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 Commissions 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?
Peter
Wardle: There are lots of questions about the Bill at
the moment. We are already beginning to try to work out what our
guidance would look like and we would hope to have that guidance in the
public domain by January. I do not think that it is possible to get
anything useful and in detail in the public domain before then. I have
said to Members of the House elsewhere, when I was asked this question
before, that I
would certainly hope that we would be able to finalise the guidance as
soon as possible after Parliament has finished its consideration of the
Bill, and that, subject to the number of last-minute changes, the
responses that we receive to consultation and so on, we would certainly
aim to finalise the guidance and make it available to people in a
definitive form, as far as we are concerned, as soon as possible. We
definitely welcome the indications that the Secretary of State gave to
the Committee on Tuesday that he was considering trying to align the
date on which the new provisions bit with our ability to get properly
consulted guidance into circulation.
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 Bills possible retrospective
effectwhether intentional or notI 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 States 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 expenditureif it
would be helpful, I could make available to the Committee the relevant
extractsthe question of accrual versus cash accounting is
relevant.
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