New Clause 15 — Reporting Donations to Members of the House of Commons

Orders of the Day — Electoral Administration Bill – in the House of Commons at 4:00 pm on 11th January 2006.

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'(1) Schedule 7 (control of donations to individuals and members associations) to the 2000 Act is amended as follows.

(2) In paragraph 10, after sub-paragraph (7) insert—

"(8) This paragraph does not apply to a donation received by a member of the House of Commons.

(9) For the purposes of sub-paragraph (8), it is immaterial whether the donation is made to the member of the House of Commons in that capacity or in his capacity as a member of a registered party."

(3) In Part 5 of the Schedule, after paragraph 15 insert—

"Donations to members of the House of Commons

15A (1) This paragraph applies in relation to donations received by a member of the House of Commons if—

(a) the House of Commons has in place arrangements requiring the member to report such donations, and (b) the Commission think that the arrangements correspond to the requirements of paragraph 10.

(2) The Commission must make such arrangements as they think appropriate corresponding to section 69 as modified in pursuance of paragraph 15(3) to maintain a register of such information as they receive relating to such donations."

(4) The Secretary of State must not make an order under section 69 for the purposes of this section as it applies to members of the House of Commons unless he is informed by the Commission that they are satisfied that they will receive the information mentioned in paragraph 15A(2) of that Schedule (as inserted by subsection (3) above) in relation to such members.'. —[David Cairns.]

Brought up, and read the First time.

Photo of David Cairns David Cairns Parliamentary Under-Secretary, Scotland Office

I beg to move, That the clause be read a Second time.

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

With this it will be convenient to discuss the following amendments: No. 21, in clause 29, page 33, line 36, leave out

'of four months ending with' and insert

'from Notice of Election until'.

No. 22, in page 33, line 40, leave out

'of four months ending with' and insert

'from Notice of Election until'.

No. 23, in page 34, line 1, leave out

'starting with the day when the vacancy occurs and ending with' and insert

'from Notice of Election until'.

No. 20, in page 34, line 17, leave out subsection (6).

No. 3, in clause 30, page 34, line 33, at end insert—

'"(3B) For the purposes of subsection (3A), any expenses incurred by a registered political party in respect of communicating with an individual elector in that election, at the address at which he is registered, shall be treated as an election expense if that communication makes reference to—

(a) the constituency in which the elector is registered, or

(b) any place or person within that constituency, or

(c) any candidate in that election, irrespective of whether that communication makes reference to the candidate of that party by name.".'.

Government amendment No. 63.

Photo of David Cairns David Cairns Parliamentary Under-Secretary, Scotland Office

In discussing the new clause, I shall take the opportunity to indicate the Government's attitude to the other amendments in the group.

Schedule 7 to the Political Parties, Elections and Referendums Act 2000 sets out the requirement that holders of elective office should report donations that they receive to the Electoral Commission, which then publishes them. Hon. Members must currently report donations to not only our own Register of Members' Interests, but the Electoral Commission, and many hon. Members take the view that such duplication is unnecessary. Mr. Heath made that point on Second Reading.

On Second Reading, I said that we would consider the matter carefully and introduce our proposals. The Standards and Privileges Committee, of which Sir George Young is the Chair, published a report today expressing its support for new clause 15:

"We commend its proposals to the House"— the Government's proposals—

"as an effective means of removing the existing duplication of reporting requirements faced by Members."

The new clause is relatively simple. It means that hon. Members will not have to report donations to the Electoral Commission, whether those donations were received in their role as an MP or in their role as a member of a registered political party. For technical reasons, the new clause retains the requirement for the Electoral Commission to record details of such donations on its register. The commission will also continue to monitor compliance with the regulatory system, as set out in the 2000 Act. However, it will have no role to play on the non-reporting of donations, and the Register of Members' Interests will retain its functions on that issue. The provision will commence only when the Electoral Commission is content that the House authorities have sufficient arrangements in place to ensure that the commission can still maintain an accurate register, but we do not think that that will be a problem.

We are working on a solution that would remove the requirement for all holders of elected office, which includes MEPs, Members of the devolved Administrations and local councillors throughout the UK, to report donations to the Electoral Commission. The Electoral Commission and the relevant bodies, including the Scottish Executive and the Standards Board for England, support the proposals, but some technical issues remain to be resolved, and we will continue to explore them with the intention of tabling an amendment, which will be introduced later in the Bill's parliamentary passage, covering all holders of relevant elective office.

Amendment No. 21 deals with what has become known as the "four-month issue" or the "relevant period issue". Although the provision concerns only third-party spending, there has been a great deal of discussion about the efficacy of the relevant period concept. I should like to take a moment to explain to the rest of the House the point that we have reached.

All members of the Committee, without exception, accepted that there is a problem in our system. We accept the principle of expenditure limits for national parties; that has been set, agreed to, and adhered to. We also accept the principle of expenditure limits in individual constituencies during general elections. That is a well understood and well adhered to policy. However, a relatively recent and growing phenomenon is that of the third category, as my right hon. and learned Friend the Minister described it in Committee, of unlimited, uncapped local spending in specific constituencies in the run-up period—the proximity period—to a general election. If we accept, as I think we all do, that there is a role for money to play in elections, but that it has to be regulated and limited, now is the opportunity to address the lacuna whereby unlimited spending can be undertaken in individual constituencies, often to the tune of many tens of thousands of pounds.

The Electoral Commission made a proposal, which we incorporated into the Bill and discussed on Second Reading, to introduce a four-month election campaign period, to be dated backwards from polling day, which would in effect spread the spending that takes place during an election across four months. That was an attempt to deal with the third category of spend. That proposal was not without its flaws, which were debated in depth, so I will not rehearse them. One problem is that we would not know when we were in the four-month period, because we cannot know that an election is going to take place until Parliament is dissolved, the Prime Minister goes to the palace and the election kicks off.

Another proposal was to revert to the status quo ante and not have MPs becoming candidates on the dissolution of Parliament, but it was felt that that would resurrect the prospective parliamentary candidate system, which also had its flaws—that was why we moved away from that in the first place.

Another major consideration in Committee was that because the spending limit for the four-week campaign—for want of a better phrase, the short campaign—is relatively low, perhaps on average about £10,000, although it obviously varies according to the size of constituency, if it was spread not over four weeks but four months, that would seriously limit the amount of legitimate campaigning that could go on in the run-up period to a general election. We have absolutely no wish to do that. The hon. Member for Somerton and Frome suggested—I do not think that it was his preferred option, but an attempt to explore some of the problems involved—that we should simply double the limit for the election campaign spend. However, that would create other problems. If the limit was put up to £20,000 or £25,000, there would be nothing to stop someone not spending anything in the run-up period but spending it all during the election campaign, which would have a distorting effect.

I hope that I have made it clear that there is no obvious solution to the problem that does not result in other problems. We therefore undertook in Committee to attempt to explore the issue further, in consultation with Front-Bench spokesmen, and to give an outline of how we will proceed.

Another point that was clearly expressed in Committee was that during the run-up period, or proximity period—the three months before the dissolution of Parliament—we will all continue to be MPs and to do our duties as MPs, including communicating with the electorate. Members expressed the fear that if we did that inadvertently during the time that was retrospectively to be part of the election campaign, we would get into trouble. That is a legitimate fear. We have to make it absolutely clear that expenditure by MPs discharging their duty to communicate with their constituents will not, wherever it has been sanctioned by the incidental expenses provision, in any way be counted against election spending after the event. We must be clear about that. Further consultation with the House authorities and the Electoral Commission is required to ensure that such a provision is robust and that Members of Parliament who go about their business will not be caught out by claims that something or other constituted election expenditure.

Of course, the rule for indicated expenditure provision is that it must not be used for campaigning or party political purposes, irrespective of whether we are in the run-up to a general election. If we maintain the integrity of the IEP rules, that fear can be set aside.

We seek consensus on the issue. Mr. Heald was probably right to say that all the controversy was likely to be about the first group of amendments. That is not to say that there will be harmony on everything else but we all accept that a problem exists and we are trying to find a solution together.

We want a workable solution that tackles the problem and maintains and strengthens the transparent and accountable regulatory system. To that end, we have been consulting the Opposition parties and the Electoral Commission, and have devised what may be—I believe that it will be—a workable alternative. We propose to maintain the concept of a run-up period to the election campaign but to protect the election campaign as it currently stands. In other words, the campaign will kick off at Dissolution and a Member of Parliament will continue to be entitled to spend everything that one is now allowed to spend during the four-week campaign. That money is ring-fenced.

However, we propose to introduce the concept of a run-up period of three months, during which there will be a separate cap on what can be spent locally in a constituency. That period would have an expenditure limit. The definition of election expenditure would take account of the fact that Members of Parliament continue to carry out their parliamentary duties and constituency activities. During the run-up period, election expenses would cover only campaigning costs.

The proposal would create a rolling three-month period with a discrete limit. That will provide greater clarity by setting the rules for what can be spent on campaigning activities in the run-up to the dissolution of Parliament. It would avoid a situation whereby candidates accidentally exceeded the election expenses limit simply because they did not know that they were in the election period. The three-month proximity or run-up period and the current period would apply to all candidates thereby maintaining a level playing field.

The proposal does not resolve all the problems about the concept of a run-up period. Legitimate anxieties remain about the role of election agents and their legal responsibilities. I am sure that the hon. Member for North-East Hertfordshire will want to discuss those further. Problems remain such as precisely what spending should be included in the two different periods. Amendment No. 3 focuses on that. Whatever happens, the election expenses limit will almost certainly need to be increased. Problems remain about communicating with an individual elector and the correct category into which such communication falls.

We therefore propose to table an amendment at a later stage to take a power under the Bill to introduce a scheme through secondary legislation, which will follow full and wide-ranging consultation with all interested parties. We will learn from political parties' expenditure, party lists in Wales and Scotland and the Electoral Commission's current work on expenditure at the previous general election. I want to give a clear assurance that hon. Members will have the opportunity to have their say during any proposed consultation and before any scheme is submitted to Parliament.

Photo of John Redwood John Redwood Conservative, Wokingham 4:15 pm, 11th January 2006

Does the Minister's outline proposal mean that only the last three months before an election would be subject to the controls? When he says that it would apply to the rolling three-month period, would that involve only those candidates who had not been a good judge of when the election was going to be? They could have spent a lot more between six and three months before the election, if they had been right in their judgment as to when the election was to be held. Is that correct?

Photo of David Cairns David Cairns Parliamentary Under-Secretary, Scotland Office

That is essentially correct. The judgment has been made, however, that money spent closer to an election is more efficacious than money spent earlier. One of the proposals was simply to replicate the national system of having a 12-month period in which a rolling cap applied to every month, irrespective of the time of year. I was not attracted to that, however, because it is all very well for political parties to manage such a system given that they have well-paid professional people with great experience of these matters, whose job is to do just that, but it is a different matter for those of us who have voluntary agents, on whom we do not want to place too heavy a burden. We also do not want to create a perverse incentive for parties not to appoint agents until Dissolution, in order to avoid accusations of unauthorised spending. There is a balance to be struck. Before we get into too much detail, however, a lot more consultation and discussion needs to take place.

Photo of Rosemary McKenna Rosemary McKenna Labour, Cumbernauld, Kilsyth and Kirkintilloch East

I am happy to hear that from my hon. Friend, because there is clear evidence in at least two constituencies in Scotland of the aspiring MP spending hundreds of thousands of pounds—not just tens of thousands—over a period of two to three years. That is a blatant misuse of funds, because it covers not only the election period and the preceding six months, but the two or three years leading up to that.

Photo of David Cairns David Cairns Parliamentary Under-Secretary, Scotland Office

I accept my hon. Friend's valid and legitimate concern. We are trying to address the most serious aspect of this fairly recent phenomenon without making the system too bureaucratic or placing too many burdens on voluntary agents. We are trying to strike a balance. Spending during the proximity period is more efficacious than at other times—that is why people do it, of course—and we probably need to be most concerned about that period at this stage.

Photo of David Heath David Heath Shadow Leader of the House of Commons, Shadow Spokesperson (Cabinet Office)

As the hon. Gentleman knows, we are grateful to him for looking again at this issue. His proposal certainly has a basis for agreement. We agree, however, that the reporting process still presents some difficulties. In principle, if we could avoid the reporting, the suggestion made by Mr. Redwood should apply. That is that in any three-month period there should be a cap on expenditure, provided that our agents did not have to report on every three-month period, because that would be too onerous a task. We might look again at that, but I agree with the Minister that the three months before a general election are the crucial period.

Photo of David Cairns David Cairns Parliamentary Under-Secretary, Scotland Office

I thank the hon. Gentleman for that intervention. It is relatively easy for us to pass these regulations in response to legitimate concerns, but out there in the real world, they have an impact. I suspect that if the 650 agents out there knew what we were cooking up, they would be marching on Parliament to say, "What on earth are you up to? You're making things even more burdensome for us." We are aware of that possibility. On reporting, in regard to submitting electoral expenses, there is no doubt that the three-month/one-month period effectively creates an additional bureaucratic hurdle. As well as merely accounting for the election expenditure, the agent will have to account for the three months prior to that period. I hope that we can keep this as simple as possible—perhaps by using just one form, for example, so that the account is simply a continuation of that of the previous period. In reality, I would imagine that this will not be that much of an issue in the vast majority of constituencies, because there will not be a huge amount being spent in any given three months.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Secretary of State

Obviously, this would not apply to any of the main parties, but one could imagine a situation in which an agent had come in to act on a voluntary basis for a candidate for a badly organised party during an election. He might not know anything about the candidate's spending history. How will the provision be policed, given that it is retrospective?

Photo of David Cairns David Cairns Parliamentary Under-Secretary, Scotland Office

The hon. Gentleman has highlighted one of the key issues that remain to be resolved. Whether we talk of unintended consequences or of moral hazards, if we write into statute that the agent, once appointed, cannot be held responsible in any way for what was spent in the past, we shall merely create an incentive for no one to appoint an agent until Parliament is prorogued or dissolved before an election. That would lead to anarchy. Everyone would be spending everything and appointing agents the day before the Prime Minister went to the palace, and no one would be accountable for anything.

We are trying to strike a balance. I have been frank about the fact that we have not resolved all the issues, which is why it would be unwise at this stage to write anything too prescriptive into the Bill. The amendment that we propose to table in another place will be an enabling amendment, allowing us to present subsequent orders through the affirmative procedure. It will give us time to study the Electoral Commission's proposals, examine what happens elsewhere, continue the discussion among ourselves, and return to our constituencies and prepare for the arrangements by consulting our own agents. I have a particularly excellent agent, who I am sure will cope with it all admirably. None the less, we should be aware that we are creating burdens.

Amendment No 20 deals specifically with unauthorised third-party election expenses. Following the case of Bowman v. UK, the Government amended section 75 of the Representation of the People Act 1983 by means of the Political Parties, Elections and Referendums Act 2000 to increase the expenditure limit for unauthorised third parties. However, the relevant section remains ambiguous in relation to precisely what the money can be spent on. Clause 29 clears that up. Expenditure by unauthorised third parties up to the specified level, £500, will be allowed on holding public meetings or organising any public display, on issuing advertisements, circulars or publications, and on other ways of presenting a candidate's views to the electorate.

The purpose of clause 29(6), which amendment No. 20 would delete, is to enable the clarification provided by clause 29 to apply, to minimise the dangers of erroneous prosecution of a third party who has misunderstood the ambiguous legislation and may therefore have contravened it while acting in good faith. Anyone who has been prosecuted—which has already happened in one case—will now be able to cite subsection (6) in his or her defence, or in the event of a repeal.

We have taken powers in the Bill to ensure that when there is a list election under one of the various proportional representation systems, the names of all the candidates will not have to appear at the bottom of the documents, on which the imprint is quite large. Someone—I think it was a Conservative Back Bencher—asked about county council and other elections. [Interruption.] In fact, it was the hon. Member for Somerton and Frome. I apologise for calling him a Conservative. [Interruption.] Apparently the hon. Gentleman will see me outside. I spent the new year in his constituency, and this is how he repays me!

A sensible point was made. In next year's London election, one party will put up 60 candidates. Will the names of all 60 have to be listed at the bottom of the leaflets? They would take up half the space, which would obviously be silly. Our amendment No. 63 extends the provisions already applying to other types of election to cover the eventuality described by the hon. Gentleman.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Secretary of State

I welcome amendment No. 63, because it makes a good deal of sense. It would allow the party name to be used if there were more than one candidate. I am glad that the Minister listened to what was said in Committee. We also welcome new clause 15, which will make life simpler and less confusing for all concerned without reducing sensible control over the transparency and accountability of Members of Parliament.

As I said on Second Reading, I share the concern that has been expressed about the more general issue of holders of elective office being required to report donations to the commission and to the body to which they are elected. I was pleased to hear the Minister's assurance that this issue is being looked at. We should also pay tribute to the commission, which was prepared to suggest sensible proposals and to support them.

I thank the Minister for the welcome consultation that has taken place on the more difficult issue of a proposed regulated period for election expenses. As we pointed out, if the date of an election is unknown, a regulated period with an expenditure cap can create real problems. If the election date proves to be a surprise or if the election is delayed—as happened following the foot and mouth crisis—the money might be spent before the campaign starts; as a result, it would be impossible to compete effectively in the campaign. So it is good that the Minister has examined this issue and concluded that the election period itself should be ring-fenced, and that the expenses for the period in question should be dealt with according to current practice.

On the proposed taking into account of an earlier period, the Minister is right to say that the power to create such a provision through regulation should be discrete and subject to full consultation. There are some problems with this proposal. If volunteer agents—who may have been appointed as recently as the Dissolution of Parliament, or when an election campaign starts—are to be told, "You will be responsible for what happened in the previous three months", they might prove quite difficult to recruit. Alternatively, we might end up with prospective parliamentary agents, just as we used to have prospective parliamentary candidates. So we need to look at this issue, although I accept the more general point that problems can arise if there is very heavy expenditure just before the election period starts.

Photo of John Redwood John Redwood Conservative, Wokingham 4:30 pm, 11th January 2006

Of course, we used to run our Conservative associations—I guess that the same is true of Labour associations—properly until the election was called, and then close them down for the election period, so that they could not spend anything that could conceivably be construed as promoting the candidate. We cannot close our associations down for three months beforehand in the belief that there might be an election, so surely a limit must be set that allows an association—be it Conservative, Labour or Liberal Democrat—to spend its money promoting itself and its message in the normal way, and to promote any local government candidates who may be needed for by-elections or local government elections. Otherwise, associations could apparently overspend, even though the money was spent on more general purposes.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Secretary of State

That is one of the key issues. Of course, it is not necessarily associations that would have spent such money. If a council promoted a particular issue and the councillor taking the lead on it proved later to be the parliamentary candidate, that could give rise to all manner of questions relating to council expenditure. We should also bear in mind the incidental expenditure provision. The Minister is right to say that if money is spent properly and in accordance with House rules, it should not be treated as a pre-election expense. However, it is necessary to examine in detail the commission's view of such matters, which it has a duty to define.

So we need to consult fully on these many complex details if we are to avoid ending up with a provision that is very hard to implement. My initial view was that although there is a problem, in solving it we might create a worse one. I therefore welcome the Minister's commitment to full consultation and to a separate order-making power, which could be implemented at a much later date, once all these issues have been looked into. The Electoral Commission is also concerned about the matter, and it will be worth looking at the study that it is undertaking.

Progress is being made, so I do not want to press amendments Nos. 21 to 23. The Government have listened to the very important points made in Committee by my hon. Friends the Members for Huntingdon (Mr. Djanogly) and for Epping Forest (Mrs. Laing).

Photo of David Heath David Heath Shadow Leader of the House of Commons, Shadow Spokesperson (Cabinet Office)

I agree that several bouquets should be handed to Ministers in respect of this group of amendments and I am grateful for their engagement with the arguments advanced on Second Reading and in Committee. I am pleased that the potential nonsense posed by the imprints has been resolved and welcome new clause 15 in particular. The Minister was right to say that I called for that change on Second Reading, when I made it clear that a duplication existed in the two sets of rules. That was unhelpful in many ways, as the lack of distinction between those rules was causing problems. I shall not steal the thunder of Sir George Young, because he is Chairman of the Standards and Privileges Committee and I served under him in the previous Parliament, so I know how concerned that Committee was about the matter. I am grateful to Ministers for the resolution that has been achieved.

Amendment No. 3, in my name, is a serious proposal, as it deals with a practice that is becoming widespread in all parties around the country that effectively circumvents the rules on local election expenditure. Literature generated from national parties' central headquarters is sent to individual electors in a way that can be construed only as an attempt to influence a specific election. However, because that literature does not mention the local candidate and is instead signed by the leader of the national party, or someone else, it does not have to be counted against local expenditure limits.

All hon. Members will have seen that happen. The practice is especially prevalent in hotly contested marginal constituencies, but probably unknown in others. All three major parties are guilty of what I consider an abuse: a piece of material put though people's doors that is intended to promote the interests of one party and its candidate in an election, or which is intended to reduce the likely success of another candidate in that election by drawing attention to real or imagined shortcomings in that candidate's performance or policies is election material and should be identified as such.

I would have preferred the Bill to be explicit about that, but I recognise that the Government and the Electoral Commission are genuinely working to identify what should be considered as local election material. I am content to allow that work to go on, but I will not be content if large sums continue to be spent in individual constituencies without being caught by the expenditure limits.

Photo of Andrew Turner Andrew Turner Shadow Minister (Cabinet Office)

At the last election, I was privileged to receive a letter from the former leader of the Liberal Democrat party, Mr. Kennedy, inviting me to support that party. The hon. Gentleman will know the effect that that had in my constituency. When he says that such a letter must be identified as election material, does he mean that it should be attributable to the relevant party's local candidate, or that it should be a cost charged to that party's national expenditure allowance?

Photo of David Heath David Heath Shadow Leader of the House of Commons, Shadow Spokesperson (Cabinet Office)

I am very clear. The spending should be counted against the election limits for the specific candidate. I am working on the assumption that central party organisations do not send out vast quantities of material without the local candidate's at least acquiescing, if not with his or her prior knowledge. I accept that that assumption is questionable, but nevertheless we can deal effectively with the mischief only by having proper control. The practice has been growing among all parties. Certainly, a significant number of letters were addressed to individuals in my constituency from Mr. Howard, and I know that people had letters from my right hon. Friend Mr. Kennedy. Let us not be silly about this: we all know it is being done by the national parties in a competitive environment and I think it is an abuse and that we need to deal with it.

Photo of John Pugh John Pugh Shadow Minister (Transport)

Surely the case is overwhelming when the letter contains data that are entirely specific to a particular constituency?

Photo of David Heath David Heath Shadow Leader of the House of Commons, Shadow Spokesperson (Cabinet Office)

I agree, but there is a much easier test. It would be a mistake to get into the situation in which each item of mail has to be scrutinised to see what relevance it has to the local constituency. The only sensible way that I can identify to deal with the abuse is to say in terms that a communication to a specific elector in a specific constituency that has a political content either in supporting a party contesting the election or in opposing one is election material. Most normal people would recognise it as such, and I should like the law to recognise it as well.

I am grateful to the Minister for listening to what was said in all parts of the Committee about the four-month issue. Let us be clear about our common ground: we all accept that there is a potential abuse, which needs to be dealt with, through substantial expenditure prior to an election being called that is not caught by the present limits. I was concerned on a number of grounds by the original proposal put to the Committee. Clearly, it distorted current election limits, which were intended to apply during an election period, but which were to be extended over four months. I was concerned because of the difficulties of identifying such expenditure in the context of an election for which there is no fixed term, and therefore no fixed date. I was particularly concerned by the position in which honorary, non-professional agents would be put. They would have to account for expenditure over which they had no direct control and which, indeed, might have happened before their appointment. As a matter of natural justice, people should not be legally responsible for something over which they had, and could have, no control.

The Minister has made a suggestion to me and Mr. Heald, which we readily accept is a starting point for discussion, of separating out the three-month period before the election from the usual one-month campaign period. That makes sense because it preserves the present system for the campaign period, but the great unanswerable question in my mind is how we deal with the reporting issue for a period that is not defined and in which no one is actually controlling the expenditure, but someone nevertheless has to produce under pain of law an accurate account of the money expended.

We can explore this matter further and I do not want to detain the House today in exploring all the possibilities. I took seriously the point made by Mr. Redwood about the rolling three months and the differentiation between that and the period immediately prior to an election. Things could operate on two levels. It could operate as a general prohibition of political expenditure in support of a particular party or candidate over any three-month period, which would enable someone to challenge the expenditure of large amounts of money in a constituency over that time. That would be more difficult without a reporting procedure, but it might provide some check on unnecessary or inappropriate expenditure.

We could also have a proper reporting procedure over the three-month period preceding the election, but we would need some way of protecting the agent from responsibility for matters over which he or she has no control. Part of the answer might be the responsibilities of the political associations in each constituency through the Political Parties, Elections and Referendums Act 2000 procedure. I receive regular complaints from the honorary treasurer of my constituency association about the onerous duties now placed on treasurers. They now have a very difficult task in reporting terms and the good ones take very seriously how they account for expenditure by their constituency association. Given that returns already have to be made by law, that could provide part of the answer, but it is not the whole answer because of the issue of third-party expenditure.

I look forward to further discussions on this matter. It is right that we do not proceed further with debate on these matters today, but listen to what the Government have to say, contribute to their future considerations and ask those outside the House who are expert on the issue for their views on what is practicable and how we may address the problems. We have made substantial progress on several issues in this group of amendments and I am grateful to the Government for listening in this instance.

Photo of George Young George Young Chair, Standards and Privileges Committee, Chair, Standards and Privileges Committee 4:45 pm, 11th January 2006

Mr. Heath said that he did not want to steal my thunder, but the appropriate meteorological definition for what I want to say is more a ray of sunshine than anything to do with thunder. I wish to speak briefly in favour of new clause 15.

In opening the debate on the previous group, the Minister said that many of the amendments and new clauses were not hers, and new clause 15 is one of them. Its parentage is the Electoral Commission and the Standards and Privileges Committee, and I hope that that is a good pedigree. We all favour deregulation and spend much time trying to deregulate business and individuals. The new clause gives us the opportunity to deregulate ourselves. I am sure that I am not alone in noticing that MPs have to fill in more and more forms as we go about our daily lives. New clause 15 would enable us to minimise, to a small extent, their number.

As the Minister and the two previous contributors have said, we have to report certain financial donations to two institutions—the Register of Members' Interests and the Electoral Commission. That requirement can lead to confusion. New clause 15 paves the way for a uniform system of registration by MPs. To that extent, it is deregulatory and I welcome it.

I am also grateful to the Government for responding so swiftly to the report that was published this morning, which led to new clause 15. It paves the way for repealing the duplicatory registration requirements and, if it is approved, the Committee will carry out a general review of the House's rules on registering and declaring interests and report back. We have to adjust our rules to accommodate the current requirements of the Electoral Commission. The new clause is good news for the House and for the Select Committee system, because the Government have taken on board one of its recommendations. I hope that it will begin to make life a little simpler for Members of Parliament.

Photo of John Horam John Horam Conservative, Orpington

My right hon. Friend Sir George Young said that the new clause was a ray of sunshine. I particularly welcome it, as I was the Member on whose conduct his Committee reported and whose inadvertent straying threw light on the possible duplication and confusion that Members were wont to experience.

Before the last general election, my constituency association received a donation that was duly reported to the Electoral Commission, but which I failed to report to the registrar of Members' interests. Subsequently, I found that Members on both sides of the House had been in the same confusion and ignorance as me; namely, that they had to make that double declaration. The registrar kindly offered to deal with the matter through a simple exchange of letters, as it was a minor infringement, but with my undying commitment to the interests of the House and all its Members, I declined and instead insisted that my right hon. Friend and his Committee look into the matter. It seemed to me that Members were ignorant about their obligations and, as my right hon. Friend said, there was considerable duplication. I am delighted that the Committee and, I think, the registrar agreed and, as a result, the Government have introduced the new clause.

Never has something that I advocated been responded to so rapidly by the Government of the day—and even by one whom I oppose. I wish that I could pull off the same trick in more important areas, but I am delighted that the Government have responded so quickly to the report of my right hon. Friend's Committee and to my views. I thoroughly commend the new clause to the House.

Photo of John Redwood John Redwood Conservative, Wokingham

I pay tribute to my right hon. Friend Sir George Young, whose recommendation I have pleasure in supporting, and also to my hon. Friend Mr. Horam who helped to instigate it. It is a modest deregulation that will in no way affect the honesty of reporting and will help all involved.

In an intervention, I raised one of the problems that I saw with putting a three-month control on expenditure before an election was called; namely, that there could be a local government by-election in the area. Would that mean that the MP or the leading challenging candidate in the subsequent general election would have to rule themselves out of active campaigning in the by-election, as otherwise all the expenses involved could be deemed part of the controlled expenditure?

I speak as someone who, perhaps contrary to my views on free enterprise and economics, believes in regulation and control of the amount that candidates can spend in a general election. That we have extremely modest expenditure limits on individual races in individual constituencies is welcome. It means two things. First, it is easier for the challengers and, in a democracy, there should be choice and a proper challenge and, secondly, a Member of Parliament does not have to spend many months, or the whole of their time in Parliament, worrying about raising money, as, for example, members of Congress do. That unwelcome feature of an otherwise rather good American democratic system is one that I am pleased that we do not have in our country. I speak as someone who is philosophically in favour of tight expenditure controls.

I also favour controls even tighter than those we have at present on the sums that parties can spend on the national race in a general election. Most of the money spent by national parties in a general election is wasted. The only problem is that they do not find that out until after the event. Looking at the voting figures for all three main parties in the last general election, it is clear that practically all the money was tipped down the drain because the number of people abstaining greatly exceeded the number voting for even the most popular party—in England, the Conservatives and in the United Kingdom as a whole, Labour—let alone any other conclusion one might draw from those numbers.

Difficult cases could arise if we tried to extend the controls to the three-month period before an election was called. Let us suppose that quite close to the general election in this Parliament the Labour party needs a leadership contest, which is not that ridiculous a supposition. From time to time, the Prime Minister has said that he would like to serve all or most of this Parliament before bowing out, so there could be such a contest. We have been told that there is much talent and several people might like to be Labour leader and Prime Minister for a week or two. They would obviously want to put their names forward and campaign actively to attract support from the membership of the Labour party and the trade union movement in their democratic process. Therefore, very close to an election in the three-month control period, three, four or five Labour Members could spend a lot of money on promoting themselves and their views not just to the national membership generally, but in their own constituencies. It would not be their intention that that would have a big influence on the forthcoming race in their constituencies, but a great deal of money would certainly be spent on promoting them, as individuals and candidates for Prime Minister, just before the election was called.

Anyone looking at such expenditure would say that it clearly influences voters in those constituencies during the subsequent parliamentary challenge, although it has a different purpose. We must take into account those very hard cases when trying to craft a regulation that could stop what we want to stop—a party or individual spending disproportionately huge sums of money before an election is called with a view to influencing its outcome—without stopping all the legitimate activities that go on, such as leadership contests, local government contests and the normal promotion of active party politics in communities, all of which takes money. We need a little bit of caution, however good the intentions may be.

Photo of Brian Binley Brian Binley Conservative, Northampton South

I pay tribute to Ministers, because we had a good Committee process and they have tried hard to listen and to take account of the points made by Opposition Members, and I thank them for that. If there is one issue where we should use all the talent of the House, it is electoral administration. I am delighted that that seems to be the Minister's view, and I am particularly appreciative.

I wish to deal with just two points, the first of which is agents. Many hon. Members—particularly you, Mr. Deputy Speaker—will know that I was proud to be a professional agent some years ago, when professional agents were much more likely to be seen. Sadly, that has changed, and we now see many less experienced agents. When I talk about professional agents, I mean those people who were agents for 22 years, although they did not get paid for it, and by dint of experience, made themselves very professional indeed.

We had a cadre of professional agents in that respect whom we could rely on to aid the electoral process. My experience suggests that they took their duties seriously and that they worked together to ensure that the democratic process was in the main carried out as well and honestly as possible. That is less prevalent today. Indeed, many agents are thrown into the job at the last moment, simply because no one else will accept it. Therein comes the problem, because agents are vital to the good administration of elections and, if we make it more difficult for them to do the job, we will make the good administration of elections more difficult. That point concerns me seriously and I hope that the Government will rethink that.

The second point concerns limits, for the Bill seems schizophrenic in talking about the co-ordinated online register of electors. I welcome CORE, but it gives an opportunity for political parties to use direct mailing much more efficiently. On the one hand, CORE suggests that we ought to move to a more professional approach, yet on the other, the new clause seems to suggest that we ought to limit that ability. Frankly, that issue has not been thought through properly, so the Government should reconsider it to get a more consistent view.

Do we want direct marketing elections, or do we not? If we want such elections, we need limits. If we do not want them, we need to be more decisive on the issue. The new clause does not answer that question and the Minister is concerned that he has not quite hit the right note. I ask the Government to reconsider that proposal and, to return to agents, they should think again, because we are all involved, and if we make such things more difficult, we make the whole electoral process more difficult.

Photo of David Cairns David Cairns Parliamentary Under-Secretary, Scotland Office

We have had an interesting and well-informed debate that has perhaps been more indicative of the way in which the Bill has progressed through Parliament than that on the first group. Such was the outbreak of consensus that we drove Mr. Forth out of the Chamber, although I am sure that he will reappear when we discuss reducing the voting age.

Photo of David Cairns David Cairns Parliamentary Under-Secretary, Scotland Office 5:00 pm, 11th January 2006

I am enjoying it. Metaphors about banging heads against a brick wall come to mind.

Questions were asked about new clause 15 and the reporting issues. It is true that success has many fathers and failure is an orphan. At least three hon. Members claimed paternity of new clause 15, but I am happy to give credit where it is due. I said immediately before Sir George Young entered the Chamber how indebted we were to him and his Committee for its report, so I am happy to repeat that now. I am grateful to him for casting the move as deregulatory. I had not conceived of it in those terms, but that will win us brownie points with the Cabinet Office and my right hon. Friend the Chancellor, who champions the deregulation agenda with great vigour.

The discussion about the period of four months highlighted the fact that everyone accepts that there is a problem, but understands that any solution proposed would create other problems. That shows the need for us not to be too prescriptive in primary legislation, but to proceed slowly and incrementally through secondary legislation.

A specific point was made about leadership elections. I appreciate that they are all the rage these days and am sure that we will have one in due course. There are two possible solutions to the problem that Mr. Redwood mentioned. We would have to consider what the money was being spent on and ensure that our definitions were sufficiently robust to withstand the case that he mentioned. I was glad that he raised the matter because I had not considered it and we will now do so.

It is important that we get the limit right in the run-up period because it must be high enough so that the routine run-of-the-mill stuff done by us, constituency associations and constituency Labour parties is not constrained, but low enough to dissuade rich people from trying to buy seats. That is the essential dilemma that we face. It would be foolish to put such limits into primary legislation, so I commend what has been proposed to the House.

Question put and agreed to.

Clause read a Second time, and added to the Bill.