Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill — Commons Reasons and Amendments

– in the House of Lords at 3:01 pm on 28th January 2014.

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Votes in this debate

Motion A

Moved by Lord Wallace of Saltaire

That this House do not insist on its Amendment 1 and do agree with the Commons in their Amendments 1A and 1B in lieu.

Lords Amendment 1: Clause 2, page 2, line 7, after “secretary” insert “or special adviser”

COMMONS DISAGREEMENT AND AMENDMENTS IN LIEU

The Commons disagree to Lords Amendment No 1 and propose Amendments 1A and 1B in lieu.

1A: Page 2, line 20, at end insert—

“( ) Regulations may amend subsection (3) so as to provide that communications made personally to a special adviser are within that subsection.”

1B: Page 2, line 30, at end insert—

““special adviser” means a person who serves the government in a position in the civil service of the State and whose appointment to that position meets the requirements applicable to that position set out in section 15(1) of the Constitutional Reform and Governance Act 2010.”

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Lords Spokesperson (Cabinet Office), Lord in Waiting (HM Household) (Whip) 3:07 pm, 28th January 2014

My Lords, as noble Lords will recall, Amendment 1 was moved by the noble Lord, Lord Tyler, on Report in this House and agreed to by a majority of 18 votes.

Amendment 1 would extend the scope of the register to those who lobby special advisers, in addition to those who lobby Ministers and Permanent Secretaries. Our colleagues in the other place recognised the objective of the amendment and, indeed, expressed some sympathy with the motives of those who had supported it. They concluded, however, that the case had not been made to extend the scope in this way at present, but recognised that discussions regarding the inclusion of those who communicate with special advisers will continue. They therefore proposed what I believe is a pragmatic and constructive response to the noble Lord’s amendment. The amendments in lieu proposed by the other place would introduce a power for the Minister to amend the definition of consultant lobbying provided for by Clause 2 to, subsequently, and if necessary, include communications with special advisers. Such a power would enable Ministers to extend the scope as suggested if and when they are persuaded in this Government or the next of the case for doing so.

As I have observed, the other place was not persuaded that the case for such an extension had yet been made. That is because it recognises that the register is intended to complement the existing government transparency regime. Both systems—transparency and the register—are intended to enhance the transparency of the key decision-makers, the Ministers and Permanent Secretaries, and those who communicate with them. The other place confirmed this view that the Government’s focus on key decision-makers is appropriate and proportionate. We accept that lobbyists make communications to Government other than directly to Ministers and Permanent Secretaries. Ultimately, however, it is for Ministers and Permanent Secretaries to be responsible for the decisions taken within their departments.

While special advisers may provide advice, they are not decision-makers. It is Ministers, not special advisers, who are ultimately responsible for the actions of their departments; and it is Permanent Secretaries who are the officers accountable to Parliament for the performance of those departments. It is therefore only right that Ministers and Permanent Secretaries—not special advisers—are the main focus of the meeting reporting system, and the main focus of the register.

Special advisers are defined by the Constitutional Reform and Governance Act 2010, which includes the requirement that they are a person,

“appointed to assist a Minister of the Crown after being selected for the appointment by that Minister personally”.

That Act also provides for a statutory code for special advisers that makes clear that they may not,

“(a) authorise the expenditure of public funds; (b) exercise any power in relation to the management of any part of the civil service of the State; (c) otherwise exercise any”,

statutory or prerogative power.

As that code makes clear, the employment of special advisers adds a political dimension to the advice and assistance available to Ministers. They are an additional resource for the Minister, providing assistance from a standpoint that is more politically committed and politically aware than is available from the permanent Civil Service. The Government do not, therefore, intend that communications with them be captured by the meeting reporting system, nor by the register.

The other place recognised that the amendment proposed by this House would dissociate the register from its main objective, which is to complement the existing system by extending the transparency we apply to decision-makers to those that seek to influence them. They agreed by a substantial majority of 53 that Lords Amendment 1 be disagreed with, and replaced by the proposed Amendments 1A and 1B. In so doing, they have proposed a constructive compromise that would allow the scope of the register to be expanded to capture communications with special advisers, if the case is that it should do so.

The amendments in lieu should assuage the concerns of those who have asked that we do not eliminate the possibility of expanding the scope if justified in the future. I hope therefore that noble Lords will reconsider their position, and recognise that the amendments in lieu represent the most pragmatic and proportionate approach to this matter at present. I beg to move.

Photo of Lord Tyler Lord Tyler Liberal Democrat

My Lords, I am grateful to my noble friend Lord Wallace of Saltaire for his explanation of the position. I am delighted to see him back in his normal very active role on the Front Bench, and acknowledge immediately the efforts that he has made with my noble and learned friend Lord Wallace of Tankerness to find solutions to some of the problems with which we have all been grappling over what seems to be now many months, but certainly many weeks.

The government amendment in lieu precisely describes the situation we are now in. This House rightly insisted that better transparency arrangements should apply to meetings by lobbyists held with special advisers. Those arguments are well rehearsed, and I do not intend to repeat them. The amendment in lieu simply reflects the fact that there was no majority in the other place to reject out of hand the amendment we passed in your Lordships’ House. Liberal Democrat MPs would not vote to do that. Equally, the other part of the coalition has not yet been prepared to shine a light on spads’ activity at this stage. So Motion A accepts the principle that transparency for special advisers’ meetings is desirable, and there is clearly no practical problem in extending the transparency principle in this direction, or else it would have been spelt out in the amendments in lieu.

The Motion also accepts that the Commons does not desire this extension yet. It leaves the matter open until there is a government majority in the other place to switch on the provisions; I await that day with bated breath. It would obviously be helpful to hear from the opposition Front Bench whether the party opposite can commit categorically to switching on the transparency arrangements in the amendment, if and when Labour is in any way involved in the next Government.

However, the Liberal Democrat position is quite clear. We agree with the Prime Minister that,

“sunlight is the best disinfectant”.

We would introduce the pine scent of transparency to the work of spads right now; apparently, he does not want to do so quite yet. I shall support the amendment in lieu, and I thank my noble friends for working so hard behind the scenes to secure it.

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) 3:15 pm, 28th January 2014

Since I was asked a question, I will say two things. One is that we regret that the wider amendment, which would have taken senior civil servants in, was not also supported. The other is that we look forward to being in government and to turning on this provision, but also to turning off an awful lot of what the current Government are doing.

Motion A agreed.

Motion B

Moved by Lord Wallace of Tankerness

That this House do not insist on its Amendments 26 and 27, to which the Commons have disagreed for their Reasons 26A and 27A.

Lords Amendment 26: Clause 28, page 16, leave out lines 10 to 23 and insert—

“2A (1) For the purposes of this Schedule “third party constituency expenditure” means controlled expenditure incurred by or on behalf of a third party in relation to—

(a) 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 or otherwise distributed within any particular constituency or constituencies), or

(b) unsolicited telephone calls falling within paragraph 1(2) of Schedule 8A, made to such electors or households which can reasonably be regarded as intended to ascertain or influence their voting intention, where the effects are wholly or substantially confined to any particular constituencies or constituency.

(2) Third party constituency expenditure—

(a) shall be attributed to those constituencies in equal proportions, or

(b) shall be attributed solely to that constituency, as the case may be.

(3) For the purposes of sub-paragraph (1), the effects of third party constituency expenditure are wholly or substantially confined to any particular constituencies or constituency if—

(a) there is no significant effect in any other constituency or constituencies, and

(b) it can reasonably be inferred that the third party selected the relevant electors or households (or both) or otherwise distributed the material wholly or substantially to contact electors in the particular constituency or constituencies and not a wider section of the public.”

COMMONS DISAGREEMENT AND REASON

The Commons disagree to Lords Amendment No 26 for the following reason—

26A:Because a wider range of expenditure than it provides for should be included when attributing a third party’s expenditure to a particular constituency for the purposes of determining whether a limit on expenditure in that constituency has been exceeded.

Lords Amendment 27: Page 16, line 29, leave out “controlled” and insert “third party constituency”

COMMONS DISAGREEMENT AND REASON

27A: The Commons disagree to Lords Amendment No 27 for the following reason—

Because the amendment is unnecessary in light of the provision made in paragraph 2A(4) of Schedule 10 to the Political Parties, Elections and Referendums Act 2000 (as inserted by Clause 28(5)).

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 other place has passed a Motion to disagree with Lords Amendments 26 and 27. As noble Lords well know by now, these amendments would narrow the range of activities that would count towards constituency limits. I do not propose to take up time once again by making the case for why constituency limits are needed, but perhaps I could express my gratitude at the outset to the noble and right reverend Lord, Lord Harries of Pentregarth. We had a discussion about these amendments yesterday that I found very helpful both in respect of this Motion and the next one, which is on staffing costs. It was clear from our discussions that we have very much narrowed down the differences that there are between us, and I very much hope that we may be able to persuade the noble and right reverend Lord not to press his amendment in lieu.

The noble and right reverend Lord, Lord Harries, said at Third Reading last week that,

“there should be real restraints in place to stop large sums of money distorting an election result at constituency level. There is therefore no disagreement about the purpose of this clause”.—[ Official Report , 21/1/14; col. 587.]

That was very welcome and I turn now to Amendment 26B, tabled by the noble and right reverend Lord, Lord Harries, in lieu of his Amendments 26 and 27. Perhaps I might observe that Amendment 27 was thought to have been a consequential amendment. I think that parliamentary counsel thought that it was unnecessary and might be confusing. Having discussed this with the noble and right reverend Lord, I know that he will no longer seek to insist on that amendment.

Debating Amendment 26B shows that there is little difference between us, or between the Bill as currently drafted and what the noble and right reverend Lord wishes to achieve. He is understandably concerned about the workability and enforceability of constituency limits, and that is what his new amendment now seeks to resolve. I believe that this amendment is also aimed at addressing the concerns of campaigners, who argue that they are for the most part organised on a national basis and that to split expenditure along constituency lines is not always straightforward. Those campaigners that are not arranged on a national basis but across a small area have similar concerns about appropriately allocating expenditure across a small number of constituencies. Very often in these debates, the example of the HS2 campaign has been cited.

Lords Amendments 26 and 27 were initially put forward last week with a view to making constituency limits more workable by narrowing the activities that they would apply to. The Government have listened to and recognise the concerns expressed but we believe that they are misplaced. While I am grateful for the efforts which the noble and right reverend Lord, Lord Harries, has gone to, he too now realises that those Amendments 26 and 27 were not addressing the issue at hand.

Amendment 26B seeks to make it clearer when expenditure should be attributed to a constituency. Most crucially, there is an omission from this amendment of something in the one which the House considered last week on Third Reading. His amendment now moves away from seeking to apply the constituency limit to just a narrowed range of activities. The House has already agreed that it is appropriate to make third parties account for their expenditure against an expanded range of activities. The House has also agreed that constituency limits are necessary. As I have raised before, narrowing the range of activities that would apply to the constituency limits in turn limits the very effectiveness of these constituency limits. The reason this Bill widens the range of activities that count towards controlled expenditure is to cover a potential gap in UK election rules. Therefore, the amendment in lieu in the name of the noble and right reverend Lord, Lord Harries, is very welcome in recognising that.

I do not agree, however, and I hope I can explain why. Some of the concerns, while I understand why they have been raised, are perhaps misplaced. I do not agree with the view that attributing expenditure to constituencies is as difficult as is sometimes being suggested, either for the commission to provide guidance on and enforce, or for campaigners to undertake. Of course there will inevitably be difficult cases, but that is always the case, and the Electoral Commission is there precisely to provide the guidance to campaigners that they may need.

I did take the point made by my noble friend Lord Cormack last week, and passed on to the Electoral Commission his very constructive suggestion that there be a round-table discussion where a number of these issues could be addressed with regard to guidance in this area.

Amendment 26B has been drafted so as to require that the "significant effect" of expenditure is taken into account and not its geographical location. This is exactly what is already provided for in the Bill in Clause 28. What Amendment 26B further seeks, however, is to introduce a second test to determine whether expenditure is incurred in a constituency or not. This second test asks whether it can also "reasonably be inferred" that electors or households have been specifically targeted in a constituency.

I am not sure whether that was a throwback to the earlier amendment which talked about leaflets being specifically targeted in a constituency, but we believe that it is an unnecessary additional test. I fear that it would not add to any greater clarity.

The Bill's provision on constituency limits has, after all, been drafted in line with current PPERA rules and Electoral Commission guidance. Although bringing constituency limits is new, noble Lords will recognise that under PPERA expenditure must currently be attributed between England, Scotland, Wales and Northern Ireland. That is why there are separate spending limits for each part. Expenditure must be attributed between each part of the constituent parts of the United Kingdom on the basis of where its “significant effect” is felt. The Electoral Commission has clear guidance on how to allocate expenditure in this way and the same process will apply to constituency limits.

If a third party holds a rally in one constituency with a view to influencing the electoral success of a party or candidates in another constituency, that is where the “significant effect” is likely to be felt. The expenditure will be attributed to that constituency where the effect of that activity is intended and felt. That may be one or other or conceivably both of those constituencies.

The other point that has been raised is in terms of some of the difficulty of calculation. Where a significant effect is felt in several constituencies, the expenditure will be equally split between those constituencies—that is in the noble and right reverend Lord’s amendment and is indeed already in the Bill. There is no requirement for a detailed calculation of the precise amount or proportion of expenditure in each constituency, as has sometimes been suggested.

Inevitably, there will be minor overlaps. Again, the Electoral Commission already has guidance to this effect. That guidance notes that where a third party’s spending in one part of the UK has a minor effect in another part, the spending should be allocated to the part of the UK the spending was aimed at.

I give an example from existing PPERA provisions that are reflected in the commission’s guidance. If there were a major issue in Wales and a third party advertised in a Welsh newspaper that is also distributed or spills over—a minor spillover—into part of, say, Shropshire, then the entire spending would be allocated to Wales because that is where the effect is intended. Of course, this exact same principle will apply to constituency limits. The areas are smaller, admittedly, but the principle is the same.

Third parties and the commission will be required to assess attribution of spending on a qualitative basis—as indeed they are required to do at present. I simply add that the constituency limits are also almost equal to the current £10,000 PPERA registration threshold for England. As the Electoral Commission already enforces this limit, I do not see that there is any merit in claims that the commission will have difficulty in enforcing £9,750. It is perhaps easier to identify £9,750 when it is spent in a single small area than £10,000 being spent across England.

The reason given why the Commons disagree with Amendment 26 is:

“Because a wider range of expenditure than it provides for should be included when attributing a third party’s expenditure to a particular constituency for the purposes of determining whether a limit on expenditure in that constituency has been exceeded”.

The amendment that we are debating today in the name of the noble and right reverend Lord, Lord Harries, addresses the reasons that the Commons have given. What we are left with are concerns about significant effect, which, as I have indicated, is in the Bill already, and an equal measure among the constituencies in which there has been a significant effect, which is also in the Bill. I also indicated that the extra part that the noble and right reverend Lord has added does not actually add to the clarity. This is appropriately a matter for the Electoral Commission to give guidance on. I do not think that there is then a huge amount between us. On the basis of that explanation, I ask the noble and right reverend Lord not to move his Motion and I beg to move.

Motion B1

Moved by Lord Harries of Pentregarth

As an amendment to Motion B, leave out from “House” to end and insert “do not insist on its Amendments 26 and 27 but do propose Amendment 26B in lieu.”

26B: Page 16, leave out lines 10 to 23 and insert—

“2A (1) For the purposes of this Schedule, “third party constituency expenditure” means controlled expenditure incurred by or on behalf of a third party.

(2) Third party constituency expenditure—

(a) shall be attributed to those constituencies in equal proportions, or

(b) shall be attributed solely to that constituency, as the case may be.

(3) For the purposes of sub-paragraph (1), the effects of third party constituency expenditure are wholly or substantially confined to any particular constituencies or constituency if—

(a) there is no significant effect in any other constituency or constituencies, and

(b) it can reasonably be inferred that the third party selected the relevant electors or households (or both) or otherwise distributed the material wholly or substantially to contact electors in the particular constituency or constituencies and not a wider section of the public.”

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

My Lords, as the noble and learned Lord has indicated, this amendment on constituency limits is a significant revision of the amendment passed by your Lordships but rejected by the Commons. It leaves out the first part of our previous amendment in order to meet the reasons for disagreement as stated on the Marshalled List—the Government’s wish to include a “wider range of expenditure” than was previously suggested.

As the noble and learned Lord said in the House at Report stage, he thought that public meetings and events should be brought within its scope. In leaving out the first part of our previous amendment, we have accepted, for the purposes of the Bill where it now is, that this is what the Government wish to do, without necessarily being fully persuaded by their arguments. We have therefore concentrated entirely in this revised amendment on trying to achieve greater clarity about how controlled expenditure could be attributed to a particular constituency.

Sub-paragraph (2) of the amendment states:

“Third party constituency expenditure … shall be attributed to those constituencies in equal proportions, or … shall be attributed solely to that constituency, as the case may be”.

I give as an example a campaign against a motorway extension that goes through three constituencies. On the basis of heading (a), the controlled expenditure would be split three ways in equal amounts. I give as another example a public meeting opposed to a new development. The development is taking place in a marginal constituency but the public meeting opposed to it is taking place just over the border in the next constituency. On the basis of heading (b), the controlled expenditure would be attributed to the marginal constituency because this is where the meeting was trying to influence voters. This amendment would in fact be a tightening up of the Bill. As the noble Baroness, Lady Mallalieu, pointed out on Report, the Bill as it now stands would enable the kind of public meeting that I have indicated to take place without being caught by the Bill, although the noble and learned Lord has now faced that one and suggested that it might. However, we believe that this part of the amendment would help the Government in trying to stop abuse.

The third part of our amendment states that,

“the effects of third party constituency expenditure are wholly or substantially confined to any particular constituencies or constituency if … there is no significant effect in any other constituency or constituencies, and … it can reasonably be inferred that the third party selected the relevant electors or households (or both) or otherwise distributed the material wholly or substantially to contact electors in the particular constituency or constituencies and not a wider section of the public”.

I take the noble and learned Lord’s point that if the House of Commons were able to accept this amendment, that sentence confining it simply to leaflets might need to be widened to other activities.

Under the example I have just given of a public meeting to oppose a buildingdevelopment, on the basis of sub-paragraph (3)(a), the controlled expenditure would be attributable only to the constituency in which the development was taking place, even though the meeting was in fact in a neighbouring constituency. That is because in the words of the clause there would be “no significant effect” in it. I give as another example one of the big agricultural shows that take place every year around the country. A number of campaigning groups during the regulated period take the opportunity to hold meetings and give out leaflets on controversial issues in farming methods, such as cruelty to animals, pesticides, badgers and hunting. They are high profile and huge numbers of people from the region or indeed the country who attend the show are given these leaflets. On the amendment that is before us today, that activity would not be caught by constituency regulation, although it would be still be controlled by national expenditure regulation. That is because, according to sub-paragraph (3)(b), it has to be shown that the material is substantially orientated towards electors in a particular constituency or number of constituencies. It is clear from that example that the campaigners did not have a particular constituency or constituencies in mind. Their expenditure would count nationally but not in relation to any one or more constituencies.

This is a common-sense amendment that makes it much clearer for campaigners and better enables them to judge which expenditure will count towards constituency limits and which will not. The noble and learned Lord has suggested that this can be dealt with easily by guidance from the Electoral Commission, but the campaigning groups were quite uncertain about this area. They believe that it needs to be in the Bill so that they can be crystal clear about what activities will be drawn within the scope of the regulation on constituency limits. For the same reason it will make it much easier for the Electoral Commission to monitor and enforce.

This limited amendment makes it harder to abuse the electoral process, meeting the Government’s main objective, and makes it easier for campaigners to stay within the rules and to know that they are doing so. I beg to move.

Photo of Lord Tyler Lord Tyler Liberal Democrat 3:30 pm, 28th January 2014

My Lords, I regret the position that we seem to have reached now on constituency limits. Your Lordships’ House may recall that I proposed a very simple amendment on this issue in Committee and on Report. I suggested then that only election materials directed at electors or households in particular constituencies, or telephone calls to electors in those constituencies, should count under the specific constituency limit. That was very simple.

The Government argued that that approach was too simple and excluded too much activity, particularly the potential for handing out leaflets in a town square. The noble and right reverend Lord, Lord Harries, has been diligent in attempting to deal with that problem, but I think that in the process we have been sent round in a circle. Sending information to a household is an easy test, because it is easy to know where a household is and therefore in which constituency its occupants are likely to vote. However, handing out information in a public place is different, as has been indicated, because people move around and could be from all sorts of different constituencies.

In the amendment in the name of the noble and right reverend Lord, Lord Harries, we are faced with a further test: can it reasonably be inferred that the third party selected the relevant electors or households, or both, or otherwise distributed the material wholly or substantially to contact electors in the particular constituency or constituencies and not a wider section of the public? In other words, did the organisation, in doing what it was doing, mean to do it? That is quite a difficult question for anyone to answer, let alone the Electoral Commission. I am still not convinced by that and I am particularly not convinced about it in relation to election materials that are sent to households. It is perfectly clear that such materials would be constituency campaigning, and no extra test should need to be applied for such campaigning to count under a constituency limit. So this is a muddle.

The Bill as it stands says that,

“the effects of controlled expenditure are wholly or substantially confined to any particular constituencies or constituency if they have no significant effects in any other constituency or constituencies”.

I had hoped that the issue of so-called “significant effects” could be done away with—it is extremely difficult to adjudicate on that—but neither the amendment nor the Government’s position appears to do so. The amendment adds the additional test I referred to just now, and I certainly do not think that it helps in terms of clarity and transparency.

I want to put on record again my continuing concern that in raising the threshold for registration, which was welcome on a national basis, we have got ourselves into a further muddle on the application of constituency limits. This is a classic case of unintended consequences resulting from a late-stage concession.

Mr Andrew Lansley, the Leader of the Commons, put this very clearly in the other place just last week:

“Campaigners may now spend the entire constituency limit of £9,750 at any time during the regulated period, or just in the last few weeks before the election if they so wish. That makes it less restrictive and easier to comply with”.—[Hansard, Commons, 22/1/14; col. 352.]

What he did not acknowledge is that campaigners who are spending entirely in just one or two English constituencies could still spend up to just below that limit—£9,749.99—in each of the two constituencies and not even register because the threshold is £20,000.

A trade union, a maverick millionaire with an anti-European bee in his bonnet or, even, another group wanting to influence the outcome in a marginal constituency could spend serious money without anybody knowing until it was too late. So much for transparency and accountability. Under the radar, such intervention could take place without either the amount spent or who paid for it being disclosed. That remains a mistake, an unfortunate loophole weakening these measures in the Bill.

At Third Reading, I set out a simple way in which to improve the position so that those campaigning in one or two constituencies would have to register at £5,000 or, if that was thought to be too low, at least at a lower figure than the £9,750 spending limit. That would have made for the continuum that I described in that debate, where registration occurs at point X and the limit on spending occurs at point Y. The Electoral Commission, on whose advice we have to rely in matters of this sort, specifically advised that X and Y should not be in the same place, and I very much regret that the Ministers in both Houses have not been able to address that point.

These issues can really now only be dealt with in guidance from the Electoral Commission, and I wish it luck with that. As my noble and learned friend Lord Wallace of Tankerness said earlier, we look forward to some very substantial round-table discussions, and I hope I may be able to play a small part in them because I think this is an extremely important issue.

The introduction of a constituency limit on non-party expenditure is an extremely important principle, and really the most important measure in Part 2. I am sure Members of the other place, when they are faced with very considerable sums of money being invested in trying to unseat them, will agree with that. I welcome it for the fact that it is here in the Bill, even though I think there were two improvements that could still have been made to it. I believe those issues will now be central to the post-legislative review of the Bill after the 2015 election. I look forward to that review.

Photo of Lord Cormack Lord Cormack Conservative

My Lords, this is a case of confusion worse confounded, so I am very much in sympathy with the points made by my noble friend Lord Tyler in that respect. I thank my noble and learned friend Lord Wallace of Tankerness. He has been exemplary in the way that he has sought to respond and consult, but he has been in a bit of a straitjacket for two reasons.

First, as has been said so often during the course of this Bill, if ever a Bill needed pre-legislative scrutiny it was this one, but it did not get it. That decision was taken probably at a pay grade above that of my noble and learned friend Lord Wallace of Tankerness, but it was a mistaken decision.

The other problem that we face, and here I make a plea to the Minister, is that we passed these amendments in this House last week and within 24 hours they were reversed in another place. That is no way to treat your Lordships’ House. There should have been wider consultation and discussion. Clearly, my noble and learned friend Lord Wallace of Tankerness had fruitful, although not totally successful, discussions with the noble and right reverend Lord, Lord Harries. For that we should all be grateful, because the noble and right reverend Lord did so much with his commission and in other ways to try to improve this Bill. However, those discussions, however well meant and however protracted, were not enough. There should have been a proper opportunity for real discussion before we had to face the answer from the other end of the corridor. This is no way to treat your Lordships’ House.

As far as this particular series of amendments is concerned, we now have to rely on those round-table discussions. I am glad that the Minister felt that that was a useful suggestion and am grateful to him for acting on it and discussing it with the Electoral Commission already. I hope that those discussions will take place and that they will take place soon, but that they will not be rushed, because this is an extremely complex and difficult situation.

I know very well why the Minister said what he said this afternoon, and I also understand the argument elegantly put by my noble friend Lord Tyler. This is complex. All of us who have stood for election to the other place, or indeed for election to local councils, know that the distribution of leaflets is an inexact science. When you are doing it outside a shopping centre or a railway station or other places where people congregate, you have no idea to whom you are giving the leaflets and which constituency they come from. You have a rough idea that most of them may come from your own constituency, but many of them will not.

Let us have these discussions. Let us hope that they are fruitful. Let us hope that they can build upon the imperfect base that this Bill provides for them. Therefore, let us move on this afternoon.

Photo of Baroness Mallalieu Baroness Mallalieu Labour

My Lords, I rise briefly to support the amendment of the noble and right reverend Lord, Lord Harries. This amendment is plainly a compromise. It does not frustrate the intention of the Government to impose strict constituency limits. That is accepted in the amendment. It responds to the concerns of Ministers both here and in the other place that not all activity had been regulated; now it is. It meets exactly the objection of the Commons. It now includes campaigning activities of all kinds that are clearly targeted at a particularly constituency or constituencies to influence voters.

Above all, the amendment has the merit of clarity for the campaigners themselves, is more practical and is more readily enforceable. I employ, if not the exact words then the spirit, of the wise advice of the noble Baroness, Lady Williams of Crosby, at an earlier stage, that we should not reject an improvement in pursuit of perfection. There can be no perfection in this Bill because it has been conducted at such speed. However, this is a simple improvement that I hope that this House will insist 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, I will first echo the point made by the noble Lord, Lord Cormack, that it took just 24 hours to reject the advice of this House and of the voluntary sector. I understand that, anticipating another victory today, they are going to do the same tomorrow. They do not seem to take your Lordships’ House too seriously. It also means, of course, that we have not had the opportunity to hear from the Electoral Commission about the new position—although we have heard from the voluntary sector, who remain deeply concerned about the Government position on this.

Just yesterday the Government had another blitz on red tape, boasting how they were removing unnecessary shackles from a number of bodies. Last week, the Government published their Deregulation Bill, which will get its Second Reading in the other place on Monday. Therefore, on the one hand all this red tape is being lifted off organisations, and yet on the other we have here something that will tie up charities, churches, women’s groups, young people’s movements and green campaigners in completely unnecessary red tape and complicated accounting. It is not that simple.

The problem with constituency limits is not their aim but their workability. The third sector does not organise by constituency—it does not even know most of the constituency borders. It focuses on things like HS2, Heathrow or badger setts. Therefore, it is a bit of accounting and bureaucratic red tape to ask those organisations to do their accounts in a completely different, geographical way—not according to where their staff work or their pay grades, but based on whether they might have happened to spend a bit of time campaigning on something which then became a political issue, either because a party did or did not like it. If the Government cannot understand that, it is only because they have not run those organisations.

I will repeat one more thing that I said earlier. The Electoral Commission has said that these rules may not be enforceable in the timescale of an election. Motion B1, which proposes Amendment 26B—which, as the noble and right reverend Lord, Lord Harries, said, would restrict the requirements simply to campaigning that is clearly directed at particular electors—is surely a better way forward than the Government’s way. The noble and learned Lord gave the example of an ad, but that is not the point. Ads are easy; they are like printing things—you know where they will be. Getting a bit of one campaigner’s time, or getting someone who may have helped organise a photo shoot, is what is being asked for, and that is the difficulty.

It is extra bureaucracy and it is the reason why an organisation such as the National Federation of Women’s Institutes has written to all of us, proud of its 99-year history of non-sectarian, non-party political campaigning on issues that matter to women of all ages. It is worried about the Government’s position on this. It says—and its members are not dumb; they have read the Bill carefully—that the,

“Bill and its impact matters greatly to our members, especially as we hope to continue our proud tradition of campaigning into our 100th year in 2015”.

We need to agree this Motion and the following one on staff costs. If we agree them, we hope that the Government will not just take until tomorrow to tell us to think again. Finally, the Government’s rejection of this is not worthy of a Government who profess to believe in the big society.

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 3:45 pm, 28th January 2014

My Lords, I thank noble Lords who have taken part in this debate. To those who mentioned that the House of Commons considered your Lordships’ amendments within 24 hours, I point out that it accepted 94 out of 97 amendments, which shows the considerable changes that this House made to the Bill. All bar three of the changes—or four, if you include the small technical one—were accepted by the other place.

My noble friend Lord Tyler spoke again on the constituency limit of £9,750. As I said last week—and I recognise his strength of feeling on this—a balance needed to be struck with attempts to remove some of the administrative burdens that the noble Baroness, Lady Hayter, talked about. That is why we decided to raise the limit to £9,750 for the period from dissolution to polling day. It was originally about £5,000. That was intended to help many groups.

I turn to the amendment spoken to by the noble and right reverend Lord, Lord Harries. First, I generously acknowledge that his amendment seeks to address the reasons that the Commons gave for not agreeing to the amendment carried at Third Reading last week. That is very important, because it means that we are now looking at some of the detail. In moving the Motion that proposes the amendment, the noble and right reverend Lord talked about the importance of trying to get greater clarity. First, he focused on the fact that proposed new paragraph 2A(2) in his amendment says:

“Third party constituency expenditure—(a) shall be attributed to those constituencies in equal proportions, or (b) shall be attributed solely to that constituency, as the case may be.

The Bill, as brought to your Lordships’ House, says at new paragraph 2A(2) in Clause 28(5):

“Controlled expenditure whose effects are wholly or substantially confined to any particular constituencies or constituency—(a) shall be attributed to those constituencies in equal proportions, or (b) shall be attributed solely to that constituency, as the case may be”.

With regard to (a) and (b), the words are exactly the same. They are already there in the Bill.

The noble and right reverend Lord then gave the good example of agriculture shows where leaflets of a generic nature on a particular campaigning issue are distributed. He said that that should not be attributed to a particular constituency just because the show field happened to be in that constituency, as the show brought in people from a wide area. I know exactly the kind of event that he is talking about and his example is a good one. I do not think that it is intended that that should be seen as a narrow constituency issue. He said that, to address that, Amendment 26B states:

“For the purposes of sub-paragraph (1), the effects of third party constituency expenditure are wholly or substantially confined to any particular constituencies or constituency if—(a) there is no significant effect in any other constituency or constituencies”.

The Bill as brought to your Lordships’ House says:

“For the purposes of sub-paragraph (2)”— the numbering is different—

“the effects of controlled expenditure are wholly or substantially confined to any particular constituencies or constituency if they have no significant effects in any other constituency or constituencies”.

Again, the words are almost exactly the same. The only real difference between what the noble and right reverend Lord is proposing and what the Government already have in the Bill is in proposed new paragraph 2A(3)(b) in the amendment, which says that,

“it can reasonably be inferred that the third party selected the relevant electors or households”.

That might be relevant in terms of written material, but it is difficult to see its relevance in other things such as transport or media events—press conferences or rallies.

Therefore, the words are almost identical bar that one example and, like my noble friend Lord Tyler, I do not honestly believe that the noble and right reverend Lord’s amendment provides added clarity. In fact, I think it is less clear with that additional paragraph. The Electoral Commission is the body charged with giving guidance and it will seek to give guidance, as it has already had to do, in terms of the national distribution of expenditure. The difference in the wording is very small, but I fear that what the noble and right reverend Lord has put forward does not add clarity—it makes it less clear—and the other parts of his amendment are already in the Bill. On that basis, I ask him not to insist on the amendment.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

My Lords, I thank the noble and learned Lord for his words and welcome the idea of a round-table conference where some of the issues raised by the noble Lord, Lord Tyler, can be addressed. There seems to be no substantial difference between us, except for the fact that it did not seem at all clear to charities and campaigning groups that what was involved in their campaigning at constituency level was already in the Bill. The noble Lord suggested that a combination of what is already in the Bill and much more detailed and careful guidance from the Electoral Commission will meet the point. However, campaigning groups and the Electoral Commission would generally welcome something along the lines I have suggested being firmly in the Bill. This would make it absolutely clear what is allowable and what does or does not come within the scope of the Bill. I therefore feel I should test the opinion of the House.

Division on Motion B1

Contents 231; Not-Contents 249.

Motion B1 disagreed.

Division number 1 Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill — Commons Reasons and Amendments

Aye: 229 Members of the House of Lords

No: 247 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Motion B agreed.

Motion C

Moved by Lord Wallace of Tankerness

That this House do not insist on its Amendment 108 to which the Commons have disagreed for their Reason 108A.

Lords Amendment 108: Schedule 3, page 57, line 14, at end insert—

“Exclusions of background staff costs

1A 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.”

COMMONS DISAGREEMENT AND REASON

The Commons disagree to Lords Amendment No 108 for the following reason—

108A:Because a third party’s expenditure on staff should not be excluded from the definition of “controlled expenditure” for the purposes of Part 6 of the Political Parties, Elections and Referendums Act 2000.

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 4:09 pm, 28th January 2014

My Lords, third parties are by their very nature individuals or organisations who may undertake a main function, be it raising awareness of environmental issues, workers’ rights, animal rights or electoral reform, or who are set up for the purpose of campaigning in election. It is because third parties do not fight elections themselves, but seek to participate in them, often alongside another main function, that the regulatory regime for third parties relates to the activities they undertake. Where a third party’s activities,

“can reasonably be regarded as intended to promote or procure the electoral success of a party or candidate”,

this is regulated. The Electoral Commission guidance says that the full costs of any activity should be included, including expenditure on staff costs. This is to ensure that activities that seek to influence the votes of electors are transparent. This is a fundamental principle of our democracy.

The noble and right reverend Lord, Lord Harries, stated on Report:

“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”.—[Hansard, 15/1/14; col. 279.]

That statement raises important issues which go to the heart of the Government's belief that as a matter of principle staff costs should be included within the calculation of controlled expenditure. However, we do agree with the noble and right reverend Lord that third parties should not have to account for every small or insignificant amount of staff time. The amendment that noble Lords passed on Report has as its heading, “Exclusions of background staff costs”. I understand and recognise that particular concern. Indeed, the conversation that I had with the noble and right reverend Lord made it very clear where his concerns were. There should not be an accounting for every small or insignificant amount of staff time.

Campaigners, as well as noble Lords in debates in this House, have raised concerns over how a third party would be able to calculate these costs. The Electoral Commission, in its guidance, outlines that third parties should provide an honest assessment. It is important to stress this because I think this is where some of the concern comes from. That does not mean that staff have to keep timesheets, for example, of five-minute breakdowns of how their time was spent, nor has the regime around staff costs operated on this basis for the past two general elections. Under PPERA, staff costs associated with election materials have had to be accounted for. Neither the legislation, nor the guidance from the Electoral Commission, has even suggested that that kind of detailed breakdown of how time is spent is required of third parties.

An honest assessment must be made and this should not be burdensome for third parties. I will use the example that the noble and right reverend Lord, Lord Harries, used on Report. If a third party employee spends 10 per cent of his or her time over a four-week period on election activity, and has an annual salary of £30,000, that is divided by the weeks in the year, which provides a figure of £577 a week. If we multiply that by four, we get a figure of £2,308, 10 per cent of which is approximately £230.

There is nothing in PPERA, nor in this Bill, that suggests that every small or insignificant amount of staff time must be accounted for such as the few hours a member of staff otherwise not involved in the campaign spent proofreading a document, or directing attendees to an event. It must involve expenditure—whether because a person was employed for a specific task, or because the extent to which a person was diverted from their normal duties was sufficient to constitute some additional cost.

That leads me to my second point. The amendment of the noble and right reverend Lord, Lord Harries, appears to accept the principle of including staff costs; his amendment excludes the calculation of staff costs from certain activities—public rallies, organised media events and transport. However, third parties would still have to account for staff time where it formed part of the controlled expenditure for items such as election materials or canvassing.

I ask noble Lords to consider and reflect that if it is deemed reasonable and possible to calculate and include the cost of an in-house designer spending 10% of their time over a four-week period designing an election leaflet, why is it not reasonable and possible to calculate a communications officer spending 10% of their time over a four-week period organising press conferences or a public event? The answer is that it is not unreasonable, and it is not an overly burdensome requirement, to ask third parties to make such an honest assessment.

The final point I would like to highlight to noble Lords regards the statutory review period provided for by the Bill. The review will carry out a comprehensive assessment of the operation of the Bill as it operates during the 2015 general election. It will then make recommendations on how the regulatory regime for third parties may be improved. Surely we want the review to have available to it all the necessary information as to how the third party regulatory regime operates. While it is true to say that both the Electoral Commission and the Political and Constitutional Reform Select Committee in the House of Commons argue that staff costs should be excluded for the 2015 general election, they both support the principle of staff costs being included. In light of this, the Government would argue that we should include staff costs for all controlled expenditure activity and let the review look at the evidence of how this regime operates during the 2015 general election. We will then have the fullest evidence base on which we can make sensible judgments for the future.

In the debates on this Bill, no evidence has been provided that third-party campaigners cannot undertake this task; indeed, the evidence of the last two general elections clearly suggests that it has not been a problem to calculate these costs in respect of these two elections. If we are talking about having to do a five-minute timesheet, that is clearly not a burden that we want to impose on campaigning organisations. However, I think that the idea that the Electoral Commission has worked out for assessment—it has had to do this over the past two general elections—is the right one. I think I have mentioned before in general terms that the Government looked at bringing forward a de minimis exemption or exclusion of staffing costs. One text that we looked at said:

“Expenses incurred in respect of time spent by a member of the third-party staff—whether permanent or otherwise—on a matter listed in paragraph 1, where the total time spent by the member on the matter can reasonably be regarded as insignificant”.

I thought that if we had tabled that one, we would have just opened up another debate about what could reasonably be regarded as insignificant.

The proposal that has been put forward reflecting the way the Electoral Commission has operated is a sensible one. I emphasise that with the increased registration thresholds, small organisations will almost certainly be exempt from the regime. It is only when they are spending £20,000 in England that controlled expenditure kicks in. It is a threshold which shows serious intent to become involved in the election in a way which will be to the benefit of, or could reasonably be considered to be promoting, a particular candidate or party. Volunteer time will continue to be excluded.

I do not believe that the noble and right reverend Lord, Lord Harries, really intends the situation to arise that seconding a member of staff to run a series of rallies over the period of an election or hiring a particular member of staff for a year—or in this case, seven and a half months for the controlled election period—should not count. I accept that he is trying to cover what he describes as “background staff costs”. Unfortunately, the way his amendment is drafted would allow staff costs for someone who was actually seconded to a particular campaign or was hired for the purpose of running a whole series of rallies to be brought within the definition of controlled expenditure. I therefore do not believe that that would lead to increased transparency, so, in these circumstances, I beg to move.

Motion C1

Moved by Lord Harries of Pentregarth

As an Amendment to Motion C, leave out from “House” to end and insert “do insist on its Amendment 108”.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench 4:15 pm, 28th January 2014

My Lords, as the noble and learned Lord has indicated, this is about the exclusion of background staff costs from regulated expenditure. First, let me emphasise that campaigning groups fully support the idea of a wider range of activities being brought within the scope of regulation than were originally in PPERA. They fully support this in the interests of greater transparency. This range of activities is set out in proposed Schedule 8A of PPERA, which refers to material being made available to the public, such as leaflets, canvassing and market research, press conferences and media events, transport costs, rallies and public events. The amendment before us reads:

“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”.

The reference is only to sub-paragraphs (3) to (5) of the controlled activities referred to in Schedule 8A of PPERA—that is, to press conferences and media events, transport, rallies and public events. It would mean that background costs in relation to those events would not count as controlled expenditure. Let me stress that the cost of the events themselves would count—the cost of the hall, for example, or the cost of any canvassing, or the cost of transport or market research. What would not count would be the background costs, which are the occasional phone calls or e-mails in the course of a working day that might be connected with such events.

The Government gave no reason for their rejection of our original amendment, but just reiterated that all staff costs should be included. The amendment is not about the amount of money that could count towards controlled expenditure, it is about burdensome, unenforceable regulation. Indeed, the Electoral Commission has repeatedly emphasised that aspect and recommended that no staff costs should count towards controlled expenditure in 2015—after which, of course, the whole issue of controlled expenditure could be looked at again in the light of real experience rather than hypothetical threats.

The noble and learned Lord suggested that there had been no real problem in the previous two elections for campaigning groups or the Electoral Commission in trying to ascertain what those background staff costs were. I suggest that, in fact, people were not really aware of the regulations during the two previous elections; they have only just woken up to them. It is very dangerous to use the example of the two previous elections as a guide to what should happen at the next one.

The Government have indeed made some changes to the bad Bill that first came before this House, but these changes do not make the process of identifying and accounting for staff costs any easier. The Bill very significantly reduces total spending limits by 60% in England. Introducing a wide range of additional staff costs at the same time in effect makes the spending limits even tighter. That is not a problem for smaller charities or campaigning groups; they will not reach the registration threshold. We are grateful that the Government have raised the threshold so that they will not come into it.

However, in addition to those smaller groups there are the big groups, such as Hope not Hate, and coalitions of charities and campaigning groups, such as Stop Climate Chaos. They are very concerned about that aspect of the Bill. I remind the House that all that campaigning potentially comes within the scope of the Bill, even if it is not particularly directed towards any particular party or candidate, because of the subsections to Clause 26 which provide that you do not have to mention the name of the party and it does not have to be your first intention, but you can still be reasonably interpreted as being biased towards one party or another. Any campaigning by those big organisations becomes problematical under the Bill.

The Government recently announced proudly that they were doing away with about 800 regulations for small businesses, but here they are imposing a huge regulatory burden on campaigning groups, groups which are now so fundamental to the effective working of our democratic process. Do the Government seriously expect charities and other groups campaigning now to log every phone call and e-mail concerned with organising a particular public event separately from all other calls and e-mails and then try to calculate what they cost?

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

The noble and right reverend Lord asks whether the Government mean for every phone call to be logged. When I was moving the Motion, I said that we do not expect a five-minute timesheet to be ticked off. That is not what is anticipated—nor, indeed, what has happened among the number of organisations which indeed registered in 2005 and 2010.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

I was aware of the noble and learned Lord’s point, and I was going to come to it. I take that point—he said quite unequivocally that he did not expect campaigning groups to log all those small items—but the fact is that they are expected under the Bill to take staff costs into account. That is what the Bill states. If they are expected under the Bill to take staff costs into account, presumably they are expected in some way to provide a note of what those costs are. They have to go about that in one way or another, and that involves a lot of scrutinising of the cost of what they do and adding it up.

This is a bureaucratic nightmare. It is no accident that the Electoral Commission is reluctant to support the Bill on this particular issue. It is no wonder that political parties have resisted taking staff costs into their accounts for this very reason of complexity.

This amendment does not have any bearing on the situation about which some politicians have expressed concern, in which a third party may want to second staff to work for a party or a candidate. That is not a situation regulated by third-party rules. Such costs would either count towards a party’s spending limit or a candidate’s spending limit, depending on the timing and nature of the secondment. Ensuring appropriate enforcement, rather than changing the rules, is the appropriate response to such concerns.

This amendment does nothing to frustrate the Government’s purpose of trying to prevent big spenders from distorting elections through third-party campaigns, and it is one that matters very much to charities and campaigning groups, because of the regulatory burden. I beg to move.

Photo of Lord Tyler Lord Tyler Liberal Democrat

My Lords, on this final group of Commons disagreements, I am much more at one with the noble and right reverend Lord, Lord Harries, and much more dispirited that the Government have not been able to move on this issue. Again, it does seem a relatively minor difference between what the noble and right reverend Lord has been suggesting and what my noble and learned friend has been saying about the way the Bill is intended to be explained and implemented by the Electoral Commission.

The noble and right reverend Lord, Lord Harries, and his assiduous commission originally suggested that no staff costs should be included in election expense returns submitted by non-party campaigners. I did not agree with that and I do not now, since some of those costs—for example, in relation to producing and distributing election material—are significant. I think we are all at one on that now, and they could be very significant in particular circumstances. Those costs are already regulated under the Labour Government’s Political Parties, Elections and Referendums Act 2000, and rightly so. Non-party organisations have had to account for those in both the 2005 and the 2010 general elections.

Staff costs in relation to canvassing could also be very relevant to election outcomes in particular circumstances. Clearly paying people to canvass in a way that could promote or procure the electoral success of a party or candidate is significant. The amendment therefore seeks to exclude staffing costs from consideration only when it comes to organising press conferences and rallies and in relation to transport, as the noble and right reverend Lord, Lord Harries, has said. I do not know if my noble and learned friend can give adequate reassurance now on those points. I heard what he said just now, but I hope he may be able to go into some greater detail about the guidance that will be given to campaigners. Perhaps he can say that despite what the Bill says, somehow the incidental costs of someone travelling to a rally or booking the room for a press conference will not be included. However, I do not see where the de minimis provision is in the Bill. How will the Electoral Commission guidance deal with this level of detailed accountancy and audit?

Photo of Lord Rooker Lord Rooker Labour

On that point, bearing in mind that if people are campaigning there must be an opposing view, what is to stop a fourth party in an election demanding of the campaigning group all the detail of its expenditure, if there is nothing in the legislation prevent it? There is no de minimis, as the noble Lord rightly says. What is to stop the trouble-maker who is opposed to the third party campaigning from forcing that issue on to the third-party group? There is nothing in the legislation. Surely guidance cannot deal with that.

Photo of Lord Tyler Lord Tyler Liberal Democrat

I understand the point that the noble Lord is making, and I think he shares my anxiety that, at this very late stage, there is not a clear indication of how that might happen. As he will know better than me having contested even more elections than I have, and with greater success of course—I had a few at council level that were more successful—in the heat of a campaign it is going to be very difficult for any organisation to adjudicate on these matters, be it the Electoral Commission or anyone else. I am afraid that this is a fact of life. It is one of the reasons that I referred to some problems that will undoubtedly occur at the latter stage of an election campaign. I am not sure whether the noble Lord was in his usual place then.

If there is a simple answer to this apparently minor problem, then it begs the question of why we are having such a big argument today with those who are publishing full-page newspaper advertisements on this subject. That is very curious indeed. If there is not a clear answer, then it still must be a legitimate concern of legitimate campaigners. Even now, a little movement on the Government’s side could significantly reassure campaigners while not in any way undermining the purpose of the Bill. I therefore look forward to hearing my noble and learned friend the Minister’s response to this short debate.

In the mean time, I must observe in conclusion that anyone who still refers to this Bill as a “gagging Bill” must surely have ignored all the improvements that have been made to it, not least by my noble friends on the Front Bench and, if I may say so, by the noble and right reverend Lord, Lord Harries, and his commission. There are also the improvements that have been made by your Lordships’ House. If being required in the interests of transparency and accountability to demonstrate whether, along with an intention to promote or procure the electoral success of a candidate or party, you are spending a substantial sum of money is still thought to be gagging you, then we may well ask, “What are you trying to hide?”.

I regret very much that we have reached this stage and that there is still some confusion on this relatively minor issue, but I look forward with interest to hearing my noble and learned friend’s response.

Photo of Baroness Mallalieu Baroness Mallalieu Labour 4:30 pm, 28th January 2014

My Lords, I support Motion C1 in the name of the noble and right reverend Lord. Of all the matters raised in relation to the Bill, this is the one which many of the charities and campaigning organisations which gave evidence before the Harries commission raised as the most important for them. It was the one about which, above all, they felt most strongly and they most earnestly wanted to see it changed. For campaigning organisations this is the single most important amendment, whether they are charities or not.

As they see it, this is a bureaucratic nightmare. It is a burden which we are seeking to impose and which they really have no way of defining accurately. How are they to separate regulated and unregulated staff time? The Minister has said that he does not want timesheets kept and that all that he is suggesting is an honest assessment. But what is the difference between an honest assessment, a rough calculation and an edited guess or, quite frankly, thinking of a figure? Where is the dividing line to be drawn and how can we land the Electoral Commission with the job of trying to do that? We are about to produce something which is wholly unenforceable and which the Electoral Commission itself believes should not apply for the 2015 election, after which there will be a proper review and a look at the whole question of staff costs, for both political parties and campaigning organisations. I strongly support our resistance to attempts to land people with a load of rubbish.

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

My Lords, I, too, regret the fact that the Government felt unable to accept the exclusion of staffing costs from the Bill because I believe it to be a very important part of what charities are all about. I recognise that my noble and learned friend has done his very best to try to shorten the gap between us. However, I have a particular question for him because many charities are sustained by the work of elderly volunteers. I think all of us who go to charity shops are conscious that much of the work being done is done by them. Not only is the work done by them; their lives are substantially enriched by their involvement and commitment to a particular charity, which may well be a relatively local one.

If a volunteer of that kind or a part-time worker has expenses which they can then ask the charity to meet—for example, for meals, transport and so forth—I am not clear whether this amendment, or indeed the Bill, will catch it. I raise that point because I honestly do not know the answer and because the issue here is not just one of bureaucracy. There is also that of the very real contribution which working for charities and campaigning groups makes to the happiness and good life of many of our fellow citizens.

Photo of Lord Horam Lord Horam Conservative

My Lords, I will answer directly the point made by the noble and right reverend Lord, Lord Harries, and the noble Baroness, Lady Mallalieu, on the question of regulation: the degree of regulation and degree of bureaucracy. That was the main burden of both their comments.

I declare once again that I am a member of the Electoral Commission. I do not speak on behalf of the Electoral Commission; I speak for myself. However,

I am a member of the commission and therefore have some awareness of the sort of arguments that have taken place.

I remind the noble Lords that, as regards the level of regulation and bureaucracy, the Electoral Commission has already recommended that, in principle, all staff costs should be taken into account: for non-party campaigning groups, for political parties, for charities and for all groups. They should have all their staff costs taken into account in any future general election. That is the position of the commission.

It is not a popular position. The parties do not like it; the charities, obviously, do not like it; but the Electoral Commission believes that is right and in the interests of a fair election process, where financial forces on both sides are evenly balanced and there is transparency about what financial support each particular group may have. That is the position in principle. Therefore, it cannot be said that the Electoral Commission sees any difficulty in practice or in principle in looking at the whole of staff costs, because it has said that it supports including the lot.

Therefore, we are really arguing only about the next general election. Originally, as all noble Lords will remember, the point was that under the Bill, the regulated period was going to start in May of this year. At that point, the Electoral Commission said, “This is too soon. If we are going to have to deal with all this extra detail, the charities will have difficulty in doing so—and so will the Electoral Commission”. That is the springboard from which the commission made its position plain; that there would perhaps be practical difficulties in doing it for this general election.

Since then, of course, the Government have changed their position. We are now talking about a much reduced regulatory period of seven and a half months. We are talking about the whole of the summer—the spring and the summer and the early autumn—when it is possible for the charities to look at this, if they are regulated, and to come to some conclusion. That dramatically changes the position. Although the Electoral Commission, as the noble and right reverend Lord, Lord Harries, fairly pointed out, still has some reservations about the next general election, it says in its latest advice that the amendment of the noble and right reverend Lord, Lord Harries, has only some advantages over the Government’s. That is fairly constrained language. It is a question of either/or, and it is not a very strong recommendation in favour of one or the other; it is saying that there are some advantages to the Harries amendment over the Government’s present position. It is not a big sell, in other words. So we should look at it sensibly and practically from that point of view.

In addition, as the Minister said, what we are looking for here in 2015 is, first, an honest assessment of the position. No one is looking at excessive detail, because excessive detail cannot be provided and probably cannot be checked, as the noble Lord, Lord Tyler, pointed out, on the timescale we are talking about in the middle of the general election. Lots of things are in practice unenforceable—even now, under the electoral arrangements we have at the moment—in the timescale of a general election. We are looking at an honest assessment. Thereafter, the review, which has to take place under the Bill, or under the Act as it may be, can look at what actually happened in this general election as a guide to future general elections. So in all those ways, the Government’s position is still strong and is worth supporting.

I will make a final point that was made in a previous debate by the noble Lord, Lord Martin of Springburn, who I am glad to see in the Chamber this evening. This is about the process of a general election, where the main players are the candidates, and the financial support they have is limited by Acts of Parliament. We know that political parties have a clear limit on what they can spend. Equally, there should be a clear limit and transparency about non-party campaigning. The candidates and the parties are the main players in the general election, not charities. The charities should be able to have their say, but the system should be regulated and transparent. I think that that is the Government’s position.

In those circumstances, given the Electoral Commission’s position on regulating non-party campaigning, which it is clearly in favour of in principle, and given that it does not see any undue practical problems, given proper time, perhaps the noble and right reverend Lord, Lord Harries, should think again about pressing his amendment.

Photo of Baroness Howarth of Breckland Baroness Howarth of Breckland Crossbench

My Lords, may I ask a simple, pragmatic question? Bearing in mind the calculations that the Minister demonstrated earlier, and what he said about various e-mails and telephone calls not being taken into account, could he give some indication, in order to help the charities, of how rough an estimate will do?

Photo of Lord Walton of Detchant Lord Walton of Detchant Crossbench

My Lords, I have not spoken previously on the Bill, but in the course of my professional career I have had the privilege of being associated with a large number of medical charities of which I am still president, vice-president, patron or vice-patron, covering a wide range of topics of relevance to human health. Having said that, they are at one in expressing concern about the provisions of the Bill, and in supporting the amendment tabled by my noble and right reverend friend Lord Harries, for the reasons that he has given today.

This morning, when I arrived at your Lordships’ House and went into the Attendants’ Office, to my great surprise I found a copy of the Daily Telegraph pushed into my docket. I could not imagine what it was there for until I looked through the pages, and there was a whole-page advertisement, sponsored by a vast range of charitable bodies, all seeking support for his amendment because of their concerns about their ability to function and to serve the population in which they are interested to the best of their ability. For that reason, I strongly support the amendment.

Photo of Lord Martin of Springburn Lord Martin of Springburn Crossbench

My Lords, let me say briefly that I have the highest regard for the charities in the United Kingdom, but I also have a deep concern about how general elections and constituency elections are fought. My worry is about the single-issue organisations that can be created. Some charities go back 100 or 150 years, but a single-issue organisation could be created this evening with the aim of undermining a candidate in a constituency.

As was mentioned last time, there might be a legitimate argument about saving a hospital. However, I can point to the fact that, in one of the English constituencies, a government Minister was defeated by a candidate who was fighting on a “Save the hospital” campaign. I have no argument against that candidate, who did the legitimate thing by standing, getting enough assenters for a nomination form and nailing his colours to the mast in saying, “I am the candidate fighting against the hospital closure”.

That is one thing, but if you get a single-issue organisation that starts up a year before a general election —bear in mind that we know the date of that election—then that is something unique. Such organisations can say, “Right, we’ll get a campaign started within a constituency”, and they can spend more money than any individual candidate. A noble Lord says that that is not true, but they can. They could spend perhaps £16,000. When I stood for re-election as Mr Speaker, my memory is that I could spend £12,000, but they could spend more.

Okay, we live in a democracy, but if a single-issue organisation is on the go, we are entitled to ask that it give an account of how it spends its money and where it gets its money from—that is also important. If the organisation is campaigning on, say, a hospital issue, it is allowed to canvass, to go on the doorsteps and to arrange press conferences, rallies and all the rest of it. When Parliament is dissolved, it might say, “We have a good case for putting up a candidate”. If in those circumstances it goes from being a single-issue organisation to putting up a candidate, it could have spent far more than any single candidate.

We are talking about what is, often, power without responsibility. I cling to the argument about hospitals. If a Conservative candidate says, “I want to save the hospital”, the question that will be posed to that candidate is, “Well, what other hospital in the area will you close down?”, because the budget will not support every hospital in the area. A single-issue organisation has the power but not the responsibility. Okay, I agree that we live in a democracy, but it is not rocket science to record how many phone calls were made or how many canvassers were put out, particularly in these days of electronic systems.

I give to charities like anyone else, but once some of them have your name they soon know how to get it on the record and make sure that you get a circular every month—it can be “Dear Michael” or “Dear Lord Martin” or whatever suits them. I worry about how we might distort a parliamentary election, and I think that what the Government are putting up is a safer bet.

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, the problem with including staff costs is the issue of workability. As we have heard from the NCVO, ACEVO and the people who run these charities, what is in the Bill at the moment is simply not workable. As I said earlier, the Bill asks these voluntary organisations to divvy up their staff costs, including national insurance and pension contributions, not only by which part of the country they live in but by what chunk of their work has gone on campaigning on an issue that subsequently attains high political saliency. This is not even about keeping records, given that the organisation may have to go back and look at something.

What we are talking about is not just the designing of an election leaflet but the office staff who help to steward a meeting or arrange visiting speakers. It is not for nothing that organisations such as the British Legion support this amendment, as does the BMA. The BMA says that there is a clear and compelling case to ease the bureaucratic burden to help non-party campaigners comply with the legislation. They want to be able to live within the law, which should not be written in a way that makes it impossible for them to keep to it. They do not want to be tangled up with bureaucratic demands that they might fall foul of. Surely we want to help them by not putting unnecessary burdens on them.

Earlier, the noble and learned Lord again used the word “intended”. We had an exchange on that before, but not everyone was here so let me repeat the argument. As the noble and right reverend Lord, Lord Harries, said, we are talking here not just about campaigns that are “intended” to promote a candidate. Clause 26 goes much further than that, because it could include things that turn out to help, or indeed harm, a party. Given the exchange between the noble Lord, Lord Tyler, and my noble friend Lord Rooker, it could be that a charity has campaigned for fluoridation, which then becomes an issue with one party in favour and another against. The charity, which has been campaigning for fluoridation, would then suddenly find that this is a political issue, so it will need to account for its staff costs. We are not talking about people moving into a constituency; we are talking about charities that campaign on such issues, which could then be caught up in this provision.

What is the purpose of insisting on the inclusion of such costs? This is not about taking big money out of politics. It risks placing motivated, altruistic organisations in a position where they can either campaign freely for what they believe in, provided that they deal with all this red tape, or go quiet. The noble Lord, Lord Tyler, may not like the word “gagging”, but if people choose not to criticise a policy because they are worried about the red tape, that sounds like a gag to me. I think this House would be well advised to send this amendment back down the corridor and say that it is unnecessary, unworkable and does nothing about transparency.

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, 28th January 2014

My Lords, once again, I thank noble Lords for their contributions to this debate, which has raised a number of important issues, some of which we have been over many times during our exchanges on this Bill.

I thank the noble and right reverend Lord, Lord Harries of Pentregarth, for his amendment, which refers to “background staff costs”. If he had managed to find the elixir or the magic potion that defined background staff costs, he might well have found that we were much more amenable to accepting his amendment.

Unfortunately, his amendment does not do what it says on the tin, because it would allow substantial staff costs to be excluded, not just background ones. For example, it could be that a campaigning organisation decides to employ someone for the regulated period to run rallies or press conferences. That would be their specific job, and if it fell within the definition of controlled expenditure under the amendment as it stands, it would not be caught. I do not think that is simply background staff costs.

There is not much difference between us. As we have indicated, we are not looking to have five-minute breakdowns of how time is spent. That is not what is intended. Let us go back to the origins of this. The noble Baroness, Lady Mallalieu, said it is the issue that perhaps came up more than any other in all the discussions—possibly coalitions was a close second or perhaps just slightly ahead. From meetings which I attended with my noble friend Lord Wallace of Saltaire, who attended a lot more than I did, I am certainly aware that the issue of staff costs came up.

It is worth reminding ourselves that, when we were conducting these discussions, the difficulties that many of these organisations expressed were about the extension of staff costs into areas such as press, media and transport costs, given that the threshold originally proposed was £5,000 in England and £2,000 in Wales, Scotland and Northern Ireland. There was genuine concern, not least among charities, that inadvertently some of the work they were doing could take them over the threshold. The Government recognised that. For those issues of canvassing and election material and so on, staff costs will now need to be accounted for, but that will be against a background of a £20,000 threshold in England and a £10,000 threshold in Scotland, Wales and Northern Ireland. Indeed, as my noble friend Lord Horam pertinently pointed out, we are also now looking at a regulated period of just over seven and a half months, rather than just under 12 months as was originally proposed in the Bill.

We did listen to charities and other organisations. About the biggest thing we have done is to raise these thresholds. If you are spending £20,000 to campaign on an issue that falls within the definition of controlled expenditure, I honestly do not believe that it is something that you inadvertently slide into. It must require quite serious thought to do that. That is the reassurance I would give to the noble Lord, Lord Walton, who expressed the views of the charities.

We had a debate on charities, and I am not going to go over all that ground again, but I think it was clear from that debate that it is thought that on only a very narrow band of activity could charities be subject to both Electoral Commission regulation and Charity Commission regulation. Indeed, most charities would not want to take up a position. Historically, they have not taken on positions where they would have been seen to be partial to a particular party or candidate. It is important that we put that in context.

The other thing that I want to put in context is that, in fact, there is nothing in this Bill that relates specifically to staff costs. What we have done is to use the architecture of the Political Parties, Elections and Referendums Act 2000, brought forward by the party opposite when it was in government, and that architecture applies to the additional range of activities. One cannot say that the whole idea of staff costs is new; it is not. When the party opposite was in government, it brought in a regime in which third parties had to account for their costs and expenditure, including staff costs in regard to election materials. The noble Baroness is shaking her head, but there is nothing more in terms of the definition of staff costs in this Bill than that. I accept that this extends to media events, press events, rallies and transport. However, as my noble friend Lord Horam said, the Electoral Commission would like to see all of these included for political parties.

It is a matter of judgment as to whether this should be done for the 2015 election. I argued earlier that, given there will be a review, it might be better to have a review based on some experience. However, the experience that we have had with the approach adopted by the Electoral Commission in two elections is that it appears not to have caused problems. It is the case that some 30 organisations were recognised third parties at the 2010 general election and those that incurred expenditure included their staff costs in their spending returns. We were not aware of any difficulties in calculating these costs. Hope not Hate, which was referred to in the debate, was one of these registered organisations. It is worth while to get some context: of these 30 organisations, only two were charities. As I have said already, we have also raised the threshold quite significantly.

My noble friend Lady Williams asked about volunteers. As I indicated, volunteers are excluded in the current legislation and I am advised that personal expenses are also. I hope that gives her reassurance.

We share a common objective in not wishing to have the additional burden of more administration, and we believe that the Electoral Commission has an important role there. It has done so until now, using the approach in its guidance of “an honest assessment”. While that is our common objective, I think that the difference between us is that the amendment which I, on behalf of the Commons, am seeking to reject is one that does not just deal with background staff but would drive a coach and horses through the whole idea of including staff costs. For example, in the case of a third party being able to employ someone to run a whole series of rallies over the regulatory period of seven and a half months, that would fall within the definition of controlled expenditure. That goes far further than what would simply be described as background staff costs.

I therefore urge the noble and right reverend Lord to withdraw his amendment.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

I thank the noble and learned Lord and the other speakers who have spoken in this short debate. I was very glad to hear from the noble Lord, Lord Tyler, that he is more sympathetic to this amendment than he was to our previous one. I hold out hope that perhaps those who were convinced by the Government’s answer to the last amendment —that what we wanted was already in the Bill or could be dealt with by regulation—might be more sympathetic to what we are saying in this one, because this one matters very much to charities and campaigning groups.

The noble Lord, Lord Horam, pointed out that the Electoral Commission is very keen for the staff costs of political parties also to be taken into account. However, it is also true that it is very resistant to that because of this very issue of complexity. I am not aware that the Electoral Commission has rescinded its original advice, despite the shorter regulation period, that for the 2015 election staff costs for third-party campaigners should not be taken into account.

My noble friend Lord Martin made a heart-felt plea as someone who has stood in many elections and experienced active campaigning groups at first hand. The noble Lord was dealing with what happens at a constituency level. As he has gone to pains to point out, he is keen on the democratic process, and the spending at constituency level is strictly regulated. This is primarily not about spending but about bureaucracy. We can see the difficulties from this very debate.

Photo of Lord Martin of Springburn Lord Martin of Springburn Crossbench 5:00 pm, 28th January 2014

I respect everything the noble and right reverend Lord has said, but just to clarify my position, there are two ways of dealing with election finances: there is cash, and in kind. My worry is that the third-party group can be given support, perhaps even unwittingly, in kind rather than with cash.

Photo of Lord Harries of Pentregarth Lord Harries of Pentregarth Crossbench

I thank the noble Lord. However, the issue is primarily one of bureaucracy. We can see the kind of muddle there is because the noble Lord, Lord Martin, said that of course telephone calls and e-mails and the costs of those can be accounted for, while the noble and learned Lord on the Front Bench said that that is not really needed, and the noble Baroness, Lady Mallalieu, pointed out that this is such a rough guide that it is too vague to be enforced. I therefore feel that we should test the opinion of the House on this issue.

Photo of Lord Bichard Lord Bichard Deputy Chairman of Committees 5:01 pm, 28th January 2014

My Lords, there being an equality of votes, in accordance with Standing Order 56, I declare the amendment disagreed.

Division on Motion C1

Contents 245; Not-Contents 245.

Motion C1 disagreed.

Division number 2 Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill — Commons Reasons and Amendments

Aye: 243 Members of the House of Lords

No: 243 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Motion C agreed.