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The right hon. Member for Rotherham raised a further important consideration. Invoking draconian powers of search and entry in respect of any donor, political officer or candidate, or any of the huge number of volunteers trying to do the right thing by engaging in politics for the best of public-spirited reasons, compounds the sense that making donations to political parties is
inherently dodgy rather than a public-spirited activity essential to a healthy democracy. It should be noted by the House that the first time that those powers are used to kick down a party donor’s door will be another step away from voluntary support of parties and towards total state funding—that will be a sad day indeed. Thus, the powers must be exhaustively examined in Committee, and we hope that the Government will think again about them.
Clause 8 requires all those donating or lending more than £200—the de minimis level—to a political party to give the party a written declaration about the original source of the funds. Political parties will be required to confirm that they have received such declarations and to take “reasonable steps” to verify them. We, like all parties, are concerned—the Justice Secretary helpfully recognised that it is a proper concern—that that imposes a disproportionate and excessive regulatory burden. Rather than helping parties to broaden their fundraising, a broad desire to which all parties have subscribed, the requirement will put off small donors and discourage voluntarism.
Sections 40, 54 and 61 of the Political Parties, Elections and Referendums Act 2000 already prohibit donors from concealing the source of donations by channelling money through others—the use of proxy donations by Mr. Abrahams was already illegal. Moreover, if a members’ association is used as an agency to channel a donation from a particular donor, that original donor must be declared under the law, as it stands.
Importantly, the Electoral Commission has said:
“we believe that the benefits of these changes will be quite limited, since all they do is place additional procedural requirements on donors and recipients. They will not extend the current restrictions on concealing donations, nor will they add materially to the transparency of party funding as the new declarations will not be sent to the Commission or made public. However, they will impose potentially substantial new regulatory burdens on parties and donors. It is not presently clear whether the benefits of these provisions will be sufficient to justify those new burdens.”
As we know, the Electoral Commission always expresses itself with the utmost delicacy, but it must be clear to all that it is saying that these provisions will mean a minimal benefit but a massive burden.
John Mann: The right hon. Gentleman rightly suggests that those powers should be strengthened and that unincorporated bodies should make declarations to the Electoral Commission. He stated that a law already covered the requirement for donations of more than £200 by an unincorporated association to be declared, but that is not the Electoral Commission’s view. When asked, its written response to me and others has been that unincorporated bodies do not have to provide such information. That is a huge gap in the law, is it not?
Mr. Maude:
The position is that if the association is used as a cover simply to channel money directly from a donor to a party by providing a cloak of anonymity, that is against the law, as it stands—and rightly so. No one suggests that that situation should be different. I understand the hon. Gentleman’s concern and his wish for all this to be strengthened, but the proposal does not strengthen things. It is a sledgehammer that manages to miss the nut; it does not achieve what the Government
want to achieve. All it does is impose a massive extra burden on local parties and central parties. The impact assessment that has been done by the Ministry of Justice—
Tony Lloyd: Will the right hon. Gentleman give way?
Mr. Maude: I just want to finish this point, because I am conscious of the fact that the Front-Bench speeches are taking a lot of time and many others wish to speak.
The impact assessment is inaccurate. The compliance burden on the central party and the registered treasurer will be very substantial, given the number of transactions involved, the number of accounting units of parties involved and the lack of professional staff in most accounting units. Treasurers in local parties are volunteers, and the threat of new regulatory sanctions being available to the Electoral Commission will cause a flight of volunteers from legitimate party activity. We all earnestly say that we want to encourage more political activism and voluntarism so that more people engage with the political process. The Bill will have exactly the reverse effect.
The impact assessment estimates a cost to political parties of such rules in the region of £7,000 to £10,000, but that massively underestimates the volume of donations over £200 and the cost of verification. The language that is redolent of the anti-money laundering provisions, and the high tests, will require far greater resources in the future. The idea that reasonable steps would involve no more than five minutes’ work, as the impact assessment suggests, is manifestly absurd. Five minutes is no more than one telephone call, which would tell the party little and provide no comfort whatever. For a much bigger donation, any party will delve much more deeply under the existing rules. Having been chairman of the Conservative party, I can say that we do that, although it is not clear from the Abrahams case that Labour has always done the same—I suspect that it does now.
Tony Lloyd: The right hon. Gentleman is suggesting that he supports considerable transparency. How would he deal with the Stargate Holdings to Bearwood transactions, which were outside any proper reporting system? Very strong allegations were made in The Sunday Times and the “Dispatches” programme that the Conservative party gained massive sums of money from Lord Ashcroft without any of it being properly recorded.
Mr. Maude: It is not news to anyone that Bearwood is a company associated with Lord Ashcroft. The trail shows that clearly, and it is not a secret. The money comes from legitimate activities conducted in the United Kingdom, and therefore the donation is legitimate and permissible. I see no evidence to suggest that anything other than that is the case. If the hon. Gentleman believes that that is not the case, I suggest that he take it up with the Electoral Commission.
The activities that have been described are already illegal, and the Electoral Commission has made it crystal clear that the Bill provides no better protection for the public interest in transparency than we have already. All the Bill would be is a massive hammer blow against exactly the sort of voluntarism and wider participation that we all genuinely want to see. I am delighted that the
Secretary of State for Justice has accepted the need to go back to the drawing board on that provision.
I now move on to the partisan heart of the Bill. It was a grave disappointment when over the summer the Secretary of State committed, in the White Paper, to the measure in clause 10: the reintroduction of “triggering”, the archaic, confusing and discredited system under which many of us were elected and re-elected—indeed, some of us lost elections, too. It is the system in which election spending limits are triggered when a candidate first does something that is capable of being interpreted as campaigning to be elected to Parliament.
The Secretary of State rightly makes much of the fact that when he took through the Political Parties, Elections and Referendums Bill, he did so on a consensual basis. That is indeed to his credit. In his statement in the summer, he made a brave stab—and he tried to continue it this afternoon—at maintaining that this provision would also be consensual, on the slender ground that the then Conservative spokesman in the other place had tabled some probing amendments on the removal of triggering.
Martin Linton (Battersea) (Lab): Will the right hon. Gentleman give way?
Mr. Maude: Let me finish this point, as it might help the hon. Gentleman. I know what his majority is, and I know that he has expressed views through the newspapers on many occasions about his great anxiety that his seat is under serious threat from, if I may say so, a most admirable, hard-working and energetic candidate, who I hope will be in his place after the next election.
On the question of whether there is any agreement on the triggering provision, it is worth recalling that in the course of the Hayden Phillips discussions—those who were there at the time can bear this out—the question of the arrangements put through by the Justice Secretary eight or nine years ago came up. There was explicit agreement that they should not be changed. The idea that somehow consensus has mystically emerged on the idea of going back to something that has been so discredited over such a long period seems bizarre.
Martin Linton: I thank the right hon. Gentleman and I am flattered that he so anticipated this point that he took the trouble to check up on the size of my majority. Surely my right hon. Friend the Justice Secretary has better reason to believe that there was consensus on the issue, and not only because of the amendment that Lord Mackay of Ardbrecknish moved in the House of Lords. Incidentally, when Lord Bach said to him:
“If he withdraws his amendments, I promise to look at the point that he has raised”,
“I am happy to do that”—[ Official Report, House of Lords, 24 October 2000; Vol. 618, c. 229.]
That sounds as though the amendment was meant seriously, rather than as a probing amendment. Surely, the main reason for that belief is that Opposition Members in the House of Commons made no attempt in Committee, on Second Reading or on Third Reading to move any amendment to change the nature of triggering.
Mr. Maude: Sadly, in every way, Lord Mackay is no longer available—he is in another other place, and we miss him very much—and he cannot tell us what was in his mind when he moved the amendments. However, he said at the time that they were probing amendments and we are entitled to take him at his word.
I find it slightly trying that the Government and Government Members are seeking to invoke some apparent consensus from eight years ago to justify reintroducing something now when there was plainly consensus about getting rid of it, as the decision was made without a Division. The situation is very bizarre. Let there be no doubt that there is not consensus on this provision. I have said it many times before, and I will say it again if I need to. There is no consensus, for reasons that I shall expand on after I have given way to the Justice Secretary.
Mr. Straw: I am listening to the right hon. Gentleman with care. When the 2000 Act was going through, everybody thought that it provided for comprehensive controls on spending at a national and local level, not only within the specific, typically four-week election period but outside that period too. That was one point that was made by the late Lord Mackay. He said that the key, for him, was that a candidate’s election, for funding purposes,
“should start from the first moment that he or she, or anyone on their behalf...takes any action to promote their candidature for an election at which they are subsequently nominated. It could not be simpler.”—[ Official Report, House of Lords, 22 November 2000; Vol. 619, c. 903.]
Surely the right hon. Gentleman is not now arguing that in 2000 it was assumed that we would end up where we have ended up, with national campaign expenditure controlled for the 12 months leading up to a general election, while candidate spending, far from being controlled more than it was before 2000, is controlled less and only for the last four weeks of an election.
Mr. Maude: If the Justice Secretary wants to put forward a proposal that constituency spending by a candidate should be controlled and capped for the 12 months before an election, which would put it on the same basis as the national cap, let him make such a proposal. I would be willing to discuss it. There are considerable problems with the idea, as there are with the fact that the national cap runs for 12 months when, as we know, unlike local elections or devolved elections, there is no certainty about when a general election will take place. However, it is at least a proposal that would have merit and could be discussed.
The Electoral Commission proposed that there should be a four-month period. Such a provision was in the Bill introduced—although not by the Justice Secretary—two years ago, and did not go through, but it was a rational proposal that makes some sense and we would be willing to discuss whether something similar might be a solution to the problem. However, to revert—almost through lack of anything else—to the old discredited regime is a bit pathetic. There are so many reasons for dropping the provision that it is hard to know where to begin.
The provision would reintroduce law already acknowledged to be bad. In the Fiona Jones case back in 1999, the Lord Chief Justice, Lord Bingham, remarked:
“This is a field in which misunderstanding is rife...There is no simple and decisive test to determine whether an expense is or is not an election expense within the meaning of the Act.”
The Committee on Standards in Public Life, in the report to which the Justice Secretary referred, slammed the old rules. In 1998, the committee noted explicitly that
“there is considerable doubt among individual candidates and the political parties about when, for purposes of the Representation of the People Act 1983, a constituency election campaign is deemed to have begun. There is only a limited body of case law bearing on the subject and interpretations of the Act vary considerably from constituency to constituency and from candidate to candidate.”
Those of us who have been around long enough can all remember the absurdities under the old rules. A candidate’s literature could not show a photograph of him or herself alone, but it was okay if they were with someone else. Candidates were allowed to promote themselves only as associated with the policies of their party. Ridiculous and absurd artificiality was involved, with uncertainty and anxiety for candidates throughout the process. It beggars belief that we should be considering reverting to that discredited system as any part of a modern electoral system.
John Hemming (Birmingham, Yardley) (LD): The provision rests fairly and squarely on the balance of power between incumbency and otherwise. Does the right hon. Gentleman share my concern that if it comes into law any Member who has issued an annual report paid for by the communications allowance will find that they have automatically exceeded the limit come the general election?
Mr. Maude: The hon. Gentleman makes an ingenious point. I shall deal briefly with the communications allowance and its implications a little later on.
It is legitimate to ask whether the lack of certainty under the previous regime can adequately be dealt with by a combination of statute law and clear guidance. Perhaps it can, but it will require much more time, which brings me to the second objection to the provision. The idea that it could be allowed to come into effect at Royal Assent, let alone from today’s date, is both mad and wrong. The Justice Secretary’s original and outrageous suggestion in his statement in the summer was that the measure could be backdated to the date of Second Reading. That is absolutely monstrous. Such premature commencement is in breach of the Government’s code of practice on issuing guidance—their guidance on guidance—which states that guidance should be issued three months before any regulation comes into effect:
“To give organisations time to prepare for regulations, guidance will be issued at least 12 weeks before a regulation comes into effect, with some necessary exceptions, e.g. emergencies.”
In the case of the hon. Member for Battersea (Martin Linton) it may feel like an emergency, but I doubt whether it would quite measure up to one in the national scale of things. The guidance continues:
“Sometimes more than 12 weeks will be needed, for example if a regulation is complex or costly to implement.”
The provision is both complex and costly.
Martin Linton: Will the right hon. Gentleman give way?
Mr. Maude: I want to make progress. I am conscious that we are taking up too much time and that many other Members want to speak. I have given way generously throughout my speech.
The Electoral Commission said that it could not issue draft guidance until Royal Assent, and that it would then expect to consult very fully on such guidance before it became final. In the note on the White Paper circulated to the parties, the commission stated:
“It would take some time after Royal Assent to finalise and issue any guidance.”
I hope the Justice Secretary is listening. I am setting out the Electoral Commission’s view about his provision and what would be involved:
“The Commission would have strong reservations about the practicality of enforcing new rules which depended upon such guidance until the date at which the final guidance was available. The Commission also strongly supports the recommendation of the Gould review of the 2007 Scottish elections, that no changes to the rules surrounding elections should be applied to an election held within six months of those changes coming into force.”
It is unseemly haste to bring into effect a discredited system; it is unnecessary and will compound bad law with reckless implementation.
The third objection to the provision is that it is in effect retrospective. Hundreds of parliamentary candidates from all parties are already in place across the country. Perfectly properly and in accordance with the law that the Justice Secretary himself brought in, they have conducted themselves in a way that under the old rules would have triggered their election expenses. If this monstrous provision came into effect they would have to find some absurdly artificial way of “detriggering”, which would involve taking down websites, pulping literature and changing already published material. [ Interruption. ] The hon. Member for Pendle (Mr. Prentice) is facing an outstanding and energetic Conservative candidate so I can see why he feels sensitive about the matter. It makes my whole point: this is a thoroughly partisan Bill, which it is wrong to introduce in this way. The fact that two Labour Members in marginal seats, with energetic candidates on their tails, object so strongly, makes the case that this Bill is not in the public interest—it is in the Labour party interest.
The important point is that even if agreed clear guidance were in place so that there was no uncertainty, there would still be a massive, hugely effective penalty on candidates who have behaved completely properly in accordance with the law that the Justice Secretary himself brought in. The House should always reject retrospection and for that reason alone I hope the Justice Secretary will withdraw the proposal.
Martin Linton: Will the right hon. Gentleman give way?
Mr. Maude: No, I have gone on too long and I want to draw my speech to a close.
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