled an anonymous donation of over a quarter of a million pounds—£282,000—for an advertising wrap around Metro, by far its biggest single contribution to the leave campaign. Metro, of course, does not circulate in the Province of Northern Ireland. As my noble friend Lord Rennard will recall, the rules on political donation transparency were not extended to the Province in 2000 for very special reasons. Those reasons may not apply now and should surely be revisited. The practical result of this devious action has been to create an apparent case of political money laundering.

I hope that Ministers and the commission will again agree that this potential abuse should not be permitted to continue and increase, and the latter must be given powers, in legislation, to tackle it. Together, those two examples result in the leave campaign standing accused not only of lying in the substance of its campaign but of cheating in the process of delivering it.

My third example is even more urgent and topical, because the trend that I will identify is insidious and undermines one of the most vital features of our representative democracy. Since 1883, there have been firm rules to prevent individuals and organisations pouring excessive sums of money into constituency campaigns to secure the election of individual candidates—to prevent the purchase of MPs, if you like. In all the elections that he contested, I am sure that the noble Lord, Lord Young, was reminded that every single penny spent to secure his success was restricted by law and had to be observed rigorously and reported or he could have ended up in court. A number of other Members of your Lordships’ House stood for election to the other place, and I am sure that they too were reminded by their agents at regular intervals during campaigns about the expenditure of any sum to secure election.

Over recent years, however, an ever-increasing percentage of the investment in target seats has come from the various national parties’ campaign funds, with hugely different—and higher—permitted totals. All parties have seen this as an obvious way to increase their chances of success in those constituencies, while neatly dodging the long-established local financial constraints.

In recent weeks we have all been indebted to Michael Crick and Channel 4 for their determined investigative journalism on this issue. Personally I regret that the BBC has appeared to be prepared to leave it to its rivals to undertake this important role. However, the Times also covered the issue extensively in its issue of 4 March under the headline:

“Election fraud inquiry rocks No 10”.


Considerable interest followed from that. While media attention has fizzed around these cases, the official response has been positively pedestrian. Outrageously, these matters have been allowed to drag on for more than 20 months. Quite apart from anything else, this has been hanging over the heads of a number of individual MPs, whose whole political career could be at risk.

It is surely absurd for so many individual police forces, many of which may never have undertaken a similar investigation, to have to learn afresh how campaign funding is restricted by law. That is why Clause 23 of our Bill makes provision for the Electoral Commission to be empowered in this key role of ensuring compliance with all expenditure limits in election law.

Meanwhile, Clause 19 sets out clearly a way to circumscribe the growing abuse of the whole purpose of our electoral legislation. Subsection (3) of that clause is the only part of the Bill that I intend to quote directly this afternoon. It reads:

“No more than one per cent. of the amount specified in subsection (2) may be incurred by a represented registered party for the purposes of—


(a) sending unsolicited material falling within paragraph 4 of Schedule 1 which is addressed to any person registered, or entitled to be registered, in the register of parliamentary electors for any particular constituency; or


(b) making unsolicited telephone calls to such persons”.


To be clear, this means that only 1% of the overall national PPERA limit could be spent in any one constituency on the two key campaign methods that are demonstrably targeted. After all, a letter or telephone call to an elector at home in a constituency cannot be said to be doing other than influencing the result in that constituency. It is one of the features of our electoral system that there is no national result or regional result—only constituency results.

What we are suggesting may not prevent all the present cunning attempts to bypass the law, not least with the advent of targeted social media advertising, but it would be a good start. If the Government took on this cross-party Bill, they could certainly make it more comprehensive: for example, by dealing with the deployment of central party staff and the busloads of activists sent to marginal seats. I do not know whether the noble Lord normally reads the Daily Mail every morning, but I am sure that his department will have drawn his attention to page 2 of that newspaper this morning. Possibly he also saw Channel 4 last night, which was very relevant.

I am very confident, being well aware of the recent extensive, excellently prepared and fair recommendations of the Electoral Commission, that its expert advice would be available to Ministers. I have a summary of relevant recent Electoral Commission statements, which I do not propose to read out now, but I am sure the Minister is well aware of them.

The Times article to which I referred earlier was accompanied by a leading article which concluded:

“The spending rules exist for good reasons. They ensure that constituency candidates face each other on a level playing field. Fiddling expenses undermines not just the result, but the public’s faith in the institutions of government. Above all, the electoral process must be seen to be honest and above reproach”.


I wholeheartedly agree and I hope that the noble Lord, Lord Young, will do so, too, when he winds up the debate.

I readily acknowledge that the likelihood of any further progress for our cross-party Bill at this time in the Session is precisely nil. However, help is at hand. Members of your Lordships’ House will recall the crucial recommendations of the Select Committee on Trade Union Political Funds and Political Party Funding, chaired by the noble Lord, Lord Burns. I am proud to admit that I originally suggested the creation of that committee and served on it. Our report, published just over a year ago, referred to the Conservative 2015 election manifesto commitment to,

“seek agreement on a comprehensive package of party funding reform”.

Our report included one very important recommendation, number 138, which was approved unanimously:

“Whether or not clause 10 is enacted, in whatever form, the political parties should live up to their manifesto commitments and make a renewed and urgent effort to seek a comprehensive agreement on party funding reform. We urge the Government to take a decisive lead and convene talks itself, rather than waiting for them to emerge”.


Your Lordships’ House subsequently accepted the Select Committee’s report enthusiastically, and the Trade Union Bill was amended—but we waited in vain for the Government’s response to this crucial recommendation.

At long last, on Christmas Eve, six months beyond the conventional limit, Mr Chris Skidmore, Parliamentary Under-Secretary at the Cabinet Office, wrote to our committee chairman. His memorandum setting out the Government’s response largely ignored this recommendation and failed completely to reiterate the 2015 Conservative manifesto commitment. Instead, he stated baldly:

“Despite a decade of talks, there is still no cross-party consensus on the separate and broader issue of party funding at this time”.


I am not quite sure how he arrived at that view in advance of convening talks. I suspect it may be that the Conservatives just do not want to find a consensus. However, he went on to promise that,

“the Government is open to constructive debate and dialogue on small-scale measures which could command broad support—if there was a positive reaction to such a potential step from the main political parties”.

Let me repeat the vital phrase, “a positive reaction”. I do not know Mr Skidmore, but I am sure the Minister will concur that the team in the Cabinet Office always choose their words with extreme care. It is impossible to have a “reaction”, positive or otherwise, without having an action to react to. Therefore, I take it that the Government are now ready to respond and put some proposals to a cross-party group or committee which they will convene, to meet the recommendation of the Select Committee so warmly endorsed by your Lordships’ House.

Indeed, it may be that the Minister will be able to outline those proposals this afternoon. I say “this afternoon” because I have always been told that it is when the Mace hits the Woolsack that the afternoon starts—so even if our clock is saying 11.35, it is technically the afternoon. In any case, we in this House—and especially those of us from across the House who agreed unanimously to the Select Committee’s recommendations, several of whom I am delighted to see here today—will now look to the Government to initiate these talks immediately, with a view to taking this further in the Queen’s Speech and the new Session.

The Prime Minister came to office last year without the trouble and expense of an election. But she none the less pledged to lead a Government which would be,

“driven not by the interests of the privileged few”.

While donations and expenditure to election campaigns remain unreformed, she simply cannot realise this ambition. A privileged few will continue to have privileged access to government and to power. So, before we get too close to another general election, it is time finally to grasp this nettle. We who have worked on this cross-party Bill offer it as a practical starting point for cross-party discussions and for the legislation that must surely follow. I beg to move.

--- Later in debate ---

[Lord Tyler]

My Lords, I am extremely grateful to a number of noble Lords for giving up their Friday to discuss what may have seemed a rather arcane subject to some and, indeed, one which, because of the nature of this Bill and the limited time that is going to be given to it between now and the end of this Session, is rather an academic subject as well.

I hope that the noble Lord, Lord Young, will take it that every person who has contributed to this debate today is effectively echoing, “Something must be done”—and I shall come back to the suggestion that he made at the end of his speech in a moment.

Two or three points have come out in the debate which may need to be put on one side. First, I am not suggesting—and it has never been suggested—that there should be a net increase in state funding. As the noble Lord accepts, the Bill recognises that there could be ways to make substantial savings. He referred to my right honourable friend Nick Clegg and his evidence to the Select Committee. Colleagues on the committee will recall that he indicated what savings might be made and committed himself to the proposition that any change should incur no net increase in state funding, only some reallocation. As my noble friend Lord Rennard said, we have over the years put forward suggestions about how savings could be made in other ways. This point was also raised by the noble Lord, Lord Whitty.

I am also very conscious of the point made by the noble Lord, Lord Fraser—I am glad he contributed to the debate—that my Bill has been substantially overtaken by concerns about the way in which funding has gone into referenda and referendum campaigns. I hope the Minister recognises that this is an important additional issue which we should all be thinking about and addressing now. There might be another one in two or three years’ time and we do not want to have a repeat of that concern.

I turn to the issue of consensus. How does the noble Lord know that there is no consensus, any more than Mr Skidmore who said there was none? Until the Government actually accept the very clear recommendation of the Select Committee that some new initiative should be taken, we do not know if there is a consensus or how far it might go. I agree with every point made by the noble Lord, Lord True, about the need to catch up with some of the issues that have arisen in recent years. True to his name, he speaks with considerable authority about the difficulties that may be faced by those who have too much money to throw around at present. Every single member who has contributed today is clearly indicating that there is a consensus—at least across your Lordships’ House—that we have got to address these issues. I hope the Minister will take that point back.

The Minister has demonstrated, not just today but on previous occasions, that he is very sensitive to the concerns which are often expressed in your Lordships’ House. We are not directly affected by how elections are run, but we have a very proper constitutional responsibility—not just a right—to look hard at electoral law. Will he commit himself to taking part in the discussions which his honourable friend has now agreed we might have? We could break the logjam, and I hope the noble Lord, Lord Young, will be prepared to take part.

We cannot ignore the advice of the Electoral Commission. It has made recommendations about reviewing the relationship between the definitions of regulated candidate spending and regulated political party spending that have been in place since 2000 and about the focus on spending in constituencies. This was a major theme of my speech earlier today, of my Bill and of media and public concern. If we are to regain the trust which the noble Lord, Lord Bew, rightly identifies, we have to address that issue. I am sure the Electoral Commission would be happy to help us with it.

Bill read a second time and committed to a Committee of the Whole House.