Mr.
Tyrie: I shall be brief. I am grateful for the opportunity
to answer the allegation about the Churchill luncheon club, which is a
group of people who come together to have lunch, for which they pay
£20 to £30, and £5 profit, if we are lucky, is
made per person per lunch. The money slowly accumulates over two or
three years, and once every few years a relatively small donation is
made to the Bognor association or to the Chichester association. The
last donation to my association was, I think, a few thousand
pounds—£2,000 or so, although I cannot remember exactly
how much—which was made some time in the early 2000s, perhaps
2001 or 2002. I wonder whether the hon. Member for Manchester,
Central feels that there is anything untoward or concerning about
that.
Mrs.
Laing: Does my hon. Friend consider that it might have
occurred to the hon. Member for Manchester, Central that, had the
luncheon club to which my hon. Friend refers wished to give the
impression that it had nothing to do with the Conservative party, it
would not have chosen to call itself after Sir Winston
Churchill?
Hon.
Members: Missing the
point!
Mr.
Tyrie: I entirely agree with my hon. Friend. Hon. Members
on the Government Benches say that she is missing the point, so let us
find out what point we are
missing.
Tony
Lloyd: For clarity, I was not one of those who said that
the hon. Lady is missing the point. I know that she often does, but it
is not for me to comment on that
now. If
the hon. Gentleman examines what I said a little earlier, he will see
that I said that the low value unincorporated association of the kind
that he describes is without stain on its character. I do not wish to
cast doubt on its purpose or on the probity of those involved.
It is exactly that sort of thing that benefits from the transparency
that I am arguing for. I was arguing, as I think the hon. Gentleman now
concedes, that such collective mechanisms for giving are legitimate, as
long as we know what they are for, who takes part and what the
mechanisms of the financial transfer are. That is legitimate. I am
happy to say to the hon. Gentleman’s friends and colleagues,
through him, that I cast no doubts whatever on anything other than
their public spiritedness in seeking to enhance the political
process. 2.15
pm
Mr.
Tyrie: I am grateful for that assurance. I am just left
wondering why it was raised in the beginning, and why it has been
raised on the Floor of the House on more than one occasion.
I want to
make one other point of substance in the debate on the schedule. The
Minister and several hon. Gentlemen, particularly the hon. Member for
Manchester, Central, suggested that transparency was a sufficient
condition for sorting out the problems of public perception in this
area. Transparency is a necessary, but not a sufficient condition. Was
it enough to dispel the impression that honours had been bought in the
1980s when captains of industry appeared to get them because they came
from companies that quite transparently had made large donations? I do
not think that it was enough. Was it enough to dispel the impression
that Bernie Ecclestone’s donation, declared at £1
million, had some influence on whether a ban on tobacco advertising was
enforced on the industry of which he was such a prominent member?
Transparency is not enough. A necessary condition for cleaning up the
area must come in two parts: a cap on donations and the removal of
intermediary institutions, whatever their
type.
Mr.
Wills: We have largely dealt with the issues in the debate
on clause 8 and the consequential changes, so I will not detain the
Committee for long.
I hope that I
was not suggesting that transparency was a sufficient condition. I
agree with the hon. Gentleman that it is a necessary condition, but it
is not the only condition that is needed. I do not necessarily agree
with his entire prescription, but that is for another day. As I have
said, we have largely debated the matter under clause 8, so I hope that
the Committee will agree that schedule 3 should stand part of the
Bill. Question
put and agreed
to. Schedule
3, as amended, agreed
to.
Clause
9Defence
to charge of failing to return donation from impermissible
donor
Mr.
Djanogly: I beg to move amendment No. 182, in
clause 9, page 8, line 18, leave
out
‘all’.
The
Chairman: With this it will be convenient to discuss the
following amendments: No. 183, in
clause 9, page 8, line 21, after
first ‘the’, insert ‘party or
its’. No.
184, in
clause 9, page 8, line 21, after
‘treasurer’, insert
‘reasonably’.
Mr.
Djanogly: The clause proposes to insert a defence into
section 56 of PPERA to excuse the party treasurer from liability for a
criminal offence under section 56(3). Section 56(3) requires the
treasurer of a party to return such a donation or to pay an equivalent
amount back to the donee. The offence arises from a failure to return
donations from donors considered impermissible under section 54(2) and
attaches to both the party and the party treasurer.
We have
tabled a series of probing amendments. Amendment No. 182 would remove
the need for “all reasonable steps” in proposed new
section 56(3A). By removing the word “all” in subsection
(a), the requirement becomes more practical. Requiring reasonable steps
is one thing, but requiring “all reasonable steps” is
quite another. The exhaustive nature of the “all”
requirement imposes an unduly high burden on parties and treasurers. In
essence, they must second guess all the possible routes of verification
that the commission could come up with.
Local
treasurers are not professionals. They are often volunteers who help
out of a sense of civic duty. To require them to take “all
reasonable steps” seems unreasonable to us. The requirement of
reasonableness, as set out in the clause and in many other pieces of
legislation on any number of different subjects, applies the so-called
reasonable man test to any given set of circumstances. Called on to
adjudicate on disputed behaviour, the courts should ask what a
reasonable man would have done. That should be
adequate. Amendments
Nos. 183 and 184 would amend proposed new section 56(3A) of PPERA as
set out in the clause. The section covers the party’s belief as
well as that of the treasurer and states that such belief must be
reasonable. Amendment No. 184 seeks to rerun the arguments in favour of
the inclusion of a test of reasonableness, where the opinions of
individuals form the crux of the section in question. The need for
objectivity as the yardstick against which to measure that belief where
it has given rise to dispute, is important to ensure fairness and
safeguard individuals from arbitrary penalties.
Amendment No.
183 would insert the word “party” alongside “the
treasurer” in subsection (b). That is included in proposed new
section (3A), and is perhaps a drafting oversight on the part of the
Government. As it stands, only the treasurer must believe the donor to
be a permissible donor. That is odd because the reasonable steps
verification requirement in subsection (a) is imposed on both party and
treasurer.
As I
understand it, the party would currently be able to take reasonable
steps to verify whether a donor is permissible, and leave it at that.
Furthermore, it could suggest that in such situations, the treasurer
must believe the donor to be permissible, despite not necessarily
having undertaken the verification. That seems confusing and the
amendment has been tabled in an attempt to clarify what is required by
the people involved, and to ask the Minister to explain the drafting of
the provision.
Mr.
Wills: I appreciate the intention behind the amendments.
They seek to clarify important points of detail and I am happy to
respond. Amendment No. 182 would downgrade the requirement on regulated
persons to prove that they have taken “all reasonable
steps” and to claim that as a defence. Instead, it would require
them to take only “reasonable steps”. In our view, that
would undermine the important requirement to take “all
reasonable steps” found in section 56 of PPERA. It would mean
that having taken some—but not all—reasonable steps could
be used as a defence. That would create a mismatch between the
obligation in the 2000 Act and the protection that should properly
result should it be fulfilled.
Section 56
(1) of the 2000 Act imposes the requirement to take “all
reasonable steps” to verify that a donation can be accepted. If
that obligation is fulfilled, and if the party still feels that it is
entitled to accept the donation, there would be no offence if it turns
out later to have been wrong. To allow some protection if the
obligation is only partially fulfilled does not make sense. Indeed, it
may result in less rigorous efforts to comply with the requirements to
ascertain the identity and permissibility of donors.
The
requirement in section 56 means that parties are under an obligation to
ensure that they take all reasonable steps to verify the identity and
permissibility of donors. Amendment No. 182 would devalue that by
establishing an easier defence. “Reasonable” is the key
word. “All reasonable steps” does not mean that all steps
that could possibly be taken, should be. We are concerned about the
amendment, not least because it would send the wrong signal about the
importance of compliance.
Amendment No.
183 would mean that a decision on the permissibility or otherwise of a
donation could be made by the party as a distinct entity, as well as by
the party’s treasurer. It is unclear how it could be proved that
the party as a collection of members believed something, but that is
what the amendment would allow. We believe that the provision is
workable only if it refers to an individual’s belief and the
treasurer is the obvious individual in that respect.
The amendment
would not expose the treasurer to any wider liability. It simply makes
it clear that it is his or her belief that is important in a case where
all reasonable steps have been taken, and that there is a subsequent
question about whether it was believed that the donation should
lawfully be accepted. For those reasons, I do not believe that the
amendment would work.
I do not
fully grasp the purpose behind amendment No. 184. A reasonable belief
may be harder to prove than a simple, subjective one and that makes the
defence more difficult to satisfy. In that situation, requiring a
reasonable belief to be shown would be unduly burdensome, and it is
therefore unnecessary. It is hard to imagine an unreasonable belief
being reached if all reasonable steps have been taken to ascertain the
permissibility or identity of a donor. Therefore, we are not sure that
the amendment adds much. In the absence of clarity as to the rationale
for the amendment—which potentially makes the defence easier
while the other amendments in the group have the opposite
effect—we would resist
it.
Mr.
Tyrie: I would be grateful if the Minister guessed at what
his own test of reasonableness would translate into, in time or cost
per case. That would give us a sense of what we are talking about. If
someone could show that he had put in that amount of time, reasonably
and intelligently, would that constitute a
defence?
Mr.
Wills: So far, in these lengthy proceedings, I have
resisted all temptation to give specific examples, and I will do so
even at this late stage. The hon. Gentleman knows that every situation
is different, and it would be wrong to give any indication otherwise.
He is well aware of the consequences of my doing so, and so he will
forgive me if I resist. I am happy to give way again, but he will not
tempt
me.
Mr.
Tyrie: Is the Minister aware of the impact
assessment’s own assessment that £5 per case might cover
it?
Mr.
Wills: Of course I am aware of that. We have already
discussed it in the Committee. I will not be tempted down that route.
We have made a general statement, and have made a perfectly reasonable
guess about what the amount might be. The hon. Gentleman asks for
specific examples in specific cases and, as I have said, I will not be
tempted down that route. However, I hope that I have given enough
clarification to encourage the hon. Member for Huntingdon to withdraw
the
amendments.
Mr.
Djanogly: That was an interesting debate on
reasonableness. I listened to the Minister talk about
“all” reasonable processes; I would have thought that if
something is reasonable, it is reasonable. I am still not sure why
“all” is needed. I shall go away and think about that
further. On
the individual and the party, I agree that belief can attach only to an
individual. I do not dispute that. My issue is a drafting one. One part
of the clause refers to the individual, and another to the individual
and the party. That might be a consistency issue, and the Minister may
wish to look at it in due course. On that basis, I beg to ask leave to
withdraw the
amendment. Amendment,
by leave,
withdrawn.
David
Howarth: I beg to move amendment No. 152, in
clause 9, page 8, line 22, at
end add— ‘(3B) The defence
established by subsection (3A) shall not apply where the donor was not
a permissible donor by virtue of section [Non-electors to be
impermissible
donors].’.
The
Chairman: With this it will be convenient to discuss new
clause 22— Non-electors to be impermissible
donors— ‘(1) For the
purposes of the 2000 Act a person who is not qualified to vote at
parliamentary elections shall not count as a permissible
donor. (2) A company controlled
by a person who is not a permissible donor by virtue of subsection (1)
shall also not count as a permissible donor for the purposes of the
2000 Act. (3) A company shall
count as controlled by a person in the same circumstances as those set
out in section [Donations by companies controlled by impermissible
donors]
(2)(a)-(c).’.
David
Howarth: The amendment is to the new defence to which the
hon. Member for Huntingdon referred, and would exclude from the scope
of that defence the effect of new clause 22. The heart of the debate is
therefore the new clause, and it will become obvious why the new
defence should not apply to it.
The new clause
simply aims to exclude Members of the House of Lords from giving
donations to political parties. In the future, the House of Lords may
become an elected body, and its Members would become parliamentary
electors again. They are not parliamentary electors now, but they could
be in the future, at which point, my proposal would have to be
reconsidered. Nevertheless, in the interim period, the purpose of the
new clause is to exclude donations from Members of the other
place. 2.30
pm The
new clause could be interpreted more radically, although that was not
the intention of myself or my hon. Friend the Member for Argyll and
Bute when we tabled it. However, it is a legitimate interpretation that
will interest the hon. Member for Chichester, and would make it the
single most unpopular new clause ever proposed to a Bill dealing with
party funding. Under this more radical interpretation, the new clause
would exclude donations from all companies, trade unions,
unincorporated associations and trusts, which would destroy the
financial base of all three main parties. That is not the intention,
but it might be useful to discuss that
point. During
the stand part debate on schedule 3, the hon. Gentleman said that one
of his criteria for cleaning up politics—another was a donation
cap—was that donations from all intermediate bodies should be
got rid of, which is the case in other jurisdictions in the world, such
as Canada, I believe, and certain parts of the United States. It is
worthwhile thinking why we should not adopt the same policy, at least
as a
goal.
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