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.
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.
| 
