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7.13 pm

Martin Linton (Battersea) (Lab): I start by welcoming the Bill. It is limited and focused on specifics, and it is intended to be. I would support spending caps and caps on individual donations, and I would support a greater degree of state funding. Like my hon. Friend the Member for Slough (Fiona Mactaggart), I spelled out all my views in a pamphlet many years ago. It was called “Money and Votes”, and was published by the Institute for Public Policy Research in 1994. Many of those proposals went to the Neill Committee and became part of the Political Parties, Elections and Referendums Act 2000.

I fully recognise, however, that the agenda is still unfinished. There are many things that should be in a second political parties Act. I would argue, however, that those things should not be in this Bill, which is about closing the gaps and loopholes in existing political parties legislation. Clause 8 deals with what one might call the Coleshill manor clause—unincorporated associations. Clause 10 is what I would call the Ashcroft loophole clause. I know that the noble Lord did not invent, create or cause the loophole, but he was the person who first exploited it as a donor, and he is now doing so as deputy chair of the Conservative party. Clause 11 is what one might call the autumn election clause, dealing with registration during the notifying period.

While many other reforms may be desirable, I should point out to the hon. Member for Cambridge (David Howarth) that although opposition often takes the form of delay, he should beware of supporting opposition that is intended to cause delay and to defend unfair and
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unintended advantages enjoyed by one party. It is hugely important to implement the Bill in good time before the next election. That point is almost too obvious to make. Like many of my hon. Friends, my prospective opponents in my constituency are the recipients of Ashcroft money, which gives them an unfair advantage. It is important to proceed as fast as possible with the Bill, which essentially will right the wrongs in the 2000 Act. Any attempt to put spending or donation caps in the Bill, desirable as those things might be, would undoubtedly be the cause of further delay. I would support minor amendments, such as lightening the burden on treasurers. Like my hon. Friend the Member for Slough, I am equally grateful to the treasurer of my local party, Councillor Tony Belton, whom she knows well. He is one of many people who put up with a huge burden of regulation as the treasurer of a constituency party.

The most important clause in the Bill is, in my view, clause 10. I have before me the Hansard report of the famous night in the House of Lords when the loophole in question was inadvertently created. My right hon. Friend the Secretary of State has never tried to conceal the fact that it was a mistake. In fact, it was made in the House of Lords long after the Bill left the Commons. The crucial phrase was “the dissolution of Parliament”, which appeared in the Bill only some time after it left this place. My right hon. Friend is right in saying that there was an amendment from a Conservative peer to remove the clause. It was not described by that peer as a probing amendment, but as a genuine point, and when the Minister, Lord Bach, asked him to withdraw the amendment so that he could look into the point, the Conservative peer agreed.

There was consensus at the time, but a clearer sign that there was consensus was that the Opposition in the House of Commons did not, at any stage during Second Reading or the Committee dealing with the Bill, propose to remove triggering, or propose to remove the spending controls on local candidates. That was never mentioned during the debate. My only criticism of the Government is that it has taken us seven years to get from that initial mistake to a Bill that will close the loophole. I do not pretend that reintroducing triggering is a 100 per cent. foolproof way of preventing excessive candidate spending, but it is the best way available at the moment. I look forward to a Bill that will introduce limits on national and local spending that will be far more effective.

Mr. Djanogly: Given what has been said so far by many Members on both sides of the House, does the hon. Gentleman think that it would be fair to introduce the measure before the next general election?

Martin Linton: Of course it would. If it was unfair to remove the spending limits on candidates, it must be fair to reinstate them.

Let me remind the hon. Gentleman what happened before this country imposed limits on candidates’ spending. To do so, I must go back to the 1880 election, when one candidate made donations to 15 chapels, 17 churches, 23 cricket clubs and 150 societies in his constituency in order to secure re-election. A contemporary commentator calculated that the money spent by candidates in that election—in 1880—was £21/2 million. When inflation is taken into account, that is a huge sum, equivalent to
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roughly £171 million in today’s terms. If it is calibrated to the earnings index rather than the retail prices index, it amounts to £2.6 billion.

That was the political world before candidate spending limits were introduced, and those who oppose their reintroduction should bear in mind that it is the world to which they are attempting to return us. Anyone who wishes to see a more contemporary example need only look across the Atlantic, where expenditure of $1 billion has already been exceeded in a presidential election campaign—and who knows what next month’s election will do?

Lord Ashcroft started on a very moderate basis, giving cheques for £20,000 or £40,000 to candidates in the 2005 election. I do not know whether Opposition Members were beneficiaries, although I can see one or two who may have been. In this election, as deputy chairman of the Conservative party, he is handing out cheques for a mere £5,000 or £25,000, depending on the perceived marginality of constituencies. But, of course, in the wake of those donations from central office, there often follow much larger private donations, taking advantage of the loophole—which everyone acknowledges to have been unintended—that there is no limit on candidate spending. That is why it is so important for us to legislate to close the gap.

David Howarth: I do not think that the hon. Gentleman has grasped the central point, which is that the Lord Ashcroft money is party expenditure and not necessarily candidate expenditure. All that Lord Ashcroft, or someone acting in the same way, needs to do to evade the measure in the Bill is not to mention the candidate’s name. Everything that the hon. Gentleman has cited will still apply, but will not be covered by the Bill.

Martin Linton: We have already discussed this. I suggest that the hon. Gentleman speak to some lawyers— [Laughter]—unless he is a lawyer. If he is, he should know better.

As I read it, the provision clearly states that there are only two forms of spending: a national form of spending that is covered by the national limits, and any form of spending that could be defined as a candidate expense, which is covered by the local limit. If the letters that have been referred to—I have seen some in my constituency—are not included in candidates’ expenses when candidate spending limits are re-imposed, they will automatically be set against the national limit. There are only two kinds of spending, and every instance of spending must be of one kind or the other. That, in effect, closes the loophole.

David Howarth: I think that the hon. Gentleman should look at the existing legislation, which exempts from the national limit—which, incidentally, is only one year before the election anyway—

—the word “party” should be noted—

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Martin Linton: I am referring to a different part of the legislation. I cannot quote from it now, because I do not have access to it. However, I suggest that it is disingenuous of the hon. Gentleman to have made a speech in which he did not make a single criticism of any proposal in the Bill. [Interruption.] No, he did not make a single criticism of it. Now he proposes to vote against it. He should beware of supporting an Opposition who clearly have an interest in delaying the Bill, when his own parliamentary colleagues are suffering from the effects of this loophole because Ashcroft money is being spent against their interests as much as those of Labour Members.

Let me read the hon. Gentleman what Lord Ashcroft said in his last book, appropriately entitled “Dirty Politics, Dirty Times”. He pointed out gleefully:

—which, incidentally, clearly meant making use of that loophole.

Adam Afriyie (Windsor) (Con): Earlier, the hon. Gentleman took us back to 1993. The central thrust of his argument about escalating expenditure during elections is not supported by the Library research paper on the Bill, which plainly states—in two separate places on page 44—that spending levels have been falling.

Martin Linton: My neighbour and hon. Friend the Member for Southampton, Test (Dr. Whitehead) is checking the context, but even if that were true, this would be a point of principle. For more than 100 years there have been limits on spending by candidates. They have been inadvertently removed, and they should be reintroduced. The way in which they are reintroduced should of course be fair to all parties, but we should not hold back from reintroducing them because of practical difficulties.

Dr. Whitehead: My hon. Friend may be interested to know that the two references on page 44 of the research paper relate, first, to a disputed analysis for the Policy Exchange, which does indeed exclude Ashcroft money and Liberal Democrat income, and, secondly, to a declining amount of local constituency expenditure as recorded by the Constitutional Affairs Committee, not a decline in national expenditure. The “arms race” is all about a discussion of the rise of national party expenditure.

Martin Linton: I thank my hon. Friend. I shall take that up with my old friend and sparring partner Michael Pinto-Duschinsky, with whom I have often been happy to disagree on issues to do with party funding.

I have always advocated—both to the Neill committee and to the Committee that dealt with the first political parties Bill—that it was wrong to distinguish between national and local spending, because it would lead to questions of definition and might create loopholes. I have always argued that, as in the Canadian system, a single limit should apply to both national and local spending. I urge my hon. Friend the Minister, even at this late stage, to consider that as a far better solution. If national spending must be divided equally between all constituencies, the constituency limit effectively bites on the national spending limit, and there can be no room for moving spending from one category to the other.

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Clause 8 deals with unincorporated associations. I should have thought that that reform, too, was clearly intended. It was not intended in the 2000 Act that such associations should escape the disclosure provisions, and I have heard no Opposition Member argue that they deserve to.

I see that the hon. Member for Chichester (Mr. Tyrie) is present. He was the beneficiary of a £3,000 donation from an organisation called the Churchill luncheon club. I am sure that it is an entirely legitimate organisation, but that £3,000 donation may conceal many donations over £200 which escape declaration simply by being channelled through the luncheon club. I am sure that the hon. Gentleman attends its meetings and has a very good lunch, but I should have thought that, as a believer in disclosure, he would be one of the first to insist that his donors are happy to declare their identity, if indeed their donations are above the disclosure limit. I look forward to hearing whether he thinks that there is any particular reason why they should be exempt.

I shall now briefly refer to the parts of the Bill that deal with the Electoral Commission. I take very much the point that it has too few regulatory tools at its disposal—it can either issue a reprimand or refer to the police—and I agree that there should be many intermediate offences.

I understand that the Minister has already said that there will be a careful consideration of proposed new schedule 19A to the 2000 Act and that his ears will be open to counter-proposals. There is a great deal of concern about the powers to enter MPs’ offices and seize documents. The hon. Member for Gosport (Sir Peter Viggers), who speaks on behalf of the Speaker’s Committee, says that these powers have been used only once, but if they are to be extended in this Bill it is important that we do not create a situation where people could feel at greater risk of unnecessary intrusion into their affairs. We have seen what has happened to some Members of this House. I shall not mention specific cases, but reporting an unintended failure to disclose to the police is an incredibly serious issue. That is a power that should be used with extreme caution, if at all—indeed, we should think very seriously about whether that power should exist.

Let me make a final point. It is on the issue of consensus, which has been mentioned on all political sides in this debate. It is important that we understand the limits of consensus. It would, of course, be highly desirable for this Bill to be passed on the basis of consensus. Indeed, before tonight I expected the official Opposition and the Liberal Democrats to agree to these proposals, because, after all, they have always agreed to candidate limits, and they agree about the deficiencies that exist, and it was not intended that the 2000 Act should remove candidate limits. Therefore, there is no particular reason why any of the Opposition parties should vote against the Bill. However, we need to think back through history to 1976, when the Houghton committee, which the Labour Government set up in 1975, reported to the House on a series of proposals including disclosure of donations, donation limits, spending limits and an element of state funding. They were discussed more than 30 years ago. However, all those proposals had to be shelved because the Prime Minister
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of the day believed it was necessary to have consensus between all parties before progressing with any proposed party funding legislation. As a result nothing was done. I believe that happened because Lord McAlpine, who had recently become the treasurer of the Conservative party, had advised the then Leader of the Opposition that, however bankrupt their party was, doing as he said would hurt the Labour party more than them.

Therefore, nothing was done, and we entered a period of 30 or so years when funding gradually fell into disrepute. The bottom of the barrel was scraped and scraped again, individual donations were chased, and millionaires were tapped for funds. I shall not embarrass the Conservative party by mentioning all the names involved in all the scandals of the 1990s, but they well know that as a result of that failure to tackle the issue in 1976 the politics of this country fell into disrepute, and now we are left, 30 years later, trying to pick up the pieces. Therefore, a Government should never hold back from doing what they believe is right simply because they cannot achieve a consensus, especially if that consensus is being unreasonably withheld by an Opposition who well know that their candidates are enjoying an unfair advantage, and who never opposed candidate limits in the first place, but choose to oppose it now.

I say to the Liberal Democrats that it would be terrible if they were to oppose the Bill simply because of what is not in it. They must judge the Bill by what is in it and whether it is right or wrong. It would be a dereliction of duty by both main Opposition parties if they failed to give this Bill a fair wind.

Several hon. Members rose

Madam Deputy Speaker (Sylvia Heal): Order. I do not wish to stifle this interesting debate, but I am conscious that several Members wish to make a contribution and I have an eye on the clock. I therefore ask Members to restrict their contributions just a little.

7.35 pm

Mr. Andrew Turner (Isle of Wight) (Con): It is a great pleasure to follow my hon. Friend the Member for Gosport (Sir Peter Viggers)—and, indeed, to follow the hon. Member for Battersea (Martin Linton). It occurs to me that there is nothing to prevent a Labour candidate or MP from doing exactly the same as the Conservatives have done in respect of Lord Ashcroft. However, I shall ignore that issue for most of my speech. Instead, I wish to raise some issues regarding elements of the Bill, and also to mention one issue that has been omitted.

The new powers to be awarded to the Electoral Commission are of concern to me. I believe that some of the civil sanctions that the commission would be able to exercise following the enactment of the Bill may prove unacceptable in practice. Paragraph 10 of proposed new schedule 19B to the Political Parties, Elections and Referendums Act 2000 allows the commission to impose so-called stop notices. These are to be imposed on individuals to prohibit them from carrying on an activity that the commission believes is “likely to involve” their committing an offence under the 2000 Act. The wording implies not “has done”, but merely “may do”. Likewise, a stop notice can be imposed if the commission believes the person’s activities are likely to lead them to commit an offence or contravention of the Act.

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Does the Lord Chancellor recognise that those measures could interfere with an individual’s wholly legal actions? An individual could be treated as if they had already committed an infringement, even if their actions never led to such an infringement. Is not the Electoral Commission’s purpose to ensure that elections are run legally and to punish individuals appropriately once an infringement has occurred, and not before? Does the Lord Chancellor not also agree that absolute clarity is needed when qualifying situations are deemed “likely” to lead to an offence?

Also of great concern is a proposed change under clause 2 that would give the commission an investigative power akin to a search warrant. The power allows authorised commission staff to enter an individual’s or party’s premises to access financial records and information. In many situations, not least during an ongoing election campaign, such action would be highly disruptive; it may, in fact, damage the electoral system rather than safeguard it. Does the Lord Chancellor not agree that this power should be used only in the most serious circumstances? Would it not be better to have the power suspended during the period of an election campaign? Would not complaints escalate if it were possible for people to disrupt an opponent’s campaign? Indeed, it is difficult to imagine a situation in which the need to search a premises is so great that it would not be a police matter to begin with.

The change under clause 7 that relaxes the political restrictions on membership of the commission is another concern. Currently, people must have had a 10-year period out of politics before they can become a commissioner. That prevents politically active and potentially partisan individuals, such as donors, party members or employees of political parties, from becoming commissioners. I accept the relaxation of political restrictions on the commission’s chief executive from 10 to five years out of politics, but I feel that the relaxation for all other commission staff from 10 years to just one year is too extreme. I do not agree that any political member should be allowed to be the chief executive. The commission must be politically savvy, but not at a cost to its independence or credibility. Under the current proposals, it is not unfeasible that someone such as the former Prime Minister, Mr. Blair, could become a commissioner in a year and a day. Does the Lord Chancellor not agree that a period of at least one Parliament, or five years, out of politics is needed for all commission staff, to minimise the possibility of current politicians being investigated by their contemporary rivals—or indeed friends?

One issue that is not covered in the Bill but requires serious consideration is the existence of multi-seat electoral divisions and how such boundaries are drawn up. In my constituency, Isle of Wight, 40 seats will be contested at the next county council elections. Among those, there are 38 single-seat electoral divisions and the solitary, and in my view anomalous, two-seat electoral division of Bembridge, Brading and St. Helens. Single-seat divisions enjoy the clear accountability afforded by a single elected member, but an unusual two-seat electoral division is more problematic.

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