Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill Debate
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Lord Wallace of Tankerness
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Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill
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The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD)
My Lords, first, I thank those who have contributed to this debate, in particular those who have welcomed the government amendments. We certainly sought to listen and take on board comments from a wide range of those engaged in campaigning. I pay tribute to my noble friend Lord Wallace of Saltaire, who met far more groups than I did. These meetings and deliberations, and indeed the contributions made in Committee in your Lordships’ House, have very much informed the proposals that we have come forward with today. Again, I thank the noble and right reverend Lord, Lord Harries of Pentregarth, and the other members of the Commission on Civil Society and Democratic Engagement for their contribution to this debate.
The purpose of Schedule 3 is to extend the range of activities for which a third party incurs controlled expenditure. It takes forward a recommendation from the independent Electoral Commission to align the range of activities for which third parties incur controlled expenditure with that for political parties. The Electoral Commission has highlighted that there is no clear reason why controlled expenditure for third parties applies only to election material. This difference means that a potential gap arises in the rules governing elections in our country.
The Government and the Electoral Commission believe it is important that this potential gap in the regulatory regime is addressed. However, the Government also acknowledge some important issues that have been raised, not only by noble Lords but a number of campaigning groups. As such, we have tabled a number of amendments to Clause 26 and Schedule 3. I will take the opportunity to explain what they do.
Currently, the regime under the Political Parties, Elections and Referendums Act 2000 outlines specific activities that do not incur controlled expenditure. These include volunteers, publications which are not advertisements in newspapers, broadcasts on certain channels such as the BBC or S4C, and certain reasonable personal expenses. Government Amendment 37 removes these exclusions from Section 87 of PPERA and Amendment 44 inserts them into new Schedule 8A and expands the types of expenses that are excluded from incurring controlled expenditure.
The full range of exclusions that the Government have brought forward includes amendments to expenses in respect of the translation of materials from English to Welsh or Welsh to English. I shall say something about the important points made by the noble and learned Lord, Lord Morris, and the noble Lords, Lord Wigley and Lord Elystan-Morgan. At present, controlled expenditure is incurred on the production and publication of election materials, such as leaflets. The Bill retains this, but costs associated with translating these materials from English to Welsh or vice versa will be excluded. The noble and learned Lord, Lord Morris, said he hoped that this was an oversight and that it was not there in the first place. If there was an oversight, and I think there probably was, it was probably also an oversight in the 2000 Act, because election materials are covered by the provisions in that Act. I hope, albeit belatedly, that there is considerable cross-party and non-party consensus that it is something we should be doing.
The Government believe that this highlights the importance of the Welsh Language Act 1993, which treats the Welsh and English languages as equal. It follows the practice of producing election material and ballot papers in Welsh. We are grateful to the noble and learned Lord for raising this issue in Committee. He asked about production costs. When we are giving something it is easy to say that it is not as much as you thought we were giving, but we believe that extending the exemption further than the cost of translation would go too far. It would allow campaigns to print different material for different addresses without being regulated. For example, if a campaigner prints 100 leaflets in English, he can then print 100 leaflets in Welsh for an entirely different purpose. Therefore, we thought it important that this amendment should relate to the cost of translation, rather than the production of material.
Indeed, that is what we thought was intended by the noble and learned Lord’s amendment, when it says that production,
“shall not include costs incurred by the translation of those materials from English into Welsh or from Welsh into English”.
Indeed, the Government’s amendment refers to,
“expenses incurred in respect of the translation of anything from English into Welsh or from Welsh into English”,
which may even go further—there may be expenses other than translation expenses. I want to make it clear that we think, having considered this, that to relate it to the publication costs—to the printing of the leaflets—goes further than is needed to address the important point about Welsh translation.
Lord Wigley
Surely the Minister accepts that if an organisation—say, the NSPCC—requires a leaflet to be put out in England and in Wales, in England it might be in other languages but it need be only in English to meet the law. In Wales, it would be in Welsh bilingually with English. Sometimes that can mean double the size of the leaflet. Sometimes it might be constrained to six instead of eight pages in the way that bilingualism can be laid out, but the cost of producing something in a bilingual format for the customers is significant because of the print and the paper, not just the time taken to translate a leaflet. That is relative peanuts in the operation. If the Minister is excluding the other parts, there is a very serious implication.
Lord Wallace of Tankerness
My Lords, as I have indicated, we thought that the amendment that the noble Lord, Lord Wigley, has signed did not actually go further than we were going. I think there has been a proper debate on this. I do not want to mislead the House into thinking that we are willing to countenance in the Bill an opportunity to exploit it and to double up on the number of leaflets. I hear what the noble Lord says and, subject to what I have already said about not wanting to incur a loophole, I am prepared to consider whether the wording reflects what might be called a marginal cost of translation but not costs that might allow more leaflets to be published. The noble Lord is nodding his head; perhaps he agrees that that is not an unreasonable position.
I hope that the noble and learned Lord, Lord Morris, will agree that it is not entirely clear that these additional production costs were covered by his amendment either. Certainly, we did not think they were.
Lord Morris of Aberavon
I thank the noble and learned Lord. It is obvious to me that, in accordance with the definition of “controlled expenditure”, production is specifically referred to. You cannot have anything to translate unless you have something produced: that means a piece of paper. I was certainly not encouraging a vast increase in the whole gamut of informational literature, but rather the specific translation and the costs incurred in preparing for the translation, particularly the paper. It may be that I was not ambitious enough. That is entirely my fault and that of those who were advising me—they were not ambitious enough in putting forward that the provision should include specifically the preparation of a document for the purpose of translating. That is all that I am asking.
Lord Wallace of Tankerness
My Lords, I do not think that there is really all that much between our position and what has been said both by the noble and learned Lord and the noble Lord, Lord Wigley. I hope that we can look at it and get the right wording to capture the consensus among us without creating loopholes for having much more material produced. On that basis, I hope that the noble and learned Lord will not press his amendment and, all being well, we will get our amendment on to the Order Paper.
Lord Morris of Aberavon
I am encouraged by that. I hope that, if I do not press my amendment, we will return to the matter at Third Reading after further consideration.
Lord Wallace of Tankerness
That is indeed what I had in mind. Time may be short, but I think that we can have some useful engagement on that.
Government Amendment 43 excludes the costs associated with providing protection of persons or property in relation to a public rally or event. While the Government believe that it is important that third parties who organise public rallies or events which seek to influence voting intentions incur controlled expenditure, it is only right that third parties do not incur controlled expenditure ensuring that such events are run safely.
Government Amendment 44 excludes expenses that are reasonably attributable to a person’s disability. This would mean that costs associated with, for example, providing materials in Braille, or ensuring that any person with a disability could attend a public event or meeting, would not count towards the third party’s controlled expenditure.
Government Amendment 42 provides that parades notified under the Public Processions (Northern Ireland) Act 1998 are excluded from the provisions of PPERA. Your Lordships will recall that we had a debate in Committee on Northern Ireland. Although the particular issue of parades was not raised, we were aware that it was a concern that some people had expressed. The noble Lord, Lord Rooker, led an important and helpful debate on Northern Ireland, and we seek to address it here.
Government Amendment 38 amends the defence, currently in the Bill, for a person or third party charged with an offence of incurring controlled expenditure in excess of the spending limit—that is, above the limit in a part of the UK or the constituency limit—to show that they complied with the relevant code of practice so that it covers both recognised and non-recognised third parties. The amendment is needed to reflect the changes to the reporting requirements in a later government amendment which provides for no spending return if the threshold is not reached. We have since identified a couple of points not properly dealt with in the amendment. The first is that the defence does not adequately cover the case where an offence might be committed by virtue of expenditure incurred on behalf of the third party. Secondly, the defence should also cover the offence in relation to targeted expenditure. We think that it is important in both these cases that those subject to regulation should have the benefit of the defence and we will therefore bring forward amendments at Third Reading to deal with these outstanding anomalies.
Government Amendment 41 clarifies the drafting on public rallies, so that it is “public rallies or events” to be inserted by Amendment 42. The reference to “public meetings” is removed, as it was unnecessary and potentially confusing because “other public events” includes public meetings.
I turn to the amendment moved by the noble and reverend Lord, Lord Harries of Pentregarth, and a number of other amendments that have been spoken to in this group. Amendment 34 would amend Clause 26 so that any campaign which could reasonably be regarded as intended to promote or procure electoral success, involving legislation going through Parliament during the regulated period, would not count as controlled expenditure. I listened carefully to the speech made by my noble friend and agree with him that we should not pass legislation which inhibits expression of legitimate opinion.
To incur controlled expenditure and be included in the regulatory regime, it is important to remind ourselves that the third party must be carrying out activity which could reasonably be regarded as intended to promote or procure the electoral success of a party or a group of candidates. We have heard concerns that campaigns against specific policies or pieces of legislation will be caught by the regulation. It might assist the House if I set out how, generally, this will not be the case and the circumstances in which it might be. The noble Baroness, Lady Mallalieu, asked whether we would meet the Electoral Commission. I can tell her that this issue has been raised with us. We have been in discussion with the Electoral Commission and I can confirm that it agrees with this interpretation.
If a campaign group wished to lobby parliamentarians over legislation going through the House, this would not be subject to regulation under Part 2. It is only where the expenditure by a campaign group can reasonably—that is, objectively—be regarded as intended to promote or procure the electoral success of a party or candidates that such activity will be subject to regulation. For example, encouraging constituents not to vote for MPs in the general election if they had voted a certain way on the legislation before Parliament should and would be included as activity leading to controlled expenditure. If a group so closely aligns itself with a policy of a particular party that its campaigning on behalf of that policy can only reasonably be seen as encouraging support for that party, that would also count. That is campaign activity, and where it takes place the Government believe that spending on it should be transparent to the public.
The noble and right reverend Lord, Lord Harries, gave a good example when he talked about new towns. We believe that under his example, people will be able to support or oppose such a proposition freely. It would be caught only if they promoted electoral success, for example, by distributing leaflets reading, “Don’t vote for candidate X”—or X party—“at the next election”, because he or she had supported or opposed the new town. The amendment states,
“unless the expenditure relates to legislation before Parliament during the regulated period”.
If Parliament were to accept that definition, it would really open the door to any amount of expenditure. My noble friend Lord Horam suggested a limit of £300,000; in fact, it would not be controlled expenditure, it would be unlimited expenditure in the run-up to an election which could be directed against or for a particular party. Given that there are restrictions on what the political parties can spend during that period, it is not reasonable that there should be such a wide gap in the provisions that an unlimited amount of expenditure could be related to a particular campaign.
I reiterate that the general position is that if a campaign group wishes to lobby Parliament and parliamentarians over legislation, that is primarily directed at trying to change legislation and would not be subject to regulation under Part 2. As my noble friend Lord Horam said, we are seeking a balance, allowing proper room to campaign but not to swamp.
I also highlight that the Electoral Commission does not support this amendment. It states that such an exemption would allow unlimited spending on a potentially wide range of topics. It believes that it could produce significant and unintended gaps in the coverage of the rules. The issue of the year up to the campaign was raised generally in the debate. Of course, a later amendment will mean that this is actually only a seven-and-a-half-month period. Clearly, if, as a result of experience, people feel that the guidance has not been sufficiently helpful, as we have provided in later amendments, there will be a review post the 2015 election. The amendment as it stands opens up a considerable gap and would lead to an imbalance whereas, as my noble friend said, we should be seeking a balance.
On Amendment 40, my noble friend Lord Tyler seeks to amend Schedule 3 so that costs associated with sending materials to committed supporters who have been actively involved in the activity of the third party would be excluded from the calculation of costs for controlled expenditure. Costs of sending material to members or certain supporters are already excluded, as PPERA and the Bill make clear. The material or activity must be available or open to the “public”, which for these purposes would not include those members or supporters.
As the existing Electoral Commission guidance makes clear, the exact nature of a committed supporter will vary between organisations, but could include regular donors by direct debit, people with an annual subscription or people who are actively involved in the third party. The amendment goes much further than that. Amendment 40 defines those actively involved as those who have made a donation to the recognised third party, or those who have made a direct communication to the recognised third party in the past 12 months.
Consequently, an individual who writes to a campaign organisation with a general inquiry about their activities, or even one who lives next to an animal sanctuary who writes to them complaining about the noise, might possibly be regarded as being actively involved. I do not believe that that is my noble friend’s intention, but I fear that using that definition allows the provision to become ineffective, particularly in an age of instant electronic communication.
The Electoral Commission does not consider people to be committed supporters if they have simply signed up to social networking sites or tools, or appear on mailing lists that may have been compiled for general commercial, campaigning or other purposes. An exclusion of costs, based on direct communications with third parties—whatever the nature of that communication—creates a wide exemption.
I know that my noble friend has worked hard and has met officials to try to resolve this; I regret, however, that we fear the definition he has come up with is too wide. We believe that the better way is that the Government and the Electoral Commission believe that the Electoral Commission’s guidance is the proper place to outline who counts as a committed supporter. In its briefing the commission outlined that it does not support this amendment due to the fact that it is unclear what scale of campaigning would be exempted from the regime or how the test would apply in practice.
Finally, my noble friend referred to Amendment 45A to ensure that any changes to the range of activities outlined in new Schedule 8A would be made through an affirmative resolution procedure. That is already the case in the Bill as drafted. I draw noble Lords’ attention to Clause 26(12), which amends Section 156 of PPERA so that any order under new Schedule 8A, as inserted by Schedule 3 to the Bill, is by affirmative resolution. It does so by amending the existing section of PPERA, setting out what parliamentary procedure applies to orders and regulations. The Government agree that it is important that any changes to the list of activities that incur controlled expenditure should be subject to the affirmative resolution procedure.
I hope that that reassures my noble friend. In the light of the explanations given, I hope that the noble and right reverend Lord, Lord Harries, is prepared to withdraw his amendment.
Lord Rooker (Lab)
I have thought of a question while the Minister has been speaking, which is not in any way diversionary. It ties in with the comments made earlier about what would happen if, in this period of a year, a Government sought quite deliberately to save legislation. The Minister answered the point about legislation in Parliament, but there are highly controversial matters outside Parliament; people do newspaper adverts and all kinds of things. I have been thinking about this question, having gone through paperwork recently. When we get close to an election, the Cabinet Secretary and the head of the Civil Service will issue an edict around Government to Ministers and departments about what you can do and what you cannot do in that period. Is that going to change now that we have a fixed-term Parliament, with this window and this picture of a much larger window?
This is not purdah, but an extended period in which other people are constrained about what they can say and do. Will the advice that normally comes out close to an election from the Civil Service to Ministers actually change and take account of what is being done in this legislation?
Lord Wallace of Tankerness
My Lords, I always know it to be dangerous when the noble Lord stands up and says he has been thinking about something—and so it was.
I took the fixed-term Parliament legislation through your Lordships’ House and I do not recall—nor, indeed, have I seen at the present time—anything that suggests there is going to be any change. Of course, that means that there still will be a period during which Governments are not allowed to do this; but I have not seen any proposal to reflect the fact that there is a fixed-term Parliament. When that period will arise will become more apparent, or more foreseeable. If I have got that wrong, although I do not think I have, I will inform the noble Lord.
Lord Harries of Pentregarth
I thank all noble Lords who spoke in favour of my amendments and the other amendments to which my name has been attached and I thank the Minister for his response.
The noble Lord, Lord Horam, drew attention to some of the unfortunate consequences, as he understands it, of this legislation at constituency level. However, what I had in mind was primarily what happens at the national level. He suggested that political parties would be limited in what they can campaign; but the Government, in pursuing their legislation, are not limited in the amount of money they can spend in order to get legislation through Parliament, and nor are the Opposition.
Suppose you have two third parties: one, the Countryside Alliance, which wants to campaign against a new town, and the other the National Housing Federation, which wants to campaign in favour of more housing. Why should they be inhibited by the Bill in a way that the political parties would not be inhibited? As the noble Baroness, Lady Mallalieu, pointed out, we are not talking about the post-Dissolution period, so a lot of the ill effects that the noble Lord suggested might happen at constituency level would not be allowed by this amendment, because we are talking about only legislation going through Parliament and that ends when Parliament is prorogued. Therefore I believe that this is a crucial issue that goes to the heart of our democracy.
Lord Wallace of Tankerness
The noble and right reverend Lord indicated, when referring to what my noble friend Lord Horam had said, that it had not been his intention to engage in constituency expenditure. Does he accept that if this is not controlled expenditure, it could lead to expenditure in a constituency up until the time when the Representation of the People Act kicks in?
Lord Harries of Pentregarth
I accept that there are certainly implications for what might happen at local level. However, I ask the noble and learned Lord to continue to think about it because this issue goes to the very heart of the democratic process. I very much hope that, having talked to the Electoral Commission to see whether there might be a way forward, he might give the very clearest statement at Third Reading, which would then be translated into advice for the Electoral Commission. We need something here to safeguard the fundamental rights of campaigners to campaign during this period. With that, I beg leave to withdraw the amendment.
Lord Wallace of Tankerness
My Lords, I thank my noble friend Lord Phillips for raising the important issue of charities and seeking to exclude them from the regulatory regime governed by controlled expenditure for third parties. In Committee, we had a useful debate during which I indicated that some very important points had been made and undertook to give consideration to them. To those who ask the Government to take this issue away and to think about it, I say to your Lordships’ House that we have given this very serious thought. I probably spent more of my time on it than I had necessarily expected over Christmas and the new year in Orkney. I will not overegg it but I think my wife thought that it probably was more than was healthy.
With other Ministers, the Government have seriously thought about this matter and looked into it. Under present charity law, charities are organisations which must be established for charitable purposes only which are for the public benefit. An organisation will not be charitable if its purposes are political. Campaigning and political activity are legitimate and valuable activities for charities to undertake. However, this must be undertaken by a charity only in the context of supporting the delivery of its charitable purposes.
The Charity Commission and the Electoral Commission produce guidance for charities on campaigning and political activity. Both regulators acknowledge that there may be a narrow range of circumstances—noble Lords who took part in Committee will remember that the word given to me by officials was “sliver”, which I did not particularly like but was meant to show that it was a very narrow range of activities—in which charities may be compliant with charity law and also operate within the regulatory regime established by the Political Parties, Elections and Referendums Act 2000. I listened carefully to the speech of my noble and learned friend Lord Mackay of Clashfern. The Charity Commission guidance updated in January 2011 on charities, elections and referendum states:
“A charity may publish the views of candidates in local and national elections where these views relate to the charity’s purposes and publishing them will raise public interest and debate about the underlying issues. The charity must not encourage support for any particular parties or candidates”.
It goes on to say that “even if” a charity is,
“following the guidelines set out in this document and in Speaking Out: Guidance on campaigning and political activities by charities (CC9), if you use material that could be seen as indicating to the public that particular candidates or parties support or oppose your policies, it is possible that you may need to register as a third party with the Electoral Commission”.
Indeed, that has been the position following PPERA 2000. My understanding is that two charities registered in 2010 .
I admit that the circumstances may be very narrow but the important point to remember is that we are using an objective test. It is not a subjective intention of the charities: it is how a reasonable person might perceive what the charities have done. As the noble and right reverend Lord, Lord Harries of Pentregarth, pointed out, Clause 26(4)(c) states that,
“a course of conduct may constitute the doing of one of those things even though it does not involve any express mention being made of the name of any party or candidate”.
Applying that consideration and the objective test is the considered view of the Electoral Commission and the Charities Commission that there could be circumstances in which PPERA should apply.
Lord Low of Dalston
I am sorry to intervene on the noble and learned Lord, but does he not agree that the test is only partly objective because the test is not what a reasonable person would make of what the charity has done but what a reasonable person would make of the charity’s intention?
Lord Wallace of Tankerness
My Lords, I can do no better than remind your Lordships of Clause 26, which states that,
“the expenditure can reasonably be regarded as intended to promote or procure electoral success at any relevant election for—”.
The point is that there is a distinction between an objective and a subjective test. It may be that if the charity was complying it was not intending, but if objectively it was thought to have done so it would fall into that narrow range of activity. The important point was made by the commission chaired by the noble and right reverend Lord, Lord Harries; namely, that it is the activity that is important rather than who is undertaking the activity.
I know that the House wants to move on, but the e-mail issued yesterday evening by Mr Rowley has been referred to by a number of noble Lords. He says:
“We recognise that there are some circumstances where a charity’s activities can adhere to charity law but may still require them to register with the Electoral Commission during an election period. Indeed, during the last General Election a small number of charities did register with the Electoral Commission. Due to the increased awareness and scrutiny of this area we believe that this number may increase, regardless of the change in the scope of activities and limits that this Bill proposes”.
My noble friend Lord Phillips was suggesting that somehow or other the information on this coming from the Charities Commission was out of date. It is important to recall that it does set out the current position, but it is a situation in which PPERA is not changing with regard to the definition. It will not change as a result of this Bill, so the case remains that a narrow scope of activities could be covered. The Electoral Commission is clear that charities should not be exempt from the PPERA regime. It highlights that such an exemption would undermine the effectiveness of the PPERA regime and create incentives for campaigners to carry out as much campaigning activity as possible via charitable channels. Potentially that could have implications for the reputations of the charities.
I repeat what the commission said:
“It is the Commission’s view that it is right that charities are not excluded from within this legislation, and we believe the Government’s approach to distinguish by activity rather than by type of organisations is correct”.
The Government’s view, however, is that the nature of the PPERA test, to which I have referred, and the constraints of charity law will mean that the circumstances in which charities are brought within the scope of PPERA rules will be very rare. First, they must meet the PPERA test where their activities can reasonably be regarded as intended to promote or procure the electoral success of a party or candidate. Secondly, if they meet this test they must incur controlled expenditure over the registration threshold. The amendments that we will debate later and that are being brought forward by the Government to raise the registration threshold in essence will ensure that smaller or even medium-size charities will not have to register with the Electoral Commission.
I heard comments in Committee and in the meetings that I have had about the importance of trying to keep the administrative burden to a minimum. I accept that there was force in the concerns expressed when I first became engaged in this Bill and attended meetings with my noble friend Lord Wallace of Saltaire, in which charities said that there was a possibility that they could do something that took them into PPERA-controlled expenditure, with the limit at £5,000—£2,500 in Scotland, Wales and Northern Ireland. That might happen, without their knowing that there could be a freeze on their activity. But limits of £20,000 for registration are now proposed; in Scotland, Wales and Northern Ireland it is £10,000.
If charities are undertaking that level of expenditure this is neither unreasonable nor the sort of thing that will get lost in the loose change. It is significant expenditure. Therefore many charities will be removed from any concern by the thresholds that we are setting. Those approaching that level of expenditure may wish to consider whether it is appropriate. In terms of the general core principles of accountability and transparency in the Bill, it is important that if a body is undertaking the kind of activity that falls within this scope it should be accountable and transparent. In some of my discussions with the chief executive of OSCR, the Scottish charities regulator, he said that he thought that the transparency argument was important: if two organisations were doing exactly the same thing that brought them within the scope of the Bill or PPERA, it was wrong that one should have to be accountable and transparent, and the other, because it was a registered charity, should not. In transparency and accountability terms, this departed from an objective of the Bill.
Charities have raised concerns as to what happens if a party or a candidate adopts one of their policies. The Electoral Commission guidance is clear on this point. If a party or a candidate adopts a charity’s policy this will not automatically result in the charity incurring controlled expenditure. A charity will incur controlled expenditure only if it subsequently highlights the fact that party A or candidate B supports its policy, or ramps up its campaign. As such, the Government are not persuaded that there is a compelling case to take such a significant step as to exempt charities from the regulatory regime. It is the activities of the third party and not the type of organisation that should be subject to regulation. I can assure my noble friend, who raised the matter, as did other contributors to the debate, that the regulatory regime on charities will be explored during the review of third-party campaigning that we have indicated, as laid out in later amendments, will take place after the 2015 election.
We have had a good debate. I am not sure that I can elaborate these points much further. The noble and learned Lord, Lord Mackay of Clashfern, very properly made the point that the shape of the Bill will not be determined by the Charity Commission or the Electoral Commission; it will be done by Parliament, by your Lordships’ House and the other place. But, in doing so, it is important that we have some regard to those who have dealt with these issues in elections past, and to the Charity Commission and the Electoral Commission, which agree that the amendment proposed by my noble friend would not be appropriate in these circumstances. I therefore invite my noble friend to withdraw it.
Lord Mackay of Clashfern
Is my noble and learned friend saying, as a law officer of the Crown, that it is lawful for a charity in pursuance of its charitable purpose to do something that can,
“reasonably be regarded as intended to promote”,
the interests of a particular party or candidate?
Lord Wallace of Tankerness
My Lords, that has been the legal position since 2000. It is very rare that it would happen but, conceivably, there is a very limited range of activities that could fall within that. It would not be the intention of the charity but it might be reasonably seen by others to be the intention of the charity. It is because of that very limited possibility that it is important to maintain the provision as it is rather than implement the exemption proposed by my noble friend.
Lord Phillips of Sudbury
My Lords, I am grateful to my noble and learned friend the Minister for the way in which he summed up the debate. I am grateful to all those who have participated in discussing this important amendment. Given that Third Reading is on Tuesday, realistically there is not time to have the sorts of discussions that some noble Lords have looked for, particularly in terms of the speed at which the Charity Commission will move in relation to these sensitive matters. One has to look to the review of the workings of this legislation in the wake of the 2015 election. That will be vital. Having said that, I beg leave to withdraw the amendment.
“( ) In section 87 of that Act (expenditure by third parties which is not controlled expenditure)—
(a) in subsection (1), omit paragraph (a) and the “or” at the end of it;(b) omit subsection (2).”
“Arrangements between third parties notified to the Electoral Commission
(1) Part 6 of the Political Parties, Elections and Referendums Act 2000 (controls relating to third party national election campaigns) is amended as follows.
(2) In section 94 (limits on controlled expenditure by third parties)—
(a) after subsection (3) insert—“(3A) For provision requiring certain controlled expenditure to be disregarded in determining for the purposes of subsection (3)(a) whether a limit is exceeded, see section 94A(5) (arrangements between third parties notified to the Commission).”;
(b) in subsection (4), for “such a case” substitute “the case mentioned in subsection (3)”;(c) in subsection (5A)—(i) after “Subsections (3) to (5)” insert “and section 94A”;(ii) for “those subsections” substitute “those provisions”;(d) in subsections (8) and (10), after “the purposes of this section” insert “, section 94A”;(e) in subsection (11)(a), after “this section” insert “and section 94A”.(3) After section 94 insert—
“94A Arrangements between third parties notified to the Commission
(1) A recognised third party (“a lead campaigner”) may, at any time before the end of a regulated period, send a notice to the Commission—
(a) stating that the lead campaigner is party to an arrangement of the kind mentioned in section 94(6), and(b) identifying one or more third parties that—(i) are parties to the arrangement, and (ii) have agreed to be minor campaigners in relation to the arrangement.(2) A notice under subsection (1)—
(a) may not identify a third party as a minor campaigner if the third party is a lead campaigner in relation to the same arrangement, and(b) may not be sent by a recognised Gibraltar third party.(3) On receipt of a notice under subsection (1) by the Commission, a third party identified in the notice becomes “a minor campaigner” in relation to the arrangement in question.
(4) Controlled expenditure that is incurred during the regulated period in a part of the United Kingdom by or on behalf of a minor campaigner in pursuance of the arrangement is to be treated for the purposes of section 96 (returns as to controlled expenditure) as having also been incurred during the period and in the part of the United Kingdom concerned by or on behalf of the lead campaigner.
(5) In determining for the purposes of section 94(3)(a) whether a limit is exceeded by a third party in relation to a regulated period, controlled expenditure incurred in a part of the United Kingdom is to be disregarded if conditions A to C are met in relation to the expenditure.
(6) Condition A is that the expenditure—
(a) is incurred in pursuance of an arrangement that has been notified to the Commission under subsection (1), and(b) is, by virtue of section 94(6), treated for the purposes of section 94 and Schedule 10 as incurred by or on behalf of the third party.(7) Condition B is that the third party is, at the time the expenditure is incurred, a minor campaigner in relation to the arrangement.
(8) Condition C is that the total of the controlled expenditure incurred during the regulated period in the part of the United Kingdom by or on behalf of the third party (disregarding any expenditure in relation to which conditions A and B are met) does not exceed the limit for that part mentioned in section 94(5).
(9) Section 94(6) applies for the purposes of subsection (8).””
Lord Wallace of Tankerness
My Lords, Amendment 39 relates to arrangements between third parties notified to the Electoral Commission. In our earlier debates, this was referred to as the coalition issue—not be confused with the coalition—and in the meetings I attended with charities and campaign groups it was probably the issue that was raised more often than any other. My noble friend Lord Wallace of Saltaire agrees.
The Government received many representations to this effect and I would like to make it clear, as I have done on previous occasions, that this Bill does not amend the controls on third parties that each incur controlled expenditure as part of a coalition. In addition, only coalitions that incur expenditure that can, in the phrase we have been using,
“reasonably be regarded as intended to promote or procure the electoral success”,
of political parties or candidates are regulated and will continue to be regulated. Those rules are necessary and I will take a moment to clarify their operation.
Section 94(6) of PPERA requires that if two or more third parties work together to incur expenditure to a common plan or arrangement, the entirety of the expenditure they incur as part of that coalition must count against each third party’s individual spending limit. However, it is also important to be clear about what is not caught.
Baroness Tyler of Enfield (LD)
My Lords, I rise briefly to support Amendment 39A and, in doing so, very much welcome Amendment 39 introduced by my noble and learned friend. In Committee, I drew on my personal experience of being involved in coalitions of charities both previously and currently. It is very important —Amendment 39A achieves this—that even small and medium-sized charities are not restricted to being involved in only one coalition. I end by giving the example of when I was chief executive of a charity in the field of family relationships. At any one time, with a very small amount of money, we would be involved in a campaign to do with children and young people, a campaign to do with domestic violence, and a campaign to do with older people and the role of grandparents. All of those were important activities. We could never have done that ourselves; we simply did not have the money. That is why Amendment 39 is so important.
Lord Wallace of Tankerness
My Lords, I expressed appreciation for those who have welcomed Amendment 39, not least my noble friend Lady Tyler, because—I do not say this in any critical way—that is where we have managed to build on the amendment moved in Committee by the noble and right reverend Lord, Lord Harries. It would allow smaller charities, without reaching the threshold limit, to engage in a number of different campaigns.
I respond to the example used by my noble friend, and to the noble Lord, Lord Ramsbotham, and the noble Earl, Lord Sandwich, about the kind of campaigning that charities are doing. My noble friend talked about promoting grandparents’ rights, and I know that the noble Lord, Lord Ramsbotham, has a passionate interest in rehabilitation issues. As he said, the Government have encouraged the work of coalitions. One has to remember that to be subject to controlled expenditure, a campaign must fall within the definition set out in Clause 26. I honestly do not believe, without a huge leap of imagination, that the valuable work done by coalitions to promote the rehabilitation of offenders or grandparents’ rights could be interpreted as seeking the election or promotion of a particular party. By no stretch of the imagination could a reasonable person think that that was intended to secure the promotion of a particular party or candidate in an election. The noble Earl, Lord Sandwich, raised similar concerns.
The overwhelming amount of campaigning by charities will not fall within the definition of controlled expenditure here. I hope that that gives some reassurance, because I recognise the sincerity with which these concerns are expressed. Work that is being done to promote rehabilitation in prisons cannot be seen in any way as falling within the ambit and scope of activity that would bring it within PPERA-regulated controlled expenditure.
My noble friend’s amendment is intended to allow third parties that set up a coalition to move away from the common plan rules by allowing that coalition to have both its own spending limit and separate, individual spending limits for the members of the coalition. The coalition will be able to spend up to the national limit, and its members will also be able to spend up to the national limit on activities not taken forward as part of the common plan.
My noble friend was right to point out that the issue we are grappling with here has been in place since 2000; I accept that the range of activities increases under the Bill, but the problem has been with us since the outset. I point out that under existing legislation, there is nothing to stop a coalition establishing itself as a distinct third party. This allows the organisations and their members also to campaign on separate issues individually, with a separate spending limit.
The Electoral Commission has been very clear on this point, both in its guidance and in its evidence to the Commission on Civil Society and Democratic Engagement. That evidence gave the example of a lead campaigner which runs the coalition’s campaign and authorises its spending. Only the lead campaigner would be required to register with the Electoral Commission. Contributions to the coalition campaign from other third parties will be treated as donations or donations in kind to the campaign. In the words of the Electoral Commission,
“this means that the ... campaigners do not need to register themselves or report anything themselves to the Electoral Commission”.
Those campaigners would therefore be able to continue to campaign independently, too, to the maximum spending limit.
However, the Electoral Commission also made it clear in its Report stage briefing that it cannot support this particular provision. It noted that the amendment,
“would allow an individual or organisation to spend substantial amounts campaigning on an unlimited number of issues, as long as they are working together with someone else in each of those campaigns. For instance, someone could spend hundreds of thousands of pounds on each of a series of campaigns with others that attack different aspects of a political party’s manifesto in the run-up to an election”.
For example, it could be that you have an energy company that went into campaign with other energy companies, set up a coalition in favour of fracking and supported candidates who would support that. It could spend up to, say, £300,000 on that. Quite separately, under my noble friend’s amendment, it could be engaged in another campaign, with other participants, in which it tried to promote onshore wind power and could spend up to £300,000 on that. I am sure that that is not the intention of what my noble friend is proposing, but I fear that might well be the result his amendment would have.
I know that my noble friend has worked hard on this—as have many people—to try to find the right way to deal with this coalition issue. I do not believe that his amendment would have an effect that was helpful; and, as I indicated earlier, it is possible for a coalition to set itself up as a third party in itself. In these circumstances I invite my noble friend not to press his amendment, as it may have consequences that he does not intend. However, I hope we have indicated to the House, through the amendment that the Government have brought forward, that they have listened, have grappled with the issue and have built upon the amendment proposed by the noble and right reverend Lord, Lord Harries, in Committee.
(a) ”
Baroness Royall of Blaisdon (Lab)
My Lords, the inclusion of staffing costs is hugely burdensome for large and small campaigning organisations. We have heard that tonight and we have all received e-mails and had discussions with campaigning organisations. Like the Electoral Commission, our preference would be for all staffing costs to be taken out for the 2015 election period. However, we recognise that this is an excellent compromise and I urge the noble and learned Lord, Lord Wallace, to accept it. Later on this evening the noble and learned Lord will be putting a review into the Bill, which could be an opportunity to revisit these things, so I very much hope that he will accept the amendment.
Lord Wallace of Tankerness
My Lords, I thank the noble and right reverend Lord, Lord Harries, for his amendment, because I, too, recognise that this issue has been regularly raised in many of the meetings that we have had—as did my noble friend Lord Cormack and the noble Baroness, Lady Royall. The noble and right reverend Lord’s amendment seeks to exclude those staff costs associated with staff directly employed by a third party from the calculation of controlled expenditure for transport, press conferences and organised media events, and for public rallies and public events.
The starting point is to recognise that the PPERA Act 2000 has always required third parties to account for staff costs. I acknowledge that the Bill extends the range of activities that may incur controlled expenditure; these are the activities that the noble and right reverend Lord seeks by his amendment to remove from staff costs. The Bill seeks to retain the need for staff costs to be included. As I said, I recognise that there has been concern, first, over the unfairness of third parties having to account for these costs when political parties do not. I think that my noble friend Lord Tyler mentioned that. Secondly, there has been concern about the difficulty for third parties in calculating the staff time attributable to activities giving rise to controlled expenditure.
On the issue of third parties having to account for these costs while political parties do not, your Lordships will be aware that when Parliament passed the 2000 Act it felt that it would be transparent and proportionate for a third party to account for staff time. This was on the basis that a third party undertakes campaigning activities other than simply political campaigning, and where a third party enters into political campaigning its spending for those purposes should be fully transparent. I am sure that that was the underlying thinking behind the 2000 Act. I would at least hope that someone who is employed by the Liberal Democrats during an election is actually working for the Liberal Democrats. Indeed, I am sure that the other parties would hope the same on behalf of their staff. It is as transparent as it possibly can be.
Regarding the concerns of third parties over the difficulties associated with calculating staff time, this is an existing element of the regulatory regimes. Its operation in the last two general elections, alongside Electoral Commission guidance on this, highlighted that such costs can be accounted for without becoming overly burdensome. The Electoral Commission takes a proportionate approach in current guidance to the calculation of controlled expenditure, including staff costs, by clearly stating that third parties should make an honest assessment of the costs that need to be reported.
I have shared with a number of the groups which have come to see me since Committee the fact that we did examine whether it would be possible to put in a de minimis exemption. Quite frankly, having seen what its terms would be, it would give rise to more concern about legal definitions than it merited, particularly if we had a de minimis exemption in statute. That would make it much more difficult for the Electoral Commission to take that proportionate approach to the calculation of controlled expenditure which it has done through its guidance.
It should also be noted that with the increases in the registration threshold the smaller organisations to which my noble friend referred, be they charities or campaigning organisations, will not be subject to regulation and the need to calculate staff costs. The best way of addressing the de minimis question is by what we have done in raising the threshold and taking so many of these organisations outwith the scope of controlled expenditure altogether.
My noble friend quite properly paid tribute to the work done by volunteers, not only for charities but for so many campaigning organisations. In many respects, they are the people who make the wheels of campaigning and democracy go round. However, volunteer costs will continue to be excluded from the calculation of controlled expenditure. In Amendment 44, which the House has just agreed, volunteer costs are excluded from the calculation of staff costs by virtue of paragraph 1A(1)(c) of new Schedule 8A. They were excluded under the existing regime, but it is important to emphasise that volunteer costs will also be excluded under what we are proposing. There is a world of difference between volunteer costs, which will be excluded, and the great advantage that there can be to candidates or political parties of third parties putting paid staff into campaigning activity in constituencies, or into running media events, press conferences or rallies.
The result of the amendment proposed by the noble and right reverend Lord, Lord Harries, would be to exempt that kind of expenditure associated with paid staff being moved in at the time of an election to facilitate the electoral advantage of a particular party or candidate. It is for that reason that the Government do not feel able to accept the noble and right reverend Lord’s amendment, and I invite him to withdraw it.
Lord Harries of Pentregarth
I am disappointed with the noble and learned Lord’s reply. This was a very simple step that the Government could have taken to ease the regulatory burden on charities and campaigning groups. It is disappointing. He stressed the fact that staff costs were already in PPERA. With due respect, that is no good reason for continuing them, if we have an opportunity to improve that Act and make it not just workable but one which eases the burden on charities and campaigning groups.
The Minister stressed that the Electoral Commission had found it possible to regulate this, but the fact is, as he knows, that charities and campaigning groups find this whole area very burdensome. I really do not see how the Electoral Commission can possibly police this area and work out what percentage of the time has been allotted, let us say, to the mounting of a public rally. What kind of receipts or statements is it going to get from the charity concerned? I am afraid that I find it very disappointing and I would like to test the opinion of the House.
“(1) Section 94 of the Political Parties, Elections and Referendums Act 2000 (limits on controlled expenditure by third parties) is amended in accordance with subsections (1A) to (1E).
“(1A) In subsection (3), for paragraph (a) (but not the “and” after it) substitute—
“(a) during a regulated period—(i) any controlled expenditure is incurred in a part of the United Kingdom by or on behalf of a third party in excess of the limit for that part of the United Kingdom mentioned in subsection (5), or(ii) any controlled expenditure is incurred in a particular parliamentary constituency by or on behalf of a third party in excess of the limit mentioned in subsection (5ZA),”.(1B) In subsection (5)—
(a) in the opening words, for “(3)” substitute “(3)(a)(i)”;(b) in paragraph (a), for “£10,000” substitute “£20,000”;(c) in paragraph (b), for “£5,000” substitute “£10,000.”(1C) After subsection (5) insert—
“(5ZA) The limit referred to in subsection (3)(a)(ii) is 0.05% of the total of the maximum campaign expenditure limits in England, Scotland, Wales and Northern Ireland.”
(1D) In subsection (5A) for “(5)” substitute “(5ZA)”.
(1E) In subsection (10), omit the “and” at the end of paragraph (c) and after paragraph (d) insert—
“(e) the “maximum campaign expenditure limit” in a part of the United Kingdom is the limit imposed by paragraph 3 of Schedule 9 in relation to campaign expenditure incurred in the relevant period (within the meaning of that paragraph) by or on behalf of a registered party which contests all the constituencies in that part (and to which sub-paragraph (6) of that paragraph does not apply).””
Lord Wallace of Tankerness
My Lords, one of the aspects of the Bill that has received considerable attention and debate during our discussions, not only in your Lordships’ House but with campaign groups, relates to the registration thresholds, spending limits and constituency limits.
On registration thresholds, the point has been made repeatedly that small campaigners who do not incur much expenditure would be brought into the regulatory regime. This would, it has been claimed, impose undue administrative burdens on organisations that are not equipped to handle those responsibilities.
Noble Lords will recall that the Government have been considering this issue for some time. Indeed, my noble friend Lord Wallace of Saltaire gave a commitment on the first day in Committee that the thresholds would be revised. Extensive debate in Committee followed, at which representations were made to either revert to the existing PPERA thresholds, or to raise them further. I am grateful to my noble friend Lord Hodgson and to the noble and right reverend Lord, Lord Harries of Pentregarth, for leading that highly useful debate.
The Government have considered this matter and the appropriate level for registration thresholds further. Amendment 46 proposes to raise the levels to £20,000 in England and £10,000 in Scotland, Wales and Northern Ireland. The noble and learned Lord, Lord Hardie, has tabled an amendment proposing those levels be set at £20,000 for each constituent part of our United Kingdom. I simply observe that the Government’s amendment represents not only a substantial increase from the levels currently in the Bill, but reflects the original structure where the amounts were higher in England than in Scotland, Wales and Northern Ireland, no doubt due to the fact that there is a substantially greater number of constituencies and voters in England than in Wales, Scotland and Northern Ireland. Nevertheless, this is still a significant increase not only for England, but for Scotland, Wales and Northern Ireland, and it doubles the current registration thresholds in PPERA.
These thresholds will effectively exclude from the controls those campaigners who incur only small amounts of money. They will be able to campaign as they currently do, secure in the knowledge that unless they spend a substantial amount of money on controlled expenditure, they will not be subject to any aspect of the regulatory regime.
Bearing in mind what not only noble Lords but people outside sometimes hear in general debates or see in e-mails, it is also important to point out that these are thresholds for registration. It has sometimes been represented that there are limits on what organisations can spend, but the thresholds for registration are consistent with our objective of promoting transparency and accountability. We are maintaining the constituency limit of £9,750 throughout the regulated period to prevent a third party focusing a significant amount of its spending power on a small part of the United Kingdom.
Amendment 46 also specifies that, where a third party spends £9,750 in a constituency, it must register with the Electoral Commission. This is to ensure that the offence of spending more than £9,750 in a constituency is fully effective. I know my noble friend Lord Tyler is particularly interested in that point. As constituency limits apply only in relation to regulated periods involving a parliamentary general election, so the constituency threshold will have effect only in relation to such periods. We recognise that the current draft does not accurately reflect this, and the Government will accordingly bring forward an amendment at Third Reading to correct that.
In contrast, my noble friend Lord Tyler has proposed that rather than require a constituency registration threshold of £9,750, the registration threshold should be only £5,000. Reintroducing a lower constituency threshold than £9,750, as proposed by my noble friend, would only reinsert an extra layer of bureaucracy and confusion, particularly as the Government have also tabled Amendment 53, which would remove a post-dissolution limit of £5,850. The government amendment means that campaigners may spend the entire £9,750 throughout the regulated period, or just in the last few weeks before the election. Having just one constituency limit will be a much more straightforward and easier regulation to follow.
Finally, on spending limits, campaigners and Members of your Lordships’ House have sought to retain third parties’ spending limits at either the existing PPERA amounts, or even beyond those. The noble and learned Lord, Lord Hardie, and the noble and right reverend Lord, Lord Harries of Pentregarth, were clear on this point when we addressed this issue in Committee. The spending limits in the Bill for Scotland, Wales and Northern Ireland have particularly concerned campaigners. It has been argued that third-party campaigning in any part of the UK generally has a fixed cost; leaflets, for example, cost the same whether printed in Wales or England, and billboards cost the same, whether they are placed in Scotland or Northern Ireland. As a result, the spending limits for Scotland, Wales and Northern Ireland were felt to be disproportionately low. It is with that in mind that government Amendment 47 would uplift those limits by an extra £20,000 each. This would mean that there would be a spending limit of £55,400 in Scotland, £44,000 in Wales and £30,800 in Northern Ireland.
The Bill proposes spending limits for each of the parts of the UK which add up to £450,000. It is important to remind your Lordships that while these limits were initially to be over not quite a year—from the day after the European elections—if your Lordships approve our amendment which we will debate later, these will apply over the length of the reduced seven-and-a-half-month regulated period, which is also reflected in another government amendment. In fact, therefore, there is a larger amount in Scotland, Wales and Northern Ireland over a shorter period. Indeed, the amount for England is over a shorter period.
I have previously sought to explain that considerable amounts of campaigning can still be undertaken for that amount. In Committee, I gave the example of £390,000 buying a campaigner 40 million leaflets, a dozen front-page adverts in a national newspaper or even 780,000 telephone calls from a professional phone bank. I hope that noble Lords will agree that these government amendments as a whole will lead to a substantial increase in the registration thresholds and a significant uplift to the limits in the Bill for campaigning by third parties in Scotland, Wales and Northern Ireland.
I note that the noble and right reverend Lord, Lord Harries of Pentregarth, has further amendments on spending limits. I will respond to them when I wind up. I beg to move.
Lord Hardie (CB)
My Lords, before speaking to the amendment in my name, I thank the Government and the noble and learned Lord the Advocate-General for listening to the concerns from all sides of the House about the original proposal in the Bill to reduce the existing thresholds for registration as a recognised third party. The government amendment addresses these concerns and, rather than reducing the limits, they have accepted that the limits should be increased. It is appropriate that tribute is paid to the efforts made by the Government and the noble and learned Lord.
However, Amendment 46 does not address the anomaly that I mentioned in Committee, caused by having different registration thresholds for England and the rest of the United Kingdom. My amendment would remedy that by having the same registration thresholds throughout the United Kingdom. I noted that the Minister suggested that the distinction between England and the rest of the United Kingdom was the larger number of constituencies and voters. It is important to appreciate that there is a distinction that should be drawn between total expenditure by third parties in each constituent part of the United Kingdom, as against expenditure limits that determine whether the third party is required to register for recognition.
I accept that a distinction must be drawn between the various countries when one considers the total expenditure by a recognised third party in each country. That distinction reflects the number of parliamentary constituencies in each country and the greater number of voters in England than in any of the other three countries. That is the point that has been addressed since the 2000 Act, and is preserved in that Act, notwithstanding the amendments, in paragraph 3(2) of Schedule 10.
However, the threshold for registration is different. There is no justification for distinguishing between the different countries in this respect. The distinction was introduced in the 2000 Act, which followed the fifth report of the Committee on Standards in Public Life on the funding of political parties in the United Kingdom, which was presented to Parliament in October 1998. I referred to this in Committee and will not repeat these references. However, in Committee I explained that that report and the Government’s response to it never suggested any distinction between the different countries. There was a reference in a footnote which suggested that the reduced figure of £10,000 across the United Kingdom might be more significant in the three countries other than England, but it did not go as far as suggesting that there should be a difference.
I have been unable to find any subsequent explanation for halving the limit of £10,000 allowed for England in the other countries of the United Kingdom. I do not understand the need for a distinction when it comes to the threshold for registration. It is illogical and risks inhibiting local people from engaging in effective political debate about issues that are of concern in their constituency at a crucial time in the electoral process, by imposing upon them what my noble and right reverend friend Lord Harries of Pentregarth described at Second Reading as a,
“bureaucratic burden on small charities or campaigning groups, especially during the actual election period”.—[Official Report, 22/10/2013; col. 914.]
For example, suppose that a local hospital is threatened with closure and a group of individuals in the constituency wish to make this an issue at the general election but stop short of fielding their own candidate. If some candidates in that election support the retention of the hospital while others do not, the expenditure by the local group will be controlled expenditure. If this occurs in England, the pressure group can spend £20,000 before the need for registration and the administrative burden that entails, but if it occurs in Scotland, Wales or Northern Ireland, it can spend only £10,000. The expenses of running such a campaign in Scottish, Welsh and Northern Irish constituencies will be similar to those in many English constituencies. Do the Government seriously suggest that the cost of transport to meetings or venues of meetings in every English constituency is double that in any constituency elsewhere? In his reply, will the noble and learned Lord the Advocate-General explain the justification for this distinction?
My final point is that my amendment is not academic. Apart from being fair to all people across the United Kingdom who wish to campaign in the course of a general election about a matter of local importance to them, there is also a question of perhaps greater significance: that the consequences of not registering but exceeding the registration threshold are a criminal offence under Section 94 of the 2000 Act. Why should electors face prosecution in Edinburgh, Cardiff or Belfast for spending £6,000 on a campaign without registering as recognised third parties but have immunity in Newcastle for identical activity?
Lord Wallace of Tankerness
My Lords, I thank all noble Lords who have contributed to this debate. I express particular appreciation of the welcome that has been given to the very significant increase in the registration thresholds that the Government have brought forward and to the uplift in the spending limit in Scotland, Wales and Northern Ireland. To follow on from my noble friend Lady Williams, it is certainly useful to remind ourselves, as she also did very eloquently in Committee, of the core purpose of the Bill, which is to ensure that our electoral and democratic system is not hijacked by people who can spend large amounts of money without proper accountability, and that there is proper transparency. It is important that we keep those important points in our minds when we consider the different measures.
Perhaps that is consistent with the point made by my noble friend Lord Tyler, which I addressed in my opening remarks, on not wanting a particular constituency to be overwhelmed. He proposed a threshold of £5,000 and said that he did not wish to find a situation where an organisation could come rattling into a constituency with one week to go, spend £19,999, get away with it and not be accountable for that. It is important that the Representation of the People Act might have a certain impact on that kind of expenditure, if it offended that Act; under the Bill that expenditure is increased from £500 to £700. I ask my noble friend to reflect on that, although I know that he does not overlook it as he knows full well about it.
But, more importantly, there is not that kind of loophole. My noble friend seems to have overlooked—and I did try to draw his attention to it in my opening remarks —that it will be an offence under the Bill to spend more that £9,750 in a constituency, even where the RPA does not apply. One of the consequences of a situation where we are amending another piece of legislation is that it is not always self-evident. Amendment 46 says:
“In subsection (3), for paragraph (a) (but not the “and” after it) substitute … (ii) any controlled expenditure is incurred in a particular parliamentary constituency by or on behalf of a third party in excess of the limit mentioned in subsection (5ZA)”.
I think that the purpose of that is in fact to make a registration requirement if the constituency limit of £9,750 is reached, or at least that is what I am reliably advised and I know that it is certainly the intent that there should be a registration of the maximum for each constituency to make more effective the criminal sanction that will follow if a party or third party spends in excess of £9,750. His example of spending £19,000 could not actually happen under the Bill, in line with the proposed amendment.
Lord Tyler
Whether it is £9,000 or £19,000, my general point is that I have been unable to find anything in electoral law where there is a spending limit but no paperwork for anybody to provide that shows that they are keeping within that spending limit. It seems to me that there is a potential anomaly. I am just asking my noble and learned friend to be absolutely certain before, as has been said, we send back to the other House a potential anomaly in these circumstances.
Lord Wallace of Tankerness
My Lords, I do not think that there is an anomaly. One of the reasons for putting in the registration requirement was to try to address the kind of anomaly that my noble friend mentions. We share the same objective and if he thinks that there is a loophole there then I will certainly make sure that we look at that, because these provisions have been worked up over recent days. I think that it is okay, but it is probably quite good counsel that we should check to make sure that that is in fact the case.
The noble and learned Lord, Lord Hardie, made his case for having similar registration thresholds in Scotland, Wales and Northern Ireland as in England, and I can see some force in what he is saying. He says that he has not been able to divine why there has been a difference, which has been in place since the very outset. Since PPERA, a distinction has been made: it was £10,000 for England and £5,000 for Scotland, Wales and Northern Ireland. I will not allow myself the cheap debating point that that was what the noble and learned Lord proposed in Committee, but I think that his purpose behind that was to make sure that the Government considered the threshold properly.
It is interesting too—I will finish this point and then let the noble and learned Lord come in—that what is actually proposed by the Government is also the architecture proposed by the commission chaired by the noble and right reverend Lord, Lord Harries of Pentregarth. The commission report proposes £20,000 for England and £10,000 for Scotland, Wales and Northern Ireland.
Lord Hardie
I was going to say that I would not add such an adjective. The noble and learned Lord will remember that I tabled two amendments: the first was to preserve the status quo and the other was to seek an increase in the limits. As the noble and learned Lord has much more experience in political matters than I have, he will appreciate that it is useful to have a stop-gap in case the main objective is not achieved. In relation to the comment about the point made by my noble and right reverend friend Lord Harries, the noble and learned Lord might remember that, in Committee, when the noble and right reverend Lord was speaking, having heard my suggestion that there should be uniformity for registration levels, he indicated that he thought that there was some force in that and that it had not been a point considered by the commission.
Lord Wallace of Tankerness
My Lords, I was going to say that I was aware that the noble and learned Lord had also tabled an amendment in that group to raise the threshold to provide an equalisation—at, I think, £25,000 if my information serves me correctly.
It is a fair question as to why there is such a difference. I think one of the reasons, which I gave at the outset, is that there is a difference in the number of voters and number of constituencies. It is also the case that spending of less than £20,000 could have a more significant impact in, say, Northern Ireland, which is a very compact area with a very focused media. Spending of less than £20,000 could have a much more significant impact there than in England, and I suspect that the different political and media circumstances was one of the considerations as to why the difference came about in the first place.
There are one or two points made by the noble and learned Lord that I could not quite follow. He said that if there was a hospital closure in a particular constituency, a pressure group could spend up to £20,000 in England but just under £10,000 in Scotland. Of course, following on from the debate that we have just had about constituency limits, they would be restricted to £9,750 in Scotland, Wales, England and Northern Ireland regarding the kind of example that he gave. He suggested—I apologise if I misheard him—that someone could be prosecuted for spending £6,000 in campaign expenditure in Edinburgh but not in, for example, Birmingham. I think that he will accept that, with a £10,000 threshold, that would not happen in either Birmingham or Edinburgh. I do not think that I misheard him, but sometimes people get that impression and suddenly there are concerns.
Lord Hardie
The noble and learned Lord is correct; it was a mistake on my part, I should have said £12,000. The point was that it is simply over the limit in Scotland but under the limit in England.
Lord Wallace of Tankerness
My Lords, we recognised the core expenditure that was needed in Scotland, Wales and Northern Ireland in order to mount campaigns and that has been reflected by—for the first time, actually—making a distinction and giving an uplift for Scotland, Wales and Northern Ireland over and above the percentages that have otherwise been applied.
The noble and right reverend Lord, Lord Harries of Pentregarth, proposes reverting to the total national spending limit of £988,500. As I have explained, the Government have brought forward amendments to increase spending limits for Scotland, Wales and Northern Ireland but, as I explained in Committee, only a few political parties at the last general election spent more than £390,000—the total now would be £450,000—on the full range of activities that we now wish to extend to third parties. Only the Conservative Party, Labour Party, Liberal Democrats and UKIP spent more than £390,000 and, I assume, more than £450,000.
As my noble friend Lady Williams said, there are risks associated with allowing third parties to incur vast amounts of spending. Given that third parties campaign for or against electoral success of political parties, it is a very reasonable assumption that a relationship can and does develop between some third parties and political parties. This opens up the potential for supporters of political parties to demonstrate their backing by diverting their funding to an aligned third party and away from the political parties themselves, which have their own limits. I do not think it is right that, where limits are imposed on political parties, they can be circumvented in this way.
Even the limits that we have allow very extensive campaigns to be mounted. I do not wish to indulge in too much repetition, but £390,000—and of course it has gone up by £60,000—is 40 million leaflets, a dozen front-page adverts in a national newspaper, or 780,000 telephone calls from a professional phone bank. These are not insignificant campaigning activities and I therefore believe that the judgment that we reached in coming to these figures is the right one.
I therefore urge the House to support the Government’s amendments with regard to thresholds and I invite noble Lords not to press their amendments.
(a) in relation to England, 2% of the maximum campaign expenditure limit in England;(b) in relation to Scotland, £20,000 plus 2% of the maximum campaign expenditure limit in Scotland;(c) in relation to Wales, £20,000 plus 2% of the maximum campaign expenditure limit in Wales;(d) in relation to Northern Ireland, £20,000 plus 2% of the maximum campaign expenditure limit in Northern Ireland.”;”
Baroness Hayter of Kentish Town
My Lords, we also strongly support the amendment. It is not the provision’s intention that we have problems with but its workability. It will add an enormous bureaucratic burden. When people campaign against the proposed path of HS2, flight paths around Heathrow or fracking and so on, that is not divided up by constituency. It is strange that a Government who are cutting red tape elsewhere, and who on Monday said that they could not possibly ask special advisers to list their meetings with lobbyists, seem to want this for really small organisations. Amendment 52, which limits the requirement to telephone calls and literature aimed at households, is immensely sensible. I hope that the Government will do one of two things: either accept the amendment or put off their new rules until after the next election.
Lord Wallace of Tankerness
My Lords, we have just had a discussion on constituency limits, and it was also covered extensively in Committee. The House has agreed to a government amendment to remove the post-Dissolution limit to make the provision less complex, yet there remains some concern about it. From what was said in a previous debate, I think that my noble friends Lord Cormack and Lord Tyler believe that there should be some limit on constituency spending. My noble friend Lord Tyler argued for a lower limit but now wants lots of expenditure to be incurred without any limit at all. That is a concern that we have.
It is important to put this in context. Constituency spending limits do not replace the existing controls under the Representation of the People Act 1983. Those long-standing rules stipulate that third parties campaigning for or against a particular candidate may spend only up to £500 in doing so. Other than raising that amount to £700, and requiring records to be kept of such expenditure, this Bill does not affect those provisions.
In contrast to the RPA rules, Clause 28 introduces a new limit on how much a third party that is promoting the electoral success of parties, or candidates who support particular positions, can spend in individual constituencies. As has already been explained, the limit is £9,750. The reason for this amount—which might, on the surface, appear somewhat odd—is that it is equivalent to 0.05% of the maximum campaign expenditure limit applied to political parties. This limit will apply for the duration of the regulated period for a UK parliamentary election.
As has already been rehearsed, the need for constituency limits is profound. It is not right that candidates and parties should effectively be bowled out of the field purely because well funded campaigners are able to outspend them. Elections are the principal domain of political parties and candidates, and those who are not campaigning for their own electoral success should still be able to participate: that is the essence of our democracy. However, in these circumstances, we believe that the voices of such campaigners do not diminish the voices of the political parties and candidates and that constituency limits will ensure that.
The Bill makes clear that a third party’s expenditure would be wholly attributed to a constituency only if that expenditure had “no significant effect” in any other constituency. That means expenditure in a local area could, of course, be attributed to several constituencies if the effect was felt in them all. Expenditure with a wider regional, or even national, reach would be attributed proportionately to all the relevant constituencies.
My noble friend Lord Tyler has proposed an amendment to dampen the effect of these constituency limits. The amendment proposes that only certain costs —in other words, only expenditure related to certain activities—should count towards constituency limits. Specifically, the amendment says that only costs associated with election materials should be counted. That would mean the costs related to leaflets, mailshots and adverts, all of which must also have been either specifically addressed to or delivered to households in a constituency, and unsolicited telephone calls to such households.
I recognise the issue which my noble friend is trying to address, but I believe there are drawbacks. For instance, significant activities such as rallies and events would not be regulated at a constituency level if his amendment passed. I gave some of my colleagues an example of Scottish Liberal Democrat pre-election rallies in Edinburgh East. Anyone who knows Scotland will know that Liberal Democrats would not be spending money in that constituency; no doubt Edinburgh East Liberal Democrats will now write to me and say, “Do not let us down”. That was a national campaign, but an event in my own former constituency could not, by any stretch of the imagination, relate to any other—not even Caithness, Sutherland and Easter Ross.
In addition, material otherwise distributed or displayed would also not count towards the constituency limit. A third party could therefore freely distribute leaflets by hand in a town centre, or, indeed, in shopping areas in different parts of a constituency, in the knowledge that, because they are not being delivered to voters’ homes, the associated costs need not be accounted for in that constituency’s limit.
We are concerned that these are key gaps which would allow a third party to target an area by holding large partisan events, or flood an area by handing out election material in the street or in shopping precincts. Allowing only certain activities to count towards constituency limits would undermine the entire principle of constituency limits, on which my noble friend spoke so eloquently earlier. For that reason, I urge my noble friend to think again and to withdraw his amendment.
Lord Tyler
My Lords, I am rather disappointed by that. Throughout today’s debate and, indeed, on previous occasions, many noble Lords—particularly my noble friends on the government Front Bench—have quoted the advice of the Electoral Commission. I apologise to the House for detaining it for a minute, but this is what the Electoral Commission says about this amendment:
“In principle, we support Amendment 52, tabled by Lord Tyler and others. It narrows the scope of the constituency limits so that they only cover spending in respect of election material sent to voters and households in a constituency, and unsolicited phone contact with such voters”.
Then, in heavy type, it continues:
“We see benefits in defining the scope of activity covered by the constituency controls more narrowly than in Part 2 of the Bill generally”.
The Electoral Commission feels there is a need to deal with this question and has identified it as one of the problems with campaigning organisations. Even if the amendment in our names does not meet the particular point and is not the right way to go about it, there is clearly a need to do something. Will the Minister undertake, in these last few days before Third Reading, to go back to the Electoral Commission and discuss this issue with it again? On that basis, I am prepared to withdraw the amendment.
Baroness Hayter of Kentish Town
My Lords, we have Amendment 62A in this group. In order that the notes in reply can be thrown away, I give notice that I will not speak to it. Essentially, the issues were covered in the earlier group. Nevertheless, we retain our concerns about constituency limits and would very much like to have voted on the previous amendment, but there we are. However, we support the other amendment.
Lord Wallace of Tankerness
My Lords, the noble and right reverend Lord, Lord Harries of Pentregarth, has tabled an amendment which would raise the constituency limits from being the equivalent of 0.05% of the maximum campaign expenditure limit applied to political parties to 0.1013%. This would amount to almost £20,000—specifically, £19,753.50. As the noble Baroness indicated, we have already debated the issues on constituency limits. I have explained the necessity of constituency limits being in place. Without these limits in place, a third party could otherwise be able to focus the entirety of its spending power on a small part of the United Kingdom, outspending even candidates and parties in that location. That point was forcefully made by my noble friends Lord Cormack and Lord Tyler. It is important that those limits are set at an appropriate level and it is our view that the noble Lord’s amendment would not be appropriate.
I will not repeat the earlier points. We wish to promote accountability and transparency. Constituency limits relate to campaigning for or against a particular party and instances where a campaign is intended, or may reasonably be regarded as intended, to support groups of candidates who might hold particular views or support particular policies. Where such campaigning is subject to a national limit, it is also right that it is subject to a proposed constituency limit but we believe that that must be at a proportionate level. The comments we heard in earlier debates suggest that the limit we have set is too generous. Indeed, even my noble friend Lord Tyler might think it. However, we think that the limit we have set is proportionate, especially as we have removed the distinction between spending throughout the regulated period and spending during the period between the dissolution and election day. The limits are intended to remove undue influence, particularly by those campaigners who can afford to spend significant amounts of money. I do not believe that the noble and right reverend Lord’s proposal would be proportionate. It could allow substantial sums of money—sums, as we have heard, such as £12,000, which is the candidate’s limit. To have a third-party sum that is almost half as much again does not appear to be proportionate. I therefore urge the noble Lord to withdraw his amendment.
Lord Harries of Pentregarth
My Lords, I can well appreciate the noble and learned Lord’s answer to that. The issue that is continually raised by the commission I chair is the rationale for always linking third-party spending and regulation to political-party spending and regulation. That has never really been fully set out. I take the point that the noble and learned Lord has made but I hope that he will take on board the fact that there is continuing concern among charities and campaigning groups about constituency spending, and not just the spending but the regulation for campaigning in constituencies. As the noble and learned Lord knows, there is also great concern in the Electoral Commission. Even if he is not prepared to consider this amendment again, will he look seriously at Amendment 52 in the name of the noble Lord, Lord Tyler? That would help significantly. If he is not sympathetic to my amendment, I hope that he might be able to look again at Amendment 52 and bring something back in relation to it. With that, I beg leave to withdraw the amendment.
Lord Wallace of Tankerness
My Lords, these amendments address concerns raised by noble Lords in Committee and by campaigning groups in the discussions we have had with them. It is important to guard against the risk that significant donors might use third parties to aid political parties and evade the party spending controls. That is why at present third parties campaigning nationally during regulated elections are subject to rules on donations similar to those of political parties.
However, recognised third parties need to report only donations related to controlled spending, and currently are required to do this only once at the end of every campaign, as part of a return to the Electoral Commission after the relevant election, rather than at the regular intervals required of the political parties. Therefore, Clause 32 introduces important measures to improve transparency by ensuring that people know the source of reportable donations received by third parties during the regulated period via quarterly and weekly donation reports.
I hope that noble Lords support the principle of providing information on reportable donations during the election campaign. However, the Government acknowledged in Committee that the right balance needed to be struck between increased transparency and the avoidance of overly burdensome reporting requirements. As set out in the Bill, only third parties that are required to register with the Electoral Commission are required to provide reports on the donations they receive. The amendments that this House agreed earlier today to increase the registration thresholds mean that only third parties which incur controlled expenditure of more than £20,000 in England or more than £10,000 in each of Scotland, Wales or Northern Ireland will have to produce donation reports.
Furthermore, government Amendments 81 and 89 remove the need for recognised third parties to provide nil reports. Instead, a recognised third party will be required to provide a donations report to the Electoral Commission only when they receive a reportable donation. Only donations over £7,500 are reportable. If a third party does not receive a reportable large donation, they will not have to provide a report.
The Government have also brought forward amendments to take account of snap general elections. The Government accept that these provisions, while important in the regulated period for an election the date of which is known in advance, may cause problems if they were to be applied to an early parliamentary election. If a snap general election were to occur, third parties would have to provide weekly reports to the Electoral Commission only during the post-dissolution period, and then only if they receive a reportable donation. They would not have to prepare quarterly reports.
The Government believe that these amendments meet the concerns of charities, particularly in relation to the removal of nil reporting, which was a key area of concern for both the NCVO and the Commission on Civil Society and Democratic Engagement. They retain the vital transparency measures introduced by the Bill, but ensure that unnecessary burdens are not placed on campaigners.
I apologise to my noble friend Lord Hodgson, who asked me about nil returns in the debate we had on coalitions. I assure him that if a coalition spends less than the registration threshold, it will not have to produce a spending return. If a coalition does not receive a donation, it will not have to provide a nil return.
At present, recognised third parties have to provide details of their campaign income and expenditure to the Electoral Commission after a UK general parliamentary election and after the poll for certain other elections. Campaigners pointed out that many third parties register with the Electoral Commission with the intention of incurring controlled expenditure but at the end of the regulated period find that they have not spent above the registration threshold. While it is important to ensure transparency in spending any donations, we have listened carefully to the concerns of campaigners and, as I have said previously, we do not want to impose unnecessary administrative burdens, particularly on small campaigners.
To ensure that these provisions are proportionate, government Amendment 98 provides that a third party which registers with the Electoral Commission but does not incur controlled expenditure in excess of the required registration threshold does not have to submit a spending return or a statement of accounts. The intention is that a recognised third party should also have to prepare a report if its expenditure in a constituency, in the case of a regulated period involving a parliamentary election, exceeds the constituency threshold that will from now on apply to non-recognised third parties. We recognise that the amendment does not currently do that so we will bring forward a small amendment at Third Reading to put that right.
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, the Bill provides that a statement of accounts should also be submitted to the Electoral Commission. To ensure that this additional obligation is proportionate, individuals would be excluded from this requirement. The Government believe that not to exclude individuals would result in an unwarranted intrusion into their personal financial matters. However, individuals who exceed the spending threshold would still be required to provide details of their campaign income and expenditure, as is currently the case.
Under the Bill as introduced, the Government also provided that those third parties, such as companies, charities and trade unions, which provide statements of accounts under another legislative framework that could be reviewed by the Commission would also be exempt from any requirement to provide a separate set of accounts.
Government Amendments 108 to 111 make minor amendments to improve the working of this arrangement. Government Amendment 112 provides that a statement of accounts can be sent to the Electoral Commission in a longer timeframe: within nine months of the end of the regulated period where they do not have to be audited, or 12 months where they do have to be audited.
Again, the Government believe that these amendments, alongside the existing provisions in the Bill, ensure that transparency is improved without overly burdensome requirements being placed on third parties. I therefore beg to move.
Baroness Royall of Blaisdon
My Lords, I, too, welcome the amendments that have been put forward by the Government, as far as they go, but as the noble and right reverend Lord, Lord Harries, said, there is more work to be done and it would be excellent if the Government would commit to come back at Third Reading with further amendments. This might seem a bit curmudgeonly, because the Government have received plaudits throughout our debate this afternoon for having moved a long way and tabled many amendments. However, if it had not been for the noble and right reverend Lord, Lord Harries, his commission, which has also received praise this afternoon, and the excellent work that it has done, the Bill would still be the exceedingly bad Bill that it was when it arrived in our House, precisely because it was rushed, did not have proper pre-legislative scrutiny and a great deal of it was not necessary. So while I thank the Government for having listened—and they have moved—I place on record that none of that would have happened without the noble and right reverend Lord, Lord Harries, and his fellow commissioners, who undertook the consultation that the Government themselves should have undertaken in the first place.
Lord Wallace of Tankerness
My Lords, I acknowledge the welcome that has been expressed for these amendments, which lift a considerable administrative burden from campaigning organisations. I note what the noble and right reverend Lord, Lord Harries, has said, echoed by the noble Baroness, Lady Royall.
I will look specifically at what the noble and right reverend Lord said, but I know that there were a number of other things that the Government looked at and decided they did not wish to accept—it is not as if they have come out of the blue. However, I will check that the suggestions that we looked at and decided not to go ahead with were those to which he referred; it is only fair that we do so. However, I do not want to do that with any raising of expectation, because, as I think the noble and right reverend Lord will realise, we have given considerable consideration to these points. I ask the House to accept the amendments.
“Returns as to controlled expenditure
(1) Section 96 of the Political Parties, Elections and Referendums Act 2000 (returns as to controlled expenditure) is amended as follows.
(2) For subsection (1) substitute—
“(1) Subsection (1A) applies where, during a regulated period, any controlled expenditure is incurred by or on behalf of a recognised third party in a relevant part of the United Kingdom in excess of the limit for that part mentioned in section 94(5).
“(1A) The responsible person must prepare a return in respect of the controlled expenditure incurred by or on behalf of the third party during that period in each relevant part of the United Kingdom.”
(3) In subsection (7)—
(a) in the opening words, for “(1)(a)” substitute “(1A)”;(b) in paragraph (a), omit “falling within subsection (1)(a)”.”
(a) a statement of the income and expenditure of the third party for the regulated period, and(b) a statement of its assets and liabilities at the end of that period.”
“Candidate’s personal expenses not to count for local election expenses limit in England and Wales
(1) In section 76(5) of the RPA 1983 (exclusion of personal expenses from limitation on election expenses), after “subsection (1A) above” insert “or a local government election in England or Wales”.
(2) Subsection (3) applies where, before the relevant date, an enactment—
(a) provides that section 76 of the RPA 1983 is to have effect in relation to an election of any description as it has effect in relation to a local government election in England or Wales, or(b) otherwise makes provision (however expressed) to the effect that that section applies to an election of any description as it applies to a local government election in England and Wales.(3) If the date of the poll at an election of that description is on or after the relevant date, section 76 of the RPA 1983 applies to the election as amended by subsection (1).
(4) In this section—
“the RPA 1983” means the Representation of the People Act 1983,
“the relevant date” means the date on which the amendment made by subsection (1) comes into force, and
“an enactment” means an Act of Parliament or any subordinate legislation (within the meaning of the Interpretation Act 1978).”
Lord Wallace of Tankerness
My Lords, government Amendment 117 would exclude personal expenses from being considered for the purposes of candidates’ expenses limits at local elections in England and Wales. I do not think that this issue has yet been referred to in any of our deliberations.
The Government have brought forward the amendment to bring greater consistency to the treatment of personal expenses across the different types of election. It will also ensure that the Access to Elected Office for Disabled People Fund can successfully continue operating following the expiry of existing secondary legislation.
The access to elected office fund was set up by the Government to award grants to disabled people who are, or go on to become, candidates at elections. The fund’s grants are intended to help candidates overcome barriers to elected office that might arise as a result of their disability. Currently, such awards from the fund would not count towards candidates’ spending limits at certain elections, as they would be considered personal expenses. Noble Lords will no doubt be aware that personal expenses are exempted from candidates’ limits at certain elections, such as UK general elections, police and crime commissioner elections and Greater London Authority elections, among others.
However, there is currently no such exemption at local government elections. Given the generally low expenses limits that apply at those elections, recipients of the fund are likely to find themselves in the unusual and punitive position of having their entire expenses limit taken up by fund awards. It is a distinct unfairness that disabled candidates should have to account for costs associated with their disability when campaigning in elections. The Government therefore brought forward secondary legislation last year so that fund awards would be excluded from candidates’ spending limits at all elections. That secondary legislation will cease to have effect in June this year. The Government therefore consider that the Bill presents a key opportunity to make such an exclusion permanent, while also rationalising the position of personal expenses across various elections.
Rather than merely exclude disability expenses financed by fund payments from candidates’ limits, as the order does, this amendment instead extends the personal expenses exemption to local elections, including parish and community council elections, in England and Wales. It will cover any disability-related expenses incurred by a candidate personally, regardless of whether they are financed by the fund. This is a sensible amendment. It seems unfair to require that disability costs should count towards candidates’ spending limits at local elections when they are already excluded from certain other elections.
Amendment 127 is a related amendment that will allow the new clause inserted by Amendment 117 to be commenced by order. I beg to move.
Baroness Hayter of Kentish Town
My Lords, I simply give the amendment a warm welcome. We previously discussed this with the noble Lord, Lord Wallace of Saltaire, probably in the Moses Room last year, but we had not seen this clever device to add the provision. We should congratulate the Government on finding a nice wheeze for this.
Lord Wallace of Tankerness
My Lords, perhaps I may reassure the noble Baroness, Lady Royall, that she is not the sole spectre at the feast. Indeed, as I think the noble Lord, Lord Campbell-Savours, indicated when he moved the amendment, he does not expect the Front Benches to fall into line with him. We had this debate four weeks ago. Admittedly, there are differences in this amendment—but, frankly, in the intervening four weeks the Government’s position has not changed.
That is not to say that raising these issues is not without merit. As my noble friend Lord Cormack said, it may serve to stir up the leaderships of all three parties. I endorse what was said by my noble friends Lord Tyler, Lord Cormack and Lord Hodgson, and by the noble Baroness, Lady Royall, about politics being a noble calling. We in your Lordships’ House like to think that we make a contribution. We may disagree with each other—sometimes quite strongly—but we recognise, across the House, that we have good motives for coming into politics. Although we operate, vote and make speeches by different lights, we nevertheless have the common good of the nation at heart.
However, the proposal we are dealing with this evening is not necessarily the one and only way to restore the nobility of the political calling. The rules on party financing have been the cause of much discussion. The noble Baroness, Lady Corston, gave us a very good historic perspective when she mentioned the Houghton committee. This has gone on for some time. Most notably, this Government led talks on the subject between the three main political parties during 2012 and 2013. In 2010, each of the three parties had a manifesto commitment of one kind or another to some reform of party financing.
It is a complex issue. I noted the four points that the noble Lord, Lord Campbell-Savours, said had been given as excuses. I checked the speech I made in Committee, and we advanced none of the four then. In particular, I made it very clear that talks were no longer continuing, and I quoted from the Written Ministerial Statement issued by the Deputy Prime Minister on 4 July 2013 when he announced that the talks had not produced results—I think they met seven times—and that it was clear that the reforms would not now go forward in this Parliament.
The noble Lord’s point was that some people were arguing that talks were still going on. I did not seek to do that, but it is a legitimate expectation that all parties will seek to find a way forward on this complex issue in the next Parliament. I was not party to these talks but I am told that they were close. The Government want party funding reform but, as the noble Baroness, Lady Royall, said, it should come as part of a package and by consensus. Some have asked for donations to be treated in the same way as charitable giving, and I can understand the relevance of that comparison from a tax point of view. However, I am not sure that the public necessarily see donations to charities—many of which we have been discussing in the course of our debates on the Bill—in the same light as giving support to political parties through the tax system.
I suspect that many noble Lords support state funding of political parties. As has already been mentioned, we have Short money, Cranborne money and the money that goes to the Royal Mail. However, this would be a significant step. Short funding is probably not mentioned on doorsteps. However, although I was probably still a student when it first came in, I remember that it was a major step which attracted quite a lot of discussion. It would be naive to think that a step as significant as the Exchequer funding political parties in this way through the tax system would not be devoid of any comment, which is why I think all parties have sought to go forward together by way of consensus.
As my noble friend Lord Cormack said, I do not believe that this is the appropriate Bill for dealing with this issue, but it is the Government’s hope that further discussions will take place in the next Parliament. My noble friend Lord Hamilton said that he wanted more done after the next election. I would echo that. Anyone from all party leaderships who reads our debates and follows this will realise that there is an appetite among Members of all parties that this matter should not be allowed just to gather dust in the next Parliament. But I do not believe that it is appropriate to act in the context of this Bill or at this time and without a bigger package that commands a consensus among all the parties. I therefore invite the noble Lord to withdraw his amendment. If he seeks to push it to a vote, as he has indicated, the Government will not support his amendment.
Lord Campbell-Savours
My Lords, I shall push my amendment to the vote. I thank all those who contributed in a most passionate way to the issues that we have raised in this debate. In the 1997 to 2001 Parliament, we were told that the matter would be resolved during the next Parliament and it was not. In that Parliament we were told that it would be dealt with in the next Parliament. Hayden Phillips came in the next Parliament and it was not resolved. We were told that it would be resolved in this Parliament. Again, there have been talks but it has not been resolved. We will go through Parliament after Parliament after Parliament ducking this issue. That is why it is important that we take a decision now. Some of us are becoming exasperated by the ducking and weaving.
For me, one of the great joys of coming to the House of Lords from the Commons is that I have always regarded ours as the House of free thinkers. In the Commons, you are held in a rigid, party, heavily whipped atmosphere where there is very little room for the kind of flexibility that we can exhibit as Members of this place. Because of the rigidity of debate in the other place, I believe that party reform ultimately will come through this House and not from the House of Commons. That is why tonight I am going to push my amendment to a vote. As I have said, I believe that this is the House which at the end of the day will make the reforms. I do not know, but it might well be that I will be defeated this evening—although I suspect some people will be surprised by the names of those who move into our Lobby.
As has been said, it is never the right Bill, the right time or the right moment to spend money, but this is the right time to take a decision. I should like to test the opinion of the House.
Baroness Hayter of Kentish Town
My Lords, I am glad that the noble Lord, Lord Tyler, made that point about the Charity Commission, because no matter how good the commitment, we want to see this co-ordinated guidance. Having this requirement in the Bill would mean that it was not just a promise but an actuality.
In addition to making sure that it happens, the provision would be a signal to the charities, given that they will be caught by new restrictions under the Bill that they have not dealt with before, that the House has taken seriously the need for them to be absolutely clear and for there to be co-ordinated guidance on that. There is no downside to having it in the Bill, so I hope that the noble and learned Lord has one yes that he can pull out of his bag at this stage.
Lord Wallace of Tankerness
My Lords, my noble friend Lord Hodgson tabled a similar amendment in Committee and brings forward this amendment to require the Electoral Commission to produce guidance for third parties and for that guidance to be co-ordinated with the Charity Commission, particularly to consider the impact of Part 2. As has been said, the issue was discussed at length in Committee, and it is clear to the Government that there is a lack of understanding among third parties and charities as to exactly what are their responsibilities under existing PPERA provisions—the point made by my noble friend Lord Tyler. That the Bill amends those provisions reinforces the need for clarity. The Government made clear in Committee that the issue of guidance and whether a duty should be imposed on the Electoral Commission would be revisited at Report.
Those are not just honeyed words, because since our debates in Committee, the Government have discussed with the Electoral Commission the importance of its producing clear guidance. It is essential that such guidance take into account the impact on charities in particular. Although charities do not campaign in support of political parties at elections and only two have ever registered as third parties to date, there is still an obvious need to ensure that they fully understand the workings of the new regime—that has been made very apparent during our many debates today—and whether they might be held to account by the new provisions as a result of their activities.
As the independent regulator, it is of course for the commission to provide this guidance, but the Government agree that the views of the charities regulator, the Charity Commission, must also be taken into account. Indeed, this involves not just the Charity Commission but its equivalent in Scotland, OSCR, and the Charity Commission for Northern Ireland. Suitable guidance, particularly aimed at charities, can come only if it is jointly produced.
I am pleased to note what the Electoral Commission stated in its briefing to Parliament. If your Lordships will allow me, I shall repeat the words already cited by my noble friend Lord Horam, because they are important. That is why this is substance, not just words. The commission’s precise words are:
“We are committed to working with the UK’s three charity regulators to ensure that charities have clear and reliable guidance about how to comply with the rules. The Electoral Commission and Charity Commission for England and Wales will produce a joint introductory guide for charities that need to understand if their activities are covered by non-party campaigning rules ... Our guidance will explain key areas of the rules such as deciding what counts as regulated spending, how to manage regulated spending, and how the rules cover co-ordinated campaigning in coalitions”.
The Government welcome that clear commitment. At the big risk of quoting again from the e-mail from the Charity Commission, sent at 18.08 yesterday evening, in that e-mail, under the heading, “Co-ordinated guidance for charities that need to understand if they are covered by the rules”, Mr Rowley states:
“The Charity Commission and the Electoral Commission have committed to producing co-ordinated guidance along with a joint introductory guide for charities ahead of the regulated period for the 2015 General Election should charities not be exempted. We are sensitive to the particular help that some charities may need to comply with both electoral and charity law. In the past we have worked closely with the Electoral Commission to ensure their advice for charities on complying with electoral law and our guidance on charities and political campaigning in an election period is aligned and have continued to work closely together throughout the passage of this Bill”.
The Government will continue in our discussions with the Electoral Commission. We will follow them up, and I am sure that our brief debate this evening will have further reinforced to the Electoral Commission the need for it to provide clarity to campaigners. It is the Government’s view that the Electoral Commission must produce guidance in consultation or co-ordination with the Charity Commission and the other charity regulators in the United Kingdom, particularly with regard to how charities might be required to comply with the regime.
I can see why noble Lords say that there is nothing to be lost by having the provision in the Bill, but when a clear and unequivocal commitment has been made by the Electoral Commission, and by the Charity Commission in the quote I have just read, as my noble friend Lord Horam said, it is unnecessary to put this in the Bill. In the light of these commitments, which I think go further than honeyed words, I ask my noble friend to withdraw his amendment.
Lord Hodgson of Astley Abbotts
My Lords, as it is 10.05 pm I shall be brief. I am very grateful to all those who have spoken in support of this amendment—the noble and right reverend Lord, Lord Harries, my noble friends Lord Cormack, Lord Horam and Lord Tyler, and the noble Baroness, Lady Hayter of Kentish Town.
I tabled the amendment with the Hippocratic oath in mind—first, do no harm. I could not see that this could do any harm. It could only do good, because it is either superfluous—in which case, it does not matter—or, if things started slipping, it could be brought into play. Therefore, I cannot say that I am pleased with the outcome. The “too difficult” tray, in which I always thought this would end up, probably has been pushed a bit further round the desk by the words that we managed to extricate from the two commissions. However, it is late. I hope that my noble and learned friend will continue to look at this.
Another amendment that I was keen on, which the Government have accepted—namely, the review—will be an issue for the reviewer to look at. I think that there will be issues, unless we really join this up tight; charities will find things complex and difficult. However, given that it is 10.05 pm, I beg leave to withdraw the amendment.
“( ) section 26(10) and (11) (definition of “election material”);”
Lord Wallace of Tankerness
My Lords, this is the final group of amendments. There has been much discussion about the regulated period for third parties and whether it is indeed of an appropriate length. Many have argued that 365 days is simply too long. The noble and right reverend Lord, Lord Harries of Pentregarth, proposed in Committee that the regulated period should be shortened to six months. As noble Lords know, there are different regulated periods for different elections. For the general election it is 365 days. For elections to the devolved Administrations and the European Parliament it is four months.
What is the purpose of a regulated period? It is the time before an election within which financial limits on expenditure apply and campaigning rules must be adhered to. It is the time during which expenditure incurred for campaigning purposes must be reported. Noble Lords will know that the Bill already reduces the regulated period for the next general election in 2015, so that it will commence on 23 May 2014, which is the day after the European elections. The reason for this is that the original regulated period would have been a combined period for the 2014 European parliamentary election and the 2015 general election and would have started on 23 January 2014.
However, as the Bill makes changes that would have affected third party campaigning in European parliamentary elections, it would not have been sensible to have those changes take effect in the midst of the regulated period. The two regulated periods are therefore separated by the Bill, so its changes will take effect for the first time only for the 2015 general election.
The Government have now tabled Amendment 128, and Amendments 131 to 134, to shorten further the regulated period for third parties. These amendments will shorten the regulated period so that it commences on 19 September 2014. That is the day after the Scottish independence referendum. Although this Bill does not affect campaigners in the referendum—it is important that we make that clear—for the avoidance of any doubt and to ensure that there is no confusion, the day after the referendum has been chosen as an appropriate start date for the regulated period.
This step has been taken in response to calls from third party campaigners that they will need further time to fully understand the implications of the Bill and to ensure that they know how to comply with its provisions in the run-up to the 2015 UK parliamentary general election. I should stress that we are not reducing the spending limits to take account of the shorter regulated period. Campaigners will still be able to spend up to £319,800 in England, up to £55,400 in Scotland, up to £44,000 in Wales and up to £30,800 in Northern Ireland on promoting the electoral success of parties or candidates.
However—and this is crucial, not least as a follow-on to the previous amendment—delaying the start of the regulated period will give campaigners crucial time. The move has been supported by the Electoral Commission, to give it and the Charity Commission sufficient time to produce clear and easy to follow guidance. As has already been said, we believe that it is essential that campaigners have the clarity they have been asking for, and shortening the regulated period will allow the Electoral Commission enough time to test the appropriateness and clarity of its guidance with the campaigners themselves.
I should make clear here that only the regulated period for third parties is being amended. The regulated period for political parties will still begin on 23 May 2014, as under the existing transitional provision in Clause 42. It is also the case that for future general elections the period of one year will apply—although, given that there is to be a review, no doubt people will wish to raise this then. I just make it clear that the reduced period is for the 2015 general election.
The Government have also tabled Amendments 126, 129 and 130. These are minor and technical amendments to improve the drafting of Clauses 41 and 42. I beg to move.
Lord Harries of Pentregarth
My Lords, I warmly welcome this shorter regulatory period for the 2015 election, for the reasons that the noble and learned Lord stated: it will enable the Electoral Commission to prepare the guidance to educate the people who will have to conform to it. However, I express the hope that in the review, the review body will look seriously at the recommendation of the commission which I chaired, that for third-party campaigners there should be a six-month period. This seven and a half-month period is absolutely right for this election but a six-month period should be reconsidered afterwards.
Perhaps I might end on one final point. We are all very much aware that this whole process has, towards the end, been extraordinarily compressed. Normally, the Government would listen first, bring forward amendments in Committee and then report those back on Report. We did not have any government amendments in Committee. The Government listened, and I am glad that they did, but this means that this Report stage has been a kind of compression of Committee and Report all in one. The implication of this is that I very much hope that the Minister will take seriously those amendments that we did not press to a vote, while hoping that he might come back at Third Reading having thought again. Because of this very compressed period, that would be a great help to the House.
Baroness Royall of Blaisdon
My Lords, following on immediately from what the noble and right reverend Lord was saying about this compressed period, I particularly hope that in view of what the noble Lord, Lord Tyler, said in withdrawing his Amendment 52 on constituency limits, the Government will bring that back at Third Reading. As I understand it, the noble Lord, Lord Tyler, believes that the Government made a commitment to do so. That was the basis on which he withdrew his amendment. I do not wish to have a discussion this evening but I hope that the noble and learned Lord will look at it.
Lord Wallace of Tankerness
I did not actually respond to anything that my noble friend said, so there was no commitment. I said to officials immediately after that it would be appropriate if we went back and talked to the Electoral Commission, but that was without any commitment that we would bring an amendment back. We would take the points that were raised on my noble friend’s amendment to the Electoral Commission but, to make it clear, without a commitment on bringing it back. That is only fair because I did not actually make any commitment.
“section (Candidate’s personal expenses not to count for local election expenses limit in England and Wales) (candidate’s personal expenses not to count for local election expenses limit in England and Wales);”
“(a) regulated periods beginning after that day, or(b) (for the purposes of enactments having effect otherwise than in relation to regulated periods) expenditure incurred after that day.”
“( ) In Part 2 of this Act—
(a) section 32(12) to (15) extends to the United Kingdom and Gibraltar, and(b) section (Post-election review) extends to the United Kingdom.”