Report on the effects on processes for controlling political party donations

Overseas Electors Bill – in a Public Bill Committee at 2:45 pm on 31st October 2018.

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“(1) The Secretary of State must prepare and publish a report on the effects of the provisions of this Act on—

(a) the ability of political parties and campaigners to determine the permissibility of donations from persons resident overseas, and

(b) the ability of the Electoral Commission to take enforcement action where the rules on such donations have been breached.

(2) The report must be laid before Parliament within 3 years of the provisions of this Act coming into force.”—

Brought up, and read the First time.

Photo of Layla Moran Layla Moran Liberal Democrat Spokesperson (Education)

I beg to move, That the clause be read a Second time.

It is a pleasure to serve under your chairmanship, Ms McDonagh. Now I have the right clause in my head. The other one was about overseas constituencies, and I am partly sad that that did not pass, but this is the clause that I feel passionately about. New clause 2 tackles, or tries to start to tackle, some of the issues around donations that will arise as a result of this Bill. I prepared the clause with the Electoral Commission and we have had many conversations about its concerns regarding donations to do with this Bill. I strongly urge hon. Members from across the House to bear some of these things in mind.

The issue arises because by removing the 15-year time limit we will by definition have many people who were not at some point in the past on the electoral register. The way that political parties are currently allowed to accept donations is that it is quite easy to look up whether someone has previously been on the electoral register at some point in the past 15 years. Let us face it, we probably have the data from the lists that we have kept over the years. Even if someone came to us and said, “Right, I’ve been living in Belgium”—or Cambodia, or whatever—“and I would like to make a donation. I was on the electoral register at this address at this time,” it would be very easy for us to check.

The problem with this Bill arises because there will now be a large number of people who are absolutely—as is right—British citizens and allowed to vote, who will now be allowed to make political donations but will not have been on the register at any point in the last 15 years. What the Electoral Commission would like, which is not what I have proposed, is clarification in law that someone has to be on the register now in order to make a political donation, so that that grey area is completely removed.

We could say, “Well, you could just make sure they are registered,” and a political party could just ensure they are on the register. The problem arises because there is a Supreme Court judgment from 2010 that said that political parties, and anyone accepting a donation, must bear in mind the permissibility of being on the electoral register. They do not have to be on the electoral register; they just have to be allowed to be on the register by the current law.

This Bill thus opens up a large number of people who could possibly donate into the UK and puts a huge onus on political parties to decide whether to accept the donation. In this new clause we are simply asking for a report. I know that reports are all the rage in all these new clauses, but the report would come after the Bill was enacted and would not stop anything, but would ask the Government to look carefully at the specific matter of donations to do with this Bill.

I know that the Minister has said in other arguments that the Government want this to be a very closely defined Bill, and I understand that. However, the problem I am raising arises only because of the Bill, so it is right to make a provision to assuage the Electoral Commission’s concerns about the issues that it will bring up. We are asking for a simple report on, first, whether political parties have faced situations where they could not tell whether donations coming in were from permissible donors. Incidentally, the flip side of that is that British citizens who are now within their rights to vote and want to be able to donate to political parties will have trouble doing so. We need to ensure that that is as easy as possible. Secondly—this is critical—the Electoral Commission is worried about its ability to enforce whether donors are permissible.

Photo of Ben Bradshaw Ben Bradshaw Labour, Exeter

The hon. Lady may or may not be aware that the biggest donation to the Democratic Unionist party in political history was made during the referendum campaign and we still do not know whether the donor was permissible. The Government’s refusal to backdate the change in the rules to make donations in Northern Ireland transparent means that we do not know, and possibly never will know, the source of that money. She will be aware that that is of great concern to many parliamentarians and the Electoral Commission, as well as to investigative journalists and the people of Northern Ireland. They have been trying to get to the truth of whether that money, which bought hundreds of thousands of pounds of advertising in the rest of the UK—it was not spent in Northern Ireland, and some of it was spent on Cambridge Analytica—in effect helped to buy the referendum.

Photo of Layla Moran Layla Moran Liberal Democrat Spokesperson (Education)

I thank the right hon. Gentleman for his helpful intervention. In fact, I asked the question in Northern Ireland questions today. We can leave aside what is going on with the referendum, the investigation into Vote Leave and all the rest of it, but also we cannot. The public are keenly aware, now more than ever, that there is a potential problem with political donations and interference from abroad. This new clause would allow a mechanism to say to the public, “We understand your concerns and we promise to take them into account.”

I credit the Minister. I think she does a fantastic job, and I have said that to her. She said that during the course of her normal working life she will talk to the Electoral Commission as issues arise and all the rest of it, and I absolutely agree, but I think we need to send a strong signal to the public that we are taking the issue seriously. The new clause is an opportunity to do that, as a direct consequence of how electors will be allowed to enter registers in this country. I urge everyone to support the new clause, partly because it is the right thing to do, partly because the Electoral Commission has specifically asked for it and partly because it would send a strong signal to the public that we take foreign donations seriously and that this Government will ensure that if there are any shenanigans, they will be caught comprehensively—not as we go—and dealt with.

Photo of Chris Matheson Chris Matheson Shadow Minister (Cabinet Office)

I congratulate the hon. Lady on bringing forward the clause and her introduction to it. It was very welcome and had great clarity. She touched, as did my right hon. Friend the Member for Exeter, on some of the more unpleasant and unpalatable reasons why the new clause is necessary. Despite overseas donations from overseas citizens or citizens based outside the UK being prohibited, there are still mechanisms whereby Russian money, for example—it is in the news at the moment—might find its way into a campaign or political party to try to distort UK democracy. We need to be clamping down on that. That is not simply the case of some Russian billionaire who happens to have somehow mysteriously been given a British passport having a tennis match with two leading politicians. There are more discreet channels for siphoning money into British politics and distorting it.

The hon. Member for Oxford West and Abingdon makes a clear point. The hon. Member for Montgomeryshire —he is in charge of the Bill—said earlier that the new clause would be a delaying mechanism, but it would not delay the Bill and it would give a sense of certainty and clarity. More importantly, it would focus people’s minds on the importance of being wary of dirty foreign donations—I use that word with consideration—and forces that would malignly seek to intervene in our democracy. As such, the new clause is most welcome, and I pay tribute to the hon. Lady for introducing it.

The new clause requests that the Secretary of State

“prepare and publish a report on the effects of the provisions of this Act on...the ability of political parties and campaigners to determine the permissibility of donations from persons resident overseas, and...the ability of the Electoral Commission to take enforcement action where the rules on such donations have been breached.”

I have previously mentioned concerns about registration. It is more difficult to take enforcement action against persons living overseas. Again, that is why the consideration given by this new clause is important.

The Association of Electoral Administrators has expressed significant concern about the consequences of the Bill for the integrity of UK election campaigns, leaving the door wide open to unchecked foreign donations to UK election campaigns. There is widespread fear that, without proper preparation, the Bill could open floodgates to wealthy overseas donors having undue financial influence over our elections.

Our democratic system must continue to prevent elections from being influenced by wealth. At a time when public trust in politicians is pretty much at an all-time low, due to revelations about, for example, overspending by the Vote Leave and BeLeave campaigns—my right hon. Friend the Member for Exeter alluded to some of that in his intervention—it is important and is in the Government’s interests to put in place robust legislation to prevent foreign money from unfairly influencing our elections. We must avoid developing an American-style system, in which the voices of the most wealthy are elevated above all the rest.

An influx of unfair and illegitimate foreign donations could have a detrimental impact on the integrity of our democracy. Our reason for supporting the new clause is that one perhaps unwitting and unintended consequence of extending the franchise—along with all the difficulties that we have discussed in debates on previous amendments, such as the pressures on electoral registration officers or the investigatory ability of the Electoral Commission—could be to make it easier for dodgy foreign donations to get through and to taint and contaminate our democracy.

I will make a point that is perhaps a little party political, but I will make it anyway. Not always, but most of the time, those donations tend to go in one direction when they reach the UK. I ask Ministers to think carefully about whether there are any unintended consequences from the Bill.

The Government should intend to clarify in legislation that a person must be included in an UK electoral register at the point when the donation is made in order to be a permissible donor. According to the Electoral Commission, changes to the eligibility of overseas voters will prevent practical difficulties for political parties and campaigners to determine the permissibility of donations.

The complexity of overseas registration, as discussed in previous sittings, will cause practical difficulties when it comes to verifying campaign donations. In the case, for example, of a one-off referendum—we have seen it; my right hon. Friend the Member for Exeter alluded to this—someone can make the donation and it can have its effect and change the nature of a campaign. Yet by the time the permissibility or otherwise is established, the decision has been taken one way or another and that donation has had its desired effect. It may well be, as with the case of dodgy dealings in the referendum, that somebody gets a slapped wrist and pays a fine. These are very rich people, by the way, who can afford to pay those kind of fines. There has to be some kind of enforcement or verification at the time that the donation is made.

The Government are yet to clarify if a person must be included in a UK electoral register at the point when a donation is made in order to be a permissible donor. The precedent was set by the Supreme Court, and the Opposition feel it is important that that provision should be set out in legislation. The Supreme Court judgment of 2010 ruled that a donor’s eligibility to be registered was a significant factor in deciding permissibility. The 2010 judgment related to a donation made by a UK citizen and a UK Independence party member, who was eligible to register as an overseas voter but who, at the time that some of the donations were made to UKIP, was not actually registered. UKIP did not forfeit any of the money that it had received and was taken to court by the Electoral Commission.

Section 54 of the Political Parties, Elections and Referendums Act 2000 provides that a donation must not be accepted by a political party if the donor is not a permissible donor at the time of receipt. A permissible donor is defined in section 54(2)(a) as

“an individual registered in an electoral register”.

A political party that receives a donation must take all reasonable steps to verify the identity of the donor and whether he or she is a permissible donor. Under the terms of the statute, if a party is not satisfied that the donation is made by a permissible donor, it can return the donation within 30 days.

The hon. Member for Oxford West and Abingdon referred to the onus that that would place on the political parties themselves. Again, that is an unintended consequence: that political parties, not just electoral registration officers, would be put in quite a difficult bind in trying to establish whether the donor were permissible. In addition to political parties, the onus would also be on official or unofficial campaigns in referendums to investigate whether the donor is permissible or not. Of course, as we have seen in the past, that is not always an action that has been followed with vigour and ardour.

Sections 58 to 60 of PPERA provide for forfeiture in relation to donations made by impermissible donors. In particular, section 58(2) provides that where a political party has accepted a donation that it is prohibited from accepting, the Electoral Commission may apply to a magistrates court for an order of

“forfeiture by the party of an amount equal to the value of the donation”.

That is exactly what happened in the 2010 case. A member of UKIP was entitled to be registered as an elector but, for the period 1 December 2004 to 2 February 2006, that gentleman’s name was not on any electoral register. UKIP did not return any of the donations within 30 days, or at all.

On 16 March 2007, the Electoral Commission applied to the City of Westminster magistrates court for an order of forfeiture for an amount equal to the donations. Initially, the judge ordered the forfeiture of only £14,481, which was the value of donations received by UKIP after the date of a meeting between the Electoral Commission and the party, at which point UKIP could be demonstrated to have been aware that the gentleman in question was not on the electoral roll. Following judicial review, the Court of Appeal held that the magistrates court had erred in its construction of the Political Parties, Elections and Referendums Act 2000 and had not made a valid exercise of discretion under section 58(2). The court held that an order for forfeiture of an unlawful donation must reflect the full sum of the donation. UKIP appealed to the Supreme Court but was unsuccessful.

The primary object of forfeiture was the direct prevention of the mischief that the legislation is designed to prevent—in other words, to prevent unfair foreign funding to political parties. Furthermore, fully forfeiting the donation serves to deter against failure to comply with the requirements of the Act that are designed to ensure that donations are not received from an impermissible donor. The law provides that a donation must not be accepted by a political party if the donor is not a permissible donor at the time of receipt and, therefore, none of the donation total is permissible and should be forfeited in full.

I will add to what the hon. Member for Oxford West and Abingdon said, so as to direct the Committee a bit. A donation is a sum of money, goods or services with a value over £500. Parties must ensure that those are from permissible sources. All permissible donations over £7,500 to a central party, or a cumulative total during the year that exceeds £7,500, or £1,500 to constituency parties, must be reported to the Electoral Commission. I am sure that Government Members have a lot of experience of having to deal with donations of that size.

There is no data relating to the amount of money donated by overseas voters, but given the drastic increase in the franchise that will result from the Bill, we can fairly assume that the amount will be significant enough to warrant a detailed report. Under current laws, overseas voters are permitted to make party donations if they are registered to vote in the UK, as set out in the Political Parties, Elections and Referendums Act 2000. Although the Bill will make millions of new overseas voters eligible to vote, it is critical that they can donate only while they are registered. The Electoral Commission is asking for clarity that someone must be included on a UK electoral register at the point when the donation is made.

I go back to the point that my hon. Friend the Member for Nottingham North and I talked about, and to which the Minister responded. We can seek the guidance from those tasked with undertaking the provisions in this Bill or others, and we can seek their advice and we can consult them, but when those people—the experts who will be carrying out these measures—make suggestions, it is surely best to listen to what they say and to undertake to do that. If the Electoral Commission has requested that we undertake these measures, let us give it the respect that its officers and its expertise deserve and build those measures into the Bill.

The commission wants a clearer stating of the 2000 Act, so that parties must forfeit all money received from donors who are not registered to vote, even if they are eligible but unregistered because of an administrative oversight. All that the new clause does, therefore, is bring the proposed legislation up to date. We considered consequential amendments to schedule 1 last week, and the Opposition did not seek to amend those consequential amendments because they were simply that, but this is surely a consequential amendment too. Expanding the franchise and responding to the changes that have been made also require changes that have been brought about by experience and practice.

Photo of Ben Bradshaw Ben Bradshaw Labour, Exeter 3:00 pm, 31st October 2018

Does my hon. Friend share my concern that this fits into a worrying pattern from the Government? The Electoral Commission made several specific requests, including in connection with making the new rules in Northern Ireland retrospective, which the Government refused to honour. In the Minister’s statement to the House after the Electoral Commission found evidence of illegality by the leave campaign, she said that she would look to ensure that it had all the powers it needs. Once again, however, the Government are not willing to follow its advice and its clear request. Many of us feel that its powers are feeble and weak anyway, so for heaven’s sake, let us give it the powers for the things that it wants to do.

Photo of Siobhain McDonagh Siobhain McDonagh Labour, Mitcham and Morden

Order. I ask leave of the Committee to suspend the sitting for five minutes for personal reasons.

Photo of Chris Matheson Chris Matheson Shadow Minister (Cabinet Office)

May I take advantage of those personal reasons too?

Photo of Siobhain McDonagh Siobhain McDonagh Labour, Mitcham and Morden

Anybody may take advantage of those personal reasons, and then we will return to hear more of the contribution of my hon. Friend the Member for City of Chester. We will resume at 3.15 pm.

Sitting suspended.

On resuming—

Photo of Chris Matheson Chris Matheson Shadow Minister (Cabinet Office)

Before we suspended, my right hon. Friend the Member for Exeter asked whether I see a worrying trend of the Government being given advice by the Electoral Commission but not taking it into account. I seem to remember that in the run-up to the 2015 general election—probably in November or December 2014—the Electoral Commission proposed limiting the national spend on an election to £25 million or £30 million. Conservative Ministers in David Cameron’s coalition Government said, “Thank you, but we’ll ignore that,” and set the budget for the total national spend at about £78 million, which was conveniently close to what was in the Conservative party’s war chest at the time. The answer to my right hon. Friend’s question is yes, I do see a worrying trend.

If we are going to have an independent Electoral Commission as the guardian of the integrity of our electoral system, we should follow its recommendations. If it recommends x, we should not ignore it and proceed with y; we should show it a bit of respect. I say to Government Members that, having established an independent Electoral Commission, we should put its views before individual party considerations.

I have utter admiration for my right hon. Friend: he was in the House during the passage of the Political Parties, Elections and Referendums Act 2000, so he has direct experience of the discussions that went on at the time and he knows exactly what we are talking about. More than that, he has direct knowledge of how things were before the Act and of the reason for having an Electoral Commission in the first place. I urge Committee members to take careful note of what he has to say on the matter. There was a reason for passing the Act and for banning foreign donations, and there is a reason that today, as part of that lineage, we seek clarification on the effect on overseas donors of expanding the franchise under the Bill.

Earlier, I mentioned enforcement. A critical question that the UK Government must consider is how electoral donation laws will be upheld when the rules are broken by a British person abroad. What preparations has the Minister made to enforce donation laws when they are breached by British individuals overseas? We have heard from the hon. Member for Oxford West and Abingdon about the onus placed on political parties, but what about individuals abroad? Will they be considered culpable or liable under those circumstances?

We believe that better investigation is needed of how best to control political party donations to avoid illegal donations from overseas. I am speaking in favour of the hon. Lady’s new clause, and welcoming it warmly, because there is a real question mark over whether we are opening ourselves and our democracy up to further abuse, at a time when there is increasing evidence of meddling in our democracy from abroad by certain state actors, and through the use of foreign money. We all know who and what I am talking about, and we should not be blind to the dangers. In giving my support to the new the clause, I ask hon. Members, without being overly dramatic, to bear it in mind that our democracy is once again at stake. We need to be very careful that the Bill has no unintended consequences that allow malign foreign state influences greater access to meddle in and distort our democracy.

Photo of Alex Norris Alex Norris Labour/Co-operative, Nottingham North

We said at the outset that the integrity of our democracy is paramount, and during these sittings we have had to be mindful of unintended consequences and risks that could be created by the Bill, and this issue certainly falls into that category. I commend the work done by the hon. Member for Oxford West and Abingdon. This is the second time today that she has raised a significant point, and her leadership on this matter is very much valued across the House.

At no point have we said that the goal of the legislation is to expand the pool of eligible donors. That is its impact, though, so it is right that we should ensure that it does not create a weakness in our democracy and a vulnerability. The 2010 Supreme Court judgment said that eligibility to be registered was a significant factor in deciding permissibility, so we operate in that world. However, we do not have clarity from the Government—it would be great to get it at the earliest opportunity—on whether their position is that a person must be on the register at the point of donation. I was looking for that, but I do not think that the Government have ever showed their hand on it. It would be really valuable if they did so.

It is important to stress, as the hon. Lady did, that the new clause would not delay the Bill in the slightest; it would create a parallel process. I understood, heard and reflected on what the Minister said about normal business, and I took some reassurance from that, but on something so important there are two reasons that it will not suffice for the matter to be left to normal ministerial business.

First, this matter above all requires genuine transparency. We understand and respect the work that Ministers do, but it is important for everybody in the country who does not have insight into that to understand, and to have confidence in, that element of our democracy. That is why transparency is uppermost, and sunlight would be very much the best disinfectant when it comes to money in politics.

Secondly, Ministers change. A wise colleague told me early on to try to get good relationships with Ministers because they have such an important say over what happens in our communities, but not to get attached to those relationships because they change. That is why getting things written down and having something public that we can work with is so important. That would not delay the Bill, but it would, I hope, help to contain an unintended consequence of it and, as a result, give us all a bit more confidence in the very murky world around party donations.

Photo of Glyn Davies Glyn Davies Conservative, Montgomeryshire

I always listen to the hon. Member for Oxford West and Abingdon with great interest. She raised a lot of interesting points, and I do not think for one second that the new clause would delay the Bill; the points made by those on the Opposition Benches about that are right.

However, I think the new clause would extend the Bill. My intention in introducing the Bill is just to extend the franchise, and going into a complex, controversial area might well be a job for another Bill. I did not intend that to be part of this Bill. I hope, on that basis, that the hon. Lady will not press the new clause to a vote.

Photo of Chloe Smith Chloe Smith The Parliamentary Secretary, Cabinet Office, Assistant Whip

I fundamentally recognise the seriousness of the issues we are talking about today, and I thank the hon. Member for Oxford West and Abingdon for highlighting them in the new clause. This is a very important debate, and I am glad we have had it in Committee. I am glad, too, that she has, in her customary way, gone to the lengths of understanding the issue at hand and of making sure that it is drawn to the attention of the Committee.

I am also aware, of course, of the specific arguments that are advanced and the solution that is proposed by the Electoral Commission, but I note that, as the hon. Lady herself said, the new clause would not actually provide that solution. It would do a slightly different thing.

There are two points I want to make in response. The first is an argument specifically about the new clause and the Bill. As I said in response to other amendments, I am not convinced that an evaluation and a report are in themselves necessary. The Government do, of course, keep the processes and regulations that underpin political donations under review.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, The Cotswolds

The Bill provides a lot of flexibility in regulations and guidelines. While I take with absolute sincerity what the Opposition spokesperson said, particularly in relation to the activities of certain sovereign powers, I am sure he would agree that those activities are constantly changing. What we want is a Government who monitor what is going on very carefully, through whatever agencies they can, and respond in relation to the latest threats. My worry about the new clause is that if we enshrined it in statute, everybody would forget about it and the matter would not be given the currency it deserves. I recommend that the Minister keep it flexible, keep reviewing the situation and, if necessary, amend the Bill by guidelines or regulations.

Photo of Chloe Smith Chloe Smith The Parliamentary Secretary, Cabinet Office, Assistant Whip

I am grateful to my hon. Friend, who reminds us that when we seek to regulate we aim to have a combination of legislation—primary and secondary—backed up by guidance from regulators. It is absolutely right that we need that blend, which has already been referred to here and in other debates in Committee. It is also right that we keep looking at enforcement in practice as a matter of course. That is the end of the point that I want to make, which has been augmented by my hon. Friend.

Photo of Ben Bradshaw Ben Bradshaw Labour, Exeter

My point relates to the earlier intervention. I cannot speak for the hon. Member for Oxford West and Abingdon, but I suspect she might be less inclined to press the new clause were she to hear some assurance from the Minister that, rather than just keeping these things under review, the Government will commit legislative time—it is not as if we have a very heavy legislative programme at the moment—to implement the very specific requests that the Electoral Commission made following its investigations into law-breaking by the Leave campaign. She knows exactly what those recommendations and requests are. All we need is a commitment from the Government that they will use this vast expanse of legislative time with nothing else going on here to actually do it, rather than simply saying, “We will keep all these things under review.”

Photo of Chloe Smith Chloe Smith The Parliamentary Secretary, Cabinet Office, Assistant Whip

The right hon. Gentleman’s sarcasm may have run away with him a little there. As he knows, we are not rich in legislative time at the moment. That is due to one of the issues that I know is extremely close to his heart, and sits behind his question, which is Brexit and the legislative changes needed. I take the broader point that there is a broader set of considerations here, and I was just going to come to those.

Photo of Chris Matheson Chris Matheson Shadow Minister (Cabinet Office)

I genuinely do not think my right hon. Friend was being sarcastic. He is both well informed and also very passionate about—

Photo of Chris Matheson Chris Matheson Shadow Minister (Cabinet Office)

No, I cannot, because the Minister is giving way to me. May I ask the Minister to reconsider that one point? My right hon. Friend made a fair point and she might have misheard amidst the hubbub of the Committee.

Photo of Chloe Smith Chloe Smith The Parliamentary Secretary, Cabinet Office, Assistant Whip 3:30 pm, 31st October 2018

If the right hon. Gentleman would like to confirm that he genuinely thinks we are not short of legislative time, he is welcome to do so, but that is the truth of the matter. However, that is not even the nub of my response to the hon. Member for Oxford West and Abingdon; the nub is about where is best to have that consideration.

First, as a result of listening to this Committee—as you would expect me to do, Ms McDonagh—but also as a matter of the regular work that I would have done anyway, I have asked my officials to work with the Electoral Commission to understand the pressure points around donations in so far as they might relate to the Bill. We will want to work together on any further guidance that the commission would produce on donations. That is a reference to the regular work that the Executive and the Electoral Commission would do together anyway, which I mentioned earlier. That work is part of the combination of legislation and guidance that has to work together to produce a workable system.

I note that the basic rules on donations are not changed by the Bill. Those rules—some of which the hon. Member for City of Chester has made sure to read out for us this afternoon—state that donations over £500 to registered political parties must be from permissible donors, which includes individuals on the UK electoral register, political parties registered in Great Britain and companies and organisations registered and active in the UK. Those rules are effective at root because they prevent non-UK nationals living abroad from making large donations to political parties here.

Secondly—this is the heart of the matter—the topic that the hon. Lady has raised in her new clause has implications that are wider than the Bill. My hon. Friend the Member for Montgomeryshire, as he has pointed out, feels that his Bill is not the right vehicle for this serious and wide-ranging topic, and I agree.

All the broader arguments have to come together, whether they are about the ability of the Electoral Commission to take enforcement action, the arguments it made in its June 2018 report on digital campaigning, for example, or reports that have been produced elsewhere—reports that are in themselves in need of serious consideration and response. That may well add up to the point that the right hon. Member for Exeter was making. What I can say to him is what I have said to the House, and will happily say again: the Government are rightly taking the time to reflect on those things together in a considered way. I hope that makes it clear to the Committee that the vehicle for such consideration is not my hon. Friend’s Bill.

Indeed, to return to my first point, the new clause would not necessarily take us forward to those broader arguments. It would do something slightly different, and it is not the right amendment to meet the Electoral Commission’s request or a good use of the vehicle that is the Bill. The topic is much broader and needs to be looked at properly.

However, I am happy to make a commitment that I and my officials will work closely with the Electoral Commission to ensure that we understand the pressure points around donations, in so far as the Bill may freshly introduce any. The Electoral Commission will be producing guidance and will want to work with the Government to do that. It is in all our interests to ensure that the aims and objectives of this legislation interlock with the right guidance. That is what we will do, and I am happy to make that commitment, but I suggest that we need to return to those broader issues in a different place and time.

Photo of Chris Matheson Chris Matheson Shadow Minister (Cabinet Office)

Before the hon. Member for Oxford West and Abingdon winds up the debate, I want once again to thank the Minister for her response. It is her view, and that of the hon. Member for Montgomeryshire—the Member in charge—that this specific Bill is not the right vehicle for addressing the concerns that I and other hon. Members have expressed.

My one concern—it was hinted at by my right hon. Friend the Member for Exeter, and I hope I am not misquoting him—is, “If not in this Bill, then when?” How many times will the advice of the Electoral Commission be sought and then not acted upon? I take the point that she is consulting on these matters, but the longer this goes on, the more frustrated hon. Members get—a familiar argument for those of us who sit on other Bill Committees at the moment.

It is a serious point in this case. At what point does the Minister plan to bring forward the consolidated proposals for this and other matters? I do not expect her to reply now, because she has already replied very fully to the new clause, but there is a concern that once again the matter is being paid lip service—perhaps that phrase is disrespectful to the Minister, which is not my intention. It is perhaps being kicked into the long grass or, more respectfully, not given the urgency it needs. The implications of widening the franchise are not given the urgency needed.

In thanking the Minister for her response to the hon. Lady and the Committee, I ask her to realise that the more cumulative the effects of the different recommendations by the Electoral Commission, the greater the need for action rather than further consideration.

Photo of Layla Moran Layla Moran Liberal Democrat Spokesperson (Education)

I would like to thank everyone who has contributed to this debate, particularly the hon. Member for City of Chester, who put flesh on the bones of what I was talking about, particularly with regard to the Supreme Court judgment.

The point to make about guidance is that the guidance has always been there. The problem was that the judgment made it okay for those donations to be acceptable. Until such time as that loophole is closed, that is the problem and that Supreme Court judgment therefore allows it.

We would love to think that it would never be our parties that do it. In that case, it was UKIP, which does not have an MP any more. It could be a smaller, banana republic-style party that comes out of the woodwork. With the shifting sands of politics as they are, I have major concerns that this could well end up as a loophole that emerges quite soon after the introduction of this legislation.

As to the scope, this is answering specific concerns raised by the Electoral Commission as a result of this legislation. The reason I did not go for doing exactly as they say is because there may well be unintended consequences beyond that single issue worth taking into account, as a result of this legislation.

That is why I believe that a clause saying that a report would come back with actions for what the Government will do to close those loopholes is the right thing for this legislation. I would love to think that another Bill would then come along to tidy it all up. The Minister rightly points out that, on the one hand, we have very uncertain business and there are many days when we do not have a lot of things to do. However, should Brexit happen, we know that we will then be facing 10 years of a very fraught legislative process, while we go through all the changes that will be needed.

I am seriously concerned that, unless we send a signal now to the electorate that we are taking this absolutely seriously, guidance is not going to work. We had guidance and it did not work, because it still allowed that donation to be accepted. We need to send a strong signal and the proposed new clause would do exactly that.

Question put, That the clause be read a Second time.

The Committee divided:

Ayes 5, Noes 8.

Division number 9 Caledonian Pinewood Forest — Report on the effects on processes for controlling political party donations

Aye: 5 MPs

No: 8 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

New Clause 3