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Schedule 3

Political Parties and Elections Bill – in a Public Bill Committee at 1:15 pm on 20th November 2008.

Alert me about debates like this

Declaration as to source of donation

Photo of Nick Ainger Nick Ainger Labour, Carmarthen West and South Pembrokeshire

I beg to move amendment No. 149, in schedule 3, page 34, line 2, at end insert—

‘Schedule 6 to the 2000 Act (details to be given in donation reports)

A1 In paragraph 2 of Schedule 6 to the 2000 Act (details to be given in donation reports), after paragraph (b) of sub-paragraph (10) there is inserted—

“(c) the names and addresses of all the members of the association and donors donating £1,000 or more annually to the association.”.

Schedule 6A to the 2000 Act (details to be given in transaction reports)

A2 (1) In paragraph 2 of Schedule 6A to the 2000 Act (identity of authorised participants: quarterly reports), after paragraph (b) of sub-paragraph (10) there is inserted—

“(c) the names and addresses of all members of the association and donors donating £1,000 or more annually to the association.”.

(2) In paragraph 2A of Schedule 6A to the 2000 Act (limit transactions), after paragraph (b) of sub-paragraph (11) there is inserted—

“(ba) the names and addresses of all the members of the association and donors donating £1,000 or more annually to the association;”’.

We have just completed our scrutiny of clause 8, which is designed to improve transparency in systems. The amendment would extend that transparency to unincorporated organisations. We have had much discussion and debate—some of it seemingly interminable—about transparency. The amendment addresses an omission in clause 8. Although we have amended the clause to set new monetary thresholds, it requires people to provide information about the source of donations. Amendment No. 149 does the same thing for unincorporated associations. I recognise that it may not be perfectly drafted.

The Electoral Commission, in the paper that it circulated to members of the Committee, states that the commission sees merit in increased transparency in this area. It goes on to say that it may be helpful to introduce greater transparency about those who provide substantial donations to unincorporated associations. However, it recognises that that imposes an additional administrative burden on those organisations, which was the debate we had about clause 8.

There is cross-party consensus that there should be greater transparency in the membership and source of funds through these unincorporated associations. For example, although he is not in his place, the hon. Member for Chichester said on 20 October this year:

“I am fully in favour of transparency...I completely agree with the point made earlier that nor can we allow vehicles”—

by that, I assume he was referring to unincorporated associations—

“to be created especially for the purpose of concealment.”—[Official Report, 20 October 2008; Vol. 481, c. 105.]

The shadow Leader of the House, in an exchange with the Leader of the House at business questions in March 2007, said:

“We are happy to discuss...greater transparency on donations, such as those by unincorporated associations, and new powers for the Electoral Commission.”—[Official Report, 15 March 2007; Vol. 458, c. 469.]

Sir Hayden Phillips, who in his report referred to unincorporated associations, has said:

“Unincorporated associations and companies that make donations to political parties should be required to identify the people involved in making the decisions.”

There seems to be general consensus that that is an area where we need to improve transparency. Amendment No. 149 may not be perfect, but it addresses the need for us to legislate and extend transparency to the source of donations and the individuals who make donations in excess of £1,000 through unincorporated associations.

Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice), Shadow Solicitor General

We are keen to avoid imposing further administrative burdens on donors or party officials without a pressing need to do so. I note that a similar amendment, which did not propose the same threshold, was tabled but not selected. Although the commission might support additional transparency, which everyone probably supports, it is against the amendment, and it is worth putting that on the record. It states that

“the Commission does not support amendments 7 and 149 which seek to introduce new reporting requirements for donations from unincorporated associations. The Commission sees merit in increased transparency in this area, but any change to the regulatory regime should balance that against the additional administrative burdens on regulated entities and on donors. We do not think these amendments strike the right balance, since they impose sweeping new reporting requirements, going beyond those applying to e.g. registered companies or trade unions where the identities of those controlling the organisation are already in the public domain so do not need to be listed in the donation report.

The amendments also require details about donors to an association for any purpose . . . not just those whose donations are political in nature. Much of this information may be irrelevant and potentially misleading, since it is unlikely that all the members of and donors to the organisation will have participated to the decision to make any given donation. It may be helpful to introduce greater transparency about of those who provide substantial donations to unincorporated associations which fund political parties, but the workability of any new requirements in this area, and the administrative burden associated with them, would need careful thought.”

We agree with those points.

Photo of Tony Lloyd Tony Lloyd Chair, Parliamentary Labour Party

It is interesting that the hon. Gentleman praises anything that the Electoral Commission says on that. Does he believe that it has done a good job so far on the issue of transparency with regard to unincorporated associations? It is a simple question, so I wonder whether he will put it on the record.

Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice), Shadow Solicitor General

I am not sure whether it is for me to judge, and as it is not part of the Bill, it is not a topic on which I have done a huge amount of preparation. However, we believe that proxy donations and intentionally using an unincorporated association as an agent are already covered by PPERA. That threatens to create large volumes of red tape for the voluntary sector, which could be discouraging for donations to voluntary organisations and, in turn, to political parties. We also have general concerns about the focus on transparency issues for only one small donor sector. There are other donor sectors, not least the trade unions, that should be looked at in the context of the whole. We do not think that the focus should be on individual sectors, but we would be prepared to examine the issue in the round.

Photo of David Howarth David Howarth Shadow Solicitor General, Ministry of Justice, Shadow Minister (Shadow Solicitor General), Home Affairs

Earlier, the Minister talked about consensus being a necessary condition of reforming the area. I think he is wrong because it tends to give a veto to parties with a particular interest, and I think that that is another area where we might be suffering from that problem. I would like to put on record, however, that I support the amendment. Its intention seems to be extremely important and useful. Everyone knows that the unincorporated bodies to which we are referring are organisations such as the Midlands Industrial Council, which are devices to disguise the identities of donors. That is what they are invented to do and that is what they have been doing.

Photo of Martin Linton Martin Linton Labour, Battersea

Is the hon. Gentleman aware that telephone calls to Coleshill manor, the seat of the Midlands Industrial Council, are not currently being answered and that there is a suggestion that the Constituency Campaigning Services Board, exactly the kind of organisation to which he is referring, might have closed down? Perhaps that is a recognition that those organisations really are merely a conduit.

Photo of David Howarth David Howarth Shadow Solicitor General, Ministry of Justice, Shadow Minister (Shadow Solicitor General), Home Affairs

I am not aware of that, but the conclusion that the hon. Gentleman draws from the information provided seems a plausible explanation.

Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice), Shadow Solicitor General

The hon. Gentleman says that the Midlands Industrial Council is there only to hide donations. That is a very serious allegation, which has been put to the Electoral Commission, and, my understanding is that it has been reviewed and shown not to be the case. I do not know how the hon. Gentleman gets to make that allegation, but he might like to back it up a bit more.

Photo of David Howarth David Howarth Shadow Solicitor General, Ministry of Justice, Shadow Minister (Shadow Solicitor General), Home Affairs 1:30 pm, 20th November 2008

This is an example of the Electoral Commission being guilty of naivety. Its response to the hon. Member for Carmarthen, West and South Pembrokeshire’s amendment is an illustration of why it is important to have political commissioners. The idea that we are talking about “voluntary sector associations”, in the words of the hon. Member for Huntingdon, as if they are ordinary charities, set up for another purpose, which happen to give money to political parties, is ridiculous. That is not what is going on at all. These organisations are, for the most part, set up to donate money to political parties. They must be scrutinised with great care, and transparency is of immense importance. This is all about whether they existed before and had a life prior to their existence as bodies that donate to political parties. Are they real organisations? For the most part, I fear that they are not.

Photo of Martin Linton Martin Linton Labour, Battersea

May I help the hon. Gentleman by pointing out that the leader of the Conservative party has said that that shadowy organisation, which is not answering its telephone, the Constituency Campaigning Services board, based at Coleshill manor, is “practically a part” of the Conservative party?

Photo of Andrew Tyrie Andrew Tyrie Conservative, Chichester

I am a bit astonished by what the hon. Gentleman is suggesting. He seems to be saying that the Electoral Commission is a waste of time, that it has fallen down on the job and that it has not arrived at a reasonable level of transparency. It has looked into this issue in immense detail and has produced a thorough and comprehensive rebuttal; unfortunately, I do not have it with me. The hon. Gentleman’s defence for continuing to make the allegations seems to be that it has no idea how to do its job.

Photo of David Howarth David Howarth Shadow Solicitor General, Ministry of Justice, Shadow Minister (Shadow Solicitor General), Home Affairs

I would not go that far, but the views that the Electoral Commission has expressed about the amendment show a deep naivety about the nature of the problem that we face. We are not merely dealing  with charitable bodies or voluntary associations that have a separate life and suddenly happen to give money to political parties, which should not, therefore, face an administrative burden because it would get in the way of their other functions. These bodies do not have any other functions—this is their point. Therefore, it is not disproportionately burdensome to ask them to keep a record of how much money they are getting from particular individuals so that they know what has happened when they pass that money on to political parties. That is perfectly reasonable given how, for the most part, these organisations come into existence.

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test

If those organisations, which appear to have no other function, were to keep a record, would that not automatically be a reason for them to cease to exist? Therefore, his suggestion is, perhaps, otiose. Would the hon. Gentleman reflect on that?

Photo of David Howarth David Howarth Shadow Solicitor General, Ministry of Justice, Shadow Minister (Shadow Solicitor General), Home Affairs

The hon. Gentleman has produced an interesting reason for passing the amendment. Proxy and non-transparent donations are to be discouraged. If the amendment discouraged that form of donation, I would not be too sorry.

A point was raised about how the amendment applied to trade unions. As far as I am aware, trade unions are unincorporated associations, so I am grateful to the hon. Member for Carmarthen, West and South Pembrokeshire for tabling an amendment that applies to the unions. The trade unions are in the unusual position of existing anyway; they are, in fact, voluntary organisations that would have a life without giving money to a political party. The question whether that would be a great burden to them is one that Labour Members are in a better position to answer than me, but I am sure their answer would be that trade unions would be willing to bear the burden of the amendment. Since that would be the only objection, I do not understand why it cannot be accepted.

Photo of Tony Lloyd Tony Lloyd Chair, Parliamentary Labour Party

What the hon. Member for Huntingdon said was interesting. When asked whether he considered that the commission had done a good job in respect of unincorporated associations, he said that he did not have time to consider it. However, he was forthright in his response to the hon. Member for Cambridge when he said that its examination of the Midlands Industrial Council had been full and proper.

Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice), Shadow Solicitor General

The answer to the hon. Gentleman’s point is simple. I was briefed at a later date by one of my hon. Friends.

Photo of Tony Lloyd Tony Lloyd Chair, Parliamentary Labour Party

You would be the first to agree, Sir Nicholas, that it is a delight to know that, even though the process is slow, the Conservative Front Bench learns bit by bit—although, in this case, perhaps not enough.

The hon. Member for Cambridge was right to point out that trade unions are unincorporated associations. He might want to reflect on his original words that unincorporated associations are set up only for the purpose of funding. It is clear that trade unions are not  set up primarily for that purpose. Nevertheless, he is right that the trade unions would be caught by the amendment tabled by my hon. Friend the Member for Carmarthen, West and South Pembrokeshire, which I support as, among other things, chair of the trade union group of Labour MPs. The trade unions have nothing to hide in that context, nor would they want to hide relatively high-value donations. That is a reasonable position, and it puts the spotlight firmly on organisations such as the Midlands Industrial Council, which most certainly is set up only for the purpose of funding one particular political party.

I asked about the role of the Electoral Commission because it is obvious to many people that one of the criticisms of it has been its failure properly to investigate, even with its powers, organisations such as the Midlands Industrial Council. That is important if we want to achieve adequate transparency that reassures members of the general public that they can know who the funders are, particularly the high-value funders. Even if the amendment were not optimal, I hope that my right hon. Friend the Minister will take seriously the need for us to move rapidly in its direction, which would guarantee that all high-value donors can be known. I say clearly to the Conservative party, my party and to the Liberal Democrats that there is nothing wrong with people acting in a public-spirited way and giving money to political parties, but it is wrong when that is done covertly and is designed to prevent the public from being reassured that the money trail is legitimate and is there simply to enhance the benefits of our party political system.

Photo of Andrew Tyrie Andrew Tyrie Conservative, Chichester

Perhaps one or two Labour Members will confirm that I am not completely out of sorts with what the hon. Gentleman is saying. I just wonder whether he has thought through the full implications of his argument. Surely, at the heart of matters, is whether we think that individuals or institutions have a role in donations. If we are to move to long-term reform, we must reach the point at which parties are donated to by those who can vote for them, and that they are individuals, not organisations, trade unions, companies or intermediaries such as the one that we are discussing.

Even though I recognise that it would be hugely difficult in a short period for the Labour party to adjust, does the hon. Gentleman agree that there might be merit in it thinking over the long term of moving in the direction of removing all intermediary institutions, including trade unions and businesses, as well as bodies such as the Midlands Industrial Council, from the role of funding political parties in the 21st century?

Photo of Tony Lloyd Tony Lloyd Chair, Parliamentary Labour Party

The hon. Gentleman has consistently put forward particular views on these matters. I understand but do not share all of them. For the record, I do not necessarily believe that intermediary organisations are wrong, whether they be private companies or unincorporated associations, as long as it is clear what the flows of moneys are and who has access to what the public will perceive as financial influence if those transfers of money are not properly transparent and properly there to be seen.

We can differ about the role of the trade unions in funding my party. I do not agree with the hon. Gentleman that collective giving is of itself a bad thing, but it  would be a bad thing if the members of a trade union could not dissent from the political fund, which of course they can do under the law as it stands. What would be equally wrong with something like an unincorporated association, even if my party gains from the existence of such structures, is if a clear audit trail cannot be seen—if there is not transparency about where the money comes from and who is seeking to give it—to allow us to elicit at least some sense of the purpose behind the giving.

Photo of Andrew Tyrie Andrew Tyrie Conservative, Chichester

I am fascinated by that reply, because it seems to acknowledge the idea that as long as there is transparency, it is all right for intermediate bodies such as trade unions and such institutions or, for that matter, companies to donate money with the purpose of obtaining influence. The hon. Gentleman used the word “influence” in his reply to my intervention. Does that not go to the heart of the perception of the problems with such institutions and the need for reform to remove concern in the public mind?

Photo of Tony Lloyd Tony Lloyd Chair, Parliamentary Labour Party

I honestly do not agree with the hon. Gentleman. What I sought to say—I will need to read the record to ensure that what I sought to say is what the words actually say—is that transparency is necessary so that the public are able to see whether people are seeking to gain unreasonable influence. We need transparency so that people are not allowed to draw that conclusion about the political process.

I have no objection to the existence of an organisation such as the Midlands Industrial Council. In a society and democracy such as ours, it is, at present, part of a legitimate process. What is difficult is the perception that it is a shadowy organisation whose very existence is designed to obscure the identity of those who give.

I do not mind people giving to the Conservative party. I encourage them to give to my own party through the means available. I do not think that an intermediary body of itself is the problem because, as the hon. Gentleman will know, my party went through a long and, I accept, sometimes tortuous process whereby the concept of the collectivisation of the giving process was necessary historically to set some kind of balance against the unfair power of money in party politics. That goes back to the origins of the Labour party. I do not think that my party needs to run away from that background as if it were somehow illegitimate or immoral, because it is neither.

What the Labour party and the trade unions have to do, as should all political parties and unincorporated associations, is guarantee that the public at large and the individuals involved are quite clear on the question of transparency. That is the spirit that my hon. Friend the Member for Carmarthen, West and South Pembrokeshire seeks to capture with the amendment.

Photo of Andrew Tyrie Andrew Tyrie Conservative, Chichester

I am grateful to the hon. Gentleman for giving way so generously. This helpful exchange goes to the heart of some of the problems. Nobody on the Conservative Benches seeks to alter the constitutional relationship between the Labour party and the trade unions. It is only the issue of influence that may be bought by money that is of legitimate concern in my view and, I believe, in the view of most Opposition Members. Indeed, it is the public’s concern as well. The hon. Gentleman has just confirmed again that he did  not mean to say what he said, but the record will show what he did say—we will have to wait and see. He said that we need transparency to know whether organisations seek to gain an unreasonable influence over the political process, which suggests that there are donations for which influence at a reasonable level is gained. I fundamentally disagree with him. That is the division on the issue. We do not think it is right for people to be able to buy influence over the political process, full stop.

Photo of Tony Lloyd Tony Lloyd Chair, Parliamentary Labour Party 1:45 pm, 20th November 2008

The hon. Gentleman and I are at one on that. For example, the question must arise about who funds an unincorporated association, the Churchill luncheon club, which I believe is a donor to his constituency, and what their role and ambitions are. After I have sat down, he might seek to catch your eye, Sir Nicholas, to explain the role of the Churchill luncheon club.

Photo of Andrew Tyrie Andrew Tyrie Conservative, Chichester

I would like to catch the hon. Gentleman’s eye, as he has referred to my constituency.

Photo of Tony Lloyd Tony Lloyd Chair, Parliamentary Labour Party

Indeed. I shall give way if the hon. Gentleman can tell us who the donors to the Churchill luncheon club are.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

Order. I am not much liking this. There is too much nitty-gritty about the constituencies of individual Members of Parliament. May we perhaps concentrate on the matter in the same way in which it was introduced—succinctly and to the point?

Photo of Tony Lloyd Tony Lloyd Chair, Parliamentary Labour Party

Alas, Sir Nicholas, I was tempted by others. As often happens in this big old world, temptation leads us in the wrong direction. I will try to correct the error of my ways henceforth and bring my remarks to a conclusion. I apologise, in a sense, to the hon. Member for Chichester, because your ruling means that I cannot give him the opportunity to respond. As a matter of courtesy, I would have liked to give him that opportunity.

Let me simply say this: in our political system, it is right that unreasonable influence is something we all deplore. Inevitably, the public have suspicions. They have had suspicions about my party in the recent past when flows of money arose that we have not been able properly to account for. As a long-standing member of my party, I regret and deplore that, and I hope that hon. Members from all political backgrounds would do the same.

The way to get round the matter is not to get rid of the unincorporated association—whether at constituency or national level—but to ensure that we have the transparency necessary to reassure the public that the exchange is legitimate and not one that seeks to acquire unfair and unreasonable influence. That is what the Bill ought to be about.

The hon. Gentleman and I disagree about the exact conclusions, but it might well be that we agree with the sentiments behind what my hon. Friend the Member for Carmarthen, West and South Pembrokeshire is seeking to do.

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test

For the purposes of clarity, can my hon. Friend explain the point on the £1,000 of donations referred to in the amendment? A distinction appears to be made between the results of, for example, a lunch where a number of people have contributed some money in relation to that lunch, which is collected and donated in a convenient way, as opposed to an arrangement whereby a number of people, for the purposes of hiding the origin of their donation, donate large sums of money, which are gathered together?

Indeed, if the origins of those donations were recorded, there would be no point in having intermediary activity at all and the organisation concerned might well cease to exist. As, I think, my hon. Friend the Member for Battersea suggested, one organisation that might be in that category may have recently ceased to exist—perhaps in anticipation of something that might happen in the Committee.

Photo of Tony Lloyd Tony Lloyd Chair, Parliamentary Labour Party

I shall bring my remarks to a conclusion by exploring the line of argument put forward by my hon. Friend. Of course, he is right.

At the heart of the amendment is the issue of collective giving at relatively modest levels—for example, the kind of thing that might take place at a luncheon club. Such a club may well be legitimate and beyond suspicion, and I am happy to state that. That also applies to a trade union. I know of no trade union where an individual gives at the level of £1,000, but certainly, if the union is giving collectively, the question about transparency ought to catch it.

The matter before us is the perception that all political parties have gained from shadowy organisations whose purpose is to prevent the transparency that the amendment seeks. That is why I strongly support the spirit behind the amendment.

Photo of Andrew Tyrie Andrew Tyrie Conservative, Chichester

On a point of order, Sir Nicholas. I seek your guidance on how I might be able to respond to the allegation made about my constituency. I completely agree—even if I quietly disagree—with the point that you made from the Chair, but I would be grateful if you told me how I might put the record straight. I do not want to create undue fuss, but I do not think the matter can be left entirely.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

I think that there will be a debate on the schedule as a whole. Perhaps the hon. Gentleman—briefly and succinctly—may correct the record then.

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

The extent and quality our debate on the clause demonstrate the debt that the Committee owes to my hon. Friend the Member for Carmarthen, West and South Pembrokeshire for tabling the amendment. I understand and share the concern expressed on Second Reading and in today’s debate that we need to do more to promote greater transparency of donations from unincorporated associations. We must ensure that such structures are not used to conceal the ultimate source of donations to parties.

Unincorporated associations have given money to all the parties represented here today: the Labour Finance and Industry Group has given money to my party; the Midlands Industrial Council, as we have heard, is a long-standing donor to the Conservative party; and  there are historic Liberal clubs, often registered as unincorporated associations, that give money to the Liberal party. The hon. Member for Perth and North Perthshire is not present, but if he were I would remind him that that the Scottish women’s independence fund trust has donated money to the Scottish National party.

There is nothing inherently wrong about such associations contributing. Of course, it is a matter of consensus that such contributions should not be used to purchase influence—that is abhorrent. The only people who should have influence over political parties are the voters, through exercise of the vote. That is the source of authority and power in our democracy, nothing else. Everyone is agreed on that.

The point that my hon. Friend the Member for Manchester, Central made is important and I am surprised that the hon. Member for Chichester should take issue with it. Transparency is the best guarantor for everybody that such influence is not purchased in our society, and above all that everybody in our democracy can see that it is not being purchased. It is not the existence of unincorporated associations that matters; what matters is that they should be transparent. We have to recognise that there is enough evidence to show that they are not as transparent as we would wish.

The provisions in clause 8 and schedule 3, which apply to unincorporated associations as they do to other donors, already address some of the concerns about transparency, which I share with other hon. Members here. There is a lot of cross-party agreement on the importance of transparency.

I appreciate that there are continuing concerns and I am willing to consider actively—indeed, we are considering actively—what more we can do. Again, I would prefer to move forward on a consensual basis, as on many areas of the Bill. One way we could promote greater openness about donations from unincorporated associations would be to require them to declare the names and addresses of their members and donors. We must be certain that we are not putting undue burdens on them and bear in mind the need for flexibility and proportionality, but we are considering options to that effect.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

The Minister has suggested two groups: those listed as members and those who might be listed as donors. Is there a reason for suggesting the first group?

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

Yes, there is, because we need to be quite clear about the source of the donations. There are issues about how exactly we would frame any amendment that might be considered necessary. I will resist the hon. Gentleman’s invitation to go further at this stage, because that is one area in which we are actively considering tabling an amendment of our own.

I ask my hon. Friend the Member for Carmarthen, West and South Pembrokeshire to withdraw the amendment. I know that the Liberal Democrats are anxious to reach their amendments, which are further down the amendment paper, and I do not want to detain the Committee. I can assure the Committee that we are continuing actively to examine these issues. We recognise the concerns and feel that there probably  needs to be further movement on them, but we want to consider all the options before coming back to hon. Members.

Photo of Nick Ainger Nick Ainger Labour, Carmarthen West and South Pembrokeshire

Bearing in mind the debate and the Minister’s positive response, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Martin Linton Martin Linton Labour, Battersea

I beg to move amendment No. 8, in schedule 3, page 34, line 4, at beginning insert—

‘(A1) In paragraph 1 of Schedule 7 to the 2000 Act (prohibition on accepting donations from impermissible donors), at the end of sub-paragraph (7)(c) there is inserted “, or a compliance officer appointed by the holder of a relevant elective office to act on his behalf.”’.

I do not wish to detain the Committee for long, because there are weightier items in other clauses to discuss. This is a little amendment about the appointment of compliance officers. Political parties already have compliance officers. Sir Nicholas has one—to judge from today’s Question Time. I gather from the hon. Member for Congleton (Ann Winterton) that there are regular breakfast meetings with your compliance officer. Candidates have compliance officers called agents, which has been written into law for more than 100 years, but nominees for party office do not, and the amendment suggests that they, too, should be able to have compliance officers.

The Electoral Commission commentary supports the amendment in principle. It would add to the list of relevant donees, which we all are, the words

“a compliance officer appointed by the holder of a relevant elective office”, as well as five more words—

“to act on his behalf”— but the Electoral Commission does not agree with those, as it believes they would pass the legal responsibility to the compliance officer.

I can assure the Committee that it is the intention of the amendment not that the compliance officer should take over all the legal obligations of a nominee or candidate, but that those should be shared with the office holder. I do not know whether those words carry that implication, but if they do they should be left out. The amendment would allow nominees to elected party office to delegate to a compliance officer some of the responsibility to make declarations—which, the Committee has heard constantly, has become quite onerous—without passing on the legal responsibility for ensuring that that had happened.

PPERA also relates to internal party elections. Similar legislation in Canada provides an elaborate structure of limits and subsidies for nominees as much as for candidates. Although many elections to party office are internal, some are wider. We all know circumstances in which an election to party office could be to choose the Prime Minister, as happened only last year. That was an uncontested election, so many of the issues did not arise, but it is not difficult to imagine circumstances in which they would. The electorate in a party election can be 5 million or 6 million, making it the largest election in the country, although that probably does not quite beat the Mayor of London, who has an electorate of 7 million, but it very nearly does.

So, elections for party office can be major events, and the candidate will have a huge burden of responsibility—he or she has to take personal responsibility for ensuring that every donation is declared. To take final responsibility is one thing, but not to be able to delegate in any way, to anyone else, creates enormous difficulties.

I shall not go over the factors involved any more, because they are well understood by everyone in the room—equally, the Electoral Commission is not raising any opposition in principle—and I commend them to the Minister. I hope that he can add the words “or a compliance officer” to the list of regulated donees.

Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice), Shadow Solicitor General

I shall be brief as I am interested to hear what the Minister has to say. I wonder whether the amendment would make it more complicated to work out who had the burden of responsibility. Otherwise, we are open-minded.

Photo of Michael Wills Michael Wills Minister of State, Ministry of Justice, The Minister of State, Ministry of Justice 2:00 pm, 20th November 2008

I have sympathy for the intention behind the amendment. I understand why there is interest in such a measure, but I ask the Committee to consider a number of points before we move forward. First, we should consider whether, for those who are not minded to appoint such an officer, it might be burdensome to require them to do so. We need to be clear whether the provision could be permissive.

There is nothing in the Act as it stands to prevent a regulated donee from appointing a compliance officer, but that person would have no statutory basis. In that sense, if we were to provide in the Bill that a person may appoint a compliance officer—a permissive provision—that would serve primarily as a useful clarification of the existing legal position.

Secondly, if we accepted the provision, we would need to consider whether such an amendment would extend to Members of this Parliament alone or to other holders of relevant elective office within schedule 7. A holder of a relevant elective office would include a member of the European Parliament elected in the United Kingdom, a member of the devolved institutions, a member of any local authority apart from a parish or community council, the Mayor of London or any other mayor elected under the Local Government Act 2000. Consideration and consultation on this point would be necessary before the provision became part of the Bill, although we would not necessarily foresee any problems coming out of that consultation.

Thirdly, the amendment as drafted would not achieve its desired effect. Rather, it would be add “compliance officer” to the list of regulated donees set out in paragraph 1(7)(c) of schedule 7 and would thereby result in regulating donations to compliance officers. I do not think that that is the intention of the amendment, but that would be its effect. For that reason alone, I must resist it. However, following the consultation that I mentioned, I am happy to consider tabling at a later stage of the Bill a similar provision that would achieve the principle underlying the amendment, if there is sufficient agreement from the Committee to do so.

Finally, for the purposes of clarity, I should point out to the Committee that the appointment of a compliance officer would not, as I think the amendment intends, absolve the donee of responsibility for any breach of  the regulations. Ultimate responsibility would depend on the circumstances of each case and it could rest with both or either the donee or compliance officer. That reflects the approach taken under the Representation of the People Act 1983 in relation to candidates and their agents. Were we to bring forward a Government amendment to make it clear that these appointments could be made for regulated donees, we would not depart from that principle.

So, bringing all those different points together, if it is clear that there is agreement to move forward and introduce a measure that achieves the intention behind the amendment, we will endeavour to do so. We will consult and consider further the impact of the proposed amendment on all officers whom it might affect. We would have to consider the technical and legal matters as well. I am prepared to take the matter forward and to consider it seriously. Bearing that in mind, I hope that the amendment will be withdrawn.

Photo of Martin Linton Martin Linton Labour, Battersea

On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Nick Ainger Nick Ainger Labour, Carmarthen West and South Pembrokeshire

I beg to move amendment No. 9, in schedule 3, page 34, line 4, at beginning insert—

‘(A1) In paragraph 1 of Schedule 7 to the 2000 Act (prohibition on accepting donations from impermissible donors), at the end of sub-paragraph (8)(a) there is inserted—

“(aa) member of the House of Lords;”’.

This is a probing amendment and I shall be brief. Members of the House of Lords who are members of political parties are already regulated donees, but Cross-Bench Members, who are of no party, are not. I would like an explanation. We have three types of peers, including some hereditary ones and life ones—

Photo of Nick Ainger Nick Ainger Labour, Carmarthen West and South Pembrokeshire

Many types—I accept that—who are not regulated donees. Will the Minister give the Committee an explanation?

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

I am grateful to my hon. Friend for moving the amendment, which allowed the hon. Member for Chichester, from a sedentary position, to make the case admirably and succinctly for reform of the House of Lords, for which I am grateful. I hope all members of the Committee agree on that.

As my hon. Friend pointed out, the amendment would amend schedule 7 to PPERA, such that the holder of an elective office would include a Member of the House of Lords as well as a Member of the House of Commons. Members of the House of Lords would therefore become subject to controls on donations contained in the 2000 Act. As my hon. Friend pointed out, many peers are already subject to the schedule 7 controls by virtue of the fact that they are party members. Therefore, as he observed, the effect of the amendment would be felt only by those with no party affiliation, such as Cross-Benchers and bishops.

I understand the intention behind the amendment. As my hon. Friend knows, we are planning to bring forward shortly radical reform of the House of Lords and the way it is constituted. That has been about 100 years in the making. We are on the verge, I believe, of cross-party consensus on that. I look for nods around the Committee and see assent from all parts. This is pertinent, Sir Nicholas. I am sticking to the clause. We will shortly be introduce further proposals for reform.

Photo of Andrew Tyrie Andrew Tyrie Conservative, Chichester

Will the Minister at least consider and, I hope, agree that whatever measure is proposed for reform of the House of Lords, it should require that whoever currently sits in the House of Lords becomes a new type of peer, one type of peer, which would satisfy the concern underlying the clause?

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

Order. That question is outside the scope of the schedule. If it were something to do with donations, it would have been in order. The classification of peers is quite another matter.

Photo of Andrew Tyrie Andrew Tyrie Conservative, Chichester

May I complete my intervention by rephrasing it slightly? Since we have established that different categories of peers have different donation requirements, and since we have agreed in principle that it might be possible to put peers on a similar basis, might that not be the simplest way of addressing the concerns of the hon. Member for Carmarthen, West and South Pembrokeshire who tabled the amendment?

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

I am grateful for your indulgence, Sir Nicholas. I shall wrap up my answer to the intervention by addressing the purpose of the probing nature of the amendment. I am not sure where the problem exists. Presumably, those peers were excluded from the scope of the 2000 Act precisely because they are not elected and, as such, they would be unlikely to receive political donations. That is not a problem of which we have been made aware. But, most importantly, there is no point legislating for a problem of whose existence we are not aware and which, as I said, will shortly be resolved. When the House comes to consider how a reformed House of Lords will be constituted, that will be the proper time to examine donations, Members and the reporting requirements, because then that will be pertinent. I hope my hon. Friend the Member for Carmarthen, West and South Pembrokeshire will therefore ask leave to withdraw the amendment.

Photo of Nick Ainger Nick Ainger Labour, Carmarthen West and South Pembrokeshire

In light of what my right hon. Friend the Minister said, it seems that the matter will be addressed, although that may take some time. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: No. 160, in schedule 3, page 34, line 7, leave out ‘£200’ and insert

‘£5,000 (where the regulated donee is a members association) or £1,000 (in any other case)’.

No. 161, in schedule 3, page 34, line 12, leave out from ‘exceeding’ to second ‘by’ in line 13 and insert

‘£5,000 to be received by a members association by way of a donation, or an amount exceeding £1,000 to be received by a regulated donee other than a members association’.

No. 162, in schedule 3, page 34, line 25, leave out ‘£200’ and insert

‘£5,000 (where the regulated donee is a members association) or £1,000 (in any other case)’.

No. 163, in schedule 3, page 35, leave out lines 1 to 3.

No. 164, in schedule 3, page 36, line 2, leave out ‘£200’ and insert ‘£5,000’.

No. 165, in schedule 3, page 36, line 7, leave out ‘£200’ and insert ‘£5,000’.

No. 166, in schedule 3, page 36, line 20, leave out ‘£200’ and insert ‘£5,000’.

No. 167, in schedule 3, page 36, leave out lines 40 to 42.

No. 168, in schedule 3, page 37, line 30, leave out ‘£200’ and insert ‘£5,000’.

No. 169, in schedule 3, page 37, line 35, leave out ‘£200’ and insert ‘£5,000’.

No. 170, in schedule 3, page 38, line 6, leave out ‘£200’ and insert ‘£5,000’.

No. 171, in schedule 3, page 38, leave out lines 26 to 28.—[Mr. Wills.]

Question proposed, That the schedule, as amended, be the Third schedule to the Bill.

Photo of Andrew Tyrie Andrew Tyrie Conservative, Chichester

I shall be brief. I am grateful for the opportunity to answer the allegation about the Churchill luncheon club, which is a group of people who come together to have lunch, for which they pay £20 to £30, and £5 profit, if we are lucky, is made per person per lunch. The money slowly accumulates over two or three years, and once every few years a relatively small donation is made to the Bognor association or to the Chichester association. The last donation to my association was, I think, a few thousand pounds—£2,000 or so, although I cannot remember exactly how much—which was made some time in the early 2000s, perhaps 2001 or 2002. I wonder whether the hon. Member for Manchester, Central feels that there is anything untoward or concerning about that.

Photo of Eleanor Laing Eleanor Laing Shadow Minister (Justice)

Does my hon. Friend consider that it might have occurred to the hon. Member for Manchester, Central that, had the luncheon club to which my hon. Friend refers wished to give the impression that it had nothing to do with the Conservative party, it would not have chosen to call itself after Sir Winston Churchill?

Hon. Members:

Missing the point!

Photo of Andrew Tyrie Andrew Tyrie Conservative, Chichester

I entirely agree with my hon. Friend. Hon. Members on the Government Benches say that she is missing the point, so let us find out what point we are missing.

Photo of Tony Lloyd Tony Lloyd Chair, Parliamentary Labour Party

For clarity, I was not one of those who said that the hon. Lady is missing the point. I know that she often does, but it is not for me to comment on that now.

If the hon. Gentleman examines what I said a little earlier, he will see that I said that the low value unincorporated association of the kind that he describes is without stain on its character. I do not wish to cast doubt on its purpose or on the probity of those involved.  It is exactly that sort of thing that benefits from the transparency that I am arguing for. I was arguing, as I think the hon. Gentleman now concedes, that such collective mechanisms for giving are legitimate, as long as we know what they are for, who takes part and what the mechanisms of the financial transfer are. That is legitimate. I am happy to say to the hon. Gentleman’s friends and colleagues, through him, that I cast no doubts whatever on anything other than their public spiritedness in seeking to enhance the political process.

Photo of Andrew Tyrie Andrew Tyrie Conservative, Chichester 2:15 pm, 20th November 2008

I am grateful for that assurance. I am just left wondering why it was raised in the beginning, and why it has been raised on the Floor of the House on more than one occasion.

I want to make one other point of substance in the debate on the schedule. The Minister and several hon. Gentlemen, particularly the hon. Member for Manchester, Central, suggested that transparency was a sufficient condition for sorting out the problems of public perception in this area. Transparency is a necessary, but not a sufficient condition. Was it enough to dispel the impression that honours had been bought in the 1980s when captains of industry appeared to get them because they came from companies that quite transparently had made large donations? I do not think that it was enough. Was it enough to dispel the impression that Bernie Ecclestone’s donation, declared at £1 million, had some influence on whether a ban on tobacco advertising was enforced on the industry of which he was such a prominent member? Transparency is not enough. A necessary condition for cleaning up the area must come in two parts: a cap on donations and the removal of intermediary institutions, whatever their type.

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

We have largely dealt with the issues in the debate on clause 8 and the consequential changes, so I will not detain the Committee for long.

I hope that I was not suggesting that transparency was a sufficient condition. I agree with the hon. Gentleman that it is a necessary condition, but it is not the only condition that is needed. I do not necessarily agree with his entire prescription, but that is for another day. As I have said, we have largely debated the matter under clause 8, so I hope that the Committee will agree that schedule 3 should stand part of the Bill.

Question put and agreed to.

Schedule 3, as amended, agreed to.