Political Parties and Elections Bill

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The Chairman: Thank you for that clarification.
If you have finished, Mr. Wishart, I call Eleanor Laing.
Q 40Mrs. Eleanor Laing (Epping Forest) (Con): Thank you, Mr. Cook, but Mr. Djanogly would like to follow up a question.
The Chairman: Mr. Djanogly has just indicated to me that everything is satisfactory.
Q 41Mr. Djanogly: I wanted to come back on a point made by Mr. Linton.
The Chairman: You want to pick up on another point. Eleanor Laing, are you are using Mr. Djanogly as a runner?
Mrs. Laing: Yes, Sir.
The Chairman: Run, Mr. Djanogly, run.
Q 42Mr. Djanogly: Thank you, Mr. Cook. Mr. Linton asked an interesting series of questions and I would like to look more at that area. If a company wishes to make a donation, what must happen?
Mark Sweeney: We must first be satisfied that the company is complying with the law under, I think, section 54(2) of the Political Parties, Elections and Referendums Act 2000 in respect of carrying on business in the United Kingdom. There are also procedures under the Companies Acts, which I do not have in front of me, to do with the degree to which a company must go through a procedure internally to make it clear that it will make a political donation.
Matthew Smith: A certain resolution has to be made to ensure that the company agrees that a donation to a political party can be made out of its funds.
Q 43Mr. Djanogly: How frequently would that resolution have to be passed?
Matthew Smith: I do not have the provisions in front of me. My belief is that it would have to be passed each time that a donation was made.
Q 44Mr. Djanogly: Or at least annually?
Matthew Smith: At least annually. We can probably provide some clarity on that at a later date, but certainly a resolution must be made, and my belief is that it is each time a donation is made.
Q 45Mr. Djanogly: Do you know what would have to be in that resolution?
Matthew Smith: No, I cannot give the details, but we shall provide them to the Committee.
Q 46Mr. Djanogly: To be more specific, would it include an amount that had to be given?
Mr. Straw: With apologies for interrupting, I am very happy to ask officials, through Mr. Wills, to provide the Committee with a note setting out exactly how this works, if that would be of assistance.
Q 47Mr. Djanogly: For the counter side to that, let us look at a trade union. If a trade union wants to give a donation, what does it have to do in terms of voting, or having a political fund, let us say?
Mr. Straw: You will be familiar with the rules for political funds, which are consolidated in the 1992 Act. I do not apologise for not having that with me, but I am again happy to provide the Committee with a detailed note.
The regime for the operation of political funds was tightened considerably during the 1980s and early 1990s. The regime is now a significant one, because it requires that every 10 years there should be a ballot of all the members of the trade union—regardless of whether they are paying the political levy—to decide whether to continue to operate a political fund.
The regime is very transparent—I am glad you asked the question. There is then a decision made by individual unions whether to affiliate to the Labour party. They either are or are not. Classically, the general unions—ones involved in the private sector—have been and remain affiliated to the Labour party; those involved in the public sector, for obvious reasons, have not been. There is then a process of further openness, through the certification officer. In one or other of the official documents, which I published, there is reference made to the fact that we checked back, in the context of the Hayden Phillips inquiry and subsequent talks—
Mr. Djanogly Secretary of State—
Mr. Straw: Sorry, if I may just finish this point. I know for certain that, in the 10-year period, there were 10 complaints about the operation of the political levy.
Q 48Mr. Djanogly: I am not asking about the certification officer, with respect. I did not go anywhere near that.
Mr. Straw: You asked about what the checks were. Only one of those complaints was ever found against a trade union—that was the prison officers, who are not affiliated to the Labour party.
Q 49Mr. Djanogly: I thought that the answer we had about the information not being known was delivered as though it were not relevant to the Committee. This is directly relevant to party funding issues, and I am surprised at the lack of knowledge of the Committee in relation to it.
It would be helpful to the Committee if information could be given as to how often companies and unions have to vote. I think you will find that companies have to vote annually and unions every 10 years. The form of the resolution should be analysed in relation to both. I think you will find that companies have to vote on who the money goes to and how much goes, whereas unions do not have to do either. A full breakdown of the party funding voting issues would be relevant.
The Chairman: Order. The purpose of this particular period is to take evidence from witnesses, rather than to make statements about a previous belief. I ask all hon. and right hon. Members to pose questions, rather than to make lengthy statements.
Q 50Mr. Djanogly: Could the Secretary of State provide that information?
Mr. Straw: Yes, happy to do so.
Q 51Mr. Andrew Turner (Isle of Wight) (Con): It appears that the donor declarations will not be sent to the Electoral Commission. Such declarations do not even need to be kept for a minimum period. Does that constitute a lack of transparency? That is what the Bill is trying to get at, but what is the point of such donor declarations at such a low level?
Mr. Straw: Two points. First, I am afraid that I am to blame for this Public Bill Committee process. I long had the gleam in my eye of setting up the process, and I chaired the Modernisation Committee for a year and persuaded colleagues to go with it. Anyway, I happen to think that it is a very good thing, not least because it forces the Secretary of State to engage his brain about the detail and the wider policy behind a Bill. Whether or not this part of the Bill operates satisfactorily is a subject that should be examined in Committee.
We are seeking all the time to secure a balance between ensuring proper transparency and not imposing onerous burdens on political parties. Contrary to myth, political parties are not run by money-grabbing, self-seeking people. Almost exclusively, they are run by volunteers who do it because they believe in their cause and are willing to go out on wet Wednesdays nights and so on. I feel that passionately, but sometimes, informed as well as ill-informed reporting about how parties operate can give the wrong impression.
I think that I have spoken formally to the House about the limit, and I will speak about it now. We are happy to look at raising clause 8 limits, perhaps bringing them into line with other appropriate limits. That can be discussed outside the Committee as well as inside. A Bill is just that—it is open to improvement. The original limit was set too low, and we have listened to representations about that.
Q 52Mr. Turner: I am grateful for that. Last year, the Prime Minister promised a liberty test for all new powers of entry. Why does no liberty test accompany new powers of entry for the Electoral Commission? Should we not be more careful about giving the Electoral Commission powers to go into people’s private homes?
Mr. Straw: The Prime Minister not only said that there would be a liberty test, but such a test is inherent in all these proposals. Those powers of entry can be exercised only when the Electoral Commission has a reasonable belief that an offence has been committed and has obtained a warrant from a justice of the peace. It is not its decision, but that of a justice of the peace.
I understand the concerns raised about the precise operation of the clauses. I have heard representations on that subject from all parties, as it came up on Second Reading. I am actively looking at whether we can tighten the test further—it is already tight—and raise the judicial level at which warrants are issued from magistrate to judge. Mr. Wills hopes to come back to the Committee on that.
The Chairman: We are moving towards a line after which I intend to switch the discussion to triggering. Mr. Tyrie and Mr. Linton will come in first.
Mrs. Laing: Thank you, Mr. Cook. Anticipating what you have just said, I was intending to switch to triggering now.
The Chairman: I hope that you did not read my thoughts.
Mrs. Laing: Mr. Cook, I would not dream of telling the Committee what you are thinking.
The Chairman: Thank you for dreaming.
Q 53Mrs. Laing: Secretary of State, may I take you back to your opening remarks at the beginning of the Committee when you said that one of the main purposes of the Bill was to increase confidence in the electoral system? Without putting the question, I am sure that you will agree that uncertainty reduces confidence in the system and that uncertain law is bad law.
Mr. Straw: It is not my purpose that it should operate retrospectively. I appreciate that I raised the possibility that it might operate in the same way that some tax provisions sometimes do, from earlier dates than is normal with legislation—not in a retrospective way; but again, that point was raised in the House, and we have received other representations about it.
You are correct that currently, under the commencement provision in clause 19, the provisions are planned to come into force on the day when the Bill receives Royal Assent, not retrospectively—clause 10(5), as you will recall, is specifically to avoid that. Even if the clause as drafted and clause 19 were passed without any amendment, subsection (5) of clause 10 states:
“The amendments made by this section do not apply to any expenses incurred before the commencement of this section.”
It is certainly not the case, and it was never the intention, that if a political party is lawfully printing leaflets in support of a candidate at the moment—even though they are dished out afterwards—the provisions would catch that. It would obviously, I accept, be unfair. Clause 10(5) makes that clear.
However, I have also said that we are open to argument about whether commencement should take place on Royal Assent or later. Just to anticipate a point, if I may, Mr. Cook, I acknowledged, I think, on Second Reading, that the Electoral Commission said that it would need to take time to seek guidance once it had seen the legislation. I am certainly willing to consider that.
Q 54Mrs. Laing: This might be a ray of light. Are you saying, Secretary of State, that it is not your intention that the Bill should have retrospective effect, and that therefore if it transpires during the deliberations of the Committee and later in the consideration of the Bill that it will have a significant retrospective effect, the Government will accept amendments to stop that retrospective effect?
Mr. Straw: Yes. I do not accept that it is retrospective at the moment, but I also want to say that it is a general principle of legislation that it should not have retrospective effect, save in very specific circumstances. The principal one is where a wrong has been done to an individual, and you want to right it. Whatever benefits the Bill has, that is not one of them.
Q 55Mrs. Laing: Indeed. Thank you very much, Secretary of State. That was very helpful. Can I take you further on the question of clarity—about the triggering rules? Again, I am concerned that if the Bill becomes law it should be clear. None of us wants another Fiona Jones case, with its ultimately tragic consequences.
Mr. Straw: Where I agree with you is on the quality of your constituency. To let the Committee into a secret, I was born and brought up in Mrs. Laing’s constituency and my mother was a Labour councillor for quite a period, into her late 70s, and she still lives there.
On the specifics, I should first explain that I made the decision in the light of discussions that have taken place, using my judgment and not Hayden Phillips’ judgment, but also having considered what he said on page 15, which I have already quoted. Also, given what everybody accepts, that there was an unintended gap in the law because everybody thought that triggering would continue under the 1983 regime and it did not, I thought that we ought to reintroduce it. I thought that there would be a broad consensus for that, not least because Lord Mackay of Ardbrecknish—not Lord Mackay of Clashfern, who was Lord Chancellor, but the late Lord Mackay who was leading on the Bill in the House of Lords—moved amendments to make it clear that the 1983 regime would continue. I regret that Ministers were reassured that that was unnecessary, but there we are. I have never suggested that the trigger arrangements are perfect, but they did act as a dampener.
With respect, I do not accept that with the communications allowance somehow incumbent MPs will be advantaged over those who are candidates. Again, I draw attention to what the then Lord Chief Justice, now Lord Bingham, said in the Fiona Jones Court of Appeal judgment. He drew a distinction, which is there under the 1983 Act and will still be broadly there under the revised definition:
“Election expenses are not incurred where a constituency party carries on its ordinary political activity otherwise than with reference to a specific election which is reasonably imminent, even though such activity has the ultimate aim of winning public support and gaining or retaining power in the constituency; nor are they incurred by a candidate who nurses the constituency. An election expense means expenses incurred, by or on behalf of a particular candidate”
in respect of the conduct or management of the election, which has now been widened slightly to the purposes of the election. That distinction will have to remain in the law for as long as we do not arrive at an arrangement—which Mr. Howarth raised with me, but for which there is currently no consensus—where all spending by political parties at all times is subject to an overall limit, whether national or local.
There is agreement about the objective here. I do not say that this triggering proposal is perfect. If there were better ways of doing it and if, for example, we could find a way of improving what went into the 2006 Bill and was then dropped, let us look at it.
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