Political Parties, Electionsm and Referendums Bill

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Mr. Walter: Perhaps it would be helpful if we admitted that we come to the Committee as members of political parties that have existing financial structures. We are attempting to assess the impact that the Bill will have on them. The hon. Member for Hazel Grove spoke about the federal structure of his party, and the Bill's effect on it.

I shall reflect on how the Conservative party is structured at present.

Mr. Miller: That will be fun.

Mr. Walter: Well, I shall allude to the changes and reforms in my party in the past couple of years, which hon. Members may not have followed as closely as those of us on the inside. Until recently, there was nothing that could be clearly identified in law as the Conservative party. There were three different structures. The parliamentary Conservative party—the body in this House—was responsible for electing the leader of our party and for other matters related to our activities in the Chamber and in Government. There was another body, known as Conservative central office, which was the office of the leader of the party, and derived its authority from whoever was, for the time being, the party leader. Then there were the myriad independent Conservative associations and other bodies, such as the Scottish Conservative and Unionist party, which were also independent of the party. Those bodies in the country came together in a federal structure, called the National Union of Conservative and Unionist Associations—

Mr. Grieve: Confederal structure.

Mr. Walter: Yes, a confederal structure, as my hon. Friend says. Those bodies collectively provided the finance for the second arm, the office of the leader, through various payments.

We have changed that structure. The Conservative party is now an identifiable organisation.

Mr. Tipping: A force.

Mr. Walter: Indeed. Perhaps in a year or so it will be an even greater force. I shall expand on the points made by my hon. Friend the Member for Beaconsfield. As part of that structure, each constituency association—accounting units in the Bill—now has two financial officers, which leads to our probing amendment. We have a financial officer who is responsible for fund raising and for managing the budget of the local Conservative association, but he is not the treasurer—the accounting officer; the man who does all the bookkeeping, puts together the accounts, accounts to the Inland Revenue for any tax that might be due, ensures that the agent is paid on time and so on.

There are two distinct management functions. In tabling the amendment, we seek recognition of the two distinct financial roles: first, there is the important role, to which my hon. Friend the Member for Beaconsfield alluded, of ensuring that there is a responsible officer within the party organisation, or within its accounting units, who will be responsible to the party, to the greater public and to the Electoral Commission for ensuring that it has complied with the Bill's provisions, produced its accounts on time, and not taken donations, or spent money on activities that were not permissible. Secondly, nationally our party has the problem whereby the person who is called ``the treasurer'' is, in fact, the chief fund raiser and not the accounting officer. Will the Minister give us some guidance on the clause?

Mr. Tipping: I was grateful to hear about the history of the Conservative party and how it had emerged into such a confederated structure. I was even more interested in the comments of the hon. Member for Beaconsfield, when he said that one of the underlying issues for his own party is who is in overall control. I heard some of my colleagues make some helpful suggestions.

10.15 am

This probing amendment covers some of the ground that the Committee covered in relation to a federal structure. At different levels in political parties, different people take different responsibilities for financial affairs. The hon. Member for North Dorset clearly recognised the concept of accounting units, which the Committee will want to consider. It will also want to discuss the responsibilities that are devolved to a local level. The Bill puts onerous duties on parties that register. Someone in the party must take responsibility for complying with them and it is really up to the political party to decide who that should be.

Mr. Grieve: The Minister has clarified the issue. When I read the clause, I was concerned that a dispute might arise when a political party nominated its compliance officer, who had full accounting responsibility, but was then told by the commission that that person was not the party treasurer. Such disputes must be ironed out now rather than later.

Mr. Tipping: The hon. Gentleman will recognise that one of the themes of the Bill is that a scheme must be established between the commission and the parties. Agreement can be reached by the commission and the different parties on their structure. The essential part of the probing amendment and the Bill is that one person from the party should be responsible. He may be called ``the treasurer''; it may be that other terms are used in negotiations between the commission and the parties. The term itself is not important. What is important is that one person is responsible for compliance. For argument's sake, let us call that person ``the treasurer''. The Bill makes it clear that the person who returns the compliance forms ensures that they are in order.

The Bill is also clear that that person is responsible across the party for fundraising. It does not necessarily mean that the person who has overall responsibility will do the day-to-day work; the reverse is more likely.

I imagine that the Conservative party is not that different from the Labour party in that a series of officials have responsibility for fundraising to ensure financial compliance. The Bill insists that a scheme should be agreed between the party and the commission, and that only one person—let us call him ``the treasurer''—is responsible for the party's meeting its compliance obligations. However, he is also responsible throughout the organisation for the money raised. Unless one person is responsible for that work, there could be real difficulties. I realise that this is a probing amendment, but I suspect that that is not a real difficulty. It is an issue that political parties will want to consider.

On Second Reading, my right hon. Friend the Home Secretary suggested that political parties should begin to organise and prepare now. If it is our intention—I think that it is—that the Bill should be in place for the next general election, it would be wise to start making progress.

With those reassurances, I hope that the hon. Member for Beaconsfield will be prepared to withdraw the amendment.

Mr. Grieve: I am most grateful to the Minister. He has gone a long way to reassuring me about how the scheme will operate. His earlier comments about the nature of compliance and who is responsible for it will, if there is disagreement with the commission on the scheme, doubtless be waved under the commissioner's nose when the commission is being told how to interpret the legislation.

We hope that the scheme will work well. I agree with the Minister that it may be necessary for political parties to alter their financial structure in order to adapt. Political parties have no reason to sit back and say that they will not change anything. It is simply a question of trying to avoid pitfalls and ensuring that the scheme works smoothly. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Grieve: I beg to move amendment No. 4, in page 13, leave out lines 33 to 38.

The amendment might seem rather surprising. It may seem strange to suggest that being found to be criminally responsible for a failure to comply with the legislation should not bar one from being the treasurer of a political party. If my party ever suffered the misfortune of its treasurer being found not to have complied and being prosecuted for the offence, I certainly hope that we would not subsequently use his services as treasurer.

The Committee has a fundamental matter to consider. Members of Parliament lay down the law of the land and the people have to obey it. However, there is a difference between that and the political process because, by virtue of being a democracy, we grant people the right to change the Government at election time. We give them the right to put forward unpopular, unpalatable and, if they so wish, downright outrageous proposals.

For example, let us suppose that a party was set up consisting entirely of people who had been convicted of murder. Having all been released from Her Majesty's prisons and therefore having regained the vote and the ability to stand in an election, they could say that their aim as a political party was the legalisation of murder. Nothing would prevent them from doing that. We must therefore consider the position of those who operate a political party and who fail to comply with the law. If they fail to do that, they are prosecuted and punished, but the clause provides not only that such people will be prosecuted and punished but that they then might not be able to fulfil the criteria of being a political party at all, because some of the party's officers will be disqualified from holding office. I trust that the Minister will forgive me for raising that possibility, which I hope never arises. However, one can envisage small political parties effectively being struck off the register because they have failed to comply, been prosecuted or not produced returns. In the context of wishing to maintain the right of people to come together and form political parties, is that the correct approach to adopt?

That may appear to be taking the argument to extremes, but there is an issue involved. I hope that it does not concern my own party, or the Minister's party, or any mainstream party that has the opportunity to form a Government. But is the requirement—this is the key issue—really necessary? It treats political parties as though they were companies with fiduciary duties. I hope that my political party will always behave like a company with fiduciary duties and see itself in that way, but there is no reason why a political party should have to do so—unpalatable as that may be to me. I would therefore need to be persuaded that the legislation as a whole would fall apart if the provision were removed before feeling happy about letting it remain.

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