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New Clause 17 — Limitation of pre-candidacy election expenses for certain general elections

Guide to the Rules Relating to the Conduct of Members – in the House of Commons at 9:00 pm on 9th February 2009.

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'(1) In the Representation of the People Act 1983 (c. 2) ("the 1983 Act"), after section 76 there is inserted—

"76ZA Limitation of pre-candidacy election expenses for certain general elections

(1) This section applies where —

(a) a Parliament is not dissolved until after the period of 55 months beginning with the day on which that Parliament first met ("the 55-month period"),

(b) election expenses are incurred by or on behalf of a candidate at the parliamentary general election which follows the dissolution, and

(c) the expenses are incurred in respect of a matter which is used during the period beginning immediately after the 55-month period and ending with the day on which the person becomes a candidate at that election.

For the purposes of this section, section 90ZA(1) has effect with the omission of the words "after the date when he becomes a candidate at the election".

(2) Election expenses incurred as mentioned in subsection (1) must not in the aggregate exceed the permitted amount, which is the relevant percentage of the following sum—

(a) for a candidate at an election in a county constituency, £25,000 plus 7p for every entry in the register of electors;

(b) for a candidate at an election in a borough constituency, £25,000 plus 5p for every entry in the register of electors.

(3) The relevant percentage is—

(a) 100% where the dissolution was during the 60th month of the Parliament;

(b) 90% where the dissolution was during its 59th month;

(c) 80% where the dissolution was during its 58th month;

(d) 70% where the dissolution was during its 57th month;

(e) 60% where the dissolution was during its 56th month.

For the purposes of this subsection, the "56th month" of a Parliament is the month beginning immediately after the 55-month period; and so on.

(4) In subsection (2) above "the register of electors" means the register of parliamentary electors for the constituency in question as it has effect on the last day for publication of notice of the election.

(5) Where election expenses are incurred as mentioned in subsection (1) in excess of the permitted amount, any candidate or election agent who—

(a) incurred, or authorised the incurring of, the election expenses, and

(b) knew or ought reasonably to have known that the expenses would be incurred in excess of that amount,

shall be guilty of an illegal practice.

(6) The candidate's personal expenses do not count towards the permitted amount."

(2) The amendments made by this section do not apply in relation to any expenses—

(a) incurred before the commencement of this section, or

(b) incurred in respect of any matters used before 1 January 2010.'.— (Mr. Wills.)

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

With this it will be convenient to discuss the following: amendment (a) to Government new clause 17, in proposed new subsection (1)(a), leave out first '55' and insert '50'.

Amendment (b) to Government new clause 17, in proposed new subsection (1)(a), leave out second '55' and insert '50'.

Amendment (c) to Government new clause 17, in proposed new subsection (1)(c), leave out '55' and insert '50'.

Amendment (d) to Government new clause 17, at end of proposed new subsection (3)(e), insert—

'(f) 50% where the dissolution was during its 55th month;

(g) 40% where the dissolution was during the 54th month;

(h) 30% where the dissolution was during its 53rd month;

(i) 20% where the dissolution was during its 52nd month;

(j) 10% where the dissolution was during its 51st month.'.

Government amendment 38.

Amendment 10, in clause 11, page 9, line 36, at end insert—

'(6) No act or statement made before the commencement of this section shall be taken into account in deciding whether a person has become a candidate.'.

Government amendments 39 to 43.

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Photo of Michael Wills Michael Wills Minister of State, Ministry of Justice, The Minister of State, Ministry of Justice

This group of amendments will overhaul and refine the provisions in the Bill relating to candidate expenditure. I think that it is true to say that the provisions have attracted a great deal of comment, not to mention controversy and criticism. We have listened to those criticisms, as we always do. The group of amendments are intended to address the various concerns raised by hon. Members. I shall begin by setting out the points on which I think that we are on common ground. I believe that we can all agree that changes to the legislation on party funding should, as far as possible, be made on the basis of a broad consensus of support between the political parties. We cannot allow party funding to become—or, just as importantly, to be perceived to have become—a partisan issue. That would be hugely destabilising to our democracy. All of us on both sides of the House have a duty to ensure that legislation on party funding supports a strong, fair and open democracy that commands the trust and respect of the electorate.

Inevitably, election campaigning requires money to be spent, but it is a long-established and, I believe, well-supported principle that first and foremost, elections are a contest of ideas and policies. Excessive election spending devalues the integrity of our democratic system. I hope we can all agree on that. It is for this reason that the law on party funding has, since the late 19th century, set strict limits on the amount of money that can be spent in pursuing election.

In the first instance, the law limited only the amount that a candidate could spend on election campaigning. However, in recognition of the increasingly important role of national campaigning conducted by political parties, the law has, since the passage of the Political Parties, Elections and Referendums Act 2000, also limited the amount that can be spent nationally.

Both the candidate and the national campaign spending limits must operate in recognition of the fact that we do not have fixed-term Parliaments. I do not wish to enter into that debate today—indeed, Mr. Deputy Speaker probably would not let me do so. I mention it merely because a consequence of that is the uncertainty over whether and when an election will be held. That is a difficulty when we try to specify the length of any regulated period for election expenses.

In the case of the national spending limit, the starting point for the regulated period is counted back 365 days from the date of the election. This means that parties can face some uncertainty in accurately planning their campaigning expenditure. In practice, however, most parties will closely monitor their campaigning expenditure at all times, and employ staff to ensure compliance with legislative requirements.

The same cannot be said of campaigning expenditure that specifically seeks to advance the electoral prospects of a candidate. Campaigning at the local level is often sustained by volunteers. We can all agree that those dedicated people are the lifeblood of our political system, and whatever we do to make sure the system is open and transparent and commands the trust of the electorate, we must also take great care to ensure that legislation does not impose undue burdens on those volunteers.

For many years, the law on candidate spending deliberately did not impose a fixed point from which the limit on election expenditure would apply. Rather, the limit applied from the point when an individual began behaving and campaigning as a candidate—a system that is often referred to as "triggering". This led some to seek to avoid the limits by referring to themselves as only prospective candidates. The 2000 Act sought to reduce uncertainty for candidates and agents by setting a clearly defined point in legislation from when an individual could be regarded as a candidate. In the majority of cases, this is the date of the Dissolution of Parliament.

Candidates have thus had certainty about the point from which to begin counting their election expenses. However, the wholly undesired, and to some extent unforeseen, effect of this has been the potential for significant levels of unregulated candidate expenditure to take place prior to Dissolution.

We have sought to address the issue before. The Electoral Administration Bill of 2005 contained proposals recommended by the Electoral Commission for a regulated period for candidate expenditure counted back four months from the date of the election. The measure was criticised on all sides of the House, however, in view of the uncertainty that it would create for candidates and the volunteers who work to help them. The proposal was consequently removed from that Bill. But the potential for high levels of unregulated spending before Dissolution remains.

We said in the White Paper that we would consider a return to the principle of candidate spending regulation that existed before 2000, whereby the purpose for which expenditure is used would determine whether it is counted against the spending limit.

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Photo of Alan Reid Alan Reid Shadow Minister (Northern Ireland), Shadow Minister (Scotland)

In general, I support the new clause. However, if a national political party were to deluge a constituency with target mail urging people to vote for that party in that constituency without mentioning the candidate, surely that should count as expenditure against the candidate of that registered party. That is surely a loophole in the clause.

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Photo of Michael Wills Michael Wills Minister of State, Ministry of Justice, The Minister of State, Ministry of Justice

I will come to that point later. This is an extremely complex area. It is highly contentious, as we discovered yet again during the passage of the Bill. If the hon. Gentleman will forgive me, it is important that I go through the sequence of arguments about how we ended up where we have now ended up.

Before I go any further, I should say that no one would regard the measure as the end of the story. We always search for perfection, but sometimes we have to recognise that is somewhat further out of reach in some cases, such as this, than in others.

As I said, we said in the White Paper that we would consider returning to the principle of candidate spending regulation that existed before 2000—that is, the purpose for which expenditure is used determines whether it is counted against the spending limit. Colloquially, that is called "triggering". It is worth noting that that principle was specifically and clearly endorsed by the Committee on Standards in Public Life in its far-reaching report of 1998. In this Bill we have therefore proposed a spending limit that would regulate all spending for the purposes of a candidate's election, including that used before he or she is formally defined as a candidate.

Unfortunately, debate on that point was curtailed in Committee; however, I am clear that the measure does not enjoy the support of Opposition parties. I am disappointed that we have not been able to secure agreement to the proposal. Nevertheless, in our characteristic spirit of openness and co-operation, we have listened to the views put forward by hon. Members and tabled this group of amendments, which will retain the existing consideration of the purpose for which expenditure is used and, additionally, introduce a fixed point in time from which that expenditure is regulated for certain elections. I believe that that will achieve more effective regulation of spending and minimise uncertainty for candidates.

Although there is usually uncertainty about whether a general election will be called at any particular point, the one point of absolute certainty is the last possible point by which a Parliament must be dissolved; when a Parliament enters its final months, we can be certain that a general election is imminent. In those circumstances, those intending to stand as candidates will have formed their intention and many prospective or already declared candidates will be likely to begin campaigning well in advance of Dissolution. We believe that in those circumstances it is possible and desirable to provide for a longer regulated period for candidate expenses.

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Photo of Bob Spink Bob Spink Independent, Castle Point

I congratulate the parliamentary draftsmen on how they have tackled this complex area, and I am delighted that this is not necessarily the final word on the issue. The Minister will agree that elections in this country have often been held six months before the final date at which an election must be called; that is the aim of any Prime Minister and generally the sensible thing to do. Why can the restricted period not be longer than the five months? If it were a 10-month period, it would take account of the real period during which candidates would be expected to start to push, particularly in marginal seats?

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Photo of Michael Wills Michael Wills Minister of State, Ministry of Justice, The Minister of State, Ministry of Justice

The hon. Gentleman has tabled an amendment to that effect, and no doubt we will get on to it in due course.

We have come to our position because we think that the current situation, in which in effect spending is regulated only for the month or so after Dissolution, is not desirable. It is an unintended consequence of previous legislation and we need to improve on it; we believe that the amendments would do that. Under current legislation, an individual generally becomes formally regarded as a candidate only on the date of the Dissolution of Parliament, the result being that campaigning expenditure is limited only from that period onwards. The amendments introduce a second regulated limit for candidate expenses. It would only regulate candidate expenditure between the point at which 55 months of a Parliament had elapsed and the date at which an individual formally became a candidate. As that is generally the date of Dissolution, in most cases we refer to it as the "pre-Dissolution limit". At that point, the existing candidate spending limit will come into force.

The new proposal contains a key aspect of the previous triggering proposal, in that it is capable of applying to what people do before they are formally regarded as candidates. The proposed new limit would apply only if a Parliament ran for more than 55 months. When that happens, there is no doubt that an election will take place shortly, so any uncertainty about whether an expense is really an election expense is greatly reduced. The proposed new limit would not apply for shorter Parliaments. In those cases, the uncertainty about when an election will take place makes specifying a longer regulated period more difficult. In those circumstances, only the current post-Dissolution limit would apply.

It is our intention that the new limit will regulate the same types of expenditure as the current limit. As with the current limit, it will regulate all spending on specified matters which are used

"for the purposes of the candidate's election."

As with the current limit, the new limit will regulate all expenditure that is used during the regulated period, even where that expenditure is incurred beforehand. That means that it will not be possible for an individual to seek to avoid the limit by stockpiling campaign material shortly before the regulated period begins for use afterwards. However, the new limit will not have retrospective effect; that is to say, it will not apply to any expenses that are incurred before commencement of the clause and then used at a time when the new limit applies. As with the current limit, the level of the spending limit will vary from constituency to constituency according to the number of electors and the nature of the constituency.

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Photo of Andrew MacKinlay Andrew MacKinlay Labour, Thurrock 9:30 pm, 9th February 2009

I am truly trying to follow this, but I am a little bewildered. In a situation such as that in 1964 or February 1974, what is the regime as regards expenses in the period where it is unlikely that a Parliament is going to run for the duration? If there were a hung Parliament, surely all the big battalions would have been trying to pour money into what was an uncertain period of a few months.

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Photo of Michael Wills Michael Wills Minister of State, Ministry of Justice, The Minister of State, Ministry of Justice

I understand my hon. Friend's concern, and as a matter of common sense I can see the force of what he says. However, this measure is predicated on the one thing that we can be absolutely certain about. Of course he is right that as in 1964, with a very small majority, or 1974, with, essentially, a hung Parliament, the likelihood is that there would be an imminent general election. However, we do not know—that is the difference. We know, because of statute, when a Parliament must end, but in those circumstances, although it is likely that there would be an imminent general election, we do not know that. We do not know what deals will be cobbled together; ingenuity and hunger for power are extraordinary things. The whole basis of this proposal is that it is predicated on what we know for a fact, taking into account all the concerns that people have raised about uncertainty. I hope that that clarifies the position for my hon. Friend.

In general, although the level of the spending limit will vary from constituency to constituency, it will amount to around £30,000. The specified sum may in future be increased by order because of inflation or following a recommendation from the Electoral Commission. It may be that a Parliament runs for over 55 months but does not run to its full term. In that event, the amendments provide for a pro-rating of the limit. We are open to views on the appropriate fraction of the limit that should apply in those circumstances. We have made our best guess of what would be a sensible and reasonable approach, and we are open to representations on that. However, we have provided that the pro-rating should be staggered to take account of certain fixed costs incurred as part of campaigning.

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Photo of David Howarth David Howarth Shadow Secretary of State for Justice

I have come across this point about fixed costs before, but I ask the Minister to list what he thinks they are. In most campaigns, the fixed costs will have been incurred long ago and all that one has in the run-up to the election, five months before, are variable costs.

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Photo of Michael Wills Michael Wills Minister of State, Ministry of Justice, The Minister of State, Ministry of Justice

As I say, we are open to representations on this. We want to take a view that as far as possible commands consensus. If the hon. Gentleman wants to come forward with an alternative proposal, I can absolutely assure him that we will consider it with an open mind, as we have done with all the representations that we have received.

We propose that the new clause and associated amendments will be commenced by order following Royal Assent. The exact date of commencement is to be determined and will in part hinge on the timetabling of a debate to consider the appropriate use of parliamentary allowances during the longer regulated period. Regardless of the date of commencement of the new clause, for the sake of clarity and simplicity we have provided that should the new limit be needed for the current Parliament, it would only begin to regulate expenses used after 1 January 2010. That is slightly later than the 55- month point, but we do not consider that this significantly undermines the purpose of the provisions.

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Photo of Francis Maude Francis Maude Shadow Minister (Cabinet Office)

Will the Minister be a little more specific about the proposal that the Government plan to bring before the House on the use of Members' allowances during this equivalent period? He will know from previous discussions that we are concerned about symmetry in this case. Members of Parliament have large allowances available that can be used for pro-active communication with their electors. When candidates are affected by this measure, which we support, to control spending during the last few months of the Parliament, the House must put in place rock-solid arrangements regarding the use of allowances, whether for communications or for incidental expenses, to do stuff that promotes Members of Parliament in a way that is equivalent to a candidate's campaigning. I am grateful to him for the indication that new clause 17 will not commence until such matters have been decided, but it is crucial that the House understands exactly what is proposed, and that there is no intention to commence the provision until that happens.

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Photo of Michael Wills Michael Wills Minister of State, Ministry of Justice, The Minister of State, Ministry of Justice

The right hon. Gentleman knows that we understand his concerns about symmetry, which is why we have said what we have said on this matter. We heard such concerns expressed forcefully on Second Reading and we are taking them into account. Some of the issues are complicated, but we accept the point about symmetry. I can give the right hon. Gentleman the assurance that he wants on commencement. The House will know exactly what we will propose in due course.

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Photo of Martin Linton Martin Linton Labour, Battersea

In view of the complete absence of Conservative Back Benchers during this debate—I cannot think why—would my right hon. Friend care to comment on the common-sense view that many Conservative candidates, without any constraints on their spending, are more likely to start their campaigns in September and run them for six months until the expected date of the election, rather than in January? It would be more valuable to have these commendable controls in place, not from the 55th month, but from the 50th, in order to give a good six-month run, thus preventing the distortion to the result of the election that could be caused by the fact that very rich candidates are able to put huge amounts of their own money into their election campaigns.

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Photo of Michael Wills Michael Wills Minister of State, Ministry of Justice, The Minister of State, Ministry of Justice

I understand my hon. Friend's concerns. I suspect that Mr. Reid may be able to make a similar point, so I shall give way to him.

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Photo of Alan Reid Alan Reid Shadow Minister (Northern Ireland), Shadow Minister (Scotland)

If the Government are considering the communications allowance used by Members of this House, can they also look at similar allowances used by those in devolved Parliaments or Assemblies? For example, at the last general election, my opponent was a Conservative list MSP, and it would be unfair if a candidate in such a position were allowed to use the Scottish Parliament equivalent of the communications allowance. All the Parliaments' communications allowances need to be looked at.

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Photo of Michael Wills Michael Wills Minister of State, Ministry of Justice, The Minister of State, Ministry of Justice

I understand all of those concerns. We have done our best to reach a consensus on the agreements. They are not ideal, and it may well be that there is no such thing as an ideal solution. Wherever we strike the balance, there will be problems, but we regard the provisions as a significant improvement on what exists already, and on that basis, I hope that the House will be able to support the new clause.

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Photo of Francis Maude Francis Maude Shadow Minister (Cabinet Office)

I warmly welcome the Government's climbdown on this issue; it is a long-overdue return to an attempt to reach consensus. The Minister is completely right that it is not possible to reach perfect agreement. The Justice Secretary said last summer that he believed that there was a consensus about reintroducing a trigger. When I heard him say that, I looked at what I said in response to his statement on 16 June last year, to see whether I had been at all ambivalent about it. I found that I had said that it would be

"an atrocious abuse of power for the Government to force through restrictions on what parliamentary candidates can spend from money they have raised privately, while sitting MPs can spend ever-more taxpayers' money on promoting themselves".—[ Hansard, 16 June 2008; Vol. 477, c. 694.]

I can see that that was most equivocal, and did not make it at all clear that we had reservations. I must resolve to stop speaking in code and say exactly what I mean.

The Government's decision is a welcome return to consensus. The proposal to return to triggering was universally condemned as a return to an unworkable, unwieldy rule that had long outlived its usefulness. It was an attempt to appease Labour Members who were feeling the hot breath of their electoral nemesis on their necks, convinced that their salvation lay in controlling the wall of money that seemed to be heading their way.

I know that Martin Linton has been a long-time campaigner on the subject and is deeply concerned about it. I can reassure him that the amount of support being given by the central party to the excellent candidate against whom he will be fighting the election, whenever it comes, is actually very small. He is right to be concerned about his electoral future, not because of the amount being spent but because there is an outstanding Conservative candidate in Battersea who has a brilliant, enthusiastic team that she has inspired locally. That is where his nemesis lies, and his salvation does not lie in provisions such as he seeks.

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Photo of Martin Linton Martin Linton Labour, Battersea

I can assure the right hon. Gentleman that I campaign not for myself in any way—I am totally confident about the result in my constituency—but for the principle that candidates' spending should not be unlimited. The Conservative party has subscribed to that principle for the past 100 years, but as the result of an unintended change in the law, it has suddenly embraced the freedom to spend as much money as it likes. Many of my colleagues of all parties will bear the brunt of such unrestricted spending, and it is an insult and an affront to democracy that the House should support it.

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Photo of Francis Maude Francis Maude Shadow Minister (Cabinet Office)

If the hon. Gentleman says that his campaigning was entirely high-minded and selfless, of course I accept that—it is obligatory that we must. I note, however, that a dispassionate viewer would say that the matter has a considerable effect on his constituency. I reassure him that it is not what is causing him a problem in his constituency. That is entirely to do with the fact that there is an outstanding candidate there, who is campaigning night and day with a brilliant team of enthusiastic volunteers.

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Photo of David Winnick David Winnick Labour, Walsall North

Is the right hon. Gentleman familiar with Lord Ashcroft's words? He said:

"We haven't been wasting our time or our resources. Of the 33 candidates who won seats from Labour or the Liberal Democrats" at the last election,

"no fewer than 25 had received support from the fund that I had set up with Leonard Steinberg and the Midlands Industrial Group".

Many of us would consider that an abuse of the electoral system.

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Photo of Francis Maude Francis Maude Shadow Minister (Cabinet Office)

Frankly, it is very hard to see how it is an abuse for candidates to raise money to fight their campaigns. Why is that any more of an abuse than the hon. Gentleman and his colleagues raising large amounts of money from the trade unions in a way that is much less transparent?

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Photo of Francis Maude Francis Maude Shadow Minister (Cabinet Office)

The hon. Gentleman seems to think that that is different, but it is not. The argument is completely bogus.

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Photo of Francis Maude Francis Maude Shadow Minister (Cabinet Office)

I give way to the hon. Gentleman, another Member with a very marginal seat and an outstanding Conservative candidate hot on his heels.

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Photo of Gordon Prentice Gordon Prentice Labour, Pendle

The candidate whom I defeated last time was Jane Ellison, who is standing in Battersea this time. Does the Gentleman feel comfortable about taking barrel loads of money from the self-confessed tax exile, Lord Laidlaw?

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Photo of Francis Maude Francis Maude Shadow Minister (Cabinet Office)

I shall simply cite the Justice Secretary when that matter was raised in a debate a little more than a year ago. He said that what mattered was that a donor was legal and permissible under legislation that he had piloted through Parliament. He also said that an individual's tax status was a matter for that individual.

I welcome the Government's death-bed conversion and I am grateful for it. I stress the point that I made in my intervention on the Minister. It is essential that the House should provide for preventing the use of allowances by incumbent Members of Parliament to promote themselves proactively, whether through newsletters or direct, unsolicited mail, to constituents during an election period. If the provision is to be fair and democracy is to work properly, there must be absolute symmetry. It would be outrageous to place statutory constraints on candidates' spending out of money that they have raised privately while Members of Parliament continued to be able to spend taxpayers' money on promoting themselves in their constituencies.

I did not hear from the Minister with the clarity that I sought the commitment that the new clause would not commence without a cast-iron resolution of the House to prevent the use of the allowances for such proactive purposes.

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Photo of Michael Wills Michael Wills Minister of State, Ministry of Justice, The Minister of State, Ministry of Justice 9:45 pm, 9th February 2009

I am sorry that the right hon. Gentleman did not hear a clear commitment. I thought that I made it clear that the two matters were linked—one depends on the other—but that, first, we must get broad cross-party consensus on what needs to be done about parliamentary allowances. We are not quite there yet.

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Photo of Francis Maude Francis Maude Shadow Minister (Cabinet Office)

That is the bit that I did not hear clearly. I heard the commitment not to commence the provision without a resolution of the House, but I did not hear what the Minister proposed to put before the House as a constraint on the use of allowances. It is crucial—the Minister must understand that. I believe that he does understand it, and I know that the Justice Secretary understands how unfettered—or any—use of taxpayers' money to promote a Member of Parliament's activities when statutory constraints, with criminal penalties, were placed on candidates' ability to promote themselves would be unfair, and would be seen to be unfair. Symmetry is essential.

We are not remotely convinced that the new clause is necessary. However, we believe that it is acceptable and we happily acquiesce in it, but there must be symmetry in its introduction. We want an election whereby challenging candidates can contest with incumbents on the same footing.

I assume that amendment 41 applies to the late selection of a candidate simply to prevent previously incurred expenses from escaping the net. If the Minister has a chance to reply—he probably will not—I would be grateful if he confirmed that the expenses that the new, earlier period of 56 months plus catches will be defined in the same way as expenses in the election period. It would be hugely complicated if there were any difference in the definition of expenses for those purposes.

With those observations, we support the amendments.

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Photo of Martin Linton Martin Linton Labour, Battersea

I shall not take up much of the House's time because I do not want to stand in the way of amendments being moved. However, I have campaigned for the past seven years to close the Ashcroft loophole. I appreciate that Lord Ashcroft did not invent it, but he has made more use of it than anybody. It was an unintended consequence of earlier legislation, and the House agreed that it was undesirable. During that time we have had one attempt to close that loophole.

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Photo of Francis Maude Francis Maude Shadow Minister (Cabinet Office)

Could the hon. Gentleman just explain why it is a loophole for a legitimate donor of any sort to be willing to support a candidate in his constituency? What is that a loophole in, for heaven's sake?

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Photo of Martin Linton Martin Linton Labour, Battersea

It is a loophole in the controls on candidates' spending that have existed for 128 years in this country, which are supported by all parties. It was only as an unintended consequence of the Political Parties, Elections and Referendums Act 2000 that that loophole was created.

The original Bill proposed a return to triggering. We never regarded that as an ideal solution, but it would have brought back the controls that existed before 2000, for which there were a lot of legal precedents, and it would have worked. In its place, the Government have proposed a 55-month period, which in theory would come into force on 10 December. However, my right hon. Friend the Minister said that he would commence it on 1 January, which will restrain candidates' spending in the three months before the last possible date for a dissolution.

It is certainly true, as shown by the evidence from Lord Ashcroft and from Peter Bradley, the former Member for The Wrekin, that most spending happens in the pre-campaign period between January and March and is done both by candidates locally—that was the evidence from the 2005 election—and by the national parties. The 55-month period that my right hon. Friend proposes would have the salutary effect of restraining spending during that pre-campaign period. I would regard that as far better than the status quo, which is to have no controls at all.

My hon. Friend Dr. Whitehead and I suggested a 50-month period in Committee, because the key period is not just the January-to-March period, but from September onwards. The last six months before the last possible date for dissolution is when it is most important to have controls on candidates' spending. I stick by the view that that would be the best control that we could introduce at this stage.

In fact, we would have preferred a 36-month period, which would automatically introduce candidate controls after three and a half years of any Parliament, so that whether an election was held after four or five years, there would be controls on candidates' spending in the last six months. I welcome the fact that my right hon. Friend said that what we have now is not the end of the story. New legislation will have to be introduced in the next Parliament, and I hope that it will propose a 36-month period.

I end by reminding hon. Members that controls on candidates' spending were introduced in 1880, as a result of outrageously high spending in the election of that year, when candidates spent a total of £2 million. In today's terms, that would be £171 million. Indeed, if we use the earnings index, which is a fairer measure, we realise that the amount would be £2.2 billion. That is even more than the $2 billion spent by all the candidates in the recent US election, which was the most expensive election in recent history. Britain was even worse than that before we had controls on candidates' spending. If we want to return to having candidates being able to buy their way into Parliament, all we have to do is to have no laws on candidates' spending at all. I welcome new clause 17, but I hope that hon. Members are with me in preferring spending to be controlled from the start of the 36-month period or, at the very least, for the last six months of a Parliament.

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Photo of David Howarth David Howarth Shadow Secretary of State for Justice

I am very glad to welcome the demise of clause 11, as it did not produce the answers, which many hon. Members were looking for, to a number of problems. Basically, there are two problems, although they are different. One is the Lord Ashcroft problem, which Mr. Winnick mentioned. It arises when money is thrown at constituencies from a centrally raised fund. The second problem is what might be called the Zac Goldsmith problem, which is where a very wealthy candidate spends money on promoting himself. These two separate problems cannot be solved using the same provision. All through this debate, we have been dogged by the problem of trying to achieve two different things with one suggested mechanism.

The mechanism now being proposed in place of triggering is certainly better than triggering, which never really worked. It simply resulted in a lot of angry letters being exchanged between agents, with one accusing another of having started election expenses and then getting a letter back— [ Interruption. ] Andrew Mackinlay says that it did work. It worked in one sense, in that it represented a kind of background threat, but people who were brazen just got away with it anyway.

The triggering mechanism also led to a number of straightforward evasions, such as calling oneself a prospective parliamentary candidate, a parliamentary spokesperson or the editor of the newsletter—[Hon. Members: "Who would do that?"] I have no idea who would do that kind of thing, but those were all well-known evasions. The process became a laughing stock. The attempt to bring it back was an attempt to solve both the problems that I have just mentioned but, in the end, it was not going to work. A number of meetings took place between experts and the Electoral Commission, and the commission tried to put forward draft guidance, but it became very clear that, as a practical matter, this was not going to work.

We have now come back to the suggestion, which I think was originally made by Martin Linton, of having a fixed date from which there would be a period of pre-election control on candidates' spending, and having a second period of controlled candidates' spending following the Dissolution of Parliament. That is workable. I do not think that it causes the problem that triggering has—namely, that it cannot be made to work in practice—but it has serious flaws that will have to be thought about as the Bill goes through the House of Lords.

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Photo of Bob Spink Bob Spink Independent, Castle Point

The hon. Gentleman supports Government new clause 17, but does he agree that it should be even tougher, and that it should involve a 50-month period rather than a 55-month period? If so, will he allow me a moment to speak to my amendments (a) to (d)?

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Photo of David Howarth David Howarth Shadow Secretary of State for Justice

I hear what the hon. Gentleman says, but those amendments are technically deficient in an important way, and would not achieve what he wants, because he has not changed the start date. Unfortunately, they would keep the start date of 1 January in the Bill. Although there is a lot of merit in what his amendments say about spreading out the period, and about making things smoother in regard to the number of months, they would not work as a practical suggestion— [ Interruption. ] Does the Secretary of State want to intervene?

I want briefly to go through the defects in the existing proposal. It deals only with individual spending and not with party spending, and it gives the governing party, which knows the date of the general election, an unfair advantage. That really needs to be sorted out. The percentages in the Bill sort of deal with that point, but they do not go far enough.

Finally, and most importantly, the proposal does not deal at all with third-party expenditure. It deals only with expenditure by candidates and agents, and not with third-party spending on behalf of candidates. I hope that the Minister will at least have time to deal with that last point.

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Photo of Michael Wills Michael Wills Minister of State, Ministry of Justice, The Minister of State, Ministry of Justice

In the few remaining seconds, I want to pick up on some of the points that have been raised in this important discussion. Regulated matters will be treated in exactly the same way in the pre-Dissolution and post-Dissolution periods. We considered the 50-month period that has been proposed by various Members, but we rejected it because we believe that it would increase uncertainty for candidates to an unacceptable extent. Interestingly, the Electoral Commission has clearly stated its support for a start point of 55 months. It does not support amendments proposing a start point of 50 months because it, too, believes that that would increase uncertainty to an intolerably high level.

My hon. Friend Martin Linton has made important contributions today and in Committee. He said that he assumed that new legislation would come forward in the next Parliament, but he would be rash to make such an assumption. It is absolutely fundamental that any action at all in this area should proceed on the basis of cross-party consensus. We believe that this Bill has now reached that point, and we hope that hon. Members will support the new clause.

Debate interrupted (Programme Order, this day).

The Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the clause be read a Second time.

Question agreed to.

New clause 17 accordingly read a Second time, and added to the Bill.

The Speaker then put forthwith the Question necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

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