Political Parties and Elections Bill

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Q 2The Chairman: Does Mr. Pinto-Duschinsky want to come in here? He appears to have made some remark.
Michael Pinto-Duschinsky: Yes, I made a factual point, as I sometimes do, because it is good to get these things correct.
On the question itself, there have been some grounds for concern about the Electoral Commission. Some of them have been addressed; I agree with Professor Ewing on that. There are grounds for concern, first, about the appointment procedures for the original chief executive and the original chairman—it is very important that those appointment procedures are seen to be wholly non-political. I think this is a matter of history now.
The commission spent too much time on electoral policy and participation, in encouraging modernisation and participation, and ignored its regulatory role. That is being addressed now to some extent, but it is notable that the assurances on examining the inaccuracies in the electoral register that the Electoral Commission gave in writing to the Committee on Standards in Public Life have not been followed through. This has been in the service of not wishing to highlight the huge extent of inaccuracies in our electoral register and the need to change to a system of individual registration. Paradoxically, the commission favours a system of individual registration, but it has not brought forward the evidence that it promised to the Committee on Standards in Public Life—a major survey of inaccurate names on the register.
The commission also has failed to deal effectively with the problem of electoral fraud. The amount of electoral fraud has been systematically understated. Indeed, Electoral Commission documents called for local reporting to be careful in case reports on electoral fraud lessened confidence—it was inviting people not to report electoral fraud.
It is significant that the key questions of registration and electoral fraud have been left out of the Bill. Those are the key gaps in the electoral system today and in the architecture of the Political Parties, Elections and Referendums Act 2000. The other thing that I should point out is that there are loopholes in the 2000 Act relating to funding by third parties and the funding of referendums.
Those are four vital areas that have been left out of the Bill. Some of those relate to the Electoral Commission, and some to the wider problems. However, I do not think that at the moment we can really think in terms of abolishing the Electoral Commission. We should want to help it to concentrate on its core role. To that extent, there is a lot in the Bill with which I would agree.
Q 3The Chairman: What about Professor Justin Fisher?
Professor Justin Fisher: I would broadly concur with Professor Ewing’s view. It is important to remember that the changes introduced by the 2000 Act were a series of fundamental changes, both for the parties and the establishment of the commission. Therefore, as Professor Ewing suggests, there has been a steep learning curve. It is also important to divorce the criticisms of the commission made by the three separate reports in 2006-07 from the situation that followed. It is unhelpful to focus on activity before that period.
The commission has addressed some of the complaints that were levelled against it. Some of those complaints were reasonable, some were utterly unreasonable. In my study of how campaigns were conducted, it seemed that some of the parties had unrealistic expectations of what the Electoral Commission would and would not do. As a result of those observations, I welcome the proposals in the Bill to reduce the qualifying period for Electoral Commission staff, which is a sensible move.
I am, however, opposed to the move to introduce political commissioners. That satisfies no one and the formula proposed fails to recognise the increasingly multi-party character of British politics. If I were a leader of the Scottish National party or Plaid Cymru, I would be hopping mad, given that my party would be in government or in coalition in the devolved institutions yet under the proposals there would be room for one representative only.
Many of the complaints have been addressed. I welcome the move on commission staff, but I think that the move on political commissioners is a step too far and needs a rethink.
Q 4The Chairman: Does Professor Ewing want to come back? You had a short innings, so do you want to add to your opening remarks?
Professor Keith Ewing: Not really, except on the political commissioners to endorse what Justin has said.
As I said, I do not know of any Westminster-type democracies that have the idea of political parties being represented on the commission. I cannot think of other regulatory bodies, although there might be some, that include members of the regulated community to regulate the people who are to be regulated. It seems to be a very strange idea.
A further point is that I understand the reason why the proposal has been introduced: it comes out of the lack of confidence in the commission and a time of problems in the past, to which Justin referred. However, I think those problems have been overcome. An idea that was designed initially to help the commission could in the long term serve only to weaken it. We ought to be seeing what we can do to strengthen the commission’s independence and overall authority.
Q 5David Howarth: Professor Fisher started to answer this question in his earlier remarks, so perhaps I can give the other two a go first and come back to him. Looking specifically at the party fundraising and expenditure parts of the Bill, what do you think are the leading problems in that area and to what extent do you think the Bill solves those problems?
Professor Justin Fisher: I shall focus first on expenditure. The Bill seeks to address what I consider a genuine problem: excessive spending in some constituencies prior to the official candidate campaign period. That clearly is a problem and there is academic evidence to support the argument that it has beneficial effects for a party that engages in pre-campaign spending. However, I have deep reservations about the proposal put forward to counter that issue, which will effectively return us to the situation we had before the implementation of the 2000 Act. It seems that that is a poor solution for a number of reasons.
First, before 2001, when the new Act came into place, the system known as triggering barely worked. It was almost impossible to enforce and there was a great deal of uncertainty from all sides about what constituted appropriate spending. Secondly, it fails to deal with the fact that the number of candidates standing for election has increased. You will see in my memorandum that at the last election there were 3,354, which is an average of five per constituency. The idea that the Electoral Commission can effectively police those with completely different start points seems to be a significant challenge—for it and for local returning officers.
A further concern that I have simply relates to the practicalities of implementing this sort of legislation in terms of the agents—those who are legally responsible for MPs’ expenses. We have been studying the work of agents at elections at every election since 1992—we have a lot of data on who the agents are, how much experience they have and so on. In our most recent survey, which is of 2005, we found not only that the vast majority were volunteers, but that a majority had not worked under the previous legislation. More than 60 per cent. of agents from the main five parties had no experience of triggering. In the original White Paper proposals, the implication was that we were simply going back to rules that had existed before and that everyone would know how they worked. That is patently not the case.
My concern is that we might create an unreasonable regulatory burden on volunteers and, without those volunteers, elections simply will not run. Part of the Phillips inquiry and many of the inquiries on party funding were about re-engaging voluntary activity at local level. It strikes me that although this proposal has the right message at its heart, it is the wrong way of going about things.
Professor Keith Ewing: In direct response to your question, my view is that, overall, the structure put in place in 2000 by the 2000 Act is basically sound. It was designed to deal with three questions: first, the issue of transparency; secondly, foreign donations; and thirdly, the issue of election expenses. That was all wrapped up with an independent commission to supervise the process. That package emerged from a consensus report, around which the three main parties united. To this day, the foundations that were put in place as a result of the Neill committee report are sound, but, as is inevitable with any form of regulation, flaws, loopholes and gaps are exposed as political party practices on fundraising and spending change.
Despite all the excitement that has emerged in the past two or three years, my view is that the legislation is sound but that loopholes need to be plugged. There are loopholes in relation to transparency, such as the issue of unincorporated associations making donations to political parties. They are largely unregulated and there is a lack of transparency on that. One issue that needs to be addressed is the extent to which foreign donations are adequately controlled consistently and in the spirit of the Neill committee. Another issue is the serious loophole on spending limits.
I do not feel quite as strongly about the third issue as Justin does. Perhaps triggering could be made to work, and perhaps we need to go back to that with a more realistic view about how it can be implemented, bearing in mind our experience from 100 years of the arrangement since 1883. The problem will be with what happens to the money. If the candidate cannot spend the money that is currently being spent, where will it go and who will spend it? Currently, if the money is going to be spent by the constituency party, it will form part of the overall spending limit of the national party. That would cover one of the obvious potential loopholes that will emerge from a triggering regime. What we have to ask is what other loopholes might emerge. We have some time, before the Bill is passed, in which to anticipate potential loopholes and to take steps to deal with them. This loophole has to be addressed, for obvious reasons—for example, it is undermining the spending limit ambitions of Neill. Those three issues are not all dealt with in the Bill, but they need to be.
Q 6David Howarth: The idea of anticipating loopholes in the Bill raises the big issue of party spending as opposed to candidate spending. Do you agree that we can see that that is going to be a problem in the future, and that we should be doing something to address it either at national level or—this is a big gap in the Bill—at the local level. We currently have national spending limits, although only for a year, and candidate spending limits in the election period, but we have no party local spending limit at all.
Professor Keith Ewing: In the non-election years.
Q 7David Howarth: Yes.
Professor Justin Fisher: That is quite true. The danger is that you would require volunteers to keep records, for which they could face criminal prosecution if they are in breach, throughout the campaign period. Unfortunately, we have to accept that as long as we have a difference between party spend at national level and candidate spend at constituency level, some things will slip between the cracks. The Bill’s goal should be to try to deal with that as best it can, but we should be under no illusions that it will plug the hole completely.
Michael Pinto-Duschinsky: First, let me address the architecture of the system and what is wrong with party funding. What is wrong is that not enough people want to give money to political parties or candidates. We have had nothing like the Obama method of fundraising large numbers of small donations through the internet. That applies to all parties, and would apply to your party. Compared with the number of votes that you get, the number of members that you have is very small. That is the nub of the problem with British party funding, but that is not amenable to legislation. Indeed, if you have too much regulation and too much subsidy, you will make the problem worse.
The Bill looks at one legitimate area and one legitimate loophole that relate to local candidate spending, but it does so in a way that leads to many problems of detail. As an observer of the British constitution, I think that the debate about whether amendments can be tabled by 3 o’clock or 6.30 shows great disrespect for the British constitution. You cannot debate important matters that may be of detail, but which would have crucial effects on the working of our system and the confidence in it within such a tight deadline.
Keith Ewing and I were both expert advisers for the Labour party in the Fiona Jones case, and we know the tragic consequences for her and for the political system of certain ambiguities that will come back in spades under the Bill. For example, Fiona Jones was charged for transport. What is transport? We know from the Bill that transport costs are included as a candidate’s cost, but that does not tell us what is meant by transport, what is included and what is excluded. In fact, we shall not know that until after the Electoral Commission gives guidance and it is put before the House. It would be scandalous if the Bill came into force until that were known. Indeed, it is not for the Electoral Commission to give that guidance in the first instance. It ought to give guidance on unanticipated matters of law, but you can anticipate that that is a loophole and it is for Parliament to be much more careful about what is a transport expense.
When is local party spending candidate spending, and when is it not? This morning, the chief executive of the Electoral Commission said words to the effect that that was a knotty problem. Well, it is, but it is for you to solve it before you put a half-baked Bill through the House of Commons to become our sovereign law. Moreover, let us consider the big loophole whereby Members of Parliament can, through the communications allowance and elsewhere, put forward advertising that their opponents cannot. If you want amendments, I can give you a set of possible amendments, one being that, in the communications allowance—I say this only half in jest—there should be equal time for all Opposition candidates. For example, if any of you put forward eight pages about yourselves, each of the other candidates should be able to do so without payment, or without it counting against the limit, or you change the rules of the communications allowance so that, to produce equality, you cannot do it. To create fairness, we need to look carefully at the uses of the communications allowance. That was brought up clearly on Second Reading.
I come to another problem. When does national expenditure that is targeted on marginal constituencies count as local expenditure? We all know that political parties will have their posters sited more in areas that benefit marginal constituencies than in others. I asked the Electoral Commission about that very point, and it said that it did not have the money to investigate the matter. The real question is what national activities will count as local activities. There is then the matter of transitional arrangements and, finally, third-party expenditure. Even if you say that you bring political parties under a regulatory regime throughout the parliamentary cycle, you will find, as does exist, that many pressure groups are in practice offshore islands of one political party or another, rather like the German political Stiftungen, which have legal independence, but everyone knows that they support one party or another. To go down some of these lines, you have to look at that as well. The bottom line is that a decent Bill could come out of this. The Government have a legitimate concern, but there needs to be time for discussion of all the details in a sensible way, rather than rushing, with the inevitable bad results.
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Prepared 7 November 2008