Draft Control of Donations and Regulation of Loans etc. (Extension of the Prescribed Period) (Northern Ireland) Order 2011

The Committee consisted of the following Members:

Chair: Mr Lee Scott 

† Anderson, Mr David (Blaydon) (Lab) 

† Burns, Conor (Bournemouth West) (Con) 

Creasy, Stella (Walthamstow) (Lab/Co-op) 

† Elphicke, Charlie (Dover) (Con) 

† Freer, Mike (Finchley and Golders Green) (Con) 

† Laing, Mrs Eleanor (Epping Forest) (Con) 

† Leech, Mr John (Manchester, Withington) (LD) 

† Lloyd, Stephen (Eastbourne) (LD) 

McDonnell, John (Hayes and Harlington) (Lab) 

† Newton, Sarah (Truro and Falmouth) (Con) 

† Opperman, Guy (Hexham) (Con) 

† Pound, Stephen (Ealing North) (Lab) 

† Rotheram, Steve (Liverpool, Walton) (Lab) 

Simpson, David (Upper Bann) (DUP) 

† Skinner, Mr Dennis (Bolsover) (Lab) 

† Swire, Mr Hugo (Minister of State, Northern Ireland Office)  

† Watkinson, Angela (Lord Commissioner of Her Majesty's Treasury)  

† Wood, Mike (Batley and Spen) (Lab) 

Mike Clark, Committee Clerk

† attended the Committee

Second Delegated Legislation Committee 

Monday 14 February 2011  

[Mr Lee Scott in the Chair] 

Draft Control of Donations and Regulation of Loans etc. (Extension of the Prescribed Period) (Northern Ireland) Order 2011 

4.30 pm 

The Minister of State, Northern Ireland Office (Mr Hugo Swire):  I beg to move, 

That the Committee has considered the draft Control of Donations and Regulation of Loans etc. (Extension of the Prescribed Period) (Northern Ireland) Order 2011. 

It is a great honour to serve under your chairmanship for what I think is the first time, Mr Scott; I hope that it is not the last. 

The order will extend the period in which donations and loans to political parties in Northern Ireland can be made confidentially. Hon. Members may be aware that the law provides that political parties and other recipients in Northern Ireland must abide by the reporting requirements set out in the Political Parties, Elections and Referendums Act 2000 on donations and loans received. In that regard, the rules governing party funding in Northern Ireland are the same as those that apply elsewhere in the United Kingdom. However, an important difference is that although in Great Britain the Electoral Commission is obliged by law to publish details of those donations, it is expressly forbidden from doing so in Northern Ireland. 

The Northern Ireland (Miscellaneous Provisions) Act 2006 provides for donations to be kept confidential in Northern Ireland, but only for a temporary period—what is referred to in the Act as the “prescribed period.” That prescribed period was originally due to expire on 31 October 2010. However, hon. Members may recall that I introduced an order shortly after the election last year to postpone the expiry until 1 March 2011, to allow for a full public consultation on future policy. 

The full 12-week consultation ended on 25 October 2010. A total of 26 responses were received, including from the political parties, the media and members of the public. The consultation demonstrated strong support from members of the public and the media for full and immediate transparency. That was also supported by some political parties, including Sinn Fein, the Alliance party and the Green party. 

The Ulster Unionist party and the Democratic Unionist party supported the extension of the current arrangements, due to ongoing security concerns. The Social Democratic and Labour party agreed that donor identities should be kept confidential, but believed that work should be undertaken to bring more transparency to the existing process. The Electoral Commission also believed that identities should continue to be kept confidential if the Government concluded that the time was not yet right

to move to full transparency, but it agreed that there was room for greater transparency in the existing arrangements. 

Overall, the consultation demonstrated clear public support for greater transparency, but concerns remain about the possible intimidation of donors. That is complicated further by the fact that it is difficult properly to assess levels of intimidation in Northern Ireland. Reports by the Independent Monitoring Commission have consistently reiterated that 

“tables of statistics include only those acts of violence which come to the notice of the police, and, as we know well from other sources of information, not all incidents are so reported. It is not possible to quantify intimidation short of actual violence, which may also not be reported and which can have just as traumatic an impact.” 

It is, however, clear that in recent years the overall security situation in Northern Ireland has deteriorated. In particular, recent reports by the Independent Monitoring Commission have indicated an increase in paramilitary beatings and shootings. It is very likely that that rise in violent activity has been accompanied by an increased risk of intimidation, and that there could be a threat to the safety of those making donations to parties in Northern Ireland if their identities were made known. 

I have therefore reluctantly concluded that the time is not yet right to move to full transparency, and that is why I am introducing to the Committee the order to extend the prescribed period. However, I have taken note of the clear expressions of support for greater transparency from the general public and others, received as part of the consultation. Since the consultation ended, my officials have been examining the possibility of bringing greater transparency to the current process within the existing legislative framework. 

I am particularly concerned that the 2006 Act, as drafted, does not just protect donor identities, but prohibits the release by the commission of any details relating to a donation. I had hoped that the 2006 Act might have allowed for an order to be made to relax the current strict arrangements so that some details of donations and loans might be released, such as details of the recipient, the amount received and when the donation was made. However, I am advised that there are worries about the extent to which the 2006 Act would permit that. 

None the less, I have asked my officials to continue to consider the possibility of further secondary legislation to provide for increased transparency. If that is not possible, we will seek to make such provision through primary legislation when a suitable legislative vehicle can be found. Members of the Committee might be aware that the consultation also sought views on whether the identities of those who have made donations and loans during the prescribed period should be kept confidential when the prescribed period ends. Unfortunately, the 2006 Act, as drafted, would not provide for that; it would instead provide for identities to be published when the prescribed period ends. 

The majority of respondents to the consultation called for full and immediate transparency, including the release of identities of donors when the prescribed period ends, but the DUP, UUP and SDLP strongly opposed that, as did the Electoral Commission. They believed that many donors and recipients were not aware and did not properly appreciate that the law currently provides for the eventual release of the information and that they

might not have donated at all if they had known that to be the case. In light of such concerns, the Government will seek to make provision when the next suitable legislative vehicle can be found, to ensure that donor identities are not released retrospectively when the prescribed period expires. 

In summary, I assure members of the Committee that it gives me no pleasure to bring the order before the Committee this afternoon. I look forward to the day, as I am sure do members of the Committee, when we have complete consistency throughout the United Kingdom when it comes to transparency of party funding arrangements. But the time is not yet right for that, and we cannot ignore the security risks that might arise if the identities of donors were made known. Nevertheless, I reassure the Committee that, in the meantime, we will work as hard and as quickly as we can to bring greater transparency to the existing arrangements in Northern Ireland. 

4.38 pm 

Stephen Pound (Ealing North) (Lab):  I reiterate the comments of the Minister of State about the great pleasure it is for all of us in this room, let alone the Palace, to serve beneath you, Mr Scott, on this occasion. Many congratulations on your appointment as Chair. I wish to trespass on your good nature for a moment. 

Last week at Northern Ireland questions, I endeavoured to do as any decent, civilised human being would, and welcomed the Minister of State to the Privy Council—a well merited, possibly overdue and thoroughly deserved elevation. Mr Speaker felt it inappropriate for me to make such comments, but I trust that you, Mr Scott, will allow me on this occasion to speak on behalf of all members of the Committee and welcome the right hon. Gentleman to the Privy Council. It will not have escaped your basilisk stare, Mr Scott, that of the two Northern Ireland Ministers and two shadow Ministers, three are now Privy Counsellors. One is not. I doubt whether the fourth should be elevated on the grounds of merit, but perhaps a case can be made for symmetry. 

I move on to the business of the day. The order is a piece of St Augustine legislation— 

“Lord, make me chaste, but not yet.” 

Some members of the Committee will see that as a reference to a Robbie Williams song, but I assure them that St Augustine of Hippo said it originally, in 453. All parties and people represented in the Committee believe that the present situation is not acceptable—it is not something for the long term, but is a result of the current exceptional circumstances. 

On 21 July last year, the right hon. Member for Wythenshawe and Sale East (Paul Goggins) discussed the matter in Committee, when my hon. Friend the Member for North Ayrshire and Arran (Katy Clark) was in the Chair. He agreed with the Government that none of us wished to be in this place, but that we were where we were. 

At the time, the hon. Member for Upper Bann referred to 

“young mavericks who seem to be on a blood hunt.”—[Official Report, Seventh Delegated Legislation Committee, 21 July 2010; c. 6.] 

He felt that the situation was so serious and dangerous that we could not at that stage head towards what would be a UK-wide normalcy. With that in mind, Her

Majesty’s Opposition will not oppose the order, seek to press the Committee to a Division or oppose the principle. However, we wish to make some points, a number of which might appear to be fairly basic. 

The Minister talked about a “suitable vehicle” for primary legislation. Can he flesh that out a little? Does he consider a piece of stand-alone legislation or an order to be simply unacceptable? Or does he feel that it should be part of another piece of legislation? I would not have thought it massively contentious. 

Secondly, who holds the present data? I assume it is the Electoral Commission. If we are to believe, as many suggest we should, that the information is so incendiary and dangerous that individuals could be threatened by its very existence, what arrangements are being made for the security of that information? Who is keeping a close and watchful eye on it? I hardly need to beg the obvious question, but if primary legislation takes away the need for any retrospective identification, what will be the procedure for wiping the records, given that few Departments have a particularly good record when it comes to the total destruction of information? 

Another point concerns the information currently available to us. When debating the order in the Moses Room, the Minister’s noble Friend in the upper House, Lord Shutt, referred to the information available on the Electoral Commission’s website—which, I have to say, is fascinating reading. It shows that Sinn Fein had an annual income of £1.17 million, whereas the Northern Irish Labour party has an income of about £150 and no donations. 

At the moment, the website also points out a great deal of information that I would have thought could identify at least the donor stream, if not the donors. The obvious example is the Conservatives in Northern Ireland, who have an income of £215,000, including £204,000 of donations—that is an incredibly high percentage. I would have thought that a donation or donations totalling £204,000 could be identified fairly quickly. I should add that the Labour party’s income is actually £1,450, although there are no donations. 

Overall, we are where we are, and we need to move forward as quickly as possible. At the moment, this legislation is sadly necessary. It is sad that we should still have to concern ourselves in such a way so many years after the Good Friday agreement. 

What steps is the Minister taking—other than the general steps being taken in his Department—towards the state of normalisation to which we all aspire? I appreciate that he could, quite rightly, say that everything in his Department is pointed in that direction. However, in the specific area of political contributions, what is he specifically and actually doing to encourage a system of transparency and openness? All 26 people who responded to the consultation, without exception, said that they wanted to see more transparency, albeit not immediately. 

4.45 pm 

Mr Swire:  I am most grateful to the hon. Gentleman for his comments. His appeal to join the Privy Council will no doubt have been heard by the usual channels. He welcomed me to the Privy Council, which suggests that he is already a member, but perhaps that was a slip of the tongue. In the interests of good working relations and symmetry, I have no doubt that his recognition will come in due course. 

I would not say that this is a non-contentious piece of legislation; it is not. It is a contentious piece of legislation in so far as we are not where we want to be with it. We have no alternative but to do what we are doing today. As I said in my opening remarks, I regret that we are doing it. The hon. Gentleman was gracious enough to echo those remarks. 

Does that mean that we are content to leave things as they are? No, it most certainly does not. We will explore the possibility of amending the current arrangements to provide for greater transparency while protecting donor identities. That will require legislation. The timing will depend on whether it can by done by primary or secondary legislation. In answer to the hon. Gentleman’s question, I should say that if this can be done by secondary legislation, we hope to make the changes shortly. If primary legislation is the only option, the matter will clearly take much longer. 

The hon. Gentleman asked whether we would consider other ways of addressing the matter, such as by a stand-alone Bill. We are genuinely open to any suggestion and will examine all options at the time. We want to move the issue on. The order goes completely against the flow towards greater transparency, which we all want to get to. There is no reason why Northern Ireland should continue indefinitely to be inured from this desire—correct, as far as I can see it—for greater accountability and transparency. 

The hon. Gentleman raised an interesting point about the Electoral Commission and the release of information. It is, of course, a matter for the commission, but it is

under a strict duty not to release certain information and it is a criminal offence if it does so improperly. For the enlightenment of the Committee, although I am sure that it is aware of this, let me say that any donation in Northern Ireland is already registrable with the commission if it is over £7,500. If any of those donations appear to be wrong in any way—to have come from the wrong place, for example—it is incumbent on the commission to release that information. In terms of security, these matters are, of course, for the commission. As for what happens to the data, that is something that we can consider when we introduce the legislation. 

The hon. Gentleman made a plea for normalisation. Hear hear to that, I say. I will now say what he probably expects me to say, which is that everything that we do is an attempt to “normalise” Northern Ireland. However, as with everything in Northern Ireland, the word means different things to different people. His and my mature and reasonable understanding of normalisation means that things should be the same for someone voting in Belfast as they are for someone who is voting in Banchory, Birmingham or Budleigh Salterton in my own constituency. There should be no difference and that is something that we are trying to move towards. 

However, we live in the world as it is and not as we would have it. I assure the hon. Gentleman and the Committee that we will not let matters rest here. We are not happy to have introduced this extension, but we believe that we have no alternative. 

Question put and agreed to.  

4.49 pm 

Committee rose.