Q
119Mr.
Reid: Existing legislation allows you to recommend
increases in the expenses limit. If the Bill is passed, so that
expenses limits cover a much longer period, would you recommend an
increase in the expenses limit? If so, have you given any thought to
what that would be?
Peter
Wardle: We would certainly recommend an increase in
the expenses limit, in principle. When we recommended that serious
consideration should be given to a four-month period, we made such a
recommendation. I am afraid that I cannot remember whether we gave a
precise figure, but we certainly said, broadly speaking, that, if
quadrupling the period, it would be foolish to stay with the existing
limit. We would have to acknowledge that this was over a longer period.
May I just add to that? It is slightly more difficult to come up with a
number if you are talking about an indeterminate period. The beauty of
the four-month period was that it was
clear.
Q
120Mr.
Reid: Finally, in paragraph 25 you raised the problem of
transport, and how that could be apportioned for election expenses. To
give you an example from my own constituency, as a sitting MP, I fly
out to one of the islands to hold a surgery and, while I am there,
distribute some leaflets about voting for me at the next general
election. The literature itself is clearly election expenses, but how
do you apportion the travelling expenses? If my main purpose for going
was to hold a surgery but, in addition, while I am there, I incur
election expenses, how do you apportion the
travel? Peter
Wardle: That is a good question. It is not a question
particularly triggered by the Bill’s proposals—the
question arises already, if in the regulated
period.
Mr.
Reid: Only in the regulated
period. Peter
Wardle: Yes. We have guidance. It is not easy, and we
have attempted to address that question in our existing guidance. I am
afraid that I do not have that, chapter and verse, but we can follow
that up in a note to the
Committee.
The
Chairman: Two hon. Members wish to come in on this
subject, and I want to help the Committee. We have three other
important areas to cover: the composition of the commission, donations,
and registration. Will hon. Members who wish to ask a brief question
under this heading of triggering do so
quickly?
Q
121Tony
Lloyd: This relates back to ambiguity about the timing of
the impact of candidacy. I have been surprised by Peter Wardle’s
remarks so far, because clause 10(5) on page 9
states: “The
amendments made by this section do not apply to any expenses incurred
before the commencement of this
section.” Is
there really any ambiguity in
that? Peter
Wardle: As Sir Nicholas noted, I was being invited to
give an interpretation of the law. I carefully sought to avoid doing
that. What I said was that there is more than one interpretation. I
heard what the Secretary of State said, and it seemed clear to me, but
some people are unpersuaded and there are one or two issues. The one
that Mr. Reid raised about contracts entered into but not
discharged—the standard period—may be one on which it
would be helpful to have the position clarified. It is a transition
issue, and when something is introduced you sometimes need transitional
measures, perhaps simply to put something beyond doubt rather than to
change something in the original Bill.
Q
122Mrs.
Laing: Has the Electoral Commission made any assessment or
comparison of the effectiveness of recent general elections when there
was a triggering mechanism, and when there was not? In the recent past,
we have had general elections when there was triggering, as you
mentioned, Mr. Wardle, but during the last two there was
not. Has there been an assessment or comparison of the effect of
that?
Martin
Linton: It was written by Lord Ashcroft and called
“Dirty politics, Dirty
times”.
Peter
Wardle: The short answer is
no.
The
Chairman: Thank you. May we now pass on to the
commission’s composition? I call, first, David
Howarth.
Q
123David
Howarth: The commission has expressed concern about the
proposal to add to the commissioners some who would be exempt from the
normal rule that people involved in politics recently cannot be
commissioners. I think there has been some change of emphasis or change
in the way that the commission expresses its objections, so will you
put on the record your present thoughts on that
proposal? Peter
Wardle: The first point is that the commission
understands and endorses the underlying aim of the proposals. Its work
should be informed by a clear and current understanding of how
political parties work. There can be no question about that. We very
much welcome in principle the ability to employ staff with more recent
involvement in party politics than the current 10-year ban allows,
although we think the blanket relaxation to one year, except for the
chief executive’s post, may go too far. For example, I am not
sure that all political parties would welcome the appointment as
director of investigations someone who, 18 months previously, was
closely identified with one political party or another. However, if
that is understood, the commission can make its own sensible decisions
on when it takes advantage of the relaxation on staff and when it does
not. My
concern about the proposals for the commissioners is where the
proposals in the Bill have departed from the principles set out by the
Committee on Standards in Public Life in its report on the commission.
First, there have been frequent references to the fact that new
commissioners nominated by party leaders will always be in a minority.
In that context, neither the CSPL nor anyone else recommended, before
the Bill was introduced, that there should be a reduction in the
current 10-year ban for the other commissioners who are not party
nominees, yet clause 7 reduces the length of that ban from 10 years to
five. In principle, that means that, of 10 commissioners,
you could have four who were MPs a year ago and six who were MPs five
years ago. That seems to be a significant departure from the principle
of introducing political experience to the commission that the CSPL set
out, and it gives me some concerns about the extent to which the
balance between independent commissioners and political nominees will
be
maintained. I
am sure that people will say that I have painted an extreme scenario,
that that would never happen, but it seems that that is the effect of
the Bill. I have not yet understood the rationale for the reduction
from 10 years
to five years for the non-politically nominated commissioners, alongside
the introduction of party nominees. That is my first
point. My
second concern is that the CSPL clearly said that the process for
appointing commissioners with recent political experience should
somehow reflect the provisions of the code of practice for public
appointments. It is difficult to see how the process set out in the
Bill does that. The point to note is that, up till now, the
Speaker’s Committee has consistently taken the view and insisted
that the process for appointing electoral commissioners should be
clearly in line with the code of practice for public appointments. I
suppose that I am making a plea on behalf of the Speaker’s
Committee, which gets the job of implementing this, for Parliament to
be as clear as possible about expectations for the appointment process
so that there is no confusion, and so that people do not try to invent
a process that is different from what Parliament
wanted. Thirdly,
a more technical point: it seems that there is no provision in the Bill
to deal with the possibility that one party or another might fail to
nominate. That does happen from time to time when parties have the
right to nominate to organisations. If that were the case, there is a
risk that the Speaker’s Committee could find itself in quite a
dilemma, because, without a nomination from a party, or from more than
one party in some cases, it cannot get on with the next stage of the
process. That is a procedural point, but it would be good to consider
it. Those
are my main concerns. It is important that Parliament thinks about them
rather than simply sending the measure through on the nod, because your
colleagues on the Speaker’s Committee will be given the job of
implementing
it.
Q
124David
Howarth: On the first concern, which is the reduction from
10 to five years for the non-political commissioners, the response that
has been put to me is that since those appointments will still be Nolan
appointments—we are talking about the code of practice for
public appointments—the situation is not as dangerous or as
risky as you are saying. That will be taken into account in the
appointment procedure, and it will not involve the new rather awkward
process that you described for the appointment of political
commissioners through the Speaker’s Committee. How do you
respond to
that? Peter
Wardle: Yes, provided all of that happens, but there
is nothing in the Bill to ensure that it does. As I understand it, the
decision to follow the Nolan process is a decision that the
Speaker’s Committee has consistently insisted on, and that is
absolutely right, but I am not sure that the Bill mandates that for the
other appointments. What it does is reduce the disqualification that
currently applies on the basis of party political involvement from 10
years to five
years.
Q
125Tony
Lloyd: I would like to turn specifically to clauses 8 and
9, which deal with the source of donation. For the record, may I ask a
simple question? Does the commission consider that it has a primary
duty to encourage and insist on transparency of the ultimate
donor? Peter
Wardle:
Yes.
The
Chairman: By the way, we have moved on to
donations.
Tony
Lloyd: Yes, I did say that, Sir
Nicholas.
The
Chairman: But I was under the impression that you
wanted to come in under composition of the commission. So, for the
information of members of the Committee, we are on
donations. Peter
Wardle: If I may just add to my answer, yes, so far
as the law requires it. We cannot insist on transparency or disclosure
of identity beyond what the law requires. That is
self-evident.
Q
126Tony
Lloyd: Indeed. The commission in its paper to the
Committee
states: “We
welcome the Government’s decision to look beyond unincorporated
associations”, but
you go on to say
that “the
benefits of these proposals may be quite limited, since the law already
prohibits concealing the source of a donation by channelling the money
through
others.” You
then say that they are effectively restricted because
“the new
declarations which donors are to be obliged to provide to donees will
not be sent to the Commission or made
public”. With
unincorporated associations, such as dinner clubs, it is difficult or
impossible for the commission to bring transparency forward. You are
saying that, as drafted, the Bill does not do enough to allow you take
away the veil that restricts public knowledge of the ultimate donor.
What powers do you seek that would allow you to strip away the veil
provided by incorporation or the dinner club
structure? Peter
Wardle: It is not a question of the
commission’s powers, but of changing the framework that we
regulate. Currently, whatever my powers, I can only require and
investigate allegations of non-compliance with the law as it stands. As
everyone knows, the purpose of clause 8 is to underline what the law
currently requires and ensure that, in the transaction between donor
and recipient, that point is specifically addressed, but it is only the
point that is currently in the law. If Parliament wanted to go beyond
it and change the law, we would be getting into the much bigger area of
how wide the net of transparency is cast, and that goes back to the
debates that the House had on Second Reading and in some of the
evidence sessions involving the Secretary of State on Tuesday about the
extent to which Parliament wants to change the underlying framework
that we regulate. Whatever powers we have will make no difference if
the underlying law stays the same.
Q
127Tony
Lloyd: But there is a question of power. At the moment, if
an agent operates on behalf of a unincorporated association, he has a
duty under the law to say that the donations comply with the law. There
is no ambiguity in the law about that. You are saying that we need to
change the nature of the total structure to require an agent to
declare, for example, that the donations are legitimate and within the
law, such as that the donors are UK nationals and comply with the
donation limits. What would you need to pursue that
matter? Lisa
Klein: Currently, with unincorporated associations,
the law of agency applies if the donor is a friend of party x and is
saying to the unincorporated association, “Please give this
donation to party x or to candidate y.” It is set out in
legislation that the agent is required to disclose to the recipient
party or candidate the identity
and details of the source of the donation. That is then reported by the
party in reports and returns filed to the Electoral
Commission. However,
under the law of agency as set out in the Bill, there is a spectrum
and, at the other end of the spectrum, a lot of broad discretion might
rest within the unincorporated association for deciding to whom the
donation is made and the amount of the donation. In that case, under
those basic principles, there would not be an obligation because the
unincorporated association is making the decision about the disposition
of the funds. We could envision a framework that changed that to the
extent that it required greater transparency of funds received by the
unincorporated association, but that is not how the law is set up under
the
Bill.
Q
128Tony
Lloyd: Specifically, would the Electoral Commission seek
that change in the law to strip away the scale of
unincorporation? Peter
Wardle: The commission has not expressed a view that
the law should change. That is because, until very recently, all those
issues were effectively up for grabs, in the context of the inter-party
talks on party funding. Frankly, we did not think that the commission
would necessarily be listened to terribly hard, although we were
consulted by Sir Hayden Phillips to see whether we would pick out
particular
issues. To
the extent that a wider solution has not emerged from those talks,
clearly there is a range of areas—you have mentioned a couple of
them—where there is a case for changing the rules. However, I
acknowledge that this is a difficult issue, about which the Secretary
of State for Justice and Lord Chancellor, as well as the Front-Bench
spokesmen of the other parties, have all expressed a wish in principle
to proceed by
consensus. On
the particular issue of the unincorporated associations, as Lisa Klein
has explained, the difficult element is where there is a grey area
about who took the decision on where the money would go. There have
been suggestions mooted that there should be some concept of where the
controlling mind of the unincorporated association is, which takes the
decision on where the money goes. In principle, that would lead to
greater transparency in the area that you are talking about, but it is
not without its
pitfalls.
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