Political Parties and Elections Bill

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Q 108Tony Lloyd (Manchester, Central) (Lab): I will want to return more generally to themes in clauses 8 and 9 and sources of donations at a more appropriate stage, Sir Nicholas.
Specifically in the context of investigation, may we have some comments on the Electoral Commission’s own views in the paper that it sent to us? Paragraph 20 discusses the changes in the audit process with respect to donors and unincorporated associations. In this regard, specifically, the commission argues that these changes will not add materially to transparency. Have there been instances where the lack of investigation powers has prevented the removal of the veil of the unincorporated association or discussion of the vexed question of foreign donors? Are investigation powers enough now? Will the new powers make this a more straightforward process?
Lisa Klein: Without the new donation transparency requirements as set forth in the Bill, in the context of an investigation under the current set up, we do not have the authority to require documents or to obtain information from individuals. So in the context of foreign donations, in the abstract, if we were to investigate that type of matter we would be doing so at the discretion of the voluntary co-operation of the donor in providing the information. Under the new Bill, it would go further than that. If we had a reasonable suspicion that there was a failure to comply with the law, in terms of the ban on foreign donations, we would be entitled to pursue that through a formal notice and to ask those questions of the donor.
Q 109Martin Linton (Battersea) (Lab): I want to ask about the provisions, both in the existing Bill and the new Bill, to deal with unintended errors. Obviously, the main part of your work is searching out intended deceit and corruption, which is important, but equally it is important to know how the commission deals with honest mistakes, when it comes across them. As I understand it, section 167 of the Representation of the People Act 1983 allows people to seek relief if they make an honest mistake. Should there not be a similar provision in your investigative powers? If you come across a case where you do not believe that there was any intention to deceive or to fail to comply, but nevertheless a mistake was made, will you have sufficient latitude under the Bill to say that because there was no intention to deceive, you do not need to proceed?
Lisa Klein: It is difficult to answer that in the abstract because different offences require different levels of intent, and some do and some do not. However, the Bill is helpful not so much in respect of investigative powers but in determining an outcome within loose groups of sanctions. It is precisely because of the large number of inadvertent or negligent errors that it would be better and more appropriate to address them through the suite of sanctions that are available in the Bill. The goal would be to ensure that political parties’ systems are robust enough to meet their obligations and to address the minor administrative errors that occur.
Q 110Martin Linton: You are saying that a sanction is necessarily appropriate if there is an unintended error. Surely, for many unintended errors, you would not want a sanction.
Lisa Klein: Obviously, that is true, but a sanction may be a compliance order or an undertaking to revisit some of the systems. I am using “sanction” in terms of our ability to suggest that some corrective action could be taken to prevent a recurrence of an administrative order.
Q 111Mr. Andrew Turner (Isle of Wight) (Con): What penalty or sanction will you be evidencing? Will it be a criminal action or a civil action?
Lisa Klein: Under the proposed law, there are civil sanctions that will apply to criminal offences. There are safeguards within that, in that we have to operate to a beyond reasonable doubt standard before we impose civil sanctions.
The Chairman: We shall now move on to triggering, and I call the Liberal Democrat spokesman.
Q 112David Howarth (Cambridge) (LD): Thank you, Sir Nicholas. Clause 10 proposes to bring back the system of triggering so that instead of there being a clear date for when election expenses start, there will be different dates for different people depending on whether they behave like candidates. I believe that you said in September that it is important in this area for lines to be drawn clearly in legislation, otherwise there will be great scope for confusion and avoidance. The last time we had this type of rule, many people said that it was unenforceable because it was so unclear.
What is your view of the present state of the Bill? How clear is it, and to what extent will you have to give supplementary guidance, as you are invited to do in the Bill, before the measure can effectively be put into operation?
Peter Wardle: Before I say anything else, it is well known that the commission has taken the view that the current trigger point is undesirably close to the date of a general election. We put forward a proposal to extend the period to four months before the general election, acknowledging that that was not a perfect solution. The matter was debated extensively when the Electoral Administration Bill was under consideration in 2005 and 2006, and, for understandable reasons, Parliament concluded that there may well be a better way of addressing the general concern about the very short period for candidate expenses to be regulated in the run-up to a general election.
The proposal in the Bill, as one of the witnesses who will appear later today characterised it, moves from a single trigger point to 650 trigger points, multiplied by how ever many candidates appear. Clearly, from the point of view of regulators, candidates and agents, that does not fill us with joy, in terms of our ability to be very clear about the precise circumstances that will apply in each case and also our ability to follow up any potential infringements.
In passing, I should say that, of course, it is not just the Electoral Commission that gets involved in these offences, because they are Representation of the People Act 1983 offences and not offences under the Political Parties, Elections and Referendums Act 2000. Local police might also take a view on whether or not the law has been broken.
So, in general terms, when we looked at this issue previously it was for that reason that we suggested a single trigger point, but we also suggested that one further away from the date of the election would be preferable all round, because it would be clear.
However, we have made it very clear that it is for Parliament to determine the right way forward on this matter. As a good regulator, we will always seek to provide as much guidance and clarity as we can about what must be done to comply with the rules, as set out in clause 1, and what, if anything, we would like to see in terms of best practice beyond basic compliance with the rules.
We will do our best to produce guidance that is helpful. I am sure that we will have to update that guidance on a fairly regular basis, to take account of new issues that are put to us or new developments that emerge. It will be available to candidates, agents and others to help them to interpret the rules.
As the Secretary of State said when he appeared before the Committee on Tuesday, there is some history and some case law in this area, although not all of it is directly relevant because things have changed since the regime that was previously in place.
I should also say that, of course, Electoral Commission guidance will not overrule a decision of the courts. There are very few judgments in this area and people will not be able to rely conclusively on our guidance at any stage. Ultimately, it can all be tested in the courts.
For that reason, we have made the comment consistently since the Bill was published that the clearer that Parliament is about what it intends to achieve with the Bill, the easier it will be to provide the guidance and the easier it will be to comply with the rules. A number of questions have been raised in this Committee and elsewhere on particular situations and how the rules would apply to them. Those situations are very good examples of the sort of things that we would want to address in guidance. However, I could not sit here today and say that I am confident that we will be able to produce an absolutely clear answer in 100 per cent. of those situations. We will certainly do our best.
Q 113David Howarth: On the assumption that the Bill stays as it is, how long do you think that it will take to produce the best guidance that you can produce in the circumstances, after the Bill becomes law?
Q 114David Howarth: The Secretary of State said that one of the reasons why the situation was clearer now was that the law had changed on what counted as an expense. Does that help you to issue the guidance or does it make it more difficult because, in a way, it wipes out the previous case law?
Lisa Klein: I would tend to agree that the earlier case law becomes more questionable, and therefore some of the guidelines become less reliable.
Q 115Mrs. Eleanor Laing (Epping Forest) (Con): Continuing on the same subject, on Tuesday, the Secretary of State seemed to agree with the Committee that unclear law is bad law. He appeared to suggest that the relevant part of the Bill would not come into effect until after the Electoral Commission had produced its guidelines. That puts an enormous onus on your organisation. Given the current lack of clarity in the Bill, do you have specific recommendations for improving the drafting, so as to make your task of producing clear guidelines more possible?
Peter Wardle: In the written memorandum that we submitted to the Committee, paragraph 25 gives a couple of specific examples of things that would help candidates and the regulator if they were written more clearly into the Bill. Those issues have already been discussed. The current provision is very general.
We mentioned two issues. One was the question of a candidate who is already selected at the time that the provisions kick in. The Secretary of State made it clear that the intention of the Bill was not to count back. However, there are other questions about a candidate who might have stockpiled election literature which they then bring into use after the triggering point. In such cases, we would need to look at how much of the cost of producing that literature is picked up when it is deployed, as opposed to the cost of producing new literature.
There is also a question about the general promotion of an individual candidate. Every Member of the House who commented, leapt upon the point that in the previous situation, people found ways of talking about themselves without mentioning their names. That is a tricky problem that guidance might not resolve.
Q 116Mrs. Laing: Thank you for that. We are also concerned about the retrospective nature of the Bill. Last Tuesday, the Secretary of State clearly told the Committee that it was not his intention for the Bill to be retrospective, and he agreed in principle with the point that retrospective law is bad law. As the Bill stands, do you think it likely that there will be a retrospective effect if it goes through? It might not be the intention of the Secretary of State, but will it be a fact arising from the Bill?
The Chairman: This is interpretation, Mr. Wardle.
Peter Wardle: I will choose my words as carefully as possible. Given the concerns about the impact of the provisions on candidates who have already identified themselves as such before the date on which the new provisions commence, it might be helpful for Parliament to put beyond doubt the question of how those situations will be affected by the Bill.
Q 117Mrs. Laing: Thank you. That is very helpful. If we take that a step further and consider the Bill’s possible retrospective effect—whether intentional or not—I am also concerned about its disproportionate effect. If our democratic process is to be respected, it must be seen to be fair. It would also appear that, if the Bill in its current form becomes an Act of Parliament, candidates will be disadvantaged by comparison with sitting Members of Parliament. Is it possible that a situation could arise whereby a candidate could be deemed, at the point of triggering, to have already spent to the extent allowed for election expenses, and would therefore not be able to campaign at all during the election period?
Peter Wardle: The answer to that question depends very much on the answer to your previous question. One interpretation of the Bill clearly says that the spending of the candidate who declared before the proposals in the Bill take effect would be caught. I do not think that that is the Secretary of State’s interpretation. My understanding was that he was seeking to say that, effectively, the clock starts in such cases when the Bill comes into effect. However, given the lack of clarity, as I said before, that seems to be an area where it would probably be helpful if Parliament were able to put beyond doubt the answer to that question.
Mrs. Laing: That is very helpful. Thank you very much.
Q 118Mr. Alan Reid (Argyll and Bute) (LD): To pursue the last question, the Bill talks of expenses being incurred. What is your definition of “incurred”? For example, what if a candidate contracted with a printer for, say, four leaflet runs for the whole constituency and paid before Royal Assent? If the money was handed over before Royal Assent, would that be a loophole in the present wording of the Bill?
Peter Wardle: That is one of the areas in which we have said that there needs to be more clarity. Certainly, if you look at our guidance on the existing rules on candidate expenditure—if it would be helpful, I could make available to the Committee the relevant extracts—the question of accrual versus cash accounting is relevant.
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