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The House divided: Ayes 281, Noes 202.
AYES
Ainger, Nick
Ainsworth, rh Mr. Bob
Allen, Mr. Graham
Anderson, Mr. David
Anderson, Janet
Armstrong, rh Hilary
Atkins, Charlotte
Austin, Mr. Ian
Austin, John
Bailey, Mr. Adrian
Baird, Vera
Balls, Ed
Banks, Gordon
Barlow, Ms Celia
Barron, rh Mr. Kevin
Battle, rh John
Bayley, Hugh
Beckett, rh Margaret
Begg, Miss Anne
Benton, Mr. Joe
Berry, Roger
Betts, Mr. Clive
Blackman, Liz
Blackman-Woods, Dr. Roberta
Blizzard, Mr. Bob
Blunkett, rh Mr. David
Borrow, Mr. David S.
Bradshaw, Mr. Ben
Brown, Lyn
Brown, rh Mr. Nicholas
Brown, Mr. Russell
Bryant, Chris
Buck, Ms Karen
Burden, Richard
Burgon, Colin
Burnham, Andy
Byers, rh Mr. Stephen
Byrne, Mr. Liam
Caborn, rh Mr. Richard
Cairns, David
Campbell, Mr. Alan
Campbell, Mr. Ronnie
Caton, Mr. Martin
Challen, Colin
Chapman, Ben
Chaytor, Mr. David
Clapham, Mr. Michael
Clark, Paul
Clarke, rh Mr. Charles
Clarke, rh Mr. Tom
Clelland, Mr. David
Clwyd, rh Ann
Coffey, Ann
Cohen, Harry
Connarty, Michael
Cooper, Rosie
Cooper, Yvette
Cousins, Jim
Crausby, Mr. David
Creagh, Mary
Cummings, John
Cunningham, Mr. Jim
Curtis-Thomas, Mrs. Claire
Davidson, Mr. Ian
Dean, Mrs. Janet
Devine, Mr. Jim
Dhanda, Mr. Parmjit
Dobbin, Jim
Dobson, rh Frank
Donohoe, Mr. Brian H.
Doran, Mr. Frank
Dowd, Jim
Drew, Mr. David
Dunwoody, Mrs. Gwyneth
Eagle, Angela
Efford, Clive
Ellman, Mrs. Louise
Engel, Natascha
Ennis, Jeff
Farrelly, Paul
Fisher, Mark
Fitzpatrick, Jim
Flint, Caroline
Flynn, Paul
Follett, Barbara
Foster, Mr. Michael (Worcester)
Francis, Dr. Hywel
Gapes, Mike
Gardiner, Barry
George, rh Mr. Bruce
Gerrard, Mr. Neil
Gibson, Dr. Ian
Gilroy, Linda
Godsiff, Mr. Roger
Goodman, Helen
Griffith, Nia
Griffiths, Nigel
Gwynne, Andrew
Hall, Mr. Mike
Hall, Patrick
Hamilton, Mr. David
Harman, rh Ms Harriet
Havard, Mr. Dai
Healey, John
Henderson, Mr. Doug
Hepburn, Mr. Stephen
Heppell, Mr. John
Hesford, Stephen
Heyes, David
Hill, rh Keith
Hillier, Meg
Hodge, rh Margaret
Hodgson, Mrs. Sharon
Hoey, Kate
Hood, Mr. Jimmy
Hope, Phil
Hopkins, Kelvin
Howarth, rh Mr. George
Howells, Dr. Kim
Hoyle, Mr. Lindsay
Hughes, rh Beverley
Humble, Mrs. Joan
Iddon, Dr. Brian
Illsley, Mr. Eric
Irranca-Davies, Huw
James, Mrs. Siân C.
Jenkins, Mr. Brian
Johnson, rh Alan
Johnson, Ms Diana R.
Jones, Helen
Jones, Mr. Kevan
Jones, Lynne
Jones, Mr. Martyn
Joyce, Mr. Eric
Keeble, Ms Sally
Keeley, Barbara
Keen, Alan
Keen, Ann
Kelly, rh Ruth
Kemp, Mr. Fraser
Kennedy, rh Jane
Khabra, Mr. Piara S.
Khan, Mr. Sadiq
Kidney, Mr. David
Kilfoyle, Mr. Peter
Knight, Jim
Ladyman, Dr. Stephen
Laxton, Mr. Bob
Lazarowicz, Mark
Lepper, David
Levitt, Tom
Lewis, Mr. Ivan
Linton, Martin
Love, Mr. Andrew
MacDougall, Mr. John
Mackinlay, Andrew
MacShane, rh Mr. Denis
Mactaggart, Fiona
Malik, Mr. Shahid
Mallaber, Judy
Marris, Rob
Marsden, Mr. Gordon
Marshall, Mr. David
Marshall-Andrews, Mr. Robert
Martlew, Mr. Eric
McAvoy, rh Mr. Thomas
McCabe, Steve
McCafferty, Chris
McCarthy, Kerry
McCartney, rh Mr. Ian
McDonagh, Siobhain
McFadden, Mr. Pat
McFall, rh Mr. John
McGovern, Mr. Jim
McGuire, Mrs. Anne
McIsaac, Shona
McKechin, Ann
McNulty, Mr. Tony
Meacher, rh Mr. Michael
Merron, Gillian
Michael, rh Alun
Milburn, rh Mr. Alan
Moffat, Anne
Moffatt, Laura
Mole, Chris
Moon, Mrs. Madeleine
Moran, Margaret
Morgan, Julie
Morley, Mr. Elliot
Mountford, Kali
Mudie, Mr. George
Mullin, Mr. Chris
Munn, Meg
Murphy, Mr. Jim
Murphy, rh Mr. Paul
Naysmith, Dr. Doug
Norris, Dan
O'Brien, Mr. Mike
Osborne, Sandra
Owen, Albert
Palmer, Dr. Nick
Pope, Mr. Greg
Pound, Stephen
Prentice, Bridget
Prentice, Mr. Gordon
Prescott, rh Mr. John
Primarolo, rh Dawn
Prosser, Gwyn
Purchase, Mr. Ken
Purnell, James
Rammell, Bill
Raynsford, rh Mr. Nick
Reed, Mr. Andy
Reed, Mr. Jamie
Riordan, Mrs. Linda
Robertson, John
Robinson, Mr. Geoffrey
Rooney, Mr. Terry
Roy, Mr. Frank
Ruane, Chris
Ruddock, Joan
Russell, Christine
Ryan, Joan
Salter, Martin
Sarwar, Mr. Mohammad
Seabeck, Alison
Shaw, Jonathan
Sheerman, Mr. Barry
Sheridan, Jim
Simon, Mr. Siôn
Simpson, Alan
Singh, Mr. Marsha
Skinner, Mr. Dennis
Slaughter, Mr. Andrew
Smith, rh Mr. Andrew
Smith, Ms Angela C. (Sheffield, Hillsborough)
Smith, Angela E. (Basildon)
Smith, rh Jacqui
Smith, John
Snelgrove, Anne
Soulsby, Sir Peter
Southworth, Helen
Spellar, rh Mr. John
Stewart, Ian
Stoate, Dr. Howard
Straw, rh Mr. Jack
Stringer, Graham
Stuart, Ms Gisela
Sutcliffe, Mr. Gerry
Tami, Mark
Taylor, Ms Dari
Taylor, David
Thomas, Mr. Gareth
Thornberry, Emily
Timms, Mr. Stephen
Tipping, Paddy
Todd, Mr. Mark
Trickett, Jon
Truswell, Mr. Paul
Turner, Dr. Desmond
Turner, Mr. Neil
Twigg, Derek
Ussher, Kitty
Vaz, Keith
Waltho, Lynda
Wareing, Mr. Robert N.
Watson, Mr. Tom
Watts, Mr. Dave
Whitehead, Dr. Alan
Wicks, Malcolm
Williams, Mrs. Betty
Wills, Mr. Michael
Winnick, Mr. David
Winterton, Ms Rosie
Wood, Mike
Woolas, Mr. Phil
Wright, Mr. Anthony
Wright, David
Wright, Mr. Iain
Wright, Dr. Tony
Wyatt, Derek
Tellers for the Ayes:
Mr. Ian Cawsey and
Tony Cunningham
NOES
Afriyie, Adam
Alexander, Danny
Arbuthnot, rh Mr. James
Bacon, Mr. Richard
Baker, Norman
Baron, Mr. John
Barrett, John
Beith, rh Mr. Alan
Benyon, Mr. Richard
Bercow, John
Blunt, Mr. Crispin
Bone, Mr. Peter
Boswell, Mr. Tim
Brady, Mr. Graham
Brazier, Mr. Julian
Breed, Mr. Colin
Brokenshire, James
Brooke, Annette
Browne, Mr. Jeremy
Browning, Angela
Burstow, Mr. Paul
Burt, Alistair
Burt, Lorely
Butterfill, Sir John
Campbell, Mr. Gregory
Campbell, rh Sir Menzies
Carswell, Mr. Douglas
Cash, Mr. William
Clappison, Mr. James
Clark, Greg
Cormack, Sir Patrick
Cox, Mr. Geoffrey
Curry, rh Mr. David
Davies, Philip
Davies, Mr. Quentin
Dodds, Mr. Nigel
Donaldson, Mr. Jeffrey M.
Dorrell, rh Mr. Stephen
Duddridge, James
Duncan Smith, rh Mr. Iain
Dunne, Mr. Philip
Evans, Mr. Nigel
Fabricant, Michael
Fallon, Mr. Michael
Featherstone, Lynne
Field, Mr. Mark
Foster, Mr. Don
Fox, Dr. Liam
Francois, Mr. Mark
Fraser, Mr. Christopher
Gale, Mr. Roger
Garnier, Mr. Edward
Gauke, Mr. David
George, Andrew
Gibb, Mr. Nick
Gidley, Sandra
Gillan, Mrs. Cheryl
Goldsworthy, Julia
Goodman, Mr. Paul
Goodwill, Mr. Robert
Gove, Michael
Gray, Mr. James
Grayling, Chris
Green, Damian
Greening, Justine
Greenway, Mr. John
Grieve, Mr. Dominic
Gummer, rh Mr. John
Hague, rh Mr. William
Hammond, Mr. Philip
Hammond, Stephen
Hands, Mr. Greg
Harris, Dr. Evan
Harvey, Nick
Heald, Mr. Oliver
Heath, Mr. David
Heathcoat-Amory, rh Mr. David
Hemming, John
Hendry, Charles
Hermon, Lady
Hoban, Mr. Mark
Hollobone, Mr. Philip
Holloway, Mr. Adam
Holmes, Paul
Horam, Mr. John
Horwood, Martin
Hosie, Stewart
Howarth, David
Hughes, Simon
Huhne, Chris
Hunt, Mr. Jeremy
Hunter, Mark
Hurd, Mr. Nick
Jack, rh Mr. Michael
Jackson, Mr. Stewart
Jones, Mr. David
Kawczynski, Daniel
Keetch, Mr. Paul
Kirkbride, Miss Julie
Laing, Mrs. Eleanor
Lamb, Norman
Lancaster, Mr. Mark
Lansley, Mr. Andrew
Leech, Mr. John
Leigh, Mr. Edward
Letwin, rh Mr. Oliver
Lewis, Dr. Julian
Liddell-Grainger, Mr. Ian
Lilley, rh Mr. Peter
Llwyd, Mr. Elfyn
Luff, Peter
Maclean, rh David
MacNeil, Mr. Angus
Malins, Mr. Humfrey
McCrea, Dr. William
McIntosh, Miss Anne
McLoughlin, rh Mr. Patrick
Miller, Mrs. Maria
Milton, Anne
Moore, Mr. Michael
Mulholland, Greg
Mundell, David
Newmark, Mr. Brooks
O'Brien, Mr. Stephen
Oaten, Mr. Mark
Öpik, Lembit
Paice, Mr. James
Paterson, Mr. Owen
Pelling, Mr. Andrew
Penning, Mike
Penrose, John
Pickles, Mr. Eric
Prentice, Mr. Gordon
Pritchard, Mark
Pugh, Dr. John
Randall, Mr. John
Redwood, rh Mr. John
Reid, Mr. Alan
Rennie, Willie
Rifkind, rh Sir Malcolm
Robathan, Mr. Andrew
Robertson, Mr. Laurence
Robinson, Mrs. Iris
Robinson, Mr. Peter
Rogerson, Mr. Dan
Rowen, Paul
Ruffley, Mr. David
Russell, Bob
Salmond, Mr. Alex
Sanders, Mr. Adrian
Scott, Mr. Lee
Selous, Andrew
Shapps, Grant
Shepherd, Mr. Richard
Simmonds, Mark
Simpson, Mr. Keith
Soames, Mr. Nicholas
Spelman, Mrs. Caroline
Spicer, Sir Michael
Spink, Bob
Spring, Mr. Richard
Stanley, rh Sir John
Steen, Mr. Anthony
Streeter, Mr. Gary
Stuart, Mr. Graham
Stunell, Andrew
Swayne, Mr. Desmond
Swinson, Jo
Swire, Mr. Hugo
Syms, Mr. Robert
Taylor, David
Taylor, Matthew
Taylor, Dr. Richard
Teather, Sarah
Thurso, John
Turner, Mr. Andrew
Tyrie, Mr. Andrew
Vara, Mr. Shailesh
Villiers, Mrs. Theresa
Walker, Mr. Charles
Walter, Mr. Robert
Waterson, Mr. Nigel
Watkinson, Angela
Webb, Steve
Weir, Mr. Mike
Whittingdale, Mr. John
Widdecombe, rh Miss Ann
Wiggin, Bill
Willetts, Mr. David
Williams, Hywel
Williams, Mark
Williams, Mr. Roger
Williams, Stephen
Willis, Mr. Phil
Willott, Jenny
Wilson, Mr. Rob
Winterton, Ann
Winterton, Sir Nicholas
Wishart, Pete
Wright, Jeremy
Young, rh Sir George
Younger-Ross, Richard
Tellers for the Noes:
Mr. David Evennett and
Mr. Henry Bellingham
Question accordingly agreed to.
Lords amendments Nos. 9 to 15 agreed to.
Bridget Prentice: I beg to move, That this House agrees with the Lords in the said amendment.
Mr. Deputy Speaker (Sir Michael Lord): With this we may discuss Lords amendments Nos. 62 to 75, 103, 110 to 122, and 126 to 129.
Bridget Prentice: Amendments Nos. 61 to 63 were introduced following pressure from both Houses for an increase in the number of descriptions that a party can register with the Electoral Commission. The original number was five, which was the number recommended by the Electoral Commission. That would allow, for example, one description for each of England, Northern Ireland, Scotland and Wales, and one for the United Kingdom as a whole. The Liberal Democrats introduced the amendments in another place. They sought to increase the number of descriptions to 12 because that equals the number of nations and regions in the United Kingdom, and so that parties could register descriptions such as “London Liberal Democrats”, “East Anglian Conservatives”, or “Yorkshire and Humberside Labour”. I therefore recommend that the House accept those amendments.
Amendments Nos. 64 to 72 fulfil the commitment made by my hon. Friend the Under-Secretary of State for Scotland on Third Reading in this House. Members may recall that amendments moved then became clause 59, and that they removed the need for duplication in reporting of donations, but for MPs only.
7 pm
By way of brief background, schedule 7 of the Political Parties, Elections and Referendums Act 2000 sets out, among other things, the requirement that “holders of elective office” should report the donations that they have received to the Electoral Commission, which then publishes them. That has the effect that MPs, MEPs, Members of devolved Administrations and local councillors throughout the UK have to report donations both to the Electoral Commission and to the relevant register of members’ interests of the body of which they are a member. The Select Committee on Standards and Privileges, chaired by the right hon. Member for North-West Hampshire (Sir George Young)—to whom I express my gratitude for his help in this matter—expressed concern about the duplication, referring to it in a report published on 20 July 2005.
Lords amendments Nos. 64 to 72 remove the requirement of dual reporting for holders of relevant elective office. That means that holders of the relevant elected office would not have to report any donations received to the Electoral Commission, whether the
donations were received in their role as the relevant elected officer or in their role as a member of a registered political party. Of course, as with the provisions already included in clause 58, the Electoral Commission will retain the obligation to record any details it receives from the relevant registers of members’ interests. The commission will continue to supervise compliance with the regulatory system as set out in the Political Parties, Elections and Referendums Act 2000.
The House should note that this provision can be commenced only once the Electoral Commission is content that the relevant authorities have arrangements in place to ensure that the commission is still able to maintain an accurate register. I hope that hon. Members will see that as an appropriate balance between requiring transparency and removing bureaucratic duplication. The amendments are supported by the Electoral Commission, as well as relevant bodies, including the Scottish Executive and the Standards Board for England.
Lords amendments Nos. 73 to 75, 103, 110 to 122 and 126 to 129, on the reporting regime for loans, fulfil the commitment that I made to the House on 20 March that the Government would table amendments to the Bill to make it compulsory for political parties to disclose any loans that they receive. There are issues relating to the funding of political parties that go beyond the disclosure of loans and the review by Sir Hayden Phillips will deal with those. We have tabled these amendments now because there is broad agreement between the political parties and the Electoral Commission as to what should be done. This Bill presented us with an opportunity to act immediately in seeking to deliver the same openness for loans as currently exists for donations. I was heartened by the consensus on the principles of seeking to achieve greater openness and transparency in relation to significant loans afforded to political parties, individual members, members associations and holders of relevant elective office.
The amendments take the form of a new part 4A of, and schedule 6A to, the Political Parties, Elections and Referendums Act 2000—PPERA.
Mr. David Winnick (Walsall, North) (Lab): The position on loans was a glaring loophole for which we are all responsible, not only the Government. It should have been recognised at the time, but all Labour Members are very pleased that it will at last be closed.
Bridget Prentice: My hon. Friend is right. All hon. Members need to take some responsibility for this, and the right hon. Member for North-West Hampshire recognised that on behalf of the Standards and Privileges Committee. That is one reason why we have had such openness and consensus on the issue.
Part 4 of and schedule 6 to PPERA provide a system for the regulation of donations to political parties. That regime requires all donations over £5,000 to a political party to be reported to the Electoral Commission, and ensures that donations can be made only by individuals or organisations with a sufficient connection to the United Kingdom. It has been accepted that those requirements have brought
transparency and openness to the making of donations, which is why we have chosen the same regime for loans. Indeed the new provisions deviate from the requirements for donations only where necessary to reflect the difference between a loan and a donation. I am sure that hon. Members will agree that it makes sense to build on the success of the existing regime to try to achieve the same level of openness regarding loans.
Before coming to the more detailed aspects of the regime as set out in the new sections and schedule, it might be useful to remind the House of the four main features. First, the reporting requirement is triggered when a loan exceeds the initial reporting threshold of £5,000 or the subsequent reporting threshold of £1,000. Such loans, whether made on commercial or less than commercial terms, will have to be reported to the Electoral Commission. That will be at quarterly intervals, and at weekly intervals during a general election period. Secondly, all loans extant on the day that the provisions come into force would have to be disclosed, and any taken out thereafter. Thirdly, a party would be permitted to take out a loan only from the same sources from which it is permitted to receive donations, although existing loans will not be subject to that permissibility requirement. Fourthly, the regime would cover not only loans, but all credit facilities and the provision by third parties of guarantees and securities.
On 20 March, the Lord Chancellor wrote to all the parties represented at Westminster and he has since held meetings with many of them. Each has shared our concern that we should act quickly and recognised that a scheme similar to that now well established for donations would be a proportionate response to the need for transparency. We have also taken the views of Sam Younger, chairman of the Electoral Commission, who has welcomed the proposals, and consulted the British Banking Association.
Mr. Andrew Turner: I appreciate, as I am sure do hon. Members on both sides of the House, the efforts that have been made to secure consensus on this point. Is there anything to prohibit foreign nationals or others making large donations to campaigning organisations that are not registered as political parties, such as the Countryside Alliance or the League Against Cruel Sports?
Bridget Prentice: I will come to that issue shortly. We need to address concerns about third parties—
Mr. Peter Bone (Wellingborough) (Con): Am I to understand from what the Minister has said that, if an organisation had a temporary overdraft in excess of £5,000, it would have to be reported?
Bridget Prentice: If a loan already exists and is ongoing, it will not have to be reported, but any loan made subsequently will be reported. I will cover issues such as capitalisation later. It is a complex and technical part of the Bill, but I hope that I will answer the hon. Gentleman’s question as I continue.
The scope of the regime is not merely restricted to straightforward loans. The regime also includes credit facilities, such as overdrafts, and arrangements where a third party offers a guarantee or security in respect of
the liabilities of a political party. If security agreements were not included in the new regime, a wealthy backer could offer guarantees to all of a party’s commercial suppliers, and enable the party to obtain anything that it might need at any given time, even though the party’s own credit rating would mean that it could not otherwise do so.
One of the key issues in deciding whether a regulated transaction has to be disclosed will be its value. Disclosure will not be required for loans of £5,000 or under, unless the combined lending from the same authorised participant exceeds £5,000 during the course of a reporting year, and the regime does not apply at all to loans of £200 or under.
New section 71G specifies that the value of a loan is the total amount to be lent——that is, the “interest charged” is not included. For a credit facility, the valuation is the maximum amount that may be borrowed under the arrangement. For an arrangement involving any form of security, it will be the contingent liability assumed by the person who gives the security.
A question arose in the other place about loans that contain capitalisation provisions—that is, a facility for outstanding interest to be rolled up into the total sum of the loan. These amendments provide that, where a regulated transaction provides for capitalisation at the outset, the potential for capitalisation is not considered in the valuation of a loan. That would be a matter of particular importance in the case of loans whose face value is just below the reporting threshold and which contain capitalisation provisions that might cause the initial value of the loan to exceed the reporting threshold.
We have intentionally steered away from imposing on political parties the rather inexact science of having to ascertain whether capitalisation provisions might cause a loan to cross the reporting threshold. However, where the face value of the loan crosses the reporting requirement, the existence of capitalisation provisions would have to be recorded in the report to the Electoral Commission. We believe that that approach strikes the right balance between practicability and transparency.
Proposed new section 71H deals with the important question of permissibility. We believe that, as happens with donations, a lender should be either an individual whose name is on the electoral roll or an organisation with a sufficient connection to the UK. Proposed new section 71H prevents a party from entering into a regulated transaction with anyone other than authorised participants, the latter being defined by reference to the existing list of permissible donors in section 54(2) of PPERA. The restriction will not apply to regulated transactions entered into before the new provision commences.
The permissibility requirement is enforced by a range of criminal offences. For example, when a party takes out loans with unauthorised participants, the party and its treasurer may commit criminal offences.
Mr. Angus MacNeil (Na h-Eileanan an Iar) (SNP): The UK link is one thing, but should not the Bill ensure that there are no links between political parties and seats in the upper House of Parliament?
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