Q
32Mrs.
Laing: Somebody might already have triggered by
now. Roy
Kennedy: If it is not retrospective, they would not
have done, would
they?
Q
33Mrs.
Laing: It is not fair to take you further on that because
it is a question that we spoke about on Tuesday to the lawyers on the
Bill
.
The
Chairman: Mr. McIsaac, you are the only one who
has not commented on
this. Ian
McIsaac: Obviously, I do not have the detailed
knowledge of my colleagues. While, as finance director, I would welcome
anything that prevents people from spending money, I can see that, on
this occasion, that could give rise to a lot of
inequity. Picking
up your point, at the end of the day there will presumably be a judge
who decides, if push comes to shove. No amount of guidance can
necessarily determine that outcome. Unless someone’s liberty or
membership of the House of Commons is concerned, I would have thought
that leaving any uncertainty where a judge might come to a different
conclusion would be very damaging.
The
Chairman: I have to be entirely impartial in the Chair,
but it seems to me, with the Minister sitting on my right, that this is
perhaps a matter to which he may well direct his attention during the
debate in
Committee.
Q
34Martin
Linton: I was fascinated to discover that Mr.
McIsaac has experience from a previous job of
money-laundering. Ian
McIsaac:
Anti-money-laundering.
Q
35Martin
Linton: I am not suggesting for a moment that that is
relevant to your current job, but it might help you to explain to us
the complexities of some of these issues to do with
companies. I
have two particular problems with the Bill. One concerns these
unincorporated associations and private companies, which are
effectively excluded. Some of them, such as Midlands Industrial Council
and Bearwood, have made donations of well over £1 million, so it
is fair to assume that within that there might be donations well over
the £5,000 declarable level.
I would like to
hear your opinion of the idea of having declarations of the true
individual source of donations over £5,000, even though they
might be given through an unincorporated association or private
company.
My second
question relates to donations that a person or his party might receive,
which are intended for a particular donee. I know that donations have
been canvassed, for instance, for members of staff of George Osborne,
the shadow Chancellor, which is perfectly legal and above board. As I
understand it, these are declared in the Electoral Commission accounts,
as opposed to the House of Commons register, as donations to the
Conservative party, so there is no indication there that they are given
for the shadow Chancellor’s staff. That raises all sorts of
issues about shadow Ministers and their accountability. I wonder
whether he would welcome a change in the law that would make that more
explicit. I know that he wrote to the Electoral Commission saying that
this money is, at the moment, commingled with other funds, not
segregated. These people are employed by the Conservative party, so all
the money goes into the same
pot.
The
Chairman: Order. I am extremely patient. I did ask
for succinct questions to our witnesses.
Martin
Linton: I have asked some
questions.
The
Chairman: This appears to be a speech. I am speaking not
to you, Mr. McIsaac, but to Mr.
Linton. Ian
McIsaac: Shall I answer your three questions? The
first concerned companies. Obviously, we go through the process that I
have mentioned to you. If a company is an agent for another donor, the
company already has a legal obligation to declare that to me. If it
does not, it commits an offence. We draw the attention of our donors to
that, where we believe it to be relevant.
You mentioned
also an unincorporated association—a particular one—and
again the law is quite clear: where the unincorporated association is
acting as an agent for one of its members, it is the member who has
made the donation, not the unincorporated association. In fact, the
particular entity you mentioned has been reviewed by the Electoral
Commission. Those suggestions were made, and were signed off by the
commission.
Q
36Martin
Linton: I am asking not whether it obeys the letter of the
current law—I am taking it for granted that it does—but
about possible changes to the law that would make it more
explicit. Ian
McIsaac: The issue really is whether a piece of paper
saying, “By the way, you know that that is the law really,
don’t you?” is sufficient. I think that, by and large,
people know that it is the law, but a large organisation could deal
with that. I would be surprised if anything changed, and if they
suddenly said, “Oh, now that I must sign a declaration, let me
come clean. It wasn’t my money at all; it was someone
else’s.”
Q
37Martin
Linton: Clearly, if the money was not sent in that way, it
would have to be declared, and the individual’s identity would
have to be
declared. Ian
McIsaac: That happens already in the case of the
association you mentioned. Individuals request it to be passed to the
Conservative party. We record that as being a donation from the
individual, not the association. It is clear that that is
happening.
On the final
point you mention, it would be useful to have clarity when money has
been given to the party with a wish attached to it that it be used to
support a member of staff working in someone’s office. The
Electoral Commission guidance seems to suggest that if it is supporting
the role of an MP—his party role as a shadow Minister—the
party should declare it to the Electoral Commission. When it is
supporting the MP as a constituency MP, it is the regulated donee, the
MP, who should report it to the commission. It is, interestingly,
whoever receives the money.
That seems to
be the guidance on the Electoral Commission website, and that is the
guidance on which we base our actions. It is slightly unsatisfactory,
because there could be a situation in which an MP receives money, but
the party has the obligation to report it, or the party may receive
money and the MP may have the obligation to report it. That is separate
from the Register of Members’ Interests to which the MP, as a
matter of good sense and good dealing with the House, will report it,
whoever received
it.
Q
38Martin
Linton: But you would not have any objection if it was
made clear in law that when a donation was made for a particular donee,
that should be made clear in the party
accounts. Ian
McIsaac: You say the party accounts.
I—
Q
39Martin
Linton: In the party declaration of donations, in the
register of
donations. Ian
McIsaac: My difficulty is that when someone pays
money to the party, and I bank it and commingle it with party funds,
that money ceases to exist. I may be able to follow that wish, or I may
not. It is rather like a charity when someone says, “Here is
some money; I want it to be used for building a certain dam, and for no
other purpose.” If the project is cancelled, the money must be
sent back. Or someone may say, “I would like it to be used for a
purpose similar to that, following your normal charitable
objectives.” One is trust money, which is very specific, and the
other is general support with a wish that it support a particular
objective.
The matter is
slightly more complicated than that, but I see where you are coming
from. By and large, MPs do report donations to the Register of
Members’ Interests, so there is transparency and
clarity.
Q
40Martin
Linton: Are you satisfied that the money from Bearwood is
from a legal
donor? Ian
McIsaac: If I was not satisfied, I would not be here;
I would be in Wormwood
Scrubs.
The
Chairman: A very good answer.
Hilary
Stephenson, have you anything to say to Mr. Linton on behalf
of the Liberal
Democrats? Hilary
Stephenson: There are essentially two things: the
source of the money and the application of it. On sourcing, we are very
much of the view that the purpose of legislation and the requirement
for public reassurance are about ensuring that we have law that gets us
back to the source of the money. That clarification would be
welcome. On
particular donations for particular purposes, at the moment I cannot
think of an example in which that applies. I can see that there might
be some difficulties in some cases, but in principle it is a good thing
that it should be clear whether such conditions are made.
Roy
Kennedy: My view is similar. I obviously welcome
transparency, and it is important to be clear about where money comes
from. A declaration of assets will help with that. It will determine
where the money has come from. There will be particular uses. If that
is the case, it should be stipulated as
well.
The
Chairman: Three people have caught my eye; the first is
David
Howarth.
David
Howarth: My question has been
answered.
Q
41Tony
Lloyd: I have a specific question for Ian McIsaac, which
is the stem of a general question for everybody. Mr. McIsaac
said to us a few moments ago that where there was no unincorporated
association, one would seek to know who the individuals who made a
contribution through that association were. Do you make a public
declaration on who those people
are? Ian
McIsaac: I did not intend to say that. I intended to
say, and I think that I did say, that when an individual instructs or
requests the unincorporated association to pay the money over to my
party, it is recorded as an amount coming from that donor, not from the
unincorporated
association.
Tony
Lloyd: And is registered with
the— Ian
McIsaac: And is registered by me with the Electoral
Commission as coming from that donor. If the unincorporated association
is a members’ association, that association itself has the
obligation to declare all amounts over £5,000 directly to the
Electoral
Commission.
Q
42Tony
Lloyd: In fact, that moves us on to a more general
question. In the previous sitting, Professor Ewing suggested that all
associations and equivalent bodies ought to have a statutory duty to
act, so that they police the donations going through those bodies in
the first instance. Mr. McIsaac, you indicated that
unincorporated associations do that, but I am not clear that that is
the case. I would be grateful for your view on whether they already
have that legal obligation.
Ian
McIsaac: They have the obligation, because it is in
the law. I can only assume that they discharge their obligation. I have
no reason to believe that they do not. The association that your
colleague mentioned earlier is well aware of that, and the Electoral
Commission has reviewed that issue with it and has satisfied itself
that that is what
happens.
Q
43Tony
Lloyd: That it is a regulated
donee? Ian
McIsaac: No, it would be a regulated donee if it was
a members’ association. That particular one is not a
members’ association, but others are. “Unincorporated
association” is the umbrella term and the members’
association is a subset of that.
Q
44Tony
Lloyd: That is helpful in clarifying the position.
Professor Ewing suggested that for those bodies that do not have a
legal obligation to declare the sources of their income, there is
inevitable concern about whether the ultimate sources of the donations
are compatible with the law, even though they may have a legal
structure. Should we force all such unincorporated associations to
register and provide details of their donations, so that they have the
duty to police the situation? Would the various parties support
that? Ian
McIsaac: I heard that. I assume therefore that there
would also be obligations to file financial statements. The Electoral
Commission now wishes to standardise those and incorporate them into
regulations, with regulatory sanctions. Baring in mind that when I went
on to the Electoral Commission website this morning and looked up
unincorporated associations, I found that even my colleagues to my left
accept donations from unincorporated associations. One of them accepted
£1,072 and the other £754. That is apart from my
party.
Q
45Tony
Lloyd: It is a common question, I agree.
Ian
McIsaac: I can see regulatory overload
killing the golden goose. Many associations are small—dinner
clubs and this, that and the other. I think that trying to generate
volunteerism and political engagement is, by and large, a good
thing.
The
Chairman: I call Andrew
Tyrie.
Tony
Lloyd: Sir Nicholas, this is a general
question.
The
Chairman: You addressed it to Mr. McIsaac, but
if you want the other witnesses to answer, please go
on.
Q
46Tony
Lloyd: To clarify, the first specific question was to
Mr. McIsaac and the more general question was to all the
witnesses.
Hilary
Stephenson: I think that there is a clear difference
between organisations that donate a few hundred pounds, which are
primarily volunteer organisations, and much larger organisations and
donations. In going along this line, the way to do it would be to have
a kind of cap on where that imposition came in. In principle, it would
seem quite sensible, although, as I said, I do not have hands-on
expertise to whether there are further complications with
it. Roy
Kennedy: In principle, it would be a good thing. You
have to get the figures right. Perhaps we could follow the model of the
£200 that is recordable by the association with the report at
another level. Yes, we should be clear where the money is coming
from.
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