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|Session 2007 - 08|
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Public Bill Committee Debates
Draft Electoral Administration Act 2006 (Regulation of Loans etc: Northern Ireland) Order 2008
The Committee consisted of the following Members:
Celia Blacklock, Committee Clerk
attended the Committee
Third Delegated Legislation Committee
Wednesday 30 April 2008
[Dr. William McCrea in the Chair]
Draft Electoral Administration Act 2006 (Regulation of Loans etc: Northern Ireland) Order 2008
That the Committee has considered the draft Electoral Administration Act 2006 (Regulation of Loans etc: Northern Ireland) Order 2008.
I welcome you to the Chair this afternoon, Dr. McCrea. The purpose of the order is to make provision for the regulation and verification of loans to political parties in Northern Ireland by the Electoral Commission from 1 July 2008. Prior to laying the order, the Government consulted the Electoral Commission and the Northern Ireland political parties. I warn members of the Committee that the order and my speech include reference to legislation with some of the longest titles that I have ever come across as a Minister. Nevertheless, I am sure that they will find it helpful if I briefly set out the legislative provision that has already been made for the regulation of donations and loans to political parties in recent years and explain how the order fits in.
The Political Parties, Elections and Referendums Act 2000 governs the regulation of political donations and loans in the United Kingdom. When it was passed, it created a new regime for the regulation of donations to UK political parties that began to operate in Great Britain, but the scheme was not commenced for Northern Ireland parties at the time.
In 2006, it was decided to extend the controls on donations to Northern Ireland. The 2000 Act provisions were modified by the Northern Ireland (Miscellaneous Provisions) Act 2006 to introduce arrangements that reflect the particular circumstances of Northern Ireland. First, Irish citizens and prescribed Irish bodies were allowed to donate to Northern Ireland political parties. Secondly, provision was made for the Electoral Commission to hold records of donations confidentially until 2010.
The broad outline of the arrangements for Northern Ireland was set out in amendments to the 2000 Act. The detail of the arrangements, including the conditions that Irish citizens or bodies must meet in order to make donations and the steps to be taken by the Electoral Commission to verify donations, was set out in a subsequent order: the Political Parties, Elections and Referendums Act 2000 (Northern Ireland Political Parties) Order 2007the longest title of any legislation that I have ever come across. The regime for the regulation of political donations is now operating in Northern Ireland.
In 2006, a new regulatory regime was also created for loans to political parties in Great Britain. It has not yet been applied to political parties in Northern Ireland,
As members of the Committee will have gathered, the arrangements for the regulations of loans set out in the order have strong similarities to those already introduced for donations in Northern Ireland. That strong link is based on section 63 of the Electoral Administration Act 2006, which specifically allows the Secretary of State to modify the loans regime in its application to Northern Ireland in a way that corresponds to, or is similar to, the modifications made for donations.
As with political donations, the order includes Irish citizens and prescribed Irish bodies in the list of those individuals and bodies authorised to make loans to Northern Ireland political parties. In doing so, it creates arrangements that acknowledge the special place that Ireland occupies in the political life of Northern Ireland. We intend to set out in a subsequent order the conditions that an Irish citizen or Irish body must meet in order to make loans to a Northern Ireland recipient.
The order addresses potential concerns relating to the possible intimidation of persons and businesses that wish to enter into regulated transactionsloans or donationswith political parties. Thankfully, Northern Ireland has rejected the violence of the past and embraced a democratic and peaceful future. However, violence and intimidation remains a favoured option for a small minority to achieve their ends. We cannot allow such individuals to subvert the right of the people of Northern Ireland to participate in the democratic process. For that reason, as with the provisions that regulate donations, the order provides for legitimate loans to Northern Ireland parties to be reported in confidence to the Electoral Commission. It is a temporary measure that will last until 2010. The period may be extended by order with Parliaments approval, but it remains my firm hope that that will not be necessary.
It is important to note that the commission will have the power to verify reported transactions and to release information contained in a report on a regulated transaction if it believes on reasonable grounds that the regulated transaction was entered into with an unauthorised participant. We intend to set out in the second order the steps that the commission must take to verify information contained in donation reports during the confidential reporting period.
The order represents an important step forward from the current, unregulated state of affairs toward the level of accountability that the rest of the UK enjoys. In line with the provisions of the Good Friday agreement, it acknowledges the important relationship
Mr. Laurence Robertson (Tewkesbury) (Con): May I, too, welcome you to the Committee, Dr. McCrea? Oddly, we used to have an awful lot of statutory instruments and orders on Northern Ireland business, but we have not had any for quite a long time. As soon as I begin to lose my voice, we have two in a week. I suppose that that is how life goes here.
I thank the Minister for his courtesy in providing me with various items of information on the order and for going through it briefly with me, but I am a little concerned about its contents, as I said when a similar measure on donations in the Northern Ireland (Miscellaneous Provisions) Act 2006 was proposed. I should like to develop one or two of those concerns. I am worried that we are approaching the matter in two stages. We are being asked to approve the principleand probably a little moreof the order now, but we will come to the details later in the year, which is rather unsatisfactory. I do not know why we could not consider the measures together or why we could not consider one order today and one tomorrow, so that we could look at everything at once. It is peculiar that the matter is being treated in that way. The devil is in the detail is an old saying, but it is often true. I should like to place on record my slight concern about the way in which we are dealing with this business.
It is useful to ask a few questions about how the provisions on donations in the 2006 Act are workingI hope that you will find such questions in order, Dr. McCrea, because I believe that they are relevant. Has the Minister been able to assess the level of donations since the 2006 from the south? Which parties in the north have benefited from donations? How much does he anticipate each party will receive in loans from the south? It is not for me to make this case, but there is a worry that the measure may benefit one or two parties in Northern Ireland rather than all the parties. I am concerned about that, but it is probably for others to raise the matter, and no doubt they will do so as the Committee proceeds.
One of the biggest worries about allowing donations and loans from the Republic concerns the original source of such money. If it starts off fairly innocently in the Republic, that is one thing, but we are all aware of the negative impact of money from AmericaNoraid, to name one organisationthat has had a deadly effect in Northern Ireland at times. We are concerned to ensure that, if money purports to come from the Republic, it does come from the Republic. That must be difficult for any Government to monitor, but will the Minister put our minds at rest? Has that been monitored so far, and how will it be monitored in future?
An intriguing situation might arise, which I have discussed briefly with the Minister, and I will pose a question. Will the Conservative party in Northern Irelandwe organise therebe eligible for loans from the Republic? Is the party eligible for donations? I understand that it is illegal for the Conservative party in
I want, too, to discuss the confidential nature of donations and loans. I understand the thinking behind the measure but, as the Minister said, things have moved on a great deal in Northern Ireland, although he is correct to mention the dissident republicans and some loyalist groups that want to continue the troubles and the violence for their own ends. I understand that they cannot be allowed to disrupt what the Government intend to happen, but they are being allowed to disrupt what is seen as normal in Great Britaina genuine openness on donations. We are all well aware of some of the concerns about party funding in the United Kingdom, and I regret that, unfortunately, in one part of the United Kingdom we are not going to have openness about such funding.
The fact that that money will come from a separate jurisdiction adds a further twist, and I am concerned that none of us will be able to assess where that money comes from. Presumably, we will not be able to assess where it is going. Not being able to make that assessment is a problem for me as a parliamentarianthe Electoral Commission can find out that information, but I cannot do so. Nor will you, Dr. McCrea, as a Northern Irish Member of Parliament, be able to find out such information. I have concerns, therefore, about the confidential nature of donations.
I have a few concerns about the order. As I said, we are dealing with only half of it, and I am concerned about that half, for the reasons that I have expressed. I look forward to the Ministers responseif he does not have all the facts to hand, perhaps he will do me the courtesy of writing with the replies.
Mr. Gregory Campbell (East Londonderry) (DUP): I rise to speak, and serve again under your chairmanship, Dr. McCrea.
The Minister has been clearly outlined the essential target date1 July 2008and the fact that the order is the first stage of a two-part process. My party, and virtually everyone in Northern Ireland, would welcome a move towards openness and transparency in party political funding and loans. My party and I share some of the reservations expressed by the hon. Member for Tewkesbury. He said that it was not for him to highlight some of the issues, but I cannot say the same. It is for someone like me to do so, and therefore I shall.
The concern is that the order would mean little to a normal political party, because we all should be subject to the type of scrutiny and regime that is envisaged. The problem is, of course, that there is one political party that is emerging. It is hoped that it will continue to emerge from a difficult and violent past and become a proper political party, and we continue to monitor its movement and its development towards that stage, which we hope it reaches sooner rather than later. Our concern is that that party, Sinn Fein, has previously had access
The Minister indicated that loans would be reported in confidence to the Electoral Commission, but I should like him to address the central point. If issues emerge, either in the reporting or the non-reporting of what appear to be funds that can be deployed by a political party to the disadvantage of that partys opponents, what is the mechanism whereby the Electoral Commission can say, We have received this information in confidence, but because of the nature of these reports we are minded to do something.? Once the Government are aware of such concerns, how do they alert public representatives and the community to ensure that they remain confident that the Government and democratically elected politicians are aware of what could happen and are prepared to take action to stop it? That is the issue: we must try to instil confidence in the wider community and retain that confidence, in the process, not just of donations but of loans.
Mr. Alan Reid (Argyll and Bute) (LD): It is a pleasure to serve again under your chairmanship, Dr. McCrea. I thank the Minister for his explanation of the order. The donations regime in part 4 of the Political Parties, Elections and Referendums Act 2000 applies to Northern Ireland, but sections 71(a) and 71(b) of that Act allow Northern Irelands political parties, individuals and members associations to accept donations from Irish citizens and Irish bodies that meet certain conditions. That is in recognition of the special place that Ireland occupies in the political life of Northern Ireland. The order ensures that loans made to Northern Irelands political parties are covered by the same provisions as donations, and ensures that the acceptance of loans extends to prescribed Irish bodies and Irish citizens. I welcome the extension, because it makes sense for loans to be covered by the same rules as donations.
I have a few questions for the Minister. The order states that Irish bodies and Irish citizens can make loans, and that the Electoral Commission has a duty to carry out verification processes. However, as other hon. Members have said, the detail will come in a future order. I am puzzled about why that is necessary, because the rules on who can make donations and the steps that the Electoral Commission has to go through for the verification of donations are already set out in the Elections and Referendums Act 2000 (Northern Ireland Political Parties) Order 2007. If the purpose of the order is to make the regime for loans the same as that for donations, I do not understand why the
Because of the fear of intimidation, there is a rule that between 1 July 2008 and 31 October 2010, loans will be given in confidence, as is the case with donations. As other hon. Members have said, that means that the funding of political parties in Northern Ireland will not be transparent. While I accept the reason for those concerns and the fact that loans have to be given in confidence, I draw the Ministers attention to a point that I made when we passed the donations order. Although it might be correct not to publicise the name of the Irish citizen or body giving a donation, there could be a summary report on the amounts given or loaned to each political party in Northern Ireland, and a breakdown of categories of donors or those who have made loans. For example, there could be a breakdown of information on whether a loan was given by an individual, a business, a political party, a trade union, a members association or another body. Although the name of the individual or body could be kept confidential, there could still be a breakdown by category, which would at least give some indication of how Northern Ireland political parties are funded, without putting any individuals at risk.
When the prescribed period comes to an end on 31 October 2010, it will be quite straightforward to learn the date on which donations are given. Each donation is given on a certain date. Although loans are given on a certain date, by their very nature they are in existence over a longer period. If a loan is given before 31 October 2010 and has not been paid back by that date, will it be publicised on that date? I look forward to the Ministers answers to my questions, but I certainly support the principles behind the order.
Dr. Alasdair McDonnell (Belfast, South) (SDLP): It is a privilege to serve in Committee with you in the Chair again, Dr. McCrea. I think that this is the second time that I have had the privilege of thanking you for your consideration.
I have no specific difficulties with the order, because it purely follows on from existing legislation. However, I have a general worry and I beg your indulgence for a few moments, Dr. McCrea, so that I can raise some points. While regulation, from a point of principle, is excellent, I worry that so much regulation is being introduced that, whatever little bit of money is raised, we spend a fair slice of it complying with it. At least, that is my experience. My party is not as well positioned as others that are represented here to raise large sums of money. I am deeply concerned about ever-shrinking donations and the impact of that.
My colleague and learned friend, the hon. Member for Argyll and Bute, raised the issue of trying to monitor what is happening. I think that we must also monitor the flow of money that is coming in. Most of us are in a fair amount of debt, politically. Democracy is expensive.
As you know, Dr. McCrea, contesting elections is also expensive. If democracy is to succeed, resources are needed to contest elections and to create space for that democracy, and nowhere is that more relevant than in Northern Ireland. I share the concerns about paramilitary or paramilitary-style money. I also share the concerns that those with a paramilitary backgroundhaving undertaken some dastardly deeds in the pastmay not have many qualms about making a few false claims here and there, and that forms may not have much impact on or relevance to them. It is a question of working the process.
My concern, which I must express at this stage, concerns increasing difficulties with money being raised publicly and having to be controlled and managed, lest it be tainted in some way or construed as a push or a shove, a nudge or a winkordare I say it?a bribe. All the implications are drawn behind the regulation, and I urge the Minister to persuade those responsible to look again at the possibility of a degree of public funding that would ultimately eliminate all the suspicion and distrust, or at least a large slice of it. Until we reach that point, we will not get a satisfactory arrangement; there will always be fraying at the edges and concerns.
I assure colleagues from other parties that the problem with the flow of money to my party from south of the border is the sheer lack of it, rather than any suspicious resource. I will use all my power in the next year or two to ensure that that flow is increased. It is essential for my party, and for those elements of democracy that I try to represent, that we get some money, and that has always been a useful source. We try to keep it legitimate, clean and above board, but I am baffled by the idea of having to tell some Dublin business man who has given me a few pounds that he must take his passport to be checked at the British embassy, or wherever, before he can hand me the cheque. My concern is that we can bottle this up, but we will reach a point where we cannot dither over the issue any more. Public funding must become the issue, rather than regulating things to the point of strangulation.
Paul Goggins: May I say to the hon. Member for Tewkesbury that I am glad that his voice is holding out at least past the second order, although I can only promise him that there will be some more in the weeks ahead? I am sure that he looks forward to our continued exchanges on that basis. He asked a question, as did the hon. Member for Argyll and Bute, about why we had to deal with this order in two parts, and that was the first question that I asked when I was being briefed and getting ready to come here.
The position is clear. We consulted the Joint Committee on Statutory Instruments on the issue, and it advised us that the orders had to be done in sequence rather than both at the same time. Put simply, this order will amend the primary legislationthe 2000 Act. That means that we create the power, but that we must set out the detail of how it is to be exercised in a subsequent order. Having been considered today, the order must then go to the House of Lords for consideration, which is due to happen on 12 May. We will lay the second order immediately after that and we will try to get it to Committee as soon as possible because, as the hon. Member for Argyll and Bute pointed out, all that must be done before 1 July. I apologise for the fact that we
The hon. Member for Tewkesbury asked for my assessment of the new system of regulating donations, which has been in place in Northern Ireland for a while. Clearly, it is not possible for me to comment on amounts in any detail, as that remains confidential. However, I am keen to, and will, discuss with the Electoral Commission how reports are made and what global information it can share with us. That takes care of the point about whether it is possible to report donations and loans in categories. I shall go away and check the relevant details, in time for our returning to debate the second order.
The Committee should rest assured that the making of donationsand, in future, the making of loansis closely scrutinised by the Electoral Commission. All donations from companies and other organisations have to be verified and half the donations made by individuals are verified, according to a strict formula. On donations from Irish citizens, stringent checks are made through the Department of Foreign Affairs to verify that somebody who donates as an Irish citizen is indeed an Irish citizen, and that donations from companies and other organisations are legitimate within the framework that we have set out. It is a detailed set of rules, properly enforced by the Electoral Commission.
Mr. Robertson: As I understand it, in Great Britain if a company makes a political donation, that has to be declared in its accounts. Is there a similar requirement in the Irish Republic?
Paul Goggins: I will need to check on the detail of that, but what is clear is that the Electoral Commission will also carry out checks in Companies House in Dublin. Companies have to publish their annual accounts and all those will be checked. I imagine that donations have to be itemised within those accounts, but I would want to be absolutely certain before confirming that for the hon. Gentleman. I shall happily drop him a line.
Donations made by Irish citizens to the Conservative and Unionist party in Northern Ireland would be allowed under the legislation. I have a list of political parties registered in Northern Ireland, and the Conservative and Unionist party is one of those. However, having received that money, the party would not then be able to hand it over to the association in Tewkesbury to help the hon. Gentleman get elected, because that is not allowed, and he understands that. I was reflecting on the list earlier, as there are some rather interesting organisations registered as political parties in Northern Ireland.
Mr. Campbell: Before the Minister elaborates on those organisations, does that mean that if and when the Labour party organises in Northern Ireland, the same rule would apply?
Paul Goggins: The Labour party of Northern Ireland is registered as a political party. The same rules would applyit would not be able to support my bid to retain Wythenshawe and Sale, for example. Among the parties registered are the Free England party, whichis an interesting organisation to be registered in Northern Ireland; Make Politicians History, which was prominent in the Assembly elections last year; and the Resolutionist partymany
Under the Good Friday agreement and the settlement that came out of that, we recognise the distinct position of Ireland regarding its relationship with Northern Ireland. The principle is that Irish citizens and bodies can make donations to Northern Ireland. The parallel to that is that individuals and organisations in Great Britain can also make donations to Northern Ireland, but not the other way round. There is a simple reason for that: we do not want Irish citizens or organisations channelling funds through the north into Great Britain, as that would not be in keeping with the principles outlined in the legislation.
Mr. Robertson: This is a difficult point to put. Can no political party in Northern Ireland donate to a political party in Great Britain, regardless of where the money has come from? My point is that it would be difficult to prove where the money came from. Let us say that £1 million went to the Conservative party in Northern Ireland, but in its overall accounts it received £3 million from whatever sources; does that not leave it £2 million from which to donate? That is a technical point, but an important one.
Paul Goggins: It is a good pointit would be hard to know where the money had come from, and that is why there is a blanket prohibition on the political parties in Northern Ireland giving to parties in Great Britain. It might well have been generated within Northern Ireland, but it might have come from an Irish citizen, so we have a blanket ban in place for that reason. I share the hon. Gentlemans hope that in 2010, it will not be necessary to renew the powers of confidentiality. I hope that by then, we will have full transparency and that peoples names and the size of their donation will be entered on the Electoral Commission website, as happens now in Great Britain.
I say to the hon. Member for East Londonderry that it is important that full regulation be in force. At the moment, individuals and organisations can make loans to political parties in Northern Ireland. There is no system of regulating that, and we must have such a system for the reasons that he gave. We are moving to a mature democracy in Northern Ireland where peace prevails, and it is important that proper democratic rules and principles are adhered to. The Electoral Commissions role is to verify that donations and loans are made properly and are lawful. Clearly, at present it cannot publish full details on the website, giving names and amounts, but I assure the hon. Gentleman that it enforces strictly the rules laid down in regulation. Indeed, if a loan is found to be unlawful it has to be repaid, and with interest.
I thank the hon. Member for Argyll and Bute for his welcome for the proposition that we are bringing forward today. I have explained why we are introducing the system in two stages; the detail is yet to come. He is right that the detail will be similar to that relating to donations, for obvious reasons. I have set out the time scale: 12 May in the House of Lords, and we shall meet subsequently. However, all will happen before 1 July.
As I promised, I will check whether it is possible to provide reports by category or sub-total. I am not sure, and I would sooner be sure and confirm such matters to the hon. Gentleman. I also need to check the detail regarding loans made before October 2010, and how they would be repaid in such circumstances. No doubt we shall discuss such details when we next meet in Committee. I reassure him and other members of the Committee that, although the Electoral Commission cannot publish details on the size of the loan or the name of the person making the donationor, in future, on the loan for which we are making provision hereif there were civil or criminal proceedings in relation to that donation or loan, the Electoral Commission could disclose such details to the enforcement authorities, and rightly so.
My hon. Friend the Member for Belfast, South raised some wider issues about the cost of democracy, which is a subject that concentrates all our minds. As money has to be raised, that is all the more reason why we must be ever more vigilant about its source and have a proper system of regulation. I know that my hon. Friend supports thateven though it comes with a price, as he said. I wish him well for the future in raising a bit more money, whether it is from south of the border or from wherever in the north. I am sure that he agrees that the Government have done more than any other Government to tighten up the system of loans and donations in Great Britain, which will soon be in place in Northern Ireland. It is important that we take such action. Even though on occasion, it has caused individuals and parties some difficulties, it is right to bring in the legislation and to ensure that it is properly adhered to.
My hon. Friend also referred to public funding for political parties, and of course, that debate will continue. For that to be successful, there needs to be common ground between parties, and I hope that such issues remain open for public discussion. Hopefully, we have made a start with the order, and before the end of July we will have completed our task of ensuring that it is in place, so that not only donations to political parties but loans can be properly and fully regulated in Northern Ireland.
Question put and agreed to.
That the Committee has considered the draft Electoral Administration Act 2006 (Regulation of Loans etc: Northern Ireland) Order 2006.
Committee rose at nine minutes past Three oclock.
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