Mr.
Wills: I may just have glimpsed a shadowy ghost of the
consensus that I have been so avidly seeking throughout today. Apart
from the occasional moment when the hon. Gentleman strayed into some
general partisan comments about the overall nature of the Bill, there
is a large measure of agreement on a lot of the substantive issues.
Before I set out answers to some of his questions and our case for the
clause, I point out that it was remiss of me not to address a couple of
the important questions that he asked earlier.
On the
difference between “necessary” and
“sufficient”, although the hon. Member for Cambridge had
a good go at it, I try never to avoid anything and I can tell the
Committee that “necessary” will detail what is required
in cases where the Bill requires clear steps to be taken, while
“sufficient” will provide what needs to be done as a bare
minimum when the nature of the obligation may be less clear. I hope
that that clarifies that important point. Let me clarify a further
point. In the hon. Gentleman’s previous remarks, he seemed to
suggest that my comments about “complex” and
“various” in relation to the previous group of amendments
referred to the Bill. In fact, they referred to the 2000 Act, which has
been in effect for eight years, so that was the point that I was
making.
Clause 1 is an
important part of the Bill for a lot of the reasons that the hon.
Member for Huntingdon has set out. It emphasises that the commission
has a role in monitoring compliance with the controls, but it also goes
further and sets out the commission’s role in securing
compliance. That will make it clear that a key part of the
commission’s monitoring role is to investigate allegations or
suspicions of regulatory failure, and to consider whether to take
further action.
The clause also
enables the commission to prepare and publish guidance setting out its
opinion of what is required under the legislation referred
to—section 145(1) of PPERA. The clause clarifies the
commission’s role by making it clear that it has the
responsibility not only to check whether relevant restrictions and
requirements are being complied with, but to take the steps it
considers necessary to ensure that the rules are complied with, and to
deter non-compliance. The clarification of the commission’s role
is intended to address a recommendation of the Committee on Standards
in Public
Life. The
2007 report on the Electoral Commission drew on evidence received by
the committee that suggested the commission’s interpretation of
its regulatory mandate in the 2000 Act had led it to take a passive
approach. In turn, that made it a less effective regulator and led to
less public trust and confidence. The committee therefore recommended
that the 2000 Act should be amended to make it clear that the
commission has a duty proactively to investigate allegations or
suspicions of failures to comply with the regulatory
framework. In
particular, the committee recommended that the word
“monitor” in section 145 of the 2000 Act should be
replaced by the word “regulate”. However, we believe that
such an amendment would not sufficiently achieve the underlying
intention of the committee’s recommendation, which is to place
greater emphasis on the active steps that the commission may take in
order to perform its role. The wording of the clause will bolster the
commission in performing its role and will place the correct emphasis
on the importance of an active approach to regulation. We believe that
that will result in a strengthened regulator. It is essential that the
commission and those whom it regulates be in no doubt about the extent
of the commission’s role as a regulator of party funding and
campaign expenditure.
The second
aspect of the clause relates to the commission’s ability to
publish guidance, and is necessary to ensure that regulated individuals
and political parties fully understand what they are required to do, or
avoid doing, to comply with party funding legislation. We recognise
that party funding rules are complex and that those charged with
compliance are often volunteers who may lack financial skills. The
clause is intended to reflect that. Such guidance might cover
frequently asked questions, or it might set out some scenarios on novel
circumstances and steps that the commission would expect a regulated
individual to take to comply with regulatory requirements in those
circumstances. The clause also allows the commission to produce best
practice guidance or pro formas that parties or regulated donees might
like to use to submit returns to the commission. The intention of this
part of the clause is to ensure that the commission takes an active
role in helping those whom it regulates to comply and avoid inadvertent
breaches of the
rules. The
hon. Member for Huntingdon asked various questions about the budget and
was interested to know whether the commission would have sufficient
funding to enable it to discharge these new duties. He will be aware
that the commission is funded directly from the consolidated fund,
after the Speaker’s Committee, about which the Committee has now
been much enlightened, has approved its estimates. I am happy to write
to him
with the details of that budget. Indeed, I am sure the commission will
be happy to let him know directly what its views are about the adequacy
of its
funding. The
hon. Gentleman spent a reasonable amount of time asking how we got to
this position. I do not want to exhaust the Committee’s patience
by providing a blow-by- blow account, but it is not surprising that in
an area as complex and important as this, the legislation needs to be
constantly revisited to ensure that it is appropriate to the
circumstances. I do not need to remind the Committee of the various
issues that have arisen from all parts of the House in recent years,
which have suggested that we needed to take a fresh look at this
subject. I have no doubt that, no matter how important and useful the
Bill is in achieving its objectives, we will revisit these issues in
legislation. Incidentally,
it has always been clear that, since the 2000 Act, the role of the
commission should be that of a regulator. Section 145 of that Act makes
it clear that the commission’s role is to monitor
compliance—clearly, that is a regulatory role—and that it
should do so by taking “appropriate steps.” That is a
clear nod towards investigation and possible sanctions. That is not a
new role, but it does need refocusing, as the hon. Gentleman clearly
stated. The
clause is an important part of an important Bill and I hope that the
Committee will support its inclusion.
Question
put and agreed
to. Clause
1 ordered to stand part of the
Bill.
Clause
2Investigatory
powers of
Commission Question
proposed, That the clause stand part of the
Bill.
Mr.
Djanogly: We move on to clause 2, which deals with the new
investigatory powers of the commission. PPERA created the commission
and, at the same time, provided it with supervisory powers. Section 145
set out the general function of the commission as the regulator and
monitor of compliance with part III,
on “Accounting
requirements for registered
parties”, and
part IV,
on “Control
of donations to registered parties and their members
etc.” To
complement that, section 146 empowered the commission to require a
predefined group of entities to provide it with information relating to
their financial affairs. That predefined group included registered
political parties, recognised third parties, permitted participants in
a referendum campaign, regulated donees and candidates at an
election.
A person
authorised by the commission may also enter the premises of a
registered party, a recognised third party or a permitted participant
to inspect their financial records. However, according to the Secretary
of State for Justice, those powers have been used only once. On Second
Reading, he
said: “In
any event, the existing powers have been used only once since the
Electoral Commission was established nearly eight years
ago”—[Official Report, 20 October 2008; Vol. 481,
c. 50.] The
first question to ask is, why have they not been used more
frequently?
The scope of
proposed new section 146 goes well beyond that, and the Minister must
show some evidence of the need for such an extension. In particular, it
would interesting to know what formed the catalyst for the Government
to give those powers to the commission, what format the consultation
process took and who was consulted. Can the Minister provide figures
for the number of instances in which the commission has failed in its
duty as a regulator on the basis of a lack of those proposed powers? In
other words, have the Government reviewed to what extent the failure to
regulate has so far been as a result of inaction by the commission, or
of a lack of appropriate legislation? When does the commission feel
that there could be a need to go into the homes of individual donors?
How frequently is that likely to happen and on what basis?
Clause 2 seeks
to replace section 146 of PPERA, thereby providing the commission with
increased powers of investigation. Subsections (1) and (2) would insert
and give effect to what is now schedule 1 of the Bill, while subsection
(3) makes provision for penalties for offences under the new schedule.
Among other things, schedule 1 would enable the commission to require
access to financial records and information, and to enter premises to
inspect and make copies of relevant documents.
Paragraph 1(1)
of schedule 1 is particularly concerning. It would extend the power
under section 146 of PPERA to enter premises that had previously been
restricted to registered parties, permitted participants and candidates
at elections. Paragraph 3 of schedule 1 would include other bodies or
individuals such as donors. Those investigatory powers can be exercised
in cases where the commission has “reasonable grounds” to
suspect that an offence or contravention has been committed. Will the
Minister give an early indication of what he thinks would constitute
“reasonable
grounds”? This
provision has the potential to erode the willingness of law-abiding
citizens to donate to political parties—a point that has been
made by many people. It would take only one heavy-handed and
well-advertised use of those powers in someone’s home or office
for other legitimate donors to take fright at the prospect of giving
money to political parties. Giving money to political parties is, for
the vast majority of contributors, done for the noble and civic
intention of wishing to promote a better society for all. To destroy or
hinder that instinct would be inexcusable, let alone anti-democratic.
That is why we have tabled a number of amendments to schedule 1. The
stakes are high and we must thoroughly justify the need for these new,
sometimes severe powers.
In so doing,
the Minister should bear in mind the comments of Peter Wardle, chief
executive of the commission. Giving evidence to the Committee on the
extension of the commission’s powers to cover regulated donees,
he expressed reservations over the extension and
said: “We
feel that the current powers are adequate to do the job we need to do
regarding inspection. One can see why, for completeness, the powers
have been extended, but we are not convinced that we need these
powers.”——[Official Report, Political
Parties and Elections Public Bill Committee, 6 November 2008; c.
43,
Q104.] I
read with interest the White Paper published by the Ministry of Justice
in the run-up to the Bill. I note in particular the sections entitled,
“The case for change”, through to, “The
Government’s proposals for reform.”
However, in the section entitled, “The case for change”, I
was left somewhat bewildered by the fact that there was no mention of
the need for the commission to have the power to demand documents from
individuals. That does not appear until the proposals on page
27: “To
provide the Commission with a widened range of sanctions and
investigatory powers to enable it to become a more robust regulator.
The Commission’s powers to obtain information would be extended
to allow it to require the production of information from relevant
individuals not currently covered by the PPERA powers where it is
appropriate to do so...This would need to be accompanied by appropriate
safeguards.” 5.45
pm Furthermore,
there is no recommendation that the commission should be able to enter
the homes of individuals. Will the Minister tell us from whom that
recommendation first
came? The
commission states that the power of entry is consistent with that used
by other regulators. Will the Minister tell us what circumstances have
necessitated the use of such powers? How often does he or the
commission envisage the powers being used? Is the Minister also aware
of the commission’s own concerns that the safeguards for access
to premises occupied by regulated donees—including individual
MPs and other holders of elective office—may not be robust
enough? Has the Minister taken up the commission’s offer to
consider further how to safeguard such powers effectively? Does the
Minister not find it concerning that the very organisation that they
seek to empower shies away from the arbitrary power being handed to
it? According
to a press release issued by the Home Office in July there are now
1,043 separate laws that allow state inspectors to enter
people’s homes and premises. On 15 July, the operational
policing section of the Home Office slipped out a new detailed survey
of powers of entry by state officials. There was no press release, no
comment and no
fanfare. Of
those 1,043 state powers of entry, 753 are exercisable under primary
legislation and 290 through secondary legislation. In total, an
estimated 430 new powers of entry have been created by this Government.
Despite the Prime Minister’s pledge last year to curtail those
rights, a further 16 new laws are being pushed through Parliament that
entrench or extend powers of
entry. In
a speech last year, the Prime Minister pledged to curtail powers of
entry with a new liberty test. He said that any change to entry powers
would be accompanied by new guidance on using such powers and on the
rights of members of the public to prevent their abuse. To paraphrase
his speech, he made three points. He said that any change will be
accompanied by guidance on how it is to be exercised; that individuals
have the right to take action if that guidance is not complied with;
and that we should consider whether we need to do more to offer redress
for the individual against disproportionate use of those powers by the
state. From
my reading of the Bill so far, not one of those limbs of the test has
been complied with. Will the Minister explain why not, and when and how
they will be, or is it simply that, given what I hope is not going to
become the partisan nature of the Bill, the Government want to rush
through the measures in time for the next general
election?
We support the
general need to empower the commission and to provide it with tools to
be an effective regulator. However, unless we are careful, the effect
of the measures will be to push people further away from the political
process. As my right hon. Friend the Member for Horsham (Mr.
Maude) rightly pointed out on Second
Reading: “We
all agree that the Commission must have appropriate powers to enable it
to carry out its duties, but there is a real concern about the
proliferation of search and entry powers.”—[Official
Report, 20 October 2008; Vol. 481, c.
58.] Donations
to political parties are a way of volunteering assistance to the
political process, and the last thing that we wish to do is discourage
it. We must be careful to ensure that we do not introduce knee-jerk
legislation when we have not fully considered its long-term impact.
Given the rushed nature of the timetable for the Bill, I fear that we
may be in danger of doing just that. It seems that the old saying
“more haste, less speed” could be applied to the
Government. In their desire to push through the Bill, I trust that they
will not breach their own code of practice on guidance—or the
Government’s guidance on guidance—which states that
guidance should be issued at least three months before any regulation
comes into effect.
I want to
finish by saying that there is a twist to this. In answering a written
question from my hon. Friend the Member for Chichester, the Minister
noted that the consultation on clause 10 will be that of the Electoral
Commission and not the Government. Will the Minister explain the
position relating to clause 2 and schedule 1 and confirm that that full
consultation will occur, whichever body undertakes
it?
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