Political Parties and Elections Bill
The Chairman: Order. We must conclude this part of the sitting. I thank the Secretary of State and his team of witnesses, and ask them to vacate their chairs to make way for Sir Hayden Phillips and Sir Christopher Kelly.
The Chairman: Welcome, gentlemen. Thank you for coming to help us in our deliberations. You have seen the pattern that we are operating today, and we hope that you find no difficulty with it. In the same fashion as before, we will start with the principal Opposition spokesperson, or have you handed over the armband?
Q 68Mr. Tyrie: The questions that I want to ask mainly concern the future, but before that, I wanted to ask one historical question of Sir Hayden. We have an accumulated literature on the matter as the result of the work that you and I did through your committee. Would you have any difficulty with publishing any of the papers or minutes summarising meetings from those talks?
Sir Hayden Phillips: I do not personally have any problem releasing the papers that we prepared for the meetings of the three parties. My only concern, if you will excuse me for not answering with a simple yes or no, is that I need to look carefully at the minutes.
As you know, we had very wide-ranging discussions, and all sorts of things came up. We all agreed to keep our confidences in the nature of the conversations that we had and the results that would be published. I would like to think about it. However, if the three parties, having checked the minutes themselves, were satisfied that they could be published as well, I do not think that I would want to stand in the way.
Q 69Mr. Tyrie: Just to be clear, you would be happy for both the minutes and the main papers put before the committee to be put in the public domain, provided that all three participating parties agreed?
Sir Hayden Phillips: Yes, I think I would. That is the right way to proceed. I do not think that it is a judgment that I should simply make on my own in my cell, as it were. I would make it in consultation with those involved.
Q 70Mr. Tyrie: Our partys view on publication is well known. Turning to affiliation fees, I have only one more question, which will give Sir Christopher a moment or two to think about it. Do you think that it will be possible to find an agreement for a new long-term structure for party funding and control of donations that does not provide each individual affiliated member genuine choice on an annual basis over whether to donate?
Sir Hayden Phillips: Perhaps I may answer that in two ways. The first concerns the proposals that I put before the parties just a year ago. It is a happy, or perhaps unhappy, anniversary that we are celebrating here: the fact that we did not come to an agreement. I think my proposals went as far, at that stage, as I believed the Labour party could manage in ensuring on affiliation fees that the precise amount that was paid in was the precise amount that came out, that it was not mediated by the trade union leadership in any way, and that there was a clear and regular opportunity to opt out.
That is where we got to, and it is very much a matter for the Labour party and the trade unions to say whether they see a prospect down the line of adopting what I know has been the Conservative partys preferred position of individual affiliated members being given a choice of what to do, and that they should be able to donate to parties other than the Labour party.
The other way of answering the question is to say that I do not think things will necessarily remain absolutely as they are now, because I believe, as you know, that a comprehensive agreement on party funding is essential. If we do not have it, there will be problems all the way along the line, and every single year something will come up and cause a row. That is not healthy.
In Canada, to answer your question elliptically, the relationship between the New Democratic party and the trade unions was similar to the one we have had here. It made the sort of change that you have suggested, and it is fair to say that both the political party concerned and the trade unions have found that system perfectly satisfactory. The world did not fall apart, and people thought the system was clearer and, if I might put it this way, cleaner. If experience from abroad can apply here, that is the example that I have in mind.
Q 71Mr. Tyrie: To be clear, what exactly did that Canadian reform consist of with respect to donations by individual trade unionists?
Sir Hayden Phillips: If my memory serves me right, it gave people the opportunity to donate their fee through their trade union to the party of their choice.
Sir Christopher Kelly: I am not sure what my answer to that question will be worth, as I have not sat through the detailed discussions that you and Sir Hayden Phillips have sat through, but I shall say two things. First, I very much agree with what Sir Hayden said, which is that some form of agreement between the parties is a very important objective. Secondly, it is clear that some form of compromise on all sides is probably necessary. Quite what the details of that compromise are, and whether it is possible to obtain agreement only on the basis that you put forward, I frankly do not know.
Q 73Mr. Tyrie: Do you think that in the long term it is sustainable for standards and confidence in the way that parties are funded, given your job as chairman of the Committee on Standards in Public Life, that one party should be subject to a cap with no exceptions, but another should retain a privileged collection mechanism with a unique relationship with a mass pressure group, however august it may be and however much built into our legislative process?
Sir Christopher Kelly: I think that what is important for confidence in the standards that are applied is that all the parties reach agreement on what is an acceptable way of financing political parties.
Sir Christopher Kelly: Not any agreement, but on this issue, on which so much discussion has taken place, we are not talking about any agreement. We are talking about reaching compromises on issues that go back into the history and constitution of political parties, and clearly raise many difficult issues for everyone.
Q 75David Howarth: May I ask Sir Hayden to comment on the Bill and its contents, compared with his proposed agreement? Is it true that the Bill is a very long way from where the talks that you were brokering had reached?
Sir Hayden Phillips: It is very much narrower than the set of proposals that I published, with the agreement of the parties, at the end of October last year, which covered a whole range of the issues that arise in relation to party funding. On the other hand, the Secretary of State and the White Paper made it perfectly clear that
In the absence of that consensus, the judgment was that it was not wise or sensible to proceed with something much more comprehensive. It seemed to me wholly reasonable for the Government to say, Look, one area where we know we can and ought to make an advance is in reforms to the Electoral Commission. That is the central thread of the Bill. Personally, I think that that is worth doing.
Q 76David Howarth: To come back to your proposed agreement, to what extent at the time did you think that you had a consensus, particularly on the issue of expenditure caps? What place did you think that the expenditure cap had in the overall package?
Sir Hayden Phillips: The point about expenditure in this was to make sure that there was an overall package. The focus obviously began with the issue of donations: I observe from reading the newspapers as a private citizen that issues around big donations continue to vex people, and I fear that they will go on doing so until a change is made. To try to get that balance between those who thought it was more important to control spending and those who thought it was more important to control donations, it seemed to me natural common sense to try to persuade the parties to cover the whole waterfront, which they agreed to do.
I think that we made good progress, although others will have their own views about that. Over a year and a bit, we went quite a long wayas did the Select Committeein agreeing the principles on which an agreement might be made, but I always made it clear to those I was talking to, and we had all agreed it, that nothing was agreed until everything was agreed. That was the basis on which we did it. Otherwise, it could fall apart at any time when we got down to the detail in a whole range of areas. We did not come on to negotiating the detail of some areas, such as spending limits, although in principle people were in favour of greater and more comprehensive control.
My precise proposals were not agreed. Equally true, the arrangements in relation to donations and affiliation fees, to which Mr. Tyrie referred, were not agreed. Nor had we agreed my precise proposals for additional public expenditure, partly to make up the losses that would otherwise be incurred from donations caps and partlyI thought in a reasonable way in the modern worldto engage the public more directly in a sense of ownership of party politics. That is a long and rather rambling answer, I am afraid.
Q 77David Howarth: I suppose the question arising out of it is whether in your view the talks broke down because of the failure to agree on those details, in the light of the agreement on the principles, or was there any reversal on the principles themselves by any of the parties taking part?
Sir Hayden Phillips: No, I do not think so. If I look back to my reportI published it in March 2007I was very careful to ensure that the words I used, where I said that we had reached agreement on the principles, were indeed ones that were acceptable to the three parties. I think that Andrew would confirm that that was the case.
No, I do not think that people went back on the principles we had agreed. Translating them into precise reality was the problem. In relation to affiliation fees, I had always been conscious of the Conservative partys preferred position, so it was not a surpriseit may have been a slight disappointmentthat I could not shove the Conservatives a bit further towards the proposals, but that is a different issue.
Q 78David Howarth: A final detail point. On expenditure caps, you will recall that the methodology you followed was heavily criticised by Mr. Pinto-Duschinsky. Do you have any response to what he said? He will be appearing as a witness later in the week.
Sir Hayden Phillips: I did not really enter into that argument, nor do I think it valuable or interesting.
I think that there was a general feeling on the part of all parties that if we could try to dampen down the amount of money spent, it would probably be a pretty good thing, without going into the question whether there was an arms race or not, what the statistics said or anything else.
To put a personal view about the bill poster expenditure that goes on, if I talk to individual Members of Parliament from all parties, they will mostly say to me with great frankness that it is a waste of time. If you know that as a matter of common sense, you try to do something about it. That is what I was doing.
Q 79Nick Ainger (Carmarthen, West and South Pembrokeshire) (Lab): Sir Hayden, you will be well aware that it is not only funding that is important to political parties; it is also membership and volunteers, because at the end of the day, they are the people who go out and do the work. On Second Reading, a number of Members raised the issue of the new powers that would be given to the Electoral Commission, particularly those involving entering peoples homes to seek information about alleged breaches of the regulation. What effect, if any, do you think that that will have on the cohorts of volunteers on which all political parties depend?
Sir Hayden Phillips: That is something that I was very conscious of in the work that I did with the parties. I was always very conscious that we had to try to have a proportionate regulatory system, and that not every single volunteer was a forensic accountant.
The issue here, as I understand it, is that the existing powers of the Electoral Commission under the present law are pretty extreme and robust. What the Bill has done is reveal that underlying reality, rather than fundamentally changing the position. My personal view is that the Committee will want to ensure if those powers are to be implemented that the safeguards are real, so that we do not find that people who are not experts in the field but are good volunteers are being harried and pursued unreasonably. That is a general position of mine, not a specific issue. It is very much up to the Committee to try to find the sorts of amendment that will make everyone feel comfortable that the powers are not excessive.
Q 80Nick Ainger: What safeguards would you recommend to the Committee, bearing in mind your support for the contentions that we must keep that great cohort of volunteers enthusiastic and not make them increasingly concerned that they may face criminal charges?
Sir Hayden Phillips: There are two key elements. I do not pretend to be an expert on the detail of this; I have not gone into it to the extent that you have done. I think that one would need to be satisfied that the Electoral Commission intended to operate in a way that would be fair and be seen to be fair. That is an area in which it is given powers to issue guidance. I think that we should ask the Electoral Commission to set out guidance about the way that it intends to operate in that area.
The second thing that I would want to assure myself of is that the process through which the authorities had to go in order to get to that point was sufficiently well policed by an independent judicial or other mechanism that that pathway was clear and had to be carefully trodden. But if you want, I will go away and think further about it, and if the Chairman wants me to and I have any thoughts, I will let the Committee have them, but I would need to look at it in much more detail than I have so far to answer your question fully.
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