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2 Mar 2009 : Column 597

Bob Spink: I believe that indexation as proposed in the Opposition amendments would complicate the Bill and lead to a lack of clarity. It would also add very small, insignificant sums that would not substantially change the position on party funding or the complex process that donors must undergo. In fact, it would change things very little and would only introduce massive complexity. Tiny percentages would be added, creating a rather strange figure for the Electoral Commission to monitor, at a time when we are increasing these sums by massive percentages—150 per cent., or 50 per cent.—which would wipe out the impact of any indexation over a very long period. Does the Minister not think that the Opposition parties are trying to have cream on their sticky buns?

Mr. Wills: Let me take a moment in which to contemplate that enticing image. [Laughter.] No—I have calmed down now.

As always, the hon. Gentleman makes an interesting point that has some merit. We did consider it, but I am afraid that in the end we rejected it. Let me explain why. Obviously, I cannot speak to the Opposition amendments—no doubt the Opposition will do that very well themselves—but I will explain why I was persuaded on this point, in an effort to reassure the hon. Gentleman.

Of course the hon. Gentleman is right about complexity. We should always try to avoid it, for precisely the reasons that he mentioned. We want to make the compliance burden as light as possible, although there has to be a compliance burden: let there be no doubt about that. Compliance is essential, transparency is essential and accountability is essential, for all the reasons that I have already given. Complexity can militate against those elements—I will concede that point to the hon. Gentleman—but, as always, it is a matter of striking a balance. I think it important for us to accept and entrench the principle of a threshold—that is implicit in all previous legislation, and it is implicit here—along with the principle that, although where we strike the balance is a matter of judgment, wherever we strike it there is a threshold below which donations should not be recorded.

What persuaded me of the merit of the Opposition amendment—and the reason for our intention, subject to a condition that I shall explain in shortly, to table our own amendments in the House of Lords to achieve the same effect—was the fact that one part of it does entrench the principle of there being a threshold. That means that we will not have to return to the threshold, because we will not see it being eroded over time by inflation. Of course, under this Government we have had record low levels of inflation thanks to the prudent management of my right hon. Friends the Prime Minister and the current Chancellor of the Exchequer, and as a result of that historic achievement we face a global recession much better equipped than we would have been otherwise. Nevertheless, we cannot legislate for future Governments, and we do not know how successfully they will handle whatever inflationary challenges may emerge in future. We all remember what happened under the previous Conservative Government—I know the hon. Gentleman does—

Chris Ruane (Vale of Clwyd) (Lab): Remind us.

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Mr. Wills: Inflation went up to unsustainable levels—

Chris Ruane: How much?

Mr. Wills: It was 22 per cent., which was a huge burden on my constituents and those of every Member. It is a time we all regret; even Conservative Members now regret that they let the economy get so badly out of hand. Sadly, we cannot be confident that they have learned the lessons and the situation may just happen again. At that point, we have to be clear about the advantages of indexation, so I am glad that Opposition Members have recognised the danger that inflation may let rip again should the Labour Government—for whatever reason—not be in power indefinitely.

James Duddridge (Rochford and Southend, East) (Con): I fear the Minister may be losing his way. Although I disagree with his history lesson, which was somewhat more enjoyable than sitting on the Bill’s Committee, despite that being enjoyable too, I welcome his concession on indexation. Will he outline the methodology for his approach in the Lords to overcome some of the problems of indexation that have been mentioned—such as the small increases—so that we do not have to come back to those issues, as we have had to do since the Political Parties, Elections and Referendums Act 2000, with the 25 per cent. increase, and can allow for the sensible increase the Minister proposes?

Mr. Wills: Those are important points, but if I may I shall conclude the point I was making about the value of the Opposition amendment. I look forward to hearing what Opposition Members have to say and I have no doubt they will correct me if they think I have misunderstood the purpose of their proposal. I am merely setting out why I am persuaded that we should accept the principle behind it. The hon. Gentleman raises an important point about how we can do that and I shall deal with it in a moment.

To return to my earlier point, it is important to entrench the principle of indexation; we do not want to find that the thresholds fall a long way behind inflation and that we have to come back to the House. Every time we come back to the House for these sorts of discussions, we hear contributions such as those from the hon. Members for Castle Point and for Perth and North Perthshire (Pete Wishart). They are quite properly scrutinising what the Government propose and our approach to Opposition amendments. That is what they should be doing. They scrutinise us vigorously and I am grateful for it, because it will enable the Bill to be more muscular and to achieve its effect. I have no doubt whatever about that. However, in doing so they call into question public trust not just in the Government, the Opposition or any of the minority parties, but in the whole political process. That is not necessarily helpful. We need to be scrutinised and we must be accountable, but constantly having to revisit subjects such as these feeds a pervasive cynicism in the political process, which is not always justified. We have to be careful about that.

Indexation seems a practical and sensible way forward, subject to the important point made by the hon. Member for Rochford and Southend, East (James Duddridge), to which I shall return shortly. In the meantime, I hope the hon. Member for Castle Point is reassured by my
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understanding of the point behind the proposal—that we entrench the principle of a threshold. Once the House has collectively agreed what it should be, it will be entrenched and can be uprated in line with an appropriate measure of inflation.

The hon. Member for Rochford and Southend, East made an important point. The measure of indexation should command public confidence, which is what I think the hon. Member for Castle Point wants to achieve. We all agree that we want a measure that commands public confidence. The hon. Member for Rochford and Southend, East was alluding to the fact that we could use a variety of indexes—with or without housing costs or earnings. In the past, those matters have been of great contention in the House in relation to other areas of public policy, so we have to be careful about which measure we choose. We also have to be careful about how exactly it will translate into practice. We do not want to put an excessive burden on volunteers; nor do we want to put an excessive compliance burden on the Electoral Commission, which has other valuable missions to perform.

As I said, I propose to resist the Opposition amendments for the reasons I have given, but I shall consult statisticians and Members to see if we can come to an agreement about the measure of inflation that would command the broadest possible consensus and then introduce amendments in the Lords.

Mr. David Winnick (Walsall, North) (Lab): Many times today I have heard my right hon. Friend talk about consensus, reaching the right balance and the rest of it, but given the impression that some Labour Members have, and bearing in mind the decision that was reached when we last debated the Bill, may I suggest that we should not surrender too much? Otherwise, it is not consensus; surrender would be a more appropriate word. I hope that my right hon. Friend bears that in mind when he says that he will consider other aspects of the matter.

4.15 pm

Mr. Wills: My hon. Friend makes an important point, and I was about to address it. Whatever the uprated figure is, we will almost certainly need to lay a statutory instrument before Parliament to make the figure clear. The House will have an opportunity to express a view on it. Each change will mean a change to the figure in primary legislation; a statutory instrument is probably the best way of achieving that.

James Brokenshire (Hornchurch) (Con): The Minister is making an important point, not just about the methodology and what rate or index is used, but about the method by which it would be implemented. Does he agree that there is some merit in setting out in the Bill the approach that is to be taken? We are considering transparency, and are seeking not to give the impression that things are being hidden away or swept under the carpet. However, sometimes simply putting the information in a statutory instrument may inadvertently give an impression that that is happening. Perhaps the best way to emphasise transparency is to express the information as clearly as we can in the Bill.

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Mr. Wills: That is a good point, and it is certainly one of the issues that we will bear in mind when formulating the amendments that we propose to bring before the Lords.

Rob Marris (Wolverhampton, South-West) (Lab): On indexation, my right hon. Friend has already talked about simplicity, and we are all well aware that most political parties are run almost purely by volunteers. May I put it to him that when he considers what indexation regime to introduce, he should consider indexing only once in the lifetime of each Parliament? Volunteers in particular get a figure in their head and then do not move with the times. I understand that; it is not their job to do so—they are volunteers. We could make the change once each Parliament—perhaps, say, within two months of a general election. That would have the virtue of simplicity, which would assist volunteers.

Mr. Wills: As always, my hon. Friend makes an extremely important point. That is one of the issues that we will have to consider. As I have said, we cannot guarantee that this Government will be in power indefinitely. We have to cater for the risk of inflation taking off, as it has in the past. We have to be careful and sensitive to what may happen in future. However, he makes an important point about volunteers. As I say, we will consult hon. Members from all parts of the House informally on that. I hope that, in the Lords, our amendments will command a broad consensus. As long as this House expresses its view on the principle, we will go forward. For the reasons that I have given, I hope that Opposition Members will withdraw their amendments, but I look forward to hearing what they have to say.

Amendments 121 and 122 are Opposition amendments on limits on donations. During the passage of the Bill, we have heard a good deal of debate about what is a reasonable excuse for non-compliance with the regime in the Political Parties, Elections and Referendums Act 2000. I think that we can all find some sympathy for an individual who makes a small, inadvertent error and who subsequently fears criminal prosecution by the police, or action by the Electoral Commission. However, we have also been clear that if we want to deal with such concerns, we must ensure that we do not create a loophole to be exploited by the less scrupulous individual, who might seek to conceal a larger wrong behind the claim of a small-scale error. We have considered those concerns and believe that there is merit in addressing them. I am happy to confirm that we intend to introduce amendments in the other place to reframe some of the offences in the 2000 Act that might currently be so widely framed as not to take full account of inadvertent errors for which there is a genuine, reasonable excuse.

I hope that that approach will be welcomed by Members who are concerned that the current framing of certain offences is too stark, binary and polarising. I hope that they will be reassured that the Electoral Commission will be better able to apply its reasonable judgment at the outset of considering a potential case. We have listened carefully to all the concerns that have been expressed about that and taken account of them.

Bob Spink: I am not consoled or persuaded at all. In fact, I am deeply concerned that, yet again, the Opposition parties are seeking to relax the high standards to which
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political parties and donors are to be held. Those standards are intended to ensure that what they do is transparent and available to the public. The public will look at the House with deep suspicion and wonder where the Opposition parties are coming from. Why do they not want to be held to account? Why do they want to create little loopholes and escape routes for their friends, to enable them improperly to give more money to political parties?

Mr. Wills: I am afraid that I do not accept that for one second. We are not creating a loophole or relaxing the criteria at all. The British people, on whose behalf the hon. Gentleman professes to speak, are driven by the principles of fairness and justice. We are trying to ensure that those principles are applied. People can make small, inadvertent, genuine errors. Who among us can hold his hands up and say, “I have never made a single mistake, no matter how small, at any cost to anyone else”? I am not sure that even the hon. Gentleman will say that. If he wants to stand up and tell me that he has never made a mistake with the best of motives, I am happy to let him do so. Is he going to? I think not.

Bob Spink rose—

Mr. Wills: Oh, he is. I give way to the hon. Gentleman.

Bob Spink: Amendment 121 would insert an escape clause, stating:

Surely we are placing too much responsibility on the commissioners to judge the political climate of the time. Why would anyone want to stick an escape clause in legislation such as this? Do they anticipate that their supporters and donors will make small, inadvertent errors?

Mr. Wills: I believe that the hon. Gentleman was reading from the Conservative amendment.

Bob Spink: Yes.

Mr. Wills: We intend to resist that amendment. The hon. Gentleman is not reading from the amendments that we propose to introduce in the other place, because they have not been written yet. Before he criticises what we are planning to do, he might want to see what it is.

David Howarth (Cambridge) (LD): There are dangers of the sort that the hon. Member for Castle Point (Bob Spink) mentions, and I hope that the Minister will take them into account when producing his own amendments. In particular, it is right to point out the danger of defining the existence of a crime according to the later opinion of the commission. That is never a correct way of framing a criminal offence.

Mr. Wills: As always, the hon. Gentleman makes an extremely important point. He is right that we have to strike a balance, and we are sensitive to such concerns. We made it clear in Committee that the perception of the public is paramount, and we will abide by that principle. However, there is a problem that we cannot
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ignore, and we must address it in the best way we can. We are addressing it by reframing the offences in question so that they are applied only when necessary.

Bob Spink: I was making a point about the Minister’s attitude towards the Conservative amendments. I would be more sanguine about the amendments if I did not know the Conservative party’s track record in driving a coach and horses through election law and the public test of what is acceptable—for instance, by taking money from people who do not pay tax in this country to fund marginal constituencies by £20,000, £30,000 or £40,000 a year before the election is even declared. I do not want to give the Conservative party any loophole through which it can jump; nor do the public and nor do those in the media, who are watching us carefully in the House.

Mr. Wills: The hon. Gentleman’s relationship with the Conservative party is infinitely fascinating—it is the stuff of drama—and I should be delighted to explore it with him at some other time, but I should like now to make a little progress with the new clause and amendments. As I say, we want to table amendments in the other place, and I hope that most Members will welcome that.

Martin Linton: Without wishing to disagree with the hon. Member for Castle Point (Bob Spink) in any way, may I say that I welcome my right hon. Friend’s announcement that he will introduce an amendment in the other place on the issue, and I hope that it will not simply reflect the Opposition amendment, which puts the onus on the Electoral Commission to determine what it regards as a reasonable mistake, but give some latitude to candidates to seek relief through the courts where they feel that they have made a late declaration that was unintended.

Mr. Wills: I am grateful to my hon. Friend; I was about to make exactly that point. Specifying the phrase

is not a factor that adds anything useful on a practical level. The commission is already compelled to act reasonably when it considers civil sanctions. If it fails to do so, that is grounds for appeal against any decision to impose a sanction. So what I suspect is the desired effect of amendment 121 is already achieved in the Bill by other means. In fact, although I accept that that amendment is well intentioned, it would be distinctly unhelpful in that—I think that this is the point that has been made—it would make the commission’s opinion central to the offence. Accordingly, in a case where the police and the Crown Prosecute Service decided that an offence was so serious that it warranted criminal prosecution, rather than civil proceedings instituted by the commission, a court would still be required to consider what the commission thought to decide whether an offence had been committed. Surely, that cannot be the intention, and I certainly do not think that it would be right.

Rob Marris: I urge my right hon. Friend to resist amendment 121, which would put the onus on the commission and make life very complicated. However, I also urge him to look very carefully at amendment 122, which would change a subjective test into an objective test of whether something was an individual’s reasonable belief and would therefore make it much easier for any
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tribunal, court or whoever to decide whether any shenanigans had taken place. Therefore, although my right hon. Friend and the Government might not like the exact wording of amendment 122, it would tighten things and it contradicts amendment 121. We would be better with amendment 122, not amendment 121.

Mr. Wills: Again, I have heard what my hon. Friend says, and he has got a point. I will come to our view on amendment 122 very shortly, and I then want to conclude because there is a lot of business to get through and I need to let other Members speak.

On amendment 121, I am also concerned by the use of the phrase “innocent mistake”. I think that we all agree that the commission must act proportionately. It has repeatedly said that the new range of civil sanctions that we propose will help it to achieve that, but the phrase “innocent mistake” carries no legal weight. Indeed, it is quite vague and confusing. I do not believe that it is helpful. In any event, given the nature of the conduct required for the offence, which I have already described, that or similar wording would not add much to ensuring that inadvertent errors were not unfairly penalised.

Amendment 122 would insert a requirement for an individual to make a declaration about their reasonable belief, rather than requiring them to act to the best of their knowledge and belief, as the Bill is currently drafted. To adopt that wording would substantially weaken the requirement and make it inconsistent with other declaration requirements contained throughout the Political Parties, Elections and Referendums Act. I think it is right that we ask the best of people, rather than something less, given that they will be penalised for a failure only if they act intentionally or recklessly in making the relevant declaration. As I have said, the requirement for an act to be carried out knowingly or recklessly will not, in my view, catch a person who makes a statement in good faith. That strikes the right balance between rigour and fairness in this context, and I do not think we should disturb that balance.

Given that, and given the assurances I have given about amendments we intend to introduce in the other place, I hope Opposition Members will see that these amendments are unnecessary, and that they will withdraw them.

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