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Clause 10 will tackle excessive unregulated candidate spending through provisions that, in effect, return to the principle of the pre-2000 system known as triggering—an issue that we have already discussed. The clause achieves that by amending existing legislation so that, in relation to parliamentary general elections, the limit on the amount of election expenses as defined by the Representation of the People Act 1983 will include all expenses of that type where they are used by a person for the purposes of promoting their election candidate. That alters the current position, which is that the limits do not include election expenses incurred or used prior to the date of the dissolution of Parliament
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or that person’s formal adoption, nomination or declaration as a candidate. Under the new provisions, it will not matter on which side of dissolution or adoption the expenses are incurred or used, provided that they are incurred or used to promote the candidate’s election.

I understand, accept and acknowledge that there are some concerns about that matter, but the principle of strengthening candidate spending rules, which are clearly not adequate at present, must be right. There was broad understanding in the Hayden Phillips considerations that there had to be strengthening and a more comprehensive set of arrangements in respect of total spending.

I note from the reasoned amendment tabled by the Liberal Democrats that they are now expressing reservations about the trigger. That was not the view of the Liberal Democrats in the House of Lords just a few months ago, however, when the noble Lord Rennard argued:

I am glad to have met the Liberal Democrats’ requirements in June, even if they have changed since then.

Clause 11 extends the Electoral Commission’s existing power to issue codes of practice, and finally, the Bill contains two electoral reforms that I hope will command universal support. Clause 12 allows electors registering to vote on household canvass forms to be added to the electoral roll in the event of an election being held during the canvass period, to prevent the potential disfranchisement of electors in that situation, which can happen. Clause 13 will enable European parliamentary elections to be administered by local authority returning officers on local authority boundaries, which will assist in the effective administration of European parliamentary elections.

I hope that we can agree on broad principles today, while we can work in Committee on what I hope will be agreed positions on practicalities. I repeat my commitment to do my best to reach a consensus, and in that spirit, I commend the Bill to the House.

5.16 pm

Mr. Francis Maude (Horsham) (Con): I beg to move, To leave out from “That” to the end of the Question, and to add instead thereof:

Democracy requires there to be political parties, and political parties require money. In any democracy that money comes either from the taxpayer or from voluntary
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donations and subscriptions—or more usually, as is the case in this country, by some combination of the two. We believe that democracy is healthier when the bulk of the parties’ revenues are met from voluntary donations. It is important to recognise that it is as much in the public interest to support democracy by supporting a party financially as it is to support a charity. It is a public-spirited activity.

Mr. Gordon Prentice (Pendle) (Lab): Will the gentleman give way?

Mr. Maude: Perhaps I could get a paragraph or two into the speech before, very happily, giving way to the hon. Gentleman.

It is a matter of the greatest regret that a Bill has been introduced by Labour that every other party seems to oppose. It has long been a tradition, as the Justice Secretary acknowledged, that on such matters every effort should be made to reach agreement between the major parties. It is undesirable that a Government should use their majority to force through a major change that would advantage the governing party against opposing parties without even trying to consult those other parties.

More broadly, the Bill is a wasted opportunity. After months of discussions and negotiations under the patient and resourceful chairmanship of Sir Hayden Phillips, we had the chance to put through serious reforms to party funding that would create a long-term settlement to deal once and for all with the big-donor culture. We do not favour additional state funding for political parties, but we agreed from the outset of those discussions that if all the current concerns were dealt with by means of a comprehensive cap on donations, we would reluctantly go along with additional state funding. As it turned out, despite Tony Blair’s intentions—good intentions, I think—Labour simply refused to agree that donation caps should apply equally to trade union affiliation fees, so the chance to settle these matters once and for all was lost.

Mr. Prentice: I wonder whether it is legitimate for political parties to take money from people who are not resident in the United Kingdom for tax purposes.

Mr. Maude: It is legitimate for political parties to take money from legitimate donors who are allowed under the law. If the hon. Gentleman wants the definitive word on the matter, I simply remind him of what the Justice Secretary said when he was asked about particular donors to the Labour party during our debate in December. He said that the tax status of individuals is a matter for them.

Mr. MacShane: The right hon. Gentleman is saying that he wants to be a virgin and have sex at the same time—he cannot do that. His noble friend Lord Fowler, a former colleague, said in a book published a couple of months ago that the Conservative party should have gone in the 1990s for complete state funding and put an end to all external financing. If the Conservatives do not do that, they will always end up being tainted by Lord Ashcroft, loans and so on, and if there is a change of Government in the next 10 or 20 years, under proposed new schedule 19 to this Bill they will know all about that.

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Mr. Maude: I bow to the right hon. Gentleman’s superior knowledge in respect of the first part of his intervention. I listened with interest to the rest, but I am afraid I cannot agree with him that the answer is universal state funding. I completely understand the view expressed by my noble Friend Lord Fowler. He, like me, has been chairman of the Conservative party, and is scarred—as we all are—by what has been associated with the big-donor culture. That is why we believe that the answer is not simply to replace everything—to nationalise the whole process, as the right hon. Gentleman seems to suggest.

Mr. MacShane: It is the vogue.

Mr. Maude: It may be the vogue for the time being, but it is not a very desirable vogue. The right answer is to apply a comprehensive cap on donations, at such a level that no one will seriously believe that the donor—whether it is a trade union, an individual or a company—can have significant influence on the party involved. [Interruption.] The right hon. Gentleman says casually that a donor can parcel it out. Under the arrangement that we came close to agreeing during the Hayden Phillips discussions, that could not happen. The cap is on the total amount given by a particular donor in a particular year. That deals absolutely with the issue that seems to exercise so many Labour Members, who seem to feel that they are especially vulnerable in their marginal constituencies.

Dr. Gavin Strang (Edinburgh, East) (Lab): I agree with what the right hon. Gentleman is saying about the state funding of political parties, but in its evidence to the Neill commission the Conservative party said that it was relaxed about trade union funding supporting the Labour party. I feel that the fundamental issue is the Conservative party’s unwillingness to make a distinction between a donation from a trade union and an affiliation fee. The Labour party is a federal party. The trade unions pay affiliation fees, participate in our affairs and help to make our policies. That is very different from what happens in the other parties.

Mr. Maude: As a former Labour leader used to say, I am glad that the right hon. Gentleman raised that point. We went into it exhaustively during our discussions, and considered very fully whether affiliation fees were to be disaggregated and treated as individual donations, thus necessarily falling below any cap that would be imposed. However, the idea that affiliation fees were in any sense voluntary individual donations was blown out of the water.

We discovered during the discussions that a Liberal Democrat Member of Parliament had been sent a ballot paper for Labour’s deputy leadership election because, completely inadvertently, he or she—we do not know who it was—had become a member of the Labour party by not opting out of the political levy. We also know that some trade unions casually register not just that 100 per cent. of their members are making this “voluntary individual donation”, but, in some cases, that more than 100 per cent. are doing so. Two are paying, I believe, 108 per cent. and 107 per cent respectively. The idea that this is an individual donation or subscription is ridiculous.

I have no objection to trade union funding of the Labour party or, indeed, of any other party. Still less do I have any objection to individual trade union members voluntarily making a subscription to any political party.
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That is absolutely fine. I entirely understand the historic relationship between the trade unions and the Labour party.

Mr. Walker: Will my right hon. Friend give way?

Mr. Maude: I will finish my point first, if I may, because it is important.

When, during the discussions, we canvassed the possibility of something so simple and basic that most people might think it already existed—a simple box on a trade union membership application form to be ticked by an applicant wishing to opt either in or out of the political levy and thus the affiliation fee; we left aside the question of which it should be—the Labour party representatives were not even willing to discuss that as an option.

As I have said, the idea that this could in any sense be a voluntary donation was blown out of the water. If the right hon. Member for Rotherham (Mr. MacShane) has any influence with his colleagues, as I am sure he has, I ask him to encourage them to revisit the issue; sorting it out would be a major step forward.

Dr. Tony Wright (Cannock Chase) (Lab): I am puzzled by the right hon. Gentleman’s description of the fate of the Hayden Phillips talks. We do not have Hayden Phillips to tell us, but we do have the specialist academic adviser Professor Justin Fisher, who says:

Is that not the truth of what happened?

Mr. Maude: I have absolutely no idea who that academic is; he certainly did not appear at any of the discussions for which I was present. The hon. Gentleman asks what Sir Hayden Phillips’s view is. Well, this Bill will presumably go before a Public Bill Committee, and that Committee can, no doubt, take evidence from Sir Hayden and find out exactly his view.

Dr. Alan Whitehead (Southampton, Test) (Lab): We actually have rather more on the record. We have the Constitutional Affairs Committee’s deliberations and conclusions on public funding. It reached a consensus, including in a discussion of what might be the role of trade union funding, donations and affiliations. That substantially informed Sir Hayden Phillips’s final report. What has changed in the meantime, after that process of consensus up to the end of the Hayden Phillips report and the eventual discussions? Was there a change of heart on trade union funding, or was there a sudden discovery that the Labour party had a relationship with trade unions that it had sought to change? I would be grateful for enlightenment from the right hon. Gentleman on what happened over that period.

Mr. Maude: The hon. Gentleman should not underestimate us. We made our position absolutely clear from the outset. In a paper that my hon. Friend the Member for Chichester (Mr. Tyrie) published some two and a half years ago, we put forward the case for a comprehensive donation cap, because we saw—as, indeed, did the former Prime Minister, Tony Blair—donation caps, and not spending caps, as the key to solving the problems of perception. However, we also said from the outset that if there was to be a cap on donations—which
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we strongly supported and which we have promoted—it had to be comprehensive, and that we could not have a system that was partial. After all, a dam that goes only three quarters of the way across the river is pretty ineffective.

Jeremy Wright (Rugby and Kenilworth) (Con): When the relevant report just referred to was written, I was a member of the Constitutional Affairs Committee, along with the hon. Member for Southampton, Test (Dr. Whitehead). The report makes it clear that the reform will work only if it is a package of measures that hangs together. Does my right hon. Friend agree that what is most disappointing about the Bill is that it deals only with a few of the reforms proposed by the Constitutional Affairs Committee, and that the ones that are not proposed seem to be those that are most inconvenient to the Labour party?

Mr. Maude: My hon. Friend makes absolutely the right point. It is odd that so many of the interventions by Labour Members have focused on what is not in the Bill. I share their disappointment that the Bill is half-baked. It is a hotch-potch Bill. It is spatchcocked together from the lesser parts of the Hayden Phillips report. Some parts come from legislation that was long ago abandoned as unworkable, and some other parts spring apparently from nowhere and so far as we can see are wanted neither by any of the parties nor by the Electoral Commission.

Parts of the Bill are, of course, unexceptionable, and it is important that we deal with them properly. We are content with the proposals for the composition of the Electoral Commission, and I agree totally with the way in which the Justice Secretary set out the case on that. I understand the commission’s concern that it does not want commissioners appointed from the party political world, but I think we all agree that that is a worthwhile step. It is important that the commission’s deliberations in regulating party funding and campaigning, and enforcing that regulation, should be informed by commissioners who have direct, real-world experience of what it is like to raise money and to manage political parties. An advisory committee is very well in its way, but it is no real substitute for having people with direct party experience involved in the decision-making process. Just to be clear, we envisage that nominees in this category would be politicians no longer in the active front line of politics, in order to provide the necessary distance and objectivity, but who were still close enough to be reasonably current with present-day practice.

Likewise, the civil sanctions proposals seem to make sense, providing helpful speed and flexibility to the commission. We shall want to scrutinise them carefully in Committee, but in a positive spirit.

The proposals in clause 12 have merit but, as the shadow Secretary of State for Justice, my hon. Friend the Member for Arundel and South Downs (Nick Herbert), said, we regret that there is still no plan to introduce individual voter registration in Britain, as opposed to Northern Ireland. We believe that that would significantly improve security and limit electoral fraud. The failure to introduce the much tried and tested Northern Ireland system, which has cut fraud in the Province and to which everyone, including the Government, have been committed—there is genuine consensus—allows the
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possibility of electoral fraud that could readily be avoided. We therefore propose to table in Committee amendments that would give effect to what the Government have already said should be implemented. I hope that they will command consensus throughout the Committee and the House.

Mr. Dunne: On the subject of voter registration, is not another enormous and disappointing absence from the Bill any mention of steps that should be taken to improve voter registration by expatriate Britons living abroad? Some 2.5 million are eligible to vote, yet we have one of the lowest expatriate participation rates of any country in the industrialised world. Why is there not a single mention of the matter in the Bill?

Mr. Maude: My hon. Friend makes an important point. There is an interesting disjuncture between the lack of any requirement of individual voter registration, except in Northern Ireland, and the process that an expatriate voter has to go through to register. It is extraordinarily difficult and immensely more burdensome than what someone in Northern Ireland has to do under the requirements of individual voter registration. As he rightly points out, the result is that an extremely small proportion of those who are entitled to vote are able, or encouraged, to do so. It would be useful for the Electoral Commission to do more to encourage them. Whether they are expatriate or live in this country, those who are legally entitled to vote should be encouraged to do so.

Clause 2 would extend significantly the Electoral Commission’s investigatory powers. We all agree that the commission must have appropriate powers to enable it to carry out its duties, but there is real concern about the proliferation of search and entry powers. Last year, the Prime Minister himself seemed to share that concern. He pledged last October to curtail powers of entry with what he described as a new “liberty test”. He pledged that any change to entry powers would be accompanied by new guidance on using such powers and on the rights of members of the public to be guarded against abuse. He said:

That is pretty clear, one might have thought, so it is disappointing that contrary to what he promised no supporting guidance on the use of the powers has been produced. The Bill fails to meet the conditions and tests laid down in that speech.

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