Amendment 18

Elections Bill - Committee (1st Day) (Continued) – in the House of Lords at 6:15 pm on 10th March 2022.

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Lord Rennard:

Moved by Lord Rennard

18: After Clause 17, insert the following new Clause—“Fines for electoral offences (1) The Political Parties, Elections and Referendums (Civil Sanctions) Order 2010 (S.I. 2010/2860) is amended as follows. (2) In Schedule 1, paragraph 5, for “£20,000” substitute “£500,000, or 5% of the total spend by the organisation or individual being penalised in the election to which the offence relates, whichever is greater”.”Member’s explanatory statementThis new Clause would allow the Electoral Commission to impose increased fines for electoral offences.

Photo of Lord Rennard Lord Rennard Liberal Democrat

My Lords, one of the problems with the Bill is that the Government failed to make any changes at all to their proposals when the Committee on Standards in Public Life published its recent report, Regulating Election Finance. The whole purpose of setting up the CSPL was to meet Sir John Major’s aim of cleaning up the reputation of politics, including political finance. It now seems that the Government want not only to control the watchdog responsible but to make sure that it has no teeth. I believe the Government have a significant conflict of interest in this matter.

The CSPL report recommended that the Electoral Commission should be able to levy increased fines for serious electoral offences. It proposed a comprehensive package of measures to improve enforcement, which included decriminalising some offences and addressing an enforcement gap in the regime covering candidate spending. There are some matters that are best dealt with by regulators such as the Electoral Commission, which must be able to enforce fines, rather than necessarily by the police and criminal courts. As the commission itself says, there could be more proportionate ways for the commission to deal with breaches of political finance law.

In 2000, when some of us sat through 11 days of debate in this House on what became the Political Parties, Elections and Referendums Act, we knew that all the parties were very nervous about having a new regulator and having to comply with new regulations. The maximum fine for parties was therefore set at a very low level. With hindsight, 22 years later, a fine of £20,000 may be seen as a very modest level of taxation for a multi-million-pound offence that could alter the result of a general election or a referendum.

In considering the appropriate level of fines, we should look at regulatory models such as that for the Information Commissioner’s Office. Since 2010, the Information Commissioner’s Office has handed out £23.5 million in fines to organisations found to have been breaking the law on rules about spamming or failing to look after consumer data.

There are two tiers to the level of fines that can be imposed by the Information Commissioner’s Office. The higher maximum amount is £17.5 million or 4% of the total annual worldwide turnover in the preceding financial year, whichever is higher. The higher maximum amount can also apply to any failure to comply with any of the data protection principles, any rights an individual may have under Part 3 of the Data Protection Act or in relation to any transfers of data to third countries. There is also a standard maximum if there was an infringement of other provisions such as administrative requirements of the legislation. The standard maximum is £8.7 million or 2% of the annual worldwide turnover in the preceding financial year, whichever is higher.

Parliament has agreed to a regulatory body such as the ICO being able to regulate organisations through the imposition of penalties on this scale. I believe the political parties must also be respectful of election law rules and, in particular, those concerning donations and election spending. The present limit of £20,000 for a regulatory body is clearly woefully inadequate. Amendment 19 in the name of the noble Lord, Lord Young of Cookham, proposes what I consider a modest increase, to £50,000, in the level of fines that can be imposed by the commission. Amendment 18 in the name of my noble friend Lord Wallace of Saltaire would put the regulation of political parties more in line with that imposed by other regulatory bodies such as the Information Commissioner’s Office. I beg to move.

Photo of Lord Young of Cookham Lord Young of Cookham Conservative 6:30 pm, 10th March 2022

My Lords, I wish to speak to Amendment 19 in my name, which has been grouped with Amendment 18. When I tabled my amendment, I did not realise I had been gazumped by the noble Lord, Lord Wallace of Saltaire, who had the same objective as me but had put a significantly higher price on it, of £500,000 instead of £50,000. I will add a brief footnote to the case made by the noble Lord, Lord Rennard.

I have two interests in this. The first is that I was the opposition spokesman on the original legislation to set up the Electoral Commission over 20 years ago. My party fully supported the establishment of an independent body to monitor elections in this country and, as a corollary, the need to give it powers to carry out its functions and to deter behaviour that undermined the integrity of the electoral process. My view is the same and, although the Electoral Commission has not got everything right, I do not join those who seek to undermine its independence, as we heard in earlier debates.

My second interest is as the immediate predecessor to my noble friend as Minister with responsibility for the Cabinet Office in your Lordships’ House and, in particular, responsibility for answering questions from the noble Lord, Lord Wallace, and others, about the powers of the Electoral Commission. Indeed, my DNA may still be on the folder in front of my noble friend.

Both experiences lead me to the view that the original powers to fine, untouched since the Act was passed, need updating to reflect what has happened in the intervening period, not least the erosion in the value of money.

Looking through the exchanges on which I took part on this very subject, I see that on 28 March 2018, in response to a Question from the noble Lord, Lord Hunt of Kings Heath, I said:

“On the specific question of the £20,000 fine, the noble Lord is correct that the Electoral Commission has expressed concern in the past that this might be regarded as simply the cost of doing business, and it is making representations that it should be enhanced to a higher level. The Government are considering those representations and, alongside any other recommendations that come out of the investigation currently under way, we will then consider what further action to take.”—[Official Report, 28/3/18; col. 833.]

On 28 June that year in response to a Question from my noble friend Lord Cormack I replied:

“My noble friend will know that the Electoral Commission has made requests for legislation, particularly to increase the sanctions that are available to it.”—[Official Report, 28/6/18; col. 240.]

Also, on 17 July that year in response to Lord Tyler—whose participation in these debates we all miss—I said:

“On the question of legislation, as I have said, we are currently considering whether the Electoral Commission should have more powers; we know that the commission wants the maximum fine to be increased from £20,000 to a higher level”. —[Official Report, 17/6/18; col. 1141.]

I am now free to express views that were at the time constrained by the rules of collective responsibility—which I stretched from time to time but I hope never broke. I fully expected on the briefing I had received that, when we legislated on the Electoral Commission, we would increase the maximum fine available.

The amendment from the noble Lord, Lord Wallace, reflects the recommendation of the CSPL. We should attach weight to that body because its first report led to the establishment of the Electoral Commission, and it has a paternal interest in its well-being. It recommended a maximum fine of £500,000 or 4%, which the noble Lord, Lord Wallace, has generously rounded up to 5%. My amendment is more modest, seeking simply to retain the value of £20,000 to take account of inflation and rounded up modestly.

It is worth digging into the CSPL report to find out why it came to this decision. The Electoral Commission itself gave written evidence, saying:

“Recent research indicates that the public believe that fines for breaking political finance laws are too lenient, given the amount of money that could be spent on campaigning. More than half of the respondents (52%) in our regular tracking research carried out in early 2020 said that a £20,000 maximum fine was not high enough. Only 27% felt that it was about the right amount”.

Although my party gave evidence the other way, the Committee on Standards in Public Life was robust in its conclusion.

My noble friend quoted with approbation the views of the CSPL in an earlier debate, and I will quote what it said on this subject, at paragraph 9.79:

“We consider that an effective regulatory system must be backed by strong sanctions. The prospect of significantly greater fines will act as an incentive to ensure that parties and campaigners put in place robust systems to ensure that the requirements of electoral law are complied with. For anyone contemplating deliberately breaching the law, it should give pause for thought. It seems that the Commission’s powers have fallen behind equivalent regulators such as the Information Commissioner’s Office and we have concluded that this should be redressed”.

I agree. Finally, it went on to say:

“We support the recommendation made by the House of Lords Democracy and Digital Technology Committee that the maximum fine the Electoral Commission may impose should be increased to 4% of a campaign’s total spend or £500,000, whichever is higher”.

I do not want to hark back to earlier debates, but it seems that this is further evidence of government antipathy towards the Electoral Commission. I hope my noble friend will be able to persuade me that this is not the case.

Photo of Baroness Jones of Moulsecoomb Baroness Jones of Moulsecoomb Green

My Lords, it is quite sweet to have these two amendments in the same group. I am sure the noble Lord, Lord Young of Cookham, knows which one I prefer.

Clearly, you have to make the political parties pay attention. At the moment political parties face higher fines for data protection breaches than they do for breaking election law, which is really inappropriate. The risk is that fines for breaking election law just become part of the cost of doing business for political parties, especially those with the deepest pockets and richest donors. That is clearly not the Green Party, but it could be other political parties represented in this Chamber.

Amendment 18 would mean that the penalties for breaking election law would actually hurt the law-breakers. It follows the same logic as the general data protection regulations by implementing proportional fines so that big organisations have to pay attention.

Photo of Lord Stunell Lord Stunell Liberal Democrat

My Lords, I rise to support my noble friend and Amendment 18 and to thank the noble Lord, Lord Young, who, once again, trumps everybody by having been the Minister, which is a bit of a theme in the debates he has contributed to that I have heard. He is all the more welcome for that, and I hope that in due course his DNA may reappear on the ministerial file so he can complete the job.

I think the case has been made very clear. In fact, the noble Baroness from the Green Party, whose name has just evaporated—the noble Baroness, Lady Jones, I do beg her pardon—made the clear comparison between the fine a party might get from screwing up on its data protection and the fine it might get from screwing up on its election expenses. I think any ordinary member of the public, and indeed any rational Member of this House, would think that if one offence were worse than the other, the election offence is surely the more serious. I hope we shall hear that, subsequent to the new Minister picking up the file, he has been able to talk to the relevant officials who decide these things on his behalf and will be able to give us some idea that the Government will produce their own amendment on Report, or perhaps will assist the noble Lord, Lord Young, in tweaking his, so that it is at an acceptable level for his officials to approve.

I want to make the case that we and my noble friend Lord Rennard set out very clearly to make this proportionate to the fines and the impact that other regulators can have on the behaviour of the organisations they regulate. This may not be entirely in the best interests of those of us in this room, because it could be our political parties that end up paying significant amounts of money. That, of course, is the trouble, because whether the turkeys will vote for Christmas is always a difficult question to answer. Actually, it is an easy question to answer, but how do you overcome the natural reluctance there is to impose on ourselves the burdens that we willingly impose on other people when they offend regulatory standards?

I hope to hear something from the Minister. If he cannot come in at £500,000, could he at least, for goodness’ sake, come in at £50,000 and give those of us here who think this system urgently needs uprating some glimmer of hope that progress is being made?

Photo of Lord Khan of Burnley Lord Khan of Burnley Opposition Whip (Lords), Shadow Spokesperson (Levelling Up, Housing, Communities and Local Government)

My Lords, I first say how much I am enjoying hearing the noble Lord, Lord Young of Cookham, expressing his views in an unconstrained manner. I am also glad that he still has his DNA all over this folder, which means there are some valuable contributions.

The amendments in this group, which would have the effect of increasing the fines the Electoral Commission can apply, raise the question of how the commission can effectively deter non-compliance. This is an especially pertinent question given that the Bill removes its power to institute criminal proceedings.

In the past year alone, the commission has investigated close to 40 different parties, individuals and campaigners. Many of these investigations have led to fines. These include penalties totalling almost £18,000 to the Conservative Party for failing to deliver accurate quarterly donation reports and failing to keep accurate accounting records. In the most recent recording period, however, there seems to be no instance of the commission imposing the maximum fine. Can the Minister confirm how many instances there have been of the full £20,000 fine being applied?

The amendment of the noble Lord, Lord Wallace, raises the possibility that the fine could equal a percentage of the total spend of the organisation—a point that the noble Lord, Lord Rennard, and the noble Baroness, Lady Jones of Moulsecoomb, have raised in relation to bringing it in line with the fairness of other organisations, such as GDPR and the Information Commissioner’s Office. This is significant in relation to raising the possibility of the equal percentage of the total spend of the organisation, because a number of smaller parties have received fines that are as large as the main parties’ fines. I look forward to hearing the Minister address the concerns raised by noble Lords in this group in particular.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip) 6:45 pm, 10th March 2022

My Lords, I am happy to respond to Amendments 18 and 19, which were spoken to very eloquently by the noble Lord, Lord Rennard, and my noble friend Lord Young of Cookham.

I start by saying that I am aware that the Committee on Standards in Public Life recommended as part of its report, Regulating Election Finance, that the Electoral Commission’s fining powers be increased to 4% of a campaign’s total spend or £500,000, whichever is higher, as was mentioned during this debate. This proposal mirrors the amendments in their intent to raise the fining powers of the commission beyond its current limit.

First, we should differentiate between civil and criminal cases. The Government’s view is that the commission already has adequate powers to impose civil sanctions on political parties and non-party campaigners up to £20,000 per offence—and I underline “per offence”. Criminal matters can be, and are, referred to the police and, in certain cases, taken to a criminal prosecution. The courts have the power to levy unlimited fines for some offences and, as the Committee is probably aware, to impose custodial sentences where appropriate.

As set out in the Government’s response to the Committee on Standards in Public Life’s report, any extension of the commission’s fining powers would need to be considered carefully to assess its necessity and proportionality. This is because it is vital that they are an effective deterrent but do not cause a chilling effect on electoral participation and campaigning. I will say more about that, because a point was made, particularly by the noble Lord, Lord Rennard, about a comparison with the Information Commissioner’s Office. Any direct comparison with the fines that can be issued by the ICO should note the clear differences between the two regulators and the types of entities they regulate. I understand his point in making the comparison, but political parties across the spectrum are not global corporations. I am pleased that the noble Baroness, Lady Jones of Moulsecoomb, has popped in for this last group. I am sure the Green Party aspires to be global, but I hope I do not offend her by saying that it is not at the moment.

Photo of Baroness Jones of Moulsecoomb Baroness Jones of Moulsecoomb Green

I will just say that there are Greens all over the world, and I have not popped in just for this last one—I have been here several times today for different groups.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip)

I have been corrected on two points, and I am glad that the world is full of Greens, I am sure, doing a lot of very good work.

There are over 350 political parties currently registered with the Electoral Commission, and many are predominantly made up of volunteers. While it is vital that the sanctioning regime is effective, it needs to be ensured that such deterrents do not cause a chilling effect on electoral participation and campaigning.

I have more of a general point to make, which I think chimes with the views expressed during this very short debate, following up on the Committee on Standards in Public Life’s recommendations. The Government are committed to making sure that elections are secure and fit for the modern age. As part of this, we keep the Electoral Commission’s role, powers and regulation under review regularly to ensure that it is able to discharge its responsibilities effectively and that electoral law can be upheld in the most effective manner.

As part of further work looking at the regulatory framework for elections beyond the Elections Bill, the Government intend to look at all the recommendations of the report by the Committee on Standards in Public Life, alongside similar reports. These include a forthcoming report from the Public Administration and Constitutional Affairs Committee into the work of the Electoral Commission.

Regarding the question about statistics, which was raised by the noble Lord, Lord Khan, I will have to write to him about how many times the £20,000 has been levied. However, the fact that he says it has not been used lately suggests that there is not an urgent need to raise it. I have attempted to answer the question on raising the amount. I appreciate the points raised. I am afraid that for this evening, at this late hour, being a Scotsman, it is not £50,000, or even £500,000. It remains at £20,000.

However, for these reasons, I hope that the House will accept my explanations. I ask the noble Lord to withdraw his amendment.

Photo of Lord Rennard Lord Rennard Liberal Democrat

I thank the Minister for his kind remarks at the outset of his reply. I might have hoped that the notes in his folder were still those of the noble Lord, Lord Young of Cookham, as opposed to the ones that he read out this evening, since I suspect that they might have been slightly different.

All the debates today have shown that the House overwhelmingly wants to have an election watchdog, and wants it to be independent and effective. The Committee, and the whole House in due course, will have to return to the issue of the role and powers of the Electoral Commission, in particular the report on election finance by the Committee on Standards in Public Life. I was surprised that the Government committed just now to looking at those recommendations; they should have been looking at them in time for them to be considered in the passage of this Bill. That might have assisted us all.

However, the hour is now late enough. We will return to these issues in due course so, on that note, I beg leave to withdraw the amendment.

Amendment 18 withdrawn.

Amendment 19 not moved.

House resumed.