Political Parties and Elections Bill

[back to previous text]

Mr. Djanogly: The hon. Gentleman seems to be basing his understanding of the clause on what the Government might be thinking, which is only a maybe, maybe, but even on that basis is he saying that the level should be set at £50,000 or £100,000, because presumably he is only talking about the largest donors?
9.45 pm
David Howarth: The hon. Gentleman is getting to the point. If we did have a £50,000 donation cap, what should the proxy donation limit be? The lower the overall donation cap, the lower the limit should be on declarations of proxy giving, because the danger would increase that people would use proxy donations to get around the caps. If it was a £10,000 donation cap, there is a case for going back to the Bill’s original proposal of just £200. The proportionality issue becomes quite different, because proportionality would then include the question of making sure that individuals did not avoid the overall cap, which would be an important matter at that point.
I will speak briefly to amendment No. 179, because I do not understand the hon. Gentleman’s intention in tabling it. He says he wants to reduce the regulatory burden, yet inserting the word “reasonable” in clause 8 would move away from the situation in which the opinion of the person making the declarations is relevant, and of course their opinion is their opinion, to one in which that opinion would count only if it was reasonable. That would increase the regulatory burden and the possibility of a legal challenge against someone who he says is a volunteer. I do not understand the insertion of the word “reasonable” in clauses where it is not the state we are regulating, but individuals. Inserting the word “reasonable” into clauses about individuals increases the burden on them; it does not reduce it. That applies to most of the hon. Gentleman’s amendments, which are entirely misconceived.
The central point in the debate on clause 8 is the cap on donations. Without a cap on donations the clause makes less sense. My optimistic view is that the clause is part of an original much bigger plan to introduce donation caps, and is all that survives of it. If that is the case, and that bit of political archaeology is true, we may be on to a better path than the one we seem to be on in the Bill.
Nick Ainger (Carmarthen, West and South Pembrokeshire) (Lab): I want briefly to congratulate the Government on accepting my amendments and those tabled by my hon. Friend the Member for Battersea. In speaking to my amendments I shall not take the 40 minutes that the hon. Member for Huntingdon took. I merely say that the level set in the Bill was clearly too low. We had a lot of evidence to that effect, which the hon. Gentleman listed at length.
I welcome what the Government have done, which is sensible and makes it far easier now for individual parties locally and nationally to administer the provision. The Government have tabled a very sensible amendment.
The Minister of State, Ministry of Justice (Mr. Michael Wills): Welcome back to the Chair on the last day of the Committee’s proceedings, Sir Nicholas.
I thank my hon. Friend the Member for Carmarthen, West and South Pembrokeshire. His and his hon. Friends’ judgment and experience have been influential in shaping the Government’s approach, and we are extremely grateful for all their work. I hope that he will feel that we have addressed the concerns adequately and that he will not press his amendments.
Before I comment on clause stand part, I will deal with the issues raised by the hon. Members for Huntingdon and for Cambridge. We are grateful for the Opposition amendments, which we hope are essentially probing amendments on which we will be able to provide sufficient reassurance that they need not be pressed to a vote.
Of course reasonableness is important. For instance, when someone is required to give an opinion it should be a reasonable one. However, the effect of the Bill will be to ensure that sensible and reasonable opinions are given. Therefore the amendments are not needed. It is an offence knowingly or recklessly to make a false declaration about one’s opinion under the clause. Accordingly, there is effectively a requirement in the clause to give an opinion that has been considered with due care and attention. On that basis, we think it is enough that someone genuinely believes the opinion they record in a declaration. We do not think that adding an extra objectivity test that requires a person to show that their opinion is reasonable would add anything useful, and might in the end be unnecessarily onerous.
I am concerned that as well as being unnecessary to achieve what is intended the amendments would not consistently change the requirements in relation to all the different types of recipients of donations to which clause 8 and schedule 3 apply. The Bill replicates the requirements in relation to donations to political parties, set out in clause 8, for donations to individuals, members associations, third parties and permitted participants in referendums. Any changes to clause 8 should therefore be reflected throughout schedule 3, and vice versa. I hope that the hon. Member for Huntingdon will accept my assurance that the amendments are not necessary, and not press them.
As to amendments Nos. 188, 194 and 198, I again invite the hon. Gentleman not to press them. I remind the Committee that they would require the commission to produce guidance notes, which would have to be attached to declaration forms. As a minimum, the guidance notes would include examples of how to value benefits, examples to assist owners in making declarations, an explanation of the penalties for non-compliance or for knowingly or recklessly making false donations, and an explanation of the time limits for the submission of declarations. This requirement would apply only to donations to individuals, members’ associations, third parties and permitted participants, but not to donations to political parties. I am not sure whether that is the effect that the hon. Gentleman intended, so I shall speak about the content of the amendment, rather than about the types of donations to which it would apply.
Clause 1 provides that the commission may prepare guidance on any of the requirements of the 2000 Act. The clause also gives the commission the function of taking such steps as it considers appropriate to secure compliance with the requirements of the Act. The commission is, therefore, already empowered by the Bill to issue guidance on the new requirements for a declaration. In fact, the Electoral Commission has already published guidance for political parties on valuing benefits, such as items sold at auction, secondment of staff by employers to work for political parties and the provision of free or discounted office space.
We would expect the commission to include in its guidance the details set out in the amendment, but a blanket requirement for the guidance to be attached to the declaration form may be unduly rigid. Those giving donations will not be required to complete specific forms, although the commission might produce a standard form, which recipients may choose to use to comply with the requirement. The individuals and organisations regulated by the 2000 Act and the Bill may choose to comply in the way that they find easiest. That is preferable to prescribing, in primary legislation, that a specific form must be completed and a specific piece of guidance attached. I hope the hon. Gentleman will withdraw the amendment.
The Chairman: Order. May I help the Minister? The Opposition do not have to withdraw their amendments, which are merely grouped with the Government amendment. If the Opposition ask the Chair for a specific Division, I would give serious consideration to that, but at present they have not.
Mr. Wills: Thank you, Sir Nicholas. I am, as always, grateful for your guidance.
I now come to the stand part debate on the general purposes of the clause and its associated schedule 3. However, before I do so, I remind the Committee of the wise words of the hon. Member for Cambridge, to which I have had recourse many times during the Committee proceedings, although the hon. Gentleman has not, sadly, been able to contribute as much as other Opposition members to our proceedings. I am endeavouring to put on record that he has made a significant contribution to the work of the Committee by reminding us all that, as we proceed, we should always have in mind two separate and sometimes conflicting imperatives. We must make sure that our democracy functions, and that depends, for all of us, on volunteers who are prepared to give their time and, on occasion, money to political parties. To put undue burdens on them would, in the end, be damaging to our democracy. However, equally, we must recognise the legitimate public concerns about the integrity and transparency of our political processes.
With those imperatives in mind, the objective of the clause and the associated schedule 3 is to bring greater transparency to donations to political parties. The clause also seeks to address the concerns of a number of Members on both sides that there was a lack of transparency as to the ultimate source of donations to political parties. As drafted, the clause adds a new requirement to section 54 of the 2000 Act, that all donations to parties of more than £200 are accompanied by a declaration relating to the source of the donation. Where money or a benefit of more than £200 has been given by an individual or organisation other than the person who physically makes the donation,
“with a view to, or otherwise in connection with, making of the donation”,
a declaration will need to be made about whether section 54(4) or 54(6) of the 2000 Act applies.
10 am
Those subsections of section 54 require the disclosure of the identity of the true donor, where someone makes a donation on behalf of another person or organisation. If a person making a declaration concludes that those sections do not apply, they must say why. It is a criminal offence to knowingly or recklessly make a false donation, and a party cannot accept a donation if it is not accompanied by such a declaration. If it does and fails to return the donation within 30 days of receipt, the party or treasurer may be guilty of an offence. A donor must submit a report to the commission where a donation has been received without such a declaration, in the same way as it is obliged to do where a donation is sent in by an impermissible donor.
Clause 8, therefore, does not add a new restriction on who can give a donation, but seeks to ensure that the important disclosure requirements in the 2000 Act are firmly in the minds of both donors and recipients when a donation is made, and that there is a dialogue between the two sides about the relevant legal requirements.
Clause 8 requires a declaration to accompany all donations above a threshold. I believe that that is of benefit. Having to sign a declaration stating whether the money is one’s own when making a political donation draws a donor’s attention to the existing requirements to declare when one is acting as an agent or otherwise giving money on behalf of another. I understand that that might seem unusual, but we believe that it is justifiable in the specific circumstances—
Mr. Djanogly: Will the Minister give way?
Mr. Wills: In a moment. I want to make this point, as it is fundamental to the purpose of the clause. We believe that the requirement is justifiable, given the gravity of the perception that someone has secretly given money on behalf of another person. It is justifiable precisely because the consequences of such an action extend more widely than to those directly affected, the donor and donee. They extend to the very integrity of our democratic system, which depends on public confidence in our politicians. We believe that making it more difficult for those giving and receiving financial support to be ignorant of the laws that apply to them can only be a good thing.
Mr. Djanogly: Taking the Minister’s line of thought forward, we could double the amount of legislation in this country by saying that for every law, we should have a law saying that people need to comply with that law. It is a circular argument.
Mr. Wills: With all respect to the hon. Gentleman, I had hoped that my not giving way when he first intervened would allow him to get the point of what I was saying, but he was obviously too anxious to make his intervention to listen. I recognise that the circumstances are specific and that it is not to be extended as a general principle. I made that point specifically. The reason for the measures in this specific set of circumstances is precisely that the consequences stretch so much more widely—to the very heart of our democratic system—than their immediate effects on those directly involved, the donor and the donee. That is why the measures are so important.
Mr. Djanogly: The Minister has not given any evidence, based on what has occurred under PPERA, to explain why the measures are required. If he could do so, we might reconsider them.
Martin Linton (Battersea) (Lab): Does the Minister agree that the hon. Member for Huntingdon might need his memory jogged about a number of other cases, such as that of Midlands Industrial Council, in which there has been a lack of transparency and clarity about the source of donations? That has now been addressed, but it took some time before the spirit of the PPERA was instilled in the unincorporated associations and members associations that regularly donate money to the Conservative party, and indeed to ours. It took some time for them to understand that the true donor in every case must be declared.
Mr. Wills: I am grateful to my hon. Friend. No doubt he has effectively jogged the memory of the hon. Member for Huntingdon, and I need not add to my hon. Friend’s eloquent exposition of the point.
It must be a good thing to encourage transparency. This is a necessarily complicated area. Anything that encourages transparency must be a good thing.
Reference was made to Mark Sweeney. The matter does not relate to him alone. The hon. Member for Huntingdon referred to him as a bureaucrat who was not sensitive to the circumstances of political parties. May I put it on the record that Mark Sweeney—who, as a civil servant, cannot answer for himself, as the Committee will appreciate—is an outstanding public servant who has done extraordinarily good work on the Bill, way beyond the call of duty? The Government are extremely grateful for what he has done. From my own experience, I know that he is extremely sensitive to the situation of volunteers. He is very sensitive to the way in which political parties operate, notwithstanding the fact that he is an impartial civil servant of the highest integrity. I associate myself proudly with him and with the work that he and other officials have done on the Bill. The British public will have reason to be grateful to him for that.
Schedule 3 makes consequential changes to the existing legislation and extends the requirements of clause 8 to donations to individuals, members associations, third parties and permitted participants. In moving forward, it is important that we get the balance right between the need for transparency and the degree of burden placed on those who have the job of ensuring compliance with the law. The hon. Member for Huntingdon made his points clearly and we have a great deal of sympathy with his remarks about the role of volunteers in public life. We listened carefully to representations from political parties and the Electoral Commission, and that is why we tabled amendments that raise the threshold at which declarations are required to £5,000 in respect to registered parties and £1,000 in respect of donations to their accounting units.
In recognition of the practical difficulties that have been raised since the introduction of the clause, we have also tabled amendments that remove the requirement for parties to take reasonable steps to verify the accuracy of the declarations. This will not remove the need for parties to take reasonable steps to ensure that a donor is permissible and that the identity of the donor is clear, as is already required by section 56(1). Even with these concessions, clause 8 and schedule 3 will promote greater transparency. The additional declaration requirement will mean that donors to political parties will be obliged consciously to consider whether they are acting as agents for someone else when giving a donation.
As I have made clear, these amendments are intended to take into account concerns that have been expressed, and for the sake of consistency, the thresholds have been raised to those that are used in relation to a number of requirements in the 2000 Act. There is a separate question about whether those thresholds should be amended because they have not been adjusted for eight years’ worth of inflation. Long term, we perhaps also need to consider whether it might be desirable to ensure that changes in the value of money are reflected more routinely. I am happy to hear views on that issue. We have already shown our flexibility. If there is consensus, I am happy to consider whether we might be able to put something to that effect in the Bill.
Specific concerns were raised about the impact assessment and consultation. We accept that we had to make a reasoned guess when making the impact assessment. We readily concede that. We still do not have a full data set of all the donations between £200, £1,000 and £5,000 for the political parties. I concede that we had to make an estimate. We do not know how far out that estimate is, but we had a number of problems in reaching it. That is why we have been so flexible in our response, trying to address the legitimate concerns that have been raised. We will continue to operate in that spirit. If we find that we need to make further adjustments, we are happy to take account of views and, if we can reach consensus, to make provisions for them.
The hon. Gentleman asked various detailed questions about the storage of declarations—where they should be stored, how long they should be stored and so on. Those are legitimate points of detail. As he rightly said, they go to the heart of how parties operate on a local level, and such concerns might become onerous in some circumstances. He is right to raise them. However, the clause, sensibly, is not prescriptive about that. We will discuss the issues with the commission—because, as he said, they are important—with a view to its issuing guidance. We think that that provides the right balance between certainty and allowing appropriate flexibility. He is right to raise those issues. They need to be addressed, and I assure him that they will be.
On the points made by the hon. Member for Cambridge, I am glad that he found an opportunity to raise matters that I know have been of concern to him. I know that he is also concerned that the Committee might run out of time to address them later, so he seized the moment. In response, I point out just two things, because I do not want to stray too far from the clause. First, I remind him that where donations are made on behalf of another, the name of the original source is already required to be disclosed to the Electoral Commission and made public under the 2000 Act, and that clause 8 merely draws attention to that requirement. Provision already exists for making the names public.
Secondly, the hon. Gentleman asked me a specific question about caps on donations. He will be aware that that is not on the agenda now. They would not work without state funding. There does not seem to be any consensus on that point among the political parties at present. The issue is fundamental to systems of party funding, and we believe profoundly that we cannot move forward without consensus. I am sure that it will be a subject for continuing discussion among the parties as well as in the public arena.
I hope I have persuaded the Committee that the clause should stand part of the Bill. Transparent, clean political party finance is vital to the health of our democracy. All parties have been affected by concerns about tainted donations or the inaccurate or incomplete reporting of donations. Adding a simple process to the existing permissibility requirement will encourage donors to political parties to be more open about their donations. I hope that it will also act as a deterrent to those who want to make impermissible donations. The public are rightly intolerant of any perception of sleazy politics. I believe that the additional requirements in the clause will help to achieve greater public confidence by promoting transparency, and I hope that it will stand part of the Bill.
Amendment agreed to.
Amendments made: No. 154, in clause 8, page 5, line 44, leave out ‘section 54A’ and insert ‘that section’.
No. 155, in clause 8, page 6, line 3, leave out ‘£200’ and insert ‘£5,000’.
No. 156, in clause 8, page 6, line 14, leave out ‘£200’ and insert ‘£5,000’.
No. 157, in clause 8, page 6, line 28, at end insert—
‘(4A) In the case of a registered party with accounting units, where it is an accounting unit of the party that is offered the donation this section has effect as if “£1,000” were substituted for “£5,000” in subsections (1) and (2)(b).’.—[Mr. Wills.]
10.15 am
Previous Contents Continue
House of Commons 
home page Parliament home page House of 
Lords home page search page enquiries ordering index

©Parliamentary copyright 2008
Prepared 21 November 2008