Draft Political Parties, Elections
and Referendums (Civil Sanctions)
Order 2010

The Committee consisted of the following Members:

Chair: Mr Peter Bone 

† Bryant, Chris (Rhondda) (Lab) 

† Cunningham, Alex (Stockton North) (Lab) 

† Dodds, Mr Nigel (Belfast North) (DUP) 

† Dunne, Mr Philip (Ludlow) (Con) 

Efford, Clive (Eltham) (Lab) 

† Elliott, Julie (Sunderland Central) (Lab) 

Gardiner, Barry (Brent North) (Lab) 

Glass, Pat (North West Durham) (Lab) 

† Harper, Mr Mark (Parliamentary Secretary, Cabinet Office)  

† Lopresti, Jack (Filton and Bradley Stoke) (Con) 

† Macleod, Mary (Brentford and Isleworth) (Con) 

† Maynard, Paul (Blackpool North and Cleveleys) (Con) 

† Mills, Nigel (Amber Valley) (Con) 

† Morris, James (Halesowen and Rowley Regis) (Con) 

† Offord, Mr Matthew (Hendon) (Con) 

† Tami, Mark (Alyn and Deeside) (Lab) 

† Williams, Mr Mark (Ceredigion) (LD) 

† Williams, Roger (Brecon and Radnorshire) (LD) 

Alan Sandall, Marek Kubala, Committee Clerks

† attended the Committee

The following also attended, pursuant to Standing Order No. 118(2):

Boles, Nick (Grantham and Stamford) (Con) 

First Delegated Legislation Committee 

Tuesday 19 October 2010  

[Mr Peter Bone in the Chair] 

Draft Political Parties, Elections and Referendums (Civil Sanctions) Order 2010 

10.30 am 

The Parliamentary Secretary, Cabinet Office (Mr Mark Harper):  I beg to move, 

That the Committee has considered the draft Political Parties, Elections and Referendums (Civil Sanctions) Order 2010. 

It is a great pleasure to see you in the Chair, Mr Bone. I think that this is the first Committee in which I have served under your chairmanship. 

The order is to be made under schedule 19C to the Political Parties, Elections and Referendums Act 2000, and it will permit the Electoral Commission to impose civil sanctions for breaches of the party funding regime established by that Act. I will talk about the technical amendments later, but first I want to outline the context of the development of the new powers. 

The Committee on Standards in Public Life conducted a review of the Electoral Commission in 2007, when it found that, 

“the only sanctions the Electoral Commission has if parties do not comply with the legislation is to name and shame or, if the offence is sufficiently serious, to refer the matter to the Crown Prosecution Service (CPS) for a criminal prosecution.” 

The committee recommended a new system of penalties to enforce the regulatory framework set out in the 2000 Act, and those recommendations were endorsed by Sir Hayden Phillips in his report on party finance and expenditure. 

The Political Parties and Elections Act 2009, introduced by the previous Government, was intended to tighten the controls on spending by political parties and candidates, and part of that process was to strengthen the regulatory role of the Electoral Commission. That Act therefore gave the commission new powers to investigate potential breaches of party funding law—rather than having to refer most things of any potential seriousness to the police—and to apply a range of civil sanctions as an alternative to criminal prosecutions. We are keen to fulfil the commitment made by the previous Government, as we believe that that new range of civilly enforceable penalties will allow the commission to act directly to enforce the 2000 Act in a proportionate, timely and economical way. 

Following Royal Assent of the 2009 Act, the Electoral Commission initiated a consultation on its proposed enforcement policy. The responses received and the commission’s resulting recommendations were considered by the previous Government during the development of the order, alongside the valuable technical advice that the Electoral Commission has produced. 

Before turning to the detail of the order, I should like to explain its procedural history. The initial draft had to be withdrawn and re-laid because of some technical

problems; the corrected draft was then laid by the previous Government shortly before the general election. It was laid with the agreement of the parties now in government, and we wish to see the order become law. I hope that it will receive the support of all members of the Committee. 

The 2009 Act inserted into the 2000 Act the key principles behind the power to impose civil sanctions, including the type of civil sanctions that will be available to the commission, how they will broadly operate and the rights of notice prior to the imposition of a sanction and appeal to a county court or sheriff thereafter. The powers closely mirror those set out in the Regulatory Enforcement and Sanctions Act 2008, which established a sanctions framework for analogous regulators. The order sets out the necessary detail of how the new powers will be applied, and it will be accompanied by a commencement order to bring the powers in the 2000 Act into force. 

It is important to make it clear that the new powers are intended to supplement, not replace, the existing ability of the police to investigate an offence and of the CPS to bring a criminal prosecution. Part 1 of schedule 2 to the order specifies those offences that will be capable of attracting either criminal or civil sanctions, depending on what the commission, police and CPS think is the right approach in each case. An individual cannot be proceeded against for the same wrong via both the civil and criminal routes. Part 2 of schedule 2 specifies those restrictions and requirements that will be capable of attracting only civil sanctions. 

Part 3 ensures the continuation of provisions currently in section 147 of the 2000 Act that will be removed from the Act when the new powers are commenced. Those provisions enable the commission to impose a sanction on an organisation for the act of one of its officers for a limited range of transgressions. The list in part 3 reflects that currently set out in section 147 of the 2000 Act, with section 41(1) on the failure to keep accounts and sections 41(4) and (5) on the failure to maintain accounts for six years. 

By contrast, those offences in the 2000 Act that are not included in schedule 2 of the order will remain subject only to criminal sanctions. Examples of such offences are, under section 61(2), knowingly giving false information to a party treasurer or withholding information with intent to deceive and, under section 148(1), altering, suppressing, concealing or destroying—or permitting such actions—documents relating to the financial affairs of supervised organisations or individuals. 

The standard of proof for the imposition of penalties remains at a criminal standard. That has always been the intent, as the aim is not to weaken the standard of proof required for a penalty to be imposed, but rather to impose the processes that link an offence to some other contravention of the rules for enforcement action and to ensure proportionate action. 

Four categories of civil sanction are being made available. Both the Government and the Electoral Commission believe that, when taken in conjunction with existing penalties, those categories will allow the punishment to fit the offence. They are fixed monetary penalties, discretionary requirements, stop notices and enforcement undertakings. The first two require positive action by the person concerned and are the types of sanction that require a criminal standard of proof being

imposed. Fixed monetary penalties have been set at £200 and will be used for minor breaches. Discretionary requirements can take the form of a variable monetary penalty up to a maximum value of £20,000 or, alternatively, an instruction to take specified actions. 

Stop notices act much like a civil injunction requiring the person, political party, recognised third party or a permitted participant to cease activity immediately. A criminal standard of proof is not required before a stop notice is imposed, but if the person concerned is not committing a breach that they are required to stop, the stop notice would cause them no difficulty. Finally, enforcement undertakings can apply where the Electoral Commission accepts a proposal from a person that outlines the action that they will take within a specified period with a view to preventing a recurrence of the offence or contravention. 

A second level of sanction is available where the initial sanction is not complied with. The order provides for monetary penalties to increase if not paid on time and to be recoverable as if they were payable under a court order. If a person fails to comply with a non-monetary discretionary requirement, the Act enables a monetary penalty to be imposed. The order sets those non-compliance penalties at between £500 and £20,000, and a failure to comply with a stop notice is in itself a criminal offence under the Act. While an enforcement undertaking is being complied with, the person who gave the undertaking is protected from other sanctions under the Act, but if it is not complied with, the full range of sanctions becomes available to the Electoral Commission. 

Use of the sanctions will be at the discretion of the Electoral Commission, and it has set out its intended approach in its enforcement guidance. The guidance sets out the principles underlying its regulatory role and provides details of how the new sanctions will be used, such as the way in which financial penalties will be calculated and the circumstances in which enforcement undertakings will be considered. 

In conclusion, it is important that the Electoral Commission has the correct tools to be able to regulate and tackle non-compliance with the law on party funding in an effective, proportionate and fair way. The Government believe that the order, in combination with the powers inserted into the 2000 Act by the 2009 Act, will give the commission those tools. The Electoral Commission has published its enforcement guidance, setting out how it intends to use the new civil sanction powers. It also intends, wherever possible, to use advice and guidance proactively, to assist individuals and organisations to meet their legislative requirements. I commend the draft order to the Committee. 

10.38 am 

Chris Bryant (Rhondda) (Lab):  It is customary at the beginning of these sittings, Mr Bone, to say what a delight it is to serve under somebody’s chairmanship. Sometimes people, myself included, have said this when they have not really meant it, but I do really mean it today. My pleasure is entirely unalloyed. Actually, it is slightly alloyed because I am worried that, by joining the Panel of Chairs, you might have sold out and there might be no more mischief left in you. I can assure you that the Opposition will look forward to using your mischief to good effect when the Government introduce more ludicrous legislation. 

However, the order is not a ludicrous piece of legislation; it is sane and sensible. If I were sitting in the Minister’s seat, although I do not think that I would have read out quite such a long speech and we are grateful for the full detail that he has provided, it would have been exactly the same tenor of speech on exactly the same piece of legislation. Sometimes, there is room for hypocrisy in politics, but today is not such a moment. Therefore, I cannot possible advance any arguments—not even nit-picking ones, which the hon. Gentleman accused me of doing yesterday in a foul calumny—why I might want to disagree with the order. 

I have one very small—[Hon. Members: “But”.] I avoided the word “but” because it is not a “but” at all. I completely agree with the measure, and I do not even want the Minister to reply on this. My concern is a simple one for party treasurers, the vast majority of whom are ordinary members of the public. Many of them have no particular experience of chartered accountancy or anything like that. In some communities, they will come from very ordinary backgrounds and may not have had any experience of putting figures together. The onus that is placed on them by the legislation that we introduced and to which we have all subscribed is very heavy. 

Given the furore over the last 25 years in relation to politics and whether we are all in it just for our own good and are all corrupt, evil bastards and all the rest of it, I sometimes worry that ordinary members of the public have lost the ability to take part in the political process without worrying that they are in danger of inadvertently falling foul of criminal sanction through some misunderstanding of the rules. With that mild plaint, which is not a plaint at the Minister at all, I am more than happy to support the order. I hope that the Minister will not want to delay us much longer. 

10.41 am 

Mr Harper:  I want to respond to that because it is probably helpful if the Government back that up. I agree with what the hon. Gentleman said about volunteers in our parties who carry out pretty thankless work. I was a Conservative association treasurer for rather a long time, although I had the benefit of professional training as a chartered accountant. Many people do the job and they worry about some of the things the hon. Gentleman described. Part of the point of the order is that, if they inadvertently make a mistake, the Electoral Commission will not have to use criminal sanctions but can use the civil penalties. 

Indeed, the Electoral Commission has gone further and said that where people have made genuine mistakes, it wants to work with them to encourage them to get things right. It set that out very clearly. That is helpful. Those people who do valuable public service behind the scenes in our parties should know that they can ask the Electoral Commission for advice. If they make inadvertent mistakes, it will want to help them and to put things straight and will not want to leap on them with criminal sanctions. It is worth the hon. Gentleman and me saying that as it is helpful for those who do that valuable public service. With that, I will not detain the Committee any longer. 

Question put and agreed to.  

10.42 am 

Committee rose.