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?
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.
As to my
concern about this area of the Bill, which we colloquially refer to as
“triggering”—but I think that all members of the
Committee understand what we mean by triggering—do you accept,
Secretary of State,
that the Bill will have a retrospective effect? How can you justify the
retrospective nature of the Bill, when there are people who are now
acting perfectly legally and within the law, in preparing for when an
election—general or otherwise—may occur, who, when the
Bill becomes law, if it becomes law in the form in which it is put
before us today, will find that they have been acting illegally? The
retrospective nature of the Bill makes it unfair, does it
not? 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.
Clarity in
election matters is extremely important. At present, the triggering
rules, as we refer to them, are not
clear. What is the event that will trigger the spending of election
expenses? Is it not the case that the triggering rules are designed, at
present, to make it more difficult for a candidate to campaign
effectively, thus benefiting the sitting MP? In my constituency, which
the Secretary of State knows to be a place of wonderful political
activity, as the sitting MP, I can spend £10,000 of
taxpayers’ money, not on campaigning—certainly never
campaigning on party matters—but on communicating with the
electorate in my constituency. Meanwhile, the Labour candidate who
might stand against me at the next general election will be prevented
from spending money that he might have raised himself, as a result of
the Bill. 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.
The Electoral
Commission made recommendations for trying to fill what is accepted on
all sides as an unintended gap in the law. As we control campaign
spending for 12 months before a general election, it was
expected that candidate spending would be controlled, not least by the
continuation of the trigger, which is not there. The Electoral
Commission said that the way to fill the gap is to have a four-month
period before an election where the candidate spending is controlled.
We put that forward in what became the Electoral Administration Act
2006, but it did not find favour. 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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