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

Lord Tyler Excerpts

Wednesday 18th December 2013 Lords Chamber

Moved by

[Lord Tyler]

170H: After Clause 29, insert the following new Clause—
“Third parties acting in concert
(1) Section 94 of the Political Parties, Elections and Referendums Act 2000 (limits of controlled expenditure by non-recognised third parties) is amended as follows.
(2) In subsection (6)(b) after “arrangement” insert (“the plan”).
(3) In subsection (6), at end insert “in pursuance of the plan”.”

[Lord Tyler (LD)]

My Lords, I have tabled this proposed new clause with my colleagues, my noble friends Lady Williams of Crosby and Lady Tyler of Enfield and, in a private capacity, the noble and right reverend Lord, Lord Harries of Pentregarth. We have given it the heading:

“Third parties acting in concert”.

We think that that is a better definition of the problem that has been brought to our attention on many occasions than using the word “coalition”, which might have other overtones.

Among all the groups that we have met, the present PPERA 2000 rules on this type of working between different organisations have emerged as a major area of concern. Indeed, they have caused great confusion and, more than anything else, given rise to the alleged chilling effect among smaller organisations. I checked with the Electoral Commission earlier this week about what exactly is meant by the present rules. Suppose organisation A contributes £15,000 to a combined operation, which acts in concert in some form of policy coalition. Then organisation B contributes £375,000 to that same campaign. Therefore, under the present rules, A and B have to record £390,000 as having been spent. However, vitally, organisation A, which has spent only £15,000, is recorded as having spent right up to the total of £390,000. That creates an extremely difficult situation for small organisations. Just by being caught up by some joint operation, they get clobbered because they might very well want to take on some different campaign activity that is nothing to do with that original campaign, and then find that they have already exceeded the limit. That is the nature of the present law, and that is the nature of the present problem that so many organisations have drawn to our attention.

The noble and right reverend Lord, Lord Harries, and his colleagues have a good amendment that would deal with this for small organisations making a contribution below the registration threshold and, of course, that is welcome. Our amendment goes further: it embodies the principle that any one group or any one campaign should be capped at the level of the national or constituency limit. We do this by engaging in the amendment with the phrase,

“common plan or other arrangement”,

which is already referred to in the 2000 Act. We are effectively saying that the money spent on that plan should be capped—it should not then be carried forward for any other campaign of a different nature—or that that money spent by a different organisation should be capped. If, in my example, organisation A was spending only £15,000, that would be the limit of the restraint on it because it clearly would not be contributing a huge sum. Just because organisation B has spent a considerable sum in pursuance of the common plan, it should not be effectively restricted by what has happened with one of their allies.

There is a way around these rules at present, which is to set up an umbrella organisation to accept donations from all the different organisations involved, but if they simply campaign together then they will be caught by the present rules. There is a defect in the 2000 PPERA rules and the Bill is our opportunity to deal with it, remove that uncertainty and assist a number of organisations that feel that this is a real constraint on what they are permitted to do. I should say briefly that, on these Benches, we strongly refute the case for Amendment 182A, tabled by the noble Baroness, Lady Royall of Blaisdon, which would seek to take away all the coalition rules. It would mean no constraint whatever on organisations, allowing them simply and artificially to multiply and then provide multiple spending limits. I am sorry that the noble Lord, Lord Bassam, is not here to explain exactly the rationale for those original 2000 PPERA rules, which were thought at the time to be both necessary and desirable. Unfortunately, they have proved to be, to a large extent, not very effective and, in some respects, a discouragement to small organisations being involved in perfectly proper campaigning operations.

The amendment of the noble and right reverend Lord, Lord Harries, goes a long way to dealing with the problem, but we think that our approach goes a little further and we hope that the Government will accept the direction in which it is going. I beg to move.

[Lord Harries of Pentregarth]

My Lords, I wish to speak to Amendment 170M. First of all, the charities and campaigning groups have indicated very strongly that what the present Bill puts forward on coalition working is totally unacceptable. All charities are encouraged by the Charity Commission and by their own trustees to work together in coalitions. We have seen many very successful examples of coalition working, but under the law as it is put forward in Part 2 of the Bill, the total amount of money spent by the coalition is attributed to each single member of the coalition. This must be, by any standard, totally unfair. We have racked our brains for the past six weeks and do not feel that we have come up with any solution to the fundamental problem. Therefore, in the first week after we come back, we will be calling a round table conference to which the Minister has agreed to come and various other people will be invited, to see whether, together, we can crack this fundamental problem of coalition working and how it can be fairly regulated. I am sure that the suggestion of the noble Lord, Lord Tyler, to which I put my name in a private capacity, will be very much on the table to be considered at that point.

However, as he mentioned, our Amendment 170M will go some way towards solving the problem for smaller groups. In that amendment, we mark the difference between a minor third party and a nominated third party. A minor third party is one that has not yet reached the registration threshold. If it is working in coalition with other parties, on the basis of my amendment it will be able to nominate another party, called the nominated third party. With the agreement of both the third party and the nominated third party, the money that the minor third party spends on that campaign will be attributed to the nominated third party as part of its overall expenditure and the minor third party will simply be able to indicate to the Electoral Commission that it is below the threshold and has, as it were, contributed this amount of money towards the nominated third party, which is very likely to be regulated. We believe that this is quite a neat way of ensuring that smaller parties—those which do not hit the registration threshold and certainly are very anxious to work in coalition —will not be brought within the scope of regulated expenditure. The Electoral Commission, in examining this amendment, remarked that it is “attractive in principle”, but wants to think about it further to see whether there are any unintended consequences.

The issue of coalition working is one of the key areas about which charities and campaigning groups are concerned. I will not go through any of the examples set out at the end of our report, but I would draw the attention of noble Lords to the Human Rights Consortium in Northern Ireland, which has been referred to at least once in this debate already, where something like 180 NGOs work together on a crucial issue. That gives some indication of why getting coalition working right is absolutely fundamental to the charity sector and, indeed, to the workings of our democracy.

--- Later in debate ---

I hope that, with some explanation of the current position and with the guidance that smaller organisations contributing to a larger campaign run by a larger body would not draw them into controlled expenditure, I have offered some reassurance, but I do so against the background that we are willing to engage on this issue. As I have indicated, this is a problem that exists even under the law as it presently is. On that basis, I invite my noble friend to withdraw his amendment.

[Lord Tyler]

I am very grateful to the Minister but also to others who contributed because, if we have done nothing else in recent minutes, we have demonstrated that there is a basic misunderstanding of the current law. It is therefore not surprising that many organisations outwith Parliament, large and small, have been confused by this issue. We should be absolutely clear, and my noble and learned friend’s latter remarks underline this, that if we are not very careful, if it were removed completely from the current 2000 Act by this Bill, this could result in those who have a direct interest in avoidance using this as a cunning plan to get around the constraints of the current law. I have read the Hansard from the time and this was anticipated as a potentially dangerous loophole in the debates in 2000 that led to the PPERA Act, and it would be totally wrong to just tear it up and throw it out.

Incidentally, in that connection, there have been comments about the role of the Electoral Commission. As I have frequently reminded your Lordships, I have a role as a member of the cross-party informal advisory group to the commission. I think that the commission should be taken to task for not identifying that this was a problem over 13 years of experience. It is unfortunate that in that respect it did not recommend to the previous Government and to Parliament that this needed to be looked at, whatever future legislation was going to try and tackle it.

It is clear from the contributions right around the House that many here who have contact with small organisations and charities know that in the past there has been a chilling effect, to use that expression, on those who wish to work in a collaborative way, which, for the reasons that have been explained so well by my noble friend Lady Tyler, needs careful attention. We need to try to avoid the existing distortions that have been identified as having been there for some time, although obviously are now more pressing, given the other changes in the Bill.

Obviously I, too, hope that between now and Report the promised discussions will result in a fairer, more rational approach for those who wish to campaign in an election together. I therefore hope that in the next two or three weeks we will see a practical solution. A number of ideas have been put forward to the Minister and I have every confidence, given what he has just said, that the Government will look at them very carefully. In the mean time—

[Lord Hardie (CB)]

Can I just clarify the noble Lord’s comments about the Electoral Commission, as I did not fully understand them. The criticism of the commission for not identifying this problem—was it that it ought to have identified it before the 2000 Act or between the Act and now? It was set up, as I understand it, by the 2000 Act so it could not have done it in anticipation of that.

[Lord Tyler]

My Lords, I am so sorry if I did not make that clear. Since the 2000 Act it has become increasingly evident that this was having an effect and discouraging a number of organisations from working together. This has come to a head now but the principle was explicit in PPERA in 2000 and it is unfortunate that the commission allowed some discussion to continue at a low level but was never in a position to nor felt able to recommend to government and to Parliament that this matter needed close attention.

Amendment 170H withdrawn.

--- Later in debate ---

[Lord Ramsbotham (CB)]

My Lords, I have put my name to this amendment and also added Amendment 170P in the spirit of what the Army refers to as KISS: “keep it simple, stupid”. That is because there is already an allowance that the Bill reduces the period to four months before European elections and elections to the devolved Administrations. I know that a number of organisations would be very happy if the period were four months rather than six months, because it would mean that there was one period for all elections. That is why I have tabled my amendment. But the great thing is to have the period reduced.

[Lord Tyler (LD)]

My Lords, the argument does appear to be very simple. I wish it was so. I will illustrate the complexity that could be caused by one or other of these amendments. Amendment 170L would create a fourth regulatory period in electoral law; there are already three. One would be of 12 months for both non-party and national political party expenditure. One would be of four months for candidates’ long campaign, introduced for the 2010 election by the PPE Act 2009. There would then be the traditional four to six-month period post-Dissolution of the so-called “short campaign”, which was imposed by the Representation of the People Act 1983 but which originated from the Corrupt and Illegal Practices Prevention Act 1883. So there is a little more complexity than both of the noble Lords who have already spoken suggested.

As the noble and right reverend Lord, Lord Harries, indicated, there are of course implications for a number of other parts of the Bill. If either of these amendments were to be passed, they would have an impact on spending caps. It would surely be very odd if his commission’s recommendations for the higher spending limits—that is, £1.25 million in England—applied over half the regulated period. This would make the proposed new limit equivalent to £2.5 million if it had been over 12 months. There could then be an argument for no constituency limits. This could mean an unlimited sum being spent in constituencies up to four or six months before an election. I do not accept the argument that nobody is interested in what is spent in the longer period leading up to an election. It can be very influential, as those of us who have fought elections know. After that period, a further £1.125 million could be spent in one constituency—a target constituency, a marginal seat or a small number of constituencies—which would vastly outspend the candidates themselves. The argument is very seductive. The two noble Lords who have spoken are regularly seductive in this House and speak with the tongues of angels, but I have to say that this particular case is not as simple as they suggest.

[Lord Deben (Con)]

My Lords, I am hoping to be seduced. There is a kernel to this that is more important than the detailed argument we have just heard. The kernel is that it might be more sensible to have a shorter period in which this whole thing operates. If I may say so to my noble friend, it is not a sensible argument to say, “It’s awfully inconvenient to do this because all sorts of other things might have to be reorganised”. I hope that the Minister will take seriously the following argument. We now have a system whereby we know when the next election and the election after that will be. If you think about it in those terms, you realise that no one is going to get anything much under way at this point just before Christmas. The real period will in any case be that from 1 January onwards. That is what is going to happen.

Given that there is so much unhappiness about this bit of the Bill and that so many people are concerned—I have checked my Twitter feed and seen how many people remain unconvinced by what the Government and the Minister are saying—it might be sensible to think about making a clear change, and saying to people, “Look, we have listened and we can see that there is still a concern about the weight upon organisations, and therefore we will at least think about the possibility of integrating into the Bill a shorter period”. That would of course mean that my noble friend’s concerns would have to be looked at. After all, this is the Committee stage. One of the things that you do in Committee is raise matters that do not actually fit at the time but might lead one to wonder whether there might be a little bit of a shift.

I was hoping perhaps not to be seduced but, in a gerundive sense, to be put in a state to be seduced. In other words, it would be helpful for the Minister to say that he will look at this and see if there is a possibility of giving confidence to people that their fears would be at least more limited.

The only other thing that I will say is that I am concerned about the immediate effect, because all the arguments about referenda and other things fitting at the same time create a very complex web. That is the second reason why I have difficulty with the views of my noble friend Lord Tyler, with whom I often agree—even though I am not supposed to. There is this difficult web in any case, and therefore it is not unreasonable to take apart the pieces and knit them together in a different manner.

--- Later in debate ---

[Lord Tyler]

My Lords, I was delighted to be able to put my name to this amendment, which indeed has cross-party support. It would be fair to say that the four Members of your Lordships’ House who have put their names to the amendment have all had extensive experience, long commitment and real concern about the maintenance of our parliamentary democracy and its health. My noble friend Lord Marland has also had considerable responsibilities in this field, and I hope that he will be able to address your Lordships’ House in a minute because he will have a particular dimension to add.

I do not think that any of the four of us are dangerous radicals, exactly, but we have all of us given a great deal of thought to this issue and have a common concern. I and my Liberal Democrat colleagues have long recognised that a broad range of small donations is preferable to a small number of large donations; that is where we come from. Tax relief along the lines of gift aid would be a good way to embody this principle in regulations about donations. As your Lordships’ House is aware, we believe that those regulations should also include a comprehensive donation cap on individual and corporate donations; that is not for this evening’s debate but I very much hope it will come in due course. With colleagues in the other place, I launched a cross-party draft Bill earlier this year, which would have made specific provision both for tax relief and for a cap.

The amendment before us has the potential to move the debate forward. After so much self-interest has thwarted progress so far, I welcome a further attempt to put momentum behind this change. The amount of money that this would cost is clearly limited in the noble Lord’s amendment, which makes clear that the maximum tax relief for the first two years of operation would be only £16 per taxpayer, and in later years a figure of £96 or another figure set by the Secretary of State. We do not have figures before us for the total cost of such a measure, but we do know that there are ways to find this money without increasing the overall cost to the taxpayer of political parties. I think that it would be the common experience of Members of your Lordships’ House that this is not exactly the best time to be persuading our fellow citizens to spend more on political parties, or even the political process.

However, I have advocated before that the freepost election addresses from which candidates at UK and European parliamentary elections can send at the cost of the Treasury—of the taxpayer—should be converted into booklets of the kind used in the London mayoral elections. It is a staggering fact that a saving of something in the region of £50 million per Parliament could be secured by doing this, and could be put into a tax relief measure of the kind being suggested. Therefore there would be no necessary net increase in taxpayer subsidy to the political parties or the political process. Now that Royal Mail is privatised, it may be increasingly attractive to taxpayers to divert some money away from their coffers and profitability into this very simple way of improving how our political system is funded.

There is no reason for anyone in this House to fear this simple change. It seems that it would apply only to small donations and would roughly affect and benefit the parties equally. Given the desire for consensus in this area, that ought to be enough to recommend it to us. It is a very good measure which has my strong support and I hope it will make some progress.

Since I am an optimist, I hope I will not have to speak again in Committee. I am sure other members of the Committee will be glad to hear that. I therefore take this opportunity of hoping that colleagues on all sides of your Lordships’ House have a very collaborative, transparent, enjoyable campaign of partying during the Christmas recess.

[Lord Marland (Con)]

My Lords, I also support the amendment. I am grateful to the noble Lord, Lord Campbell-Savours, for tabling it and for being associated with the noble Lord, Lord Tyler, who does so much thinking on this subject it is a joy to behold.

I speak with some experience as a former treasurer of the Conservative Party for three and a half years. I may not be entirely supported by the Government on this amendment but most politicians I know think that money grows on trees when it comes to fundraising for a political party and have no concept of how incredibly difficult this is whatever time of the electoral cycle you are in. Working with former Prime Minister Blair, I was one of the instigators of the Phillips report. I participated keenly in that and was disappointed when it came to naught, largely over the issue of trade union donations.

I approach the amendment by asking myself three questions. The first question is: why do people join and participate in political parties? The simple reason is that they have a keen interest in politics and democracy. However, in my experience it is also—as the noble Lord, Lord Campbell-Savours, said—fostering a hobby in the same way as you might join a museum society or any other club or society. It is therefore quite reasonable that a donation to a political party should be treated on the same basis. It also allows people to foster political debate. We are the home of democracy and, as the Prime Minister’s trade envoy, I have been proud to be able to use this as a message throughout the world. Democracy is created by political parties; political parties are created by the individuals who work for them and fund them. Democracy is therefore dependent on giving. New political parties like UKIP, for example, would not have been able to start had a large number of people not donated to it. That, in turn, fosters democracy.

We must also recognise that, as I said earlier, fundraising is incredibly difficult. Very few people like doing it, are good at it or like to be asked. Because funding is so important to our political parties, it is also incumbent upon those of us who are involved in politics to stop the continual denigration of people and institutions for giving money to them. In my experience of three and a half years as a treasurer there were very, very few people who wanted something in return for giving money and most of them were not treated with any respect. There are, of course, situations where people want to persuade a Minister or shadow Minister of the benefits of their ideas, but they will probably not take a blind bit of notice unless the idea has reasonable resonance with their political approach. It is incumbent on us to resist the temptation to criticise people who give political donations or to show them up in a bad light for doing so. It is they who allow us to promote democracy.

The next question I ask myself is: do we want to continue a mix of public and private funding of political parties? Let us not kid ourselves: political parties are funded by public money. There is something called Short money which is £6.5 million a year given to all the opposition parties. There is also the Cranborne money, which is given to opposition parties to support their shadow Ministers in action, which is public money, and a considerable amount. The future of political-party funding should be that blend of public and private support. Of course, the problem with Short money is that it goes only to opposition parties, and believe you me, there are times when parties in government suffer from a complete dearth of funding and therefore require financial support, which at the moment they do not get. Therefore the amendment proposed by the noble Lord, Lord Campbell-Savours, is worthy of support.

The final question I ask myself is: do we want to encourage parties to focus on increasing their membership and their small donations? Of course, there is overwhelming support for that. We have to rebuild our donor base of small donors and our membership, just to excite people into the task of politics and support for politicians, which has, sadly, been under attack and under threat. Every argument leads to a mixture of public and private funding. This is a very good start on the road to trying to find the best route to doing it, and so I have great pleasure in supporting the amendment.