Examination of Witnesses (Questions 364-379)
PROFESSOR JUSTIN
FISHER, DR
MICHAEL PINTO-DUSCHINSKY
AND DR
MEG RUSSELL
25 OCTOBER 2007
Q364 Chairman: Welcome to our witnesses
this morning. We are delighted to have Professor Fisher of Brunel,
Dr Michael Pinto-Duschinsky, also from Brunel, and Dr Meg Russell
of the Constitution Unit at UCL. You have come to help us with
learning the lessons of what has been going on in terms of "cash
for honours" and propriety issues surrounding the honours
system which we have been inquiring into. Because you are all
people who know about our political system in a variety of ways
and we are interested in issues of standards, corruption, party
financing and the House of Lords, we thought that, between you,
you would have some things which you may be able to help us with.
Firstly, do any or all of you want to make a short opening statement?
Dr Pinto-Duschinsky:
Thank you for inviting me to give evidence to this important inquiry.
Following your last session on Tuesday, I will be extending my
memorandum of evidence to cover some broader matters arising from
your Committee's work, but I will do that after this session,
but I would like to give four initial propositions.[1]
First, the new system of scrutinising nominations for peerages
has proved successful, although your Committee's interim report
gave useful proposals for some detailed changes. Second, to a
considerable extent, the "loans for lordships" or "cash
for peerages" affairs resulted from failures of electoral
administration. It is clear that the Electoral Commission deliberately
avoided giving guidance in the run-up to the 2005 election about
the meaning of political loans on other than commercial terms,
and I think there are important lessons to be learned from this.
Third, recent problems about party funding have arisen because
of the parties' reliance on a small number or a relatively small
number of large donors. Tightening the rules on nominations for
peerages will not deal by itself with this problem, nor will a
back-room deal between the parties to award themselves more public
money and nor will a cap on donations since such a cap will fairly
easily be avoided. Fourth and finally, the system of awarding
peerages has its problems and there is no excuse for any shortcomings
of the current system, but foreign experience shows that alternative
systems of reward have more malign consequences. We must recognise
that the root problem is a decline in party membership and activity
and unfortunately there is no easy legislative fix for this.
Q365 Chairman: Thank you. All of that
we shall want to return to in just a moment. Would either of you
two like to say anything?
Dr Russell: Well, unlike Dr Pinto-Duschinsky,
I have not provided a written memorandum and I also have not prepared
any significant kind of opening statement, but just to let you
know what I know, as it were, I have been for the last nine years
a senior research fellow at the Constitution Unit at University
College London. I am not an expert at all in party funding, unlike
my two colleagues here, but I have worked over the last nine years
on issues around the House of Lords and its reform. During that
time, I have had hands-on experience when I was seconded for two
years as Special Adviser to the Leader of the House of Commons,
Robin Cook, when he was grappling with this problem, so, aside
from studying it academically, I have done that. I have written
quite a lot on reform options for the House of Lords and I was
an adviser to the Royal Commission when it was working and most
recently I have been studying the Chamber as it is now. I am interested
in the effects of the reforms which have already happened, so
I have been looking at voting patterns in there and the extent
to which it is having an impact on policy and how reform has changed
the culture of the House, and I have conducted surveys of Members
and interviewed a lot of Members of the House of Lords. So I think
what I bring are some ideas about possible reform options for
the appointments process and also I do have some data on peers'
views on some of the points that you are looking at in this inquiry.
Q366 Chairman: That is why we have
invited you, for all those reasons. Professor Fisher?
Professor Fisher: I have a number
of points that I would like to make, but I will begin with four.
Firstly, I think what the "cash for peerages" episode
has demonstrated is that British politics is not as corrupt as
is commonly thought. Secondly, I feel that the media's role in
the entire episode was generally corrosive and often irresponsible.
Thirdly, I think that the Electoral Commission has been unfairly
criticised over the episode, particularly by the CSPL.[2]
Finally, I think the Committee should bear in mind that good law
and regulation is not necessarily law that results in prosecutions,
but regulation and law which sets the boundaries for political
life.
Q367 Chairman: Well, that is very interesting,
not least because it opens up areas of potential disagreement.
I would like to start with one rather general point and you mentioned
it in your remarks just now, Professor Fisher. One of the undercurrents
of this whole recent controversy has turned on the extent to which
our government arrangements were or were not corrupt and where
we stood on any sort of comparative analysis of these things.
I sometimes got criticised for saying that I thought on the whole
we were not corrupt, but that there were areas that needed attention.
I notice in what Dr Pinto-Duschinsky says at one point that there
is complacency around on this front. You are saying rather what
I was saying, which is that it is not a corrupt system, but that
there are problems that need attention. As political scientists,
asked to give a dispassionate assessment overall of how our system
rates in terms of cleanliness and corruption, where do we sit
and where are the areas that require attention?
Professor Fisher: As a political
scientist, I would have to say there are always measurement issues
here, but insofar as one can measure perceptions of corruption
which are of course in some ways as important as actuality and
it is important that we consider the public and their confidence
in public life, if you look at comparative evidence about perceptions
of corruption, we are mid-table. We fall below the Scandinavian
countries, but we come above many of our European partners, so
we perform comparatively well.
Q368 Chairman: We had trouble with
this when we did a report recently on standards that, although
there was data on perceptions, that is soft data, and you have
just told us in your opening remarks how corrosive the media is.
If you get people being told all the time that the system is corrupt,
that will feed through into perceptions, so what I am after really
is some hard, analytical assessment of how corrupt we are.
Professor Fisher: Well, in terms
of party funding and indeed the aspect of appointments to the
House of Lords, it is a point worth making that there has only
been one prosecution since 1925. That may be because the law is
not working, it may be due to complacency, but in terms of hard,
empirical evidence, the evidence for seeking selective benefits
by virtue of making contributions to a political party is remarkably
thin. If you were saying, "Give me some evidence of corruption
that occurs around party finance", I would have to say that
you could look at the 1920s and then, beyond that, it is very,
very difficult to demonstrate corruption on a scale that we see
in other European countries.
Q369 Chairman: Is that the area then
that you would primarily focus on if we were looking for areas
that needed attention in a system which, overall, is not corrupt?
Professor Fisher: No, no, it would
examine a number of the other aspects in which party finance often
falls into the areas of corruption, such as the award of contracts,
legislation that favours donors over non-donors and so on and
so forth. The evidence is simply not there. Now, one can make
inference and it is something that I find very difficult to deal
with—the idea that somebody who makes a contribution inevitably
is seeking to make some personal gain, and I think that is quite
the wrong way to look at issues of party finance or indeed appointments
to the House of Lords. It is perfectly legitimate for someone
to make a contribution to a party simply on the grounds that they
share the beliefs of that party.
Q370 Chairman: Well, the police investigation
ran into problems essentially between a correlation and a crime,
but this is what we want you to help us with. If I can go to the
other end of the table, in reading your memorandum to us, I think
that you seem to be saying something rather different, that there
is more complacency than there should be on this front.
Dr Pinto-Duschinsky: I think that
British public life has been complacent for many years, that it
should be remembered that when the press have brought up various
cases, many of those cases have turned out to be quite justified.
Going back quite a long way, not to do with party funding itself,
if one looked at a local government committee in the late 1960s,
there was a member of that committee who came out with the view
that corruption did not exist in British public life virtually
and a few years later he was in jail as a major player in the
Poulson case. Before the Poulson case came up about
corruption in local government, it was very difficult to get any
credibility about that and we know now that local government contracts
were rife with corruption at that time. If we look at the political
funding area, it is certainly true that we cannot look inside
the box recently because we just do not have the evidence and
I think one should be very careful in that in the absence of that
evidence, and in that respect I agree with Justin, that correlation
and causation are different things. You must remember that in,
say, the 1930s when the party leaders met about how to deal with
Maundy Gregory, and this appears in David Marquand's biography
of Ramsay MacDonald, it was under discussion that all the political
parties had been involved in it and that, if it became public,
there would be a scandal which would be like a sewer which would
poison public life. The three parties' leaders agreed with each
other that an illegal knighthood would be given to a donor who
would give a slush fund which would keep Maundy Gregory silent
for the rest of his life, so here you find that all of the party
leaders were complicit in a cover-up, and British political culture
is actually very good at cover-up and often a cross-party cover-up.
I think that whenever there has been too much complacency in British
public life, it has come back to haunt us, so I do believe that
there is much more corruption in British public life in general
than we often give credit for. As a final point, I should report,
and I hope you will not ask me for names, that I was asked to
see a government minister some years ago and the opinion was put
that that minister knew of only one person who had given a large
donation who had not asked for some favour in return, and that
is the reality of public life, so I do not think we should be
too naive on this. On the other hand, this does not mean that
we set up people to prosecute them and potentially send them to
prison or destroy their reputation without very good evidence,
so there I would agree with Justin.
Q371 Chairman: We know about the
historical record. We also know though that we have regulated
in many of the areas that you have pointed attention to just now,
much more regulation and much more transparency altogether. You
do comparative work as well, so on this issue of where we sit,
on any objective test, do we sit mid-table or do we sit at one
end? Where do we sit, do you think?
Dr Pinto-Duschinsky: Well, I have
been studying political corruption in one way or another for many
years and the recourse to perceptions, it has been done by an
organisation called Transparency International and that is precisely
because they have no idea of the objective facts, and cannot know
about them, so you have a survey of perceptions which actually
is a deeply flawed survey methodologically and, incidentally,
Transparency International refuses to be transparent about the
sources it uses.
Q372 Chairman: That is why I was
asking you.
Dr Pinto-Duschinsky: There is
not an objective test of this, but what we do know is that British
public life time and again has come to sting us if we are too
complacent.
Q373 Chairman: The warning against
complacency is clearly a good one.
Dr Pinto-Duschinsky: The area
where I think there has been special complacency has been in the
area of electoral administration.
Q374 Chairman: Yes, your paper is
very helpful on this. Can I just bring Meg in in case she wants
to say anything on this.
Dr Russell: The only thing, listening
to this conversation, that I would wish to comment on, because
I am not an expert in corruption and all of that, is that I would
agree with Justin, that, although it is difficult to find any
hard evidence for this, I believe that probably most people who
give money to political parties give it because they want to further
the ends of those political parties rather than because they want
to get something in return. It is very difficult to prove that,
but certainly a very great deal of people do give money for quite
proper reasons. At one level, I think it would be extremely surprising
if there were not a lot of major donors in the House of Lords
because the House of Lords is a chamber which is principally made
up of people who have reached high recognition in their fields,
be it in business, in science, in the law, et cetera, and
many of those people, by their nature, are well-paid individuals.
In a funny sense, if you have someone who is at the top of their
field who is being considered for membership of the House of Lords,
you have to be a little bit suspicious as a party if they have
not given a significant amount of money to the party because when
you are a wealthy individual, it is one of the only ways that
you can show your commitment, particularly when you are extremely
busy. The House of Commons is full of donors to political parties
and we do not tend to think that that is corrupt. Also I do think
there is a problem here about perceptions and taking perceptions
as a proxy for reality. Having studied the House of Lords, one
of the things that we have done is study press coverage of the
House of Lords since the 1999 reform and what that showed was
that press coverage of the House of Lords has become gradually
more positive. Our study ran from 1999 to, I think, 2005. Obviously
people get their perceptions to a large extent from the media
and the media was presenting the House of Lords increasingly positively
following the removal of the hereditary peers, but then of course
we have had just an avalanche of press coverage on this issue
which I have not tested, but which I am sure has probably damaged
people's perceptions of propriety around the House of Lords, done
a disservice to the House of Lords and done a disservice to British
politics generally. However, this has come to light in large part
because actually the system is working, rather than because the
system is not working, because it is the House of Lords Appointments
Commission that brought this to our attention. So there is a great
conundrum there.
Q375 Chairman: It seems to be said
that, on the one hand, we have got regulatory success which is
in terms of the House of Lords Appointments Commission, that it
did its job and it turned down names that it thought were not
credible, applying the test that it applied, and there is some
difference there, by the way, from the Crown Prosecution Service
who say that these people were credible, but that is a separate
issue. The Electoral Commission, certainly in the evidence that
Dr Pinto-Duschinsky has given us, is cited as an example of regulatory
failure which produced the effect that it was not possible, it
was said to us on Tuesday, to take action under the 2000 Act on
loans. Is there agreement here, that there was regulatory success
on one side and regulatory failure on the other?
Professor Fisher: No.
Q376 Chairman: Can you say why?
Professor Fisher: I think there
are two reasons here. The difficulty the Electoral Commission
had in respect of the declaration of loans is that there is no
legal definition of what constitutes a commercial loan and, therefore,
regardless of legal advice that may have been provided to parties,
it was always open to challenge in court. That, therefore, is
a failing of the legislation, not a failing of the regulator.
That has been tidied up with the Electoral Administration Act.
Were that not the case, it would have been essential for a legal
definition of "commercial" to be included in an amendment
to the legislation. That being so, it would be unreasonable to
ask a regulator to advise on something where there is no legal
agreement as to the definition, so I think the Electoral Commission
was hampered not by its own ineffectiveness—and I do not
think it was ineffective—but simply because it was an area
of law that was untested. In relation to that, I think what this
episode throws up is uncertainty about the point at which the
police should be involved in any breach of the Political Parties,
Elections and Referendums Act. Initially, the complaint, as I
understand it, was made about breaches of the 1925 Act and in
the case of a possible breach of PPERA,[3]
the Electoral Commission were unable to mount their own investigation
and the police simply took over, so I think there are issues both
in terms of the difficulties in the wording of the legislation
and the procedure—the point at which the police become involved—as
opposed to the Electoral Commission, in regulating political parties.
Q377 Chairman: The argument is though
that the Electoral Commission should simply have pronounced on
what a commercial loan was.
Professor Fisher: They were not
able to. That pronouncement would have had no legal standing.
There is no legal definition of what constitutes a commercial
loan and, therefore, whatever pronouncement they made could have
been open to legal challenge.
Dr Pinto-Duschinsky: Naturally,
if you have a law that is untested, it is a matter of definition
that it cannot be defined until it is tested in a court of law,
so to that extent I completely agree. However, if you have a major
new Act which sets up rules for our democratic life, it would
be a shame, a sorry state of affairs if it would need a court
case against at least one of the parties before we could have
any guidance as to what the law was, and in many countries electoral
commissions do give advisory opinions which can indeed be challenged
afterwards in a court of law, but which nevertheless help political
parties. In fact, when the Chief Executive of the Electoral Commission
was questioned about this by the Committee on Standards in Public
Life, he said himself that he favoured the giving of such advisory
opinions, despite the fact that they could then be challenged
in the courts later on, so the Electoral Commission itself now
agrees that it is desirable to give advisory opinions, as are
given in the United States, as are given in Canada, et cetera.
The other point is that the Electoral Commission said that it
had given what it called "comprehensive advice", so
it did not take the point in defence of its behaviour to say,
"We couldn't give advice because it's not our role",
but they actually said that they had given comprehensive guidance,
which were the words used by the Chief Executive. They said that
they were sure that the parties knew what the laws meant, so they
did not need to give advice on that ground. When it turns out
later on, when I asked the Electoral Commission and they acknowledged
in answer to a freedom of information request, that they had not
given advice, they said that during the period, the Commission
and its Chairman did not issue any specific advice when they had
previously said to the Committee on Standards that they had given
comprehensive guidance. Now, you cannot have it both ways.
Chairman: Well, a clear thing is that
the difficulty in this area meant that one arm of the police inquiry
fell away pretty rapidly. I want to bring colleagues in now to
explore these and other issues.
Q378 Kelvin Hopkins: If I may just
follow this particular point a little further, two days ago we
interviewed Assistant Commissioner Yates and Carmen Dowd from
the Crown Prosecution Service and I asked Carmen Dowd about this
very point. I asked whether it was really crucial that the Electoral
Commission had failed to give a definition of a commercial loan
which was a vital factor in the CPS deciding not to proceed towards
prosecutions, and she vigorously agreed with me. I then also suggested
that one of the reasons perhaps why the Electoral Commission was
loath to do this was because they too could see how crucial this
particular definition would be and that they might be in the firing
line with government for having given such a definition. Indeed,
the Electoral Commission—and I would like to know Dr Pinto-Duschinsky's
view on this—has been in the firing line with the Government
for some time because the Government had disagreements—particularly
on such things as individual voter registration, which the Government
did not like because they thought it might damage their electoral
standing, and on postal voting. There have been big differences
on these and other issues. The Electoral Commission has to an
extent been intimidated by central government and it could see
that this might be a red rag to the Government if they proceeded
in this way. They might be really in the firing line. Do you think
all that is just in my imagination? Carmen Dowd certainly agreed
with my view. What would your view be?
Dr Pinto-Duschinsky: Well, I am
in a bit of difficulty here because I have had talks over the
years that have been off-the-record talks. I agree with your interpretation
and I think there is direct evidence that the Electoral Commission
felt that, as a new body, it did not want to offend anybody in
the early years, that it had to build up its organisation, it
had to build up its budget and, therefore, it was unwise to stick
its neck out on virtually anything and it certainly did stick
its neck out, to its credit, on the question of registration and
individual registration, but in general it was very cautious and
I think there is not very much doubt on that. There was a specific
point where this came up because on 21 April 2005, about two weeks
before the election, it was reported in The Times that
the Conservatives had taken out £16 million in loans. It
was also reported from a Conservative Party treasurer that they
had a rate below the rate that a commercial bank would have asked
for. Subsequent to that, the Conservative Party approached the
Electoral Commission to ask if their interpretation of the law
was correct and they met with a refusal to give any guidance.
Now, having asked for, and been refused, guidance by the Electoral
Commission and having asked its lawyers, as indeed Labour had,
for their guidance and been told that they were acting within
the law as the lawyers saw it, it would have been, I think, iniquitous
if the parties were then hauled before the courts with criminal
penalties since they had done what they responsibly should have
done to check what the law was.
Q379 Kelvin Hopkins: It is interesting
that the Electoral Commission, even though it was cautious, still
became very unpopular with the Government, although not quite
as unpopular as its fairly closely associated body, the Committee
on Standards in Public Life, which undertook an inquiry into the
workings of the Electoral Commission and to which I made a submission
myself. It brings me on to my second point and that is about government
in Britain and the essence of the Blair Government in particular.
Even before that there was a very powerful, overweening Executive
quite different from many other parts of the world. The Blair
regime in particular used patronage at every level to try to ensure
that its power, the power of Downing Street, held sway on all
occasions. My question is really to Meg Russell because you worked
with Robin Cook for some time and Robin made some very interesting
observations about this and made some changes. I do not know whether
that was with your advice. On the way the leaders of parties are
elected, for example, Robin made the point shortly before he died
that what had changed was that the Leader of our Party (I am a
Labour Member of Parliament) was now elected by the mass membership
in an electoral college rather than solely by MPs. The Leader
of the Party therefore had to pay less attention to MPs because
he was not elected by them and he or she did not have to balance
political forces within the Government so the Cabinet has changed.
Labour Cabinets used to have both Benns and Jenkins, a wide range
of people, but now Cabinet members are ciphers in the image of
the Leader. Do you think those things are significant?
Dr Russell: Those are interesting
points but I think you might be taking us outside the scope of
the inquiry!
1 Ev 64 Back
2
Committee on Standards in Public Life Back
3
Political Parties, Elections and Referendums Act 2000 Back
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