Political Parties and Elections Bill

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Mr. Kidney: For once, I think I speak on behalf of all Members in saying that the present situation is not good enough, and one way or another it must be resolved on Report. The current situation is making fools of us all. On 3 July 2006, in a debate on the Electoral Commission, the hon. Member for Buckingham (John Bercow) asked the hon. Member for Gosport (Sir Peter Viggers), who speaks in the House on behalf of the Electoral Commission, whether dual registration posed the danger of duplication. The hon. Gentleman replied:
“It is not often that an hon. Member can give total reassurance to a colleague, but I assure my hon. Friend that the current legislation has now amalgamated the requirement to make a declaration to the House authorities and to the Electoral Commission”.—[Official Report, 3 July 2006; Vol. 448, c. 587.]
So, two years ago, it appeared that we had solved the problem, but still we have not. The situation is urgent. If the Minister does not provide a solution on Report, I shall table a similar amendment. For now, however, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Motion made, and Question put, That the clause, as amended, stand part of the Bill:—
The Committee divided: Ayes 11, Noes 4.
Division No. 8]
Ainger, Nick
Grogan, Mr. John
Hesford, Stephen
Howarth, David
Kidney, Mr. David
Linton, Martin
Lloyd, Tony
Lucas, Ian
Sharma, Mr. Virendra
Whitehead, Dr. Alan
Wills, rh Mr. Michael
Djanogly, Mr. Jonathan
Duddridge, James
Laing, Mrs. Eleanor
Turner, Mr. Andrew
Question accordingly agreed to.
Clause 8, as amended, ordered to stand part of the Bill.

Schedule 3

Declaration as to source of donation
Nick Ainger (Carmarthen, West and South Pembrokeshire) (Lab): I beg to move amendment No. 149, in schedule 3, page 34, line 2, at end insert—
‘Schedule 6 to the 2000 Act (details to be given in donation reports)
A1 In paragraph 2 of Schedule 6 to the 2000 Act (details to be given in donation reports), after paragraph (b) of sub-paragraph (10) there is inserted—
“(c) the names and addresses of all the members of the association and donors donating £1,000 or more annually to the association.”.
We have just completed our scrutiny of clause 8, which is designed to improve transparency in systems. The amendment would extend that transparency to unincorporated organisations. We have had much discussion and debate—some of it seemingly interminable—about transparency. The amendment addresses an omission in clause 8. Although we have amended the clause to set new monetary thresholds, it requires people to provide information about the source of donations. Amendment No. 149 does the same thing for unincorporated associations. I recognise that it may not be perfectly drafted.
The Electoral Commission, in the paper that it circulated to members of the Committee, states that the commission sees merit in increased transparency in this area. It goes on to say that it may be helpful to introduce greater transparency about those who provide substantial donations to unincorporated associations. However, it recognises that that imposes an additional administrative burden on those organisations, which was the debate we had about clause 8.
There is cross-party consensus that there should be greater transparency in the membership and source of funds through these unincorporated associations. For example, although he is not in his place, the hon. Member for Chichester said on 20 October this year:
“I am fully in favour of transparency...I completely agree with the point made earlier that nor can we allow vehicles”—
by that, I assume he was referring to unincorporated associations—
“to be created especially for the purpose of concealment.”—[Official Report, 20 October 2008; Vol. 481, c. 105.]
The shadow Leader of the House, in an exchange with the Leader of the House at business questions in March 2007, said:
“We are happy to discuss...greater transparency on donations, such as those by unincorporated associations, and new powers for the Electoral Commission.”—[Official Report, 15 March 2007; Vol. 458, c. 469.]
Sir Hayden Phillips, who in his report referred to unincorporated associations, has said:
“Unincorporated associations and companies that make donations to political parties should be required to identify the people involved in making the decisions.”
There seems to be general consensus that that is an area where we need to improve transparency. Amendment No. 149 may not be perfect, but it addresses the need for us to legislate and extend transparency to the source of donations and the individuals who make donations in excess of £1,000 through unincorporated associations.
Mr. Djanogly: We are keen to avoid imposing further administrative burdens on donors or party officials without a pressing need to do so. I note that a similar amendment, which did not propose the same threshold, was tabled but not selected. Although the commission might support additional transparency, which everyone probably supports, it is against the amendment, and it is worth putting that on the record. It states that
“the Commission does not support amendments 7 and 149 which seek to introduce new reporting requirements for donations from unincorporated associations. The Commission sees merit in increased transparency in this area, but any change to the regulatory regime should balance that against the additional administrative burdens on regulated entities and on donors. We do not think these amendments strike the right balance, since they impose sweeping new reporting requirements, going beyond those applying to e.g. registered companies or trade unions where the identities of those controlling the organisation are already in the public domain so do not need to be listed in the donation report.
The amendments also require details about donors to an association for any purpose . . . not just those whose donations are political in nature. Much of this information may be irrelevant and potentially misleading, since it is unlikely that all the members of and donors to the organisation will have participated to the decision to make any given donation. It may be helpful to introduce greater transparency about of those who provide substantial donations to unincorporated associations which fund political parties, but the workability of any new requirements in this area, and the administrative burden associated with them, would need careful thought.”
We agree with those points.
Tony Lloyd (Manchester, Central) (Lab): It is interesting that the hon. Gentleman praises anything that the Electoral Commission says on that. Does he believe that it has done a good job so far on the issue of transparency with regard to unincorporated associations? It is a simple question, so I wonder whether he will put it on the record.
Mr. Djanogly: I am not sure whether it is for me to judge, and as it is not part of the Bill, it is not a topic on which I have done a huge amount of preparation. However, we believe that proxy donations and intentionally using an unincorporated association as an agent are already covered by PPERA. That threatens to create large volumes of red tape for the voluntary sector, which could be discouraging for donations to voluntary organisations and, in turn, to political parties. We also have general concerns about the focus on transparency issues for only one small donor sector. There are other donor sectors, not least the trade unions, that should be looked at in the context of the whole. We do not think that the focus should be on individual sectors, but we would be prepared to examine the issue in the round.
David Howarth (Cambridge) (LD): Earlier, the Minister talked about consensus being a necessary condition of reforming the area. I think he is wrong because it tends to give a veto to parties with a particular interest, and I think that that is another area where we might be suffering from that problem. I would like to put on record, however, that I support the amendment. Its intention seems to be extremely important and useful. Everyone knows that the unincorporated bodies to which we are referring are organisations such as the Midlands Industrial Council, which are devices to disguise the identities of donors. That is what they are invented to do and that is what they have been doing.
Martin Linton (Battersea) (Lab): Is the hon. Gentleman aware that telephone calls to Coleshill manor, the seat of the Midlands Industrial Council, are not currently being answered and that there is a suggestion that the Constituency Campaigning Services Board, exactly the kind of organisation to which he is referring, might have closed down? Perhaps that is a recognition that those organisations really are merely a conduit.
David Howarth: I am not aware of that, but the conclusion that the hon. Gentleman draws from the information provided seems a plausible explanation.
Mr. Djanogly: The hon. Gentleman says that the Midlands Industrial Council is there only to hide donations. That is a very serious allegation, which has been put to the Electoral Commission, and, my understanding is that it has been reviewed and shown not to be the case. I do not know how the hon. Gentleman gets to make that allegation, but he might like to back it up a bit more.
1.30 pm
David Howarth: This is an example of the Electoral Commission being guilty of naivety. Its response to the hon. Member for Carmarthen, West and South Pembrokeshire’s amendment is an illustration of why it is important to have political commissioners. The idea that we are talking about “voluntary sector associations”, in the words of the hon. Member for Huntingdon, as if they are ordinary charities, set up for another purpose, which happen to give money to political parties, is ridiculous. That is not what is going on at all. These organisations are, for the most part, set up to donate money to political parties. They must be scrutinised with great care, and transparency is of immense importance. This is all about whether they existed before and had a life prior to their existence as bodies that donate to political parties. Are they real organisations? For the most part, I fear that they are not.
Martin Linton: May I help the hon. Gentleman by pointing out that the leader of the Conservative party has said that that shadowy organisation, which is not answering its telephone, the Constituency Campaigning Services board, based at Coleshill manor, is “practically a part” of the Conservative party?
David Howarth: That is an interesting description, which illustrates my point.
Mr. Andrew Tyrie (Chichester) (Con): I am a bit astonished by what the hon. Gentleman is suggesting. He seems to be saying that the Electoral Commission is a waste of time, that it has fallen down on the job and that it has not arrived at a reasonable level of transparency. It has looked into this issue in immense detail and has produced a thorough and comprehensive rebuttal; unfortunately, I do not have it with me. The hon. Gentleman’s defence for continuing to make the allegations seems to be that it has no idea how to do its job.
Dr. Alan Whitehead (Southampton, Test) (Lab): If those organisations, which appear to have no other function, were to keep a record, would that not automatically be a reason for them to cease to exist? Therefore, his suggestion is, perhaps, otiose. Would the hon. Gentleman reflect on that?
David Howarth: The hon. Gentleman has produced an interesting reason for passing the amendment. Proxy and non-transparent donations are to be discouraged. If the amendment discouraged that form of donation, I would not be too sorry.
A point was raised about how the amendment applied to trade unions. As far as I am aware, trade unions are unincorporated associations, so I am grateful to the hon. Member for Carmarthen, West and South Pembrokeshire for tabling an amendment that applies to the unions. The trade unions are in the unusual position of existing anyway; they are, in fact, voluntary organisations that would have a life without giving money to a political party. The question whether that would be a great burden to them is one that Labour Members are in a better position to answer than me, but I am sure their answer would be that trade unions would be willing to bear the burden of the amendment. Since that would be the only objection, I do not understand why it cannot be accepted.
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