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

Lord Wallace of Tankerness Excerpts

Wednesday 18th December 2013 Lords Chamber

[The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD)]

My Lords, I hear the message. The current provisions of the Political Parties, Elections and Referendums Act 2000 do not prevent political parties benefiting from expenditure by third parties in a way that would enable the political parties to avoid party spending limits. Although measures exist to regulate political party spending, third-party spending and the notional campaign expenditure of political parties—that is, spending by third parties for or on behalf of a political party—those measures are not necessarily effective in ensuring that all spending for the benefit of a political party is properly captured. Our concern, which influences or informs this clause, is that that risks undermining trust in the controls on party spending.

Clause 29 therefore introduces a new measure that requires third parties that spend significant sums in a way that can reasonably be regarded as supporting a particular political party or its candidates to be specifically authorised by the relevant political party to campaign in that manner. I heard and will certainly reflect on what the noble and right reverend Lord, Lord Harries, of Pentregarth, said—that this might somehow be something that innocent people or groups can stumble into, but I rather think that the political reality on the ground is that if a particular group is, to all intents and purposes, supporting the Liberal Democrats—I am being neutral about this—it will not do so innocently or without any notion that that is what it is doing.

Under proposed new Section 94B(3), authorisation would be required only in instances where the third party wishes to incur expenditure that exceeds 10% of its spending limit for a part of the UK. This would be treated as “targeted controlled expenditure”, and the Bill defines it as more than 0.2% of the maximum campaign expenditure limit for political parties in that part of the United Kingdom. That limit would be £31,980 in England, £3,540 in Scotland, £2,400 in Wales and £1,080 in Northern Ireland. If a political party does not want the third party to spend more than 10% of its spending limit in support of it, or for that expenditure to count towards its limit, it can simply withhold authorisation. A third party will commit an offence if it either exceeds the targeted expenditure limit without authorisation or exceeds an authorised cap set by a political party. In other words, if such a group comes to the Liberal Democrats, in the highly unlikely event that the Liberal Democrat treasurer says, “Sorry, we are not going to accept your offer of going beyond the 10% limit and we are not giving you authorisation”, it would be an offence if the group then spent money in obvious support of the Liberal Democrats beyond the 10%.

The intention of this clause is to bring a greater degree of transparency where third parties campaign to support a particular political party or its candidates. Requiring expenditure incurred as part of that campaigning to count towards the spending limits of both the third party and the political party, and for this information then to be disclosed to the public, will prevent political parties evading their spending limits by relying on co-ordinated support from campaigning groups. Clause 29 will not prevent third parties campaigning up to a significant limit without needing any kind of authorisation from a political party. Nor will it curtail third-party expenditure that cannot reasonably be regarded as intended to benefit a particular party—for example, because that expenditure supports multiple parties or candidates who support the third party’s aims.

This is an important provision to try to prevent the spending limits on political parties being circumscribed or undermined by third parties campaigning on their behalf. It does so by requiring authorisation at 10% of the third party’s spending limit. I take the point that what I believe is a relatively simple and important principle or objective may not have been expressed in the most felicitous terms. I would normally share my noble friend Lord Cormack’s desire to see legislation in much plainer English. I confess that having negotiated a coalition agreement with the Labour Party in the Scottish Parliament in 2003, including a commitment to making progress towards drafting legislation in plain English, I fear that we failed to honour that commitment. That suggests that it is easier said than done. Some challenges are bigger than others.

I do not know whether delivering the objective can be done in much simpler language. In the previous clause, much of the apparent complexities related to an interrelationship between different relevant periods because of different elections. However, judging by the mood of the House, we at least ought to look at this clause to see if something can be done in that regard. However, the underlying objective, to stop the subversion of the limits on party political funding, is a proper objective.

Clause 29 agreed.

--- Later in debate ---

[Baroness Hayter of Kentish Town]

My Lords, the last example given by the noble Earl, Lord Sandwich, is a really powerful one and it adds to the criticisms, which I endorse, of the catch-all provisions that have been added to the existing rules, which worked in the past but have become unworkable because of the increased range of activities, the addition of staff, travel and other costs, the reduction of thresholds, and the cut in the spending cap. This is what makes what was a quite innocuous concept now very difficult.

We endorse the criticisms but go further and suggest in Amendment 182A, which is in my name and that of my noble friend Lady Royall, that the combined effect of all of that is so serious and could so jeopardise joint working that it is time to review whether such an anti-avoidance dollop of restrictions, red tape and responsibility for another organisation’s spending is actually worth the candle.

Of course, had we had pre-legislative scrutiny of the Bill and known about this in advance, we might have ironed it out before, but we did not, so we are left with a situation in which restrictions on coalition spending—or, at least, subjecting it to joint limits and reporting—seem aimed at anti-avoidance only in the belief that 10 groups will get together and campaign and they will all spend £100 less than the limit. Again, we have had no evidence of this. It seems to be a solution in search of a problem.

The Royal Society for the Protection of Birds, which supports our amendment, has pointed to the increased significance of the rules because they will now apply to such a wide range of activities, and with new constituency limits. It thinks that this will threaten legitimate coalition campaigning, especially locally. For example, the RSPB works locally with other groups on infrastructure projects that affect the natural environment, such as an M4 relief road, when public reports or press events may be used. This may well be caught because one party may be in favour of a road and another party against it. Even if that is not the purpose of its work, the RSPB risks being caught if its particular objective chimes with—or is at variance with—one party, even though the RSPB’s objectives are based on the interests of birds rather than politics. It is particularly worried about how its spending would count against every member of the coalition’s spend and each member’s £9,750 limit would in a sense be double- or treble-counted if each group had to declare it as if it was its own. As the RSPB says, the combined effect of all the different rules is likely to limit what it can do.

The Board of Deputies of British Jews, also looking at the confusion surrounding coalition spending, was worried that simply having its logo on something, with therefore a bit of cost involved, would mean that that would have to be apportioned to a coalition, which could present problems and reduce its ability to support a campaign. The Libel Reform Campaign, which is made up of Sense About Science, English PEN and the Index on Censorship, believes that if it was pooling all those expenditures over a year, all those three organisations would hit their limit even if the combined limit was still below what is permissible.

NAVCA highlights that £5,000 is a lot of money for one small charity alone to spend. However, as my noble friend Lady Pitkeathley said, working in partnership can be much more effective for charities and what they want to achieve for the groups they support. Yet because all the funding is put together, the thresholds create a burden. This could discourage small charities from working in partnership to gain a voice, because they would fear everything that went with that.

It has been mentioned that the Electoral Commission itself, which traditionally saw the old coalition rules as a good anti-avoidance tool, now acknowledges that there are strong concerns about the impact, particularly on small local campaigns. If a local campaigner which is spending only a few pounds enters into a coalition with another which is spending more than the registration threshold, it may then be required to register. One campaigning group would have to take the other party’s spend as part of its own, and then comply with all the rules.

Of course, the amendment proposed by the noble and right reverend Lord, Lord Harries, might appear attractive. It allows a bigger organisation to take responsibility for some of the spending of a smaller organisation. The problem is that a smaller organisation may have decided to spend only £1,000 on something over a year, but then something happens—it gets another member of staff, or the car breaks down and it has to hire a bus—and its expenditure suddenly goes up over that year. It will be the bigger organisation, the responsible body, which will suddenly have to answer for a new range of expenditure that has not been agreed in advance. I am afraid that for small voluntary organisations that is often how spending takes place. They do not spend with a budget in advance, as the Government do. Spending is often as and when.

Problems remain, despite the attempts to answer this. As has been said, the Electoral Commission itself has failed to come up with a response, only promising us its ideas by Report. This highlights the fact that not only was this not subject to pre-legislative scrutiny but the Government did not even consult the Electoral Commission before they brought in the Bill. It is a little worrying that neither the Government nor the Electoral Commission have found a way to answer these very serious questions. For that reason, we suggest removing the old requirements on all participants to be responsible for the actions of the other. We ask the Government to find a better way of tackling any attempts by various bodies to circumvent the very proper objectives of PPERA.

[Lord Wallace of Tankerness]

My Lords, from almost every meeting I took part in with charities or representatives of NGOs, I was certainly aware that the issue of what we described as coalition or co-ordinated planning was of considerable importance to them. That said, it is worth reflecting that the Bill does not actually make any changes, apart from the technical changes to take into account the other activities. The basic architecture on expenditure by organisations going towards a coalition plan was set down in the 2000 Act. I am not quite sure whether there was pre-legislative scrutiny before that particular architecture fell into place. However, it is not the case that the law was put forward in Part 2, as was said by the noble and right reverend Lord, Lord Harries. That law is already there in PPERA.

What has happened has perhaps been fortuitous. The Bill has brought activity and greater focus, which have targeted minds on what is actually there. I accept that there is more activity now, as I am sure would be said by the noble Baroness, Lady Hayter. Yet in fact, as the law stands at the moment, if 10 groups each contribute £1,000 to the activities or to the election materials covered under the present Act, they would each be required to register. This is therefore an important issue. The noble Earl, Lord Sandwich, made this point about the concern of smaller organisations in a number of his contributions. I say to the noble Lord, Lord Ramsbotham, that we should remember to put this in the context of what the controlled expenditure is. If we are talking about the valuable and important work that is done in our prisons in terms of rehabilitation, it does not readily strike me how that would be the kind of expenditure envisaged, albeit that the groups concerned might be engaged with other bodies which fall within the ambit of the Bill and of what would lead to controlled expenditure. However, it is important that we recognise that this issue has now been identified, and I think that we all agree that we should seek to address it.

The rules on coalitions are necessary. In its evidence to the Commission on Civil Society, the Electoral Commission said:

“In our view, rules that limit what different campaigners can spend on co-ordinated campaigning are a vital element of the controls on election spending. Without them, individuals or organisations seeking to spend more than the limits on campaigning at elections could do so by setting up multiple organisations working together, with each organisation able to spend the full amount”.

As I have said, the existing provisions have been in place for both the 2005 and 2010 general elections. They seemed to work well and they remain unchanged by the Bill.

There has been some confusion about the operation of the rules, so perhaps I should take this opportunity to clarify them. Section 94(6) of PPERA stipulates that where two or more third parties work together as a group or coalition in pursuance of a common plan, the whole of the expenditure they incur as part of that coalition must count against each third party’s individual spending limit. As my noble friend Lady Tyler pointed out, that is a key anti-avoidance provision. If total spending by a group of third parties acting as part of a common plan was not counted in full against each individual third party’s limits, it would allow third parties to form many coalitions on single issues in order to evade their spending limits.

However, the amendment put forward by my noble friend Lord Tyler perhaps does not have the effect that, I am sure from what he said in moving it, he intended, because it would appear simply to reinforce what is already provided for in PPERA. I am sure that my noble friend seeks a different outcome, which is perhaps the cessation of third parties accounting for aggregated coalition expenditure. Nevertheless, his amendment has raised an issue which I see as current and, as will be clear when I come to respond to the specific amendment proposed by the noble and right reverend Lord, Lord Harries of Pentregarth, the Government want to look carefully at what more can be done to deal with these concerns. My noble friend mentioned a round-table conference—when we broke for lunch, I think that dates and times were being arranged for that.

The amendment proposed by the noble and right reverend Lord, Lord Harries of Pentregarth, would create a category of what he described as “minor” third parties which are exempted from having to account for any coalition expenditure provided their individual contribution is below the registration threshold. The third party must not have incurred expenditure in any other circumstances, and a “nominated” third party must be willing to absorb the “minor” third party’s spend and report it as its own to the Electoral Commission.

I accept that that is a constructive approach to addressing the problem that has been identified. Already, if a coalition campaign is organised by a lead third-party organisation which alone incurs, or decides when to authorise, regulated spending for the campaign, only the lead organisation is required to register with the Electoral Commission. The lead campaigner may receive contributions or donations from other organisations towards the campaign. These will be considered as donations. Where other organisations provide services or materials to the lead campaigner, these will be regarded as both in-kind donations and “notional” spending on behalf of the lead organisation. I reiterate: it is only where there is no lead organisation, and several third parties co-ordinate their campaigning while making their own decisions on when to incur regulated expenditure, that they will be covered by the rules on coalition campaigning.

I hope that in indicating what the present position is on when donations are made I have gone some way to reassuring the noble and right reverend Lord, but we recognise the concerns of small organisations which may wish to join a larger coalition to campaign on an issue. We will continue to look carefully at what more can be done. I hope that, when we meet, the benefit of a break might have enabled us to find a way to address an issue which, as I said at the outset, already exists even under the law as it stands.

In the same vein, the noble Baroness, Lady Mallalieu, specifically asked what the position would be with regard to charities. If charities were exempted, they would not incur the controlled expenditure so it would not be counted towards spending on a common plan. As I indicated in my response to the amendment moved on Monday by my noble friend Lord Phillips of Sudbury, though, while there is certainly an issue there to be addressed and we want to consider it, the Government’s position has not been to exempt charities. If we were to go down that path, the kind of issue that she has raised is one of those that would have to be considered.

--- Later in debate ---

[Baroness Royall of Blaisdon (Lab)]

My Lords, I am grateful to the noble and learned Lord, Lord Hardie, for his amendments and I welcome the amendment tabled by the noble Lord, Lord Hodgson, who just pointed out the ghastly complexity and challenges that will be faced by charities as a result of the Bill. It is eminently sensible to have an integrated set of guidance, and I very much hope that the Minister will accept this amendment so that it will be clear that this House and the Government want there to be a requirement for an integrated set of guidance.

On Monday the Government made a great deal of how the guidance that would be issued after the Bill becomes law would clear up many of the apparent difficulties contained within it. The Minister—I do not know if it was the noble and learned Lord—said:

“The Government believe that it is essential that campaigners have clarity on how they are to comply with the third-party regulatory regime. The Electoral Commission has a power to produce guidance for third parties campaigning in elections, and indeed has exercised that power in previous elections”.—[Official Report, 16/12/13; col. 1040.]

Indeed, the Minister placed such a heavy emphasis on the guidance that would be given that the noble and right reverend Lord, Lord Harries of Pentregarth, was moved to say while speaking to his amendments:

“However, perhaps I may anticipate, rather too boldly, the response that the Government are likely to make: that these kinds of issues can be dealt with in guidance”.—[Official Report, 16/12/13; col. 1057.]

Charities and NGOs need to understand how the Bill will affect them as the Bill passes through the House. To place the amount of weight that the Government place on guidance is effectively another way of avoiding proper consultation.

The first amendment from the noble and learned Lord, Lord Hardie, would ensure that the Electoral Commission is able to give charities and NGOs guidance in good time before they are subject to the regulated period, and would reduce the spending limits in line with the reduced regulated period that would result. The second would ensure that the Electoral Commission is resourced to apply these changes. As the Electoral Commission has said itself,

“The current PPERA rules on non-party campaigning are relatively narrow in scope … and the definition of what is covered is relatively clear, so we are able to produce guidance that builds on the legislation”.

However, it goes on to say with regards to the Bill before us:

“This will be particularly challenging for campaigners because of the need to apply the definition of ‘election purposes’, which is new and untested in the context of non-party campaigning. In the limited time available we will aim to produce guidance to assist with this, and will offer advice on particular queries where possible, but our experience strongly suggests that it will not be straightforward to apply the new rules to many specific types of activities”.

I know that the Electoral Commission will do all in its power to produce the guidance, but it will need time because of the complexities.

I say to the Minister that of course the best way of ensuring that the Electoral Commission is able to issue clear guidance in time is to draft clear law—to draft a very clear Bill. These sensible amendments would therefore assist in that. However, notwithstanding the desired clarity, this is a complex Bill, and time will be needed to ensure the best possible guidance so that the voluntary and charitable sectors understand their new obligations and do not unintentionally fall foul of the law. Like the noble and learned Lord, Lord Hardie, I think that small charities and voluntary organisations that do not employ lawyers as a matter of course could well find themselves unintentionally in breach of the law. As in so many things we do in this House, the lawyers will gain the most, and we cannot allow that to happen. I therefore very much hope that the Minister will signal that the Government will accept these or similar amendments in due course.

[Lord Wallace of Tankerness]

My Lords, Amendment 170J, tabled by the noble and learned Lord, Lord Hardie, would require the Electoral Commission to produce guidance for third parties, so that they are clear what actions they must take to comply with the provisions of the Bill. The Bill, should it have received Royal Assent by the time that guidance is produced, would not be permitted to take effect for a further three months. The noble and learned Lord further proposes that the Electoral Commission be given the extra resources it might need to produce this guidance and to comply with its other obligations under this Bill.

My noble friend Lord Hodgson has tabled Amendment 175, which, similarly, would require the Electoral Commission to produce guidance, but jointly with the Charity Commission. This would be designed to address specifically the impact upon charities.

The debate surrounding this Bill has made clear just what a lack of awareness there was, not only among third parties but among the public at large, of the existing provisions of the Political Parties, Elections and Referendums Act 2000—PPERA. I have certainly heard from more than one of the organisations that I have spoken to that they had not been aware that they might just have been edging towards a registration threshold back in 2010. They had not appreciated that fact. This lack of awareness has highlighted the crucial importance of comprehensive and clear guidance for all third parties, not just charities, so that they understand whether they could be affected by the provisions of this Bill as it amends PPERA.

As I said in at least one of the debates on Monday, when the original Committee on Standards in Public Life was considering the architecture and proposing the idea of an Electoral Commission it accepted that in some ways we could never achieve an absolute definition, and that, as the noble and learned Lord, Lord Hardie, predicted, some cases may have to go to the courts. However, much of that uncertainty could be avoided through guidance. That was one of the functions and roles that the Committee on Standards in Public Life saw for the Electoral Commission that it proposed should be set up.

The Electoral Commission already has the power, under PPERA, to produce guidance for third parties. As I said on Monday,

“The Electoral Commission has a power to produce guidance for third parties campaigning in elections, and indeed has exercised that power in previous elections. Campaigners require clear guidance to support them and help them understand the revised regime, and I am reassured that the commission recognises this too”.—[Official Report, 16/12/13; col. 1040.]

I think that I went on to say that the sooner the guidance can be produced in draft, the better.

Although there is existing guidance on third parties and the PPERA rules, noble Lords will be aware that the commission has already indicated that it will indeed produce fresh and enhanced guidance in time for the 2015 UK general election. It did so in its briefing to members in the other place, as recently as 29 August. Both the Electoral Commission and the Charity Commission will be aware of the demand from campaigners for clear and detailed guidance of this sort. I have no doubt that today’s debate, and the amendments tabled by the noble and learned Lord, Lord Hardie, and by my noble friend will have reinforced that message.

As in previous elections, the Electoral Commission and the Charity Commission will work closely together to develop guidance that will assist campaigners and charities to have a clear understanding of how the provisions in Part 2 relate to them. Again, the Electoral Commission made this clear in its briefing of 4 November. The Government stand ready to support this work.

I hope that the fact that the Electoral Commission and the Charity Commission have indicated an awareness of the need for clear and comprehensive guidance is of some reassurance to the Committee. However, the Government are also keen to reassure campaigners and charities that the provisions of the Bill and the PPERA rules will, and should, be clearly communicated to them. It is our view that the Electoral Commission should produce guidance in consultation with the Charity Commission, and provide specific consideration of charities. I am not sure whether a particular statutory provision is needed, but the benefit of that is very evident.

The other point made by the noble and learned Lord, Lord Hardie, in his amendment, which was also spoken to and supported by the noble Baroness, Lady Royall, was about the funding of the Electoral Commission. It is important to be aware—

[Lord Hodgson of Astley Abbotts]

Before my noble and learned friend moves on, may I ask him a question? When he was speaking so encouragingly about the joint guidance, I was not quite clear whether, in his mind’s eye—I know that he will not wish to commit himself yet—this will be one document produced by the two commissions? I ask this because once the two bodies are able to produce two documents they will do just that and leave the charities to connect them. They should be doing the connecting. They are the regulators, and they really need to do that. Is that how my noble and learned friend sees it?

[Lord Wallace of Tankerness]

I am not sure that that is entirely how I see it; my point was that whatever is produced should be produced in collaboration. I certainly am wary of saying anything that might be seen as a direction to two independent bodies, which must act independently of Government. That is why I hesitate, as I am sure my noble friend will understand. Ministerial colleagues have had meetings with the Electoral Commission—I have not done so personally—and, I think I am right in saying, with the Charity Commission, and I am sure that the message conveyed by noble Lords here will also be conveyed by Ministers.

[Baroness Royall of Blaisdon]

My Lords, as the noble and learned Lord says, he cannot give directions. However, if the measure were included in the Bill, both the Electoral Commission and the Charity Commission would be obliged to produce joint guidance.

[Lord Wallace of Tankerness]

Obviously, if Parliament wishes that to be the case and the measure is included in the Bill, we would have a different proposition, and we would want to reflect whether that was one which the Government would wish to support. Notwithstanding whether or not the measure is in the Bill, the respective commissions will no doubt hear the concerns that have been expressed and the legitimate expectation as regards their response in respect of these matters.

As I said, the noble and learned Lord, Lord Hardie, and the noble Baroness, Lady Royall, referred to resources. It is important to recognise the position of the Electoral Commission. It is an independent body established by Parliament and is overseen by the Speaker’s Committee on the Electoral Commission, which oversees the Electoral Commission’s annual estimates. I checked during the debate and I am not aware of it having asked for more resources in respect of this legislation. However, if the commission requires extra resources to perform this or any other duties, including producing this guidance, it would be for the Speaker’s Committee to come to a view on the resourcing of the Electoral Commission in the light of its roles and responsibilities. I think that there is agreement across the Chamber on the importance of proper guidance and clarity. I hope that this debate has been helpful in communicating that message to those who have responsibility for that. I therefore invite the noble and learned Lord to withdraw his amendment.

[Lord Hardie]

I have certainly found the debate helpful. I thank the noble Lord, Lord Hodgson of Astley Abbotts, and the noble Baroness, Lady Royall of Blaisdon, for their contributions. I should say to the noble Baroness that, as a lawyer who has benefited in the past from gaps in legislation, it may seem a bit churlish of me to deprive the modern generation of that. However, I agree with her that we in this House should do what we can to avoid gaps arising of which people can take advantage because of the uncertainty that causes for others. I thank the Minister for his response. I note that the Electoral Commission will produce guidance. I had not appreciated the niceties about funding, but I am grateful to him for those comments. In those circumstances, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Wallace of Tankerness]

My Lords, the noble and right reverend Lord, Lord Harries of Pentregarth, has proposed an amendment that would reduce the length of the regulated period for third parties from 365 days to six months. The noble Lord, Lord Ramsbotham, has tabled a similar amendment, reducing the regulated period to four months under the banner of “keep it simple”, although as my noble friend Lord Tyler has illustrated, it is perhaps not quite as simple as it might appear on the surface.

I am aware from the engagement in meetings that this is an issue that has come up on a number of occasions and not least because, for the first time, some bodies that might have been getting pretty close to being regulated in 2010 but did not realise it have now realised that there is something that they will have to address. I will explain by way of background the different regulated periods that operate for different elections. The regulated period for UK general elections is 365 days and for devolved Administration elections and European parliamentary elections it is four months. The reason why we have put these in is that we believe that it is not unreasonable that third parties and political parties should adhere to the same regulated period for an election. This is because the campaigns relate to the same election. I am sure, if one thinks about it for a moment, that it would be somewhat unusual and unfair if third parties were allowed to incur unlimited amounts of expenditure campaigning for or against a party or candidates in a period when the political parties themselves would be faced with a limit on their spending. That is the principle that underlies why we wish to keep the periods in tandem.

As we have discussed earlier, particularly on whether the clause would stand part—when we talked about expenditure by a third party, which is ostensibly and is indeed intended to support a registered political party—there could be a scenario where a short third-party regulated period really detracted from the rules on the political parties, as political parties could use these third parties as expenditure vehicles for a considerable period of either six months or eight months. I do not believe that this is the sort of situation that we want to end up with. That said, believing that it would be possible to have the relevant guidance in time before the regulated period starts for the 2015 election, I recognise that there are issues; my noble friend Lord Deben highlighted some of them that relate to the first election under this. Of course there will be a review, which we will come on to but the Government have already indicated that there will be a review post-2015. I hear the points made that there are still concerns with regard to the immediate prospect facing a number of organisations. The noble Baroness, Lady Hayter, made reference to that too.

I can say this in a spirit of consideration but not promise, because the principle involved here is to keep the times so that they march together. Not doing so could undermine an important aspect of the restriction on expenditure by political parties. That is why it is important that we do not disregard that principle and I invite the noble and right reverend Lord, Lord Harries, to withdraw his amendment.

[The Earl of Sandwich]

My Lords, can the noble and learned Lord explain why he always goes back to parity with political parties? We are not talking about political parties; we are very different in kind.

[Lord Wallace of Tankerness]

My Lords, I am happy to explain that. The very nature of the expenditure that will fall to be covered by Part 2 will be expenditure that is very much geared towards an election, the same election in which the political parties will be fighting. It would seem rather odd if the political parties themselves are restricted in what they can spend over a period of one year. If, for example, we were to accept the amendment spoken to by the noble Lord, Lord Ramsbotham, for eight months of that year other third-party bodies, some of whom would be endorsing quite unashamedly the policies and perhaps the candidates of one of the political parties, would be able to spend freely without any restriction at all while the political parties themselves are campaigning with restrictions. That is why I make the comparison because it would create a sense of unfairness and imbalance if those who are actually fighting an election, those whose heads are on the block on polling day, as it were, were under restrictions but third parties did not have any such restrictions for a substantial part of that time.

[Lord Harries of Pentregarth]

My Lords, I thank the noble Lord, Lord Deben, for his support in principle for reducing the regulation period. Perhaps I may remind the Minister that the Electoral Commission, at least for the 2015 election, is supportive of a six-month period. It will be reviewed after 2015, but there is a great deal to be said, at least for the 2015 election, in support of testing the six-month period. With that, I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Hayter of Kentish Town]

On this side we very much support getting rid of red tape for small organisations. I think that it is tomorrow that the Joint Committee on the Government’s draft Deregulation Bill will produce its report, so it will be slightly ironic if there is that on the one hand and, on the other, we are regulating these small groups. I look forward to what may be the time when the Minister gives us a “yes” today.

[Lord Wallace of Tankerness]

My Lords, Amendment 170N would insert a new clause that would remove the requirement for recognised third parties to provide a spending return after the election if they had not incurred controlled expenditure above the registration threshold. Instead, a recognised third party would be required to submit a declaration that they had not spent in excess of the registration threshold.

Amendment 173, spoken to by my noble friend Lord Hodgson, would amend Clause 32 so that a recognised third party would not have to submit a nil report where it had not received a reportable or substantial donation. Amendment 174 would amend Clause 32 so that a recognised third party would be able to appoint a responsible person who had been a responsible person for another recognised third party.

I will give some background before addressing specific amendments. To improve transparency and to ensure that people can see who is funding a third party before the poll takes place, third parties will be required to report any large donations in advance of the poll. This will align the reporting requirements of third parties more closely with those of political parties, and will take two forms.

First, recognised third parties will be required to provide quarterly reports of donations for each reporting period that falls within the regulated period for a UK parliamentary general election. Secondly, between the dissolution of Parliament and polling day, recognised third parties will be required to provide weekly reports of any large donations.

I am not sure if I heard correctly whether the noble and right reverend Lord, Lord Harries, suggested that the quarterly and weekly reports also applied to spending. To clarify, the quarterly and weekly reports prior to the election apply only to donations—of more than £7,500—and the spending return will continue to be a requirement after the election.

Both the quarterly and weekly donation reports would be submitted to the Electoral Commission, which would publish the information. The quarterly reports must be accompanied by a signed declaration from the responsible person of the recognised third party, stating that all reportable donations accepted were from permissible donors. The Bill introduces measures that are necessary to achieve this increased transparency. The Bill proposes that third parties provide information about large donations in advance of the election, in quarterly and weekly donation reports.

At present, recognised third parties have to provide details of their campaign income and expenditure to the Electoral Commission after a UK parliamentary general election, and after the poll for certain other elections. To improve transparency by providing a clearer understanding of the finance of those involved in elections and to align the reporting requirements of third parties more closely with those of political parties, a statement of accounts would form part of the return third parties already provide to the Electoral Commission.

To ensure that this additional obligation is proportionate, individuals are excluded from this requirement. The Government believe that not to exclude individuals would result in an unwarranted intrusion into their personal financial matters, although they will still be required to provide details of their campaign income and expenditure, as is currently the case. Third parties, such as companies, charities and trade unions, which are required to prepare a statement of accounts under another legislative framework would be able to submit these accounts as part of their return to the Electoral Commission. I hope that this is an example of proportionality.

Turning to the amendments, I hope that noble Lords support the principle of providing information on reportable donations during the election period. However, the Government acknowledge that the correct balance has to be struck between increased transparency and overly burdensome requirements. With this in mind, the suggestions of the Electoral Commission in relation to nil reporting have provided a very useful starting point. The Government want to consider these matters very carefully and to revisit them on Report, to ensure that adequate and proportionate reporting requirements are included in the Bill.

Amendment 174, spoken to by my noble friend Lord Hodgson, concerns the role of the responsible person. When a recognised third party seeks registration with the Electoral Commission, they must nominate a responsible person who ensures compliance with the provisions of the Political Parties, Elections and Referendums Act 2000.

It is for the recognised third party or coalition to nominate a responsible person who they feel is best placed to ensure compliance with legislation. That could be a person who is already a responsible person for another third party. There are therefore no restrictions placed on who the recognised third party can nominate as a responsible person, except where an individual registers as a third party, where they will automatically become the responsible person.

In relation to Amendment 170N, the Electoral Commission made a similar suggestion in its June 2013 regulatory review. The Government see merit in the suggestion, which underpins our aim that smaller bodies should not be subject to overly burdensome reporting requirements. As a result, the Government will want to consider this issue carefully and revisit it on Report.

We have heard the—understandable—strictures from my noble friend Lord Deben. In that spirit, I ask the noble and right reverend Lord, Lord Harries, to withdraw his amendment.

[Lord Harries of Pentregarth]

I thank the Minister for his response. It is probably the most positive response we have had this afternoon—it must have been the intervention of the noble Lord, Lord Deben, which tipped the balance. He has been useful on one or two things on that side in recent years.

I accept the Minister’s assurance that the Government will do all they can to reduce the regulatory burden on both donations and expenditure. With that, I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Royall of Blaisdon]

My Lords, that is an interesting idea in an interesting debate. I certainly do not defend the present system. I agree with all of the noble Lords, including my noble friend Lord Campbell-Savours, that funding causes a disconnect with the people of our country, and that we have got to do something about it. We have to lance the boil, or whatever metaphor one wants to use. People have made various suggestions, including about the cap and about other things such as those that the noble Lord, Lord Tyler, talked about. It is absolutely clear that we have to find a solution. I am sure that all of us who are engaged in politics, and all of us who are here would agree, that politics is a “noble activity”, as the noble Lord said. It is a fundamental part of our democracy, and we are here to protect our democracy and to be vibrant activists.

However, it is my party’s strong view that whilst this is an interesting idea, it should not be looked at in isolation, and that what we have to do is to knock each other’s heads together, and find a solution in the round. My party—our party—wants to resume the all-party talks. It can be done; we have got to find a way through. It is not that I am being complacent. I can see that the noble Lord, Lord Marland is getting frustrated by what I am saying, but I can assure him that I spend a huge amount of my time raising funds for my party. I know how difficult it is, and I know all the problems with the media and everything else. We have to find a solution. It may well be that this is part of the solution, but it cannot be dealt with in isolation. But I am very grateful to my noble friend for raising this very interesting issue.

[Lord Wallace of Tankerness]

I, too, would like to thank the noble Lord, Lord Campbell-Savours, for raising this. Having spent much of the earlier part of the Committee discussing non-party organisations and the limits on party expenditure, I think that it is interesting that we now move on to party revenue and how it is raised. Indeed, there is much in this debate in which I find myself in considerable sympathy, as there is a disconnect and there is a problem.

As my noble friends Lord Deben and Lord Marland and the noble Baroness, Lady Royall, reminded us, politics is a noble calling. It is not always seen like that, and we understand sometimes why it is not seen like that. But much of the work that is done in this House and in the other place, and in the various devolved Administrations and council chambers up and down the land, requires people to make a commitment and very often a sacrifice in order to make the system work. It does not work perfectly, we know that, and it will not always produce the policies that people like, but nevertheless, without the people prepared to do that work, the system would completely break down and democracy would be seriously imperilled. Democracy does not come cheap, and if people are going to have proper choices at election times it is important that funding and resources are there for particular programmes to be put before voters, who should have an opportunity to respond.

--- Later in debate ---

[Lord Campbell-Savours]

To illustrate the point, I was making a distinction between a monthly contribution and an annual contribution.

[Lord Wallace of Tankerness]

I am grateful to the noble Lord for explaining that.

It will not come as any surprise that the Government do not feel able to support the amendment. There have been discussions among the three main parties, which have been guided by the principle of consensus. There has been not total consensus but substantial consensus in your Lordships’ House this evening—a consensus that was not found in the discussions that have taken place. The noble Lord, Lord Campbell-Savours, said that there had been seven such discussions. In a Written Ministerial Statement on 4 July, my right honourable friend the Deputy Prime Minister indicated that the talks had not produced results and that it was,

“clear that reforms cannot go forward in this Parliament”.—[Official Report, Commons; 4/7/13; col. 62WS.]

From what has been said, it has been a source of considerable disappointment that agreement could not be reached. I do not necessarily think that the Bill is the best place in which to start to do these things without that wider consensus as to what other things might be needed. However, it is important that we have had this debate, which has shown that there can be consensus across the parties.

I therefore say to my noble friend Lord Cormack that, while I am sympathetic, I regret that I cannot be encouraging. I therefore ask the noble Lord, Lord Campbell-Savours, to withdraw his amendment.

--- Later in debate ---

[Lord Cormack]

The fact is that post-legislative scrutiny—which I am a great advocate of—is no substitute for a sunset clause, which brings the Bill to a proper stop. We do not have the power to do that.

[Lord Wallace of Tankerness]

My Lords, I will very briefly say that of course we need to be aware of the effects of any legislation and that often these effects do not become clear until after the legislation is in force. As far as Part 2 is concerned, the Electoral Commission already has, under PPERA, the statutory function of reporting on the conduct of elections. That report will include how third-party campaigning is carried out.

I reassure your Lordships that we agree that the impact of the provisions of Part 6 of PPERA, which would include, if it passes, the measures in Part 2 of this Bill, should be subject to a review after the 2015 UK parliamentary general election. The passage of the Bill has shown that the provisions of PPERA are not necessarily as widely known as they ought to be, and even less well understood. The 2015 election will provide an opportunity to review the effectiveness of the provisions of Part 6 of PPERA as enhanced by Part 2 of this Bill.

The Government are still considering the precise details of the review but we commit to laying the review before Parliament, and a government amendment to that effect will be tabled on Report. Such a review was recommended by the Commission on Civil Society and Democratic Engagement, led by the noble and right reverend Lord, Lord Harries, and we are grateful to him for that recommendation. When the review is carried out, it is only right that Parliament should have the opportunity to consider how to respond to its findings.

The reason I hesitate in agreeing to the sunset clause is that Amendment 181C calls for the report to be debated “before 31 May 2016”, whereas Amendment 181A would have the effect that Part 2 would expire “on 31 May 2016”. It is important that, if we have a review, it is a proper one. If there are things that need to be done, there should be an ample opportunity for Parliament to take steps and consider any amendments that are required. That would not necessarily give a proper opportunity for a full review and for Parliament to take any necessary legislative steps. The spirit is that there should be a review. It should be brought to Parliament. It is clear to all parties, regardless of who is in government after 2015, that the will to have a review and learn the lessons that any review might teach us is there. In these circumstances I hope that my noble friend Lord Hodgson, who set the ball rolling in this, will be prepared to withdraw his amendment.

I hope this will be the last time that I will be on my feet in this Committee stage. I thank noble Lords in all parts of the Chamber for their contributions. It is important that we have had them. I also thank noble Lords for the good nature in which, debating pretty complex matters, our deliberations have proceeded. The Government have been listening and will reflect over the Recess on the matters that have been raised in your Lordships’ House.

[Lord Hodgson of Astley Abbotts]

My Lords, for the second or maybe the third time this afternoon I can say how grateful I am to my noble and learned friend for his very positive response. It has been a long afternoon and I take this opportunity to thank him for the courteous way in which he has dealt with the extensive probing to which he has been subjected. In withdrawing my amendment I hope that it is not out of order if I wish him and all members of the Committee a very happy Christmas.