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We have sought to address the issue before. The Electoral Administration Bill of 2005 contained proposals recommended by the Electoral Commission for a regulated period for candidate expenditure counted back four months from the date of the election. The measure was criticised on all sides of the House, however, in view of the uncertainty that it would create for candidates and the volunteers who work to help them. The proposal
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was consequently removed from that Bill. But the potential for high levels of unregulated spending before Dissolution remains.

We said in the White Paper that we would consider a return to the principle of candidate spending regulation that existed before 2000, whereby the purpose for which expenditure is used would determine whether it is counted against the spending limit.

Mr. Alan Reid: In general, I support the new clause. However, if a national political party were to deluge a constituency with target mail urging people to vote for that party in that constituency without mentioning the candidate, surely that should count as expenditure against the candidate of that registered party. That is surely a loophole in the clause.

Mr. Wills: I will come to that point later. This is an extremely complex area. It is highly contentious, as we discovered yet again during the passage of the Bill. If the hon. Gentleman will forgive me, it is important that I go through the sequence of arguments about how we ended up where we have now ended up.

Before I go any further, I should say that no one would regard the measure as the end of the story. We always search for perfection, but sometimes we have to recognise that is somewhat further out of reach in some cases, such as this, than in others.

As I said, we said in the White Paper that we would consider returning to the principle of candidate spending regulation that existed before 2000—that is, the purpose for which expenditure is used determines whether it is counted against the spending limit. Colloquially, that is called “triggering”. It is worth noting that that principle was specifically and clearly endorsed by the Committee on Standards in Public Life in its far-reaching report of 1998. In this Bill we have therefore proposed a spending limit that would regulate all spending for the purposes of a candidate’s election, including that used before he or she is formally defined as a candidate.

Unfortunately, debate on that point was curtailed in Committee; however, I am clear that the measure does not enjoy the support of Opposition parties. I am disappointed that we have not been able to secure agreement to the proposal. Nevertheless, in our characteristic spirit of openness and co-operation, we have listened to the views put forward by hon. Members and tabled this group of amendments, which will retain the existing consideration of the purpose for which expenditure is used and, additionally, introduce a fixed point in time from which that expenditure is regulated for certain elections. I believe that that will achieve more effective regulation of spending and minimise uncertainty for candidates.

Although there is usually uncertainty about whether a general election will be called at any particular point, the one point of absolute certainty is the last possible point by which a Parliament must be dissolved; when a Parliament enters its final months, we can be certain that a general election is imminent. In those circumstances, those intending to stand as candidates will have formed their intention and many prospective or already declared candidates will be likely to begin campaigning well in advance of Dissolution. We believe that in those circumstances it is possible and desirable to provide for a longer regulated period for candidate expenses.

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Bob Spink: I congratulate the parliamentary draftsmen on how they have tackled this complex area, and I am delighted that this is not necessarily the final word on the issue. The Minister will agree that elections in this country have often been held six months before the final date at which an election must be called; that is the aim of any Prime Minister and generally the sensible thing to do. Why can the restricted period not be longer than the five months? If it were a 10-month period, it would take account of the real period during which candidates would be expected to start to push, particularly in marginal seats?

Mr. Wills: The hon. Gentleman has tabled an amendment to that effect, and no doubt we will get on to it in due course.

We have come to our position because we think that the current situation, in which in effect spending is regulated only for the month or so after Dissolution, is not desirable. It is an unintended consequence of previous legislation and we need to improve on it; we believe that the amendments would do that. Under current legislation, an individual generally becomes formally regarded as a candidate only on the date of the Dissolution of Parliament, the result being that campaigning expenditure is limited only from that period onwards. The amendments introduce a second regulated limit for candidate expenses. It would only regulate candidate expenditure between the point at which 55 months of a Parliament had elapsed and the date at which an individual formally became a candidate. As that is generally the date of Dissolution, in most cases we refer to it as the “pre-Dissolution limit”. At that point, the existing candidate spending limit will come into force.

The new proposal contains a key aspect of the previous triggering proposal, in that it is capable of applying to what people do before they are formally regarded as candidates. The proposed new limit would apply only if a Parliament ran for more than 55 months. When that happens, there is no doubt that an election will take place shortly, so any uncertainty about whether an expense is really an election expense is greatly reduced. The proposed new limit would not apply for shorter Parliaments. In those cases, the uncertainty about when an election will take place makes specifying a longer regulated period more difficult. In those circumstances, only the current post-Dissolution limit would apply.

It is our intention that the new limit will regulate the same types of expenditure as the current limit. As with the current limit, it will regulate all spending on specified matters which are used

As with the current limit, the new limit will regulate all expenditure that is used during the regulated period, even where that expenditure is incurred beforehand. That means that it will not be possible for an individual to seek to avoid the limit by stockpiling campaign material shortly before the regulated period begins for use afterwards. However, the new limit will not have retrospective effect; that is to say, it will not apply to any expenses that are incurred before commencement of the clause and then used at a time when the new limit applies. As with the current limit, the level of the spending limit will vary from constituency to constituency according to the number of electors and the nature of the constituency.

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9.30 pm

Andrew Mackinlay: I am truly trying to follow this, but I am a little bewildered. In a situation such as that in 1964 or February 1974, what is the regime as regards expenses in the period where it is unlikely that a Parliament is going to run for the duration? If there were a hung Parliament, surely all the big battalions would have been trying to pour money into what was an uncertain period of a few months.

Mr. Wills: I understand my hon. Friend’s concern, and as a matter of common sense I can see the force of what he says. However, this measure is predicated on the one thing that we can be absolutely certain about. Of course he is right that as in 1964, with a very small majority, or 1974, with, essentially, a hung Parliament, the likelihood is that there would be an imminent general election. However, we do not know—that is the difference. We know, because of statute, when a Parliament must end, but in those circumstances, although it is likely that there would be an imminent general election, we do not know that. We do not know what deals will be cobbled together; ingenuity and hunger for power are extraordinary things. The whole basis of this proposal is that it is predicated on what we know for a fact, taking into account all the concerns that people have raised about uncertainty. I hope that that clarifies the position for my hon. Friend.

In general, although the level of the spending limit will vary from constituency to constituency, it will amount to around £30,000. The specified sum may in future be increased by order because of inflation or following a recommendation from the Electoral Commission. It may be that a Parliament runs for over 55 months but does not run to its full term. In that event, the amendments provide for a pro-rating of the limit. We are open to views on the appropriate fraction of the limit that should apply in those circumstances. We have made our best guess of what would be a sensible and reasonable approach, and we are open to representations on that. However, we have provided that the pro-rating should be staggered to take account of certain fixed costs incurred as part of campaigning.

David Howarth: I have come across this point about fixed costs before, but I ask the Minister to list what he thinks they are. In most campaigns, the fixed costs will have been incurred long ago and all that one has in the run-up to the election, five months before, are variable costs.

Mr. Wills: As I say, we are open to representations on this. We want to take a view that as far as possible commands consensus. If the hon. Gentleman wants to come forward with an alternative proposal, I can absolutely assure him that we will consider it with an open mind, as we have done with all the representations that we have received.

We propose that the new clause and associated amendments will be commenced by order following Royal Assent. The exact date of commencement is to be determined and will in part hinge on the timetabling of a debate to consider the appropriate use of parliamentary allowances during the longer regulated period. Regardless of the date of commencement of the new clause, for the sake of clarity and simplicity we have provided that
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should the new limit be needed for the current Parliament, it would only begin to regulate expenses used after 1 January 2010. That is slightly later than the 55- month point, but we do not consider that this significantly undermines the purpose of the provisions.

Mr. Maude: Will the Minister be a little more specific about the proposal that the Government plan to bring before the House on the use of Members’ allowances during this equivalent period? He will know from previous discussions that we are concerned about symmetry in this case. Members of Parliament have large allowances available that can be used for pro-active communication with their electors. When candidates are affected by this measure, which we support, to control spending during the last few months of the Parliament, the House must put in place rock-solid arrangements regarding the use of allowances, whether for communications or for incidental expenses, to do stuff that promotes Members of Parliament in a way that is equivalent to a candidate’s campaigning. I am grateful to him for the indication that new clause 17 will not commence until such matters have been decided, but it is crucial that the House understands exactly what is proposed, and that there is no intention to commence the provision until that happens.

Mr. Wills: The right hon. Gentleman knows that we understand his concerns about symmetry, which is why we have said what we have said on this matter. We heard such concerns expressed forcefully on Second Reading and we are taking them into account. Some of the issues are complicated, but we accept the point about symmetry. I can give the right hon. Gentleman the assurance that he wants on commencement. The House will know exactly what we will propose in due course.

Martin Linton: In view of the complete absence of Conservative Back Benchers during this debate—I cannot think why—would my right hon. Friend care to comment on the common-sense view that many Conservative candidates, without any constraints on their spending, are more likely to start their campaigns in September and run them for six months until the expected date of the election, rather than in January? It would be more valuable to have these commendable controls in place, not from the 55th month, but from the 50th, in order to give a good six-month run, thus preventing the distortion to the result of the election that could be caused by the fact that very rich candidates are able to put huge amounts of their own money into their election campaigns.

Mr. Wills: I understand my hon. Friend’s concerns. I suspect that the hon. Member for Argyll and Bute (Mr. Reid) may be able to make a similar point, so I shall give way to him.

Mr. Alan Reid: If the Government are considering the communications allowance used by Members of this House, can they also look at similar allowances used by those in devolved Parliaments or Assemblies? For example, at the last general election, my opponent was a Conservative list MSP, and it would be unfair if a candidate in such a position were allowed to use the Scottish Parliament equivalent of the communications allowance. All the Parliaments’ communications allowances need to be looked at.

Mr. Wills: I understand all of those concerns. We have done our best to reach a consensus on the agreements. They are not ideal, and it may well be that there is no
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such thing as an ideal solution. Wherever we strike the balance, there will be problems, but we regard the provisions as a significant improvement on what exists already, and on that basis, I hope that the House will be able to support the new clause.

Mr. Maude: I warmly welcome the Government’s climbdown on this issue; it is a long-overdue return to an attempt to reach consensus. The Minister is completely right that it is not possible to reach perfect agreement. The Justice Secretary said last summer that he believed that there was a consensus about reintroducing a trigger. When I heard him say that, I looked at what I said in response to his statement on 16 June last year, to see whether I had been at all ambivalent about it. I found that I had said that it would be

I can see that that was most equivocal, and did not make it at all clear that we had reservations. I must resolve to stop speaking in code and say exactly what I mean.

The Government’s decision is a welcome return to consensus. The proposal to return to triggering was universally condemned as a return to an unworkable, unwieldy rule that had long outlived its usefulness. It was an attempt to appease Labour Members who were feeling the hot breath of their electoral nemesis on their necks, convinced that their salvation lay in controlling the wall of money that seemed to be heading their way.

I know that the hon. Member for Battersea (Martin Linton) has been a long-time campaigner on the subject and is deeply concerned about it. I can reassure him that the amount of support being given by the central party to the excellent candidate against whom he will be fighting the election, whenever it comes, is actually very small. He is right to be concerned about his electoral future, not because of the amount being spent but because there is an outstanding Conservative candidate in Battersea who has a brilliant, enthusiastic team that she has inspired locally. That is where his nemesis lies, and his salvation does not lie in provisions such as he seeks.

Martin Linton: I can assure the right hon. Gentleman that I campaign not for myself in any way—I am totally confident about the result in my constituency—but for the principle that candidates’ spending should not be unlimited. The Conservative party has subscribed to that principle for the past 100 years, but as the result of an unintended change in the law, it has suddenly embraced the freedom to spend as much money as it likes. Many of my colleagues of all parties will bear the brunt of such unrestricted spending, and it is an insult and an affront to democracy that the House should support it.

Mr. Maude: If the hon. Gentleman says that his campaigning was entirely high-minded and selfless, of course I accept that—it is obligatory that we must. I note, however, that a dispassionate viewer would say that the matter has a considerable effect on his constituency. I reassure him that it is not what is causing him a problem in his constituency. That is entirely to do with the fact that there is an outstanding candidate there, who is campaigning night and day with a brilliant team of enthusiastic volunteers.

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Mr. David Winnick (Walsall, North) (Lab): Is the right hon. Gentleman familiar with Lord Ashcroft’s words? He said:

at the last election,

Many of us would consider that an abuse of the electoral system.

Mr. Maude: Frankly, it is very hard to see how it is an abuse for candidates to raise money to fight their campaigns. Why is that any more of an abuse than the hon. Gentleman and his colleagues raising large amounts of money from the trade unions in a way that is much less transparent?

Mr. Winnick indicated dissent.

Mr. Maude: The hon. Gentleman seems to think that that is different, but it is not. The argument is completely bogus.

Mr. Gordon Prentice (Pendle) (Lab) rose—

Mr. Maude: I give way to the hon. Gentleman, another Member with a very marginal seat and an outstanding Conservative candidate hot on his heels.

Mr. Prentice: The candidate whom I defeated last time was Jane Ellison, who is standing in Battersea this time. Does the Gentleman feel comfortable about taking barrel loads of money from the self-confessed tax exile, Lord Laidlaw?

Mr. Maude: I shall simply cite the Justice Secretary when that matter was raised in a debate a little more than a year ago. He said that what mattered was that a donor was legal and permissible under legislation that he had piloted through Parliament. He also said that an individual’s tax status was a matter for that individual.

9.45 pm

I welcome the Government’s death-bed conversion and I am grateful for it. I stress the point that I made in my intervention on the Minister. It is essential that the House should provide for preventing the use of allowances by incumbent Members of Parliament to promote themselves proactively, whether through newsletters or direct, unsolicited mail, to constituents during an election period. If the provision is to be fair and democracy is to work properly, there must be absolute symmetry. It would be outrageous to place statutory constraints on candidates’ spending out of money that they have raised privately while Members of Parliament continued to be able to spend taxpayers’ money on promoting themselves in their constituencies.

I did not hear from the Minister with the clarity that I sought the commitment that the new clause would not commence without a cast-iron resolution of the House to prevent the use of the allowances for such proactive purposes.

Mr. Wills: I am sorry that the right hon. Gentleman did not hear a clear commitment. I thought that I made it clear that the two matters were linked—one depends on the other—but that, first, we must get broad cross-party consensus on what needs to be done about parliamentary allowances. We are not quite there yet.

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