Committee (2nd Day)

Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill – in the House of Lords at 3:38 pm on 15th January 2014.

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Relevant documents: 3rd Report from the Constitution Committee.

Clause 26: Meaning of “controlled expenditure”

Amendment 34

Moved by Lord Harries of Pentregarth

34: Clause 26, page 12, line 45, at end insert—

“unless the expenditure relates to legislation before Parliament during the regulated period”

Photo of Baroness Anelay of St Johns Baroness Anelay of St Johns Captain of the Honourable Corps of Gentlemen-at-Arms (HM Household) (Chief Whip, House of Lords), Deputy Chairman of Committees, Deputy Speaker (Lords)

May I assist the noble and right reverend Lord, Lord Harries? We allow some latitude, of course, at the beginning of any stage when Members are exiting the House in some large number, but may I advise any other Peer who leaves that they should not walk in front of the person who is moving the amendment? It was impossible for those on the Front Bench, who were listening to the noble and right reverend Lord, Lord Harries, even to hear the first word. I am sure that the noble and right reverend Lord, Lord Harries, may now wish to resume.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

I thank the noble Baroness very much.

Before I focus on the first amendment in this group, I thank the Minister for responding to a good number of concerns raised by the commission which I have the privilege of chairing. He has responded to quite a lot of our concerns, in particular, I note, with government Amendments 41 to 44 in this group, which we are glad to see. All these issues were mentioned in the second report of the Commission on Civic Society and Democratic Engagement. The government amendments deal with issues of safety and security, particularly in Northern Ireland, extra expenses due to disability and travelling expenses, and they take out the time of volunteers. They also include translation from Welsh to English, although I note that the noble and learned Lord, Lord Morris of Aberavon, has his own amendment to include production costs as well as translation costs, and I hope that the Government will look sympathetically on that. I am very grateful on behalf of the commission to the Minister; he has taken a lot of trouble to listen.

However—and it is a big however—there remain a significant number of concerns, on which we are hoping to have a positive response from the Government. I have in my hands a petition which was started only last Thursday by the commission and, since then, has gained the support of more than 130 NGOs and 160,000 signatures from charities and campaigning groups that are still concerned about the effect of the Bill on the workings of our democratic society.

Briefly, the amendment of the noble Lord, Lord Tyler, is about the distinction between the general public and supporters. The commission put forward an amendment to try to widen out the definition of a supporter because, in a digital age, a supporter cannot simply be considered as somebody who gives money to a charity. As that petition indicates, with its 160,000 signatures, the term “supporters” now has a much wider character. Although the Government did not accept the amendment which we tabled earlier because they thought it was too wide, I hope that they will look sympathetically at that of the noble Lord, Lord Tyler.

To focus specifically on Amendment 34, my amendment concerns legislation before Parliament during an electoral period. It is absolutely fundamental to the healthy working of democratic society that people should be able to campaign quite freely, without being inhibited by too much regulation, against legislation that is going through Parliament during the electoral period. I was disappointed that the Electoral Commission, which has been helpful at a number of points in supporting our amendments, does not support this one in its latest briefing. I will examine its arguments as to why not.

The Electoral Commission says that, if the amendment were allowed, it would allow unlimited spending on what may promote or procure the election of any particular candidate or party. Secondly, it suggests that the range of topics is potentially wide, even if it is covered by primary legislation indicated by the Government. Let us take an example and test that out. In election year, the Government decide to start legislation for, let us say, a new town of 500,000 people not far from an area of outstanding natural beauty. This policy is strongly supported by the Government of the day, but is opposed by the two other parties; it is a highly political issue. Furthermore, the town will actually cover three constituencies where there is a narrow majority.

Surely people ought to be able to campaign either for or against that quite freely without an excessive regulatory burden, even during an electoral period. Otherwise, think what would happen. The Government could save their most controversial legislation until the beginning of the electoral period and bring it forward then, knowing that the opposition to it would be more muted than if it were outside the electoral period. We must remember that one year in five will be an electoral period. This will severely hamper and inhibit the proper workings of our democratic society.

I look to the Minister to see whether it might be possible to include on the face of the Bill the particular amendment in my name. I beg to move.

Photo of Lord Morris of Aberavon Lord Morris of Aberavon Labour 3:45 pm, 15th January 2014

My Lords, I am grateful to the noble Lord, Lord Gardiner of Kimble, for the unfailing courtesy in the discussion that we had on my amendment. When I moved a similar amendment in Committee, with the support of a number of my noble friends and no one dissenting, I said that I hoped that I and all of us concerned with the status of the use of the Welsh language had nothing to worry about. Now the Government have tabled Amendment 44, which includes such provision in new paragraph 1A(1)(b), and I welcome that as a very important step indeed.

Given the history of the success in ensuring equal validity for the language over the years, I presume the failure to include in the Bill a declaratory statement of the kind now in the Government’s amendment was an unintended omission. I was particularly encouraged by the considered statement of the noble Lord, Lord Gardiner, in his reply to the previous debate, where he stated that,

“the Government believe that the Welsh Language Act 1993 includes an obligation to treat Welsh and English on an equal basis and that there is a strong and compelling case for translation costs to be excluded”— that is, excluded from the ceiling. He added, with regard to the references that had been made to the history of the language, that,

“the Government will consider how this exclusion would operate and will want to return to this important issue on Report”. —[ Official Report , 16/12/13; col. 1093.]

That is what they have done, and I welcome that. Hence my noble friend and I tabled the original amendment, and I am grateful for the support of all who spoke in Committee.

The Minister said that there is “no legal obligation” to translate election material from English to Welsh and vice versa, and that is absolutely right. In reality, however, given the sea change in the use of the Welsh language in Wales, in some parts in practice it would not be possible to make any electoral headway without the use of both languages. All parties in Wales recognise this and implement the public expectation of the use of both languages. Indeed, in my time as a constituency Member of Parliament, this is what happened and many people made representations to me in both languages.

The Welsh Language Commissioner, Meri Huws, was concerned about this lacuna in the Bill and sought my support. The Bill defines “controlled expenditure” to include,

“the production … of material which is made available to the public at large”.

Since the cost of translation of electoral material falls within that definition, the commissioner was concerned that the reduced expenditure would adversely affect the provision of bilingual election material in Wales. Non-political organisations might well choose not to use bilingual election material. That was the issue. The mischief which concerned the Welsh Language Commissioner was the possible inhibition of third parties from issuing bilingual material.

I would argue that the Government have sought to meet our need. You cannot translate anything unless you have an original document. Material produced for the public at large by definition includes the production cost. The bilingual production of the document for translation is a preliminary step towards its publication, so it is totally unreasonable to limit the exception to, for example, the actual payment to the translator, which could be quite small. Following my conversation with the noble Lord, Lord Gardiner, this morning, I hope that the noble and learned Lord, Lord Wallace, who I understand will reply, will give me the assurance I seek that “production” is basically a part of the process leading to the translation. Any other interpretation would put my noble friends, and indeed the Government, in an impossible situation.

Let me describe the situation where I was wrong and the expenditure was confined strictly to the actual costs of, for example, paying the translator. Whereas in England the NSPCC may issue material only in one language, the NSPCC in Wales would be obliged to prepare and translate a similar document in both languages. If the whole costs could not be excluded from the expenditure ceiling, that would certainly inhibit it from doing what it would like to do. If I am wrong—perhaps those advising the Minister will want to consider the reply, which I am sure will be helpful—the mischief of discouraging people from producing bilingual pamphlets and material would still be there.

I hope very much that I can have the assurance that I want. I refer again to what the noble Lord, Lord Gardiner, said in Committee, that the Government want to fulfil their obligations,

“to treat Welsh and English on an equal basis”.—[ Official Report , 16/12/13; col. 1093.]

I hope and believe that the legislation should leave this House on as perfect a basis as possible.

Photo of Lord Wigley Lord Wigley Plaid Cymru

Before the noble and learned Lord sits down, can he emphasise that the cost of production includes additional paper and printing as well as the cost of translation? That is the point where his amendment, to which my name is attached, has merit over and above the Government’s amendment. There needs to be clarification that the cost of production includes the extra costs related to having the production in two languages.

Photo of Lord Morris of Aberavon Lord Morris of Aberavon Labour

Given that the definition I have quoted refers to “production of material”, I assume that that material is included in the definition. You cannot usually translate anything unless you have something on paper to look at, which enables you to translate it. Therefore, this is an initial step in production. I emphasise, for the third time, that the definition refers to,

“the production … of material which is made available to the public”.

Photo of Lord Cormack Lord Cormack Conservative

My Lords, I very much hope that the comments made by the noble and learned Lord, Lord Morris, will be taken seriously by my noble and learned friend, as I am sure they will be. However, I will direct some very brief comments to Amendment 34, which was moved with commendable brevity by the noble and right reverend Lord, Lord Harries of Pentregarth.

We live in a very different age from people who were active in politics even 20 or 30 years ago. I do not know whether the mass membership political party is a thing of the past or not, but it is certainly not a thing of the present. We live in an age in which single-issue groups and associations predominate and have a collective membership far in excess of the Conservative Party, the Labour Party and the Liberal Democrat party put together. One can illustrate that with one statistic: the National Trust now has over 4 million paid-up members. In this new age, we have to be very conscious of the fact that we should pass no legislation in this House that in any way inhibits the expression of legitimate opinion. The Bill endangers that expression of legitimate opinion.

If ever there was a Bill that cried out for pre-legislative scrutiny, it is this one, but it has not had it. In saying that, I level no criticism at my noble and learned friend Lord Wallace of Tankerness, who has been exemplary in the manner in which he personally has sought to meet and discuss with people who have legitimate concerns and interests. Therefore, I exonerate him from all blame, but I still say to him that this is a Bill that is far from perfect. It is a Bill that should never have been presented in this form to either House of Parliament.

Another thing that makes the present age different from very recent ones is the dynamics of the fixed-term Parliament. Until a future Parliament has the good sense to repeal that Act—which I hope will not be too long distant—the fact is that we know when the next election will be and the election after that and so on. So we have a year of purdah as far as interests groups, charities and others are concerned. The simple aim of Amendment 34 is to try to alleviate some of the problems that that creates.

I very much hope that when my noble friend responds to this brief debate—and I hope that it will be a brief debate because we have a long day before us and many important issues to discuss—he will acknowledge the powerful arguments put forward by the noble and right reverend Lord, Lord Harries, which are supported by many of us. If the Minister cannot give the assurances that we seek, I hope that he will at least give the assurance that he will reflect on this matter, have further discussions and come back at Third Reading, because we need to make this very, very imperfect—no, this very, very bad—Bill a little more palatable than it is currently.

Photo of Lord Tyler Lord Tyler Liberal Democrat

My Lords, I have two amendments in this group. In preparing my notes, I had intended to say precisely what the noble and learned Lord, Lord Morris, said just a few minutes ago. It is the responsibility of this House to try to make sure that anything that leaves us is as good as it can be and as perfect as we can achieve. Today, therefore, we are all together in seeking modest amendments in most cases, but important ones that make the Bill more workable, more acceptable and more democratic.

Before I come to the two specific amendments on which my name leads, I should very much like to support the noble and right reverend Lord, Lord Harries, in his Amendment 34. It is important for the sake of civic society that we enable people to get fully involved in the dialogue with Parliament about the legislation that goes through the two Houses. I hope that, in one way or another, my noble friend will be able to make that absolutely clear. It must surely be right that, when legislation is going through both Houses of Parliament, our fellow citizens are in a position to campaign without let or hindrance to improve that legislation. I very much hope that we will have reassurance on that point.

Amendment 40, which stands in my name and in the names of the noble and right reverend Lord, Lord Harries, my noble friend Lord Cormack and the noble Baroness, Lady Mallalieu, is quite simply about bringing the concept of supporter up to date. I echo here a point made by my noble friend Lord Cormack a few minutes ago. When I was first involved in politics, those of us who wanted to engage in the political process, in the main, joined a political party. I did so as a student and I suspect that many others in your Lordships’ House did the same. Some then drifted off into other occupations. I stayed with politics, to my obvious detriment in terms of income compared with the lawyers in your Lordships’ House. From that period to now there have been dramatic changes in society. Many then did join parties; others might have joined campaigning groups. Some of those groups are still with us and still have a mass membership. In those days, it was very much the culture of the age, particularly among young people, but people today support campaigns à la carte. They do not get involved in just one campaign and stick with it to the exclusion of all others. They are involved for a time but their priorities change, just as in the consumer world people expect now to pick and choose. You go to one supermarket for one purpose and to another for another, to one airline for an outward flight and another to come home again. You do not necessarily feel that you have to join up to one hospital even—you choose. It is part of the culture of our age.

People do not sign up to any one view or any one provider of that view. They certainly do not join one group for fear that doing so would sub-contract their future views on future issues to that group concerned. Yet it is still important in electoral law to make way for groups that communicate with people who have regular, committed supporters without that being counted as some sort of electioneering. The concept of a committed supporter is now familiar to the Electoral Commission and it incorporates that in its guidance. Amendment 40 seeks to tighten that up and put it into legislative form. In short, we are saying that someone who has given money to an organisation or has directly communicated with it in the past 12 months should be accepted and recognised as a committed supporter.

To be clear, I do not believe, as some have suggested, that everyone who has given Data Protection Act consent to be contacted in future—for ever and always—should be counted as a supporter of that group full time. That surely cannot be practical. I am sure that if Members of your Lordships’ House look at their e-mail inboxes, they will find messages there from all sorts of groups in relation to which at some time we have either ticked or not ticked a box to say that we do not mind if they communicate with us. However, that is not enough to say that we are committed supporters of a particular group. Therefore, I think that our amendment is much more practical. Surely that consent should not be allowed to imply active, ongoing support for the group concerned. However, active participation in a campaign in the past 12 months—not just receiving e-mails but acting on them—is surely a signal of active support. I think it should be recognised as such alongside, and on an equal basis with, financial contributions. As I have said, the existing Electoral Commission guidance is not sufficient because it concentrates too much on donations. Support for an organisation involves much more than simply giving money and we should take this opportunity in this Bill to say so firmly so that in future the guidance is absolutely explicit.

Finally, Amendment 45A in my name makes one very simple suggestion, which I hope will commend itself to my noble friends on the government Front Bench. I do not need to tell your Lordships that the Bill is controversial. It would be reassuring for all those concerned to know that any future alterations to Part 1 of Schedule 3, which is very controversial, cannot simply be made by ministerial fiat. On many occasions in your Lordships’ House we have had the familiar problem of what I think is usually referred to colloquially as the Henry VIII power. It is not appropriate here and I hope therefore that, on the basis of Amendment 45A, that power can in future be subject to an affirmative resolution of both Houses. That would give proper control over that exercise. I accept that that is not something for today but I hope that my noble friends on the government Front Bench will look at it in time for us to consider whether that might be a useful very small addition but one that would give real reassurance to those who are concerned about the future of this legislation. On that basis, I hope that when the Minister responds he can do so positively to these amendments.

Photo of Baroness Mallalieu Baroness Mallalieu Labour 4:00 pm, 15th January 2014

My Lords, my name is added to Amendments 34 and 40 in this group, which I support. To my mind, Clause 26 goes to the heart of the damage that the Bill as it stands has the ability to do to free speech, to the right to campaign and to the right to protest. It exposes what I believe was an unintended consequence of a Bill which, as we have already heard, was placed before Parliament in haste and without proper consideration.

Clause 26 has the capacity to prevent any campaigning organisation mounting a major campaign against a Bill before Parliament in the regulatory period proposed —in other words, from September this year to May 2015 and, as others have said, for one year in every five thereafter. If Clause 26, together with the rest of the provisions in the Bill currently proposed by the Government, including today’s government amendments, had been in force in 2005, because of the 60% spending limit reduction and the inclusion of staff costs in the expenditure that has to be accounted for, it would simply not have been possible, for example, to mount rallies and marches on the scale organised by the Countryside Alliance—of which, I remind the House, I am president—all of which took place in what would have been the regulatory period for the 2005 election. I suspect that other major protests, such as the Stop the War march, would also have been troubled by the spending limits.

Although it is defective, PPERA was liveable with because the expenditure limits were set at a level which did not capture the activity of most campaigners and because staff costs did not have to be included in returns. Campaigners were therefore able to live with the legislation. However, this is not so with Clause 26 as it currently stands. As the noble and right reverend Lord, Lord Harries, said, it provides an opportunity for a Government to reserve the introduction of particularly contentious legislation to the year before an election—the regulatory period—knowing full well that opposition will be seriously restricted by the financial limits imposed under the Bill. While I accept that opposition would not be wholly silenced, it would, effectively, be seriously curtailed.

For those who have not followed it as closely as others, political campaigning under the Bill does not necessarily involve campaigning for or against a particular candidate or party. I prefer to call that “Political” campaigning with a capital “P”. Under the Charity Commission’s guidance, no charity is permitted to do that. The Bill goes further and restricts what I call political campaigning with a small “p”: in other words, campaigning on a policy, which is what many charities do. You do not have to make any mention of a particular party or candidate to be caught by the Bill, but you will be if your campaign can reasonably be regarded as intended to promote or secure electoral success, even if it can be regarded as intending to achieve some other purpose too. It does not matter that your campaign is long-standing if it fulfils those criteria. As the Minister has repeatedly said, the test is an objective one. So it is also irrelevant if your intentions, as the campaigner, were solely concerned with the issue and not with the election.

The current guidance of the Electoral Commission suggests that where, for example, one political party allies itself with the campaign of a particular organisation, it does not necessarily mean that the campaign and its material become regulated, but if there is a change in the scale and nature of the campaigning it may well do so. However, what if a party in government introduces a contentious Bill, during the regulatory period, which directly impacts adversely on your existing campaign? How can a campaigning organisation reasonably not draw attention to the fact and campaign vigorously against it? Indeed, why should it not?

Legislation before Parliament will, of course, reach a conclusion one way or another with Prorogation. The campaigning directed at legislation, albeit during the regulated period, is aimed not at the election but at something which will have concluded by election day—indeed six weeks beforehand—with Prorogation. A way must be found to enable the people of this country to express the strength of their feelings about proposed legislation at any time in the course of a Parliament. I hope that the Minister, who has repeatedly said that it is not the Government’s intention to stifle protest, will agree to take the amendment away for urgent discussion with the Electoral Commission and return next week, if not with an amendment to meet this real objection to Clause 26 then at least with an unequivocal indication of guidance to be given to permit legitimate campaigning in these circumstances. As the Minister will know, it is not enough for him to make some form of Pepper v Hart statement in this House because the courts, in due course, will not look at what is said in the debates of this House unless the legislation is itself unclear or ambiguous. The Bill is perfectly clear in what it says in that respect.

If the Minister cannot do either, I regret that we would be better off, for the 2015 election, to continue with PPERA until a proper Bill can be produced and Clause 26 should go completely.

Photo of Lord Elystan-Morgan Lord Elystan-Morgan Crossbench

My Lords, I support Amendment 35 in the names of my friend the noble and learned Lord, Lord Morris, my noble friend Lord Wigley and myself. The case has been put clearly and in very great detail by the noble and learned Lord. I am sure that on the only real issue, the Minister could dispel all doubts very easily, as the Government are showing obvious good will for the Welsh language. I was extremely appreciative of the words of the noble Lord, Lord Gardiner of Kimble, on 16 December when he reiterated the point that many of us have made; namely, that the Welsh language is one of the oldest living languages in Europe. It has been spoken for more than 1,500 years.

Would it not be churlish if the whole concession made by the Government were limited only to the fees paid to a translator—that is the issue—and did not include all other costs which are consequential or involved in translation? That clearly was the intention of the Government and, if there is any doubt whatever in the matter, I would like to see them make assurance doubly sure in that respect.

The noble and learned Lord, Lord Morris, speaks with the authority of a former Attorney-General. Indeed, he is clearly of the view that the words in Amendment 44 are wide enough to encompass exactly what is required in this case. However, if there should be any question of dubiety or it is necessary to remove any peradventure of doubt, it seems that it would be an easy matter to cure this small anomaly by Third Reading.

This is a small skirmish in relation to the Welsh language, which has suffered many attacks and anomalies in the 478 years since the Act of Union 1536. The field of endeavour still remains redolent with possibilities. One obvious campaign that will have to be fought some day is in relation to the right of a person in Wales to be tried by a jury in the Welsh language in an appropriate case, bearing in mind that a tribunal of fact such as a magistrates’ court, dealing with 98% of cases, is entitled to do that and does so under the 1967 Act. I hope that such an issue will be raised before too long in this place.

Photo of Lord Horam Lord Horam Conservative

My Lords, first, I thank the noble and right reverend Lord, Lord Harries, for welcoming the amendments made by the Government. He was characteristically generous about that and he gave quite a long list. Secondly, I thank my noble friends for what they have done, despite being incapacitated for a period, in bringing amendments of the scope that there has been in this case. Certainly, I, as a supporter of the Government, have been surprised by the extent to which the Government have agreed to the amendments originally put down.

I take the point made by my noble friend Lord Cormack that the Government were deficient in the way in which they failed to do pre-legislative scrutiny. One has to agree that post that situation, with the pause and with the extent of the amendments that the Government have put down in the past few days, they have responded generously to the points fairly made by Members on all sides of the House.

In his short remarks, the noble and right reverend Lord, Lord Harries, mentioned Amendment 34 in particular. He said that, for instance, if a new Bill came before Parliament during the regulatory period from September 2014 to the general election in 2015, it would be a big issue in any particular constituency and that therefore the Bill would inhibit discussion of the new town in that constituency, which would be wrong.

The point is really not that. Obviously there would be a huge outcry in any constituency if a new town was proposed; there is no doubt about it. Vigorous discussion would take place between the parliamentary candidates during the regulated period and with outside bodies that may be set up to campaign on this issue. Clearly, that would happen. The question is to what extent they would be allowed to finance a campaign about a new town by comparison with what the local political parties could spend in that constituency. Under the Bill they are allowed to spend, in round figures, more or less £10,000 on a campaign over a new town in a constituency during the regulated period. That is roughly the amount.

Frankly, any local party that can raise £10,000 to fight in a local constituency is doing well. I do not think that I ever got as far as that in my constituency of Orpington; it is a lot of money. Local parties are not very affluent these days and do not have many people in them. Many are collapsing from inside. They have few members and great difficulty in raising money. Therefore, £10,000 is a lot of money to inject into a constituency. If it was only that constituency and nowhere else in the country that party members were campaigning, they could inject £300,000.

We are not talking about any restriction on discussion of an issue that is before Parliament in the regulated period; it will be discussed. We are talking about the balance between what a campaign could spend on promoting a particular interest—whether it is for or against the new town—and what the local political candidates could spend. The Bill is about a balance between what local parties can spend, in a constituency and generally, and what lobbying interest groups of this kind can spend—whether they are charities, trade unions or whatever.

I am a member of the Electoral Commission, but I speak for myself on this occasion. The commission is against the amendment in the name of the noble and right reverend Lord, Lord Harries. It said clearly in its briefing to the House before Committee that more proportionate thresholds and spending limits would reduce the need for exemptions of the kind for which he is calling. In effect, the thresholds for regulation—which, I accept, as I said in previous debates on the Bill, were too low—and the spending limits, have been raised by the Government: for example, to £10,000 and to £20,000 for the registration threshold. That gives room for people to campaign on these issues, but not to swamp local political parties, as they are swamped in America, where you get super-PACs swamping the official Republican and Democratic candidates. That is what this Bill is about—a balance between what an interest group can do in a constituency, and what the political parties that are fighting and standing in a general election can do. The Government’s sensible lifting of these limits to meet the fair and correct opposition to the lower limits —which were too low—has done this. The Government’s balance is right.

There is a further point. The amendments to which the noble Lord referred at some length form a package; as he acknowledged several times during our debates, these things are linked. If you make one concession, it has an effect somewhere else. I hope that those who are concerned about the effect of the Bill will realise that this is a complete package, and that by raising the thresholds, the Government have dealt with the points that noble Lords made and therefore that the exemptions they seek are unnecessary. While acknowledging the understandable opposition, in particular of Members on the Cross Benches and in the Labour Party, I hope that they will see that this is a genuine attempt to reach consensus on how elections are conducted in this country. This is now a well balanced set of proposals. Therefore, any further attempt to carry on and unpick them would be disastrous for elections in this country.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Cabinet Office) 4:15 pm, 15th January 2014

My Lords, I join the noble and right reverend Lord, Lord Harries, in thanking the Government for the sensible and welcome amendments that they have tabled. We have just heard from the noble Lord, Lord Horam. I wonder if when he used the word “harried” he meant someone who had been harried by the noble and right reverend Lord, Lord Harries, but I will leave that to one side.

However, we feel that more changes are needed to the Bill, which we have opposed from the start, for the very cogent reason spelt out by the noble Lord, Lord Cormack: it inhibits the expression of legitimate opinion. Amendment 34 goes to the heart of that. The noble Lord, Lord Horam, spoke about constituencies, which I think is a different issue, but we might be talking about something like the bedroom tax, which the National Housing Federation campaigned against, worried about the rents coming to it. Anyone who followed the Welfare Bill will know all the detail of that, so I will not go through it. Unless we can get rid of staff costs—which I hope we will within the next hour—had the bedroom tax been in the past 12 months, it is very unlikely that the National Housing Federation, which is not a charity, would have been able to campaign in the way that it is telling us its members wanted. That was not in the past 12 months but something like that could have been.

This is legitimate campaigning. Although we have heard statements from Ministers that it was never the intention of the Government that that type of activity would be within the scope of the Bill, I think all of us feel that despite good—or bad—intentions, that is not a sufficient safeguard and clarity should be provided in the Bill along the lines spelt out in Amendment 34.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

My Lords, first, I thank those who have contributed to this debate, in particular those who have welcomed the government amendments. We certainly sought to listen and take on board comments from a wide range of those engaged in campaigning. I pay tribute to my noble friend Lord Wallace of Saltaire, who met far more groups than I did. These meetings and deliberations, and indeed the contributions made in Committee in your Lordships’ House, have very much informed the proposals that we have come forward with today. Again, I thank the noble and right reverend Lord, Lord Harries of Pentregarth, and the other members of the Commission on Civil Society and Democratic Engagement for their contribution to this debate.

The purpose of Schedule 3 is to extend the range of activities for which a third party incurs controlled expenditure. It takes forward a recommendation from the independent Electoral Commission to align the range of activities for which third parties incur controlled expenditure with that for political parties. The Electoral Commission has highlighted that there is no clear reason why controlled expenditure for third parties applies only to election material. This difference means that a potential gap arises in the rules governing elections in our country.

The Government and the Electoral Commission believe it is important that this potential gap in the regulatory regime is addressed. However, the Government also acknowledge some important issues that have been raised, not only by noble Lords but a number of campaigning groups. As such, we have tabled a number of amendments to Clause 26 and Schedule 3. I will take the opportunity to explain what they do.

Currently, the regime under the Political Parties, Elections and Referendums Act 2000 outlines specific activities that do not incur controlled expenditure. These include volunteers, publications which are not advertisements in newspapers, broadcasts on certain channels such as the BBC or S4C, and certain reasonable personal expenses. Government Amendment 37 removes these exclusions from Section 87 of PPERA and Amendment 44 inserts them into new Schedule 8A and expands the types of expenses that are excluded from incurring controlled expenditure.

The full range of exclusions that the Government have brought forward includes amendments to expenses in respect of the translation of materials from English to Welsh or Welsh to English. I shall say something about the important points made by the noble and learned Lord, Lord Morris, and the noble Lords, Lord Wigley and Lord Elystan-Morgan. At present, controlled expenditure is incurred on the production and publication of election materials, such as leaflets. The Bill retains this, but costs associated with translating these materials from English to Welsh or vice versa will be excluded. The noble and learned Lord, Lord Morris, said he hoped that this was an oversight and that it was not there in the first place. If there was an oversight, and I think there probably was, it was probably also an oversight in the 2000 Act, because election materials are covered by the provisions in that Act. I hope, albeit belatedly, that there is considerable cross-party and non-party consensus that it is something we should be doing.

The Government believe that this highlights the importance of the Welsh Language Act 1993, which treats the Welsh and English languages as equal. It follows the practice of producing election material and ballot papers in Welsh. We are grateful to the noble and learned Lord for raising this issue in Committee. He asked about production costs. When we are giving something it is easy to say that it is not as much as you thought we were giving, but we believe that extending the exemption further than the cost of translation would go too far. It would allow campaigns to print different material for different addresses without being regulated. For example, if a campaigner prints 100 leaflets in English, he can then print 100 leaflets in Welsh for an entirely different purpose. Therefore, we thought it important that this amendment should relate to the cost of translation, rather than the production of material.

Indeed, that is what we thought was intended by the noble and learned Lord’s amendment, when it says that production,

“shall not include costs incurred by the translation of those materials from English into Welsh or from Welsh into English”.

Indeed, the Government’s amendment refers to,

“expenses incurred in respect of the translation of anything from English into Welsh or from Welsh into English”,

which may even go further—there may be expenses other than translation expenses. I want to make it clear that we think, having considered this, that to relate it to the publication costs—to the printing of the leaflets—goes further than is needed to address the important point about Welsh translation.

Photo of Lord Wigley Lord Wigley Plaid Cymru

Surely the Minister accepts that if an organisation—say, the NSPCC—requires a leaflet to be put out in England and in Wales, in England it might be in other languages but it need be only in English to meet the law. In Wales, it would be in Welsh bilingually with English. Sometimes that can mean double the size of the leaflet. Sometimes it might be constrained to six instead of eight pages in the way that bilingualism can be laid out, but the cost of producing something in a bilingual format for the customers is significant because of the print and the paper, not just the time taken to translate a leaflet. That is relative peanuts in the operation. If the Minister is excluding the other parts, there is a very serious implication.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

My Lords, as I have indicated, we thought that the amendment that the noble Lord, Lord Wigley, has signed did not actually go further than we were going. I think there has been a proper debate on this. I do not want to mislead the House into thinking that we are willing to countenance in the Bill an opportunity to exploit it and to double up on the number of leaflets. I hear what the noble Lord says and, subject to what I have already said about not wanting to incur a loophole, I am prepared to consider whether the wording reflects what might be called a marginal cost of translation but not costs that might allow more leaflets to be published. The noble Lord is nodding his head; perhaps he agrees that that is not an unreasonable position.

I hope that the noble and learned Lord, Lord Morris, will agree that it is not entirely clear that these additional production costs were covered by his amendment either. Certainly, we did not think they were.

Photo of Lord Morris of Aberavon Lord Morris of Aberavon Labour

I thank the noble and learned Lord. It is obvious to me that, in accordance with the definition of “controlled expenditure”, production is specifically referred to. You cannot have anything to translate unless you have something produced: that means a piece of paper. I was certainly not encouraging a vast increase in the whole gamut of informational literature, but rather the specific translation and the costs incurred in preparing for the translation, particularly the paper. It may be that I was not ambitious enough. That is entirely my fault and that of those who were advising me—they were not ambitious enough in putting forward that the provision should include specifically the preparation of a document for the purpose of translating. That is all that I am asking.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords 4:30 pm, 15th January 2014

My Lords, I do not think that there is really all that much between our position and what has been said both by the noble and learned Lord and the noble Lord, Lord Wigley. I hope that we can look at it and get the right wording to capture the consensus among us without creating loopholes for having much more material produced. On that basis, I hope that the noble and learned Lord will not press his amendment and, all being well, we will get our amendment on to the Order Paper.

Photo of Lord Morris of Aberavon Lord Morris of Aberavon Labour

I am encouraged by that. I hope that, if I do not press my amendment, we will return to the matter at Third Reading after further consideration.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

That is indeed what I had in mind. Time may be short, but I think that we can have some useful engagement on that.

Government Amendment 43 excludes the costs associated with providing protection of persons or property in relation to a public rally or event. While the Government believe that it is important that third parties who organise public rallies or events which seek to influence voting intentions incur controlled expenditure, it is only right that third parties do not incur controlled expenditure ensuring that such events are run safely.

Government Amendment 44 excludes expenses that are reasonably attributable to a person’s disability. This would mean that costs associated with, for example, providing materials in Braille, or ensuring that any person with a disability could attend a public event or meeting, would not count towards the third party’s controlled expenditure.

Government Amendment 42 provides that parades notified under the Public Processions (Northern Ireland) Act 1998 are excluded from the provisions of PPERA. Your Lordships will recall that we had a debate in Committee on Northern Ireland. Although the particular issue of parades was not raised, we were aware that it was a concern that some people had expressed. The noble Lord, Lord Rooker, led an important and helpful debate on Northern Ireland, and we seek to address it here.

Government Amendment 38 amends the defence, currently in the Bill, for a person or third party charged with an offence of incurring controlled expenditure in excess of the spending limit—that is, above the limit in a part of the UK or the constituency limit—to show that they complied with the relevant code of practice so that it covers both recognised and non-recognised third parties. The amendment is needed to reflect the changes to the reporting requirements in a later government amendment which provides for no spending return if the threshold is not reached. We have since identified a couple of points not properly dealt with in the amendment. The first is that the defence does not adequately cover the case where an offence might be committed by virtue of expenditure incurred on behalf of the third party. Secondly, the defence should also cover the offence in relation to targeted expenditure. We think that it is important in both these cases that those subject to regulation should have the benefit of the defence and we will therefore bring forward amendments at Third Reading to deal with these outstanding anomalies.

Government Amendment 41 clarifies the drafting on public rallies, so that it is “public rallies or events” to be inserted by Amendment 42. The reference to “public meetings” is removed, as it was unnecessary and potentially confusing because “other public events” includes public meetings.

I turn to the amendment moved by the noble and reverend Lord, Lord Harries of Pentregarth, and a number of other amendments that have been spoken to in this group. Amendment 34 would amend Clause 26 so that any campaign which could reasonably be regarded as intended to promote or procure electoral success, involving legislation going through Parliament during the regulated period, would not count as controlled expenditure. I listened carefully to the speech made by my noble friend and agree with him that we should not pass legislation which inhibits expression of legitimate opinion.

To incur controlled expenditure and be included in the regulatory regime, it is important to remind ourselves that the third party must be carrying out activity which could reasonably be regarded as intended to promote or procure the electoral success of a party or a group of candidates. We have heard concerns that campaigns against specific policies or pieces of legislation will be caught by the regulation. It might assist the House if I set out how, generally, this will not be the case and the circumstances in which it might be. The noble Baroness, Lady Mallalieu, asked whether we would meet the Electoral Commission. I can tell her that this issue has been raised with us. We have been in discussion with the Electoral Commission and I can confirm that it agrees with this interpretation.

If a campaign group wished to lobby parliamentarians over legislation going through the House, this would not be subject to regulation under Part 2. It is only where a the expenditure by a campaign group can reasonably—that is, objectively—be regarded as intended to promote or procure the electoral success of a party or candidates that such activity will be subject to regulation. For example, encouraging constituents not to vote for MPs in the general election if they had voted a certain way on the legislation before Parliament should and would be included as activity leading to controlled expenditure. If a group so closely aligns itself with a policy of a particular party that its campaigning on behalf of that policy can only reasonably be seen as encouraging support for that party, that would also count. That is campaign activity, and where it takes place the Government believe that spending on it should be transparent to the public.

The noble and right reverend Lord, Lord Harries, gave a good example when he talked about new towns. We believe that under his example, people will be able to support or oppose such a proposition freely. It would be caught only if they promoted electoral success, for example, by distributing leaflets reading, “Don’t vote for candidate X”—or X party—“at the next election”, because he or she had supported or opposed the new town. The amendment states,

“unless the expenditure relates to legislation before Parliament during the regulated period”.

If Parliament were to accept that definition, it would really open the door to any amount of expenditure. My noble friend Lord Horam suggested a limit of £300,000; in fact, it would not be controlled expenditure, it would be unlimited expenditure in the run-up to an election which could be directed against or for a particular party. Given that there are restrictions on what the political parties can spend during that period, it is not reasonable that there should be such a wide gap in the provisions that an unlimited amount of expenditure could be related to a particular campaign.

I reiterate that the general position is that if a campaign group wishes to lobby Parliament and parliamentarians over legislation, that is primarily directed at trying to change legislation and would not be subject to regulation under Part 2. As my noble friend Lord Horam said, we are seeking a balance, allowing proper room to campaign but not to swamp.

I also highlight that the Electoral Commission does not support this amendment. It states that such an exemption would allow unlimited spending on a potentially wide range of topics. It believes that it could produce significant and unintended gaps in the coverage of the rules. The issue of the year up to the campaign was raised generally in the debate. Of course, a later amendment will mean that this is actually only a seven-and-a-half-month period. Clearly, if, as a result of experience, people feel that the guidance has not been sufficiently helpful, as we have provided in later amendments, there will be a review post the 2015 election. The amendment as it stands opens up a considerable gap and would lead to an imbalance whereas, as my noble friend said, we should be seeking a balance.

On Amendment 40, my noble friend Lord Tyler seeks to amend Schedule 3 so that costs associated with sending materials to committed supporters who have been actively involved in the activity of the third party would be excluded from the calculation of costs for controlled expenditure. Costs of sending material to members or certain supporters are already excluded, as PPERA and the Bill make clear. The material or activity must be available or open to the “public”, which for these purposes would not include those members or supporters.

As the existing Electoral Commission guidance makes clear, the exact nature of a committed supporter will vary between organisations, but could include regular donors by direct debit, people with an annual subscription or people who are actively involved in the third party. The amendment goes much further than that. Amendment 40 defines those actively involved as those who have made a donation to the recognised third party, or those who have made a direct communication to the recognised third party in the past 12 months.

Consequently, an individual who writes to a campaign organisation with a general inquiry about their activities, or even one who lives next to an animal sanctuary who writes to them complaining about the noise, might possibly be regarded as being actively involved. I do not believe that that is my noble friend’s intention, but I fear that using that definition allows the provision to become ineffective, particularly in an age of instant electronic communication.

The Electoral Commission does not consider people to be committed supporters if they have simply signed up to social networking sites or tools, or appear on mailing lists that may have been compiled for general commercial, campaigning or other purposes. An exclusion of costs, based on direct communications with third parties—whatever the nature of that communication—creates a wide exemption.

I know that my noble friend has worked hard and has met officials to try to resolve this; I regret, however, that we fear the definition he has come up with is too wide. We believe that the better way is that the Government and the Electoral Commission believe that the Electoral Commission’s guidance is the proper place to outline who counts as a committed supporter. In its briefing the commission outlined that it does not support this amendment due to the fact that it is unclear what scale of campaigning would be exempted from the regime or how the test would apply in practice.

Finally, my noble friend referred to Amendment 45A to ensure that any changes to the range of activities outlined in new Schedule 8A would be made through an affirmative resolution procedure. That is already the case in the Bill as drafted. I draw noble Lords’ attention to Clause 26(12), which amends Section 156 of PPERA so that any order under new Schedule 8A, as inserted by Schedule 3 to the Bill, is by affirmative resolution. It does so by amending the existing section of PPERA, setting out what parliamentary procedure applies to orders and regulations. The Government agree that it is important that any changes to the list of activities that incur controlled expenditure should be subject to the affirmative resolution procedure.

I hope that that reassures my noble friend. In the light of the explanations given, I hope that the noble and right reverend Lord, Lord Harries, is prepared to withdraw his amendment.

Photo of Lord Rooker Lord Rooker Labour

I have thought of a question while the Minister has been speaking, which is not in any way diversionary. It ties in with the comments made earlier about what would happen if, in this period of a year, a Government sought quite deliberately to save legislation. The Minister answered the point about legislation in Parliament, but there are highly controversial matters outside Parliament; people do newspaper adverts and all kinds of things. I have been thinking about this question, having gone through paperwork recently. When we get close to an election, the Cabinet Secretary and the head of the Civil Service will issue an edict around Government to Ministers and departments about what you can do and what you cannot do in that period. Is that going to change now that we have a fixed-term Parliament, with this window and this picture of a much larger window?

This is not purdah, but an extended period in which other people are constrained about what they can say and do. Will the advice that normally comes out close to an election from the Civil Service to Ministers actually change and take account of what is being done in this legislation?

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

My Lords, I always know it to be dangerous when the noble Lord stands up and says he has been thinking about something—and so it was.

I took the fixed-term Parliament legislation through your Lordships’ House and I do not recall—nor, indeed, have I seen at the present time—anything that suggests there is going to be any change. Of course, that means that there still will be a period during which Governments are not allowed to do this; but I have not seen any proposal to reflect the fact that there is a fixed-term Parliament. When that period will arise will become more apparent, or more foreseeable. If I have got that wrong, although I do not think I have, I will inform the noble Lord.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

I thank all noble Lords who spoke in favour of my amendments and the other amendments to which my name has been attached and I thank the Minister for his response.

The noble Lord, Lord Horam, drew attention to some of the unfortunate consequences, as he understands it, of this legislation at constituency level. However, what I had in mind was primarily what happens at the national level. He suggested that political parties would be limited in what they can campaign; but the Government, in pursuing their legislation, are not limited in the amount of money they can spend in order to get legislation through Parliament, and nor are the Opposition.

Suppose you have two third parties: one, the Countryside Alliance, which wants to campaign against a new town, and the other the National Housing Federation, which wants to campaign in favour of more housing. Why should they be inhibited by the Bill in a way that the political parties would not be inhibited? As the noble Baroness, Lady Mallalieu, pointed out, we are not talking about the post-Dissolution period, so a lot of the ill effects that the noble Lord suggested might happen at constituency level would not be allowed by this amendment, because we are talking about only legislation going through Parliament and that ends when Parliament is prorogued. Therefore I believe that this is a crucial issue that goes to the heart of our democracy.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords 4:45 pm, 15th January 2014

The noble and right reverend Lord indicated, when referring to what my noble friend Lord Horam had said, that it had not been his intention to engage in constituency expenditure. Does he accept that if this is not controlled expenditure, it could lead to expenditure in a constituency up until the time when the Representation of the People Act kicks in?

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

I accept that there are certainly implications for what might happen at local level. However, I ask the noble and learned Lord to continue to think about it because this issue goes to the very heart of the democratic process. I very much hope that, having talked to the Electoral Commission to see whether there might be a way forward, he might give the very clearest statement at Third Reading, which would then be translated into advice for the Electoral Commission. We need something here to safeguard the fundamental rights of campaigners to campaign during this period. With that, I beg leave to withdraw the amendment.

Amendment 34 withdrawn.

Amendment 35

Tabled by Lord Morris of Aberavon

35: Clause 26, page 13, line 19, at end insert—

“(5A) Before subsection (5) insert—

“( ) Any limit applying to campaign expenditure under this Act where that expenditure is incurred by or on behalf of third parties in connection with the production or publication of election material which is made available to the public at large, or any section of the public in Wales, shall not include costs incurred by the translation of those materials from English into Welsh or from Welsh into English.””

Photo of Lord Morris of Aberavon Lord Morris of Aberavon Labour

My Lords, I welcome the promise of a discussion with Ministers before Third Reading and if a satisfactory formula is not found, I would wish to return to the matter then. The Government might seek the advice and elicit the views of the Electoral Commission in the short period we have, so perhaps we could make progress on that basis.

Amendment 35 not moved.

Amendment 36

Moved by Lord Phillips of Sudbury

36: Clause 26, page 13, line 19, at end insert—

“( ) In subsection 8(a) after “body” insert “(except a body which is a charity)”.”

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

My Lords, first, I should like to say how good it is to see the other Lord Wallace—my noble friend Lord Wallace of Saltaire—back in his place on the Front Bench having, I hope, had restorative attention.

In Committee, there was a long debate on this amendment, which has a simple purpose: to remove charities altogether from both the Bill and PPERA 2000. I am bound to say that in the intervening period there has been a great deal of discussion, meetings and lobbying. It is fair to say that the dear old charity sector

—which must be one of the slowest of any sector in our society to get the hang of things, while being a most invaluable element in our society—is now showing its support, late in the day, for the proposal that charities are taken right out of the Bill. It is a pity that this movement did not show itself a good deal earlier.

I must also explain that in Committee there were three different supporting names on this amendment: my noble friends Lady Williams, Lord Tyler and Lord Greaves. They—how shall I put it?—stood back at this stage of the Bill to enable Peers from other parts of the House to put their names to an amendment which is felt strongly about. It is a great resource and support to have the names of the noble and learned Lord, Lord Mackay of Clashfern, and the noble Lords, Lord Best and Lord Low of Dalston, on the amendment. They are, respectively, an ex-Lord Chancellor, an ex-chief executive of the Joseph Rowntree Foundation and an ex-chief executive of the Royal National Institute of the Blind.

We have put this amendment forward today and continue to feel really strongly about it because we are convinced that to draw charities into this net is counterproductive, legally illogical, because they are the subject of a completely separate and rigorous branch of law in a way that no other NGOs are, and wasteful of scarce and valuable volunteer time and philanthropic resources if we persist in so doing. I shall address only a few points. I am very mindful of the time and my colleagues will deal with different points relating to the amendment and its consequences.

The one word that keeps coming back to me in relation to all this is “practical”—or, in this case, “impractical”. It seems a thoroughly impractical proposal to lump charities in with NGOs, which can range right across the board from being relatively public-spirited—as, for example, most of the supporters of the Harris commission certainly are—to completely self-interested NGOs, some of them acting as fronts for commercial organisations and others with political aspirations. The one thing you know for certain and beyond peradventure about a charity is that it exists exclusively for the public benefit. Private benefit and charity are wholly incompatible dimensions.

This branch of our law is not some Johnny-come-lately or some rather weak branch of law, if I may put it that way; it is about as fiercely and strongly embedded in our culture as any aspect of law. What is more, the Charity Commission, which has been doing its job for more than 150 years, is a committed body with vast experience, though admittedly with inadequate resources, which is there to try to police this extraordinary sector. Extraordinary it is because it actually needs wonderfully little policing. The amount of fraud and—how shall I put it?—manipulation in the charity sector is a tribute to the best in British society and culture.

The duty on us as legislators, when touching on this sector in particular, is to act with extreme caution because one can so easily damage that which one hopes to assist. Above all, we need to avoid confusion in the legislation that we shower on the British public. There is one way of avoiding confusion in the issue of the regulation of NGOs: to avoid shackling charities of all organisations with duplicatory regulation and thus the responsibility for two sets of regulations and indeed regulators. Of all the groups in our society that surely do not need that, above all others by far are charities. Although of course the Bill is vital and it is good that amendments have been introduced—we thank the Government for being so receptive—it is important that we retain our civic vitality, which, let us be honest, is languishing somewhat. However, in the process, we must not damage that which we seek to uphold.

The confusion surrounding charities in relation to the Bill is quite extraordinary. I can illustrate that by referring the House to the letter written last night by the Charity Commission to a number of us now in the Chamber. It deals in particular with this amendment because the Charity Commission considers it of such importance. I confess that many of us have been trying for some considerable while to get the Charity Commission to come out of its shell and be clear about what it thinks of the arguments advanced on each side of this debate. At least now we have a letter, written by the public affairs manager of the Charity Commission at 6.30 pm last night. Pretty early this morning, as one might guess, I was on the telephone to seek clarification.

The letter has four paragraphs. Can one ask Peers to put up their hands if they have had this letter? It is probably unprecedented, but I have seen one, anyhow. I suspect that a minority of those here have seen this letter and that it will be helpful to quote from it. It is important given that the Charity Commission is the kingpin in this field. The first point that it makes in relation to this amendment is under the heading “Charity law and electoral law—the current situation”. It states:

“Charities must never support political parties or candidates for election”.

That is the basic premise. It continues:

“A charity can engage in campaigning to influence public policy but only in the context of supporting the delivery of its charitable purposes. We recognise that there are some circumstances where a charity’s activities can adhere to charity law but may still require them to register with the Electoral Commission during an election period”.

I have to be honest. I was slightly crestfallen when I saw that because my proposition hitherto has been that charity law and election law in this bit of the landscape are so similar as to be no different from each other. I argued this with the senior member of the commission who is fielding calls in relation to this letter and after a while, she said, “Well, perhaps we did not put this as we intended”. It then became apparent that when the Charity Commission made this statement it was talking about the law as it stands now, not the law as it will be after the Bill is enacted.

Photo of Lord Tyler Lord Tyler Liberal Democrat

I am grateful to my noble friend because I shared his confusion about that missive last night. I too quite separately raised a question with the same person at the Charity Commission and was sent back this very explicit statement:

“We are by no means suggesting that CC9 is not fit for purpose. Instead we believe that CC9 provides clear and concise guidance on what is and is not acceptable for charities when campaigning. This is an issue that we regulate firmly and take action where necessary”.

In other words, far from saying as seemed to be the first impression that I had from the previous letter that the Charity Commission was not up to this job, it thinks it is up to the job and does not think it is necessary to change the situation so that another commission is so actively involved, as the Bill would suggest.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

I am grateful for that. My noble friend is lucky in having had a letter. When I finished the conversation, the Charity Commission said to me that it would send a new communication forthwith to everybody who received the first one to make clear that this statement did not relate to the law as it will be after the passing of this Bill. That is just one small example of—

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

I am fortunate enough to have the original letter before me. I wonder what the noble Lord makes of the statement:

“We do not believe that in the best interests of public trust and confidence in charities an exemption for charities is the most appropriate method for the regulation of charities during an election period”.

There cannot be anything clearer than that. I know it is very disappointing for the noble Lord, but the Charity Commission has come out unequivocally in opposition to his amendment and I think he will have to face that.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

My Lords, the noble and right reverend Lord, Lord Harries, is actually addressing a different issue in this letter. I was dealing with paragraph one. He is dealing with paragraph two, about public trust and confidence in charities, which I was about to come on to and which, if I may, I will deal with it in a second.

I emphasise the fact that the Charity Commission has delivered to those in this House who are particularly involved with this issue some guidance in relation to the law—comparing electoral law with charity law—that leaves us at best in a state of some confusion. I think, as I will say in a minute, that the approximation of charity law and electoral law is now so close that to all intents and purposes it is in practical terms the same. However, as we know better than anybody on earth, the capacity of lawyers—and not only lawyers—to argue about that is infinite. When you get a letter such as this from the Charity Commission, you can see why.

Coming to the point of the noble and right reverend Lord, Lord Harries, the second point here is headed:

“The effect of an exemption on public trust and confidence in charities”.

It starts by saying that the Charity Commission believes in keeping the burden on trustees and charities to the minimum that is consistent with an effective regime. That, in itself, supports my case, because for charities to have two sets of regulators is plainly not keeping their burden to a minimum. Secondly, it rather argues against its own competence to then go on to say that you need two sets of regulators.

I will also add the point that the commission makes here, when it advances the proposition, which has been heard in debate in Committee, that some organisations will seek to exploit the differences between charity law and electoral law by registering as a charity if they are a non-charity, in the expectation that that will give them more latitude in terms of what they can do during election periods.

Photo of Lord Rooker Lord Rooker Labour 5:00 pm, 15th January 2014

I was minded to vote for the amendment, but, having read the letter twice now, does the noble Lord not accept that the Charity Commission does not agree with Amendment 36? That is crystal clear. There is incompetence of a very high order by the Charity Commission, by the way, because it does not do a very good job. However, it does not agree with the Amendment 36, so do we have to spend a lot of time on this?

Noble Lords:

No.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

My Lords, that is, on the face of it, a compelling argument. However, I am trying to put it to the House that the Charity Commission’s own advice here is faulty. It admitted as much in our conversation this morning and said that it would circulate a letter forthwith.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

Which, of course, it has not done. I suspect the reason is that when the person I was speaking to went back to the chief commissioner and the chief executive, they said, “My goodness, we can’t go into print admitting that we’ve made a mistake”.

Photo of Lord Cormack Lord Cormack Conservative

I am very grateful. Of course, I was also minded to support my noble friend. However, time is at a premium. There is clearly a problem here. Would it not be better to have discussions with the Charity Commission and the Minister between now and Third Reading, and then, perhaps, to table an amendment that does have their support? We can waste an awful lot of time on this. I am not being critical of my noble friend, for whom I have very real regard, but he has been speaking for a quarter of an hour or more and we have very important issues that we must determine today.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

My Lords, I am in a cleft stick; I have indeed got 15 minutes on the Clock, but my noble friend will accept that I have been interrupted five times now, which takes a wee bit out of one’s available argument time. I will keep this as short as I can. It is unfortunate—let us put it that way—that we have a letter at the 59th minute of the 11th hour which is, at best, unclear.

I know that a number of my colleagues have different points to make. It has been said, time and again, that there should be a level playing field between non-charitable NGOs and charitable NGOs. Well, yes and no. First, we have a whole lot of improvements for the non-charity NGOs. Secondly, however, the reason we persist in seeking this important change is precisely because charities are basically different in kind, not just because they have a separate branch of law and a separate regulator.

The bureaucratic consequences for charities having to meet the demands of two regulators will be significant. Although the thresholds have been raised, which is important, the number of charities that will still be swept up by this legislation is far greater than many Members of this House may think. It will be many thousands. It does not take a great deal to rack up £20,000 if you are a charity with a few branches around the country.

Secondly, given that the vast majority of charities have no paid staff, the people who will have to implement this complex bureaucratic stuff are not professionals but volunteers. Simply tooling up a charity that is wholly run by volunteers to cope with this new regime and all that it means will be a massive and demoralising task for so many of them. Frankly, volunteers do not want to spend their precious hours getting to understand the legislation that we are in the process of putting on the statute book and then trying to get to grips with it in practical terms, filling in the forms and all the rest of it. The consequences, I put it to the House, will still be huge, despite the number of charities that are, on the face of it, taken out of the purview of these provisions by the raising of thresholds and the rest of it. I cannot emphasise that too strongly.

Let us suppose that you are a trustee of a charity. You will not have a paid chief executive, so it may be a senior volunteer who comes to you and says, “Look, Mr Phillips, we have this new legislation. We do not think we are touched by it because we do not think we will reach the threshold, but what do you want us to do?”. I am afraid an awful lot of trustees will say—

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Conservative

Not only the Charity Commission opposes this amendment; the Electoral Commission does, too. Also, we have a situation where the Government have given way on the review period. We argue there is going to be a review of this piece of legislation, so if the matters that the noble Lord is so concerned about come to pass, the review will pick them up. We are now in supposition territory. I hope that the noble Lord will reflect on that before deciding what to do with his amendment.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

I certainly will. I am grateful for that point, because I was going to say that a review of this will be essential in light of what happens at the next general election. Indeed, the noble Lord, Lord Hodgson, tabled an amendment that I think—

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

It is now a government amendment, so we are going to get it—and that is vital because we will learn a great deal after that. I will just finish the point that volunteer trustees, perfectly understandably, are going to be cautious about this new legislation. The last thing in the world they will take a risk with is the prospect that things may get a bit out of hand or may not be perfectly understood, and that they, the trustees, will end up being personally liable. As I am sure everybody hearing this debate knows, they are personally liable. It does not matter if they are a limited-liability charity.

All in all, therefore, these are some of the reasons—I think other contributors to the debate will add others—that we should avoid the huge confusion that will follow if we subject charities to both charity law and electoral law. For good reason, I will not detain the

House now beyond saying that this is still a very important issue that touches a hugely important part of our civic society—the very part of our civic society that does so much to uphold and vivify election campaigns. I beg to move.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative

My Lords, I am extremely well aware that the Charity Commission has given us a document to say that it is against this amendment, but the charity commissioners do not actually do legislation; that is our responsibility. They have set out in this missive that we got about 6.30 pm yesterday some of the reasons for their opposition.

Charities are, as I understand it, very fully regulated by law. Charities are those bodies that are established for charitable purposes only, and charitable purposes are defined as falling into certain classes, with the general provision that a charitable purpose is one that must be for public benefit. When I got this missive and had a chance to look at it, I e-mailed back the writer of the document asking, “Are you saying that a charity can lawfully, under existing charity law, engage in activities regulated by this Bill?”. I got an e-mail back to say that he was out of the office today and that, if it was urgent, I should ring a number. So I rang the number, and no one answered—although these things happen, even in the best regulated circles.

This is an extremely important point, as I see it. Charity law is sufficiently robust to require charities to obey the rules, which state that they can use their expenditure and efforts only in support of or in pursuance of their charitable purposes. As the missive says:

“Charities must never support political parties or candidates for election”.

At the moment, I cannot see why it is necessary that the Bill applies to charities. However, the Charity Commission, in the missive we got last night, goes on to explain that if the charities were exempted, its task of making sure that the charities obeyed the law in this regard would be too much for it, particularly in an election period. The Government have cut its budget so much that it cannot support this or do it properly. If that is the reason for passing the responsibility for seeing to this from a government organisation, the Charity Commissioners—which has a very long history of 150 years or so—on to charities, which depend on voluntary contributions for their financial support and to a great extent for their personnel support, it is an extremely bad one. Why should the government organisation pass on its responsibility to ensure that this is happening to the charities themselves and have them registered for that purpose?

This is an extremely serious matter that the Charities Commission has raised in this missive to us. So far as I am concerned, it requires the Government to look into the matter. I would like to see the Government undertake to look into this between now and Third Reading. I do not wish to pursue the matter further today. I originally raised this matter with the noble Lord, Lord Wallace of Saltaire, before he was away, and I am extremely glad to see that he is able to be back with us again. This is an important matter that I feel strongly about, and one that your Lordships’ House should not just pass over. We do not need to spend long on it, because it is a short but very important point.

Photo of Baroness Lister of Burtersett Baroness Lister of Burtersett Labour

Before the noble and learned Lord sits down, I have a question about the e-mail from the Charity Commission, which I have here. My reading of it is that the question about resource implications is a subsidiary argument, and that the key argument is:

“We do not believe that, in the best interests of public trust and confidence in charities, an exemption for charities is the most appropriate method for the regulation of charities during an election period”.

Surely that is the argument that the Charity Commission is putting forward against this amendment. The question about resources is just supporting that.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative

The reason that that is a difficulty is because it cannot be relied upon to enforce the law. There is no question of trust in charities being damaged by propaganda and that kind of thing. If it were shown that charities were not obeying charitable law, that would damage trust and confidence. If the commission does not have enough resources to pursue that properly—as paragraph 4, I think, says—that is a problem. I can see that if that is justified, it is a problem, but it is a very serious problem if organisations set up to ensure that the law is observed in a particular area say that they do not have sufficient resources to do it properly.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench 5:15 pm, 15th January 2014

Does the noble and learned Lord not accept that the Electoral Commission has come out exceedingly strongly against this amendment? It is not just the Charity Commission but the Electoral Commission, which has a specific statutory duty.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative

I understand that, but I do not understand why they have come out against it, because it must be based on an understanding that charities could in fact engage in activities that are regulated by this Bill.

Photo of Lord Low of Dalston Lord Low of Dalston Crossbench

My Lords, my name is added to this amendment and I do support it, but I think that we have been somewhat blown off course by the reference to this letter that we have had from the Charity Commission, which we have not had very long to consider, and also by the briefing that we have received from the Electoral Commission.

On the Charity Commission’s letter, I honestly think that this faces both ways: at one point the commission says that it is not in favour of an exemption but elsewhere it says that it believes in keeping the burden of regulations on trustees and charities to the minimum that is consistent with effective regulation. If that is what the commission is saying, then why on earth impose another burdensome layer of regulation on charities? Or is the commission saying that the regulation that it provides is not effective? I honestly think that the letter that we have received from the Charity Commission is not robust enough to sustain any argument and I do not think that we should be further diverted by it, certainly not today.

I agree that this has rather blown the debate off course and I think that the suggestion made by the noble and learned Lord, Lord Mackay of Clashfern, that this be taken away, that discussions take place and that we ask the Government to review the situation and come back with something at Third Reading, would honestly be the best way of proceeding.

Photo of Lord Best Lord Best Crossbench

My Lords, I think that I shall go with the suggestion that we defer debate on this until Third Reading. I will just throw one or two thoughts into the pot that have not yet been fully explored.

Charity law is currently very much under review. The noble Lord, Lord Hodgson of Astley Abbotts, has reported on the workings of the Charities Act 2006 and the Select Committee on Public Administration has looked into the operations of the Charity Commission. Both the noble Lord, Lord Hodgson, and the Select Committee on Public Administration issued reports last year recommending changes, and the Government have accepted many of those recommendations. In addition, the National Audit Office recently issued a report calling for a reform of the Charity Commission, and the Law Commission is looking at charity law and will report this year.

It is almost certain, therefore, that there will be significant reforms to charity law in the near future, so if charities are taken out of the lobbying Bill, which is the proposition here, there will be an opportunity, if necessary, to amend charity law and to see changes of this kind in a broader and wider context at a later date. The many arguments on why charities should be taken out of this particular Bill stand on their own, I think, and although we are giving great deference to the quangos, I find the comments of the noble and learned Lord, Lord Mackay of Clashfern, and others to be compelling. Possibly we should not be debating all those details if legislation that is specifically about the future of charities, charity law and the Charity Commission is in the pipeline. It would be better to defer our debate until then, but I would be very happy to see this brought back at Third Reading.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

Perhaps the House will allow me just a couple of minutes to put the opposing point of view to the noble Lords who have spoken so far. Their proposal is superficially very attractive and would be possible if the definition in Clause 26 were different. If the definition of “controlled expenditure” in the Bill said that it was expenditure whose prime purpose was the promotion, or procuring the election, of a particular candidate or party, it would be possible to take out charities. They should be taken out because, as the noble and learned Lord, Lord Mackay, rightly said, charities are not allowed to have as their prime purpose the support of political parties.

However, that is not what the Bill says. Clause 26—and we have heard it thousands of times—includes two important points, which are that you do not have to mention the name of the party and it does not have to be your prime intention. Therefore, you can campaign on an issue and still be caught by the regulation of the Bill. That is why—

Photo of Lord Low of Dalston Lord Low of Dalston Crossbench

I thank the noble and right reverend Lord for giving way. Does he not agree that to be caught by the legislation the expenditure has to be “intended” to procure that effect?

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

The whole point of those provisions, which is where the sting is, is that you can campaign on and focus on an issue and that can be reasonably regarded as indirectly supporting a particular candidate or party, or you can even do so inadvertently. Let us be quite clear: charities are able to campaign on issues.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

I am grateful to the noble and right reverend Lord for giving way, but he really cannot get away with that. You cannot inadvertently satisfy the requirements of Clause 26 when it says that you “intend” to promote or procure electoral success. Intention is not the same as inadvertence at all, and it is a very strong test. The fact that there are other matters that you are trying to advance at the same time does not get away from that test.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

Then why does the Charity Commission guidance—and I have read carefully both its main guidance and its guidance in relation to the Electoral Commission—include a series of examples, just like the Electoral Commission, where charities may or may not be caught? This is a borderline area. Charities are able to campaign and to campaign vigorously, and many trustees encourage them to do so. Therefore, it is always possible for them to come within the scope of this provision.

If you take out charities, only two courses are open to you. Either you have an unlevel playing field so that you have a charity campaigning against a campaigning group which is not a charity, and the charity, if it were taken out, would be able to spend an unlimited amount of money, whereas the non-charitable campaigning group would have very strict limits on what it was allowed to spend, or the Charity Commission could set up a much stronger policing body than it has at the moment—one which would match that of the Electoral Commission.

Photo of Lord Low of Dalston Lord Low of Dalston Crossbench

I am grateful to the noble and right reverend Lord and I apologise for intervening again, but does he not agree that we are continuing to get bogged down in technicalities about the interpretation of very detailed points in this clause? If the point is taken that there will be discussions before Third Reading and we can look for something more fully considered to come back then, it will make a lot of sense to put into that review the points that the noble and right reverend Lord, Lord Harries, is dealing with at the moment.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

My Lords, I take the point but it was important to state the argument because some people are understandably initially very attracted to this idea. It would lift the regulatory burden, and people are attracted to the idea of taking out charities. However, there are very strong, compelling and rational reasons why this should not be done, and that is why it is opposed by the Electoral Commission, the Charity Commission, the commission that I chair, the NCVO, ACEVO and all the others.

Noble Lords:

Order!

Photo of Lord Gardiner of Kimble Lord Gardiner of Kimble Lords Spokesperson (Department for Culture, Media and Sport), Lord in Waiting (HM Household) (Whip)

My Lords, with the greatest respect, we are really getting beyond the guidance in the Companion regarding Report stage. I think that in a sense the House would like to make some progress.

Photo of Lord Rooker Lord Rooker Labour

My Lords, I will take three minutes; I am not going into technicalities and I freely admit I am going to introduce a bit of partisanship.

The Charity Commission states:

“Charities must never support political parties”.

If that was the case—if that was the norm—we would not have a problem. I would like to vote for this but charities have got to be regulated, even during the electoral period. I make no apology: I raised this before, at Second Reading.

Page 14 of the Conservative manifesto for the 2010 election shows a full-page portrait of the chief executive of a large national charity, extolling the virtues of the policies set out on the subsequent pages. This was the Conservative Party manifesto using a charity for party-political purposes. I was appalled when I saw it and could not understand why there was not a row about it. That chief executive, whom I later recognised, turned up in this House a few months later. I am not going to mention her name because I have not given notice, but the charity is Tomorrow’s People. This was a thundering disgrace and I would like, in the discussions that are about to take place, an assurance that political parties will submit their manifestos to the Charity Commission and the Electoral Commission to make sure that this kind of abuse of the system and of charities does not happen again, either by the Conservative Party or, inadvertently, by any other political party.

I apologise for introducing a note of partisanship, but I have been waiting a long time to say this.

Photo of Baroness Howarth of Breckland Baroness Howarth of Breckland Crossbench

My Lords, with due respect to the House, as I have not spoken on this, a number of the noble Lords who are proposing the amendment are suggesting that they will not take it forward but that there will be other debates. There are amendments later which are extremely important and vital to the sector if it is to carry out its work. I would be grateful if the House could move on.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Cabinet Office)

My Lords, that being said, I will speak quickly and shortly to say that, while we absolutely understand the desire to stop the bureaucracy being placed on charities, we do not want that for other bits of the third sector either. This is why we want a much more fundamental change which takes them out too. They also use volunteers and have all these problems. We do not think the rest of the voluntary sector should be caught by something which other campaigners will not be. We are, obviously, interested in the Government’s response, but if the issue is simply about dual regulation then there may be a way for the Electoral Commission to devolve its responsibilities in this area to the Charity Commission. However, if it could not answer its phone to the noble and learned Lord, Lord Mackay, last night, I am not sure I would devolve much to it at the moment.

There is a difference: there is an area of activity which is completely legitimate for charities but which will not be covered by the Charity Commission, which only polices charitable law. Even at the moment, under PPERA, there are a whole lot of things which charities are covered by but which are not policed by the Charity Commission, so extra work would be going to them. As the noble Lord, Lord Horam, said, this clause covers work which is completely within their charitable aims and, therefore, eligible under charitable law. To take out one part of the voluntary sector and leave the other in is something we cannot understand. The charities themselves did not ask for this when they gave evidence—oral and written—to the commission chaired by the noble and right reverend Lord, Lord Harries. The Electoral Commission is against it, as are the NCVO and the Charity Commission. There may be a good reason for this: the overwhelming majority of charities that have contacted me are not in favour of it.

As I think the last speaker said, we are very interested in the important issue of staff costs. That is what the charities really want taking out, so I hope we can move quickly to it and the House can have a decision.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords 5:30 pm, 15th January 2014

My Lords, I thank my noble friend Lord Phillips for raising the important issue of charities and seeking to exclude them from the regulatory regime governed by controlled expenditure for third parties. In Committee, we had a useful debate during which I indicated that some very important points had been made and undertook to give consideration to them. To those who ask the Government to take this issue away and to think about it, I say to your Lordships’ House that we have given this very serious thought. I probably spent more of my time on it than I had necessarily expected over Christmas and the new year in Orkney. I will not overegg it but I think my wife thought that it probably was more than was healthy.

With other Ministers, the Government have seriously thought about this matter and looked into it. Under present charity law, charities are organisations which must be established for charitable purposes only which are for the public benefit. An organisation will not be charitable if its purposes are political. Campaigning and political activity are legitimate and valuable activities for charities to undertake. However, this must be undertaken by a charity only in the context of supporting the delivery of its charitable purposes.

The Charity Commission and the Electoral Commission produce guidance for charities on campaigning and political activity. Both regulators acknowledge that there may be a narrow range of circumstances—noble Lords who took part in Committee will remember that the word given to me by officials was “sliver”, which I did not particularly like but was meant to show that it was a very narrow range of activities—in which charities may be compliant with charity law and also operate within the regulatory regime established by the Political Parties, Elections and Referendums Act 2000. I listened carefully to the speech of my noble and learned friend Lord Mackay of Clashfern. The Charity Commission guidance updated in January 2011 on charities, elections and referendum states:

“A charity may publish the views of candidates in local and national elections where these views relate to the charity’s purposes and publishing them will raise public interest and debate about the underlying issues. The charity must not encourage support for any particular parties or candidates”.

It goes on to say that “even if” a charity is,

“following the guidelines set out in this document and in

Speaking Out: Guidance on campaigning and political activities by charities

(CC9), if you use material that could be seen as indicating to the public that particular candidates or parties support or oppose your policies, it is possible that you may need to register as a third party with the Electoral Commission”.

Indeed, that has been the position following PPERA 2000. My understanding is that two charities registered in 2010 .

I admit that the circumstances may be very narrow but the important point to remember is that we are using an objective test. It is not a subjective intention of the charities: it is how a reasonable person might perceive what the charities have done. As the noble and right reverend Lord, Lord Harries of Pentregarth, pointed out, Clause 26(4)(c) states that,

“a course of conduct may constitute the doing of one of those things even though it does not involve any express mention being made of the name of any party or candidate”.

Applying that consideration and the objective test is the considered view of the Electoral Commission and the Charities Commission that there could be circumstances in which PPERA should apply.

Photo of Lord Low of Dalston Lord Low of Dalston Crossbench

I am sorry to intervene on the noble and learned Lord, but does he not agree that the test is only partly objective because the test is not what a reasonable person would make of what the charity has done but what a reasonable person would make of the charity’s intention?

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

My Lords, I can do no better than remind your Lordships of Clause 26, which states that,

“the expenditure can reasonably be regarded as intended to promote or procure electoral success at any relevant election for—”.

The point is that there is a distinction between an objective and a subjective test. It may be that if the charity was complying it was not intending, but if objectively it was thought to have done so it would fall into that narrow range of activity. The important point was made by the commission chaired by the noble and right reverend Lord, Lord Harries; namely, that it is the activity that is important rather than who is undertaking the activity.

I know that the House wants to move on, but the e-mail issued yesterday evening by Mr Rowley has been referred to by a number of noble Lords. He says:

“We recognise that there are some circumstances where a charity’s activities can adhere to charity law but may still require them to register with the Electoral Commission during an election period. Indeed, during the last General Election a small number of charities did register with the Electoral Commission. Due to the increased awareness and scrutiny of this area we believe that this number may increase, regardless of the change in the scope of activities and limits that this Bill proposes”.

My noble friend Lord Phillips was suggesting that somehow or other the information on this coming from the Charities Commission was out of date. It is important to recall that it does set out the current position, but it is a situation in which PPERA is not changing with regard to the definition. It will not change as a result of this Bill, so the case remains that a narrow scope of activities could be covered. The Electoral Commission is clear that charities should not be exempt from the PPERA regime. It highlights that such an exemption would undermine the effectiveness of the PPERA regime and create incentives for campaigners to carry out as much campaigning activity as possible via charitable channels. Potentially that could have implications for the reputations of the charities.

I repeat what the commission said:

“It is the Commission’s view that it is right that charities are not excluded from within this legislation, and we believe the Government’s approach to distinguish by activity rather than by type of organisations is correct”.

The Government’s view, however, is that the nature of the PPERA test, to which I have referred, and the constraints of charity law will mean that the circumstances in which charities are brought within the scope of PPERA rules will be very rare. First, they must meet the PPERA test where their activities can reasonably be regarded as intended to promote or procure the electoral success of a party or candidate. Secondly, if they meet this test they must incur controlled expenditure over the registration threshold. The amendments that we will debate later and that are being brought forward by the Government to raise the registration threshold in essence will ensure that smaller or even medium-size charities will not have to register with the Electoral Commission.

I heard comments in Committee and in the meetings that I have had about the importance of trying to keep the administrative burden to a minimum. I accept that there was force in the concerns expressed when I first became engaged in this Bill and attended meetings with my noble friend Lord Wallace of Saltaire, in which charities said that there was a possibility that they could do something that took them into PPERA-controlled expenditure, with the limit at £5,000—£2,500 in Scotland, Wales and Northern Ireland. That might happen, without their knowing that there could be a freeze on their activity. But limits of £20,000 for registration are now proposed; in Scotland, Wales and Northern Ireland it is £10,000.

If charities are undertaking that level of expenditure this is neither unreasonable nor the sort of thing that will get lost in the loose change. It is significant expenditure. Therefore many charities will be removed from any concern by the thresholds that we are setting. Those approaching that level of expenditure may wish to consider whether it is appropriate. In terms of the general core principles of accountability and transparency in the Bill, it is important that if a body is undertaking the kind of activity that falls within this scope it should be accountable and transparent. In some of my discussions with the chief executive of OSCR, the Scottish charities regulator, he said that he thought that the transparency argument was important: if two organisations were doing exactly the same thing that brought them within the scope of the Bill or PPERA, it was wrong that one should have to be accountable and transparent, and the other, because it was a registered charity, should not. In transparency and accountability terms, this departed from an objective of the Bill.

Charities have raised concerns as to what happens if a party or a candidate adopts one of their policies. The Electoral Commission guidance is clear on this point. If a party or a candidate adopts a charity’s policy this will not automatically result in the charity incurring controlled expenditure. A charity will incur controlled expenditure only if it subsequently highlights the fact that party A or candidate B supports its policy, or ramps up its campaign. As such, the Government are not persuaded that there is a compelling case to take such a significant step as to exempt charities from the regulatory regime. It is the activities of the third party and not the type of organisation that should be subject to regulation. I can assure my noble friend, who raised the matter, as did other contributors to the debate, that the regulatory regime on charities will be explored during the review of third-party campaigning that we have indicated, as laid out in later amendments, will take place after the 2015 election.

We have had a good debate. I am not sure that I can elaborate these points much further. The noble and learned Lord, Lord Mackay of Clashfern, very properly made the point that the shape of the Bill will not be determined by the Charity Commission or the Electoral Commission; it will be done by Parliament, by your Lordships’ House and the other place. But, in doing so, it is important that we have some regard to those who have dealt with these issues in elections past, and to the Charity Commission and the Electoral Commission, which agree that the amendment proposed by my noble friend would not be appropriate in these circumstances. I therefore invite my noble friend to withdraw it.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative

Is my noble and learned friend saying, as a law officer of the Crown, that it is lawful for a charity in pursuance of its charitable purpose to do something that can,

“reasonably be regarded as intended to promote”,

the interests of a particular party or candidate?

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

My Lords, that has been the legal position since 2000. It is very rare that it would happen but, conceivably, there is a very limited range of activities that could fall within that. It would not be the intention of the charity but it might be reasonably seen by others to be the intention of the charity. It is because of that very limited possibility that it is important to maintain the provision as it is rather than implement the exemption proposed by my noble friend.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

My Lords, I am grateful to my noble and learned friend the Minister for the way in which he summed up the debate. I am grateful to all those who have participated in discussing this important amendment. Given that Third Reading is on Tuesday, realistically there is not time to have the sorts of discussions that some noble Lords have looked for, particularly in terms of the speed at which the Charity Commission will move in relation to these sensitive matters. One has to look to the review of the workings of this legislation in the wake of the 2015 election. That will be vital. Having said that, I beg leave to withdraw the amendment.

Amendment 36 withdrawn.

Amendments 37 and 38

Moved by Lord Wallace of Tankerness

37: Clause 26, page 13, line 20, at end insert—

“( ) In section 87 of that Act (expenditure by third parties which is not controlled expenditure)—

(a) in subsection (1), omit paragraph (a) and the “or” at the end of it;

(b) omit subsection (2).”

38: Clause 26, page 13, line 23, leave out subsection (8) and insert—

“( ) After subsection (4) insert—

“(4A) It is a defence for any person or third party charged with an offence under subsection (2) or (4) to show—

(a) that any code of practice for the time being issued under paragraph 2 of Schedule 8A was complied with in determining whether any expenditure is controlled expenditure for the purposes of this Part, and

(b) that the person or third party’s acts or omissions would not have amounted to an offence on the basis of the controlled expenditure as determined in accordance with the code.””

Amendments 37 and 38 agreed.

Amendment 38A not moved.

Amendment 39

Moved by Lord Wallace of Tankerness

39: After Clause 26, insert the following new Clause—

“Arrangements between third parties notified to the Electoral Commission

(1) Part 6 of the Political Parties, Elections and Referendums Act 2000 (controls relating to third party national election campaigns) is amended as follows.

(2) In section 94 (limits on controlled expenditure by third parties)—

(a) after subsection (3) insert—

“(3A) For provision requiring certain controlled expenditure to be disregarded in determining for the purposes of subsection (3)(a) whether a limit is exceeded, see section 94A(5) (arrangements between third parties notified to the Commission).”;

(b) in subsection (4), for “such a case” substitute “the case mentioned in subsection (3)”;

(c) in subsection (5A)—

(i) after “Subsections (3) to (5)” insert “and section 94A”;

(ii) for “those subsections” substitute “those provisions”;

(d) in subsections (8) and (10), after “the purposes of this section” insert “, section 94A”;

(e) in subsection (11)(a), after “this section” insert “and section 94A”.

(3) After section 94 insert—

“94A Arrangements between third parties notified to the Commission

(1) A recognised third party (“a lead campaigner”) may, at any time before the end of a regulated period, send a notice to the Commission—

(a) stating that the lead campaigner is party to an arrangement of the kind mentioned in section 94(6), and

(b) identifying one or more third parties that—

(i) are parties to the arrangement, and

(ii) have agreed to be minor campaigners in relation to the arrangement.

(2) A notice under subsection (1)—

(a) may not identify a third party as a minor campaigner if the third party is a lead campaigner in relation to the same arrangement, and

(b) may not be sent by a recognised Gibraltar third party.

(3) On receipt of a notice under subsection (1) by the Commission, a third party identified in the notice becomes “a minor campaigner” in relation to the arrangement in question.

(4) Controlled expenditure that is incurred during the regulated period in a part of the United Kingdom by or on behalf of a minor campaigner in pursuance of the arrangement is to be treated for the purposes of section 96 (returns as to controlled expenditure) as having also been incurred during the period and in the part of the United Kingdom concerned by or on behalf of the lead campaigner.

(5) In determining for the purposes of section 94(3)(a) whether a limit is exceeded by a third party in relation to a regulated period, controlled expenditure incurred in a part of the United Kingdom is to be disregarded if conditions A to C are met in relation to the expenditure.

(6) Condition A is that the expenditure—

(a) is incurred in pursuance of an arrangement that has been notified to the Commission under subsection (1), and

(b) is, by virtue of section 94(6), treated for the purposes of section 94 and Schedule 10 as incurred by or on behalf of the third party.

(7) Condition B is that the third party is, at the time the expenditure is incurred, a minor campaigner in relation to the arrangement.

(8) Condition C is that the total of the controlled expenditure incurred during the regulated period in the part of the United Kingdom by or on behalf of the third party (disregarding any expenditure in relation to which conditions A and B are met) does not exceed the limit for that part mentioned in section 94(5).

(9) Section 94(6) applies for the purposes of subsection (8).””

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

My Lords, Amendment 39 relates to arrangements between third parties notified to the Electoral Commission. In our earlier debates, this was referred to as the coalition issue—not be confused with the coalition—and in the meetings I attended with charities and campaign groups it was probably the issue that was raised more often than any other. My noble friend Lord Wallace of Saltaire agrees.

The Government received many representations to this effect and I would like to make it clear, as I have done on previous occasions, that this Bill does not amend the controls on third parties that each incur controlled expenditure as part of a coalition. In addition, only coalitions that incur expenditure that can, in the phrase we have been using,

“reasonably be regarded as intended to promote or procure the electoral success”,

of political parties or candidates are regulated and will continue to be regulated. Those rules are necessary and I will take a moment to clarify their operation.

Section 94(6) of PPERA requires that if two or more third parties work together to incur expenditure to a common plan or arrangement, the entirety of the expenditure they incur as part of that coalition must count against each third party’s individual spending limit. However, it is also important to be clear about what is not caught.

Organisations working together as coalitions on campaigns unrelated to electoral success would not be considered as working together for the purposes of PPERA. Make Poverty History is a very good example of that. The test is, as I said, whether their activities can,

“reasonably be regarded as intended to promote or procure the electoral success”,

of political parties or candidates. I hope noble Lords agree that the rules on coalitions are a necessary anti-avoidance measure. If third parties in a coalition did not have to count each other’s expenditure they would be able to evade the spending limits by splintering into many groups.

The Electoral Commission has also expressed its support for these rules, believing them to be necessary. I refer noble Lords to the Electoral Commission’s briefing before Committee stage, in which the current rules were described as,

“a vital element of the controls on election spending. Without these controls, individuals or organisations could spend unlimited sums of money by arranging for multiple ‘front’ organisations to campaign on the same issue. This would undermine the fundamental principle of controlling non-party campaigning”.

The Government agree with this sentiment but accept that small campaigners, by which I mean those that only incur small amounts of money when campaigning, should not be subject to unduly burdensome controls. That should be the case across the regime and, in relation to other aspects of the Bill, the Government have already tabled amendments intended to remove burdens from small campaigners.

I shall now explain how government Amendment 39 would work in relation to third parties that operate in coalitions. The Government cannot take full credit for this amendment, as it is inspired by and based on that put forward in Committee by the noble and right reverend Lord, Lord Harries of Pentregarth. I am grateful to him, to my noble friend Lord Tyler and to the noble Baroness, Lady Royall of Blaisdon, who also tabled amendments to the rules on coalition working in Committee, which led to a very useful and fruitful discussion. Other than some consequential changes, government Amendment 39 leaves unchanged the current Section 94(6) rules on coalition campaigning.

Instead, Amendment 39 introduces an entirely new provision. It has the effect that a third party can nominate another third party, one it is in a coalition with, to act as a “lead campaigner”. The original third party would then become a “minor campaigner” and provided that certain conditions are met, the minor campaigner would not then in any way be required to account for either its own expenditure or that of the wider coalition. Reporting to the Electoral Commission would be done only by the lead campaigner for its own expenditure and that incurred by the minor campaigner. The conditions that must be met before minor third parties can benefit in this way from the provision, are, first, that the minor third party’s expenditure must have been incurred as part of a common plan under Section 94(6); that the lead campaigner must notify the Electoral Commission of this arrangement and provide details of the minor campaigner before any expenditure has been incurred; and that the minor campaigner may not itself spend more than the limits that apply to the registration thresholds, either as part of this or another common plan, or independently.

It is on this last point that this amendment differs from that put down in Committee by the noble and right reverend Lord, Lord Harries of Pentregarth. The government amendment allows minor campaigners also to participate in one or more coalitions and campaign independently alongside. They must just ensure that they do not, across the various types of campaigns, incur total spend above the registration thresholds. Lead and minor campaigners would, of course, have to agree among themselves appropriate arrangements to ensure that the minor campaigner provided the lead campaigner with the necessary information for it to report, but I hope that this give some assurance to noble Lords that the Government have seriously considered the impact on small campaigners and taken steps to remove unnecessary burdens.

The Government believe that this amendment gives campaigners greater flexibility and better reflects the way that campaigners in coalitions operate in practice. I hope that noble Lords will accept that this amendment goes quite some way to addressing the concerns of those campaigners and that the smallest campaigners will not be unduly burdened with administrative obligations. I should add that the Government intend to bring forward several clarifying and consequential amendments to this provision at Third Reading. As noble Lords will know, it was a moving feast, and while we do not intend to alter the policy, the drafting can spell out more clearly the Government’s intention that there should be no restriction on there being more than one lead campaigner in an arrangement, and that the lead campaigner would report only for any minor campaigner it had identified in a notice. We think that this provides the flexibility that campaigners seek.

We also intend to make it clearer that a lead campaigner that has notified the Electoral Commission of this arrangement can supplement that notice to identify further minor campaigners. As I said, these clarifying measures are needed to ensure that the drafting of this amendment has the effect sought.

There are two further government amendments in this group, Amendments 63 and 64, which relate to Amendment 39. These are minor amendments, which make consequential amendments to the third-party reporting rules. I shall respond to the amendment in the name of my noble friend Lord Tyler after he has spoken. In the mean time, I beg to move.

Photo of Lord Tyler Lord Tyler Liberal Democrat 5:45 pm, 15th January 2014

As my noble and learned friend Lord Wallace has said, I and the noble and right reverend Lord, Lord Harries, the noble Baroness, Lady Mallalieu, and my noble friend Lord Cormack have a subsidiary but quite important additional amendment, Amendment 39A. I am sure that all four of us welcome the recognition that my noble and learned friend Lord Wallace has given to the fact that the 2000 Act—this is not about this Bill; it is about the 2000 Act—has caused real problems for any organisations that were encouraged to work together in what were then called coalitions. Since then, the term “coalition” has gained a different connotation, so perhaps we should talk just about “working together”. The way in which this matter was handled in 2000 has caused real concerns. I know from reading

Hansard that this confusion was caused at the last minute by a government amendment during the Committee stage of the Political Parties, Elections and Referendums Bill, as it then was, in this House.

It is curious that, over the years since 2000, very few of us seem to have heard of the problems that were caused by those provisions. Neither the Electoral Commission nor the Charity Commission ever came forward and said that these matters needed review and either repeal or revision. However, we now know, because a large number of organisations have been in touch with many Members of your Lordships’ House saying that this is a real practical problem—hence the Government’s amendment, which is excellent so far as it goes. However, as I shall seek to explain in a moment, there is one additional problem which I hope my noble and learned friend will be able to say he can look at again, since, as he just said, there will be some additional clarification at Third Reading.

As my noble and learned friend has said, the new provisions should be a major help to smaller players in those joint campaigns, ensuring that others can account for their spending, but the approach in Amendment 39 does not go quite far enough. The fundamental problem with the so-called coalition arrangements in the 2000 Act is as follows. If, let us say, Friends of Earth intends to spend £300,000 on a campaign about climate change and does so in coalition with, for example, Oxfam, which contributes £25,000, under PPERA both are deemed to have spent, or to plan to spend, £325,000. Clearly, that is absurd, because that would mean that Oxfam, which had contributed only £25,000 to that campaign, might well then be precluded from doing anything else on other issues, which it is clear was not intended by the 2000 Act and which, I hope, is not something that we would intend to do today.

To prevent people working together and therefore having to multiply the spending limits under the 2000 Act by a factor equal to the number of organisations involved seems to be most peculiar. Removing the rules altogether would create another new loophole. I keep saying to colleagues in the third sector, “We’ve got to be very careful that we don’t increase flexibility for what we think is a good cause only to create a loophole for much less meritorious campaigning activity”. However, what is unfair about the rules is not that some spending on common campaigns is counted together to prevent an overall breach of the limits but the fact that spending by one organisation on one campaign can then restrict the campaigning of another organisation on a totally different campaign. In my example, Oxfam would be deemed to have spent £325,000 not just for the purposes of that climate change campaign but for all purposes. It would then be very close to the limit, which would then mean that it would have to worry about whether any of its other spending on, let us say, development targets could,

“reasonably be regarded as intended to promote or procure electoral success”,

of a party or candidate.

If that organisation’s trustees believe that the future spending could be so regarded, they would be left with a very small amount of headroom in the national spending limit even though they had contributed a relatively small amount of money to the tune of £25,000. Therefore, £25,000 spent on climate change would mean very little room left for spending on other development targets. I am sure your Lordships will see that that would not be just and right and does not meet the objectives either of the existing law or of this Bill.

Our Amendment 39A would build on the progress made by the amendment moved by my noble and learned friend Lord Wallace in setting out the principle that there should be an overall cap on spending by any one joint campaign or by any one individual organisation. However, new subsection (6B) proposed by my amendment states that,

“expenditure by a third party within the limits set out in Schedule 10 in pursuance of any matter unrelated to an arrangement and which could not reasonably be regarded as intended to achieve a purpose common to an arrangement”,

should not be so restricted by the coalition rules in PPERA 2000.

The amendment would provide for some affected organisations a silver lining in the passage of this Bill. In short, it would remove a very unjust element of the existing law which has caused quite unintended problems for many non-party campaigners. Their arrangements would be improved immeasurably. The amendment would also improve significantly what the Government have so far managed to come up with. I hope that my noble friends will recognise that the problems with the 2000 Act are considerable. This was one very specific problem that was caused to a large number of organisations. I hope therefore that before Third Reading, when, as my noble and learned friend has already indicated, there has to be some further clarification and therefore amendment of the set of amendments that he is putting before the House today, he could look also at this additional problem, which otherwise will go unresolved and continue to cause considerable difficulty for all sorts of organisations.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

I, too, thank the noble and learned Lord, Lord Wallace, for the government amendment, which is a positive response to the suggestion put forward in our commission’s report, as he acknowledged. I have added my name to the amendment tabled by the noble Lord, Lord Tyler. I shall not repeat the reasons that he has already put forward, but it is an important amendment for charities and campaigning groups generally because they do a huge amount of campaigning not just with one coalition but with a whole series of coalitions. For instance, aid agencies may be engaged in a coalition on overseas aid and, at the same time, be engaged in a coalition on climate change. That is the way in which they work.

I want to make a point that has not been made so far in any of these debates. It concerns the fundamental purpose of this part of the legislation and whether it will achieve what the Government hope. The purpose of the legislation at this point is to stop front organisations drawing on large sums of money to distort campaigning, but I suggest that the legislation as we have it now will not have that effect. Let us take a hypothetical example. Six, very strong anti-Europeans have dinner together. They have access to large amounts of money from various sources. They go away to different parts of the country and they decide to start six different campaigning organisations under different names. But, in fact, everybody knows that their purpose is to get Britain out of Europe. Would they be caught by this legislation? No. I have read carefully the briefing note presented by the Electoral Commission, which says that you are not working together—that is, you are not engaged in co-ordinated campaigning—if you have informal discussions with other campaigners but do not discuss your plans with them in any detail—all this party will have done is have dinner together; if you speak at an event organised by another campaigner but do not participate in other ways—they could even speak at each other’s events; and if you do not consult other campaigners about what you should say in your campaign or how you should organise it. However, it goes on to say that you can sign a joint letter together. I hope that the noble and learned Lord will take seriously the fact that the legislation as it now stands will not have the desired effect of stopping big money coming in and using front organisations. We firmly support the intent but we do not think that the Bill will achieve it.

My particular concern is that this will have a cramping effect on charities and campaigning groups, even with the government amendment and even if the amendment of the noble Lord, Lord Tyler, is accepted. I beg the noble and learned Lord, if not now, before Third Reading, or at least as part of the examination of how the legislation works afterwards, to try to engage in some lateral thinking. We have not been able to come up with anything satisfactory so far; neither have the Government. We must be able to engage in some lateral thinking to stop what we and the Government want to stop without at the same time cramping the co-ordinated coalition campaign which is so important to charities.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Conservative 6:00 pm, 15th January 2014

My Lords, I intervene very briefly. I tabled an amendment on coalition working and I am very grateful to the Government for adopting this way forward.

The other issue that charities raised frequently was the question of nil returns. I know that we shall come to nil returns later under government Amendments 81 and 89, but that, I hope, will cross-ruff into this amendment. In other words, we will make sure that when the new rules for coalition working come in charities will be able to take advantage of the nil return provisions, which the Government properly propose in Amendments 81 and 89. I should be grateful for the Minister’s clarification on that.

Photo of Lord Ramsbotham Lord Ramsbotham Crossbench

I, too, welcome the government amendments and repeat something that I have said on earlier occasions about the importance of getting the issues about coalitions right in relation to the criminal justice system. If you look at the transforming rehabilitation revolution, you will find that the Government are trying to encourage coalitions to take on the supervision of offenders. They consist of a large number of different organisations, private and voluntary, and it is important that they are crystal clear on anything to do with coalitions before they are formed to take on that very important public work.

Photo of The Earl of Sandwich The Earl of Sandwich Crossbench

My Lords, I detect self-restraint in the House at the moment, and I know that we need to move on rapidly, but I just wanted to say a word in support of Amendment 39A. I have to repeat what the noble Lord, Lord Cormack, said earlier about the value of charities generally within the political system and the role of networks, which have become so important and have been encouraged by government. If the noble Baroness, Lady Chalker, were here—she could not be here today—she would explain how the Government were siding with charities all the way through the 1980s and 1990s to achieve consensus with coalitions. The idea of attacking even the larger coalitions seems to be against the Government’s own policy.

The noble Baroness, Lady Mallalieu, said on an earlier amendment that a lot of damage had been caused by Part 2, but it must also be said that the Bill has strengthened the charities in opposition to it. That must be a force for good. But one damaging effect of the Bill, which was not intended by the Government, is that if it is unamended, many charities will become more wary in their campaigning. They will in many cases withdraw from the front line. I have been 40 years in charities and church organisations attending party conferences. What would they all be like without those charities displaying their wares, and so forth?

I know that the Government have come quite a long way to meet the smaller charities, but I do not think that they have moved far enough. The noble and learned Lord should recognise the injustice of netting so many legitimate activities just to catch one or two miscreants who would probably be recognised anyway in the context of a local constituency. Charities are usually pretty visible in what they do. The Electoral Commission itself says that we are talking only about a small number. Although the numbers add up and may increase, we are all in danger of exaggerating the number involved. It is the sledgehammer effect.

Surely, when there is disaffection with elections generally and with mainstream politics and politicians, we want more awareness among the public of the range of current non-party political issues. The amendment leads us in the right direction.

Photo of Baroness Tyler of Enfield Baroness Tyler of Enfield Liberal Democrat

My Lords, I rise briefly to support Amendment 39A and, in doing so, very much welcome Amendment 39 introduced by my noble and learned friend. In Committee, I drew on my personal experience of being involved in coalitions of charities both previously and currently. It is very important —Amendment 39A achieves this—that even small and medium-sized charities are not restricted to being involved in only one coalition. I end by giving the example of when I was chief executive of a charity in the field of family relationships. At any one time, with a very small amount of money, we would be involved in a campaign to do with children and young people, a campaign to do with domestic violence, and a campaign to do with older people and the role of grandparents. All of those were important activities. We could never have done that ourselves; we simply did not have the money. That is why Amendment 39 is so important.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

My Lords, I expressed appreciation for those who have welcomed Amendment 39, not least my noble friend Lady Tyler, because—I do not say this in any critical way—that is where we have managed to build on the amendment moved in Committee by the noble and right reverend Lord, Lord Harries. It would allow smaller charities, without reaching the threshold limit, to engage in a number of different campaigns.

I respond to the example used by my noble friend, and to the noble Lord, Lord Ramsbotham, and the noble Earl, Lord Sandwich, about the kind of campaigning that charities are doing. My noble friend talked about promoting grandparents’ rights, and I know that the noble Lord, Lord Ramsbotham, has a passionate interest in rehabilitation issues. As he said, the Government have encouraged the work of coalitions. One has to remember that to be subject to controlled expenditure, a campaign must fall within the definition set out in Clause 26. I honestly do not believe, without a huge leap of imagination, that the valuable work done by coalitions to promote the rehabilitation of offenders or grandparents’ rights could be interpreted as seeking the election or promotion of a particular party. By no stretch of the imagination could a reasonable person think that that was intended to secure the promotion of a particular party or candidate in an election. The noble Earl, Lord Sandwich, raised similar concerns.

The overwhelming amount of campaigning by charities will not fall within the definition of controlled expenditure here. I hope that that gives some reassurance, because I recognise the sincerity with which these concerns are expressed. Work that is being done to promote rehabilitation in prisons cannot be seen in any way as falling within the ambit and scope of activity that would bring it within PPERA-regulated controlled expenditure.

My noble friend’s amendment is intended to allow third parties that set up a coalition to move away from the common plan rules by allowing that coalition to have both its own spending limit and separate, individual spending limits for the members of the coalition. The coalition will be able to spend up to the national limit, and its members will also be able to spend up to the national limit on activities not taken forward as part of the common plan.

My noble friend was right to point out that the issue we are grappling with here has been in place since 2000; I accept that the range of activities increases under the Bill, but the problem has been with us since the outset. I point out that under existing legislation, there is nothing to stop a coalition establishing itself as a distinct third party. This allows the organisations and their members also to campaign on separate issues individually, with a separate spending limit.

The Electoral Commission has been very clear on this point, both in its guidance and in its evidence to the Commission on Civil Society and Democratic Engagement. That evidence gave the example of a lead campaigner which runs the coalition’s campaign and authorises its spending. Only the lead campaigner would be required to register with the Electoral Commission. Contributions to the coalition campaign from other third parties will be treated as donations or donations in kind to the campaign. In the words of the Electoral Commission,

“this means that the ... campaigners do not need to register themselves or report anything themselves to the Electoral Commission”.

Those campaigners would therefore be able to continue to campaign independently, too, to the maximum spending limit.

However, the Electoral Commission also made it clear in its Report stage briefing that it cannot support this particular provision. It noted that the amendment,

“would allow an individual or organisation to spend substantial amounts campaigning on an unlimited number of issues, as long as they are working together with someone else in each of those campaigns. For instance, someone could spend hundreds of thousands of pounds on each of a series of campaigns with others that attack different aspects of a political party’s manifesto in the run-up to an election”.

For example, it could be that you have an energy company that went into campaign with other energy companies, set up a coalition in favour of fracking and supported candidates who would support that. It could spend up to, say, £300,000 on that. Quite separately, under my noble friend’s amendment, it could be engaged in another campaign, with other participants, in which it tried to promote onshore wind power and could spend up to £300,000 on that. I am sure that that is not the intention of what my noble friend is proposing, but I fear that might well be the result his amendment would have.

I know that my noble friend has worked hard on this—as have many people—to try to find the right way to deal with this coalition issue. I do not believe that his amendment would have an effect that was helpful; and, as I indicated earlier, it is possible for a coalition to set itself up as a third party in itself. In these circumstances I invite my noble friend not to press his amendment, as it may have consequences that he does not intend. However, I hope we have indicated to the House, through the amendment that the Government have brought forward, that they have listened, have grappled with the issue and have built upon the amendment proposed by the noble and right reverend Lord, Lord Harries, in Committee.

Amendment 39 agreed.

Amendment 39A not moved.

Schedule 3: Controlled expenditure: qualifying expenses

Amendment 40 not moved.

Amendments 41 to 44

Moved by Lord Wallace of Tankerness

41: Schedule 3, page 57, line 9, leave out “other public meetings or events (other than” and insert “other public events, other than—

(a) ”

42: Schedule 3, page 57, line 10, after “party” insert “, or

(b) any public procession or protest meeting, within the meaning of the Public Processions (Northern Ireland) Act 1998, in respect of which notice is given in accordance with section 6 or 7 of that Act (advance notice of public processions or related protest meetings)”

43: Schedule 3, page 57, line 14, at end insert—

“But expenses in respect of such events do not include costs incurred in providing for the protection of persons or property.”

44: Schedule 3, page 57, line 14, at end insert—

“1A (1) Nothing in paragraph 1 extends to—

(a) expenses incurred in respect of the publication of any matter relating to an election, other than an advertisement, in—

(i) a newspaper or periodical,

(ii) a broadcast made by the British Broadcasting Corporation, by Sianel Pedwar Cymru or by the Gibraltar Broadcasting Corporation, or

(iii) a programme included in any service licensed under Part 1 or 3 of the Broadcasting Act 1990 or Part 1 or 2 of the Broadcasting Act 1996;

(b) expenses incurred in respect of the translation of anything from English into Welsh or from Welsh into English;

(c) reasonable personal expenses incurred by an individual in travelling or in providing for the individual’s accommodation or other personal needs;

(d) reasonable expenses incurred that are reasonably attributable to an individual’s disability;

(e) expenses incurred in respect of the provision by any individual of the individual’s own services which the individual provides voluntarily in the individual’s own time and free of charge.

(2) In sub-paragraph (1)(d), “disability” has the same meaning as in the Equality Act 2010 (see section 6 of that Act).”

Amendments 41 to 44 agreed.

Amendment 45

Moved by Lord Harries of Pentregarth

45: Schedule 3, page 57, line 14, at end insert—

“Exclusions of background staff costs

1AA Nothing in sub-paragraphs (3) to (5) of paragraph 1 shall be taken as extending to any expenses incurred in respect of remuneration or allowances payable to any member of staff (whether permanent or otherwise) of the third party.”

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

My Lords, this amendment is very important for campaigning groups and charities, but I can move it very briefly: it is quite clear and simple.

First, let me say that the charities and campaigning groups, as part of the commission, very much support the aim both of transparency and accountability, and with that aim in mind support the extension of activities that should be regulated and are set out in new Schedule 8A. This amendment is about removing the background staff costs from those activities in sub-paragraphs (3) to (5) of that schedule. They refer to press conferences and media events; transport costs, when those are directed towards obtaining publicity—for instance, a campaign bus; and public rallies and other meetings.

We agree that all those should of course be brought into regulation, but this amendment is about excluding the background cost: that is, the cost of the member of staff of the third party. That is not primarily on cost grounds, but because of the additional bureaucracy that it would involve. How do you delineate the amount of time that the staff member spends—let us say, on mounting a public rally—from the amount of staff time they spend on their campaigning work anyway?

It is easy to assess the amount of money you are going to spend on hiring the hall for a public rally; you get an invoice for that. You do not get an invoice for a member of staff or the 10% of their time spent over four weeks doing that. Therefore, we think that the best thing to do is eliminate the background staff costs from the regulated costs in those three areas. It should be noted that the Electoral Commission recommends the removal of all staff costs, at least for the 2015 election. We are not going as far as that; we refer only to the background staff costs in relation to these three activities that are being brought into regulation. I beg to move.

Photo of Lord Tyler Lord Tyler Liberal Democrat 6:15 pm, 15th January 2014

My Lords, I strongly support the noble and right reverend Lord, Lord Harries, on this amendment. Indeed, we had very co-operative discussions about how best to tackle this problem. I am grateful to him and, indeed, to others who effectively endorsed an amendment we tabled Committee on this crucial issue.

Given that there was much quotation of the Electoral Commission’s advice earlier, it is important that it has very explicitly said that Amendment 45 offers some advantages over the current position in the Bill. With this amendment, at least, we have that endorsement.

As I said in Committee, the Electoral Commission actually thinks that counting staff costs for political parties’ election expenses would be an appropriate way to proceed. Of course, that is not in front of us today; it may be for another day and another Bill. For the purposes of this Bill, the NGOs have been dealing with a considerable problem: namely, that the Bill includes not only staff costs on direct campaigning but what are called “background costs”.

As my noble friend will no doubt point out, staff costs for non-parties are already regulated for the production and distribution of election material. Our amendment suggests that this should continue but that costs should also be accounted for if they are incurred in direct relation to canvassing voters. In that context it seems that it would not be very difficult to identify the particular costs; equally, however, we do not want to increase the difficulties that could be caused by burdensome regulation on background costs that are not in any way so easy to account for. For example, the costs in relation to organising meeting rooms, travelling to a venue or setting up a press conference might be a matter of a few minutes of somebody’s time—and therefore, for many small organisations, a considerable absurdity.

Bluntly, I do not think that anyone cares if a policy officer, whose job for the rest of the year is something completely different, spends a little time booking a room for an election rally, or incurs costs travelling to it. These matters cannot be said to be likely to greatly affect the outcome of an election in that particular area, or nationally. However, if the regulations go through without us thinking about the implications, they could unnecessarily tie up campaigners in accounting for their time—and, worse still, could deter some from campaigning at all.

As was said so forcibly earlier, there are many organisations in this country—and thank God for them—that rely entirely on time being given voluntarily to this sort of activity. Would it be necessary to try to cost that time, or would it be difficult, in any case, whether they were employed or volunteers? Many a charity and many a non-charity would find that totally inconsistent with the Government’s intention of avoiding unnecessary spending on unnecessary bureaucracy.

This amendment, along with some of the others, helps the Government to do what they say they want to do. I hope, therefore, that my noble and learned friend will be able to find some way of making a sensible compromise on the whole issue of staffing costs.

The Government have moved sensibly in so many ways to try to meet the concerns and anxieties about the so-called chilling effect that many of us have understood to be the case with organisations with which we are involved. Many noble Lords are active members of charities and non-charities that do such important work in civil society today. Surely, the last thing that we want to happen is for the time, energy, enterprise, inventive activity and, indeed, the cost of those organisations to be unnecessarily distorted by new bureaucracy of the sort that could occur. Therefore, I very much hope that the Government will see that this is a sensible compromise on the whole issue of staffing costs.

Photo of Lord Cormack Lord Cormack Conservative

My Lords, I have attended a number of meetings which the noble and right reverend Lord, Lord Harries, has convened and I, for one, am extremely grateful to him for the leadership that he has given and the amount of time he has devoted to the Bill over the past few months. Last week, following those meetings, I met with the chief executive officers of two important charities. I do not intend to name them because I did not say that I would, but when I asked them, “If we could get only one amendment through the House next week, where would your priority be?”, they said that it would be on staffing costs.

Any regulations imposed as a result of the Bill should be clear, simple and, above all, fair. The problem with this is that we would be faced with regulations that would be far from clear or simple, and which would most certainly not be fair. Because I do not want to take the time of the House when we have already had a clear and brief exposition from the noble and right reverend Lord, all I will say is: let us this evening make sure, as far as we can, that that clarity, simplicity and fairness is in the Bill.

I, too, am grateful to my noble and learned friend Lord Wallace of Tankerness and to the other Lord Wallace, my noble friend Lord Wallace of Saltaire, who we are all delighted to see back—but I urge them to go this one further step. They have done a great deal to try to make a bad Bill better; they can take another step this evening.

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Shadow Leader of the House of Lords

My Lords, the inclusion of staffing costs is hugely burdensome for large and small campaigning organisations. We have heard that tonight and we have all received e-mails and had discussions with campaigning organisations. Like the Electoral Commission, our preference would be for all staffing costs to be taken out for the 2015 election period. However, we recognise that this is an excellent compromise and I urge the noble and learned Lord, Lord Wallace, to accept it. Later on this evening the noble and learned Lord will be putting a review into the Bill, which could be an opportunity to revisit these things, so I very much hope that he will accept the amendment.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

My Lords, I thank the noble and right reverend Lord, Lord Harries, for his amendment, because I, too, recognise that this issue has been regularly raised in many of the meetings that we have had—as did my noble friend Lord Cormack and the noble Baroness, Lady Royall. The noble and right reverend Lord’s amendment seeks to exclude those staff costs associated with staff directly employed by a third party from the calculation of controlled expenditure for transport, press conferences and organised media events, and for public rallies and public events.

The starting point is to recognise that the PPERA Act 2000 has always required third parties to account for staff costs. I acknowledge that the Bill extends the range of activities that may incur controlled expenditure; these are the activities that the noble and right reverend Lord seeks by his amendment to remove from staff costs. The Bill seeks to retain the need for staff costs to be included. As I said, I recognise that there has been concern, first, over the unfairness of third parties having to account for these costs when political parties do not. I think that my noble friend Lord Tyler mentioned that. Secondly, there has been concern about the difficulty for third parties in calculating the staff time attributable to activities giving rise to controlled expenditure.

On the issue of third parties having to account for these costs while political parties do not, your Lordships will be aware that when Parliament passed the 2000 Act it felt that it would be transparent and proportionate for a third party to account for staff time. This was on the basis that a third party undertakes campaigning activities other than simply political campaigning, and where a third party enters into political campaigning its spending for those purposes should be fully transparent. I am sure that that was the underlying thinking behind the 2000 Act. I would at least hope that someone who is employed by the Liberal Democrats during an election is actually working for the Liberal Democrats. Indeed, I am sure that the other parties would hope the same on behalf of their staff. It is as transparent as it possibly can be.

Regarding the concerns of third parties over the difficulties associated with calculating staff time, this is an existing element of the regulatory regimes. Its operation in the last two general elections, alongside

Electoral Commission guidance on this, highlighted that such costs can be accounted for without becoming overly burdensome. The Electoral Commission takes a proportionate approach in current guidance to the calculation of controlled expenditure, including staff costs, by clearly stating that third parties should make an honest assessment of the costs that need to be reported.

I have shared with a number of the groups which have come to see me since Committee the fact that we did examine whether it would be possible to put in a de minimis exemption. Quite frankly, having seen what its terms would be, it would give rise to more concern about legal definitions than it merited, particularly if we had a de minimis exemption in statute. That would make it much more difficult for the Electoral Commission to take that proportionate approach to the calculation of controlled expenditure which it has done through its guidance.

It should also be noted that with the increases in the registration threshold the smaller organisations to which my noble friend referred, be they charities or campaigning organisations, will not be subject to regulation and the need to calculate staff costs. The best way of addressing the de minimis question is by what we have done in raising the threshold and taking so many of these organisations outwith the scope of controlled expenditure altogether.

My noble friend quite properly paid tribute to the work done by volunteers, not only for charities but for so many campaigning organisations. In many respects, they are the people who make the wheels of campaigning and democracy go round. However, volunteer costs will continue to be excluded from the calculation of controlled expenditure. In Amendment 44, which the House has just agreed, volunteer costs are excluded from the calculation of staff costs by virtue of paragraph 1A(1)(c) of new Schedule 8A. They were excluded under the existing regime, but it is important to emphasise that volunteer costs will also be excluded under what we are proposing. There is a world of difference between volunteer costs, which will be excluded, and the great advantage that there can be to candidates or political parties of third parties putting paid staff into campaigning activity in constituencies, or into running media events, press conferences or rallies.

The result of the amendment proposed by the noble and right reverend Lord, Lord Harries, would be to exempt that kind of expenditure associated with paid staff being moved in at the time of an election to facilitate the electoral advantage of a particular party or candidate. It is for that reason that the Government do not feel able to accept the noble and right reverend Lord’s amendment, and I invite him to withdraw it.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

I am disappointed with the noble and learned Lord’s reply. This was a very simple step that the Government could have taken to ease the regulatory burden on charities and campaigning groups. It is disappointing. He stressed the fact that staff costs were already in PPERA. With due respect, that is no good reason for continuing them, if we have an opportunity to improve that Act and make it not just workable but one which eases the burden on charities and campaigning groups.

The Minister stressed that the Electoral Commission had found it possible to regulate this, but the fact is, as he knows, that charities and campaigning groups find this whole area very burdensome. I really do not see how the Electoral Commission can possibly police this area and work out what percentage of the time has been allotted, let us say, to the mounting of a public rally. What kind of receipts or statements is it going to get from the charity concerned? I am afraid that I find it very disappointing and I would like to test the opinion of the House.

Division on Amendment 45

Contents 236; Not-Contents 193.

[The name of a Member who voted in both Lobbies has been removed from the Division Lists.]

Amendment 45 agreed.

Division number 1 Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill — Committee (2nd Day)

Aye: 234 Members of the House of Lords

No: 191 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Amendment 45A not moved.

Clause 27: Changes to existing limits

Amendment 46

Moved by Lord Wallace of Tankerness

46: Clause 27, page 14, line 42, leave out subsection (1) and insert—

“(1) Section 94 of the Political Parties, Elections and Referendums Act 2000 (limits on controlled expenditure by third parties) is amended in accordance with subsections (1A) to (1E).

“(1A) In subsection (3), for paragraph (a) (but not the “and” after it) substitute—

“(a) during a regulated period—

(i) any controlled expenditure is incurred in a part of the United Kingdom by or on behalf of a third party in excess of the limit for that part of the United Kingdom mentioned in subsection (5), or

(ii) any controlled expenditure is incurred in a particular parliamentary constituency by or on behalf of a third party in excess of the limit mentioned in subsection (5ZA),”.

(1B) In subsection (5)—

(a) in the opening words, for “(3)” substitute “(3)(a)(i)”;

(b) in paragraph (a), for “£10,000” substitute “£20,000”;

(c) in paragraph (b), for “£5,000” substitute “£10,000.”

(1C) After subsection (5) insert—

“(5ZA) The limit referred to in subsection (3)(a)(ii) is 0.05% of the total of the maximum campaign expenditure limits in England, Scotland, Wales and Northern Ireland.”

(1D) In subsection (5A) for “(5)” substitute “(5ZA)”.

(1E) In subsection (10), omit the “and” at the end of paragraph (c) and after paragraph (d) insert—

“(e) the “maximum campaign expenditure limit” in a part of the United Kingdom is the limit imposed by paragraph 3 of Schedule 9 in relation to campaign expenditure incurred in the relevant period (within the meaning of that paragraph) by or on behalf of a registered party which contests all the constituencies in that part (and to which sub-paragraph (6) of that paragraph does not apply).””

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords 6:45 pm, 15th January 2014

My Lords, one of the aspects of the Bill that has received considerable attention and debate during our discussions, not only in your

Lordships’ House but with campaign groups, relates to the registration thresholds, spending limits and constituency limits.

On registration thresholds, the point has been made repeatedly that small campaigners who do not incur much expenditure would be brought into the regulatory regime. This would, it has been claimed, impose undue administrative burdens on organisations that are not equipped to handle those responsibilities.

Noble Lords will recall that the Government have been considering this issue for some time. Indeed, my noble friend Lord Wallace of Saltaire gave a commitment on the first day in Committee that the thresholds would be revised. Extensive debate in Committee followed, at which representations were made to either revert to the existing PPERA thresholds, or to raise them further. I am grateful to my noble friend Lord Hodgson and to the noble and right reverend Lord, Lord Harries of Pentregarth, for leading that highly useful debate.

The Government have considered this matter and the appropriate level for registration thresholds further. Amendment 46 proposes to raise the levels to £20,000 in England and £10,000 in Scotland, Wales and Northern Ireland. The noble and learned Lord, Lord Hardie, has tabled an amendment proposing those levels be set at £20,000 for each constituent part of our United Kingdom. I simply observe that the Government’s amendment represents not only a substantial increase from the levels currently in the Bill, but reflects the original structure where the amounts were higher in England than in Scotland, Wales and Northern Ireland, no doubt due to the fact that there is a substantially greater number of constituencies and voters in England than in Wales, Scotland and Northern Ireland. Nevertheless, this is still a significant increase not only for England, but for Scotland, Wales and Northern Ireland, and it doubles the current registration thresholds in PPERA.

These thresholds will effectively exclude from the controls those campaigners who incur only small amounts of money. They will be able to campaign as they currently do, secure in the knowledge that unless they spend a substantial amount of money on controlled expenditure, they will not be subject to any aspect of the regulatory regime.

Bearing in mind what not only noble Lords but people outside sometimes hear in general debates or see in e-mails, it is also important to point out that these are thresholds for registration. It has sometimes been represented that there are limits on what organisations can spend, but the thresholds for registration are consistent with our objective of promoting transparency and accountability. We are maintaining the constituency limit of £9,750 throughout the regulated period to prevent a third party focusing a significant amount of its spending power on a small part of the United Kingdom.

Amendment 46 also specifies that, where a third party spends £9,750 in a constituency, it must register with the Electoral Commission. This is to ensure that the offence of spending more than £9,750 in a constituency is fully effective. I know my noble friend Lord Tyler is particularly interested in that point. As constituency limits apply only in relation to regulated periods involving a parliamentary general election, so the constituency threshold will have effect only in relation to such periods. We recognise that the current draft does not accurately reflect this, and the Government will accordingly bring forward an amendment at Third Reading to correct that.

In contrast, my noble friend Lord Tyler has proposed that rather than require a constituency registration threshold of £9,750, the registration threshold should be only £5,000. Reintroducing a lower constituency threshold than £9,750, as proposed by my noble friend, would only reinsert an extra layer of bureaucracy and confusion, particularly as the Government have also tabled Amendment 53, which would remove a post-dissolution limit of £5,850. The government amendment means that campaigners may spend the entire £9,750 throughout the regulated period, or just in the last few weeks before the election. Having just one constituency limit will be a much more straightforward and easier regulation to follow.

Finally, on spending limits, campaigners and Members of your Lordships’ House have sought to retain third parties’ spending limits at either the existing PPERA amounts, or even beyond those. The noble and learned Lord, Lord Hardie, and the noble and right reverend Lord, Lord Harries of Pentregarth, were clear on this point when we addressed this issue in Committee. The spending limits in the Bill for Scotland, Wales and Northern Ireland have particularly concerned campaigners. It has been argued that third-party campaigning in any part of the UK generally has a fixed cost; leaflets, for example, cost the same whether printed in Wales or England, and billboards cost the same, whether they are placed in Scotland or Northern Ireland. As a result, the spending limits for Scotland, Wales and Northern Ireland were felt to be disproportionately low. It is with that in mind that government Amendment 47 would uplift those limits by an extra £20,000 each. This would mean that there would be a spending limit of £55,400 in Scotland, £44,000 in Wales and £30,800 in Northern Ireland.

The Bill proposes spending limits for each of the parts of the UK, which add up to £450,000. It is important to remind your Lordships that while these limits were initially to be over not quite a year—from the day after the European elections—if your Lordships approve our amendment which we will debate later, these will apply over the length of the reduced seven-and-a-half-month regulated period, which is also reflected in another government amendment. In fact, therefore, there is a larger amount in Scotland, Wales and Northern Ireland over a shorter period. Indeed, the amount for England is over a shorter period.

I have previously sought to explain that considerable amounts of campaigning can still be undertaken for that amount. In Committee, I gave the example of £390,000 buying a campaigner 40 million leaflets, a dozen front-page adverts in a national newspaper or even 780,000 telephone calls from a professional phone bank. I hope that noble Lords will agree that these government amendments as a whole will lead to a substantial increase in the registration thresholds and a significant uplift to the limits in the Bill for campaigning by third parties in Scotland, Wales and Northern Ireland.

I note that the noble and right reverend Lord, Lord Harries of Pentregarth, has further amendments on spending limits. I will respond to them when I wind up. I beg to move.

Photo of Lord Hardie Lord Hardie Chair, Mental Capacity Act 2005 Committee

My Lords, before speaking to the amendment in my name, I thank the Government and the noble and learned Lord the Advocate-General for listening to the concerns from all sides of the House about the original proposal in the Bill to reduce the existing thresholds for registration as a recognised third party. The government amendment addresses these concerns and, rather than reducing the limits, they have accepted that the limits should be increased. It is appropriate that tribute is paid to the efforts made by the Government and the noble and learned Lord.

However, Amendment 46 does not address the anomaly that I mentioned in Committee, caused by having different registration thresholds for England and the rest of the United Kingdom. My amendment would remedy that by having the same registration thresholds throughout the United Kingdom. I noted that the Minister suggested that the distinction between England and the rest of the United Kingdom was the larger number of constituencies and voters. It is important to appreciate that there is a distinction that should be drawn between total expenditure by third parties in each constituent part of the United Kingdom, as against expenditure limits that determine whether the third party is required to register for recognition.

I accept that a distinction must be drawn between the various countries when one considers the total expenditure by a recognised third party in each country. That distinction reflects the number of parliamentary constituencies in each country and the greater number of voters in England than in any of the other three countries. That is the point that has been addressed since the 2000 Act, and is preserved in that Act, notwithstanding the amendments, in paragraph 3(2) of Schedule 10.

However, the threshold for registration is different. There is no justification for distinguishing between the different countries in this respect. The distinction was introduced in the 2000 Act, which followed the fifth report of the Committee on Standards in Public Life on the funding of political parties in the United Kingdom, which was presented to Parliament in October 1998. I referred to this in Committee and will not repeat these references. However, in Committee I explained that that report and the Government’s response to it never suggested any distinction between the different countries. There was a reference in a footnote which suggested that the reduced figure of £10,000 across the United Kingdom might be more significant in the three countries other than England, but it did not go as far as suggesting that there should be a difference.

I have been unable to find any subsequent explanation for halving the limit of £10,000 allowed for England in the other countries of the United Kingdom. I do not understand the need for a distinction when it comes to the threshold for registration. It is illogical and risks inhibiting local people from engaging in effective political debate about issues that are of concern in their

constituency at a crucial time in the electoral process, by imposing upon them what my noble and right reverend friend Lord Harries of Pentregarth described at Second Reading as a,

“bureaucratic burden on small charities or campaigning groups, especially during the actual election period”.—[ Official Report , 22/10/2013; col. 914.]

For example, suppose that a local hospital is threatened with closure and a group of individuals in the constituency wish to make this an issue at the general election but stop short of fielding their own candidate. If some candidates in that election support the retention of the hospital while others do not, the expenditure by the local group will be controlled expenditure. If this occurs in England, the pressure group can spend £20,000 before the need for registration and the administrative burden that entails, but if it occurs in Scotland, Wales or Northern Ireland, it can spend only £10,000. The expenses of running such a campaign in Scottish, Welsh and Northern Irish constituencies will be similar to those in many English constituencies. Do the Government seriously suggest that the cost of transport to meetings or venues of meetings in every English constituency is double that in any constituency elsewhere? In his reply, will the noble and learned Lord the Advocate-General explain the justification for this distinction?

My final point is that my amendment is not academic. Apart from being fair to all people across the United Kingdom who wish to campaign in the course of a general election about a matter of local importance to them, there is also a question of perhaps greater significance: that the consequences of not registering but exceeding the registration threshold are a criminal offence under Section 94 of the 2000 Act. Why should electors face prosecution in Edinburgh, Cardiff or Belfast for spending £6,000 on a campaign without registering as recognised third parties but have immunity in Newcastle for identical activity?

Photo of Lord Tyler Lord Tyler Liberal Democrat 7:00 pm, 15th January 2014

I have a separate amendment in this group. We all welcome the way in which my noble friend Lord Wallace of Saltaire and my noble and learned friend Lord Wallace of Tankerness have responded to the request for an increase in the registration thresholds. This was a key recommendation of the commission headed by the noble and right reverend Lord, Lord Harries, and it certainly deserved to be listened to.

In this last-minute change to the Government’s position, however, there is one new outstanding problem. The interaction between the national thresholds for registration and the constituency limits in the Bill simply do not hold together. As we will discuss in the next group, I believe very strongly that the constituency limits are a very important part of this Bill. Indeed, I am sure Members on all sides of your Lordships’ House are aware that if we did send back to the other place a Bill that did not deal with this point, many people there would think that we were not doing our duty.

For the constituency limits to be effective, those who spend at a constituency level will surely need to make an expenses return about what they are spending. The rules in the 2000 Act and in the Bill rightly also ask where the money is coming from. There is, however, a problem. As the Bill will stand in the light of these new government amendments, someone could be spending £9,750 in a constituency, or indeed could spend £19,500 across two English constituencies, yet would not have to register. The registration limit is now raised to £20,000, and therefore that spending and its sources would be totally opaque. It would not be transparent even though £9,750 could have a significant impact on the constituency result.

In my own amendments on thresholds in Committee, I suggested that this problem could be dealt with by stipulating that the threshold should be at a particular level which would take that into account. The Government have chosen £20,000, and that is fine, except that all the spending could be concentrated in one target marginal constituency. A group could spend a significant sum—I am suggesting £5,000 in my amendment—all in one place. Surely in those circumstances it should have to register.

The Government’s answer has been that somebody who spends more than £9,750 in one constituency will be committing an offence under their proposals. If that someone does not have to register, because he is below the new registration threshold, how can anyone know that he is committing that offence? I cannot think—and I know a little bit about these things—of any other part of electoral law in which someone who is subject to a spending limit is yet not required to produce any paperwork on what he is spending. Introducing that concept now would make for a completely absurd anomaly.

Photo of Lord Cormack Lord Cormack Conservative

Will the noble Lord not agree with me that there would be more logic in having a figure that was close to that which an individual candidate is entitled to spend? No individual candidate is entitled to spend as much as £20,000 in any constituency in the United Kingdom.

Photo of Lord Tyler Lord Tyler Liberal Democrat

My noble friend is right. He and I have relatively recent experience of these things. The normal figure is around £12,000 during the election period. As I will come to in a moment, that could be swamped under these proposals, and therefore this is an absurd anomaly. I understand why the Government have arrived at their position. Their formula sounds simple, but it may be so simple as to be unequal to the task in hand. Equally, the move in Amendment 53 to do away with different limits for constituency spending seven months before an election, and constituency spending seven days before, seems to me to lose what is an important and not particularly complex distinction in the name of simplicity—and I am not sure the Government have got this right.

I ask the Minister to consider carefully the horror story that could emerge. Imagine: a campaigning group could come into a constituency and spend £19,999.99 in the last seven days of the campaign with the aim of affecting the outcome in that constituency, and it would not need to register. A second group, unrelated to the first, could, during those seven days, do the same. It would not register. A third group, unrelated to the other two—not a coalition, not working together— could do the same. In the last few days of a campaign in a marginal constituency, just under £60,000 could be spent, completely swamping the amount permitted for a candidate and a party, which is around £12,000, in one constituency. The candidates are, as I say, limited in those final four to six weeks.

Because this spending would not be registered, it might not be revealed until after polling day. Think of the mess that that would cause to our electoral law. Because such groups, though technically in breach of the law, would not need to register, no one would be any the wiser about what they had been up to. My noble and learned friend has said that he is looking at this section with a view to some clarification, and I think he will have to agree that there is a major loophole looming in front of us. I therefore request that he look carefully at Amendment 46ZA. He may find a better solution but a solution must be found, otherwise political parties and those who will be looking at this legislation when it goes back to the other place will not have seen this particular problem, because until now the registration threshold has not been so high. It is only under the present Government’s changes in this House that it has been raised to this height.

I hope that my noble and learned friend will be able to give some reassurance to those of us on all sides of the House who are concerned about such spending that the Government are not prepared to accept this loophole.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

My Lords, Amendment 46A in my name concerns the spending cap for England. First I would like, on behalf of the commission, to warmly welcome the raising of the registration thresholds by the Government. I think that has done more than anything else to reassure the smaller charities; we give the Government a very warm thank you. We also warmly welcome the raising of the spending cap for Wales, Northern Ireland and Scotland. The spending cap for England, unlike that for Wales, Northern Ireland and Scotland, has been reduced by 60%. That reduction has taken place with an increase in the number of activities to be regulated and without taking inflation into account.

It is true that not many campaigning groups and very few, if any, charities would spend a high figure coming anywhere near that. The one I have checked that does spend quite a lot of money is Hope not Hate, which campaigns against racism all over the country. It is not a charity but a campaigning group. In 2010 it spent £319,231. That is very nearly the limit for England as we have it under the Bill, which is £319,800.

There was no evidence of abuse with the previous spending caps for England, and no rationale has been given for this reduction by 60%. Even if the Government are not willing to revert to the PPERA limits for England, I ask the Minister whether he sees any scope for some kind of compromise between the drastic reduction which has been brought about by the Bill and the spending limits there were for PPERA.

Photo of Lord Cormack Lord Cormack Conservative

My Lords, I will add just a few words to what I said a few minutes ago. I fought 12 general elections, in 10 of which I was elected, to go to the other place. In every one of those the expenditure that I was allowed was very clearly defined. The returns that one had to make afterwards were minutely examined, and there have been cases within our memory where candidates have been challenged on their returns because they were a little careless in submitting them. We have to be extremely careful. The last election I fought was in 2005, and if I remember rightly I was allowed to spend around £8,000 or £9,000. My noble friend says that it is now about £12,000, and I accept that—I am sure he is right. It was all very carefully defined, and we have to be careful, much as we all want to protect free speech and engagement in campaign and all the rest of it, that the expenditure of candidates who stand for particular political parties or as independents is not put into the shade by the expenditure that is allowed to campaigning organisations within individual constituencies. Although I do not suppose that my noble friend Lord Tyler will push his amendment to the vote, I hope that the Minister will reflect upon what he and I have said.

Photo of Baroness Williams of Crosby Baroness Williams of Crosby Liberal Democrat

My Lords, when at these debates, I have always felt that not enough attention is paid to the real danger of our fragile system of controlling election expenditure beginning to break down altogether. I am strongly in favour of charities having the right to campaign and being free to speak out about what they believe—that is absolutely right—and a huge contribution is made to us as a society in that way. Frankly, however, I am frightened that here, on the edge of the Third Reading of the Bill, we have observed and commented upon two huge anomalies that are still with us and still in the Bill, which open the door to the misuse of some aspects of the Bill in a way that would make the holding of that line against the misuse of public and private expenditure very difficult to hold.

Throughout my whole political life I have been very conscious, like the noble Lord, Lord Cormack, of the importance of the restrictions on the amount of money that passes into the British political system and what a huge benefit that has been to us in terms of retaining a democracy that is genuinely a democracy of the right of every individual to vote. Some of my colleagues in this House will know that I have been very much affected by the recent history of the United States, having been for 10 years an elective politics professor at Harvard, between 1986 and 1996. I will quickly say what so frightens me.

In 2010, the American Supreme Court decided to lift all restrictions on what amounts of money could be given by either corporations or trade unions directly to campaigns at the federal level. One of the outcomes of that—a decision that was made, let the House not forget, in 2010—was that in 2012 no less than $6 billion was poured into federal elections in the United States in a one-year electoral cycle. That was not enough. The sweeping away of all those restrictions was based upon the constitutional right of free speech, in my view distorted in a very troubling way. Today, the Supreme Court of 2014 has on its agenda yet another proposal, McCutcheon v Federal Election Commission, which would enable any individual, without restriction, to contribute any amount he or she wishes to the election of an individual named federal candidate—in other words, it is back to Eatanswill and the buying of politicians.

The United States is a great and very open democracy, but we are rapidly seeing the gradual distortion of its democracy by huge expenditure of money for other purposes than simply a desire to register a particular campaigning goal. I fully take the point that every step that can be taken has been taken to avoid that in the Bill. I am dubious about the proposal of the noble and learned Lord, Lord Hardie, to increase substantially the limit. However, I appreciate that the original limit was almost certainly too drastically cut. There is a median way there.

I will not detain the House for very long, but two things that have been raised in this debate trouble me very much. One is the example given by my noble friend with regard to the possibility of piling together expenditure in one or a small number of constituencies. The wording of the Bill adequately defends against that real temptation, which could have a major effect in the case of particular named persons that others would like to see taken away from Parliament. The second danger was reflected in the very wise remarks of the noble and right reverend Lord, Lord Harries of Pentregarth, when he gave us the example of a number of individuals who met for dinner together who decided each to set up their own particular little group and that that little group would then go for a particular objective. There would be nothing to link the two in such a way that they would count as a coalition group under the legislation before us.

I do not wish to detain the House at this late hour, but those anomalies are still only too patently with us. They open an opportunity for serious misuse of the Bill and of the electoral expenditure system. Given what we as a House and the other place have been through as regards other expenses, it is vital that we make sure that those anomalies are dealt with, that the Government consider what to do about them, and that before this legislation passes into history, serious thought is given to how the Electoral Commission in the non-charity field can make moves to try to look into any questions of this kind.

I will conclude with a rather dramatic fact. In the United States a special element in the American tax system enables non-party, non-governmental organisations to contribute to electoral expenditure on the basis of being exactly what we have been talking about—non-party, non-governmental organisations. That has seen expenditure of that source rise from $10 million in 1988 to $470 million last year, and rising. It has become the most significant single source of expenditure in elections on candidates by non-partisan, non-governmental organisations. We should be warned.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords 7:15 pm, 15th January 2014

My Lords, I thank all noble Lords who have contributed to this debate. I express particular appreciation of the welcome that has been given to the very significant increase in the registration thresholds that the Government have brought forward and to the uplift in the spending limit in Scotland, Wales and Northern Ireland. To follow on from my noble friend Lady Williams, it is certainly useful to remind ourselves, as she also did very eloquently in Committee, of the core purpose of the Bill, which is to ensure that our electoral and democratic system is not hijacked by people who can spend large amounts of money without proper accountability, and that there is proper transparency. It is important that we keep those important points in our minds when we consider the different measures.

Perhaps that is consistent with the point made by my noble friend Lord Tyler, which I addressed in my opening remarks, on not wanting a particular constituency to be overwhelmed. He proposed a threshold of £5,000 and said that he did not wish to find a situation where an organisation could come rattling into a constituency with one week to go, spend £19,999, get away with it and not be accountable for that. It is important that the Representation of the People Act might have a certain impact on that kind of expenditure, if it offended that Act; under the Bill that expenditure is increased from £500 to £700. I ask my noble friend to reflect on that, although I know that he does not overlook it as he knows full well about it.

But, more importantly, there is not that kind of loophole. My noble friend seems to have overlooked—and I did try to draw his attention to it in my opening remarks —that it will be an offence under the Bill to spend more that £9,750 in a constituency, even where the RPA does not apply. One of the consequences of a situation where we are amending another piece of legislation is that it is not always self-evident. Amendment 46 says:

“In subsection (3), for paragraph (a) (but not the “and” after it) substitute … (ii) any controlled expenditure is incurred in a particular parliamentary constituency by or on behalf of a third party in excess of the limit mentioned in subsection (5ZA)”.

I think that the purpose of that is in fact to make a registration requirement if the constituency limit of £9,750 is reached, or at least that is what I am reliably advised and I know that it is certainly the intent that there should be a registration of the maximum for each constituency to make more effective the criminal sanction that will follow if a party or third party spends in excess of £9,750. His example of spending £19,000 could not actually happen under the Bill, in line with the proposed amendment.

Photo of Lord Tyler Lord Tyler Liberal Democrat

Whether it is £9,000 or £19,000, my general point is that I have been unable to find anything in electoral law where there is a spending limit but no paperwork for anybody to provide that shows that they are keeping within that spending limit. It seems to me that there is a potential anomaly. I am just asking my noble and learned friend to be absolutely certain before, as has been said, we send back to the other House a potential anomaly in these circumstances.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

My Lords, I do not think that there is an anomaly. One of the reasons for putting in the registration requirement was to try to address the kind of anomaly that my noble friend mentions. We share the same objective and if he thinks that there is a loophole there then I will certainly make sure that we look at that, because these provisions have been worked up over recent days. I think that it is okay, but it is probably quite good counsel that we should check to make sure that that is in fact the case.

The noble and learned Lord, Lord Hardie, made his case for having similar registration thresholds in Scotland, Wales and Northern Ireland as in England, and I can see some force in what he is saying. He says that he has not been able to divine why there has been a difference, which has been in place since the very outset. Since PPERA, a distinction has been made: it was £10,000 for England and £5,000 for Scotland, Wales and Northern Ireland. I will not allow myself the cheap debating point that that was what the noble and learned Lord proposed in Committee, but I think that his purpose behind that was to make sure that the Government considered the threshold properly.

It is interesting too—I will finish this point and then let the noble and learned Lord come in—that what is actually proposed by the Government is also the architecture proposed by the commission chaired by the noble and right reverend Lord, Lord Harries of Pentregarth. The commission report proposes £20,000 for England and £10,000 for Scotland, Wales and Northern Ireland.

Photo of Lord Hardie Lord Hardie Chair, Mental Capacity Act 2005 Committee

I was going to say that I would not add such an adjective. The noble and learned Lord will remember that I tabled two amendments: the first was to preserve the status quo and the other was to seek an increase in the limits. As the noble and learned Lord has much more experience in political matters than I have, he will appreciate that it is useful to have a stop-gap in case the main objective is not achieved. In relation to the comment about the point made by my noble and right reverend friend Lord Harries, the noble and learned Lord might remember that, in Committee, when the noble and right reverend Lord was speaking, having heard my suggestion that there should be uniformity for registration levels, he indicated that he thought that there was some force in that and that it had not been a point considered by the commission.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

My Lords, I was going to say that I was aware that the noble and learned Lord had also tabled an amendment in that group to raise the threshold to provide an equalisation—at, I think, £25,000 if my information serves me correctly.

It is a fair question as to why there is such a difference. I think one of the reasons, which I gave at the outset, is that there is a difference in the number of voters and number of constituencies. It is also the case that spending of less than £20,000 could have a more significant impact in, say, Northern Ireland, which is a very compact area with a very focused media. Spending of less than £20,000 could have a much more significant impact there than in England, and I suspect that the different political and media circumstances was one of the considerations as to why the difference came about in the first place.

There are one or two points made by the noble and learned Lord that I could not quite follow. He said that if there was a hospital closure in a particular constituency, a pressure group could spend up to £20,000 in England but just under £10,000 in Scotland. Of course, following on from the debate that we have just had about constituency limits, they would be restricted to £9,750 in Scotland, Wales, England and Northern Ireland regarding the kind of example that he gave. He suggested—I apologise if I misheard him—that someone could be prosecuted for spending £6,000 in campaign expenditure in Edinburgh but not in, for example, Birmingham. I think that he will accept that, with a £10,000 threshold, that would not happen in either Birmingham or Edinburgh. I do not think that I misheard him, but sometimes people get that impression and suddenly there are concerns.

Photo of Lord Hardie Lord Hardie Chair, Mental Capacity Act 2005 Committee

The noble and learned Lord is correct; it was a mistake on my part, I should have said £12,000. The point was that it is simply over the limit in Scotland but under the limit in England.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

My Lords, we recognised the core expenditure that was needed in Scotland, Wales and Northern Ireland in order to mount campaigns and that has been reflected by—for the first time, actually—making a distinction and giving an uplift for Scotland, Wales and Northern Ireland over and above the percentages that have otherwise been applied.

The noble and right reverend Lord, Lord Harries of Pentregarth, proposes reverting to the total national spending limit of £988,500. As I have explained, the Government have brought forward amendments to increase spending limits for Scotland, Wales and Northern Ireland but, as I explained in Committee, only a few political parties at the last general election spent more than £390,000—the total now would be £450,000—on the full range of activities that we now wish to extend to third parties. Only the Conservative Party, Labour Party, Liberal Democrats and UKIP spent more than £390,000 and, I assume, more than £450,000.

As my noble friend Lady Williams said, there are risks associated with allowing third parties to incur vast amounts of spending. Given that third parties campaign for or against electoral success of political parties, it is a very reasonable assumption that a relationship can and does develop between some third parties and political parties. This opens up the potential for supporters of political parties to demonstrate their backing by diverting their funding to an aligned third party and away from the political parties themselves, which have their own limits. I do not think it is right that, where limits are imposed on political parties, they can be circumvented in this way.

Even the limits that we have allow very extensive campaigns to be mounted. I do not wish to indulge in too much repetition, but £390,000—and of course it has gone up by £60,000—is 40 million leaflets, a dozen front-page adverts in a national newspaper, or 780,000 telephone calls from a professional phone bank. These are not insignificant campaigning activities and I therefore believe that the judgment that we reached in coming to these figures is the right one.

I therefore urge the House to support the Government’s amendments with regard to thresholds and I invite noble Lords not to press their amendments.

Amendments 46ZA and 46ZB (to Amendment 46) not moved.

Amendment 46 agreed.

Amendment 46A not moved.

Amendments 47 and 48

Moved by Lord Wallace of Tankerness

47: Clause 27, page 15, line 3, leave out from “substitute” to end of line 5 and insert “—

(a) in relation to England, 2% of the maximum campaign expenditure limit in England;

(b) in relation to Scotland, £20,000 plus 2% of the maximum campaign expenditure limit in Scotland;

(c) in relation to Wales, £20,000 plus 2% of the maximum campaign expenditure limit in Wales;

(d) in relation to Northern Ireland, £20,000 plus 2% of the maximum campaign expenditure limit in Northern Ireland.”;”

48: Clause 27, page 15, line 6, leave out paragraph (b)

Amendments 47 and 48 agreed.

Clause 28: Constituency limits

Amendments 49 to 51

Moved by Lord Wallace of Tankerness

49: Clause 28, page 15, line 29, leave out from “(10),” to “insert” in line 30 and insert “after paragraph (e) (as inserted by section 27)”

50: Clause 28, page 15, line 38, leave out from “exceeded” to end of line 41 and insert “0.04% of the total of the maximum campaign expenditure limits in England, Scotland, Wales and Northern Ireland;”

51: Clause 28, page 16, line 1, leave out paragraph (c)

Amendments 49 to 51 agreed.

Amendment 52

Moved by Lord Tyler

52: Clause 28, page 16, line 22, leave out from “if” to end of line 23 and insert “the expenditure relates to—

(a) sending election material falling within paragraph 1 of Schedule 8A which is addressed to electors (whether addressed to them by name or intended for delivery to households within any particular area or areas);

(b) unsolicited telephone calls falling within paragraph 2 of Schedule 8A, made to such persons or households, which may reasonably be regarded as intended to ascertain or influence their voting intention.

( ) For the purposes of this paragraph, “election material” is defined as in section 143A.”

Photo of Lord Tyler Lord Tyler Liberal Democrat 7:30 pm, 15th January 2014

My Lords, this amendment, which I am moving on behalf of a number of noble Lords in different parts of the House, deals with some small changes to a previous amendment that we looked at in Committee on constituency limits, but they are changes that I know will be very welcome to a number of organisations which have been in touch with several Members of your Lordships’ House. It received considerable support across the Chamber in Committee and has two compelling advantages to recommend it.

First, it retains the Government’s intention to have a constituency limit. That is surely central to the Bill. As I have said consistently, I strongly support that and I know that a large number of other Members of your

Lordships’ House also think it is important to retain that. However, even if we were to take it out, as some have suggested, I would certainly expect that Members of the other place would need no whipping at all to put it back in, for the reasons that were advanced so eloquently by my noble friend Lord Cormack a few minutes ago. Surely even Labour MPs would want it to be put back in.

The second advantage to the amendment is that it very closely and carefully defines what the constituency limits should apply to. As many charities and NGOs, big and small, have pointed out to me and to other Members of your Lordships’ House, they are not used to dealing with constituency boundaries; they have quite a different sort of geography from those of us who are involved in politics. Therefore, trying to assess the relative effect of, say, a rally in different constituencies would be quite problematic. It would be problematic for the political parties too, and for that reason we, as politicians, are not asked to account for it.

I shall give a practical example. I once chaired a rally for the five constituencies, as they then were, in Cornwall, and it took place in one particular constituency. It just so happened that we won all five seats but that did not have anything to do with my chairmanship at that rally. However, how would the costs of that rally be allocated to each constituency? You could allocate the costs to one constituency but what about the other four? That clearly is not what this Bill is all about. It really is not possible to measure the effect of a rally, or indeed a billboard or a press conference, on the result in an individual constituency.

I have one other example. I lost a lot of hair—or, rather, most of it went grey—in two elections arranging the national tour of the battle bus for the then joint leaders. Your Lordships may remember that at one stage we had two leaders in the alliance—the two Davids—although they did not always see eye to eye. That caused me a great deal of aggro. However, how I would ever have accounted for five minutes in this constituency, 10 minutes in that constituency and an hour in that constituency if I were running a campaign on behalf of a non-political organisation is quite beyond me.

Amendment 52, on which I am very grateful for the support of the noble and right reverend Lord, Lord Harries, the noble Lord, Lord Cormack, and the noble Baroness, Lady Mallalieu, would limit the scope of the constituency regulations to just activities where people communicate with specific voters. The one advantage of this amendment is that it ties down very specifically the activities that target specific people at a specific address in a specific constituency—letters or leaflets sent or delivered to voters, or telephone calls directed specifically to them—and which try to influence or ascertain their voting intention. Other activity would still have to be accounted for but only on a national basis. Therefore, if it is the national tour of a battle bus, arranging rallies or whatever, that has to be accounted for nationally but under the more generous national limits.

What has been made clear to us by many organisations which think that they may be involved in the activities covered by the Bill is that, if they are asked to account only for those activities that specifically target specific individuals, that will make their lives a great deal easier. It will retain the central purpose of the Bill, which is to stop big-money campaigns dwarfing the limits that candidates have to adhere to—my noble friend was very eloquent on this point a few minutes ago, as was my noble friend Lady Williams—and it will mean that the additional costs of activity directed at specific candidates can be identified neatly, clearly and succinctly.

The Electoral Commission has very clearly endorsed this amendment and expressed clear support for it because it makes simpler the guidance that it will have to give and the subsequent monitoring that it will have to undertake. I beg to move.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

I support the amendment for the reasons that the noble Lord has set out. Constituency limits have been of very great concern to charities and campaigning organisations. I am fully aware of the kind of concerns raised by the noble Baroness, and, as the noble Lord, Lord Tyler, indicated, this issue has also been a very great concern for the Electoral Commission because it does not see how it can regulate and enforce this area. The noble Lord’s amendment will make it far easier for charities to be regulated by the law and for the Electoral Commission to regulate it.

Photo of Lord Cormack Lord Cormack Conservative

My Lords, an amendment that can produce a joint letter from the National Secular Society and the Christian Institute clearly deserves careful consideration. When they take into account that the Electoral Commission also believes that there is good sense in this proposal, I hope that your Lordships will feel likewise. I hope that we will not have to exercise ourselves by going into the Lobbies. I hope that my noble and learned friend will be able to indicate at least a significant degree of sympathy with this and, if he cannot accept these precise words, that he will undertake to come back at Third Reading next week with something similar.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Cabinet Office)

My Lords, we also strongly support the amendment. It is not the provision’s intention that we have problems with but its workability. It will add an enormous bureaucratic burden. When people campaign against the proposed path of HS2, flight paths around Heathrow or fracking and so on, that is not divided up by constituency. It is strange that a Government who are cutting red tape elsewhere, and who on Monday said that they could not possibly ask special advisers to list their meetings with lobbyists, seem to want this for really small organisations. Amendment 52, which limits the requirement to telephone calls and literature aimed at households, is immensely sensible. I hope that the Government will do one of two things: either accept the amendment or put off their new rules until after the next election.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

My Lords, we have just had a discussion on constituency limits, and it was also covered extensively in Committee. The House has agreed to a government amendment to remove the post-Dissolution limit to make the provision less complex, yet there remains some concern about it. From what was said in a previous debate, I think that my noble friends Lord Cormack and Lord Tyler believe that there should be some limit on constituency spending. My noble friend Lord Tyler argued for a lower limit but now wants lots of expenditure to be incurred without any limit at all. That is a concern that we have.

It is important to put this in context. Constituency spending limits do not replace the existing controls under the Representation of the People Act 1983. Those long-standing rules stipulate that third parties campaigning for or against a particular candidate may spend only up to £500 in doing so. Other than raising that amount to £700, and requiring records to be kept of such expenditure, this Bill does not affect those provisions.

In contrast to the RPA rules, Clause 28 introduces a new limit on how much a third party that is promoting the electoral success of parties, or candidates who support particular positions, can spend in individual constituencies. As has already been explained, the limit is £9,750. The reason for this amount—which might, on the surface, appear somewhat odd—is that is equivalent to 0.05% of the maximum campaign expenditure limit applied to political parties. This limit will apply for the duration of the regulated period for a UK parliamentary election.

As has already been rehearsed, the need for constituency limits is profound. It is not right that candidates and parties should effectively be bowled out of the field purely because well funded campaigners are able to outspend them. Elections are the principal domain of political parties and candidates, and those who are not campaigning for their own electoral success should still be able to participate: that is the essence of our democracy. However, in these circumstances, we believe that the voices of such campaigners do not diminish the voices of the political parties and candidates and that constituency limits will ensure that.

The Bill makes clear that a third party’s expenditure would be wholly attributed to a constituency only if that expenditure had “no significant effect” in any other constituency. That means expenditure in a local area could, of course, be attributed to several constituencies if the effect was felt in them all. Expenditure with a wider regional, or even national, reach would be attributed proportionately to all the relevant constituencies.

My noble friend Lord Tyler has proposed an amendment to dampen the effect of these constituency limits. The amendment proposes that only certain costs —in other words, only expenditure related to certain activities—should count towards constituency limits. Specifically, the amendment says that only costs associated with election materials should be counted. That would mean the costs related to leaflets, mailshots and adverts, all of which must also have been either specifically addressed to or delivered to households in a constituency, and unsolicited telephone calls to such households.

I recognise the issue which my noble friend is trying to address, but I believe there are drawbacks. For instance, significant activities such as rallies and events would not be regulated at a constituency level if his amendment passed. I gave some of my colleagues an example of Scottish Liberal Democrat pre-election rallies in Edinburgh East. Anyone who knows Scotland will know that Liberal Democrats would not be spending money in that constituency; no doubt Edinburgh East Liberal Democrats will now write to me and say, “Do not let us down”. That was a national campaign, but an event in my own former constituency could not, by any stretch of the imagination, relate to any other—not even Caithness, Sutherland and Easter Ross.

In addition, material otherwise distributed or displayed would also not count towards the constituency limit. A third party could therefore freely distribute leaflets by hand in a town centre, or, indeed, in shopping areas in different parts of a constituency, in the knowledge that, because they are not being delivered to voters’ homes, the associated costs need not be accounted for in that constituency’s limit.

We are concerned that these are key gaps which would allow a third party to target an area by holding large partisan events, or flood an area by handing out election material in the street or in shopping precincts. Allowing only certain activities to count towards constituency limits would undermine the entire principle of constituency limits, on which my noble friend spoke so eloquently earlier. For that reason, I urge my noble friend to think again and to withdraw his amendment.

Photo of Lord Tyler Lord Tyler Liberal Democrat

My Lords, I am rather disappointed by that. Throughout today’s debate and, indeed, on previous occasions, many noble Lords—particularly my noble friends on the government Front Bench—have quoted the advice of the Electoral Commission. I apologise to the House for detaining it for a minute, but this is what the Electoral Commission says about this amendment:

“In principle, we support Amendment 52, tabled by Lord Tyler and others. It narrows the scope of the constituency limits so that they only cover spending in respect of election material sent to voters and households in a constituency, and unsolicited phone contact with such voters”.

Then, in heavy type, it continues:

“We see benefits in defining the scope of activity covered by the constituency controls more narrowly than in Part 2 of the Bill generally”.

The Electoral Commission feels there is a need to deal with this question and has identified it as one of the problems with campaigning organisations. Even if the amendment in our names does not meet the particular point and is not the right way to go about it, there is clearly a need to do something. Will the Minister undertake, in these last few days before Third Reading, to go back to the Electoral Commission and discuss this issue with them again? On that basis, I am prepared to withdraw the amendment.

Amendment 52 withdrawn.

Photo of Lord Gardiner of Kimble Lord Gardiner of Kimble Lords Spokesperson (Department for Culture, Media and Sport), Lord in Waiting (HM Household) (Whip)

I beg to move that further consideration on Report be now adjourned. In moving this Motion, I suggest that Report should begin again not earlier than 8.15 pm.

Sitting suspended.

Amendment 52A

Moved by Lord Harries of Pentregarth

52A: Clause 28, page 16, line 31, leave out “0.05%” and insert “0.1013%”

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench 8:15 pm, 15th January 2014

My Lords, Amendment 52A concerns constituency spending limits. It proposes that the spending limit for constituencies, instead of being 0.05%, is 0.1013%. I think your Lordships are well aware that campaigning groups and charities have found the regulation regarding constituencies exceedingly burdensome and the Electoral Commission has found them unenforceable. We take very seriously all that the noble Baroness, Lady Williams, has said about ensuring that big money does not come in. Nevertheless, we think that the constituency limits are too low. Raising them by this percentage, which reflects the wider percentage of caps, would give that greater degree of freedom which the charities and campaigning groups would like. I beg to move.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Cabinet Office)

My Lords, we have Amendment 62A in this group. In order that the notes in reply can be thrown away, I give notice that I will not speak to it. Essentially, the issues were covered in the earlier group. Nevertheless, we retain our concerns about constituency limits and would very much like to have voted on the previous amendment, but there we are. However, we support the other amendment.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

My Lords, the noble and right reverend Lord, Lord Harries of Pentregarth, has tabled an amendment which would raise the constituency limits from being the equivalent of 0.05% of the maximum campaign expenditure limit applied to political parties to 0.1013%. This would amount to almost £20,000—specifically, £19,753.50. As the noble Baroness indicated, we have already debated the issues on constituency limits. I have explained the necessity of constituency limits being in place. Without these limits in place, a third party could otherwise be able to focus the entirety of its spending power on a small part of the United Kingdom, outspending even candidates and parties in that location. That point was forcefully made by my noble friends Lord Cormack and Lord Tyler. It is important that those limits are set at an appropriate level and it is our view that the noble Lord’s amendment would not be appropriate.

I will not repeat the earlier points. We wish to promote accountability and transparency. Constituency limits relate to campaigning for or against a particular party and instances where a campaign is intended, or may reasonably be regarded as intended, to support groups of candidates who might hold particular views or support particular policies. Where such campaigning is subject to a national limit, it is also right that it is subject to a proposed constituency limit but we believe that that must be at a proportionate level. The comments we heard in earlier debates suggest that the limit we have set is too generous. Indeed, even my noble friend Lord Tyler might think it. However, we think that the limit we have set is proportionate, especially as we have removed the distinction between spending throughout the regulated period and spending during the period between the dissolution and election day. The limits are intended to remove undue influence, particularly by those campaigners who can afford to spend significant amounts of money. I do not believe that the noble and right reverend Lord’s proposal would be proportionate. It could allow substantial sums of money—sums, as we have heard, such as £12,000, which is the candidate’s limit. To have a third-party sum that is almost half as much again does not appear to be proportionate. I therefore urge the noble Lord to withdraw his amendment.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

My Lords, I can well appreciate the noble and learned Lord’s answer to that. The issue that is continually raised by the commission I chair is the rationale for always linking third-party spending and regulation to political-party spending and regulation. That has never really been fully set out. I take the point that the noble and learned Lord has made but I hope that he will take on board the fact that there is continuing concern among charities and campaigning groups about constituency spending, and not just the spending of the regulation for campaigning in constituencies. As the noble and learned Lord knows, there is also great concern in the Electoral Commission. Even if he is not prepared to consider this amendment again, will he look seriously at Amendment 52 in the name of the noble Lord, Lord Tyler? That would help significantly. If he is not sympathetic to my amendment, I hope that he might be able to look again at Amendment 52 and bring something back in relation to it. With that, I beg leave to withdraw the amendment.

Amendment 52A withdrawn.

Amendments 53 to 62

Moved by Lord Wallace of Tankerness

53: Clause 28, page 16, leave out lines 34 to 45

54: Clause 28, page 17, leave out lines 16 to 20

55: Clause 28, page 17, line 22, leave out “(3C)” and insert “(3B)”

56: Clause 28, page 17, line 44, leave out from beginning to end of line 5 on page 18

57: Clause 28, page 18, line 7, leave out “(5C)” and insert “(5B)”

58: Clause 28, page 18, line 8, leave out paragraph (g)

59: Clause 28, page 18, line 18, leave out “(3C)” and insert “(3B)”

60: Clause 28, page 18, line 19, leave out “(5C)” and insert “(5B)”

61: Clause 28, page 18, leave out lines 33 to 44

62: Clause 28, page 19, leave out lines 15 to 26

Amendments 53 to 62 agreed.

Amendment 62A not moved.

Clause 29: Targeted expenditure limits

Amendments 63 to 65

Moved by Lord Wallace of Tankerness

63: Clause 29, page 20, line 13, leave out ““the purposes of this section”” and insert ““section 94A” (as inserted by section (Arrangements between third parties notified to Electoral Commission))”

64: Clause 29, page 20, line 15, leave out “94” and insert “94A (as inserted by section (Arrangements between third parties notified to Electoral Commission))”

65: Clause 29, page 21, leave out line 19 and insert “meaning given by section 94(10).”

Amendments 63 to 65 agreed.

Clause 30: Extension of power to vary specified sums

Amendments 66 and 67

Moved by Lord Wallace of Tankerness

66: Clause 30, page 24, line 32, leave out “94B(4)” and insert “94(5ZA), 94B(4) or 96(2)(aa)”

67: Clause 30, page 24, line 33, leave out “, (2A) or (2B)” and insert “or (2A)”

Amendments 66 and 67 agreed.

Clause 31: Notification requirements for recognised third parties

Amendment 68

Moved by Lord Gardiner of Kimble

68: Clause 31, page 24, line 39, at end insert—

“( ) In subsection (2), after paragraph (c) insert—

“(ca) a body incorporated by Royal Charter which does not fall within any of those paragraphs of section 54(2),

(cb) a charitable incorporated organisation within the meaning of Part 11 of the Charities Act 2011 or within the meaning of the Charities Act (Northern Ireland) 2008,

(cc) a Scottish charitable incorporated organisation within the meaning of Chapter 7 of Part 1 of the Charities and Trustee Investment (Scotland) Act 2005 (asp 10),

(cd) a partnership constituted under the law of Scotland which carries on business in the United Kingdom,”.”

Photo of Lord Gardiner of Kimble Lord Gardiner of Kimble Lords Spokesperson (Department for Culture, Media and Sport), Lord in Waiting (HM Household) (Whip)

My Lords, Clause 31 seeks to require registered third parties to identify members of their body, management committee or relevant officers. It places requirements on those bodies that are allowed to register as third parties under the Political Parties, Elections and Referendums Act 2000.

As outlined in Committee, when PPERA was passed, a number of groups were specified: individuals, companies, trade unions, building societies, limited liability partnerships, friendly societies and unincorporated associations. The Government acknowledge that as almost 14 years have passed since PPERA was enacted there may be other bodies that should now be added to the list. My noble friend Lord Hodgson of Astley Abbotts made this point persuasively in Committee. In the light of this, the Government have brought forward amendments to allow royal chartered bodies, charitable incorporated organisations and Scottish partnerships to register as recognised third parties should they incur controlled expenditure over one of the registration thresholds.

These amendments address the Government’s commitment in Committee to ensure that those bodies which would like to register as third parties are able to do so. I beg to move.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Conservative

My Lords, I will detain the House only for a moment to thank my noble friend and the Government very much for having listened to the persuasive arguments put forward by the Law Society and others and for providing a way forward for CIOs, a new corporate form that has emerged since PPERA was passed. There are more than 1,000 royal charter bodies. This is a very helpful and beneficial result and I thank the Government for it.

Amendment 68 agreed.

Amendments 69 to 73

Moved by Lord Wallace of Tankerness

69: Clause 31, page 25, line 2, after “(ia)” insert “in the case of a body falling within any of paragraphs (b) and (d) to (h) of section 54(2),”

70: Clause 31, page 25, line 3, at end insert—

“( ) After subsection (3)(c) insert—

“(d) if given by a body falling within any of paragraphs (ca) to (cd) of subsection (2), state—and be signed by the body’s secretary or a person who acts in a similar capacity in relation to the body.”

(i) the relevant details in relation to the body (see subsection (3C)), and

(ii) the name of the person or officer who will be responsible for compliance on the part of the body with the provisions of Chapter 2, and be signed by the body’s secretary or a person who acts in a similar capacity in relation to the body.”

( ) In subsection (3A)—

(a) for “or (c)(ii)” (in both places) substitute “, (c)(ii) or (d)(ii)”;

(b) after “(3)(c)” insert “or (d)”.”

71: Clause 31, page 25, line 5, after “(3B)” insert “For the purposes of subsection (3)(c),”

72: Clause 31, page 25, line 27, at end insert—

“(3C) For the purposes of subsection (3)(d), the “relevant details” in relation to a body are—

(a) in the case of a body falling within subsection (2)(ca) (body incorporated by Royal Charter)—

(i) the name of the body,

(ii) the address of its main office in the United Kingdom, and

(iii) the names of its officers or the members of its governing body;

(b) in the case of a body falling within subsection (2)(cb) or (cc) (charitable incorporated organisation)—

(i) the name of the body,

(ii) the address of its principal office, and

(iii) the names of its charity trustees within the meaning of the Charities Act 2011, the Charities Act (Northern Ireland) 2008 or the Charities and Trustee Investment (Scotland) Act 2005 (asp 10);

(c) in the case of a body falling within subsection (2)(cd) (Scottish partnership)—

(i) the name of the body,

(ii) the address of its main office in the United Kingdom, and

(iii) the names of the partners.””

73: Clause 31, page 25, line 27, at end insert—

“( ) In section 85(7)(c) of that Act (definition of “responsible person”), after “88(3)(c)(ii)” insert “or (d)(ii)”.”

Amendments 69 to 73 agreed.

Clause 32: Reporting of donations to recognised third parties

Amendment 74

Moved by Lord Wallace of Tankerness

74: Clause 32, page 25, line 34, leave out “Subject to section 95B,”

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

My Lords, these amendments address concerns raised by noble Lords in Committee and by campaigning groups in the discussions we have had with them. It is important to guard against the risk that significant donors might use third parties to aid political parties and evade the party spending controls. That is why at present third parties campaigning nationally during regulated elections are subject to rules on donations similar to those of political parties.

However, recognised third parties need to report only donations related to controlled spending, and currently are required to do this only once at the end of every campaign, as part of a return to the Electoral Commission after the relevant election, rather than at the regular intervals required of the political parties. Therefore, Clause 32 introduces important measures to improve transparency by ensuring that people know the source of reportable donations received by third parties during the regulated period via quarterly and weekly donation reports.

I hope that noble Lords support the principle of providing information on reportable donations during the election campaign. However, the Government acknowledged in Committee that the right balance needed to be struck between increased transparency and the avoidance of overly burdensome reporting requirements. As set out in the Bill, only third parties that are required to register with the Electoral Commission are required to provide reports on the donations they receive. The amendments that this House agreed earlier today to increase the registration thresholds mean that only third parties which incur controlled expenditure of more than £20,000 in England or more than £10,000 in each of Scotland, Wales or Northern Ireland will have to produce donation reports.

Furthermore, government Amendments 81 and 89 remove the need for recognised third parties to provide nil reports. Instead, a recognised third party will be required to provide a donations report to the Electoral Commission only when they receive a reportable donation. Only donations over £7,500 are reportable. If a third party does not receive a reportable large donation, they will not have to provide a report.

The Government have also brought forward amendments to take account of snap general elections. The Government accept that these provisions, while important in the regulated period for an election the date of which is known in advance, may cause problems if they were to be applied to an early parliamentary election. If a snap general election were to occur, third parties would have to provide weekly reports to the Electoral Commission only during the post-dissolution period, and then only if they receive a reportable donation. They would not have to prepare quarterly reports.

The Government believe that these amendments meet the concerns of charities, particularly in relation to the removal of nil reporting, which was a key area of concern for both the NCVO and the Commission on Civil Society and Democratic Engagement. They retain the vital transparency measures introduced by the Bill, but ensure that unnecessary burdens are not placed on campaigners.

I apologise to my noble friend Lord Hodgson, who asked me about nil returns in the debate we had on coalitions. I assure him that if a coalition spends less than the registration threshold, it will not have to produce a spending return. If a coalition does not receive a donation, it will not have to provide a nil return.

At present, recognised third parties have to provide details of their campaign income and expenditure to the Electoral Commission after a UK general parliamentary election and after the poll for certain other elections. Campaigners pointed out that many third parties register with the Electoral Commission with the intention of incurring controlled expenditure but at the end of the regulated period find that they have not spent above the registration threshold. While it is important to ensure transparency in spending any donations, we have listened carefully to the concerns of campaigners and, as I have said previously, we do not want to impose unnecessary administrative burdens, particularly on small campaigners.

To ensure that these provisions are proportionate, government Amendment 98 provides that a third party which registers with the Electoral Commission but does not incur controlled expenditure in excess of the required registration threshold does not have to submit a spending return or a statement of accounts. The intention is that a recognised third party should also have to prepare a report if its expenditure in a constituency, in the case of a regulated period involving a parliamentary election, exceeds the constituency threshold that will from now on apply to non-recognised third parties. We recognise that the amendment does not currently do that so we will bring forward a small amendment at Third Reading to put that right.

To improve transparency by providing a clearer understanding of the finance of those involved in elections and to align the reporting requirements of third parties more closely with those of political parties, the Bill provides that a statement of accounts should also be submitted to the Electoral Commission. To ensure that this additional obligation is proportionate, individuals would be excluded from this requirement. The Government believe that not to exclude individuals would result in an unwarranted intrusion into their personal financial matters. However, individuals who exceed the spending threshold would still be required to provide details of their campaign income and expenditure, as is currently the case.

Under the Bill as introduced, the Government also provided that those third parties, such as companies, charities and trade unions, which provide statements of accounts under another legislative framework that could be reviewed by the Commission would also be exempt from any requirement to provide a separate set of accounts.

Government Amendments 108 to 111 make minor amendments to improve the working of this arrangement. Government Amendment 112 provides that a statement of accounts can be sent to the Electoral Commission in a longer timeframe: within nine months of the end of the regulated period where they do not have to be audited, or 12 months where they do have to be audited.

Again, the Government believe that these amendments, alongside the existing provisions in the Bill, ensure that transparency is improved without overly burdensome requirements being placed on third parties. I therefore beg to move.

Photo of Lord Tyler Lord Tyler Liberal Democrat 8:30 pm, 15th January 2014

My Lords, I welcome this group of amendments. I said at Second Reading that the Government and, indeed, the House, have a very difficult task in getting exactly the right balance between improving transparency and accountability on one hand and the inevitable potential for more bureaucracy. These amendments are a real improvement on where we were and I commend my noble and learned friend for them. The irony is, however, that we have the complexity of the number of amendments—I have not counted them—that have been necessary to remove complexity. It is a bit alarming, but I particularly welcome the amendment concerning the nil return, which is Amendment 98 if I have got it right.

It is particularly helpful because there really was rather an absurd situation when the organisations with which Members on all sides of your Lordships’ House have been in contact thought that they might be caught up in some elaborate new accountancy exercise when they did not anticipate that they would be engaged in the kind of activities that are caught by the Bill. This is a good balance and we are achieving the right threshold for transparency and accountability, but I just forewarn my noble and learned friend that it will take some time for the organisations that we have all been in contact with to understand the full significance of this battery of complex amendments.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Conservative

My Lords, I add my thanks to those of my noble friend Lord Tyler, particularly for Amendments 81 and 89, which concern nil returns. It was extraordinarily difficult to justify to people why nil returns should be made. I am also very grateful to my noble and learned friend on the Front Bench for his reassurance about the interaction with the coalition working returns that we discussed earlier.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

My Lords, while I welcome the government amendments, I draw the attention of the House to the report of the Electoral Commission on Amendments 74 to 81, 83 to 97 and 99 to 106. It says that it supports the amendments,

“which go some way to simplify the donation reporting requirements”,

but it goes on to say:

“We regret that the Government has not adopted other recommendations we have made to reduce burdens on registered campaigners further without affecting transparency”.

It indicates what these are and ends:

“We continue to recommend these changes … we now recommend two further changes to reduce burdens further”.

Will the Minister, even in the short time between now and Third Reading, have further conversations with the Electoral Commission to see whether some of its recommendations could be accepted by the Government? From the point of view of the charities and campaigning groups there is still a huge amount of regulation to be carried with the Bill.

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Shadow Leader of the House of Lords

My Lords, I, too, welcome the amendments that have been put forward by the Government, as far as they go, but as the noble and right reverend Lord, Lord Harries, said, there is more work to be done and it would be excellent if the Government would commit to come back at Third Reading with further amendments. This might seem a bit curmudgeonly, because the Government have received plaudits throughout our debate this afternoon for having moved a long way and tabled many amendments. However, if it had not been for the noble and right reverend Lord, Lord Harries, his commission, which has also received praise this afternoon, and the excellent work that it has done, the Bill would still be the exceedingly bad Bill that it was when it arrived in our House, precisely because it was rushed, did not have proper pre-legislative scrutiny and a great deal of it was not necessary. So while I thank the Government for having listened—and they have moved—I place on record that none of that would have happened without the noble and right reverend Lord, Lord Harries, and his fellow commissioners, who undertook the consultation that the Government themselves should have undertaken in the first place.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

My Lords, I acknowledge the welcome that has been expressed for these amendments, which lift a considerable administrative burden from campaigning organisations. I note what the noble and right reverend Lord, Lord Harries, has said, echoed by the noble Baroness, Lady Royall.

I will look specifically at what the noble and right reverend Lord said, but I know that there were a number of other things that the Government looked at and decided they did not wish to accept—it is not as if they have come out of the blue. However, I will check that the suggestions that we looked at and decided not to go ahead with were those to which he referred; it is only fair that we do so. However, I do not want to do that with any raising of expectation, because, as I think the noble and right reverend Lord will realise, we have given considerable consideration to these points. I ask the House to accept the amendments.

Amendment 74 agreed.

Amendments 75 to 97

Moved by Lord Wallace of Tankerness

75: Clause 32, page 25, line 36, leave out “qualifying regulated” and insert “pre-dissolution”

76: Clause 32, page 25, line 40, leave out “qualifying regulated” and insert “pre-dissolution”

77: Clause 32, page 25, line 42, leave out “qualifying regulated” and insert “pre-dissolution”

78: Clause 32, page 25, line 43, at end insert—

“( ) A “pre-dissolution period” means a period—

(a) beginning with the first day of a qualifying regulated period, and

(b) ending with the day before the day (or the last day) during that qualifying regulated period on which Parliament is dissolved.”

79: Clause 32, page 26, line 3, after “elections)” insert “other than a period including the date of the poll for an early parliamentary general election.

( ) An “early parliamentary general election” is a parliamentary general election the date of the poll for which is appointed under section 2(7) of the Fixed-term Parliaments Act 2011.”

80: Clause 32, page 26, line 25, leave out from “recorded” to end of line 27

81: Clause 32, page 26, line 27, at end insert—

“( ) This section does not require the preparation of a quarterly report in respect of a reporting period if no reportable donations are accepted, or dealt with, as described in subsection (5)(b), by the recognised third party during that period.”

82: Clause 32, page 26, leave out lines 28 to 31

83: Clause 32, page 26, line 36, leave out from beginning to end of line 32 on page 27

84: Clause 32, page 27, line 34, leave out “Subject to section 95D,”

85: Clause 32, page 27, line 45, leave out “during a qualifying regulatory period”

86: Clause 32, page 27, line 46, after “dissolved” insert “for a parliamentary general election”

87: Clause 32, page 28, line 1, leave out from “date” to the end of line 2 and insert “during a qualifying regulated period which is the date of the poll for that election.”

88: Clause 32, page 28, line 7, leave out “general election” and insert “qualifying regulated”

89: Clause 32, page 28, line 19, at end insert—

“( ) This section does not require the preparation of a weekly report in respect of a reporting period if no substantial donations are received by the recognised third party during that period.”

90: Clause 32, page 28, line 21, leave out from “period”” to end of line 22 and insert “means a period in relation to which any limit is imposed by paragraph 3, 9, 10 or 11 of Schedule 10 (periods involving parliamentary general elections);”

91: Clause 32, page 28, line 28, leave out from beginning to end of line 24 on page 29

92: Clause 32, page 30, line 23, leave out “qualifying regulated” and insert “pre-dissolution”

93: Clause 32, page 30, line 27, leave out “qualifying regulated” and insert “pre-dissolution”

94: Clause 32, page 30, line 33, leave out “qualifying regulated” and insert “pre-dissolution”

95: Clause 32, page 30, line 36, leave out “qualifying regulated” and insert “pre-dissolution”

96: Clause 32, page 31, line 1, leave out “qualifying regulated” and insert “pre-dissolution”

97: Clause 32, page 31, line 25, leave out subsections (3) and (4)

Amendments 75 to 97 agreed.

Amendment 98

Moved by Lord Wallace of Tankerness

98: After Clause 32, insert the following new Clause—

“Returns as to controlled expenditure

(1) Section 96 of the Political Parties, Elections and Referendums Act 2000 (returns as to controlled expenditure) is amended as follows.

(2) For subsection (1) substitute—

“(1) Subsection (1A) applies where, during a regulated period, any controlled expenditure is incurred by or on behalf of a recognised third party in a relevant part of the United Kingdom in excess of the limit for that part mentioned in section 94(5).

“(1A) The responsible person must prepare a return in respect of the controlled expenditure incurred by or on behalf of the third party during that period in each relevant part of the United Kingdom.”

(3) In subsection (7)—

(a) in the opening words, for “(1)(a)” substitute “(1A)”;

(b) in paragraph (a), omit “falling within subsection (1)(a)”.”

Amendment 98 agreed.

Schedule 4: Requirements of quarterly and weekly donation reports

Amendments 99 to 106

Moved by Lord Wallace of Tankerness

99: Schedule 4, page 60, leave out lines 7 to 9

100: Schedule 4, page 60, line 22, leave out “qualifying regulated” and insert “pre-dissolution”

101: Schedule 4, page 60, line 30, leave out “qualifying regulated” and insert “pre-dissolution”

102: Schedule 4, page 60, line 42, leave out “qualifying regulated” and insert “pre-dissolution”

103: Schedule 4, page 60, line 43, leave out “qualifying regulated” and insert “pre-dissolution”

104: Schedule 4, page 60, line 44, leave out “qualifying regulated” and insert “pre-dissolution”

105: Schedule 4, page 61, leave out lines 37 to 40

106: Schedule 4, page 62, line 6, leave out from “period” to end of line 8

Amendments 99 to 106 agreed.

Amendment 107 had been retabled as Amendment 119A.

Clause 33: Statements of accounts by recognised third parties

Amendments 108 to 116

Moved by Lord Wallace of Tankerness

108: Clause 33, page 33, line 28, leave out from “must” to end of line 31 and insert “include—

(a) a statement of the income and expenditure of the third party for the regulated period, and

(b) a statement of its assets and liabilities at the end of that period.”

109: Clause 33, page 34, line 13, leave out from “satisfied” to end of line 18 and insert—

“( ) that a statement or statements prepared or to be prepared by the third party under any enactment contains or will contain the information required by subsection (2) or equivalent information, and”

110: Clause 33, page 34, line 19, leave out “(or, on publication, will be)” and insert “, or will be,”

111: Clause 33, page 34, line 20, at end insert—

“( ) Equivalent information is—

(a) a statement or statements of the income and expenditure for a period or periods other than the regulated period, or

(b) a statement or statements of assets and liabilities at a date or dates other than the end of that period, but which in the Commission’s opinion gives a sufficient indication of the third party’s accounts for, or at the end of, the regulated period.”

112: Clause 33, page 34, line 46, leave out from beginning to end of line 13 on page 35 and insert—

““(2A) Where a statement of accounts falls to be prepared under section 96A, the responsible person must deliver—

(a) the statement, and

(b) if an auditor’s report on the statement falls to be prepared under section 97(1A), that report, to the Commission before the end of the period of 6 months beginning with the end of the period under subsection (1) or (2) for the delivery of the relevant section 96 return.

(2B) “The relevant section 96 return” means the return mentioned in section 96A(1)(a) which gives rise to the duty to prepare the statement of accounts.””

113: Clause 33, page 35, line 17, leave out “or (2B)”

114: Clause 33, page 35, line 43, leave out “a return is delivered under section 98(2) and”

115: Clause 33, page 35, line 46, after “the” insert “relevant section 96”

116: Clause 33, page 36, line 2, at end insert—

“(5) In subsection (4)(a), “the relevant section 96 return” has the meaning given by section 98(2B).””

Amendments 108 to 116 agreed.

Amendment 117

Moved by Lord Wallace of Tankerness

117: After Clause 34, insert the following new Clause—

“Candidate’s personal expenses not to count for local election expenses limit in England and Wales

(1) In section 76(5) of the RPA 1983 (exclusion of personal expenses from limitation on election expenses), after “subsection (1A) above” insert “or a local government election in England or Wales”.

(2) Subsection (3) applies where, before the relevant date, an enactment—

(a) provides that section 76 of the RPA 1983 is to have effect in relation to an election of any description as it has effect in relation to a local government election in England or Wales, or

(b) otherwise makes provision (however expressed) to the effect that that section applies to an election of any description as it applies to a local government election in England and Wales.

(3) If the date of the poll at an election of that description is on or after the relevant date, section 76 of the RPA 1983 applies to the election as amended by subsection (1).

(4) In this section—

“the RPA 1983” means the Representation of the People Act 1983,

“the relevant date” means the date on which the amendment made by subsection (1) comes into force, and

“an enactment” means an Act of Parliament or any subordinate legislation (within the meaning of the Interpretation Act 1978).”

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

My Lords, government Amendment 117 would exclude personal expenses from being considered for the purposes of candidates’ expenses limits at local elections in England and Wales. I do not think that this issue has yet been referred to in any of our deliberations.

The Government have brought forward the amendment to bring greater consistency to the treatment of personal expenses across the different types of election. It will also ensure that the Access to Elected Office for Disabled People Fund can successfully continue operating following the expiry of existing secondary legislation.

The access to elected office fund was set up by the Government to award grants to disabled people who are, or go on to become, candidates at elections. The fund’s grants are intended to help candidates overcome barriers to elected office that might arise as a result of their disability. Currently, such awards from the fund would not count towards candidates’ spending limits at certain elections, as they would be considered personal expenses. Noble Lords will no doubt be aware that personal expenses are exempted from candidates’ limits at certain elections, such as UK general elections, police and crime commissioner elections and Greater London Authority elections, among others.

However, there is currently no such exemption at local government elections. Given the generally low expenses limits that apply at those elections, recipients of the fund are likely to find themselves in the unusual and punitive position of having their entire expenses limit taken up by fund awards. It is a distinct unfairness that disabled candidates should have to account for costs associated with their disability when campaigning in elections. The Government therefore brought forward secondary legislation last year so that fund awards would be excluded from candidates’ spending limits at all elections. That secondary legislation will cease to have effect in June this year. The Government therefore consider that the Bill presents a key opportunity to make such an exclusion permanent, while also rationalising the position of personal expenses across various elections.

Rather than merely exclude disability expenses financed by fund payments from candidates’ limits, as the order does, this amendment instead extends the personal expenses exemption to local elections, including parish and community council elections, in England and Wales. It will cover any disability-related expenses incurred by a candidate personally, regardless of whether they are financed by the fund. This is a sensible amendment. It seems unfair to require that disability costs should count towards candidates’ spending limits at local elections when they are already excluded from certain other elections.

Amendment 127 is a related amendment that will allow the new clause inserted by Amendment 117 to be commenced by order. I beg to move.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Cabinet Office)

My Lords, I simply give the amendment a warm welcome. We previously discussed this with the noble Lord, Lord Wallace of Saltaire, probably in the Moses Room last year, but we had not seen this clever device to add the provision. We should congratulate the Government on finding a nice wheeze for this.

Amendment 117 agreed.

Amendment 118

Moved by Lord Gardiner of Kimble

118: After Clause 35, insert the following new Clause—

“Post-election review

(1) The Minister must, within the period of 12 months beginning with the day on which this Act is passed, appoint a person to conduct a review of the operation of Part 6 of the Political Parties, Elections and Referendums Act 2000 in relation to the first relevant parliamentary general election.

(2) The “first relevant parliamentary general election” is the first parliamentary general election to be held after the beginning of the first Part 6 regulated period in relation to which one or more of the amendments made by Part 2 mentioned in section 42(1) have effect.

(3) A “Part 6 regulated period” is a regulated period within the meaning given by section 42(2)(b).

(4) The Minister may specify matters which the review must, in particular, consider.

(5) On completion of the review, the appointed person must—

(a) make a written report on the review, and

(b) provide a copy of the report to the Minister.

(6) The Minister must—

(a) lay a copy of the report before Parliament, and

(b) publish the report in such manner as the Minister considers appropriate.

(7) The Minister may pay to the appointed person such remuneration and expenses as the Minister may determine.

(8) “The Minister” means the Secretary of State or the Lord President of the Council.”

Photo of Lord Gardiner of Kimble Lord Gardiner of Kimble Lords Spokesperson (Department for Culture, Media and Sport), Lord in Waiting (HM Household) (Whip)

My Lords, government Amendment 118 requires that within 12 months of the Bill receiving Royal Assent, the Minister must appoint a person to review the operation of Part 6 of PPERA as it is amended by Part 2 of the Bill. Noble Lords will recall that in Committee there was some debate about the need for a post-legislative review of the provisions of Part 2.

I am most grateful to the noble and right reverend Lord, Lord Harries, and my noble friend Lord Hodgson of Astley Abbotts, who tabled amendments in Committee to ensure that this important matter was discussed. As was explained during Committee, it is right that an assessment should be made of the entire system of rules governing third-party campaign expenditure. That assessment should of course extend to the changes made by the Bill. The entire range of existing and newly introduced rules should be carefully reviewed after their first operation, which is expected to be at the 2015 UK parliamentary general election. A commitment was given by my noble and learned friend that an amendment would therefore be brought forward at Report to require a review of the operation of Part 6 of PPERA as it is amended by Part 2 of this Bill. That is indeed what the Government have now done. The next scheduled general election presents the first opportunity at which all the third-party campaigning rules will be in operation, and it is a timely opportunity to review the effectiveness of those rules.

The Minister must appoint a person within 12 months of Royal Assent to allow the reviewer to start work during the general election campaign. The Government believe that it is particularly important that a reviewer should be appointed sufficiently ahead of the general election to allow him or her to fully assess the operation of the rules. The amendment requires that on completion, the person carrying out the review must produce a written report. That report must then be laid before Parliament by the Minister. I am sure that noble Lords will agree that it is only right that Parliament should have the opportunity to consider how to respond to the findings in the report. Noble Lords will also have noted that in its most recent parliamentary briefing, the Electoral Commission gave its support to the amendment.

Government Amendment 135 is a related but minor amendment, which clarifies that government Amendment 118 extends to the United Kingdom only. I beg to move.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Conservative

I congratulate the Government on having brought this forward. It is really important, because so much of what we have been discussing is supposition. We are peering into the fog of the future concerning how things will work out. This will be a chance to see what the reality is. I have just one question. The amendment talks about the person—the lucky person—who will presumably be imposed for about a year, if they start in March 2015. There will be the aftermath of the general election, and the returns required after that will be six to nine months later, so they will have to be in post for a year.

The amendment refers to remuneration and expenses. One issue when people undertake such reviews is access to skilled manpower and a team who can help them. No matter what he or she is paid, if they are trying to do it on their own, they will undoubtedly be in a much weakened position. I assume, but I want to have it confirmed, that the amendment implies that adequate manpower resources will be available to the reviewer to ensure that he or she can carry out their work and appropriate investigations. I think it is an excellent proposal.

Photo of Baroness Williams of Crosby Baroness Williams of Crosby Liberal Democrat 8:45 pm, 15th January 2014

My Lords, I will not trespass on the delicate field of remuneration; but I would like to congratulate the Government on doing what they said they were going to do in putting this excellent review in the Bill.

I will add something that I can only say because of my parliamentary background. It would be immensely helpful if it could be understood that the person who conducts a review will, in the course of doing so, consult and listen to evidence from parliamentarians of all parties engaged in the campaign. They are likely, at grass-roots level, to know more than—with great respect—most leading lawyers or leading statesmen are likely to know. I very hope that it will be indicated to the person who conducts the review that he or she will be expected to invite evidence from people who are standing for Parliament and to consider the particular evidence they would like to bring to his or her attention.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

It is a great relief to be able to welcome an amendment without any qualification at all; but it might be worth reminding ourselves why a review is so essential. First, with the existing PPERA, most charities were not even aware that they were regulated; it is only recently that they have come up against it. Therefore, there are fundamental problems with PPERA that have only just been revealed, and probably we have not yet had proper time to put them right.

Secondly, we have had a very short time to think about and amend the Bill before us. As we know, there was no pre-legislative scrutiny and no six-month period for consultation—which we recommended. We have had only a very short five-week period. The commission that I chair has always made it clear that the recommendations we put forward were only for the 2015 election, because we could not see the answer to a number of issues. In particular, the issue of coalition working keeps coming up and we have not yet found a satisfactory answer to that. Therefore, it is extremely good that the review body is going to be set up and that it will be in time to watch what happens with the election. It is going to have to report within a year, which of course meets the concern raised earlier by the noble Baroness about a sunset clause. It will now have to report within a year.

I have only one question: why have the Government decided that the review should be done by one person, rather than by a committee of Parliament?

Photo of Lord Tyler Lord Tyler Liberal Democrat

I very much welcome the initiative that my noble friends have taken on this. It is vastly preferable to a sunset clause, precisely because it will start at the right moment. The timing is going to be critical, as the noble and right reverend Lord and my noble and learned friend said, because it will see right through the process of the next election and beyond. For that reason it is preferable to a sunset clause.

I, too, wonder whether the precise definition of a “person” is appropriate to this, but we will have to judge it on its results. Because my noble and learned friend has put into his amendment that a copy of the report will be laid before Parliament, the process thereon is extremely interesting. If major changes are required in this legislation, we will need to know quite quickly in order that we do not run into another period of rapid digestion, as we have on the Bill.

I particularly want to underline the point made by the noble and right reverend Lord, Lord Harries, just now. We should have this review of the 2000 Act. I take some responsibility, because I sit on a little, totally informal cross-party advisory group for the Electoral Commission. We were never forewarned of all the problems with the 2000 Act that have now come to light—not least, the coalition issue to which the noble Lord has just referred. It has been 13 years; the Electoral Commission never forewarned us of the difficulties it was encountering in giving appropriate advice to organisations that wished to campaign in this field. The Minister has taken elaborate and proper precautions to make sure that the situation never arises again, and I congratulate the Government on that.

Photo of Lord Cormack Lord Cormack Conservative

Briefly, I add my congratulations and thanks. Those who criticise—and I have been very critical of aspects of the Bill—should always praise when the right thing is done. I am exceptionally grateful to my noble friend and his ministerial colleagues for putting this amendment into the Bill. It is a very satisfactory outcome and I agree entirely with what the noble and right reverend Lord, Lord Harries, and my noble friend Lord Tyler said.

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Shadow Leader of the House of Lords

My Lords, we, too, warmly welcome this amendment and the fact that there will be a review, and that a report will be laid before Parliament. The timing is absolutely correct. Should there be a Labour Government after 2015—and in 2016 when the report is laid before Parliament—as I very much hope, if there are any recommendations for change I will guarantee at this Dispatch Box that there will be proper consultation and that if any legislation is necessary, there will be pre-legislative scrutiny of such legislation.

Photo of Lord Gardiner of Kimble Lord Gardiner of Kimble Lords Spokesperson (Department for Culture, Media and Sport), Lord in Waiting (HM Household) (Whip)

My Lords, I am most grateful for what has been a short but quite buoyant debate. It is important that we have this review. My noble friend Lord Tyler referred to the 2000 Act and a number of problems there which had not been properly identified. I am very mindful of what the noble Baroness, Lady Royall, has said. Who knows what the result will be? However, there are always lessons to be learnt from all these adventures that we have.

I say to my noble friend Lord Hodgson that it is absolutely clear that the reviewer has to have the appropriate resources to do a proper job. My noble friend Lady Williams of Crosby asked about evidence. It is clear that for the reviewer to do a proper and thorough task, that person should seek views from many sources. Clearly, it would be sensible that those in the front line of political activity, such as candidates and elected representatives, should be part of that process.

It was nice of my noble friend Lord Cormack to be cheerful about this amendment. There is important work to be done and I understand what the noble and right reverend Lord said about his inclination or desire to have a parliamentary committee. However, I have no doubt that we will see the reviewer doing what we expect him or her to do—a thorough piece of work. I look forward to that, in whatever capacity I remain.

Amendment 118 agreed.

Amendment 119

Moved by Lord Campbell-Savours

119: After Clause 35, insert the following new Clause—

“Part 2ATax relief on donations

Tax relief on donations

(1) In the Political Parties, Elections and Referendums Act 2000, after section 70 insert—

“70A Tax relief on donations

Tax relief shall be given, subject to Schedule (Tax relief on donations), to individuals who make donations to a registered political party.”

(2) Schedule (Tax relief on donations) has effect.”

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

My Lords, in moving Amendment 119, I shall speak also to Amendment 119A. We had a long debate on this subject in Committee and I do not intend to rehearse all the arguments that I used on that occasion. In Committee, it was quite clear that support for the amendment was overwhelming. Apart from the two Front-Benchers, and the noble Lord, Lord Finkelstein, no one spoke against the amendment. Everyone supported the amendment as it was phrased on that occasion. Perhaps I should clarify at the beginning of my contribution what my amendment would do. It would incentivise a system of donations by individuals by allowing taxpayers to reclaim the basic rate of tax on their donations to political parties.

It would limit the relief to the standard rate and operate in the same way as gift aid to charities or covenanting to your local church.

This issue has had much support over the years from all political parties and all the organisations associated with political debate. The Committee on Standards in Public Life, chaired by the noble Lord, Lord Neill of Bladen, recommended essentially this amendment in 1998, some 15 years ago. The Electoral Commission’s report of 2004 on the funding of political parties recommended a similar change in the law, with a £200 cap. In 2006 the Constitutional Affairs Committee in the House of Commons made a similar recommendation in line with my amendment. The Conservative Party’s Tyrie report of 2006, entitled Clean Politics, also made reference to an amendment of this nature. In 2004 the Liberal Democrats called for a scheme of tax relief of a similar nature, and indeed in 2009 moved a very similar amendment to this during the proceedings on the Political Parties and Elections Act. When the Labour Government established the Hayden Phillips inquiry in 2007, they recommended a tax relief match funding scheme that bore a close resemblance to the scheme that I am proposing, but on that occasion with a £500 cap on contributions.

Over recent weeks I have not found a single Member of this House, apart from those supporting the hierarchies of the political parties, who is opposed to my amendment. Everyone I speak to cannot understand how it is that sane politicians in sane political parties can possibly oppose what is deemed to be a perfectly reasonable and sensible amendment. They all ask, “What is the problem?”. I intend to set out briefly what the four principal objections are and how they are being answered.

First, I am told that there is a need to continue negotiations. Indeed, a colleague sent me a note on my BlackBerry today to say that that was one of the reasons why my colleagues were being advised to vote against my amendment. The fact is that no negotiations are going on. They terminated earlier this year and anyone who suggests that they are continuing is actually fibbing and not telling the truth. There are no negotiations. They fizzled out and there are people in this Chamber today who were party to those negotiations and know exactly what the position is. Indeed, I understand that Mr Clegg has stated in the other place that the negotiations have finished and, obviously, will not be reopened until some time in the future, perhaps under a separate Government. My view is simple: negotiations on these matters will not work and the only way in which we will get change is by introducing incremental improvements—a little bit here, a small change there—and over a period of time we will see a new regime established for political donations in the UK.

Secondly, I was told that a party might gain out of the proposals that I am making and indeed might abuse its position by unilaterally increasing the contribution threshold in future. I took that problem on board. In the amendment before the House today there is a change to ensure that the only way in which the contribution threshold can be changed in future is by way of primary legislation and not by regulation. A new Bill would have to be introduced in primary legislative form to change the thresholds in the Bill. In my view there is another argument in favour of the amendment. It is right to allow a scheme to percolate throughout the system to see how it beds in and whether it works. My view is that it will work and that at some stage in the future there will be a need to review the thresholds as set out in my amendment.

Thirdly, there is the cost of the scheme. When the Hayden Phillips report was published in 2007, there was a reference to a £500 cap on contributions. That cap is 25 times greater than the cap that I have set for the first year in my amendment and five times greater than my third-year figure of £96 per calendar year. My view is simple—and it is the view of others—that my proposal would cost but a few million pounds, perhaps £2 million or £3 million per year. We need to balance the problems of introducing that against all the malevolent publicity that surrounds political institutions today. Is it worth £2 million or £3 million to begin the process of avoiding all the adverse publicity that surrounds donations?

However, the fourth objection to my amendment—the one I found most ludicrous—is the view that it would be impossible to sell the principle of support for political parties through tax relief at a time of austerity. That objection surfaced during the course of discussions. It is always a time of austerity. There is never a right time to spend money, but we are talking only about a very small amount of money. However, again in a spirit of generosity, I have amended my amendment for proceedings in the House today to ensure that it would not trigger until the financial year that follows the next general election so as to avoid the very debate that people might be concerned about. I have made two concessions on my amendment, almost neutering it, but it would still stand on the statute book as a scheme to be introduced in the first year, 2016-17, at £16; in 2017-18 at £32 and in 2018-19 at £96—the threshold under which tax relief could be secured on a donation.

Today I can be even more flexible. If the Government, even after all these concessions, feel that they cannot give way, I understand that it would be possible for them to introduce an amendment to delay commencement of my proposed scheme pending an order to be brought in by the Secretary of State under the next Government. In other words, an amendment to Clause 41 could be introduced at Third Reading to allow for an order to be introduced to delay the date of commencement of the scheme.

I cannot understand, in the light of all the concessions that I have made on my amendment and the way in which I have bent over backwards to make it possible for the Government to deal with all the problems and objections that have been raised, how the Front Benches of both parties find it objectionable to introduce an amendment which I know is supported in reality in free debate by an overwhelming majority of this House as well. I say that having talked to colleagues across Parliament who simply cannot understand why the Government refuse to go down this route.

At the end of the day, the very credibility of this institution is at stake. We have had far too many scandals over the years; political scandals relating to money and politics. All I am doing in moving my amendment today is setting in train a course of events towards bringing in the embryo of a provision of change that might one day lead to a cleaner donation regime for British political parties. I am confident that, if the measure is presented in that form, as against all the scandals that we currently have in this area of political activity, the general public will support me. I hope that noble Lords will support me in the Division Lobbies later this evening. I beg to move.

Photo of Lord Hamilton of Epsom Lord Hamilton of Epsom Conservative

My Lords, I have added my name to this amendment because it is a very modest and necessary step to take towards taxpayer funding of political parties. None of us should be pleased, content or comfortable with the fact that political parties in this country are financed by the trade unions and, to a very large extent on all sides of the House, by extremely rich men who are seen to exert influence. I am not saying that they do exert more influence than anybody else who runs industries or anything, but they are seen to exert influence over policy. This does us no good at all and we should grasp this nettle and do something about it.

I am delighted that the noble Lord, Lord Campbell-Savours, has arranged that these measures would come into place after the general election. I would like to see a lot more done after the general election. I would like to see matched funding up to a certain limit, but now is not the time to talk about that. The fact remains that we are already paying opposition parties millions of pounds a year. We are paying the Opposition in your Lordships’ House Cranborne money of hundreds of thousands of pounds. I challenge anybody in this to House to say that anybody has mentioned on a doorstep either Short money or Cranborne money. They do not know that it is happening. In terms of public expenditure, they are insignificant sums of money.

We should be grasping this nettle early on in a Parliament. I hope that whoever wins the election will do so at the beginning of the next Parliament and get the entire funding of our political parties in this country into a sleaze-free zone, where it should always have been. If we go on as we are, we will have endless problems. We will always be accused of having an unhealthy influence on the political system. This does nothing for politics in this country. I therefore support the amendment with enthusiasm.

Photo of Lord Tyler Lord Tyler Liberal Democrat

My Lords, my name is also on the amendment. I will make a slightly different point from those of other noble Lords who have spoken to it.

Public service in a parliamentary democracy is an honourable activity. I look around the House, and I could say exactly the same thing about the other place, and see a great majority of people who give of their time, talents and careers, and sacrifice their family life, to public service. That is something that we should recognise as being an extremely important part of our civic life.

Yet it is absolutely true, as noble Lords have already said, that it is somehow thought that to be active in politics is less reputable than, for example, supporting a charitable or voluntary organisation; many of us do that as well. That is exaggerated, underlined and repeated every time one of us contributes something to our local church or favourite charity and gets respect from the tax system for so doing, in exactly the way that the noble Lord, Lord Campbell-Savours, has described. If politics is an honourable activity, why are we not allowing our fellow citizens to recognise that and, in their own way, be more active participants through the gift aid system?

It is not just because of the way in which politics has been supported in recent years by bigger and bigger cheques from smaller and smaller numbers of people, but also because millions of people feel disenchanted by and disconnected from the business of politics, that we have reached such a low reputation in the public mind. It is far more important to engage and incentivise millions of people than to engage and incentivise millions of pounds. In those circumstances, it is perhaps worth reminding your Lordships’ House, in addition to the points already made by my noble friend Lord Hamilton, that the taxpayer already makes a huge contribution to the business of politics. For example, the Royal Mail free delivery of election addresses for every single party and contestant in the European parliamentary election in May will cost the taxpayer something between £30 million and £40 million. The sums that the noble Lord, Lord Campbell-Savours, is referring to are a drop in the ocean compared to that. Yet it is far more likely to engage the individual citizen in the business of politics than the necessity for every single elector to receive a separate delivery from each of the parties.

It is perfectly true that there are already a number of proposals for a wider reform of the funding of political parties. Indeed, last year, I, along with colleagues from two of the other parties, produced a draft Bill that would have incorporated the latest proposals of the Committee on Standards in Public Life on this wider issue. We will not move in that direction between now and the general election but, in this modest way, we could put down a marker that we believe that the actual, practical financial support of our fellow citizens for the business of politics is just as honourable as their support for a charity or a church. It would be a very welcome development.

Photo of Lord Elystan-Morgan Lord Elystan-Morgan Crossbench

I feel deeply privileged to belong to such a broad church as is suggested by this amendment. I little thought that I would have the privilege of standing in the same rank as the noble Lord, Lord Hamilton, and the noble Lord, Lord Tyler, but I am utterly sincere in the support that I give to the amendment in the name of the noble Lord, Lord Campbell-Savours. When he very respectably sought to accost me some days ago to support this matter, I had misconceived the situation. I thought he was seeking to place political parties on a charitable basis, which of course would have been utterly improper. The definition of charity, however impractical it may be in the modern period, is well laid down in the statute of Elizabeth I and in the authority of Re Pemsel, which I still remember from my student days.

That is not at all what the amendment is about. It is a question of what fuel there should be available in a democracy to any political movement. That fuel, I suggest, is the united will of millions of people, of government, opposition or a third force, or a fourth, for that matter. That fuel is the desire and hopes of millions of individual people, possibly for tens of thousands of different reasons, but it is the amalgam of that united force that gives politics significance.

If you interfere with that system from above by the injection of vast amounts of money, you corrupt that system. It was Oliver Goldsmith, in the 18th century, who had these words:

“Ill fares the land, to hastening ills a prey, Where wealth accumulates, and men decay”.

In this case, wealth will diminish completely the significance of democratic politics. Now, we will say, “That is highly idealistic and immensely impractical”. It may well be, but we are deeply grateful to the noble Lord, Lord Campbell-Savours, who is a brave, iconoclastic, reforming character and to whom the House owes a great debt.

In America, in the two elections that President Obama has won, it may very well be that there were tactical and highly materialistic reasons why he chose to rely on millions of people rather than on the support of a few wealthy, almighty subjects. Be that as it may, it gave those campaigns impetus and significance. That is exactly what this amendment proposes. It may very well be that the amounts that are mentioned could be debated high and low. That does not matter at all. The significance is that we wish to see politics as an amalgam of millions of people with desires supported, we hope, by the substantial subvention of most of those people.

Photo of Lord Cormack Lord Cormack Conservative

My Lords, I have always believed that public life is a vocation. I greatly regret the decline in membership of political parties over the nearly 44 years that I have been in the Palace of Westminster; I touched upon that in an earlier amendment today. We do not know the precise figures, but our three major political parties in this country together have probably less than a quarter of the membership of the National Trust. That is a dismal statistic, which we should all take to heart. However, we have to recognise the realities. One of those is that if the proposals of the noble Lord, Lord Campbell-Savours, were adopted—and in principle I support them—they would not have an immediate and enormous transforming influence. I am glad to see him nodding assent.

I have no objection to Short money or Cranborne money—both are essential. We do not support our opposition parties as much as we should, and I speak with some experience, having done a stint on the Front Bench in opposition after 1997. Of course, that is taxpayers’ money. It is also right—my noble friend Lord Tyler knows my opinion on this after our brief exchange in the previous debate—to give individual candidates the opportunity to communicate with their electors at the time of a general or European election.

However, apart from principles, tonight we have to look at practicalities. Would we advance the cause of a campaign which I support if we put this to a Division tonight when we know, even though we may regret it, that the two Front Benches would oppose it, and would we advance the cause if we mustered a fairly derisory vote? I agree with the noble Lord, Lord Campbell-Savours, that there is a very wide measure of sympathy for what he proposes. However, that wide measure of sympathy would not necessarily be reflected in any Division late at night in your Lordships’ House. That could retard the case rather than advance it. I see him shaking his head, but that is a real point, and I hope made reasonably. We have to be very mindful of the realities of parliamentary arithmetic.

I hope, therefore, that what we could see from tonight is the launching of a campaign in both of the major parties—I hope among the Liberal Democrats, too—to persuade those who head up the various parties that this would be a modest but sensible move to make.

Photo of Lord Cormack Lord Cormack Conservative

I will finish in one second. As one of our colleagues pointed out, this does not confuse political parties with charities but elevates the role of the political party in our national life, and it would be right to have some form of tax concession for those who nail their colours to a mast, be it blue, red or yellow.

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

I have fought long and hard about the point the noble Lord has just made. The difficulty is this: I know that among those who will vote against my amendment in the Lobby tonight there will be many who support it.

Photo of Lord Cormack Lord Cormack Conservative

Of course—I was going to say “my noble friend”, but he is my friend—the noble Lord may well be right. However, I remember the famous words of Jack Straw, when a lot of people in the other place voted for an all-elected second Chamber on the advice of the Labour leader of the campaign for an appointed second Chamber, although he then acknowledged that he had made a tactical mistake. Jack Straw kept saying, “A vote is a vote, and that’s all that counts”. That is what will be said tonight. The noble Lord should reflect very seriously on that.

We also have to consider whether the Bill is the right one in which to insert such an amendment.

Photo of Lord Tyler Lord Tyler Liberal Democrat

I am very grateful to my noble friend and I know that he shares with me the same objectives. I think that he is advancing the old, old argument of unripe time, which we hear in this House so often. If you wait for the ripe time, it is usually when it has gone bad again, when it has gone beyond ripeness. I think that the noble Lord, Lord Campbell-Savours, by saying that the actual introduction would not take place until beyond the next general election, is simply insisting that we should put down a marker of the direction in which we wish to go. If we are not permitted to do that, what are we allowed to do in this House?

Photo of Lord Cormack Lord Cormack Conservative

Of course we are permitted to do that, but at the same time it is not unreasonable to talk about the practicalities. The fact of the matter is that if we have a vote tonight, this amendment will be very heavily defeated. It will not advance the cause. Whereas if we do not have a vote tonight, the statement of the noble Lord, Lord Campbell-Savours, which I believe not to be hyperbole but to be accurate, that there are many, many members of your Lordships’ House who are sympathetic to this point of view, will stand on the record. What will stand on the record if we have a vote is that because of a very, very small number of people, for a variety of reasons—one of them being that this may not be the right vehicle for such an amendment—the figures will not be encouraging to our cause.

I end by pleading with noble colleagues in all parts of the House that we seek in our respective parties to begin a campaign to advance this and that we talk to our colleagues in the other place as well. That is crucially important, as they are the people who get elected. Tonight is not the moment to be heavily defeated when we know, and the noble Lord in particular knows, that there is such widespread sympathy for the principle that he has very reasonably advanced.

Photo of Lord Gardiner of Kimble Lord Gardiner of Kimble Lords Spokesperson (Department for Culture, Media and Sport), Lord in Waiting (HM Household) (Whip)

My Lords, I apologise to the noble Lord, but I am very conscious of the Companion and I am very conscious that we are at Report. I sense that noble Lords would like to make progress. I apologise for intervening.

Photo of Lord Cormack Lord Cormack Conservative

I was just about to sit down anyhow.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Conservative

My reason for having supported the noble Lord in Committee and again tonight is that if, like me, noble Lords participate in the Lord Speaker’s outreach programme, they will know that when you go to schools up and down the country the issue that comes up again and again and again is that of money. We have a generation of schoolchildren about to go to university who have grown up with the idea that this is a dishonourable place where rich men and influential groups have a power because of their ability to fund.

The noble Lord, Lord Campbell-Savours, has put forward some incremental steps, which I support. I can only believe that the Front Benches cannot support them because they believe somehow, or they fear, that the comparative advantage, or competitive advantage, will be lost forever. They cannot think what it is, but something might come out of the woodwork that leaves one party at a disadvantage forever.

Sometimes, somewhere, we have to be brave, because against the £2 million to £3 million that the noble Lord, Lord Campbell-Savours, has said that it was going to cost, is the drip, drip, drip of damaging information about the behaviour and performance of this Parliament. That cannot be right for our country, whatever your political beliefs. Someone, sometime, somewhere has to be brave, and we need to give them a nod tonight to get on and be brave as soon as possible.

Photo of Baroness Corston Baroness Corston Chair, EU Sub Committee E - Justice, Institutions and Consumer Protection

My Lords, I rise very briefly to support the amendment in the name of my noble friend Lord Campbell-Savours. It takes me back 40 years to the Houghton committee on state aid for political parties. Both political parties ran away from the idea at the time—and there were only two major parties at that time, it has to be said. The campaign itself for the Houghton committee was under the slogan of “A penny from the workers to support our politics”.

It was said that we had our politics on the cheap. The amount of money that is now required to mount a political campaign or to support a political party in a constituency is eye-watering compared with what was considered to be normal in 1974. Now, we are all more and more dependent on very large donations from a very small pool of people. Whether or not those people seek personal advantage from it, the public think that that is what will happen.

The noble Lord, Lord Hodgson, is entirely right about the attitude of young people towards politics. We find a great deal of apathy and disgust, as well as a decline in participation in politics and certainly a decline in turnout in local and general elections. It is never the right time to introduce a measure such as this. I have been active as an organiser and a parliamentarian for well over 40 years and I have never, ever heard anybody from a Front Bench say, “Perhaps this is the time”; it is always, “Well, this is a really good idea, but not yet”.

The person whom I think of as my noble friend, the noble Lord, Lord Elystan-Morgan, has just referred to President Obama. He was wise enough and smart enough to see that this issue was poisoning politics in the United States. What did he do? He had a deliberate strategy of asking for $20 from millions of people. Can any of us remember—I certainly can—what Washington looked like on the day of his inauguration? Washington had never seen so many people turning up for an inauguration, and I do not think that that was an accident.

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Shadow Leader of the House of Lords

My Lords, I am sorry to be the sad spectre at the feast. I am grateful to my noble friend for the important changes that he has made to his amendment since Committee. I am also grateful to him for providing answers to the various hurdles raised in Committee and in the many discussions that he has had since.

All noble Lords are absolutely right to say that the current situation is untenable. None of us—nobody who is active in politics—is comfortable in any way with the current situation. We absolutely have to get big money out of politics, and we have to find a solution to the problem of party funding, which is undoubtedly a running sore that diminishes trust in politics. That trust must be restored if our democratic system is to thrive.

As has been said—and I completely agree—politics is a noble part of our civic life and we have to find a way forward. The proposal from my noble friend could well be part of that solution. Of course, it is correct to say that there is never a good time to put forward such proposals, but I take issue with my noble friend when he says that it is always a time of austerity. I do not think that that is true and I do not think that now is a particularly good time to put forward this proposal. However, I understand why my noble friend is doing it and I recognise that, should he wish to test the opinion of the House, he will undoubtedly have the support of some of my colleagues. However, my party’s position is that, while, as I said, this may well be part of a solution, it should not be dealt with in isolation. We have to find a comprehensive solution to the problem of party funding and it is incumbent on all of us to try to do that. Until we do, as has been said, politics will suffer, our democracy will suffer and young people will not have the faith in politics that we would wish them to have in order that we may have a healthy, democratic society.

Having said that, although I think that it is an interesting idea, should my noble friend wish to test the opinion of the House, I regret that I will not be following him into the Lobby this evening.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords 9:30 pm, 15th January 2014

My Lords, perhaps I may reassure the noble Baroness, Lady Royall, that she is not the sole spectre at the feast. Indeed, as I think the noble Lord, Lord Campbell-Savours, indicated when he moved the amendment, he does not expect the Front Benches to fall into line with him. We had this debate four weeks ago. Admittedly, there are differences in this amendment—but, frankly, in the intervening four weeks the Government’s position has not changed.

That is not to say that raising these issues is not without merit. As my noble friend Lord Cormack said, it may serve to stir up the leaderships of all three parties. I endorse what was said by my noble friends Lord Tyler, Lord Cormack and Lord Hodgson, and by the noble Baroness, Lady Royall, about politics being a noble calling. We in your Lordships’ House like to think that we make a contribution. We may disagree with each other—sometimes quite strongly—but we recognise, across the House, that we have good motives for coming into politics. Although we operate, vote and make speeches by different lights, we nevertheless have the common good of the nation at heart.

However, the proposal we are dealing with this evening is not necessarily the one and only way to restore the nobility of the political calling. The rules on party financing have been the cause of much discussion. The noble Baroness, Lady Corston, gave us a very good historic perspective when she mentioned the Houghton committee. This has gone on for some time. Most notably, this Government led talks on the subject between the three main political parties during 2012 and 2013. In 2010, each of the three parties had a manifesto commitment of one kind or another to some reform of party financing.

It is a complex issue. I noted the four points that the noble Lord, Lord Campbell-Savours, said had been given as excuses. I checked the speech I made in Committee, and we advanced none of the four then. In particular, I made it very clear that talks were no longer continuing, and I quoted from the Written Ministerial Statement issued by the Deputy Prime Minister on 4 July 2013 when he announced that the talks had not produced results—I think they met seven times—and that it was clear that the reforms would not now go forward in this Parliament.

The noble Lord’s point was that some people were arguing that talks were still going on. I did not seek to do that, but it is a legitimate expectation that all parties will seek to find a way forward on this complex issue in the next Parliament. I was not party to these talks but I am told that they were close. The Government want party funding reform but, as the noble Baroness,

Lady Royall, said, it should come as part of a package and by consensus. Some have asked for donations to be treated in the same way as charitable giving, and I can understand the relevance of that comparison from a tax point of view. However, I am not sure that the public necessarily see donations to charities—many of which we have been discussing in the course of our debates on the Bill—in the same light as giving support to political parties through the tax system.

I suspect that many noble Lords support state funding of political parties. As has already been mentioned, we have Short money, Cranborne money and the money that goes to the Royal Mail. However, this would be a significant step. Short funding is probably not mentioned on doorsteps. However, although I was probably still a student when it first came in, I remember that it was a major step which attracted quite a lot of discussion. It would be naive to think that a step as significant as the Exchequer funding political parties in this way through the tax system would not be devoid of any comment, which is why I think all parties have sought to go forward together by way of consensus.

As my noble friend Lord Cormack said, I do not believe that this is the appropriate Bill for dealing with this issue, but it is the Government’s hope that further discussions will take place in the next Parliament. My noble friend Lord Hamilton said that he wanted more done after the next election. I would echo that. Anyone from all party leaderships who reads our debates and follows this will realise that there is an appetite among Members of all parties that this matter should not be allowed just to gather dust in the next Parliament. But I do not believe that it is appropriate to act in the context of this Bill or at this time and without a bigger package that commands a consensus among all the parties. I therefore invite the noble Lord to withdraw his amendment. If he seeks to push it to a vote, as he has indicated, the Government will not support his amendment.

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

My Lords, I shall push my amendment to the vote. I thank all those who contributed in a most passionate way to the issues that we have raised in this debate. In the 1997 to 2001 Parliament, we were told that the matter would be resolved during the next Parliament and it was not. In that Parliament we were told that it would be dealt with in the next Parliament. Hayden Phillips came in the next Parliament and it was not resolved. We were told that it would be resolved in this Parliament. Again, there have been talks but it has not been resolved. We will go through Parliament after Parliament after Parliament ducking this issue. That is why it is important that we take a decision now. Some of us are becoming exasperated by the ducking and weaving.

For me, one of the great joys of coming to the House of Lords from the Commons is that I have always regarded ours as the House of free thinkers. In the Commons, you are held in a rigid, party, heavily whipped atmosphere where there is very little room for the kind of flexibility that we can exhibit as Members of this place. Because of the rigidity of debate in the other place, I believe that party reform ultimately will come through this House and not from the House of Commons. That is why tonight I am going to push my amendment to a vote. As I have said, I believe that this is the House which at the end of the day will make the reforms. I do not know, but it might well be that I will be defeated this evening—although I suspect some people will be surprised by the names of those who move into our Lobby.

As has been said, it is never the right Bill, the right time or the right moment to spend money, but this is the right time to take a decision. I should like to test the opinion of the House.

Division on Amendment 119

Contents 28; Not-Contents 148.

Amendment 119 disagreed.

Division number 2 Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill — Committee (2nd Day)

Aye: 26 Members of the House of Lords

No: 146 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Amendment 119ZA

Moved by Lord Hodgson of Astley Abbotts

119ZA: After Clause 35, insert the following new Clause—

“Electoral Commission and Charity Commissions: joint guidance

Before the commencement of this Act, the Minister shall require the Electoral Commission and the Charity Commissions to produce co-ordinated guidance on the requirements of Part 2 as they apply to charities.”

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Conservative 9:48 pm, 15th January 2014

My Lords, after the fireworks, we return to the meat and potatoes. This amendment returns us to an issue we discussed in Committee: how to ensure that the work of the two relevant regulators—the Electoral Commission and the Charity Commission—is truly joined up.

As I explained in Committee, both commissions have produced guidance. Both sets are clearly written and well signposted but they are not yet joined up. As I also explained, CC9—the Charity Commission guidance—is 35 pages long. There is a section titled “Campaigning: getting it right”, in which the Electoral Commission’s role and purpose are not mentioned at all, although the Advertising Standards Authority is. Meanwhile, in the Electoral Commission’s guidance, no reference is made to charity law; it confines itself to the two tests of the purpose test and the publicity test.

Of course, as both commissions have pointed out to me—and, indeed, in guidance to Members of your Lordships’ House—both have their individual, separate procedures for updating their guidance from time to time as the months go by. Therefore, any and all joining up has to be done by the individual charity and this is quite a challenge for a charity, especially smaller ones with limited financial and operational resources. Indeed, there must be, as some noble Lords have said, a real danger that many smaller charities will merely throw up their hands in horror and give up.

I explained to my noble and learned friend that without some ministerial pressure I was convinced that the two organisations would likely continue to plough their own individual furrows. My noble and learned friend gave the Committee some pretty honeyed words, I thought, when he said:

“I have no doubt that today’s debate, and the amendments tabled by the noble and learned Lord, Lord Hardie, and by my noble friend will have reinforced that message … I hope that the fact that the Electoral Commission and the Charity Commission have indicated an awareness of the need for clear and comprehensive guidance is of some reassurance to the Committee. However, the Government are also keen to reassure campaigners and charities that the provisions of the Bill and the PPERA rules will, and should, be clearly communicated to them. It is our view that the Electoral Commission should produce guidance in consultation with the Charity Commission, and provide specific consideration of charities”.—[Hansard, 18/12/13; cols. 1348-9.]

However, he could not quite bring himself to commit specifically to joining up the two sets of guidance. I have retabled this amendment tonight because I remain convinced that without this statutory pressure the two regulatory silos will remain intact.

The two commissions were very kind and courteous and they agreed to meet to discuss how to address this issue. Following that meeting, I have retabled my Committee stage amendments, but I have made two significant wording changes. I have replaced the phrase that I originally used, “joint guidance”, with the phrase, “co-ordinated guidance” and replaced “Commission” with “Commissions”. It was explained to me, of course, that the Charity Commission does not regulate charities in Scotland and Northern Ireland. OSCR, the Office of the Scottish Charity Regulator, and a new body recently set up in Northern Ireland will do that. By contrast, of course, the Electoral Commission regulates the whole of the United Kingdom.

So the vision I have and the vision I shared with them of co-ordinated guidance, which we discussed and they felt was a possibility, was for a homepage, prepared and signed up by the commissions, with links to policy issues or subjects that might be of more specific and important concern. This will offer two great advantages. The first is simplicity. Any charity of any size has just one place to go to look for guidance on this quite complex topic. We know it is complex because of the discussions we have been having over these past few hours. The second advantage is consistency. No regulator can introduce new policies or approaches without the other regulatory bodies knowing about it and being able to have their own specialist input. This avoids charities being caught in the crossfire of the regulators acting independently and quickly—maybe too hastily—in the heat of an election campaign.

To conclude, this amendment has, at least in principle, the support of the Electoral Commission and the Charity Commission. It certainly has the support of the NCVO and the commission of the noble and right reverend Lord, Lord Harries. I believe that it will be warmly welcomed by the sector as it grapples with the undoubted challenges of the Bill, so I hope that on this occasion my noble and learned friend can go further than honeyed words and accept this amendment. I beg to move.

Photo of Lord Horam Lord Horam Conservative

My Lords, the noble Lord, Lord Hodgson, certainly raises a very important point, which I am glad we are discussing, even though it is rather a late hour to do so. We should have some reassurance from the horse’s mouth: he mentioned that the Government have made various points, he has made various points and he has talked to the Charity Commission—presumably the Charity Commission for England and Wales—and the Electoral Commission. However, I remind the House and read into the record that our briefing from the Electoral Commission says specifically, under the heading, “A joint introductory guide for charities”:

“We are committed to working with the UK’s three charity regulators”— that is, the one for England and Wales, the one for Scotland and the one for Northern Ireland

“to ensure that charities have clear and reliable guidance about how to comply with the rules. The Electoral Commission and Charity Commission for England and Wales will produce a joint introductory guide for charities that need to understand if their activities are covered by non-party campaigning rules”.

It goes on to make various sensible points about testing its guidance, about taking campaigners’ views into account and about supporting and advising campaigners. That is all part of a process of being available in a sensible and practical way to charities and to campaigners who are not charities—which is equally important.

Given that the Electoral Commission and the Charity Commission are, I believe, working along the same lines and intend to produce joint guidance for charities and non-charity campaigners, and given the clear commitments being made, I think that it would be unnecessary to put this provision in the Bill. Neither the Charity Commission nor the Electoral Commission has the slightest doubt that it has to produce something sensible in this area. As a result of the amendments that have now been made by my noble and learned friend, there is time to do that before September, before the new arrangements kick in. While I support the spirit of my noble friend’s amendment, I think that it is unnecessary in the light of the clear commitments which have been made.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

I am happy to have added my name to the amendment in the name of the noble Lord, Lord Hodgson, for the reasons that he articulated so clearly. Reading through the guidance provided by the Charity Commission, both its general guidance and its specific guidance for election periods, it is clear that it covers the same kind of ground as the guidance of the Electoral Commission—it has to give the same kind of detailed guidance—and it must make total sense for the two bodies to produce some co-ordinated guidance. I do not think that we need any reminding that guidance for future elections will be crucial. There are so many complex areas here, and this whole subject has been so raised, that charities and campaigning groups will need to be crystal clear as to what part of their activity is covered by the regulation and what is not. I am therefore very happy to support the amendment.

Photo of Lord Cormack Lord Cormack Conservative

I am glad to add my name to the amendment. I was delighted to hear what my noble friend Lord Horam had to say, but I see no harm in putting this provision into the Bill. I hope that when my noble and learned friend the Minister replies, it will not just be with honeyed words but with a promise of a taste of honey.

Photo of Lord Tyler Lord Tyler Liberal Democrat

My Lords, this will be my shortest contribution through the whole length of this Bill, as I hope the night shift will appreciate. I want to make just one point: I am not sure whether the solution suggested by the noble Lord, Lord Hodgson, is right; I am absolutely convinced that there is a problem. I instance that by saying that, as somebody who has been involved in this area for years, I have never had advice or guidance on the problems that we have heard about so often in recent weeks from anybody in the Charity Commission. The first time that I ever heard from the Charity Commission was at 6.30 last night. There is a clear need for comprehensive, careful and co-ordinated advice from the two organisations. It has not been there in the past. They have not fulfilled their responsibilities to Parliament, to which they are responsible, over many years, and it is about time that they did. Throughout today’s discussion, it has been apparent that this lack of co-ordinated information from the two organisations has been one of the major problems that many organisations have had to face, as well as parliamentarians.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Cabinet Office)

My Lords, I am glad that the noble Lord, Lord Tyler, made that point about the Charity Commission, because no matter how good the commitment, we want to see this co-ordinated guidance. Having this requirement in the Bill would mean that it was not just a promise but an actuality.

In addition to making sure that it happens, the provision would be a signal to the charities, given that they will be caught by new restrictions under the Bill that they have not dealt with before, that the House has taken seriously the need for them to be absolutely clear and for there to be co-ordinated guidance on that. There is no downside to having the provision in the Bill, so I hope that the Minister has one “yes” in his bag that he can pull out at this stage. There is no downside to having it in the Bill, so I hope that the noble and learned Lord has one yes that he can pull out of his bag at this stage.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

My Lords, my noble friend Lord Hodgson tabled a similar amendment in Committee and brings forward this amendment to require the Electoral Commission to produce guidance for third parties and for that guidance to be co-ordinated with the Charity Commission, particularly to consider the impact of Part 2. As has been said, the issue was discussed at length in Committee, and it is clear to the

Government that there is a lack of understanding among third parties and charities as to exactly what are their responsibilities under existing PPERA provisions—the point made by my noble friend Lord Tyler. That the Bill amends those provisions reinforces the need for clarity. The Government made clear in Committee that the issue of guidance and whether a duty should be imposed on the Electoral Commission would be revisited at Report.

Those are not just honeyed words, because since our debates in Committee, the Government have discussed with the Electoral Commission the importance of its producing clear guidance. It is essential that such guidance take into account the impact on charities in particular. Although charities do not campaign in support of political parties at elections and only two have ever registered as third parties to date, there is still an obvious need to ensure that they fully understand the workings of the new regime—that has been made very apparent during our many debates today—and whether they might be held to account by the new provisions as a result of their activities.

As the independent regulator, it is of course for the commission to provide this guidance, but the Government agree that the views of the charities regulator, the Charity Commission, must also be taken into account. Indeed, this involves not just the Charity Commission but its equivalent in Scotland, OSCR, and the Charity Commission for Northern Ireland. Suitable guidance, particularly aimed at charities, can come only if it is jointly produced.

I am pleased to note what the Electoral Commission stated in its briefing to Parliament. If your Lordships will allow me, I shall repeat the words already cited by my noble friend Lord Horam, because they are important. That is why this is substance, not just words. The commission’s precise words are:

“We are committed to working with the UK’s three charity regulators to ensure that charities have clear and reliable guidance about how to comply with the rules. The Electoral Commission and Charity Commission for England and Wales will produce a joint introductory guide for charities that need to understand if their activities are covered by non-party campaigning rules ... Our guidance will explain key areas of the rules such as deciding what counts as regulated spending, how to manage regulated spending, and how the rules cover co-ordinated campaigning in coalitions”.

The Government welcome that clear commitment. At the big risk of quoting again from the e-mail from the Charity Commission, sent at 1808 yesterday evening in that e-mail, under the heading, “Co-ordinated guidance for charities that need to understand if they are covered by the rules”, Mr Rowley states:

The Charity Commission and the Electoral Commission have committed to producing co-ordinated guidance along with a joint introductory guide for charities ahead of the regulated period for the 2015 General Election should charities not be exempted. We are sensitive to the particular help that some charities may need to comply with both electoral and charity law. In the past we have worked closely with the Electoral Commission to ensure their advice for charities on complying with electoral law and our guidance on charities and political campaigning in an election period is aligned and have continued to work closely together throughout the passage of this Bill”.

The Government will continue in our discussions with the Electoral Commission. We will follow them up, and I am sure that our brief debate this evening will have further reinforced to the Electoral Commission the need for it to provide clarity to campaigners. It is the Government’s view that the Electoral Commission must produce guidance in consultation or co-ordination with the Charity Commission and the other charity regulators in the United Kingdom, particularly with regard to how charities might be required to comply with the regime.

I can see why noble Lords say that there is nothing to be lost by having the provision in the Bill, but when a clear and unequivocal commitment has been made by the Electoral Commission, and by the Charity Commission in the quote I have just read, as my noble friend Lord Horam said, it is unnecessary to put this in the Bill. In the light of these commitments, which I think go further than honeyed words, I ask my noble friend to withdraw his amendment.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Conservative

My Lords, as it is 10.05 pm I shall be brief. I am very grateful to all those who have spoken in support of this amendment—the noble and right reverend Lord, Lord Harries, my noble friends Lord Cormack, Lord Horam and Lord Tyler, and the noble Baroness, Lady Hayter of Kentish Town.

I tabled the amendment with the Hippocratic oath in mind—first, do no harm. I could not see that this could do any harm. It could only do good, because it is either superfluous—in which case, it does not matter—or, if things started slipping, it could be brought into play. Therefore, I cannot say that I am pleased with the outcome. The “too difficult” tray, in which I always thought this would end up, probably has been pushed a bit further round the desk by the words that we managed to extricate from the two commissions. However, it is late. I hope that my noble and learned friend will continue to look at this.

Another amendment that I was keen on, which the Government have accepted—namely, the review—will be an issue for the reviewer to look at. I think that there will be issues, unless we really join this up tight; charities will find things complex and difficult. However, given that it is 10.05 pm, I beg leave to withdraw the amendment.

Amendment 119ZA withdrawn.

Amendment 119A not moved.

Amendments 120 to 125, renumbered as Amendments 28A to 28D, 31A and 33A, not moved.

Clause 41: Commencement

Amendment 126

Moved by Lord Wallace of Tankerness

126: Clause 41, page 49, line 2, at end insert—

“( ) section 26(10) and (11) (definition of “election material”);”

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

My Lords, this is the final group of amendments. There has been much discussion about the regulated period for third parties and whether it is indeed of an appropriate length.

Many have argued that 365 days is simply too long. The noble and right reverend Lord, Lord Harries of Pentregarth, proposed in Committee that the regulated period should be shortened to six months. As noble Lords know, there are different regulated periods for different elections. For the general election it is 365 days. For elections to the devolved Administrations and the European Parliament it is four months.

What is the purpose of a regulated period? It is the time before an election within which financial limits on expenditure apply and campaigning rules must be adhered to. It is the time during which expenditure incurred for campaigning purposes must be reported. Noble Lords will know that the Bill already reduces the regulated period for the next general election in 2015, so that it will commence on 23 May 2014, which is the day after the European elections. The reason for this is that the original regulated period would have been a combined period for the 2014 European parliamentary election and the 2015 general election and would have started on 23 January 2014.

However, as the Bill makes changes that would have affected third party campaigning in European parliamentary elections, it would not have been sensible to have those changes take effect in the midst of the regulated period. The two regulated periods are therefore separated by the Bill, so its changes will take effect for the first time only for the 2015 general election.

The Government have now tabled Amendment 128, and Amendments 131 to 134, to shorten further the regulated period for third parties. These amendments will shorten the regulated period so that it commences on 19 September 2014. That is the day after the Scottish independence referendum. Although this Bill does not affect campaigners in the referendum—it is important that we make that clear—for the avoidance of any doubt and to ensure that there is no confusion, the day after the referendum has been chosen as an appropriate start date for the regulated period.

This step has been taken in response to calls from third party campaigners that they will need further time to fully understand the implications of the Bill and to ensure that they know how to comply with its provisions in the run-up to the 2015 UK parliamentary general election. I should stress that we are not reducing the spending limits to take account of the shorter regulated period. Campaigners will still be able to spend up to £319,800 in England, up to £55,400 in Scotland, up to £44,000 in Wales and up to £30,800 in Northern Ireland on promoting the electoral success of parties or candidates.

However—and this is crucial, not least as a follow-on to the previous amendment—delaying the start of the regulated period will give campaigners crucial time. The move has been supported by the Electoral Commission, to give it and the Charity Commission sufficient time to produce clear and easy to follow guidance. As has already been said, we believe that it is essential that campaigners have the clarity they have been asking for, and shortening the regulated period will allow the Electoral Commission enough time to test the appropriateness and clarity of its guidance with the campaigners themselves.

I should make clear here that only the regulated period for third parties is being amended. The regulated period for political parties will still begin on 23 May 2014, as under the existing transitional provision in Clause 42. It is also the case that for future general elections the period of one year will apply—although, given that there is to be a review, no doubt people will wish to raise this then. I just make it clear that the reduced period is for the 2015 general election.

The Government have also tabled Amendments 126, 129 and 130. These are minor and technical amendments to improve the drafting of Clauses 41 and 42. I beg to move.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

My Lords, I warmly welcome this shorter regulatory period for the 2015 election, for the reasons that the noble and learned Lord stated: it will enable the Electoral Commission to prepare the guidance to educate the people who will have to conform to it. However, I express the hope that in the review, the review body will look seriously at the recommendation of the commission which I chaired, that for third-party campaigners there should be a six-month period. This seven and a half-month period is absolutely right for this election but a six-month period should be reconsidered afterwards.

Perhaps I might end on one final point. We are all very much aware that this whole process has, towards the end, been extraordinarily compressed. Normally, the Government would listen first, bring forward amendments in Committee and then report those back on Report. We did not have any government amendments in Committee. The Government listened, and I am glad that they did, but this means that this Report stage has been a kind of compression of Committee and Report all in one. The implication of this is that I very much hope that the Minister will take seriously those amendments that we did not press to a vote, while hoping that he might come back at Third Reading having thought again. Because of this very compressed period, that would be a great help to the House.

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Shadow Leader of the House of Lords

My Lords, following on immediately from what the noble and right reverend Lord was saying about this compressed period, I particularly hope that in view of what the noble Lord, Lord Tyler, said in withdrawing his Amendment 52 on constituency limits, the Government will bring that back at Third Reading. As I understand it, the noble Lord, Lord Tyler, believes that the Government made a commitment to do so. That was the basis on which he withdrew his amendment. I do not wish to have a discussion this evening but I hope that the noble and learned Lord will look at it.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), The Advocate-General for Scotland, Deputy Leader of the House of Lords, Lords Spokesperson (Scotland Office), Liberal Democrat Leader in the House of Lords

I did not actually respond to anything that my noble friend said, so there was no commitment. I said to officials immediately after that it would be appropriate if we went back and talked to the Electoral Commission, but that was without any commitment that we would bring an amendment back. We would take the points that were raised on my noble friend’s amendment to the Electoral Commission but, to make it clear, without a commitment on bringing it back. That is only fair because I did not actually make any commitment.

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Shadow Leader of the House of Lords

My Lords, I am grateful for that clarification but I very much hope that, having spoken to the Electoral Commission, while I understand that the noble and learned Lord has not made a commitment, it will lead to him bringing something back at Third Reading. Having said that, I warmly welcome this group of amendments, which amend the regulated period. I am glad that it pertains only to the upcoming election, when it will be seven months. I am grateful to the noble and learned Lord and his officials for listening.

Amendment 126 agreed.

Amendment 127

Moved by Lord Wallace of Tankerness

127: Clause 41, page 49, line 6, at end insert—

“section (Candidate’s personal expenses not to count for local election expenses limit in England and Wales) (candidate’s personal expenses not to count for local election expenses limit in England and Wales);”

Amendment 127 agreed.

Clause 42: Transitional provision

Amendments 128 to 134

Moved by Lord Wallace of Tankerness

128: Clause 42, page 49, line 32, leave out “regulated periods beginning after that day” and insert—

“(a) regulated periods beginning after that day, or

(b) (for the purposes of enactments having effect otherwise than in relation to regulated periods) expenditure incurred after that day.”

129: Clause 42, page 49, line 36, at end insert—

“(including a period in relation to which a limit is imposed by that Schedule by virtue of subsection (3)(b) or (6A)(b)).”

130: Clause 42, page 49, line 37, leave out subsections (3) to (5) and insert—

“(3) If, apart from this subsection, the day on which this Act is passed would fall within a period in relation to which one or more limits are imposed by paragraph 11 of Schedule 9 to PPERA 2000 (limit on campaign expenditure where combination of parliamentary election and other election)—

(a) paragraph 11(2) of that Schedule (which disapplies limits and periods which would otherwise be imposed by paragraph 3 of that Schedule and substitutes new limits and periods) is of no effect (and is treated as never having had effect) in relation to the parliamentary general election, and

(b) for the purposes of paragraph 3 of that Schedule as it applies by virtue of paragraph (a), the relevant period is the Schedule 9 transitional period.”

131: Clause 42, page 50, line 11, leave out “subsection (4) “the transitional” and insert “subsection (3) “the Schedule 9 transitional”

132: Clause 42, page 50, line 12, leave out paragraph (a) and insert—

“(a) beginning with 23 May 2014, and”

133: Clause 42, page 50, line 17, at end insert—

“(6A) If, apart from this subsection, the day on which this Act is passed would fall within a period in relation to which one or more limits are imposed by paragraph 11 of Schedule 10 to PPERA 2000 (limit on controlled expenditure when combination of parliamentary election and other election)—

(a) paragraph 11(2) of that Schedule (which disapplies limits and periods which would otherwise be imposed by paragraph 3 of that Schedule and substitutes new limits and periods) is of no effect (and is treated as never having had effect) in relation to the parliamentary general election, and

(b) for the purposes of paragraph 3 of that Schedule as it applies by virtue of paragraph (a), the relevant period is the Schedule 10 transitional period.

(6B) In subsection (6A) “the Schedule 10 transitional period” means the period—

(a) beginning with 19 September 2014, and

(b) ending with the date of the poll for the parliamentary general election.”

134: Clause 42, page 50, line 17, at end insert—

“(6C) Subsections (3) and (6A) do not apply in the case of a period in relation to which one or more limits are imposed by paragraph 11 of Schedule 9, or paragraph 11 of Schedule 10, that ends with the date of the poll for an early parliamentary general election.

(6D) An “early parliamentary general election” is a parliamentary general election the date of the poll for which is appointed under section 2(7) of the Fixed-term Parliaments Act 2011.”

Amendments 128 to 134 agreed.

Clause 43: Extent

Amendment 135

Moved by Lord Wallace of Tankerness

135: Clause 43, page 50, line 43, at end insert—

“( ) In Part 2 of this Act—

(a) section 32(12) to (15) extends to the United Kingdom and Gibraltar, and

(b) section (Post-election review) extends to the United Kingdom.”

Amendment 135 agreed.

Clause 44: Short title

Amendment 136 not moved.