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The Electoral Commission seems to have concerns about the amendment. It says that it could considerably weaken the eligibility of declarations made under clause 8. However, I put it to the commission that we need a mechanism to deal with the issue. To that extent, the policy of straight rebuttal that the Minister advanced in Committee was not productive. However, he seems to
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have made a significant about-turn on the issue, at least in general terms; I was heartened by what he said. Nevertheless, so far there have been no specifics, so we will press amendment 121 to a Division at the appropriate stage this afternoon.

Mr. Wills: I am anxious that the hon. Gentleman should not be under any misapprehension. I said to him that I did not believe that the offence in new section 54A(6), with which these Opposition amendments are primarily concerned, is one of the offences that we consider too wide at the moment. We are bringing the amendments forward in the other place, and as I have said, we will reframe some of this. We have, as always, listened carefully to what hon. Members have said, particularly the cogent arguments made by my hon. Friend the Member for Battersea (Martin Linton) in Committee. We want to achieve the stated aim, but not in this context. Some specifics have already been given today, and I would not want the hon. Gentleman to be under any misapprehension.

Mr. Djanogly: I am thankful for the Minister’s putting the record straight. That makes it more important that we request a Division on amendment 121.

Amendment 122 would change the requirement for a declaration under new section 54A(1) to be made

by inserting a less oppressive requirement of “reasonable” knowledge. As it stands, the Bill imposes a considerable obligation on the donor by requiring them to apply the highest level of their knowledge and belief in stating whether subsection (2) applies. Subsection (2) applies if another person has provided the donor with money or another benefit in excess of the threshold in subsection (2)(b). It therefore has two layers: the fact of the provision and the value of the provision. In the case of the latter, subsection (2)(b) applies if the “value of the benefit” exceeds the threshold. Satisfying that requirement could be especially difficult. Likewise, it may be equally tough to apply one’s best knowledge in deciding whether another person has provided a benefit

That is emphasised by the lack of an obligation in the Bill for the commission to provide guidance on valuing benefits, so the potential to catch out honest donors is considerable. The provision implies that the person must use all efforts to ascertain whether a vague link or high value of an obscure benefit requires a declaration. When we consider the sanction for failure in this respect, we see that that is a tough standard to satisfy.

In short, the provision can serve only to discourage donations and engagement with the political system. I remind the Minister that he accepted the principle at stake in Committee, where he said:

That being the case, why not incorporate it clearly in the Bill? This requirement is oppressive and potentially counter-productive to the wider goals of the legislation. Our amendment seeks to temper the Bill and bring it into line with the mutual expectation that reasonableness, rather than best knowledge, is the correct requirement in these circumstances.

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James Brokenshire: My hon. Friend, and indeed the Minister, talked about the concept of acting in good faith. To that extent, there is some commonality of approach in trying to deal with good faith actions and bad faith actions, if I may use those terms. That is difficult to frame in a legislative way. Does my hon. Friend agree that there is an issue as regards the “best endeavours” obligation—the extent to which people need to make investigations to ensure that they are satisfied—and that there is, equally, a correlation with the recklessness test that appears later on as to whether an offence is triggered? Does he agree that a combination of those steps could lead to uncertainty, which I assume relates to the good faith that he is trying to achieve?

Mr. Djanogly: My hon. Friend makes an interesting and valid point that I hope will be taken on board and considered by the Minister as he reviews the provision as a whole.

Rob Marris: As I understand amendment 121, the hon. Gentleman seeks to apply a subjective test to actions that may have taken place under new section 54A(2)(a) and (b). However, the amendment does not narrow things that much. I can see the mischief in subsection (2) that he is trying to address, but his amendment does not refer to that subsection, so it seems too widely drawn.

Mr. Djanogly: The hon. Gentleman may have a point. We presented two defences that need to be reviewed, and perhaps they are not as connected as they should be—something that we can review. He agreed conceptually with one of the defences that I advanced, and found interest in the other one as well, so we are talking along the same lines to a great extent. I agree that we would want to look at amendment 122 further as we moved on to the later stages, and that will be done in the other place.

5 pm

Amendment 8 was tabled by the hon. Member for Leeds, North-East (Mr. Hamilton). It would require future donation and transaction reports published pursuant to section 62 of PPERA which relate to a relevant donation by an unincorporated association to include the names and addresses of all donors donating £5,000 or more to that unincorporated association, and the names and addresses of all of the members of that association. Essentially, it is a look-through provision in respect of which we agree with the Electoral Commission; it is too widely drawn, such that it is onerous and disproportionate. I do not want to spend too long on it because it has been effectively superseded by Government new clause 20, which we will come to in a later grouping.

Finally, I address our amendments 123, 126, 127, 128, 130, 132, 134, 135, 136, 137, 138 and 139, which all provide for indexation of the remaining threshold sums. As I said, we believe that they are important provisions that will ensure that inflation does not leave the thresholds at an excessively low real level, and that the figures will increase in line with inflation. Some have said that they do not like the proposals or that there is no practical need for them for various reasons, including that section 155 of the 2000 Act already allows the Government to increase thresholds to reflect changes in the value of money. That is all very well in theory, but in practice, Parliament will have other things to do than reconsider those figures annually. That is why such provisions
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should go into the Bill, and why we were happy to hear from the Minister that that point has been conceded by the Government. We look forward to receiving his amendments during further stages in the other place; I also appreciate his point about the need for a rounding figure to keep the figures clear and unconfusing. We will be open-minded on how such a provision is best put into effect.

David Howarth: This is one of those odd occasions where I was in favour of the new clause the Minister was proposing until I heard his reasons for it. I could have understood an argument that said, “These figures take no account of the rate of inflation since 2000, and there is a need to stick to round figures because people do not understand small fractions, so one may as well increase the number upwards to the next round figure and leave it at that for a long time.” The figures are nine years short of where indexation would normally get us, so one could then have said, “We don’t intend to change the figures for a while.” That would be especially important given the fact that inflation is now very low—in fact, we are looking at deflation.

Unfortunately, however, that was not the Minister’s argument. He suddenly came out in favour of some form of indexation and said that the figures should be increased now and then indexed. That is going too far in the direction of reducing transparency. The Minister quite rightly said that we do not have any scientific evidence about public opinion on this matter, but I caution him against making too many assumptions about whether public opinion would find what he proposes acceptable. I would be happy for him to do some research to show me that I am wrong, but to increase the figures by 50 per cent. and also to index, is to lay ourselves open to a charge that we are going too far in one go.

Mr. Wills: I do not want to interrupt the hon. Gentleman unduly, but I did make the point that we are all making judgments about the matter. I am not making any assumptions and we are making the best judgment that we can. I have certainly said, quite explicitly, that if our judgment about the matter is proved wrong, we shall be happy to revisit it. There is no science about the matter and I can assure him that I am not making too many assumptions.

David Howarth: I am glad to hear the Minister being suitably modest about his proposal, but I would have preferred him to have given a more positive reply to the suggestion made by the hon. Member for Battersea (Martin Linton) to have a review only once a Parliament, given the uplift suggested in the figures. Indeed, a revision once every two Parliaments might be appropriate, given the size of the initial uplift.

There is also an interaction between new clause 19 and new clause 1. In a way, it makes no sense to decide on new clause 19 until we have decided on new clause 1, because we have to decide whether transparency will be the only mechanism for controlling donations, as it currently is. Where transparency is the only mechanism, there is a very strong case indeed for making that transparency provision as strong as possible and for keeping the limits as low as possible.

However, if we were to adopt a cap, that would be the primary way of maintaining the public’s confidence that—to use the Minister’s words—people are not buying
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influence in politics. The transparency provisions would then provide a secondary way of maintaining that confidence. In those circumstances, one might come to different conclusions about where the transparency line should be drawn. I do not intend to divide the House on new clause 19, but given what the Minister said, I am rather more worried about it now than I was when we started our consideration of it.

The hon. Member for Huntingdon (Mr. Djanogly) said that he would like a Division on amendment 121. However, I will not be able to support him, and not just because of the technical reason—in fact, it is far more than a technical reason; it is an important reason—that I gave in an intervention. His amendment 121 would make the commission of a criminal offence dependent on what an administrative agency later decided about the circumstances that prevailed when the defendant acted. That can never be the right way to write a criminal offence.

However, that is not my only reason. Rather, I am entirely puzzled about how the defence would work in the precise circumstances that the hon. Gentleman described. As was made clear in an intervention on him, the Bill suggests that

However, after that he wants the Bill to say that it is not an offence if,

I just cannot see how one can knowingly make a false declaration innocently. If someone makes a false declaration and they intend it to be false, it can never be made innocently.

The only circumstances that have been raised are those where someone has been reckless, but what does recklessness mean in such circumstances? It means knowingly—consciously, subjectively—not caring whether what one says is true or false. I cannot see how that can ever be done innocently either. I am afraid, therefore, that I cannot support amendment 121.

The crucial question in all the amendments that we are considering is public confidence.

Mr. Djanogly: Is the hon. Gentleman therefore saying that he will not support the insertion into the Bill of any provisions to deal with innocent mistakes?

David Howarth: As the Minister said, it depends what the offence is. There is scope for an innocent mistake defence where the offence is strict, or somewhat strict, in the way that it is drawn up. However, where the offence is one of knowingly or recklessly making a false statement, it is difficult to imagine any circumstances where that could be done innocently.

As I said, the key criterion in all these debates is public confidence, and my doubts about new clause 19—although not enough to encourage me to divide the House—are based on precisely that issue. Will the changes maintain public confidence? My reason for opposing amendment 121 is exactly the same, because I do not think that making contradictory laws ever maintains public confidence.

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James Duddridge: I welcome the Minister’s attitude towards new clause 19. As a result, my comments will be quite brief. I welcome the increased donation limits, because they will mean that political parties will be less reliant on public money, trade union money and businesses’ money, which is bound to be a good thing.

I would welcome hearing from the Minister by how much he predicts overall private donations will increase as a result of the increased thresholds. Some people who now donate at a level just below the threshold will donate at a level just below the new, higher threshold. That is not for any criminal reason, or for any other reason that might make us uncomfortable. I can give the House three examples of people to whom I have spoken about this. The first is a bailiff, who wanted to contribute to a political party, but who did not want his name in the public domain, and who has a policy of keeping his name and address private. The second was a constituent who had won quite a bit of money on the national lottery, and who was conscious of the need to keep their name out of the public eye for fear of receiving unsolicited requests for donations. The third was a relatively junior civil servant who wanted to make quite a large contribution to a political party, but who felt that that might go against them in their workplace.

Conversely, some people might increase the amount of money they donate because they want it to appear on the register. For example, I was considering making a £50 donation, having met Rebecca Harris, the Conservative candidate in Castle Point. That would have been below the £200 threshold. I am actually incredibly proud of wanting to make that donation, and I think that I shall increase it to £201, so that it can go on the record, as part of the attempt to bring greater democracy and accountability to Parliament, rather than having to wait until the threshold goes up to £500 to make the same point. That would also be an awful lot more expensive for my pocket. So Castle Point Conservatives can expect a £201 donation from me as a result of this debate.

Mrs. Eleanor Laing (Epping Forest) (Con): We all want to make a donation.

James Duddridge: This seems to be quite popular. Perhaps I will arrange a whip-round after the debate.

I am grateful to the Minister for taking on board the points that have been raised about indexation. I am slightly concerned, however, given the very useful evidence sessions and the large number of very useful Committee sittings, that the Government did not table these amendments earlier. It would have assisted them if there had been a greater gap between the evidence sessions and the Committee sittings, so that they could have tabled amendments to be considered by this House rather than another place. Sometimes, the devil is in the detail and, all things remaining equal, I can imagine the House of Lords being less aware of electoral practices, and our getting into a position in which the system becomes more complex than it needs to be.

In addition to indexation, I want to talk about how the threshold is raised. I am minded to think that the idea of raising it at a general election is a good one. In that way, there would not be a problem with raising it from £500 to £512. I think that we should raise it to a round number—perhaps £550 or £600. In relation to wanting to raise the maximum amount of revenue from
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private individuals, will the Minister give consideration to years in which there are two general elections, as happened in 1974? Heaven forbid that we should find ourselves in that position in 15 months’ time, or before, if the country remains undecided about who they want to solve the problems that the Government have got us into. However, if we do end up in that position, we, as politicians, would surely want private individuals to be able to contribute twice the annual limit, rather than being constrained by that limit.

On new clause 19, which I shall deal with before briefly concluding on amendment 121, will the Minister look at connected parties? Although I fully endorse the movement from £200 to £500, if a family of five adults all contributed a smidgeon under £500, that would amount to £2,500 and over an electoral cycle of four years—the norm, if the Government are not running scared and so go the full term—it would mean a donation of £10,000. In addition, if those five individuals living under the same roof set up an unincorporated association, they could yet again make an even larger contribution. I would appreciate it if the Minister, as well as making concessions on new clause 19, looked again at connected parties.

5.15 pm

Finally, if we are to get people to donate the maximum amount from their own pockets rather than relying on the state, the trade unions and business, it is essential for the Government to take a close look at amendment 121 and associated issues. People wishing to donate money should not be assumed to be buying influence or to be potential criminals. Innocent mistakes can happen, and everything the Bill does should encourage people to make political donations, and, indeed, to be proud of making them and proud to back the vitality of our democracy. They should not be fearful of being hauled through the courts for a minor misdemeanour.

Mr. Wills: We have had an interesting discussion. We have heard what people said and we have taken most of the concerns into account. I am not sure that I agree that we are striking the wrong balance, as the hon. Member for Cambridge (David Howarth) suggested we were; we have done our best to strike it in a way that will sustain and endure. As I said, if we have got the judgment wrong, we will be happy to return to it. We think that this is a sensible way forward and we hope that the Opposition will reconsider their decision to vote on amendment 121, which I think they might regret in times to come, but it is a matter for them. I commend the Government new clause.

Question put and agreed to.

New clause 19 accordingly read a Second time, and added to the Bill.

New Clause 1

£50,000 cap on donations

‘(1) In section 54 of the 2000 Act, after subsection (1) there is inserted—

“(1A) A donation received by a registered party from a permissible donor must not be accepted by the party in so far as the amount of that donation and of any other donations accepted by the party from that donor during the same calendar year exceeds £50,000.

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