Election Candidates

– in the House of Commons at 1:41 pm on 25th April 2008.

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Motion made, and Question proposed, That this House do now adjourn. —[Mr. Khan.]

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Photo of Greg Hands Greg Hands Conservative, Hammersmith and Fulham 2:31 pm, 25th April 2008

I realise that it is only six days before the London mayoral election so I shall try to make my speech as general and non-partisan as I can, but I want to set out an important proposition. It is this: the public need to know who is providing funding for candidates for directly elected office, especially if that office comes with significant planning powers, such as those of most directly mayors and, most definitely, the elected Mayor of London.

Contrary to what was said in the Evening Standard earlier today, I am not calling for a change in the law. I am calling for proper enforcement of the existing law—the Political Parties, Elections and Referendums Act 2000—by the Electoral Commission. It is my belief that the proposition that I outlined above was actually the intention of the Act. Ironically, the Minister in charge of electoral administration is Mr. Straw—the Secretary of State for Justice. Ironically, because it was he who in a previous guise, as Home Secretary, introduced the PPERA in 2000. At the time, he said:

"At the heart of the Bill's provisions is the need to ensure that the funding of political parties is open and transparent. Greater transparency will not only strengthen the accountability of political parties but help to buttress their financial standing. The secrecy that has hitherto been permitted to political parties in their funding, and the scandals to which such secrecy has given rise in recent years, have undoubtedly left a sour taste. In contrast, all political parties—and the reputation of our political system as a whole—will benefit from the Bill."—[ Hansard, 10 January 2000; Vol. 342, c. 35.]

I believe that the "sour taste" described by the right hon. Gentleman is very much with us today, with the London Mayor election. One candidate, the incumbent, Mr. Livingstone, has not declared a single donation since the PPERA began just after his election in 2000, even though many donations were made specifically for him and for the benefit of his campaign. According to schedule 7 of the PPERA, the Mayor of London is a regulated donee. He is specifically named as such:

"Mayor of London or elected mayor within the meaning of Part II of the Local Government Act 2000."

In addition, the Mayor of London is normally a regulated donee as well, simply for being a member of a registered political party. For the 2004 election, the current Mayor was indeed a member of a registered political party, as he is also for this election. I am absolutely satisfied that, for the purposes of the Act, candidates for Mayor of London are regulated donees. It is not just I who am convinced: I have seen significant legal advice that maintains the same.

As I have said, Mr. Livingstone has never reported a single donation to the commission as a regulated donee. By comparison, the Norris for London campaign reported £490,000 given to Steve Norris as a regulated donee in 2004. My hon. Friend Mr. Johnson has declared 58 donations, totalling just under £440,000, this time to him as a regulated donee as a member of a political party.

Any London voter can quickly learn, from the names and amounts given, the nature of the funding behind the campaign of my hon. Friend the Member for Henley, as they could for Steve Norris in 2004. I believe that that is why we have political funding rules: they allow voters, stakeholders and journalists the opportunity to scrutinise for themselves who is funding the main candidates and incumbents and to make their judgment accordingly.

The Livingstone team declares that the rules do not apply to him, as it says that all fundraising is carried out in the name of the Labour party. Even if that were true—I will show significant evidence to the contrary shortly—he would still need to make the declarations as a regulated donee. It is irrelevant whether the donations are physically received by the candidate if they are made to him—the phrase in the PPERA is a "controlled donation"—for his use or benefit as the holder of such an office in connection with any of his political activities. Failure to submit the appropriate donation report is an offence under the PPERA.

So what difference does it make whether a mayoral candidate or a candidate for any other directly elected office is treated as a regulated donee under schedule 7? First, the reporting requirements for a regulated donee are significantly more stringent than for a political party. Instead of quarterly, declarations need to be made monthly. That requirement is particularly significant during the run-up to an election, where monthly or quarterly declarations make a big difference to whether the electors can see the donation before or after polling day.

The other main difference is the threshold amount. For regulated donees, it is £1,000. For political parties, it is £5,000. Again, that is a very significant difference. For reasons that I will discuss shortly—the London Mayor's very significant planning powers—I believe that it is vital for the reporting frequency to be as often as reasonably possible for the London Mayor and for the threshold to be as low as reasonably possible.

Returning to the current incumbent, his team has been arguing that he should not be treated as a regulated donee, as all funds are given via the Labour party, and therefore the rules that affect political parties should apply. However, until it was recently modified, the website that solicits donations to the Ken Livingstone campaign—kenlivingstone.com—made it explicit that donations are for the Ken Livingstone campaign, not even for general Labour party fundraising, or indeed regional, London-wide Labour party fundraising. The website was specifically inviting donations for Ken Livingstone. Indeed, the cheques were due to be made payable to a separate account in the name of Ken Livingstone. Similarly, the website claimed that the threshold above which any donation needs to be declared was £5,000, which is correct for political parties, but clearly wrong for regulated donees. Also, donations to a political party must be reported only seven weeks after the end of a quarter. For regulated donees, such reports must be made within 30 days of receipt.

To summarise, we have four very significant problems with the arrangements. First, it is impossible to see who is funding the Livingstone campaign separately from any general Labour party funding, even though donations were and still are being solicited specifically to help the candidate, not necessarily the political party. In fact, with the current way that the PPERA is being operated, we might never know who gave to Ken Livingstone and who gave to the Labour party.

Secondly, because he does not believe that he is a regulated donee, the frequency of declarations is only quarterly, not monthly. That might not normally make much difference, but in the run-up to an election of the magnitude of next week's, that makes a huge difference. The fact is that, with the last quarter of the campaign's fundraising—probably the biggest quarter of all for donations—the names will not be known until 27 May, which is 26 days after polling day. There is therefore no chance for Londoners to see who is funding the Mayor's re-election campaign.

Thirdly, the threshold is £5,000, rather than the £1,000 limit that applies to regulated donees.

Fourthly, the time lag is unacceptable, even if donations to individuals are disaggregated from those given to parties.

The Minister doubtless knows that I took up those issues with the Electoral Commission in March, but its investigation was wholly unsatisfactory. Despite the clear evidence that the spirit and letter of the PPERA were being circumvented, the Electoral Commission pronounced itself satisfied, because it said that there was no evidence that any donation had actually been made. In other words, despite a separate bank account for Livingstone donations, millions of leaflets pouring off the presses, widespread media reports of lucrative fundraising auctions and evidence from the 2000 campaign that Ken Livingstone has the ability to raise significant sums of money in his own name, the Electoral Commission saw no evidence that a single donation had actually been made to the Livingstone campaign and therefore could see no grounds for investigation.

The Electoral Commission wanted to see specific evidence that donations had not been properly reported. Its letter to me stated:

"I would point out that there is no evidence that any reportable donation has not been declared."

That is a farce. Because of the subterfuge and the refusal to report any donations, it is impossible to discover a donation that has not been declared, which is the point of the complaint.

I even pointed the Electoral Commission to past donations to suggest a pattern of behaviour that should be examined. I pointed to a donation to Mr. Livingstone's 2004 campaign from a property developer, Gerald Ronson, that had gone unreported. Again, the Electoral Commission refused to investigate or even to consider that that past transgression might suggest similar behaviour in this campaign. It said that the 2004 donation was of no interest:

"Any proceedings in relation to such a matter would have to be brought within three years of that date. This deadline has now expired."

The Electoral Commission has farcically allowed a situation in which no Londoner can have any idea who is funding the campaign for the incumbent candidate for the position of London Mayor. This is the second largest direct election in Europe, after that for the President of France, and 5 million electors deserve to know who is paying for all the glossy leaflets that come through their doors from the main candidates.

In 2004, Ken Livingstone also made no declarations, yet Londoners might well have decided differently, if they had been aware of the full facts on who was funding the candidates. My research at the office of the trades union certification officer has revealed that the largest donation to Mayor Livingstone in 2004 probably came from one of the hated tube unions, ASLEF, which made a specific donation in late 2003 to Ken Livingstone—there was no mention of the Labour party—for his campaign for re-election. The Labour party did not declare that donation, either. Londoners would have taken a dim view that Mr. Livingstone's re-election was being financed by the same tube unions who were on strike on a number of occasions—strikes which the Mayor often pretended to condemn. I note from today's Evening Standard that the same is reportedly happening now. Nobody knows who is funding Mr. Livingstone this time around, either, because of the poor application of the 2000 Act.

On donations from property developers, I have already mentioned Gerald Ronson, who made a payment to the Labour Mayor's re-election campaign two years after he received planning permission for the Heron Tower development in the City. The 202 m skyscraper was opposed by English Heritage and the dean of St. Paul's cathedral, because they said that it would damage the capital's historic skyline. However, Mr. Livingstone said that it would "support London's economic future". The Ronson donation was made after planning permission was granted and shortly before Mr. Livingstone won the June 2004 London mayoral election. A spokeswoman for the developer told The Times last month:

"I can confirm it was a personal cheque from Gerald Ronson. The exact amount was £4,990."

Mr. Livingstone also took donations from another property developer, Irving Sellar. At the Mayor's press conference two years after that election, on 21 March 2006, he said about his two donors:

"I deal with many property developers, Irving Sellar, Gerald Ronson—they're there to make a profit, they also have a commitment to the city, they have a pride in creating great buildings, they're proud they are creating jobs, they actually, they share the sense of being Londoners... I mean most of the major property developers who've had an interest in this city come along to my office, get involved, make sure their plans are acceptable to my planning officers, make a reasonable contribution."

There you have it—we not only have a Mayor who does not declare any donations, but one who welcomes what he calls "reasonable contributions" from property developers in meetings at his own office, where planning applications are being discussed.

The various donations from ASLEF, Gerald Ronson and Irving Sellar went unreported in the 2004 campaign and thereafter. Disgracefully, they have become known in the past two months, and still neither has been reported in any way to the Electoral Commission. I wonder whether that was what the Government had in mind when they trumpeted new transparency in political funding when introducing the Political Parties, Elections and Referendums Act 2000.

Why does it matter that people know who is funding the London Mayor? Perhaps that is not obvious. I have given the example of Gerald Ronson and the suspicious circumstances of the granting of planning permission, which was followed up by a donation to Mayor Livingstone's re-election campaign. The Mayor has had significant planning powers since 2000, but they have been greatly strengthened by the Greater London Authority Act 2007, which, by a strange coincidence, was brought into force just this month. It gives the Mayor the power not only to refuse an application of strategic importance but to approve one. One can therefore begin to understand why property developers might become even more interested in donating. The Mayor can now countermand a London borough's refusal to grant planning permission.

I was a member of the Public Bill Committee on that Act, and the extension of the Mayor's planning powers was considerable. The Act and guidance outline a huge range of strategic planning decisions to be taken by the Mayor, including those on developments of more than 500 homes; developments in which more than 200 existing homes are to be demolished, even if replaced by more than 200 new homes; developments with more than 20,000 sq m of floor space; buildings more than 30 m high, or 25 m adjacent to the Thames; any development including an aircraft runway; a tube or rail station; a bus or coach station; a passenger pier on the Thames, and so on. Those are clearly very considerable planning powers.

What is more, true to the Mayor's directly elected office, those decisions will be made by the one-man planning authority in private, unlike the decisions of a planning committee of a local authority. Unlike any other planning authority, the one-man authority has a separate duty to promote regeneration in London. It seems inevitable that, in his regeneration capacity, the London Mayor will have frequent interaction with property developers. The current incumbent already does, for example by visiting major developers' conferences in exotic locations such as Cannes, in the south of France. Huge strategic decisions are being made in private, behind closed doors.

Thanks to the Electoral Commission's interpretation of the 2000 Act, we will not know if any of those developers have made contributions to the Mayor's campaign during an election or to his office in non-election years. We will have no idea whether there is any financial motivation behind the decisions made in private by the Mayor—not necessarily the current incumbent—as a one-person planning authority. That is an invitation to corruption and conflicts of interest on a massive scale in meetings taking place in secrecy. The Mayor is responsible for strategic planning decisions. Unlike, say, loft extensions, such decisions are likely to involve large developers. It is precisely such large developers who are likely to be making political donations to candidates for directly elected office.

There is even more need for directly elected persons to disclose their donations than for political parties to do so. That is especially true for directly elected persons who are also one-man planning authorities. We have seen how the current Mayor links planning permissions to undefined "contributions". That sort of practice needs to be stamped out or, at the very least, we in the London electorate need to see what those contributions are.

Londoners, however, can see who is funding my hon. Friend the Member for Henley, as I said. As he is declaring his donations as a regulated donee, the Electoral Commission website lists 58 donations made over the past nine months or so. There is a monthly update for any sum more than £1,000. In contrast, Ken Livingstone has not declared a penny for eight years.

The Government need to talk with the Electoral Commission urgently to ensure that the PPERA is properly administered and enforced. While researching for the debate, I started with the premise that the law might need changing. I now do not think that that is the case. It seems to me that all we need is for the law to be properly enforced.

I have chosen to focus almost entirely on London, which was perhaps inevitable, as I am a London Member, but the same observations would apply to most, if not all, directly elected mayors and officials in this country. I happen to agree with the strong, directly elected mayor model, but it will not work if we cannot see all the reasons why people behave as they do, and especially without full transparency in donations. I look forward to hearing the Minister's response and her proposals for change and the proper enforcement of the PPERA so that we can have proper transparency in the funding of directly elected office holders.

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Photo of Bridget Prentice Bridget Prentice Parliamentary Under-Secretary, Ministry of Justice 2:51 pm, 25th April 2008

When Mr. Hands began his speech, he said—I hope not out of a sense of naivety or innocence, although perhaps there was a bit of naivety and innocence on my part—that he did not intend to make this a party political issue, but wanted to examine the matter in the round. He seems to have come to the House on the pretence of being concerned about propriety, ethics and regulations governing election expenses, yet he has spent the best part—two thirds—of the time for the debate making scurrilous attacks on the London Mayor, Ken Livingstone, who is the Labour party candidate in next Thursday's election, and on the Labour party in London and as a whole. If I may say so, he does not come to this with clean hands—I mean no pun.

The hon. Gentleman repeated serious, groundless allegations against one of the candidates just six days before the poll and, frankly, he wastes the resources of the House by so doing. I will talk about the Political Parties, Elections and Referendums Act 2000 in a moment, but first I will deal with the complaints that the hon. Gentleman made to the Electoral Commission. Given that he also attacked the commission, I remind him that it was set up under the Act as an independent organisation to oversee and regulate party funding and the behaviour of candidates and parties in this area.

The hon. Gentleman lodged a complaint with the commission that Ken Livingstone had failed to register donations in the 2008 campaign. The commission investigated his complaint and decided—I think that it reported this to the relevant Select Committee only a month or so ago, although I might not be right—that the PPERA rules had not been broken because all the money was given to the Labour party in London as a whole, rather than to Mr. Livingstone directly. A spokesman for the commission said that it had met the Labour party and Ken Livingstone's election agent and that it was satisfied that there was no evidence of a breach. When the independent Electoral Commission says that there is no evidence of a breach, it is not right for the hon. Gentleman to use the facilities of the House, under the cloak of parliamentary privilege, to try to resurrect such scurrilous and unfounded allegations.

The hon. Gentleman referred to Mr. Johnson, but of course Henley is not in London. As a Member of this House, the hon. Member for Henley has to make declarations in the Register of Members' Interests, so he is in a slightly different position; he has to ensure that he complies with the rules of the House, as well as the rules of the Electoral Commission. As far as I can see, neither the Labour party candidate, the Liberal Democrat candidate nor any other candidate has reported individual donations. I assume that that is because they, like the Labour party candidate, have had donations made to their party, rather than to themselves as a regulated donee.

The hon. Member for Hammersmith and Fulham made a good attempt at throwing the dirt around. It is pretty low politics—dirty politics, to borrow from the title of the book by his good and helpful friend, Lord Ashcroft, whom I understand donated a sizeable amount of money—£44,000—to the hon. Gentleman's 2005 general election campaign.

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Photo of Greg Hands Greg Hands Conservative, Hammersmith and Fulham

The Minister is quite right in her facts, but does she not agree that what she says rather bears out the fact that donations should be visible and transparent? She is able to make her correct assertion about the funding that I received for the last general election because the donations are visible on the Electoral Commission's website. The fact is that there are no donations visible for the Mayor of London since his first election in 2000, eight years ago.

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Photo of Bridget Prentice Bridget Prentice Parliamentary Under-Secretary, Ministry of Justice

I have already answered the point about the Mayor of London; donations to his campaign are made to the Labour party, and are used by the Labour party to fund the campaign. Many of us are concerned about the fact that an individual can throw cash at marginal seats around the country, and be subject to no serious accountability at all. I hope that that is one of the issues that we will address when we deal with party funding shortly. I have to say that we would have addressed the issue far more quickly if the hon. Gentleman's party had decided to work with us, and with the other parties in the House, on coming to a consensus on the issue. Unfortunately, his party decided not to do that, and we can only speculate on why that is.

The debate seems to be a smokescreen to hide the fact that the Conservative candidate for the mayoral election does not want to have to talk about his muddled policies and the risk that he poses to the prosperity of Londoners. I want to wake up on Friday morning knowing that we have elected a Mayor who puts London at the heart—

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Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. I hesitate to interrupt the hon. Lady, but she is moving a little way away from the central point of the debate.

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Photo of Bridget Prentice Bridget Prentice Parliamentary Under-Secretary, Ministry of Justice

I accept your admonition, Mr. Deputy Speaker.

The Political Parties, Elections and Referendums Act 2000 introduced positive changes and implemented the recommendations of the Committee on Standards in Public Life. As I said, those changes were made on the basis of broad consensus, to which we remain committed. I hope that the Conservative party will bear that in mind as we move to examine changes to party funding in further detail in future.

The Electoral Commission is responsible for monitoring whether the Act is properly observed and it is important to apply it so that the public can have confidence in the funding of political parties. It is important for all individual members of political parties and the parties themselves to work with the Electoral Commission to ensure that transparency.

It worries me deeply, as a democrat, when someone such as the hon. Gentleman can come to the House and make such allegations knowing that the Electoral Commission has found no fault. Doing that undermines the democratic process and makes people lack confidence in our system. We have moved far on transparency and we will go further, with support and consensus in the House. However, I often fear for democracy when undefined allegations, which lack evidence, are thrown around in the heat of an election campaign, thus undermining the whole process.

If the hon. Gentleman genuinely believes that he has a serious point to make, I hope that he is prepared to do it outside, in the public domain, without the cloak of parliamentary privilege to protect him. Otherwise, he undermines not only his position but that of his party and, more important, democracy itself.

Question put and agreed to.

Adjourned accordingly at Three o'clock.

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