Political Parties, Elections and Referendums Bill

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Mr. Stephen Day (Cheadle): Labour Members are enjoying my hon. Friend's speech, in which he seeks to protect the interests of all political parties, especially the smaller ones. If members of those smaller parties read the reports of the Committee proceedings, they will realise that the Conservative party is looking after their interests.

Mr. Walter: I thank my hon. Friend for that helpful suggestion.

I have referred to a number of smaller parties, several of which I had not heard of before. I shall not go through the whole list, which is in alphabetical order, lest I bore the Committee. However, it starts with the All-party Alliance against Brussels. I leave hon. Members to decide which parties might be in that alliance. The next two alliances are the Alliance party of Northern Ireland of which I have heard—and the Alliance for Democracy UK. The fourth party mentioned is the Alternative Labour List, to which I referred this morning. No one on the Labour Benches has yet provided me with information on the size of that party, although I suspect that it will grow as time progresses.

Mr. Tom Levitt (High Peak): It is defunct.

Mr. Walter: It is still on the register, so I assume that it exists and will be grandfathered into the legislation. However, we have digressed.

I was not reassured by the Parliamentary Secretary, and I want to be clear about who would be guilty of this offence. He says that the party would be guilty. If there were to be a punishment, therefore, perhaps in the form of a fine, the party would suffer. However, the party is its members. As I have said, I am not a lawyer, but parties are not incorporated; they are not companies.

Mr. Tipping: I invite the hon. Gentleman to read clause 139(1). I understand what he is saying, but he will see that at the end of subsection (1) the association is to be treated as a corporation. That tackles his point directly.

Mr. Walter: I thank the Minister for pointing that out. I had already referred to clause 139, and I will let the corporate lawyers loose on its interpretation later. To treat an unincorporated body as if it were an incorporated body is difficult in law. An incorporated body has a separate legal locus, which an unincorporated body does not have. The court may treat it as if it were a corporation, but it is, none the less, the sum total of its members. My fear is that, if that were the interpretation of the courts, the members would become liable. I am not yet convinced that that subsection is a defence. If it were a defence, we would run into another serious problem, to which we referred earlier—political parties coming and going, being on the register and then disappearing from the register.

The Minister has raised the spectre of small political parties, such as the Civil Rights Movement and the Democratic Alliance of Wales, committing offences during an election and, because it is the party that appears in court and can be convicted of whatever misdemeanour it is accused of, the party can then disband and the members can go off and form another party—perhaps the democratic alliance of Wales 2001 party. That provides the opportunity for evasion.

We have examined the legislation, and the basic thrust of the clauses—some of which we have disagreed with when they relate to offences—has been that the people who commit the offence are the responsible officers. To sidestep that now and to make the party and, by implication, the party's members responsible is like trying to hit a moving target. I prefer consistency in legislation.

We all have an interest in ensuring that the Bill is clear, transparent, and promotes financial propriety. To suggest now that the responsible of officer can say, ``Not me, guv, it was the party'', is not the way in which to proceed. The responsibility on officers and treasurers will be onerous, particularly when it goes down the line to deputy treasurers in the smaller parties such as the English National party, the Equal Parenting party, the Flaunt It.Net Internet party, the Hackney 1st party, the Green party, the Highlands and Islands Alliance, and so on. Those parties will all have the same responsibilities, and we must be able to identify the responsible person in each party. That person will be the man or woman whose name appears on the register with the Electoral Commission as the treasurer of that party.

We have discussed who that person should be and the fact that he is a compliance officer who is responsible for ensuring that the party conducts its affairs correctly and in line with the legislation. It would be wise to remove from the provision reference to the party, whether corporate or unincorporate, committing an offence. I think that all our political parties are unincorporated associations, and it would be difficult to ask a court to treat them as if they were incorporated. A court would maintain that they were unincorporated and, as such, if an action were taken against an association, it could render all its members—be they the 330,000 members of the Conservative party or the 3.3 million affiliated members of the Labour party—liable for offences committed by a single person. Therefore, I commend both amendments to the Committee, and I hope that they will be incorporated in the Bill.

Mr. Grieve: I shall not repeat what my hon. Friend the Member for North Dorset (Mr. Walter) has said, but I want to focus on the issue of a political party being guilty of an offence, which has far-reaching implications. How have such matters been dealt with in the past? Will the clause set a precedent for the criminal liability of an unincorporated association?

It has been my, at times quite pleasant, lot in life to prosecute unincorporated associations as well as bodies corporate. A feature of the health and safety legislation with which I have tended to deal is that no explicit provision exists in relation to unincorporated associations. On a number of occasions, some rather strange things have occurred. For instance, the trustees of a great landed estate were prosecuted for an industrial injury involving a chain saw that occurred at a wood stall. At a Crown court in the middle of England, a top City solicitor, a Queen's Counsel and a senior partner in a firm of London accountants trotted into the dock and pleaded not guilty to charges relating to the chain saw incident, with which they had no direct connection. It was something of a pantomime.

To avoid such occurrences, there has been a tendency for mutual agreements to be reached between the prosecution and the defence. In such an agreement, the defence is told that the unincorporated association will be prosecuted in its own name, provided that the defence will not raise the matter as a point of law to try to nullify proceedings. Just before I was elected to Parliament, such a case arose, when a very large entity that registered ships' seaworthiness was prosecuted. It was concluded that, unless it was prosecuted under its own name, 346 members of its presiding committee—which, I believe, included the Duke of Edinburgh—would have to be indicted. That poses some interesting legal convolutions.

Clause 139—which I apologise mentioning, Mr. Maxton, but it is vital to our understanding of clause 72—makes specific provision for an unincorporated association to be prosecuted under its own name. That appears to be a sensible development. However, can the Minister tell us whether a political party has been singled out in legislation in this fashion before? If the Bill sets a precedent in that respect, the House may want to consider it as an issue of principle. It is the first time that I have encountered an unincorporated association being treated as a body corporate.

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The next question that springs to mind relates directly to clause 72: why do we need to do this? Previous clauses place the onus firmly on the treasurer, and I cannot remember any reference being made during our earlier discussions to the culpability of a political party per se. Why does clause 72, which deals with the financial limits on campaign expenditure, shift the onus on to the party, given that previous clauses go to so much trouble to single out the treasurer as the person who is required to keep the entire finances of the party under control?

The next matter that puzzles me is that although the unincorporated association is treated as if it were the body corporate, clauses 138 and 139 provide that the potential liability of individuals differs from that of either corporate or unincorporated bodies. Clause 72 tells us that not only treasurers, but parties, should be responsible. Clause 139, which relates closely to clause 72, tells us not only that parties are liable, but that a party's officers, committee and—depending on the party's size—entire membership may also be liable. That troubles me, because clauses 138 and 139 clearly take a different view of culpability. One might almost argue as a consequence that it would be worthwhile for a party to become incorporated.

Clause 138(1) provides for the prosecution of

    ``(a) any director, manager, secretary or other similar officer of the body corporate, or

    (b) any person who was purporting to act in such capacity''

if the offence has been committed with their consent or connivance or is attributable to any neglect on their part. Clause 139(7) states:

    ``Where any other unincorporated association is guilty of an offence under this Act—

    (a) every officer of the association who is bound to fulfil any duty of which the offence is a breach, or

    (b) if there is no such officer, every member of the committee or other similar governing body (other than the member who is proved to have been ignorant of, or to have attempted to prevent the commission of, the offence),

    shall also be guilty of that offence''.

Those who drafted the Bill, perhaps displaying the ruthlessness that they sometimes apply to their task, apparently want to have it every which way. I do not see the point of criminalising a political party in clause 72 if, under clauses 138 and 139, individuals within that party, other than the treasurer, are to be exposed to draconian penalties that are much more severe—in terms of their chances of getting themselves off the hook—than those that are applied to an incorporated body with directors. I hope that the Parliamentary Secretary will take that point as seriously as it was intended.

I am troubled by the way in which the Bill has been drafted, and I hope that the Government will explain how the parliamentary draftsmen went about their task. I fully understand that someone has to carry the can, but why not stick to the treasurer? If one believes that it is necessary to criminalise the actions of political parties and of treasurers, why does the proposal involve spreading the net so widely that it could catch officers and, potentially, members? If officers and committee members were prosecuted, it is not clear what the penalties would be. If a treasurer or deputy treasurer is prosecuted, the likely consequences, as we discussed earlier, are that he will not be able to fulfil his office or any office that will be regulated by the Bill.

My hon. Friend the Member for North Dorset (Mr. Walter) refrained from reading out the whole list of smaller parties, and I shall be guided by his approach, although it contains some esoteric names. If the committee of such a party were prosecuted, the party could effectively be destroyed because there might be no one in it who could satisfy the criteria that were necessary for it to continue to exist. That might sound unlikely, but it could happen and it is a possible threat to the democratic process.

I hope that the Parliamentary Secretary will explain the background to this matter and assure us that the proposal is necessary and that it will work in practice.

 
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