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9 Feb 2009 : Column 1144

That flexibility is welcome, but there should be a compensating certainty, particularly in the delivery of the notice informing the subject of the requirement.

If prompt compliance is expected of the person, the commission should be an example of good practice in its own expediency. There is no time limit in the Bill for the service of either notice. As such, it is possible that the commission might delay in delivering the notice and delay on the part of the commission is also likely to be reciprocated by the person. Good practice should be a statutory requirement and we believe that the simple insertion of the word “promptly” will help achieve that goal.

Government amendment 23 follows up on a number of amendments tabled in Committee by me and the hon. Member for Carmarthen, West and South Pembrokeshire (Nick Ainger) and relates to the requirement for the commission to publish guidance. In Committee on 13 November, concern was expressed about the frequency and timing of guidance published by the commission on the use of its powers. Questions were also posed regarding the content of any guidance. Our Committee amendments 61 and 62 and the Liberal Democrats’ Committee amendment 136 sought to address deficiencies in that respect.

The consensus stemming from the debate was that annual guidance should be published and that it should be required to contain certain prescribed information, particularly on the use of investigatory powers. I am pleased to see that the Minister has taken those suggestions on board and we welcome Government amendment 23. It obliges the commission to publish annual information on the use of commission powers. It achieves that by attaching that requirement to the pre-existing annual financial reporting requirement contained in paragraph 20 of schedule 1 to the 2000 Act. The annual financial report will now include information in line with the newly introduced schedule 2 requirements. That seems to us a suitable way of going about that. We are pleased that the Government have included that positive amendment and we hope that the annual reporting requirement will reassure people that the commission is using its powers reasonably.

Government amendment 28 relates to a report published by the commission in accordance with paragraph 27 of the schedule. It stipulates that any report may, pursuant to the paragraph, omit certain information if, in the opinion of the commission, the publication of the information would or might be unlawful or if it might adversely affect any proceedings or investigation. In essence, it qualifies the obligation introduced by the welcome Government amendment 23.

Although we agree that some flexibility is acceptable in terms of reporting requirements, the measure could go slightly too far, we believe. There is no requirement that the commission’s opinion of the lawfulness or any adverse affects of publishing certain information should be reasonable. We feel that an opinion to that end should be reasonable, and our amendment (a) to Government amendment 28 addresses the deficiency. It would ensure that the commission does not become overly defensive with regard to the information that it holds. As things stand, the commission could have a very subjective and defensive set of opinions, which could prevent full and frank disclosure in its report. That would dampen considerably the positive potential of the reporting requirement.

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5.15 pm

We also have a slight reservation about the wording of sub-paragraph (b) in Government amendment 28. The effect of sub-paragraph (b) would be that information could validly be omitted from a report if its publication

That goes further than the current wording of the Bill and, again, it could lead to over-cautiousness on the part of the commission. Our second amendment to Government amendment 28—amendment (b)—changes the wording from “might” to “would”. That would refocus the commission when it decided on whether the publication of information really would damage its investigation. In combination with the mere subjective opinion requirement that I have identified, schedule 2 would, if not amended, allow for a very cautious report that might not be fully informative, and that would not fully reflect the reality of the commission’s work. I would appreciate the Minister’s further thoughts on those points.

Finally, amendment 83 inserts a threshold test after paragraph 27(2) of schedule 2. The amendment aims to ensure that the commission excludes details of less serious offences in the reports that it is obliged to publish under paragraph 27(1). The measure would serve three purposes. First, it would excuse from further censure those who have fallen foul of the legislation to a minor extent. The threshold ensures that only the more serious offenders are named and shamed. Secondly, the removal of minor offences from the reports would mean a more intense focus on the major offenders. The threshold of £5,000—the amount is negotiable, as far as we are concerned—catches the most serious cases and ensures that they are rightly named and shamed. Thirdly, the measure would act as an additional deterrent to the commission of offences and infringements. Again, I would be interested to hear the Minister’s thoughts on those proposals.

Dr. Gavin Strang (Edinburgh, East) (Lab): The House will be in no doubt about the importance of what we are debating. Clearly, we can talk in more detail about the investigative powers when we come to the next group of amendments, but any measure that allows a senior commission official or the police to enter premises to check on the income and expenditure of an individual or organisation should be looked into carefully. The House should be fully satisfied that the new framework that we are putting in place will serve Parliament and the country well.

To pick up briefly on our earlier debate on the motion on the guide to the rules relating to the conduct of Members, I do not think that anyone in the House is resisting transparency. One of the contributors to that debate suggested that the discussion indicated that hon. Members did not want to declare, or want their local parties to have to declare, events that raised more than £1,000. Certainly, that was not my position. The position is that we want maximum transparency, but clearly we have to have a system that can be handled properly, and that does not put an unreasonable demand on the volunteers on whom we all depend for the operation of the political system, which, of course, is dependent on the political parties.

I pay tribute to the hon. Members who were on the Public Bill Committee. The Government had a real wish to arrive at a consensus, and that is to their credit.
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The Minister said, perfectly fairly, that some of the Government’s amendments reflect an aim on which there should be consensus. There is no doubt in my mind—I have given evidence on such matters to the Committee on Standards in Public Life—that when we try to enact legislation governing our electoral process and governing the very important issue of donations, we should do so in a way that achieves full and proper consensus.

We can, of course, go into detail on the investigatory powers later. I will not pass comment on the commission; again, that can come later. It is a new organisation. It is important that it establishes itself, in the eyes of parliamentarians and the country, as doing an excellent job.

David Howarth (Cambridge) (LD): I understand where the new clauses and amendments tabled by the hon. Member for Leeds, North-East (Mr. Hamilton) and by the Conservatives are coming from, but I have one central problem with them, which is an objection to their consistency with what we in the House impose on the rest of society. I hope that hon. Members will explain further in the course of debate. We should not, as politicians, give ourselves special treatment in the regulatory regime that we do not give to other people. We should not give ourselves arbitrary exemptions from the type of rules that we impose on others.

It is clear that, in some cases, politics is special. It is clear that, for example, we as democratic representatives need some rights to be able to do our job. That is entirely in order and entirely behind the scandal of the treatment of the hon. Member for Ashford (Damian Green). But that has to do with constitutional matters—with the balance of power between different branches of government. It is not just about whether we feel that we ought to be given special treatment.

Mr. Djanogly: Surely the hon. Gentleman appreciates that the provisions go much further than MPs. Great concern was expressed on both sides in Committee that honourable people who give up their time on a voluntary basis for our associations, for instance, would be unfairly caught by the provisions.

David Howarth: I appreciate that point, but we must be careful not to make special rules for politics just because we know about politics and we do not know about other areas of activity in the economy and in social life.

Mr. Fabian Hamilton: Does the hon. Gentleman agree that the time of the police is better used trying to find real criminals who are causing crime in the community than chasing bureaucratic errors that were made honestly?

David Howarth: I fully support that point. I had intended to deal with the hon. Gentleman’s new clause 3 later, but I may as well speak about it now. In principle, I am fully in favour of what he says, for precisely the reason that he gives. Over the past 10 or 11 years the Government have become far too fond of creating criminal offences. They have invented more than 3,000 criminal offences, in many cases with no particular purpose in mind except to issue a press release.

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However, we must be careful to apply the same principles to everybody else in society as we apply here. I would be grateful for the support of the hon. Member for Leeds, North-East in other examples when we on the Liberal Democrat Benches try to make sure that the criminal law is not used inappropriately. We do not have the opportunity to do that now, but it is important to bear in mind—and on the whole I support his new clause—that we should apply the same argument in other cases as they come up.

I am more concerned about some of the amendments tabled by the Conservatives. We should be wary of removing civil sanctions for contraventions that are short of criminal offences. Standard regulatory practice in the outside world applies that sort of idea to a range of other activities. Why, in this case, should political activity be treated differently? If we remove any sort of civil sanction for violations that fall short of criminal violations, we are left with no sanctions at all. It is pointless to pass statutory provisions that impose obligations on people and to have absolutely no sanctions to back up those obligations. The temptation for the Government will then be to make those obligations enforceable by the criminal law, so we will end up with yet more criminal offences.

That applies even more in the case of removing the variable monetary penalties. Anyone looking at the Regulatory Enforcement and Sanctions Act 2008, for example, will see that those penalties are entirely standard. That is how regulation happens in general, and I cannot see any reason to remove such regulatory devices for the activity that we are discussing. There was an opportunity to object to them when the 2008 Act was going through Parliament; perhaps some Members did object. But given the fact that such devices represent the standard way in which regulation happens, I see no reason why what we do should get special treatment.

That brings me to amendment 74, which relates to the appeal to the High Court and on which the hon. Member for Huntingdon (Mr. Djanogly) wants us to vote. Under the 2008 Act, the standard practice—for everybody else, in every other regulatory field—is that there is no appeal to any sort of court, only to the first level of the tribunal. In giving them an appeal to the county court, we are already giving people in the line of activity that we are discussing a degree of special treatment; they have access to the ordinary courts. To go further and give people involved in politics access to the High Court would go way beyond what we offer people in other fields of activity. The hon. Gentleman said that doing so would provide for precedent. I should say that, as a matter of technical law, one High Court cannot bind another, so the amendment would not even do that. I have yet to be convinced that amendment 74 is fair in its treatment of political activity in relation to other types of activity.

I am more sympathetic on the issue of discounts for the early payment of fines. It always seemed to me that those were a rather strange provision in the 2008 Act in the first place. Paying a fine early should not mean that people pay less; it is not a matter of civil debt, simply of when the obligation is fulfilled. However, the fact that that provision in the 2008 Act makes no sense is not a reason to give the activity that we are dealing with
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today special treatment with regard to it. We should be worrying about why we passed the provision in the first place.

Mr. Djanogly: In making all those points, the hon. Gentleman runs the risk of putting the monitoring of our electoral system in the same basket as dealing with parking tickets. There is a difference between the two, and that point applies to everything that he has just said—not least, to his last point.

David Howarth: The 2008 Act deals with a whole range of topics, some of them very serious. The hon. Gentleman has to show why the special characteristics of politics, party funding and all the matters with which we are dealing should lead to the specific special treatment that he wants. I am afraid that he has not done that.

Mr. Djanogly: I would say that most people would put the running of our electoral system in a different category from that of the monitoring of commercial affairs.

David Howarth: It is in a different category, but the question is about why that different category should be treated in the specifically different ways that he is talking about. My fear is that it is simply because we in the House know more about the political process—we know far more about it than about economic and commercial processes—that we think that we ought to provide differently for it. I am afraid that I do not think that that is good enough.

Mr. Djanogly: I put it to the hon. Gentleman that the reason is that we are here to guard our democratic system.

David Howarth: Precisely right. But I want the hon. Gentleman to demonstrate that the provisions that he puts forward—in amendment 74, for example—specifically help to guard the democratic process. My central worry is that this is not to do with thinking about the function and the importance of politics but has more to do with our self-regard and our specific knowledge. That is insufficient reason to treat better an activity that we know more about than other sorts of activity that we regulate every day.

5.30 pm

Mr. Peter Hain (Neath) (Lab): My hon. Friend the Member for Leeds, North-East (Mr. Hamilton) made his case powerfully, and I understand what the hon. Member for Cambridge (David Howarth) said about our not wanting to be seen to be putting ourselves in a different category from other citizens. However, my central point is that it is not a good thing for the police and the whole panoply of criminal law and prosecutors to invade politics—sometimes, although not in my case, for party political reasons—because they often do not want to do it. It is pretty clear, from my direct experience, that the police do not welcome this practice that has grown up. We are in danger of following the American course whereby we pollute politics with all this extraneous interference.

When fraud is being committed—when an hon. Member or a member of a political party is, say, deliberately concealing a donation or seeking to obstruct justice or in some way to hinder and block the operation of the
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legislation that this Government have put in place—then those people deserve to be pursued for a criminal sanction; of course they do. But where an innocent mistake has been made involving what are complex rules, as has happened to many hundreds of Members of this House—including some here this evening, not only me—it is not sensible for the police or the whole system of criminal law to come in; it is a matter for regulation either by this House or by the Electoral Commission. I think that this Bill improves the situation.

Let us look at some examples. The “loans for peerages” case was pursued as the result of a political request. It took 15 months, nothing happened at the end of it, and the police spent a great deal of money—hundreds of thousands of pounds. The question of whether there was an issue in that case needed to be addressed by the political process—the process of transparency and democratic accountability for which this Government deserve a lot of credit for introducing. We turned our back on the old system whereby a Hong Kong billionaire could give what he liked to a particular political party and nobody knew where it was coming from, who he was or what his motive was.

The other important point about the new clause tabled by my hon. Friend the Member for Leeds, North-East—whether all its specifics are satisfactory to the House is a separate matter—is that the Electoral Commission needs to be much more accountable and needs different leadership from what it has had in the first phase of its work. If I may say so—I will not go into detail—I found it to be incompetent, dysfunctional and politically unworldly. There have been some sensible changes, with commissioners with a political background coming in. I could not believe some of the things that I experienced. One of the things that I found out in the course of this story was that if one of us were taking part in an internal party election and a member of our campaign staff, perhaps a student volunteer, got us a return to Brighton that cost, let us say, £12 or £13 off-peak, and that individual had used a credit card with a credit rating of £2,000 to £3,000—in other words, more than the £1,000 that we have to declare in relation to any donations—the commission’s view was that we would have to declare that. A £12 ticket counted as a donation in kind because of the credit card that happened to pay for it a couple of days before the money was reclaimed. I could quote countless examples—but I will not burden the House—about my own unhappy experience, which proved to me that the commission had very little idea of the political world that it was regulating.

This is not in any way intended to excuse or somehow sidestep the obligation to report on time, or the necessity for the law to be obeyed by regulated donees, which all of us are. I am simply saying that we need from the new leadership a more effective and competent commission, and one that will carry out the duties that the new legislation will enshrine. The changes that the Government have made to the Bill, which were in part provoked by the original amendments tabled by my hon. Friend the Member for Leeds, North-East and spoken to by my hon. Friends the Members for Battersea (Martin Linton) and for Carmarthen, West and South Pembrokeshire (Nick Ainger) in Committee, have made it a much better Bill. I hope that the commission’s leadership will take heed of it and start to act in a proportionate and more politically worldly fashion.

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