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Session 2007 - 08 Publications on the internet General Committee Debates Political Parties and Elections Bill |
Political Parties and Elections Bill |
The Committee consisted of the following Members:Chris Shaw, Chris Stanton,
Committee Clerks † attended
the Committee Public Bill CommitteeThursday 13 November 2008(Afternoon)[Mr. Peter Atkinson in the Chair]Political Parties and Elections BillClause 3Civil
sanctions Amendment
proposed [this day]: No. 85, in page 2,
line 26, at end
insert— ‘(1A) The Secretary
of State, after consulting the Electoral Commission, shall make an
order that specifies what discretionary requirements may be imposed by
the Electoral Commission under Part 2 of Schedule
19B.’.—[Mr.
Djanogly.] 1
pm Question
again proposed, That the amendment be
made.
The
Chairman: I remind the Committee that with this we are
discussing amendment No. 77, in schedule 2,
page 22, line 26, leave out from
‘requirement’ to end of line 39 and insert
‘such requirements as specified by
virtue of section
147(1A).’.
The
Minister of State, Ministry of Justice (Mr. Michael
Wills): I welcome you back to the Chair,
Mr. Atkinson. At the end of our previous sitting, I was
explaining why we needed to give the commission flexibility. I hope
that the Committee will be reassured to know that the commission is
required to publish guidance on how it will use the civil sanctions
before it is given the power to impose them. We expect that guidance to
be issued at the same time as the guidance on the investigatory powers
in January 2009. Should our expectation of the delivery of that
guidance change, we shall, of course, let the Committee
know. The
guidance will provide information that will be set out in the order
that the amendment would require. That approach would allow the
commission the necessary flexibility to operate the civil sanctions
regime effectively. It may also give those regulated the sort of
discretionary requirement that the commission would impose and in what
circumstances. Amendment No. 77 would amend the definition of a
discretionary requirement. In practice, it would remove the legal
definition of a discretionary requirement and, because discretionary
requirements are a key element of the suite of civil sanctions provided
to the commission by the Bill, I hope that the hon. Member for
Huntingdon will consider withdrawing the
amendment. Discretionary
requirements are defined as a monetary penalty of an amount to be
determined by the commission, a requirement to take such steps to
ensure an offence or contravention does not continue or reoccur, or a
requirement to take steps to resort to what would have been the
position if the offence or contravention had not taken
place. The amendment would remove those definitions and amend the
proposed new paragraph to remove the legal definition of a
discretionary requirement. I know that the Committee has been under
considerable pressure and I do not want to labour the point, but we
could not find section 147(1A)—it does not seem to
exist—with which the amendment would replace the proposed new
paragraph under schedule 2. For all those reasons, I hope that the hon.
Gentleman will withdraw the amendment.
Mr.
Jonathan Djanogly (Huntingdon) (Con): We are happy to hear
confirmation from the Minister about the guidance, and a reconfirmation
of its importance. As for the discretionary requirements, the purpose
of deletion was not because they need to be deleted, but to have a hook
on which to hang a debate about what they should be. On the basis of
the Minister’s explanation, I beg to ask leave to withdraw the
amendment. Amendment,
by leave,
withdrawn. Nick
Ainger (Carmarthen, West and South Pembrokeshire) (Lab): I
beg to move amendment No. 133, in
page 2, line 31, column 2, leave
out from beginning to end of line 37 and insert ‘A fine of
£1,000.’.
The
Chairman: With this it will be convenient to discuss the
following amendments: No. 82, in page 2,
line 33, leave out ‘£20,000’ and
insert ‘statutory
maximum’. No.
83, in page 2, line 35, leave out
‘£20,000’ and insert ‘statutory
maximum’.
Nick
Ainger: I join other members of the Committee in welcoming
you to our deliberations, Mr. Atkinson. I am sure that the
Minister will be pleased to know that we are about to discuss a probing
amendment. It provides an opportunity to deal with the theme that runs
through the Bill: the move from civil to criminal sanctions. The
penalties under section 147 of the Political Parties, Elections and
Referendums Act 2000 are clearly civil, and are calculated on the basis
of the period in which a person has failed to comply with the
requirement to produce documents. The sanctions range from
£500 to, ultimately, £5,000 if the individual
fails to comply within 12 months. However, in clause 3(3), which deals
with the failure to comply with a stop notice, instead of civil actions
and penalties, we have criminal actions. On indictment, an individual
could be subject to a fine or imprisonment up to two
years. As
I said during an evidence session on the Bill, one of my concerns is
that while I understand the need for deterrents for those who hold
important positions in respect of the responsibilities that are covered
by it, I fear that it contains another element of deterrence: the one
that will affect volunteers who could face not only civil but criminal
sanctions if they do not comply with the legislation. This is a hook on
which we can hang that
debate. I
am concerned that in this part of the Bill and elsewhere we may well be
introducing penalties and sanctions that are not proportionate. I would
be interested to hear what the Minister has to say on that, and also
what he has to say generally on how we can ensure that the volunteers
who are an essential part of all political parties will not be put off
from taking important positions
in those parties because they fear that they may be subject not only to
a civil penalty but a criminal penalty because of an error, poor advice
or whatever it may
be. I
think particularly of treasurers of local parties and organisations,
and agents for MPs, MSPs and Members of the Welsh Assembly and even
elected local government officials. I would be interested to hear what
reassurance the Minister can give to members of all political parties
that if they do find themselves in a position where they are subject to
the regulations set out in the Bill, they will at least face penalties
that are proportionate if they are found to be in the
wrong.
Mr.
Djanogly: Amendment No. 133 seeks to remove the summary
conviction and indictment penalty tariffs for an offence under
paragraph 14 of proposed new schedule 19B, which deals with failure to
comply with a stop
notice. We
have considerable concerns about the powers to be given to the
commission in respect of stop notices. On a fundamental level, giving
the commission the power to prevent people from doing what is a lawful
act is unsettling and something that we will wish to explore at a
relevant point when discussing the schedule. We do not support the
imposition of one-size-fits-all penalties and are concerned that the
amendment, while well-intentioned in that it would reduce the maximum
penalty, would be arbitrary and, in some cases,
disproportionate. Much
was made during the lead-up to the Bill of the role of better
regulatory regimes and the use of flexible tariffs. Professor
Macrory’s review entitled “Regulatory Justice: Making
Sanctions Effective” was published in November 2006. At the
Government’s instigation, he reviewed the entire system of
regulatory sanctions in law at that date. One of the main findings of
the report was the existence of the so-called compliance deficit, which
arises where the sanctions available to a regulator are not
sufficiently flexible to allow them to respond proportionately to
offences, the consequence of which is that regulators are reluctant to
take enforcement action. One of the stated aims of schedule 2 is to
give effect to the proposals in that report and provide the commission
with a wider set of sanctioning powers that would allow it more
flexibility and proportionality when sanctioning those committing
offences under
PPERA. We
are concerned that, under the amendment, we could take a step back from
that level of flexibility. Having a range of sanctions will always
require there to be a significant option available; it may not be used
at all, but its existence acts as a deterrent. I am afraid that the
amendment would remove that option and possibly undermine the
seriousness of the offence. Having said that, we have more sympathy
with the Government on whether this should be an indictable crime in
the first place. We will be looking at our position in that regard,
leading up to Report. We do not support the amendment as currently
proposed. Amendments
Nos. 82 and 83, tabled in my name, deal with the level of penalties
involved in breaches of stop notices. Paragraph 10 of part 3 of
schedule 2 proposes to give the commission the power to impose stop
notices on people to prevent them from carrying on an activity that the
commission reasonably believes is likely to involve committing an
offence or contravention under PPERA. Furthermore, the commission may
impose
such a notice where it believes that a person’s activity is
likely to lead them to commit an offence or contravention. In both
situations, the commission must also reasonably believe that such
activities are damaging to public confidence in the PPERA controls on
income and
expenditure. Amendments
Nos. 82 and 83, which are probing amendments, would amend clause 3(3).
They were tabled to discover why the Government feel it necessary to
increase the penalty for failure to comply with a stop notice to
£20,000—far more than the statutory maximum and the usual
penalty throughout the rest of this Bill. We will discuss our
objections to stop notices more generally later
on. David
Howarth (Cambridge) (LD): I am sympathetic to the remarks
of the hon. Member for Carmarthen, West and South Pembrokeshire, who
moved the amendment, about the difference between criminal and civil
sanctions. One might add regulatory sanctions, as well. It is important
that proportionality be maintained in looking at what consequences
there should be in respect of failures to comply with the requirements
of such a law.
With regard
to the stop notice, I have more sympathy with the Government’s
position, because the stop notice is the equivalent in civil law of an
injunction; it is saying to the person concerned, “You must stop
doing this now.” The only way in which such a notice should be
complied with is by those concerned stopping doing the thing itself. We
should not be in a position where, effectively, a person not in
compliance with a stop notice—not in compliance with the
law—can buy themselves out of compliance by paying the fine. It
is not right that, when someone faces the equivalent of an injunction,
they can simply pay a small amount of money and carry on doing what
they were doing
before. The
important question is not the size of the fine or penalty, which is
also crucial—if someone disobeys an injunction in ordinary law
the penalties are at large and they can go to jail until they
comply—but the conditions under which the stop notice can be
issued. That is the crucial question. Are the conditions under which
stop notices can be issued serious enough to justify an equivalence
with a civil injunction? I should like the Minister to explore that in
his
reply. The
present draft of the schedule talks about serious damage to public
confidence. In the Electoral Commission’s view, serious damage
to public confidence is enough to justify a stop notice. I want the
Minister to say whether that is enough. What circumstances are imagined
as leading to serious damage to public confidence? Will it be relevant,
for example, that non-compliance happens during an election? Will that
make the issuance of a stop notice more or less likely? I am perfectly
willing to accept that there are conditions in which a stop notice will
be justified. We will get to that point later, but I am not yet
entirely clear about exactly what is envisaged as serious
damage. 1.15
pm
Mr.
Wills: Again, the Government clearly recognise all the
concerns that have been expressed. I am glad that all the members of
the Committee who have spoken on the matter have recognised the need
for flexibility and proportionality. That is exactly what the Bill is
designed
to introduce. One reason why we introduced it was to deal with the
inflexibilities that have transpired in the 2000 Act. We have been
guided throughout by our desire to introduce greater flexibility and
proportionality into the
system. We
all agree that the sanction is serious, and it will be used only in the
most serious circumstances. The hon. Member for Cambridge asked what
those circumstances might be. In the end, of course, that will be a
matter for the Electoral Commission’s judgment. However, we
cannot allow the sanctions that might follow serious transgressions to
be considered an occupational hazard by someone who is absolutely
determined to break donation rules, for example, on a large scale. Such
activity during an election could have a decisive outcome on the
result. We simply must give the commission the ability to stop such
activity, which could decisively turn the outcome of an election. It is
important to realise that the power is to be used only in such extreme
circumstances, although we can talk about the nature of the
penalty.
I shall
address the amendments in some detail, because I recognise that concern
was raised about the sanction on Second Reading. It is important that I
put on the record a detailed account of how we have come to our view.
The figure of £20,000 was imported from the Regulatory
Enforcement and Sanctions Act 2008, and we saw no reason to vary it. It
is worth pointing out that the court will have discretion in imposing a
fine for the breach of a stop notice. It does not follow that fines of
£20,000 will be automatic or customary for a breach of a stop
notice.
It is
important to put on record the circumstances in which a stop notice may
be served. The commission must reasonably believe
that “the
activity as carried on by the person is seriously damaging public
confidence in the effectiveness of the controls in this Act on the
income and expenditure of registered parties and others, or presents
significant risk of doing
so”. Of
course, public law principles of reasonableness will require the
commission to consider whether its other sanctions would be appropriate
first. Only having considered all the other sanctions available to it
and decided that they were not appropriate in the circumstances could
it consider using this sanction. That is intentionally a very hard
test. As with the use of stop notices under the Regulatory Enforcement
and Sanctions Act, the person or party concerned will of course retain
the right of appeal to a county court, or in Scotland to a sheriff,
against the imposition of a stop notice. To support the use of stop
notices, sanctions for non-compliance must be available, and they are
provided for in clause
3(3). We
have significant reservations about the alternative sanctions suggested
in the amendments. I take it that they are probing amendments, but it
is important for me to put on record why we are concerned about them. I
do not believe that the sanction proposed in amendment No. 133 would
take into account the potential scale of an offence or provide for the
flexibility that may be required when a sanction is applied for on
indictment. We have deliberately ensured the possibility of a weighty
financial sanction, because the sanction ought to be
serious. If
the transgression revolved around a wealthy donor spending huge sums of
money where that was prohibited, a fine of £1,000 would simply
not be a
sufficient deterrent, but merely be taken as part of the business. There
may also be a case where circumstances are so serious that more than
one stop notice had been deployed in respect of the same person or
organisation, and those notices would not have been complied with. We
should not seek to limit the discretion of the Crown court in this way.
Amendments Nos. 82 and 83 would change the financial penalty imposed,
reducing it from £20,000 to a statutory maximum of
£5,000, for much the same reasons. A fine at such a level would
not be sufficient deterrent in circumstances where a severe sanction
should
apply. Another
significant concern that I have with all three amendments is that they
would be making quite an exception to the framework laid down in the
Regulatory Enforcement and Sanctions Act, which sets out penalties for
a breach of the stop notice in identical terms to the Bill. Again going
back to the strictures laid down by the hon. Member for Cambridge at
the start of the Committee’s proceedings, we have to be careful
about how the public perceive us as proceeding in the Bill. We must be
careful about seeking to make exceptions for
ourselves—politicians—from other people who are regulated
by public bodies, unless there is a genuine distinction to be made. In
these circumstances, I find it hard to make such a
distinction.
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