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. 12
noon
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?
Mr.
Djanogly: I have
indeed.
The
Chairman: I see. I call Andrew
Tyrie.
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 party’s 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 party’s
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.
Q
72Mr.
Tyrie: Thank you. Sir Christopher, may I ask you the same
question? 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.
Q
74Mr.
Tyrie: But will any agreement
do? 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
what he wanted to do, which is what I wanted to do and tried to achieve,
was to find an agreement between the parties on all those
issues. 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
way—as did the Select Committee—in 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 partly—I
thought in a reasonable way in the modern world—to 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 report—I published it in March 2007—I 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
party’s preferred position, so it was not a surprise—it
may have been a slight disappointment—that 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 people’s 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.
| 
