Amendment 25

Elections Bill - Committee (2nd Day) – in the House of Lords at 6:00 pm on 15 March 2022.

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Baroness Hayman of Ullock:

Moved by Baroness Hayman of Ullock

25: After Clause 18, insert the following new Clause—“Guidance to candidates on notional expenditure The Secretary of State must publish new guidance to candidates on notional expenditure within the period of 12 months beginning with the day on which this Act is passed.”

Photo of Baroness Hayman of Ullock Baroness Hayman of Ullock Opposition Whip (Lords), Shadow Spokesperson (Environment, Food and Rural Affairs), Shadow Spokesperson (Levelling Up, Housing, Communities and Local Government)

My Lords, I am speaking to my Amendment 25. In this group there is also Amendment 25A in the name of the noble Lord, Lord Rennard, which is very similar. These two amendments will echo quite a lot of the debate we have had over the last two groups, and I completely echo the words of my noble friend Lord Collins, in his response to the previous group, about many of the concerns we have about this clause.

As we know, Clause 18 concerns notional expenditure on behalf of candidates and others. In the debate we have just had, my noble friend Lord Collins, the noble Lord, Lord Rennard, and others drew attention to the detail of what this clause would mean, how it would potentially work and how election law has changed over time—and not just law. Elections have become more sophisticated and more money is being spent, so we really need to make sure that in future we conduct elections in the right and proper way. The Elections Bill needs to be able to provide that integrity and reassurance as we move forward.

Specifically, my Amendment 25 says:

“The Secretary of State must publish new guidance to candidates on notional expenditure within the period of 12 months”.

Amendment 25A from the noble Lord, Lord Rennard, suggests:

The Electoral Commission must publish new guidance to candidates”.

To be honest, I do not really mind which; I just think it is important that such guidance is published.

I read the debate in the other place on this part of the Bill. Introducing this clause, the Minister, Kemi Badenoch, said that it

“makes an important clarification to our political finance rules”.

She went on to explain—as did our Minister, the noble Baroness, Lady Scott—that this came from the Supreme Court decision in 2018 after it was

“determined that the rules on notional expenditure for candidates did not contain a test of authorisation” and

“there were concerns among parties and campaigners that candidates could be liable to report benefits in kind that they did not know about, but could be seen to have benefited from.”

Obviously, there has been a lot of discussion about what that meant in South Thanet and how that has had an impact on political behaviour during elections since.

What came over in particular from the last debate, and is important when looking at what we are talking about now around the new guidance, is the way in which campaigning has increasingly become pressurised on marginal seats. As my noble friend Lord Collins said, that is the case with all parties. He rightly referenced the fact that political income is an area we need to really look at—where it comes from, how our donations are managed and who provides them. This is an area where, if we are not careful, the behaviour of political parties could come into disrepute. I am not pointing the finger at any party, just saying that we need to be very careful around this when drawing up new election law.

Minister Badenoch went on to say that this is why the Government want to make it

“clear that candidates only need to report as notional expenditure benefits in kind—property, goods, services and facilities that are given to the candidate at a discount, or for free—that they have used themselves, or which they or their agent have authorised, directed or encouraged someone else to use on the candidate’s behalf”, so that “clarity” is provided

“to candidates and their agents on the rules that apply to notional expenditure.”—[Official Report, Commons, Elections Bill Committee, 26/10/21; cols. 299-300.]

In the Minister’s introduction, and later in the debate, the word “clarity” was used a couple of times. If we are talking about clarity, guidance is important. People need to know when any new rules are brought in. As other noble Lords have said, this is adding to complexity. As a candidate or an agent, you need to know exactly what is expected of you, and it needs to be easy to understand.

During a debate on election expenditure in the other place, Craig Mackinlay—who, as we are all aware, was the candidate and is now the MP for South Thanet—agreed with Andrew Bridgen MP that it was worrying that currently

“a candidate in an election could be liable under the law for spending on his behalf that he neither authorised, nor was even aware of.”—[Official Report, Commons, 11/2/19; col. 690.]

I have been a candidate a number of times in local and parliamentary elections—and, once upon a time, in European elections, but of course that will never happen again—and other noble Lords have talked about this. When you are a candidate, you rely an awful lot on your agent. As my noble friend Lord Grocott said, not many people actually want to be an agent; I have managed to dodge it so far. This clarity, this information, about what the guidance will mean and how they are supposed to operate within any new laws is incredibly important.

A number of noble Lords mentioned the Public Administration and Constitutional Affairs Committee’s response to this part of the Bill. The Minister said that the proposed changes in the Bill are broadly welcomed but, as other noble Lords said, there were concerns around this. As the noble Lord, Lord Rennard, said, this included moving forward with clarity—that word again. We need to know where we all stand. The report said:

“The Government’s response to the CSPL report on electoral finance regulation provides no indication of which of its recommendations (not already included in the Bill) the Government is likely to adopt (via amendment), prioritise for consultation or when or how the Government proposes to give legislative effect to recommendations that will not be included in the Bill. The Government should give clarity on its next steps in this regard.”

It would be helpful to have further information. The Government responded to this and said:

“The Elections Bill is bringing forward the key changes to the regulation of expenditure we need to make now, and it already delivers on several of the recommendations made by the CSPL report. The CSPL report puts forward many recommendations that deserve full consideration”.

I would be interested to hear from the Minister which recommendations the Government were referring to. Their response added that

“further work must be done to consider the implications and practicalities of any further changes to complex electoral law.”

It would be helpful if the Minister could update us on any further work in this regard following the Government’s response. If he is unable to provide that information today, it would be very helpful to have it in writing. The other thing that came through from the evidence to the committee was the response by Professor Fisher, who again considered that the term “encouraged by” could lead to confusion. We had a previous debate on this and I think most noble Lords who spoke agreed that “encouraged by” did not provide the clarity that we need. It is used seven times in Clause 18, scattered all the way through it.

Again, we need to make sure that the rules are understood in order for them to be properly complied with, because this is where we came unstuck before. People did not really understand them, which is why we had the issues around Thanet. The noble Lord, Lord Wallace, said that if we are not careful we will constantly be adding complexity in the Bill when what we need in electoral law is exactly the opposite. The noble Lord, Lord Collins, talked about the importance of having consensus when we are looking to change the law on how we conduct our elections.

My amendment would mean that the Secretary of State—and the amendment from the noble Lord, Lord Rennard, would mean that the Electoral Commission—would have to publish new guidance to candidates on the changes. It is important that everyone understands any new responsibilities because we cannot have misunderstanding or misinterpretation. It is not fair on candidates and very much not fair on their agents.

Amendment 30B in the name of my noble friend Lord Collins looks at the threshold for payments in respect of any election expenses. We suggest that the threshold would increase. Section 73 of the Representation of the People Act 1983, which is the section on payment of expenses through election agents, states that:

“Every payment made by an election agent in respect of any election expenses shall, except where less than £20, be vouched for by a bill stating the particulars or by a receipt.”

The Minister may be able to clarify this, but my understanding is that this figure of £20 has not been updated since 1985. Clearly, £20 was worth quite a bit more back in 1985 than it is today.

This is a just a probing amendment to suggest to the Government that they could have another look at the RPA in this area. If you are increasing spending in other areas, this is a simple thing that could be done and our suggestion of £65 in the amendment is really just intended to be a starting point for discussion. Sadly, there is not an awful lot you can buy these days for only £20. I beg to move.

Photo of Lord McNicol of West Kilbride Lord McNicol of West Kilbride Deputy Chairman of Committees

My Lords, Amendments 25 and 25A appear to be alternatives.

Photo of Lord Rennard Lord Rennard Liberal Democrat

My Lords, this debate has shown that the noble Baroness, Lady Hayman, is definitely right that we need guidance on this crucial issue of notional expenditure. Many of us think that we do not necessarily need a change in the law, given that the courts have clarified the existing position and we need further guidance about what those decisions by the Supreme Court and Southwark Crown Court mean in practice for candidates and agents.

I believe that the appropriate body to provide such guidance is the Electoral Commission. That is partly because it can obtain legal advice independent from that of the Government; the commission can obtain advice about the meaning of the law that may be different from the interpretation of the Government of the day. It can advise all parties impartially and fairly. The Government’s view is most likely to coincide entirely with how the party presently in power would like the law to be interpreted, and that is not a good thing in a democracy.

In looking at the general issue of whether it should be the Electoral Commission deciding on rules about the interpretation of election law or the Government, I came across this interesting exchange following an Oral Question of mine on 13 February 2019. My noble friend Lord Stunell asked:

“does the Minister agree that it is vital to retain a robustly independent Electoral Commission … and that we never return to the bad old days when the rules were decided by the party which formed the Government in the House of Commons?”

The Minister at the time, the noble Lord, Lord Young of Cookham, replied:

“Yes. Before we had the Electoral Commission many of its responsibilities were discharged by the Home Office, which was, of course, run by political animals; namely, Ministers. It enhances confidence in the democratic process to have an independent commission, such as the Electoral Commission, in charge of the rules. We have no intention of departing from the principles which underpin the Electoral Commission. I think I am right in saying, as the Opposition spokesman at the time, that my party supported its establishment.”—[Official Report, 13/2/19; col. 1843.]

As is so often the case, the noble Lord, Lord Young of Cookham, spoke wisely. He appeared to support what was the position of the Conservative Party for almost 20 years until very recently. Then after the 2015 general election there was the controversary we have referred to concerning notional expenditure and how the Conservative campaign headquarters appeared to be breaking the rules to support its candidates in marginal seats. We have discussed how in July 2018 the Electoral Commission took the issue to the Supreme Court, obtained clarification of the law, and charges and a conviction for a senior employee of the campaign HQ then followed.

If there was concern about the need for clarity, the Electoral Commission was best placed to provide it impartially and objectively, and indeed set about doing exactly that. It consulted all the parties extensively. It produced codes of practice for candidates and agents. These codes provided advice and they should then have been introduced as statutory instruments to have greater force in law, but even as codes there would have been something that the courts could take notice of. These codes were submitted to the Cabinet Office on 21 April 2020 and there they were buried until now, when the Government appear to want them to be rewritten in this legislation. That is why it is the Electoral Commission which should be responsible for issuing advice on the interpretation of election law, not the party in power.

I will briefly say a word on Amendment 30B in the name of the noble Lord, Lord Collins: £20 is a very out-of-date figure for an election agent to have to submit a formal voucher on. I recall as an agent many years ago when the limit was £2, and before submitting the return of election expenses I had to drive round various places to collect a receipt or a voucher for £2 to meet the very tight deadline. Oh, there is a phone ringing; my apologies, that is someone calling about the receipts that are overdue from some previous election. I think I took part in debates that increased the limit from £2 to £20 and thought that was my triumph as a former agent—the agents fought back and got the limit uprated. It should be uprated because there is no actual increase in spending in the proposition, simply a realistic increase in the limit for which you have to produce a voucher. This reduces paperwork, bureaucracy and time so that people can get on with their real jobs.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Chair, Secondary Legislation Scrutiny Committee, Chair, Secondary Legislation Scrutiny Committee 6:15, 15 March 2022

My Lords, I just want to intervene, not about the substance of the matter we are debating but about the process. We have two very interesting parallel amendments which have what one might call different routes to market. The noble Baroness, Lady Hayman, said she did not really mind which was followed. I think she should worry, for reasons I shall explain. We tend to pass by—too easily, in my view—guidance, statutory codes, as just referred to by the noble Lord, Lord Rennard, regulations and rules. Who devises them, who decides what they are, who implements them and who enforces them? I think it is important that, at some point in the debate on the Bill, we take just a moment to think about the different ways this cat can be skinned.

In the debate on Clauses 14 and 15 in the last day in Committee, the noble and learned Lord, Lord Judge, who is not in his place, led the charge, assisted by several other noble Lords from around the House, to give my noble friend the Minister a kicking. I think the idea behind those speakers was to buttress, protect and safeguard the independence of the Electoral Commission. The noble Lord, Lord Stunell, referred to this earlier. Well, up to a point. The noble and learned Lord, Lord Judge, and I are absolutely as one about the need to improve the way we scrutinise secondary legislation in this country; it is clearly deficient and no longer fit for purpose.

The Delegated Powers and Regulatory Reform Committee, under my noble friend Lord Blencathra and now under my noble friend Lord McLoughlin, produced a report at the end of last year about the democratic deficit. The Secondary Legislation Scrutiny Committee, which I chair, produced a report on government by diktat. My noble friend the Minister will be fed up with me going on about this, but we are going to go on and on and talk to our colleagues in the Commons until we begin to get a better balance in the way we handle these things. That is, of course, a debate for another day, but in those two reports, we draw attention to the danger of what one might call tertiary legislation—that is, rules and regulations made by bodies that have little or no democratic control over their self-standing and no parliamentary control. It is important that I used the phrase parliamentary control, not government control. I am talking about control by the legislature, not by the Executive.

What I am saying is in no way a criticism of the Electoral Commission, but times change, commission members change just as Ministers change, and I am not convinced, as a matter of principle, that the Electoral Commission should be given too much independence in devising and implementing processes that go to the heart of our democratic system. We may feel that the system for scrutinising secondary legislation is not good enough, but we do at least have a chance to debate it and talk about it in public, here in your Lordships’ House and in the House of Commons. We cannot amend it, and I know that is a weakness, but we do provide a focal point for people who wish to comment on it, raise issues and express their support for it, discontent with it or opposition to it.

I see the noble Baroness, Lady Bennett of Manor Castle, in her place. The SLSC was very unhappy about some aspects of the procedure the Government followed about GMO and the new regulations, and therefore last night there was a lengthy debate. Could the regulations be amended? No, they could not, but there was a great deal of opportunity for people to express their concerns about that particular regulation. If the Electoral Commission produces a code, ex cathedra, there is no point at which that debate can take place. People can complain about it or write in, but there is no forum where Parliament—again, I say Parliament, both Houses of Parliament—can say its piece about whether it is fit for purpose. After all, it is Parliament that will be most concerned with and most expert in what is being proposed.

I favour Amendment 25, moved by the noble Baroness, Lady Hayman, which says it should go through the Secretary of State. I assume that when she revises her amendment, she will say “by regulation”: he or she is not just going to write it, it will be by regulation that it would come into force. I say to the noble Lord, Lord Rennard, that if he were to amend his amendment to say that the Electoral Commission has to produce a code which will become a statutory code, I think that would also serve the purpose. At present, we need to be very clear that the Electoral Commission is not the answer to everything. There is a need for the democratic process to have some input into the way this is all moving forward, or else we will have a situation where a body may be moving away from the central ethos of what the two Houses of Parliament believe is the right way to conduct things.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Liberal Democrat Lords Spokesperson (Cabinet Office)

This is an important principle. The noble Lord and I have spent some time looking at the Charity Commission, on which he is much more expert than I am. I used to be able to quote CC9 and other bits of Charity Commission guidance by heart when I was a trustee of a charity. Does he think that the principle he is enunciating should apply to most of these commission regulatory bodies, or is the Electoral Commission a special case?

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Chair, Secondary Legislation Scrutiny Committee, Chair, Secondary Legislation Scrutiny Committee

I think the Electoral Commission is a special case because we are talking about an elections Bill, but it goes wider than that. My noble friend Lord Blencathra is hot on this. He has a list of bodies that are, as he would say, running too free, but the Electoral Commission is a special case because of the nature of the Bill we are discussing. A subsidiary question is, do we need more codes elsewhere? I have some amendments down later on, which we shall get to on Thursday, which will provide a way of clarifying and giving third-party campaigners some security and safety about what they are doing— I think that is much more important. However, that is a discussion for Thursday.

My last point is to the noble Lord, Lord Collins, about his Amendment 30B. We have said again and again that we need to have our election law in one place. The fact we are having to discuss RPA 1983 in connection with this Bill in 2022 shows how urgent this is and how the points made across the Committee need to be taken on board by the Government, who at some point need to find time to pull this all together.

Photo of Lord Stunell Lord Stunell Liberal Democrat

My Lords, I may be able to join up some of the dots in what has just been said, particularly to draw out the position of the Committee on Standards in Public Life. The noble Baroness, Lady Hayman of Ullock, said it would be really useful to know which of the CSPL recommendations the Government believed—or thought or imagined—they had ticked off: which boxes they have ticked and which they have not. Maybe the Minister in reply could undertake to write us a letter which sets out the recommendations and whether the Government have, have not or have partly fitted them into the Bill; I think that would be to the benefit of the debate. Of course, the very first recommendation of the CSPL in that report is that there should be a comprehensive Bill on all election law, as set out by the Law Commission. I know the Minister, in replying at Second Reading, explained that it was all too busy and too complex, so recommendation 1 is not going to happen at this time, but not doing recommendation 1 is causing problems with a whole lot of other things that are happening.

In defence of Amendment 25A, proposed by my noble friend Lord Rennard, the current position is as it was when the Electoral Commission drew up guidance in 2020. It submitted it to the Cabinet Office so that it could be published as a statutory instrument and, whatever the defects of statutory instruments, its guidance would in fact have come before the House. So, there is a downstream process—it may not be very effective, but it does to some extent, I hope, tick that particular box.

There is an interconnecting, moving part here, which is the strategic statement by the Government about the direction in which the Electoral Commission should pursue its activities. For me, Amendment 25 is the wrong way to go. One person’s clarification can be another person’s finger on the scale, making the weighing machine show a faulty reading. There are far too many clarifications in this Bill which, funnily enough, on examination always turn out to have the same kind of impact on the level playing field. It would be right for the Electoral Commission to do what it was set up to do, which is to regulate elections. It should be for it to draw up the guidance, which should be submitted to the Government and published as a statutory instrument which would come before both Houses for proper examination.

The point that both amendments are making is that we must have that guidance published. Some of us have been making the point, through Parliamentary Questions, debates and so on, about why that guidance has sat undistributed for two years and is now being superseded, if this legislation goes through, by a further process with no timescale attached to it, which will presumably be published some time this year. Perhaps the Minister can comment on when the Government think that guidance will be published, by whoever brings it up.

The search for clarity, which seemed to be the only argument left in the Minister’s locker about Clause 18 as a whole has been deliberately held back for two years on this very issue and is about to be held back for a further year, or six or nine months, perhaps, before it comes into force. If there is really an argument that agents and candidates have been waiting for guidance, a good question to the Minister is: why has the Cabinet Office sat on some perfectly good guidance for all that time? It is not secret guidance—the content of that guidance has been known—but it has not come into force in any way.

Maybe this Bill does mean that some of the guidance must be brought up to date to take account of the new realities, although some of us wish it did not have to. However, given that, we need to hear the timetable as well as the mechanism for ensuring that the guidance happens. I would prefer it to be guidance where there was not a Secretary of State with a finger on the scales ensuring that the reading favoured one particular point of view.

Photo of Lord True Lord True Minister of State (Cabinet Office) 6:30, 15 March 2022

My Lords, again I welcome this short debate. It was very good to hear from my noble friend Lord Hodgson of Astley Abbotts. I was not angry about what he said. I agreed with some of his points, and they were certainly points for reflection. There was a point in his speech when I wished he had been the fifth cavalry in the last debate that we had on the Electoral Commission, rather than the 55th, but the 55th cavalry is welcome. I will come on to the question of who is responsible in relation to regulation in a minute. The debate ranged widely, and while the issue of tertiary law, as he put it, and how that is considered, was a little wide of it, I acknowledge it as an important point of reflection.

The Government responded to the CSPL’s report in September 2021. The Bill already contains measures which closely relate to its recommendations. I will look at some of the material which is theoretically before us today, depending on progress. The new requirement for political parties to declare assets and liabilities over £500 on registration was recommendation 10 of the CSPL report. Another recommendation was the restriction of third-party campaigning to UK-based campaigners. These things are set out in Clauses 21 and 24. The Government intend to look at all recommendations from the CSPL, alongside recommendations set out in similar reports, as part of further work on the regulatory framework during and beyond the Bill. I will certainly take those recommendations seriously.

These amendments relate to the clarification of the law on notional expenditure. Some of the ground was covered in previous groups but I thank the noble Baroness, Lady Hayman, and the noble Lord, Lord Rennard, for their points urging timely publication of new guidance. Irrespective of whether we believe that the law needs clarification or, as is the contention which I have heard on the other side, that it does not, clearly publication of new guidance should be timely. It is the responsibility of the Electoral Commission to provide that guidance to parties and people standing in elections. Clause 19(1) amends the provision in electoral law to provide that the Electoral Commission may prepare guidance on election expenses for candidates. These amendments are to make it clear that the guidance can cover the application of the rules in relation to expenses incurred, including notional expenditure.

I cannot give a specific date, as was requested in both elections, but I assure the House that it must be locked into the process of implementation of the legislation. The responsibility sits with the commission, and therefore technically, siding a little in the debate, I think that the Government would oppose the noble Baroness’s idea of giving the duty to the Secretary of State. However, whoever it is given to, I wish to see guidance as quickly as possible. The Government have confidence that the commission will act promptly. We intend to commence the provisions in this Bill on a staggered basis and we will closely engage the Electoral Commission to ensure the readiness of new guidance at every stage.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Chair, Secondary Legislation Scrutiny Committee, Chair, Secondary Legislation Scrutiny Committee

When my noble friend says that he has confidence in the Electoral Commission, which I understand, will this be a statutory code, or will it just be guidance, without any statutory backing?

Photo of Lord True Lord True Minister of State (Cabinet Office)

My Lords, there is reference in Clause 19(1) to a duty to provide guidance. I cannot give all the specific details, but it is clearly the intention of the Government that it be covered in that way.

I understand the point made by the noble Lord, Lord Collins, on increasing the threshold at which an election agent is required to approve expenses. The noble Lord is always very thoughtful on these matters. Indeed, the noble Lord, Lord Rennard, referred to the days when £2 was the limit. Clause 20 amends Section 73 of the Representation of the People Act to allow other persons to pay expenses that they have incurred rather than the election agent. This will provide clarity to third parties who have been authorised by a candidate or agent to promote them. The Government are supportive in principle. I can tell the noble Lord, Lord Collins, of increasing relevant values by the value of inflation to ensure that they remain as Parliament originally intended. We raised candidate spending limits for local elections in line with inflation before the May 2021 elections, and we intend to review party and candidate spending limits for all other polls—obviously not those within the legislative competence of the Welsh and Scottish Governments—next year, with a view to uprating them in line with inflation since they were originally set. This should create a baseline for regular and consistent reviews of such limits in future.

The noble Lord has raised an important point. Obviously, consideration will have to be given at each stage to ensure that the implications of changing a particular figure are understood. We welcome further discussion on this point, in the spirit which he suggests, but the Government’s intention is that those levels be reviewed next year. For these reasons, I urge that the amendment be withdrawn.

Photo of Baroness Hayman of Ullock Baroness Hayman of Ullock Opposition Whip (Lords), Shadow Spokesperson (Environment, Food and Rural Affairs), Shadow Spokesperson (Levelling Up, Housing, Communities and Local Government)

My Lords, I thank the Minister for his thorough response to this debate.

On the amendment in the name of my noble friend Lord Collins around increasing the threshold, I have a slight concern that, rather than necessarily increasing the threshold, we will be saying, “Other people can also pay for things—it’s not just the agent.” Anybody who has been involved with an election and seen a poor agent trying to put the expenses together will know that if people are allowed to just start spending, it can get extremely complicated and sometimes quite worrying, because the agent needs really good control over the money during an election. I just put that into the debate. If this threshold could be reviewed as part of an ongoing review, that would be very a practical and helpful thing that we could all agree on.

I thank the noble Lord, Lord Hodgson, for preferring my Amendment 25 to that of the noble Lord, Lord Rennard, even though the Minister did not—it is nice to know that somebody felt I was going in the right direction. On the Minister’s response on the CSPL, I was trying to find out about the recommendations that are not included in the Bill—I am aware that some are in it. The Minister said that all the recommendations would be looked at; this House should have an idea of how the Government are taking this forward, whether these things may come forward as SIs in the future, and how they would be implemented.

I was also pleased to hear the Minister say that he believed that publication of new guidance should be both timely and part of the locked-in process of any implementation and that he wants to see the guidance produced as quickly as possible. I thank him very much for his response and beg leave to withdraw the amendment.

Amendment 25 withdrawn.

Amendment 25A not moved.

Clause 19: Codes of practice on expenses