Scottish Affairs Committee - Minutes of EvidenceHC 139-I

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Oral Evidence

Taken before the Scottish Affairs Committee

on Wednesday 4 July 2012

Members present:

Mr Ian Davidson (Chair)

Fiona Bruce

Jim McGovern

David Mowat

Pamela Nash

Mr Alan Reid

Lindsay Roy

________________

Examination of Witnesses

Witnesses: John McCormick, Electoral Commissioner with responsibility for Scotland, Lisa Klein, Director of Party and Election Finance, and Andy O’Neill, Head of Office Scotland, The Electoral Commission, gave evidence.

Q808 Chair: Good afternoon, lady and gentlemen. Thank you very much for coming. I will start off by asking you to tell us who you are, what organisation you represent and why you are here.

John McCormick: My name is John McCormick. I am a member of the UK Electoral Commission and I am the Commissioner with special responsibility for Scotland. I believe we are here to talk about some aspects of the regulation of a proposed referendum in Scotland.

Lisa Klein: I am Lisa Klein. I am Director of Party and Election Finance at the Electoral Commission. I am here for similar reasons to the gentleman on my right.

Andy O’Neill: I am Andy O’Neill. I am Head of Office Scotland for the Electoral Commission.

Q809 Chair: To what extent does the present regulatory framework affect referendum campaigns?

John McCormick: I will kick off for a sentence and then pass on to my colleague Lisa, if that is okay, Chairman. We have a number of principles relating to referendum regulation. They differ from election regulation and we always make that point clear at the outset of any of these discussions. There is referendum regulation and election regulation. We have a number of principles that underpin the regulation about transparency, fairness, making it easy for people to campaign and to register to campaign. We have a regulatory framework that has been in practice, as designed in the PPERA, which set up the Commission, in three referendums, most recently last year in the referendum for Wales and the PVS referendum for the UK.

For the details of the regulatory framework I will ask Lisa to say something and then come back to Andy and myself.

Lisa Klein: I interpret the question as relating to what the laws and regulatory framework are before you are into a referendum period, because PPERA does have a whole chapter on referendum. Is that correct?

Chair: Yes.

Lisa Klein: The regulatory framework applies in a couple of ways. First, political parties are under an obligation to report a certain level of donations and loans to us. They do that on a quarterly basis. Some of the funds that come in to political party coffers would be reported according to that process. It is not segregated out in terms of its being referendum money at this point.

Equally, there are member associations. Perhaps it would be helpful if I were to define that term. Those are groups that consist mainly or wholly of party members who are grouped together in an attempt to influence internal policy of the party, whether that be leadership elections or policy formulation. Those entities also have an obligation to report to us on an ongoing basis if they receive donations over a certain threshold, the threshold being £7,500.

Q810 Chair: Those are semi-secret groups like Progress and things like that inside the Labour Party?

Lisa Klein: Yes. One that comes to mind is the Muslim Friends of Labour, for example. Secondly, you have individual regulated donees, who may be members of political parties or elected office holders. There are obligations about reporting donations that attach to that role as a regulated donee.

Thirdly, just to provide the whole framework, there is third party regulation. I am mindful to say that third parties are groups or individuals who spend money campaigning on an issue for a party or a platform. They do not try to influence what is happening within a political party internally but more externally. They, too, are regulated, but that is either during the regulated period, meaning for an election, or during the referendum period. If they are active during that time period, they are obliged to submit a campaign expenditure return that documents donations and expenditures made. That applies only during a regulated period, whether it be referendum or election-related.

Q811 Chair: Andy, do you want to add anything to that?

Andy O’Neill: No, not at the moment.

Chair: That is clear as a background.

Q812 Pamela Nash: Can you confirm that the Yes campaign in the referendum in Scotland is not automatically regulated? If that is the case, can you explain why?

John McCormick: Yes. Lisa will expand on why.

Lisa Klein: If I go through the options, they could be regulated as a political party. Neither has registered with us as a political party; so there is no hook, if you will, in the legislation for the regulation. In my view, they do not meet the definition of a members’ association, both in terms of their purpose and membership. The closest they would be is to a third party, or, when it is during a referendum period, third parties are known as permitted participants. That period for regulating has not yet commenced.

Q813 Pamela Nash: Is this something that concerns you? To the outsider, this is a campaign that promotes the objectives of a single political party. It seems that this campaign has fallen through a loophole. Is that something that concerns the Electoral Commission?

Lisa Klein: Obviously, as Commissioner McCormick has already identified, transparency is important to us. We think that that is an important underpinning principle, but it is within the legislative framework, which of course is decided by the relevant Parliament. Within that we have, for example, suggested in our report following the 2011 referendum that there be some pre-polling disclosure by campaign committees, but there is no regulation at this time period. I should say that it is very similar to the context of elections in the UK. There are periods when there is not continuous regulation. If you take, for example, elections to the Scottish Parliament, there is a regulated period of four months. If you look at the UK model, it has been 365 days. It is clear to everyone that in certain instances there is active campaigning that goes on, and what happens beyond the regulated period has been discussed within this House.

Q814 Pamela Nash: Clearly this is different when there are formal launches of campaigns far outwith the regulated period for a referendum.

Lisa Klein: I am sorry; I missed the beginning.

Pamela Nash: This is a different situation when you have formal launches of campaigns-a campaign that is ongoing so long before the regulated period of a referendum.

Lisa Klein: It is. You can draw that distinction in terms of whether it is formally declared or not in the context of some of the electoral campaigns that have been going, but it has to fit within the framework that regulates it.

Q815 Chair: The Yes campaign is so obviously a front for the SNP, but by creating itself as a front, it avoids the regulation in terms of where donations are coming from that, were the SNP doing it directly, they would have to abide by. Is that not a loophole?

Lisa Klein: I have not conducted any investigation into the financial arrangements. I am only going to accept your positing, as you have described it-if that were true. I can’t ascribe a motivation to it, but that is the way the rules work and they would be fully compliant with the rules as they are.

Q816 Chair: By definition then, if a political party sets up a front organisation that is clearly all about fulfilling the objectives of that party, it is not under the same regulations that the party would be under if it was doing exactly the same thing. John, do you want to answer that?

John McCormick: Basically at the moment we have two campaign groupings that have been launched. There is Better Together, which has a number of prominent politicians associated with it and the support of some political parties. There is also the Yes Scotland campaign, with which three different political parties have said they are associated.

One of the things we will always stress in terms of a referendum, and especially one that moves on over a longer period, is that referendums don’t just involve political parties. We know that other people will be involved with both campaigns who feel strongly about the issue that will be the subject of the referendum. So it is political parties plus.

Lisa is absolutely right that, if we operate within the existing regulation, in the regulated period they will be there, but at the moment they are not as registered campaign organisations.

Q817 Chair: The idea of popular fronts and all the rest of it is fairly common in political history, isn’t it? Political organisations set up front campaigns and they have a couple of token members. We used to have a token vicar, a token worker and so on, but the political organisation actually ran it from behind the scenes. Here, given that separation is the whole raison d’être of the SNP, you effectively have a campaign designed to fulfil the objectives of that party, and that campaign is not regulated in the same way as the party would be. They can do things as a front that the party couldn’t without having to make full disclosure. Is that correct?

John McCormick: Well, in-

Chair: I think yes is the answer actually.

John McCormick: We have recommended a minimum of 16 weeks as the regulated period for the referendum. I just have to go back over this for the record. After the PVS referendum last year, we recommended that there should be a minimum period of 16 weeks as a regulated period. The Scottish Government adopted that. The regulated periods for the two referendums last year were closer to 11 weeks than the 16 weeks. The 16 weeks, as Lisa said, is the period for the Scottish Parliament, the Welsh Assembly, the Northern Ireland Assembly and the Euro elections. The 16 weeks is well known to people and has been accepted as a regulated period. The 16 weeks that the Scottish Government has proposed as the regulated period is what we are working under at the moment. But we are a bit in the dark, as everybody is, about when the referendum will be, what the question or questions will be and when legislation will come.

Q818 Chair: I do understand that. You are not addressing the point I am making. In the unregulated period, a front organisation can draw in money, spend money and undertake activities without the degree of supervision that would apply were a political party doing that. That is correct, isn’t it?

Lisa Klein: I choose my words carefully here. There is a group that has assembled on both sides of the emerging issue that consists of multiple players. That is what we have at present. If there was a situation-and I take it into the abstract-where there was evidence that a political party was trying to circumvent any reporting obligations to avoid disclosure, for example, then that is something we should be considering. I don’t see that evidence here.

Q819 Pamela Nash: Just to be clear, we mentioned earlier that there were three political parties. One of those political parties in the Yes campaign has already withdrawn support and also the independent MSP, I believe, has withdrawn. That leaves one political party other than the SNP. If they withdraw support, would the Yes campaign then be treated as an arm of the Scottish National Party and therefore be subject to the same regulation as the party?

Lisa Klein: I don’t think it is quite as easy as you make out. You have groups coming together; you also have individuals who are coming together. It is overly simplistic to suggest that, if the political parties drop out of this working group, you are then left with only one party, and that will transform the position. I can’t go further in terms of speculating about exactly where we get to. All I can say to you is that, if there was evidence of that, it is something I would want to be looking at.

Q820 Pamela Nash: It would be helpful for us to find out where the line is. You mentioned organisations within a political party, which consist only of members of that political party. If they have just one member who is not a political party member, does that make it a campaign group?

Lisa Klein: Not necessarily. If you go back to the legislative history in terms of members’ associations, they were designed to be internally influencing the affairs and structure of the party. The idea was that you would want that to be subject to disclosure because the influence is inward towards the political party and potentially to the policies of the party. It is the converse, if you will, so I am not sure that that shoe fits.

Q821 Pamela Nash: If it was solely made up of members of one party and if the influence they were trying to have was only external, would the party still be treated as a campaign group and therefore not subject to regulation of the party?

Lisa Klein: I have to go through what is subject to regulation under the law. I have outlined that for the Committee. If there was evidence of an attempt to circumvent the transparency requirements of law, I think that is something that should be brought to our attention.

Q822 Chair: I want to be clear on this. A political party can evade the supervision requirements by having a big chunk of its membership involved in a front organisation. They get a token vicar or Liberal to broaden it out, and they can then campaign without financial supervision in a way that they could not if they were actually campaigning as that political party?

Lisa Klein: That is not what I have said and it certainly is not what the members’ association-

Q823 Chair: But I am asking if it is true, though.

Lisa Klein: No; that is not what the law is saying here. What is regulated would be if it is a members’ association that has certain specific requirements.

Q824 Chair: But that is internal.

Lisa Klein: That is right.

Q825 Chair: I understand that completely. The point I am trying to address is the question of external campaigning. What is the difference between a political party campaigning for something, which is then subject to all the rules and regulations about disclosure and so on, and exactly the same structure but with a couple of additions-two extra people to pretend it is a front-doing exactly the same thing? Presumably that is entirely without supervision and regulation and surely that is the legislation being avoided. I am sorry, but Hansard doesn’t record grimacing. If you have a comment to make rather than just making a face, that would be helpful.

Lisa Klein: I am sorry. I am pausing to reflect.

Chair: It doesn’t reflect that either.

John McCormick: As Lisa said earlier, the political parties are still subject to the PPERA funding regulatory regime.

Q826 Chair: That is right, but, if the parties want to avoid it, they just get a couple of other people, call themselves something different and carry out the objectives of the party. They would avoid supervision by you in that way; is that not correct?

Andy O’Neill: No, because the parties wouldn’t be able to stand. If the parties didn’t stand during an election-

Q827 Chair: We are not talking about during elections. This is in an unregulated period.

Lisa Klein: I am very happy to take this away and ponder it some more, if that would be of assistance to the Committee. It sounds an awful lot like third party and, as I said, third parties are regulated during the referendum period. I have not been confronted with something and turned my mind to whether there could be circumvention and at what point that would be. It would depend on the facts, but I am very happy to come back to the Committee having thought this through.

Q828 Mr Reid: Reference was made to elections. If the timetable is as we expect, the European elections will happen just before the start of the regulated period for the referendum. If this Yes campaign organisation was campaigning through the European election period in support of the aims and objectives of the SNP, how would that be regulated in terms of the European elections?

Lisa Klein: I am sorry. Are you talking about a joined-up regulated period?

Q829 Mr Reid: The timetable that we expect is the European elections at the start of June 2014 and the referendum in October 2014. That would seem to suggest that the regulated period would start a few days after the polling day for the European elections. The European elections campaign itself will be a regulated period for the political parties. We also have this Yes organisation, which is campaigning in support of the objectives of one of the parties in the European elections-i.e. the SNP. From what we have heard, because it is outwith the referendum regulated period, the Yes campaign organisation won’t be regulated, yet during an election campaign it is campaigning for the objectives of one party competing in that election. I would like clarification on how the election regulated period would affect the activities of the Yes campaign.

Lisa Klein: If the activity is ongoing during the European regulated period, it would qualify as a third party and be subject to the regulation.

Q830 Mr Reid: What do those regulations entail?

Lisa Klein: The regulations entail that there be disclosure of donations received by the third party and expenditures made during the regulated period, but it would be a post-poll disclosure.

Q831 Mr Reid: You said "donations made during the regulated period." If, say, a few million pounds were given to the Yes campaign before the regulated period started, would that have to be declared as well?

Lisa Klein: That is an interesting question. Donations that are received before the commencement of a regulated period or a referendum period that are used for material and for the campaign after the commencement of the regulated or referendum period are subject to the campaign expenditure limit and to regulation.

Q832 Mr Reid: If a campaign organisation spends money during the regulated period and it has also spent money before the regulated period, presumably all the money goes into and out of the one bank account during the regulated period. How do we know which money was spent before the regulated period started and which money was spent during the regulated period? We know the amount but we don’t know whose donation was spent.

Lisa Klein: Yes, and that is true on any account. For any campaign expenditure return you don’t know which funds are being particularly used to buy those posters or to pay for a particular item.

Q833 Mr Reid: But if it was a political party they would have to declare the donations no matter when they received them. The point we are trying to make is that this campaign organisation does not have to declare donations that it received before the regulated period started. What you have said is that it would have to declare expenditure during the regulated period. It now seems very unclear to me what they have to do about donations before the regulated period. You have said that it applies if they spend the money during the regulated period, but of course we don’t know whose donation was spent during the regulated period because it has all just gone into one pot. If they got, say, £10 million in donations before the regulated period and spent £5 million during the regulated period, which of the £10 million donations became that £5 million?

Lisa Klein: Under the rules you would not be able to marry up the exact-

Q834 Mr Reid: But what donations do they then have to declare?

Lisa Klein: If it is a third party, they would have to declare donations received over £7,500 during the regulated period.

Q835 Mr Reid: But the point I am trying to make is that there seems to be a loophole here. If the donation is given before the regulated period starts and is then spent during the regulated period, it seems that that donation does not have to be declared.

John McCormick: That is right.

Lisa Klein: Yes.

Q836 Mr Reid: So you are agreeing that that is a loophole?

John McCormick: Yes; that is the law we are operating under.

Q837 Mr Reid: You agree that calling it a loophole is a fair comment?

Lisa Klein: Yes.

Q838 Jim McGovern: Possibly my point has been covered, but it is just to enlarge on what you and Pamela were saying earlier, Chair. When does a campaign group become a political campaign or a political party almost? It is probably helpful, I think anyway, to name names. You have Brian Cox and Alan Cumming, who are both pretty famous Scottish actors, fronting a campaign. Does that mean it is exempt from any regulation because they claim not to be a member of a political party?

Lisa Klein: No. I am searching for how I can make this clear for the Committee members. If they are active they can be a third party, but the rules governing what is regulated for third parties are circumscribed under the law. It is either to the period of when it is an electoral period-a regulated period-or when it is a referendum period.

I can appreciate that you are trying to take a members’ association and make it subject to the regulation, but, as I said, that would be a group of individuals who are generally focused on altering the internal policies and structure of the party. It does not apply to the external activity of the group.

Q839 Chair: With respect, that is completely erroneous. We are not discussing members’ associations. We recognise that members’ associations are designed to operate within a political party. They are semi-secret organisations like Progress. That is not what we are discussing at all, I’m afraid.

Lisa Klein: Apologies then. What I can say is that I am looking for the hooks within PPERA in terms of what is regulated.

Chair: I think you are saying to us that there are none. What we are identifying is that there is great potential for abuse. Anybody who wants to set up a front organisation to carry out the objectives of a political party without supervision can do so by finding a couple of actors as front men, a token vicar or something similar. That has been very helpful to us.

Q840 Jim McGovern: If you don’t mind, I think I should also make the point for the record that the two names I mentioned, as things currently stand, would not be allowed to vote in a referendum on Scotland because they are not on the electoral register in Scotland; they live in America.

John McCormick: The context of this makes it difficult for us to try to put it on the record. The fact is that in legal terms the referendum does not exist at the moment. There is no legislation; there is no date; we don’t know whether it is one question or two questions; and we don’t know which Parliament will approve the legislation. Therefore, the law doesn’t take account of that situation. That is what we are discussing here, Chairman. The law can’t just immediately come in to discuss that. As I think I said at the beginning, we are very aware of looking at referendums around the world and the referendums we have had in the UK. Each referendum is different and you can only take so much experience from one referendum and apply it to another because one size does not fit all.

In my view, this referendum is unique because we have a number of political parties who have become associated with umbrella campaigns right from the outset when it would seem that there are at least two years before the referendum might take place. The law does not take account of that. That is the context in which we are working. When more proposals come through and when we have something concrete to deal with, we will be giving advice and comment then, but we have got to see the shape of it.

Q841 Chair: It is only fair that we do understand and accept that you are not responsible for the law and, therefore, it is not your fault.

John McCormick: I wasn’t worried about being the head of blame, Chairman-really I wasn’t.

Chair: But you are here, you see; you are the witnesses, and so it is reasonable for us to raise these things with you. What we see as possibly the inadequacy of the existing position, as you have outlined to us, while not your fault, will be reflected in the report. Don’t take it personally. I am sure you’ve had worse.

Q842 Lindsay Roy: I want to ask about the interface between the European elections and the referendum, if indeed it is in October 2014, and the regulatory period. What happens if, for example, political parties mention overtly in their manifesto and leaflets the position with regard to the referendum campaign? Is that counted or discounted?

Lisa Klein: When there are overlapping regulatory periods, there has historically been an accommodation made in terms of the amount of campaign expenditure. There are assessments that the parties and campaigners have to go through in how to allocate that.

Q843 Lindsay Roy: Could you clarify how that would work?

Lisa Klein: With difficulty, I would say.

Andy O’Neill: Possibly an analogy is that until recently the Scottish Parliament and local government elections were combined. That was in 1999, 2003 and 2007. There are party and candidate campaign rules for the Scottish Parliament. There are candidate campaign rules for councillor candidates. If you got a leaflet that was 70% Scottish Parliament and 30% councillor, you would allocate that to the different returns. That is one practical example of how you would do it.

Q844 Lindsay Roy: But they were run simultaneously, whereas these are not.

Andy O’Neill: They were run simultaneously, but if you were overlapping you may do the same. The leaflets would be going out in the overlapping period presumably.

Q845 Lindsay Roy: But would the European elections be outwith the regulatory period?

Andy O’Neill: I don’t know when the referendum is proposed to take place so it is difficult to comment.

Q846 Lindsay Roy: If it was October 2014-

Andy O’Neill: All we have is the Scottish Government consultation paper, which says autumn 2014.

Q847 Chair: Let me just be clear about this. I understand the principle of allocation, but, if the Labour Party produced leaflets for the European elections and on one side was its position on European elections and on the other side its position on a potential Scottish referendum, half of the cost of that leaflet would not be allocated to the election campaign, would it? It would be allocated to this other campaign on the referendum, which would not in itself be regulated, thereby enabling you to produce twice as many leaflets for the same cost effectively because half the cost would go somewhere else.

Lisa Klein: What is required is that the parties have to make an honest assessment of what goes where in terms of the allocation. That would count against this combined spending limit that they would have.

Q848 Chair: Yes; that is right. If I produce 5,000 leaflets for £5,000 and half of it is for the European elections and half of it is for the Scottish referendum, I only need to declare in the European elections half of the cost.

Lisa Klein: That is right.

Q849 Chair: For the same amount of money I can therefore subsidise my European elections by using this unregulated money.

Lisa Klein: If that is how you chose to do it, yes.

Chair: That is helpful to know.

Q850 Mr Reid: You said earlier that donations given to one of the campaigns before the regulated period started would not have to be declared. Would it be legal for these campaigns to accept donations from outwith the UK before the regulated period started?

Lisa Klein: There is no prohibition on the source of donations received by campaigning organisations for expenditure that would be before the regulated period.

Q851 Chair: If all these American funding bodies decided to give a lot of money to any campaign in Scotland before the regulated period, they could absolutely pour it in, unqualified, with no need for regulation or clarification? If the CIA or KGB want to give money, they could do that? I just want to be absolutely clear. They could all do that if they wanted?

Lisa Klein: Provided that they receive it in or are using it before the commencement of the referendum period, yes.

Q852 Chair: But you wouldn’t know if they were using it before the commencement because, of course, you have already outlined that you don’t know where the money has come from because it is impossible to follow it back.

Lisa Klein: I could give you an example. Let’s say you took money from whatever source, you knew that you were doing some sort of flyer and you were using that money, and you put them in store because you wanted to use and distribute them in your door-to-door canvassing during the referendum period. Then you should be required to pay for those-

Q853 Chair: If you choose to do so. But if the KGB wanted to get Scotland out of NATO and decided to support the separation campaign, they could give lots of money, and then when the SNP printed leaflets they could say that any money that has been given by widows and orphans is the money that is declared and the other money is not declared at all.

Lisa Klein: That is right.

Chair: That would seem to be an error, wouldn’t it?

Q854 Fiona Bruce: Following on from that, in terms of expenditure during the regulated period what are the restraints that the regulations impose?

Lisa Klein: I can only talk about the PPERA legislation as I don’t know what the legislation will provide. There is a spending limit that is set-that is the main regulation-and that there be a reporting of the expenditure after the poll. That is the form of regulation that that takes.

Q855 Fiona Bruce: And that spending limit still has to be set obviously in this case.

Lisa Klein: Yes. Under PPERA, just to be clear, with regard to the reporting for participants who campaigned in the 2011 UK-wide referendum if they spent under £250,000, any expenditure over a certain level is due within three months and campaign expenditures over a certain amount are due within six months because they have to be audited. That is the requirement.

Q856 Fiona Bruce: You have talked about the expenditure. What lengths were the regulated periods in the previous referendums and what was the rationale behind those periods?

Lisa Klein: As to the periods, I must make sure I get it right. If we start with the north-east referendum in 2004, I believe that was 15 weeks. Please challenge me if I am wrong on that. Then you had both the Wales referendum and the UK-wide referendum where the referendum period was 11 weeks. In both of the latter instances, it commenced upon Royal Assent to the legislation, which is a factor. What we found through the experience-because there has to be legislation for the referendum-and in discussions with the campaigners is that that was a very short period of time to mount the campaign and get the rationale out to voters. In the light of that, we came forward in our report and recommended a minimum of 16 weeks. That is the period that was chosen in the Scottish Government proposal.

Q857 Fiona Bruce: Do you know why those shorter times were chosen previously? Was there any reason why those shorter lengths were chosen in the previous referendums?

John McCormick: They clicked in as soon as the Royal Assent came in. There was only 11 weeks. PPERA makes it a duty on the Commission to ensure that there are 10 weeks between Royal Assent during the period. We have recommended it be 16 weeks. Both of those referendums just made it, in effect.

With regard to the spending limits and the Scottish Government’s recommendation for the spending limits for the regulated period for the lead campaigners, the political parties and for other non-party campaigners, you will know that in our response to them we have said we think they are on the low side in what they have recommended and we would recommend a higher expenditure, bringing it more into line with the expenditure limits that were spent on the Scottish parliamentary elections. That is in our submission that we presented in March.

Q858 Chair: Coming back to this question of foreign money and related matters and how it is spent, there is no reason why all the groups involved shouldn’t voluntarily decide that they will have no foreign money and then make open declarations to you, even though they are not legally obliged to do so. If they did that, would you be willing to receive those submissions? If they decided that between now and the regulated period, because of the gap in the legislation that I think we have identified, people were prepared to be honest and open voluntarily and handed in to you notes saying, "We have had no KGB money, no money from the CIA, no money from the United States, and we are spending only in line with such-and-such limits and here are all our accounts", would you be willing to receive and view that?

John McCormick: We have been discussing this at some length recently, Chairman, as you might expect and we are a bit wary of that. Lisa will give you the longer answer and I will come back to it because it is an important issue.

Lisa Klein: Just going back to 2011, there was voluntary disclosure by the two main campaigners at the end during that shortish referendum period. It was during the regulated period-the referendum period-that they decided there would be some disclosure. There were different formats, information and time periods for releasing it. It definitely shows that, if there is going to be some pre-poll disclosure, it would be good to have it in a consistent format. I can certainly see the value of it.

Where I have a question is whether it is really the Commission that has a role in this as the regulator. There are a couple of reasons why the Electoral Commission would not be the appropriate body for it. We are talking about a period that is not subject to regulation and we are a regulator. All the information that we put forward is subject to regulation. We have some say over the format of it and whether it is permissible. We have authority to test it out and make sure that information is correct and robust.

In the situation that you have described we would not have any of that. If the information, although voluntarily agreed by everyone, and every campaigner who were to present between now and then, were there, and if the information lent itself to any type of controversy and there were questions, it could draw into questioning the validity of the information that we have. There is potential confusion for the voter and the electorate in that.

Q859 Chair: If you didn’t do it, who could?

John McCormick: It is not for us to speculate on who it might be, but certainly if the different political parties and the different campaigners who are interested in taking part in this forthcoming referendum wanted to come together and agree on a voluntary approach, we would be happy to give advice on the basis of our experience about what we learned from the last voluntary arrangement, where it fell short and that kind of thing. If they could set it up, we would give them some advice, but they would have to self-administer it or find a third party. One or two come to mind, but I would not like to speculate on them because it wouldn’t be fair.

Q860 Chair: You have just told us that one or two spring to mind.

John McCormick: It is not for me to say to people I have not spoken to that I have mentioned in Parliament that perhaps they would like to take on that role. One or two do come to mind, but I am not authorised and nor have I had open discussions with them about it. It is an interesting area for transparency. It is interesting, and we have some experience of where it didn’t come up to muster the last time and could have been improved on. If some people came together and said, "We would like to help the voluntary arrangement here", we would pass on our advice to them.

Q861 Chair: If, as a Committee, we asked you to give us advice about the rules and guidelines of any scheme of voluntary disclosure, not to be implemented by you, would you be willing to do so? If you gave us what you thought a scheme of voluntary disclosure should include and we then chose to pass it on to somebody of complete political virginity who could stand there and be seen to be holding the jackets and all the rest of it, that would distance you from it but it would be your experience.

John McCormick: We would be very happy to pass on our experience. It would be very much along the lines of what Lisa was saying about consistency, formatting of reporting and so on, so that everybody can have the same template for reporting and that kind of thing.

Lisa Klein: What I am concerned about is this, Chair. We know what the disclosure is of the rules that are required to assist in the publication of information. In the voluntary period, there may be other rules that are chosen. It is not really for us to decide what those rules should be.

Q862 Chair: No, no. I think you are misunderstanding the point or maybe I’m not understanding your answer. Unless I am very much mistaken, we want to see some degree of control during the uncontrolled period. We were originally looking to you to do it, but you have indicated, for reasons which I understand though I don’t accept, that you don’t want to do it. I am asking now whether you are willing to give us your guidelines for those rules-and I think you are-and then we would try and find maybe somebody else, this above suspicion Caesar’s wife figure, who would be the recipient of information put in in the format that you have suggested.

Lisa Klein: Yes; we could do that.

Q863 Chair: Is that a big task? Are we talking six months, three weeks or tomorrow morning?

John McCormick: It is not a big task. It is somewhere between tomorrow morning and three weeks.

Q864 Chair: That is helpful. In that structure, on the question of foreign money, I am tempted to say that I would be very strongly against any foreign money coming in. Apart from Northern Ireland where, if they did not have permission for foreign money to come in, the IRA were going to continue to kill people-other than that-there are no other circumstances where foreign money can be used in an election or a referendum in the UK. Is that correct?

Lisa Klein: On the permissibility of donations under PPERA, one of the goals was to eliminate foreign money. I can’t say that there is an absolute ban on it. I think our experience has shown that, because there are companies who do business in different parts of the world, funds can come in, or there can be businessmen who operate with companies overseas. Is the intended ban an absolute one? I would have to say no. The situation for the Northern Ireland registered parties is different from that.

Q865 Chair: Leaving Northern Ireland aside, it comes back to the question of tax avoidance, evasion, dodging and so on. There might be ways around it but the intention is that there should be no foreign money.

Lisa Klein: That’s correct.

Chair: That is immensely helpful.

Q866 Jim McGovern: For me it is the definition of "foreign money". If the separatists have their way, then England, Wales and Northern Ireland will be foreign countries. How do you define what foreign donations are? John mentioned earlier on that one or two names spring to mind. The phrase came to my mind, "We’ve been expecting you, Mr Bond." I imagine you were thinking of Sean Connery probably as a large donor to the SNP.

How do we define "foreign money"? For example, a Scottish couple won the Euro lottery. I can’t remember how much they won, but I think it was over £100 million and I think they have donated £2 million to the SNP’s campaign. I would suggest that everybody in Europe contributed to that, so how do you define that? Where do you draw the line?

Lisa Klein: That is a good one; that’s interesting. We operate PPERA. PPERA defines the permissible sources and this is where our realm of expertise and our jurisdiction lies. It requires that an individual be on the electoral register within the UK. If it is a trade union, it must be on a certification officer list. The list goes on. That is why we can help and assist in terms of what we have gained in our experience and how you gather information and how it is published. The content of whatever that voluntary code might be would really not be within our jurisdiction.

In terms of the lottery winners, yes, you might say that everybody contributed to it.

Q867 Jim McGovern: Everybody who bought a ticket, yes.

Lisa Klein: I think the law is that, once it is lawfully theirs and they are on the electoral register, that probably would suffice for purposes under PPERA.

Q868 Chair: On the point that it is lawfully theirs and they are on the electoral register, somebody who is dead is not on the electoral register any longer and therefore that raises the question of bequests and wills and so on.

Lisa Klein: That is also covered in the legislation, if they are on the electoral register within a certain period of time before their death. It is covered; they thought of that.

Chair: I’m glad to hear they thought of some things.

Q869 Lindsay Roy: Perhaps I could ask for an easier definition. In relation to a referendum, what do you mean by a "designated organisation"?

Lisa Klein: A "designated organisation", okay, terminology: it does get a bit arcane. The referendum legislation under PPERA enables and requires us to consider what campaigning organisation can be designated as the lead organisation. That is where the "designated organisation" comes from. We have tried to make this a little bit easier and digestible. We just called them the lead campaigners.

Q870 Lindsay Roy: But regulation doesn’t just apply to them.

Lisa Klein: No, it doesn’t. You have the lead campaigners and it applies to them. As we have talked about, it applies to the political parties during the referendum period. It applies to what the legislation refers to as "permitted participants." That is the equivalent of a third party but during a referendum period. There are rules under a PPERA referendum that would apply to the amounts they can donate if it is a lead campaign organisation. Where the legislation provides for it, there may be grants that they are entitled to. There may be Freepost and there may be broadcasts. There are some benefits that go along with that.

Q871 Lindsay Roy: How would you decide the amount that they are allowed to spend?

Lisa Klein: We would anticipate that that would be set out in the legislation.

Q872 Lindsay Roy: Is that in relation to the size of organisation?

John McCormick: The Scottish Government have said in their consultative document that the designated lead organisation would be able to spend up to £750,000.

Q873 Lindsay Roy: What about the others?

John McCormick: They have gone down to political parties at £250,000. They have a list.

Andy O’Neill: It is £250,000 for political parties, £50,000 for each non-party campaigner, and there would be a threshold of £5,000 before you had to register. It would depend on what sort of organisation you were.

Q874 Lindsay Roy: But does it depend on the size of organisation-the number of members or the number of adherents?

John McCormick: The Electoral Commission under the PPERA interviews people who compete to be the lead organisation on either side. It may be that there is only one lead organisation that puts itself forward to be designated as the lead organisation on either side. If that is the case, we have a set of criteria underpinned by the Act and we test it against those. If there is more than one on either side, we go through a process of interview and scrutiny and so on, and certain tests are applied to them before one is given the lead organisation status, if at all.

Lisa Klein: That is correct. For the sake of completeness, if the member’s question was, "Does the spending depend on the size for anybody who wishes to participate?", the answer is no.

Andy O’Neill: To add for completeness as well, in relation to limits for political parties under a PPERA referendum in Wales, we recommended that they be based around the turnout at the last relevant election. We gave an opinion to Government and that was that the relevant election should be the last devolved election. It does vary for different types of organisation. At the moment, as John said earlier, we consider the limits that are in the draft Bill in the Scottish Government consultation to be a little bit low. We have said, "We would like to come and talk to you and talk through the issues."

Q875 Lindsay Roy: Is it your understanding that you will regulate the referendum on separation for Scotland?

John McCormick: Our understanding is that we will have a role. As the Scottish Government have announced, they will be asking us to test the question-that process-and we will have a regulatory role. The extent of that regulatory role has not been defined yet, nor would we expect it to be defined yet. The short answer to your question would be yes.

Q876 Lindsay Roy: Presumably you have views on what the role would be, given your past experience?

John McCormick: We would expect the role to be broadly as defined in PPERA, with the broad exception that in PPERA the Electoral Commission provides the counting officer, the Chair of the Commission or deputy or delegate as the counting officer for the referendum. We have proposed to the Scottish and UK Government as a Commission that the counting officer should be the convenor of the Electoral Management Board, a body which is in Scotland and rooted in Scotland; we have recommended that. With that major change, we would expect our role to be broadly similar to that in PPERA.

Q877 Lindsay Roy: Are you expecting to be consulted on the question?

John McCormick: Yes.

Q878 Chair: It is a bit more than just being consulted on the question, isn’t it?

John McCormick: Yes.

Q879 Chair: The ridiculously biased question that we identified and discussed previously has now, as I understand it, been abandoned. Efforts are going to be made to bring forward a fairer question, which you will then road test and so on. We would anticipate that your advice would be accepted by all involved.

John McCormick: We anticipate that we would go through the full testing process as we have defined it to the Scottish and UK Governments in a consultation, which we have done before and have some experience of. Yes, it is a full testing process.

Q880 Chair: So some progress has been made?

John McCormick: Yes.

Q881 Pamela Nash: If you end up regulating this campaign, it will follow the rules that we have already set out so that there will be designated organisations and designated lead campaign groups appointed?

Lisa Klein: Because the legislation is not yet in place it is a bit hard to know, but we would anticipate that there would be designation of the campaign groups at this point.

Q882 Pamela Nash: It would be the same as previous legislation?

John McCormick: That is our expectation.

Q883 Pamela Nash: If that is the case, will the lead campaign groups in this case also qualify for the grants that are available for UK-wide referendums?

John McCormick: The Scottish Government have not proposed that there be grants applied to the lead organisations. In the last referendum it was £500,000 and more. We think grants are a good thing for referendums because we don’t want the arguments for the referendum question not to be put forward because people can’t afford to deploy all the resources to get the arguments across to the voters. In this case there seems to be no shortage of funding that might come forward on both sides of this referendum, but it is something that we are wary of. We think grants for a referendum argument allowing the democratic process and the voters to be fully informed are a good thing. We support grants from the Scottish Government and we said that in our consultation response to the Scottish Government, but at the moment they are not proposing that.

Q884 Pamela Nash: Just to be clear, if there were to be grants awarded in this referendum, it would need to be legislated for specifically within the Act that is going through the Scottish Parliament?

John McCormick: Yes.

Q885 Pamela Nash: And that is dominated by the party that has adequate funding at the moment for the campaign?

John McCormick: It is a parliamentary decision.

Chair: Nicely avoided.

Q886 Jim McGovern: In the Scottish Parliament’s timetable for the referendum, the regulated referendum period would not begin until 16 weeks before the referendum-possibly October 2014. Is this in line with other referendums?

John McCormick: Broadly it is, yes. That was based on our recommendation from the PVS referendum.

Q887 Jim McGovern: That is your recommendation?

John McCormick: No. After the last referendum last year we recommended that the minimum period should be 16 weeks. I believe that is the basis of the Scottish Government’s proposal in their draft.

Q888 Jim McGovern: You obviously think 16 weeks is reasonable.

John McCormick: That is based on our experience thus far, yes. It is a minimum of 16 weeks. To allow the proper planning and to allow campaigning to take place, we feel that 16 weeks is the minimum that the regulated period should be.

Q889 Jim McGovern: When you say that you are basing it on previous referendums, are you talking about the AV referendum?

John McCormick: The AV referendum and the Welsh referendum particularly, when we felt that under the PPERA guidelines, as I was saying to Ms Bruce, the PPERA says 10 weeks and those were PPERA referendums. The regulated period became 11 weeks. We felt that was just a bit tight to allow all the planning to take place. As we have said in our document, the 16 weeks’ regulated period has to be preceded by a period of between six and 12 weeks to allow the planning to take place and the guidance to be prepared so that the counting officers across the country on the basis of the legislation can set up the planning and get things in line before the regulated period begins. That period could be as short as six weeks and might be as long as 12 weeks. It is probably closer to the six weeks. On that basis, we thought that was 22 to 28 weeks, as we put in our document, at the end of the process that has to be protected.

Q890 Chair: I want to follow up with a point on that. You are saying to us, I think, that the Scottish Government are proposing the minimum regulated period that is possible with 16 weeks because it cannot really be any shorter than that at all. They are proposing the minimum period; yet the unregulated period must be about the longest in living memory. I cannot think of any other referendum where the unregulated period has been over two years and counting. Can you tell us of any other referendums where the unregulated period, either in Britain or abroad, has been as long as two years?

John McCormick: I will ask Lisa to comment on that because there are one or two international examples. We made the recommendation in our report to Parliament about the PVS referendum last year that, following that experience and the Welsh Assembly experience, we felt that the 11 weeks was a bit tight and therefore the minimum should be 16 weeks. That is what the Scottish Parliament adopted. I understand that is where the 16 weeks is from. The 16 weeks allowed sufficient time for campaigning and-

Q891 Chair: I understand that 16 weeks in your view is the minimum period that is necessary to allow all the bureaucracy and so on to churn through, but of course it is not just a question of the bureaucracy, is it? It is also a question of regulating spending. Here we have the shortest possible period of regulated spending and a longer time of unregulated spending than has ever been known in the UK. I can’t think of any other referendum in the UK where there have been two years or more of unregulated spending. Indeed, I can’t think of an international example, but you may know of one that you can draw to our attention.

Lisa Klein: We have identified the 2004 one, which was 15 weeks. There were the two in 2011 that were 11 weeks each. Although they are not exactly like for like, the longest regulated period for elections is the UK general election, which is 365 days.

Q892 Chair: That is right; I am just trying to clarify. But what about unregulated periods? Unless you assume that the first day of the next election starts when the election is counted, there is no other situation where there is an unregulated period as long as we have here, potentially open to abuses of unregulated spending and all sorts of things. Is that correct?

John McCormick: As far as we know, Chair. For example, if you went back to the referendum on the Scottish Parliament in 1997, some people had been preparing for that for years. When the Yes/No campaigns came about, it had been after a long period of people discussing it.

Q893 Chair: Yes, but until Labour won the election it was not certain there was going to be a referendum. There were no structures; there were no campaigns- Better Together or separation campaigns-lodged then, were there?

John McCormick: I am just trying to make the general point that I don’t think it is unique to this referendum-and referendums do vary greatly, as we said-that the arguments on major constitutional issues have been the subject of public debate for a long time.

Q894 Chair: Give me another example when umbrella organisations, fronts or whatever have been established so long before the actual date of the vote, as we have now?

John McCormick: The only one that comes to mind in terms of a long period is the New Zealand referendum in 2011. The polling date was announced on 2 February. The polling day was to be 26 November and the regulated period did not begin until August. There was a regulated period of 12 weeks-three months-in New Zealand last year. They had a long unregulated period.

Q895 Chair: I am not asking about the regulated period. I am deliberately asking about the unregulated period.

John McCormick: I am just saying there was an unregulated period between the announcement of the date of the referendum-

Q896 Chair: Which was how long?

John McCormick: They announced it in February and the regulated period began in August.

Q897 Chair: So the longest period that we can identify is six months?

John McCormick: That is the one that comes to my mind at the moment.

Chair: But this is over two years of potentially unregulated spending and behaviour, which clearly in a sense needs to be addressed, doesn’t it? It is very helpful to have clarified that.

Q898 Lindsay Roy: Would the Scottish Parliament be able to legislate to regulate the referendum campaign? Is that a devolved power?

John McCormick: As I understand it, the Scottish Government, as they have said in their consultation paper, intend to legislate, and the UK and Scottish Governments are in discussions about the basis of that legislation. I know that there is some disagreement between different people about the legislative basis of it, but, as we understand it, the Scottish Parliament can legislate for an advisory referendum.

Q899 Chair: As you understand it, the Scottish Government can legislate for an advisory referendum.

John McCormick: The Scottish Parliament can legislate for this referendum.

Q900 Chair: It is not an advisory referendum. You did use the word "advisory."

John McCormick: It has been described as an advisory referendum on the basis that it would give advice to the Parliament. I do not want to pre-empt the discussion.

Q901 Chair: Is that your legal advice?

John McCormick: No; I am talking about what I understand to be the Scottish Parliament’s position. They have legal advice, which I have seen reported and I have no reason to dispute that reporting or to question them, that they have the legal basis on which to conduct a referendum. On that basis they would be able to legislate for us to have a regulatory role in that referendum process.

Q902 Lindsay Roy: That differs from the UK Parliament view.

John McCormick: I understand that, yes.

Q903 Lindsay Roy: So there is nothing certain here?

John McCormick: I am hoping the matter will be resolved.

Lindsay Roy: So are we.

Q904 Chair: I want to clarify the basis upon which you are asserting the Scottish Parliament’s legal advice. Have you seen it?

John McCormick: No. I am not questioning it. The Scottish Government have published a consultation paper. We are working on that same consultation paper.

Q905 Chair: In which they have asserted-

John McCormick: They have stated their intention to have a referendum.

Q906 Chair: And they have asserted that they have legal advice that would support that?

John McCormick: Yes.

Q907 Chair: But you have not seen it and you have not taken legal advice to clarify whether their legal advice is correct?

John McCormick: I am aware of the fact that the UK Government take a different view, as Mr Roy has said. I believe that matter will be resolved one way or another in discussions at some time before the legislation process is under way, and it is a matter for us to abide by the legislation.

Lindsay Roy: It is assertion rather than fact.

Chair: That is a fair point. It is assertion rather than established fact.

Q908 Fiona Bruce: I want to go back to the grant question. I believe you have said that you consider that a Scottish referendum should have a lower grant than a UK-wide referendum. Is that right and, if so, what are your reasons for that?

John McCormick: All I said, Chair, was that we thought grants provided for lead campaigning groups were a good thing in principle because it allowed the process to take place. The Scottish Government are not recommending at the moment in the proposed legislation that there be grants. That is as far as I went. The level of the grant would be another matter.

Q909 Chair: Those who have lots of money already are not keen for it to be a balanced referendum by ensuring that each side has public money.

John McCormick: I have no idea how much money the different sides will have or have at the moment.

Q910 Chair: Do you read the papers?

John McCormick: I do.

Q911 Mr Reid: We have already established that before the regulated period starts there is no limit on what donations can be given or where they come from, but, once the regulated period starts, can you tell us what limits there would be on donations and expenditure?

Lisa Klein: Yes and no. Under PPERA there are no limits on the actual amounts of donations. There are some party funding talks that are progressing and a cap may be involved, but the current state of play is that there is no donation cap or limits on donations to parties and campaigners at this point in the UK.

Q912 Mr Reid: During the campaign itself would donations have to be from people or businesses within the UK?

Lisa Klein: Yes. They would have to meet the permissibility requirements under PPERA during a regulated or referendum period.

Q913 Mr Reid: What about expenditure? I think we have already had the evidence on that. We have already had evidence about limits on third party expenditure but what about donations to third parties? How is that regulated?

Lisa Klein: They are regulated in the sense that they would have to meet the statutory requirements of PPERA for donations that are received in connection with the campaign activity of a third party. There may be multi-purpose organisations and the campaigning segment may be fairly narrow. I am not saying this would be the case in the Scottish context here but just generally speaking for third parties. The regulation goes to money received for use in its electoral activity.

Q914 Mr Reid: Do you think there should be limits on individual donations during or before the campaign?

Lisa Klein: That is something that is really for Parliament to decide. There is ongoing discussion at the moment.

Q915 Mr Reid: We heard in evidence earlier that there does appear to be this loophole in that, before the campaign starts, donations can come from anywhere and for any amount. That money can then be spent after the regulated period starts. Will you be making recommendations to the Government that this is a loophole and it ought to be plugged?

Lisa Klein: To the extent that there is a loophole, it is because there isn’t the legislation and there isn’t a regulated period at this time. One of our obligations under this will be to report on the operation of the Scottish referendum. Certainly it will be something that we would consider. We have made recommendations in the past to address various issues that arise during electoral events. This would be no different.

Q916 Mr Reid: Will you be making these recommendations in the near future rather than waiting until after the referendum has finished before making recommendations?

Lisa Klein: No; we report on an electoral event after the event. The next opportunity will be to see what the response is from the Scottish Government to their consultation exercise, which is something that we are going to be doing a running commentary on.

Q917 Chair: Once the horse has gone, you would recommend that the stable door should definitely be bolted?

Lisa Klein: No; that is not what I am saying.

Q918 Chair: But you are not commenting as things are going along. If you notice abuses of any sort while things are under way, you would not actually comment until the end.

Lisa Klein: No. Under PPERA we have a statutory obligation to report on elections, and that is what we do. What we have right now are consultation documents that have been issued. We have submitted our consultation report. It would be inappropriate for us as a regulator to be commenting every week on something new that might be floating around. When there is an appropriate opportunity and time, we would be able to address these issues when there is a legislative proposal upon which to comment. There is not one at this point.

Q919 Mr Reid: The Scottish Government are presumably going to propose legislation to the Scottish Parliament. Would that be an opportunity for you to comment and perhaps make some of the points that have been raised today?

Lisa Klein: Yes, I think that would be an appropriate opportunity to do so.

Andy O’Neill: Our understanding is that they are independently assessing the 21,000 responses and they will report those responses some time from mid-September onwards. At that point we may get substantial proposals, and we will then look at them and comment if we feel it necessary.

Q920 Chair: But is it correct that your recommendations and comments can be ignored?

John McCormick: Anyone can ignore what we say, Chair.

Chair: Perish the thought. It would be considered first, certainly.

Lindsay Roy: Certainly we won’t.

Chair: No, no; certainly we wouldn’t do that.

John McCormick: The point about the regulated and unregulated period that Mr Reid mentions would certainly raise a challenge for further drafters of legislation. It would always raise a challenge as to how you could ensure that the regulated period began early enough to cover the areas that you are concerned about and what you refer to as "loopholes" before the regulated period, and what the trigger would be if the legislation for the referendum was not on the statute book. It raises challenges. I am not saying any challenge is insurmountable to lawyers or to legal draftsmen, but it does raise an interesting point about how all the issues that are concerning you could be captured timeously within a legislative framework.

Q921 Mr Reid: Before this Parliament’s Bill was passed, a UK general election could happen at any time at the whim of the Prime Minister. The regulated period, as you said earlier, started 365 days before that unknown date. So there is precedent for regulated periods having started even though people don’t know at the time that they have started. The precedent seems to be established.

John McCormick: Now that they are, the fixed-term Parliament allows it.

Q922 Mr Reid: But in this case, even though we don’t know the date of the referendum, what is to stop the rule being that the limit that can be spent is £x million and that limit is retrospective from polling day, even though we don’t know when the polling day is, because that is what happens with general elections?

John McCormick: On the issue of expenditure, we look at a 16-week regulated period and we look at expenditure limits for that. They are based on what we think can allow a good campaigning process to take place so that campaigners can spend sufficient funds to deliver the arguments. If that stretches across a longer period, then of course it would raise issues about the extent and limits of the campaign expenditure. A whole lot of other issues would come in on the back of that, none of them insurmountable to the legislators, but it would create other issues that would have to be looked at in making sure the campaign was effective for the voters. We always like to put the voters first to make sure that they get all the information they need on which to make their decision.

Q923 Mr Reid: As to foreign donations, surely it would be straightforward enough to legislate to say that no campaign in a referendum could accept money from a foreign source before the regulated period starts.

John McCormick: There are circumstances of course in which that could be put into generic legislation, yes; there are certain specifics, of course.

Q924 Chair: I want to clarify again the question of whether regulation is effective if it is only reported on and some sort of recommendation made after the whole process is finished. It is a "The horse has bolted and we must do something about it" sort of question. I understand your anxiety not to be constantly providing a running commentary, but on the other hand surely there must be some mechanism by which there is supervision while things are going on. If something that is patently an abuse is occurring, you or someone should be able to intervene.

Lisa Klein: I agree with you. That is one of the reasons why we have recommended that there be pre-poll reporting during the referendum period. That was one of our recommendations that we should-

Chair: Sorry; I did not hear that because people were coughing.

Lisa Klein: I said that I agreed and that that was one of the bases for us to recommend in our 2011 report that there should be some form of pre-poll reporting on donations during the referendum period.

Q925 Chair: Would that be designed to address all the potential abuses such as men arriving at Glasgow airport with bags of money and all the rest of it?

Lisa Klein: Everything.

Chair: Excellent; you might very well regret that.

Lisa Klein: Can I record on the transcript that I have a broad smile on my face? You raise a very important point. I have been in this business for a very long time on two sides of the Atlantic. No matter how much you close the gap in being able to address breaches that may arise, you have to be realistic. The due process that is required in our democratic traditions for being able to investigate and address them can always go to the wire and is often after the result.

Q926 Chair: Absolutely; I think that’s right. The point we have been trying to clarify is that, where there is something blatant, obvious and noticeable, there should be some opportunity for somebody to intervene while that is going on and take some sort of action. People themselves within the political process would be very unhappy if there was seen to be an abuse, and, even though there might not be legislative power to stop it, public opprobrium would be quite a powerful weapon in those circumstances and would tend to keep the participants honest. But, if they thought it would only come out afterwards, then they might be much more willing to take the risk.

Lisa Klein: Could I assure the Committee and the Chair that one of the things that we do is engage in campaign monitoring, which is live time? What we try to do is get the parties and the participants to abide by the law. It could happen here a lot where the law doesn’t quite exist. One of the things that we do is campaign monitor. We try and get compliance so that if something arises that is prospectively a problem we will contact campaigners and be in touch with them.

During the UK referendum in 2011, we designated one person within our staff to be a point of contact for campaigning organisations so that if they had questions there was one place that they could come and we could get their questions answered. There is a lot of effort, and the Commission is very proactive in trying to get the information out and trying to get people to comply with the law. If something is not going right, they try to be able to identify it early.

Q927 Chair: Will that person be somebody who, at some stage in the past, has either been involved in campaigning or will have access to people who have some knowledge of campaigning? On the other side, there is an anxiety that the political process is being regulated by people who have had no involvement in it and don’t understand the day-to-day processes, pressures and so on. Therefore, without wanting to seem lax, there is a certain degree of necessity for flexibility in all this.

Lisa Klein: There is. Indeed, we have talked a lot here today about putting our voters first. One of the things that we do is look at things through the lens of the campaigners as well so that there is vibrancy and an ability to campaign. We currently have under way a review of PPERA, looking at it to see whether there are unnecessary burdens that can be eliminated from campaigners. So that does go into the mix.

John McCormick: We are all well aware, and we say in a lot of our publications, comment and advice to people, that the last few weeks of a campaign are the most intense. The burdens that we put on in terms of reporting should be sensitively handled. For example, during the UK general election period the reporting is done on a weekly basis. We understand that weekly monitoring is a burden to people, but we hope by the time it is up and running and comes through it becomes routine. I would reassure you in terms of our contact with the political parties across the UK that we have the political parties’ panels, and we keep in touch with them and take advice from them.

Chair: Some of the implementation of the rules really does become jobsworthy. They are small, petty things. You are not meant to stand within a certain area of a polling station, even though it is pouring with rain and you are soaking, whereas moving five yards that way would let you stand under shelter. It is almost as if it is implemented out of badness, but presumably of course that is not your responsibility. You are not responsible for rain or badness.

Q928 Fiona Bruce: What are the main aspects of non-financial regulation?

John McCormick: There is not much beyond non-financial regulation.

Lisa Klein: "Party election finance" is the title here.

Fiona Bruce: Perhaps I could give Ms Klein and Mr McCormick a rest and ask Mr O’Neill to answer that question. That is your title. It is finance, isn’t it?

Andy O’Neill: Yes. Could you repeat the question?

Fiona Bruce: What are the main aspects of non-financial regulation?

Andy O’Neill: Of campaigners? It would depend on what the rules were for the referendum. Beyond imprint there is not really very much. Often we get parties and campaigning organisations, to use a colloquialism, "shopping" each other to the Electoral Commission. We are not the Truth Commission. It is not our job to opine on what people say about each other. There are rules of defamation and so on, but beyond imprint it is not very much.

Q929 Fiona Bruce: For the record could you say what you consider are the key principles behind campaign regulation?

Andy O’Neill: Campaigning in the political sense?

Fiona Bruce: Yes.

Andy O’Neill: We don’t have any expertise in that area. It is really down to the political parties and candidates to get their messages across.

John McCormick: What we are looking for in terms of a referendum, as I said at the outset, are transparency and fairness. We hope that by putting the voter at the centre of the process we can ensure that the legislation takes account of that so that they can trust the campaign, be informed during the campaign and the campaign can be appropriately financed to make sure the arguments get put across. Transparency and fairness underpin everything.

Andy O’Neill: And within the laws that govern it.

Q930 Mr Reid: We have talked about the Yes and No campaign and regulating that. Say we ended up with a three-option referendum. What does that mean for regulation?

John McCormick: It is an interesting issue if there is more than one question and more than two outcomes, as it were. We have covered this ground in this Committee before in terms of the number of outcomes and the number of designated organisations. We could not say anything specific about that until we had tested the question. As I said around this table, and there may be some frustration repeating it, you test a question or questions and then that testing and research process gives you the number of outcomes. The number of possible outcomes informs the designation process. We don’t speculate on models. I know some people have been speculating in the press about the number of outcomes you could have. Our experience tells us that you should not presume the number of outcomes until you have done the research testing.

Q931 Mr Reid: If there are three outcomes, that could obviously be arrived at in different ways. You could have the three options on the ballot paper and order them 1, 2, 3, or you could have different questions. Is that something you would be giving advice on? If the Scottish Government came to you and said, "We want a referendum with three options", what advice would you give on how that should be put on to the ballot paper?

John McCormick: We would expect Parliament, whether it is the Scottish or UK Parliament, to come to us with proposals for questions to be tested, rather than for us to inform that process. As we said before, if we are testing the question, we should not be a part or perceived to be a part of the formulation of the question. Lisa, do you want to add anything on the designation question?

Lisa Klein: When you register with us to be a campaigner for the referendum, if you are a designated campaigner, and spending over whatever the threshold is-under PPERA it is £10,000 and under the proposal put forward by the Scottish Government it is over £5,000-one identifies the outcome for which one is registering. There is a bit of an anomaly because there is nothing that actually requires that spend. You are free to spend all the money on one outcome. What I can say is that if you are a campaigner you get one limit. If you want to spend it between two options, you may be able to do that, but for a permitted participant or people who are participating as registered campaigners there is a limit that would have to be allocated according to their wishes.

Q932 Mr Reid: Let me give you a scenario. Say three options were put forward. Let us call them independence, devo-max and the status quo. Say the lead organisation for status quo worked out from its canvassing halfway through the campaign that it was going to end up third and decided that the least worst of the other two options was devo-max and started campaigning to urge its supporters to vote for devo-max either as a second option or to vote that way if the question was devo-max. If that organisation is registered as voting for the status quo but it ends up campaigning for one of the other options, how does that affect the spending limits?

John McCormick: As I understand it, the Act does not restrict the number of options that people can campaign for. It may be an anomaly in the Act but it does not restrict that process.

Lisa Klein: That is correct.

John McCormick: You have one limit, but, if you read the Act, on the basis of that, it does not prohibit you from campaigning for more than one option, but you have one limit. It may be an anomaly.

Q933 Chair: Simultaneously?

John McCormick: Yes.

Chair: You can simultaneously campaign for two different things?

John McCormick: It does not restrict it, as I understand the Act.

Lisa Klein: This is the PPERA legislation.

John McCormick: This is PPERA.

Q934 Chair: I want to pursue this slightly. I understand your point that you don’t want to enter into the question. We did detect that last time. If there are three possibilities, does that mean you would have three lead organisations authorised by you and there would be a lead organisation for each possible outcome?

John McCormick: It is a possibility, yes.

Lisa Klein: It’s a possibility.

Q935 Chair: I know it is a possibility but would that be the expectation? If you had three options, you would have a lead organisation for each.

John McCormick: If that were defined in the law that establishes the referendum, yes. It may be defined in the law, but the scope of the designated organisations and the lead organisation would have to be defined. As I have said, it would seem to us that PPERA has an anomaly in it where it does not restrict campaigning on more than one option but it does restrict expenditure-

Chair: I understand that point.

John McCormick: We can’t presume what is in the law.

Q936 Chair: I understand that people can switch if they think they are losing; I understand that. People did it in the campaign for a coalition. They started off on their own and so on. If you had three options then, you would have three lead organisations. If you had four options, since it is entirely possible that you would have devo-lite, devo-plus or something similar as an option, for each option potentially it would be appropriate to have a lead organisation?

John McCormick: That is a fair expectation.

Q937 Chair: Then spending limits would apply to each of those. You are saying that at the moment there would be no constraint upon them being set up to pursue one option, deciding they were going to lose and then deciding to campaign either for another or to say, "Vote for us first but then vote for them second"?

John McCormick: We are defining that anomaly in PPERA. Since we have now learned of this anomaly and will be drawing attention to it, the next legislation may take account of that.

Q938 Lindsay Roy: Would it be right to say that you have no experience of multi-option referendums on that constitutional basis?

John McCormick: That is right, yes.

Q939 Lindsay Roy: Are you aware of any multi-option constitutional referendums that have taken place on such an issue throughout the world? What percentage are binary, single options and what percentage are multi-options?

John McCormick: I could not give you a definitive answer to that. I have not done the research definitively.

Chair: Can you give us any answer?

Lindsay Roy: Very few indeed.

John McCormick: Are you aware, Lisa?

Lisa Klein: No, I’m not.

Q940 Chair: So none of you are aware of any?

John McCormick: We are not aware of them. That is not to say there aren’t any.

Chair: Absolutely.

Q941 Mr Reid: You have already said that, if the Scottish Government put a proposed question to you, you would do research and comment on that question. If we are going to have three possible outcomes, obviously that means that the design of the ballot paper will be something completely new and it is something we have never had before. Would you also expect to be giving advice on the design of the ballot paper?

John McCormick: Yes.

Q942 Mr Reid: Would you be giving advice as to whether, if there are three options, the best way to conduct the referendum would be to rank them 1, 2, 3 or to have three separate questions? Would you be giving advice on that?

John McCormick: That would be covered within the question assessment and the research process that we would undertake. We have long said in a number of different elections and referendums that ballot paper testing is something we recommend. The ballot paper should be tested with real-time voters. Sometimes you can take the content of a ballot paper that we have all agreed, but the layout and the design of the ballot paper can have an impact on how the voter perceives it. We also look for real-time ballot paper testing.

Q943 Mr Reid: So your advice to the Scottish Parliament would be that the legislation should include a phase where you comment on the ballot paper itself?

John McCormick: Yes, and we anticipate that may precede the legislative process because of the process within the Scottish Parliament where the question would be part of the Bill.

Andy O’Neill: Our advice to the Scottish Government is that whilst they are the question formers-they should form the question-they should also look at the design of the ballot paper. We have drawn their attention to our "Making your mark" guidance, which is a design guidance document for ballot papers and such. The Scottish Government have a record of testing ballot papers. They tested the council election ballot paper used last May.

Q944 Mr Reid: Within the Electoral Commission do you have any expertise or experience of referendums with three possible outcomes?

John McCormick: We don’t have that experience, no. Every referendum is different, Chair.

Q945 Mr Reid: You are effectively saying that we are in uncharted territory here?

John McCormick: I make the point light-heartedly, but generally it is something we hold on to. When you look at a referendum in one country, you cannot transpose it into another country with a different electoral system. This is a major constitutional question that is going to be put to the people of Scotland. We don’t know the basis on which it is going to be put yet, but it is a major issue and therefore there will be a lot of passion, concern and interest around this referendum. To some extent, one should never qualify it, but every referendum is unique. We start from the basis of looking at it afresh. There will be fresh legislation for this referendum. There will be a fresh context. It will not import from any other referendum that we are aware of.

Q946 Mr Reid: I am sure you remember the difficulties in 2007 where we had a ballot paper of a type that we had not experienced before. How would you ensure that, as we are in uncharted territory, there would not be a repeat of the mistakes that happened then?

John McCormick: As Mr O’Neill said, as part of the testing, we all learned a lot from the 2007 experience. We were pleased that when we got to the local elections this year and the Scottish Parliament elections last year there were no repeats of those problems. We have learned from that. The "Making your mark" document about the design of ballot papers-I know it is a bit anoraky-covers materials in polling places, the design and some of the issues that our researchers found. It is a good basis on which to start the design of a ballot paper and then test it with the voters. As Andy says, the Scottish Government did that with the last local elections.

Q947 Mr Reid: The comparison between a multi-option referendum and the 2007 situation was that in 2007 there were effectively two questions on the one ballot paper-one for the constituency and one for the list. That was not a situation that arose in 2011 or 2012. There will be similarities. So what lessons did you learn in 2007 regarding two questions and one ballot paper that you would put in?

Andy O’Neill: You have to test the ballot paper.

John McCormick: Also, you should have a national standard for a ballot paper. The same design was used. Mr Reid raises an important point, Chair. The design of the ballot paper across Scotland with the Electoral Management Board was a common design across Scotland. In 2007, when the problems arose, you were faced with different designs of ballot papers in different parts of Scotland. That gave birth to the "Making your mark" research process and to the principle of testing ballot papers. That lesson has been learned; I hope it has.

Q948 Mr Reid: We had advice from previous experts and sessions that the rules for counting could affect the result. Would you also expect to give advice on how the counting should be done if you have three options?

John McCormick: The convenor of the Electoral Management Board was the Scottish counting officer for the UK referendum last year.

Q949 Mr Reid: Yes, but that was just one question.

John McCormick: There is a lot of experience around the Electoral Management Board table. Andy sits on that Electoral Management Board and will be-

Q950 Mr Reid: But if there are three options, should it be two or three questions on the ballot paper?

John McCormick: That will come through the testing, which will precede-

Q951 Chair: So, if this goes wrong, who gets the blame? Is that you?

John McCormick: I presume people will apply blame quite widely if it goes wrong.

Q952 Chair: No, not necessarily. I think you are likely to be standing pretty much in an isolated position, unless I am mistaken.

John McCormick: Can I clarify what would go wrong that we would be blamed for, Chair?

Q953 Chair: There are several things. Leaving aside the question of the result, if there is deep confusion about what people were voting on, in the result people might come out and say, "I didn’t know that that’s what I was doing." We don’t need to have hanging chads, or the mistakes that we had in the previous Scottish elections. If I knew what might go wrong, I would be telling you now. It is a question of just identifying responsibility. As Alan has said, some of the advice we have had is that, if there are three options, then there really needs to be three separate questions. If you had four options, it goes up to six questions in order to pose each against each other. This is under the dead Frenchman rule. Then it goes on beyond that. That obviously then has a political constraint about how many questions and options it is reasonable to put in front of people.

John McCormick: Our testing is rigorous. As we mentioned in the previous session, Chair, we have said that the 12 weeks may have to be expanded to 20 weeks to re-test what comes out of that first round. If there is more than one question, there may be an extended period beyond that. We are very much aware of that and very alert to the speculation that is going on about the number of questions. For us, that will extend the question testing period. It is important that that testing is rigorous on all options across the country. It may take much longer than we anticipated the last time we spoke.

Q954 Mr Reid: If we have three options, would you be advising that the ballot paper should have three different Yes/No questions, pitching each of the options against each other?

John McCormick: That takes us into the area we don’t want to get drawn into. It is a hypothetical situation and I couldn’t answer that question with any validity at all.

Q955 Mr Reid: Who else could answer that question?

John McCormick: We take it and we test it. We don’t speculate on it.

Q956 Mr Reid: You are testing on how the voters can understand the ballot paper, but you will have three separate counts. Would you also be putting forward recommendations on how those three separate counts should all be aggregated together to give a result?

John McCormick: Yes, that is all part of the research process. I would like to underline that it is a rigorous process. We would take what was offered to us by the Parliament or Parliaments to be tested. We would test it rigorously and all the points Mr Reid has covered, Chair, would be part of that testing.

Q957 Mr Reid: I am not quite sure who initiates the process. Say the Scottish Government or the Scottish Parliament come along and say to you, "We want three questions." Are you expecting them to do the initial design of the ballot paper and the initial rules about how the three different counts should be aggregated, or would you be offering advice?

John McCormick: We would expect the proposals to come from the Parliament and then we would test them.

Andy O’Neill: What has happened in UK referendums is that the Government have proposed a question and we have commented on the question and done the question assessment. Then Parliament has decided. Our understanding is that the Scottish Government will propose the question and we will comment on it.

Q958 Mr Reid: Or questions.

Andy O’Neill: Or questions.

Q959 Mr Reid: So your role is to research and feed comments back. Would you make suggestions, though? Do you just react to what the Scottish Government are putting forward to you or are you proactive and say, "How about trying it this other way?"

Andy O’Neill: No; we don’t get involved in question formation. It is for the Government to propose the question. We will test it and then make our question assessment report public.

Q960 Mr Reid: The Government or Parliament obviously decide the questions they want to ask. I am talking about ballot paper design and how you then work out an outcome from what people have marked on the paper.

Andy O’Neill: We have already drawn our "Making your mark" document to the attention of the Scottish Government, which gives the principles around ballot paper design. They already have that.

John McCormick: And then it would be tested.

Chair: This is a trifle unfair on you-not that that necessarily stops us-because we are hypothetically at two different levels. We are hypothesising that the Scottish Government get the permission to do more than one question. The section 30 notice might very well specify that it is one question only, in which case all of this about multiple questions and dead Frenchmen falls by the wayside. Okay, I think that is clear. Are there any other points that any of my colleagues want to raise?

Mr Reid: I wouldn’t say "clear" is the right word.

Q961 Chair: Are we all exhausted? As I asked you before, are there any answers you had prepared to questions that we haven’t asked that you want to get off your chests?

John McCormick: I would just like to add a PS. It is a very arcane point to end with, Chair, but I would like to clarify something in response to Mr Reid. In the Welsh referendum and in the PVS referendum the question that was given to the Electoral Commission to test was modified subsequently. The Electoral Commission went back to the Parliament and the Assembly with revised questions and they were accepted by the Parliaments. That is an important point in terms of the question. Parliament and the Assembly were happy to accept the revised question that came from the research. I am sorry to be so pedantic, Chair.

Lindsay Roy: That is very helpful.

Chair: I reassure my colleagues that anybody such as Mr McCormick, who likes Woody Guthrie, can’t be all bad. In those circumstances I will draw matters to a close.

Examination of Witnesses

Witnesses: Professor Sarah Birch, Department of Government, University of Essex, and Professor Justin Fisher, Professor of Political Science, Brunel University, gave evidence.

Q962 Chair: Thank you very much for coming to see us at what might be a slightly inconvenient time. Welcome to the Scottish Affairs Committee. As you may have identified, we are pursuing the question of a separation referendum in Scotland and the various aspects thereof. Would you introduce yourselves and tell us what your experience is that makes you qualified to express views to us today?

Professor Birch: My name is Sarah Birch. I am a Professor of Government at the University of Essex. I specialise in the study of electoral administration.

Professor Fisher: My name is Justin Fisher. I am Professor of Political Science at Brunel University. I specialise in party finance and campaigns. I was adviser to the Hayden Phillips inquiry and also the most recent inquiry by the Committee on Standards in Public Life.

Q963 Lindsay Roy: Good afternoon. What would you identify as the key principles to ensure that a referendum is fair, because, after all, that is what we are all seeking to pursue?

Professor Fisher: I think it is reasonable to regulate the maximum spend over a certain period. One of the key questions is the length of the regulated period. It is essential that the question asked is clear and unambiguous and, indeed, not leading. I also think it is very important that we don’t try and regulate the life out of politics.

Professor Birch: I agree with Professor Fisher. The referendum has to be credible and has to be perceived as being credible. There are two aspects to this. First, the process through which the rules are decided has to be credible and perceived as being credible. Secondly, the rules themselves have to be credible. Ideally, the rules governing an election are successful if they are not talked about at all during the election campaign or the referendum campaign.

If you think about the typical general election in the UK, nobody talks about electoral administration. It is just taken for granted that we have quality electoral administration in this country, there is no problem with it and there aren’t articles in the press about whether the votes will be counted fairly. That is what you want in a referendum. You want a substantive discussion about the substantive issues. You don’t want a debate about whether the rules governing the issues are credible.

If the rules are made in a way that is credible, through a process that everyone recognises is a fair process, and if there is a buy-in for everyone who is involved in making those rules and the rules themselves, the rules will be credible. Secondly, the rules will be credible if they provide a level playing field for everyone who is involved, if they give equal opportunity for all sides in the campaign to express their views and the voters are well informed, and obviously if the ballots are printed and counted correctly and one has an opportunity to vote and so forth.

Q964 Lindsay Roy: Professor Birch, you have done some specialist work on electoral malpractice.

Professor Birch: I have.

Lindsay Roy: Would you like to highlight some of the things you have discovered?

Professor Birch: I have discovered that electoral malpractice tends to occur in countries that are undemocratic. We don’t have a tremendous amount of electoral malpractice in the UK. I have also discovered that there is a perception among established democracies, including many European democracies, the United Kingdom and the United States, that there is a fairly high degree of electoral malpractice when in fact there usually isn’t.

The trick is to build confidence in the electoral process. Even in the UK there may be 20% or 25% of people who are not entirely confident that the process is free of malpractice, when most people who are involved in elections are fairly confident that malpractice only occurs in very isolated cases. The question is how you build that confidence. That is why I talk about credibility and people believing that the process is fair.

Q965 Lindsay Roy: Given the unique circumstances here in terms of a separation referendum from the UK, what would you highlight?

Professor Birch: As I said, a buy-in on the formation of the rules so that everyone feels that their views have been taken into consideration. If there was a perception that a body that was associated with one side in this referendum imposed the rules, they would not have legitimacy. The rules can be perceived as legitimate only if everyone accepts them from the outset.

Q966 Lindsay Roy: I suppose it is really how you build trust.

Professor Birch: Yes.

Q967 Chair: I want to follow up on some of the points with Professor Fisher first. Your first point was regulated maximum spend. I cannot remember if you were in the room when we were talking about the regulated period and the unregulated period. We are anxious about the unregulated period, the length thereof and the complete lack, as far as we can see at the moment, of any controls. To which were you referring? I think you said the regulated maximum spend. Was that referring to the regulated period?

Professor Fisher: Yes. I was in the room when you were discussing that previously. There is a balance to be struck. In my view, it would be wrong to regulate everything between now and the likely date in autumn 2014. That would be excessive and probably cause more problems than it would solve. However, there is a case potentially, given the long lead time, to extend the regulated period beyond the minimum that has been recommended by the Electoral Commission, which I believe is 16 weeks. How far you go seems to me to be a question of judgment. At present, for national elections in the United Kingdom the regulated period is 365 days. If you then take elections to the Scottish Parliament, for example, which is a fixed-term Parliament, we know when election campaigning is going to take place and we also know that the regulated period is far shorter. A lot of spending will go on in the period before the regulated term starts.

It seems to me that the difference relates to the admissibility of certain kinds of donations. This is one of the areas, building on the trust argument, which may be of concern to both sides. For example, if the designated organisations don’t exist, there would not be any legislation to stop donations from the wider Scottish diaspora. That has been a controversial issue ever since PPERA was introduced. You could, on one side, say there is foreign money pouring into a Yes campaign, but, equally, those in favour of independence could argue that the same would apply to money pouring into the No campaign from south of the border. That is one of the issues that needs to be considered and it is one of the ones that could damage the very trust that Mr Roy refers to.

Q968 Chair: What is the solution to that one?

Professor Fisher: It is possible to look at a longer regulated period than the minimum of 16 weeks. Given the kinds of sums for maximum spend that we are talking about-if I recall correctly, the Scottish Government have proposed £750,000-then we have to be careful about regulating relative to the amount of money that can be spent over a regulated period of time. If you extended it to 365 days, analogous with a UK general election, that would be an awfully long period of regulation to regulate the spending of that sum of money, which, in the context of an election, is fairly small.

Q969 Chair: If the Scottish Government’s proposal was for £750,000 to be spent during the existing regulated period and you then had a second regulated period, so to speak, it would not necessarily mean that only that £750,000 could be spent in the longer period. It would mean that in the longer period you would have to report what you were spending. Just listening to you, I am assuming that you would, in a sense, have a regulated period but have, as it were, regulation-lite or some equivalent.

Professor Fisher: There is already an example of that. Before the last election, the Political Parties and Elections Act 2009 introduced two periods of regulated spending for candidates. There was a long period and a short period. The effect of that was to increase the permitted candidate spend to an excessively high level, in my view. Thankfully, very few candidates got anywhere near that level of spend; it was around £40,000 each. You could do that, but my feeling is that that introduction in 2009, which was a sort of compromise agreement that came out from the Hayden Phillips review, led to more confusion than clarification. If you are going to have a regulated period, it should be one regulated period and not a kind of light period and a strong period, if you see what I mean.

Q970 Chair: It is a question of what we are regulating and what we are worried about. One of the worries that I certainly have-and it is reflected in some of the views expressed by my colleagues-is that the referendum gets bought by huge amounts of money flooding in, as we sometimes see in the United States, during a period when there are no expenditure limits. That is seen to be unfair and, therefore, there ought to be a degree of honesty and openness about amounts of money raised and spent during a much longer period; otherwise you can just spend mega dosh in the period immediately before the regulated period.

Professor Fisher: That is a perfectly reasonable concern. The question for you is how far back you go and at what point you designate an organisation. That seems the critical issue to me. At one point is there a designated group, because before designation in effect they don’t exist?

Q971 Chair: In Scotland at the moment there are two groups that have designated themselves, so to speak. It is not official. I do not know if you were here at the very beginning when we were saying there is the Yes campaign, which is basically a front for the SNP. Then you have a broader based campaign. They are clearly identifiable at the moment. Surely there is an argument for saying that what they draw in and what they spend should be regulated as of now. If you then have a third option such as devo-max and if you have an organisation to campaign for that, they would be regulated as from the date that they announced themselves. Does that seem reasonable?

Professor Fisher: You could consider that to be a reasonable judgment. My concern with these kinds of things is that we try and regulate for every eventuality and we end up simply providing loopholes, which leads to a greater lack of confidence in the rules. There is an argument that says that, the more rules you create, the more loophole-seeking emerges and therefore a greater lack of trust.

This is not an argument against transparency, but, for example, if you look at the period after PPERA where parties were required to declare all their donations, the result was that there was a greater lack of confidence in party finance because there were simply more stories going around. People were finding out about all sorts of things that weren’t previously there. There is a balance to be struck. I recognise the point you speak about, but, in the context of other pieces of legislation that regulate these kinds of things, anything over a year would be excessive in my view.

Q972 Chair: You said that laws provoke other things. Surely there is nothing else that covers the front organisation and the broader base campaign; there is nothing else that regulates them at the moment?

Professor Fisher: That is true, but I am talking about other elections.

Q973 Chair: We are not talking about elections. We want to focus on this. As I understand it, there is nothing at all to stop, legally, either of these two organisations taking huge amounts of money. I do not know whether you were in the room when we were saying that, if anyone wanted Scotland to leave NATO, the KGB could be funding the SNP in order to bring that about. Theoretically, there is nothing to stop that, and that would not need to be declared. It would not need to be above board and nobody would necessarily know. It just seems appropriate that there is some sort of transparency about money both spent and raised during this unregulated period.

Professor Fisher: I agree, but on the other hand the other legislation is not irrelevant in this case. Prior to the introduction of PPERA in February 2001, we had no information about any of the income going to the parties. Any of the parties could raise as much as they wanted from wherever they wanted. In a sense, the situation that you describe as being unfortunate is unfortunate only in the context of the last 15 years. The other elections are relevant in that sense.

Q974 Chair: Professor Birch, you have kept silent during this. Do you want to comment on any of this?

Professor Birch: Yes. I agree with Professor Fisher on this. The fundamental problem is that countries such as the US, for example, have special organisations and a special designation as being political campaigning groups and political lobbying groups. We don’t have that in this country. An organisation that sets itself up potentially to be one of the lead organisations in a referendum has the same status basically as a stamp collecting club before it is designated as that type of organisation. It would be somewhat unfortunate if you gave organisations a different designation simply for the purposes of this referendum rather than changing the law broadly and creating a new status of organisation that was recognised as a political lobby or campaigning group that would then be something relevant for all organisations in the UK. Organisations in Scotland might feel that they had been singled out for treatment that was different from other organisations in other parts of the UK, which might potentially be setting themselves up to campaign for some referendum that they might want to have in the future.

I agree with Professor Fisher that, without that designation of a special type of organisation, it would be odd to have organisations regulated this early. I also agree that having some regulation that might extend to up to a year before the referendum would make quite a bit of sense. It seems to me that the current minimum period is very short and you would want some regulation extended quite a bit longer than the current regulations stipulate.

Q975 Jim McGovern: On a point we were making earlier, I am reminded of a visit I made to America in 2006. I was paired up with a Congressman from Kansas. It was coming up for mid-term elections. He was doing a phone-round to try and drum up financial support. After that he said to me, "That’s me up to half a million dollars now. How much do you spend on an election?" I said, "Probably about £11,000 is the maximum." He said, "Is that per day or per week?" I said, "No, that’s it." He could not actually believe it. I think our system is probably better and I am certainly in favour of regulation, but do either or both of you have a view on who should regulate a referendum on separation for Scotland?

Professor Birch: PPERA very clearly sets out the regulations for referendums. As set out in PPERA, the Electoral Commission is the natural body to regulate the referendum.

Q976 Jim McGovern: Do you think it is important who the regulatory body is?

Professor Birch: Yes. As I said before, to make special rules for this referendum that would govern campaigning groups and who is regulating would seem extremely odd. Why make special rules? The rules that we have are accepted as being fair. There are lots of things said about the referendums we had last year, but I don’t think too many people said that the regulatory structure was unfair. If the regulatory structure for referendums is broadly accepted, and we have had several referendums under the new regulatory structure we have had in place since the late 1990s, why change it? It seems to me that that structure is accepted as generally working.

Q977 Chair: Have you seen the recommendations that the Electoral Commission have made about changes to PPERA? As I understand it, they have made a number of proposals about changes, none of which are major, but they are all tidying up. I presume you generally support those as a means of improving the existing system. As I understand the first of your remarks, what we have is fine if it is tinkered with, but there is no need to do anything much beyond that?

Professor Birch: Yes. I believe the Electoral Commission are aware of some changes that need to be made, but that would be to enable them to conduct the referendum more effectively.

Professor Fisher: The principal problem has been that, since PPERA was passed, there were some drafting difficulties that meant that some areas of the law were uncertain. For example, in the AV referendum there had to be an amendment to remove the confusion about media organisations and expenditure limits. There was a series of drafting difficulties, which is not a surprise given the size of PPERA and the radical change that it led to.

Going back to your point, I completely agree with Sarah. Going back to this trust argument, the idea of setting up a duplicate Electoral Commission for one referendum seems to me to have no reason behind it and would cause the sort of uncertainty that you speak of.

Q978 Jim McGovern: Going back to what the Chair raised earlier about the regulation period, I refer back again to my experience in America. I don’t know if this applies to presidential elections, but research in America seems to suggest that the candidate who raises the most money and then spends it tends to win the election. If the regulation period is only going to be 16 weeks and one campaign is awash with money while the other might not be, that sounds pretty unfair to me.

Professor Fisher: What works in the States doesn’t always work in this country. This is an area where I have done quite a bit of research. We find that at both national and constituency level the amount of money you spend-certainly at constituency level-can have an impact but it can easily be offset by the efforts that are made for free. We have just written a paper, for example, that demonstrates that, although the Conservative Party at the last election had much more money to spend and on average their candidates spent lots more than any of the other parties, their efforts were offset by the voluntary efforts of Labour and Liberal Democrat supporters.

You can’t run an election without money and nobody would pretend otherwise, but the simple link between higher spend and higher votes doesn’t work quite as neatly. Certainly at national level there is barely any evidence for that applying at all. If you take the last election, the Conservatives raised £20 million, which is broadly speaking the limit they could spend nationally, in the last two quarters before the election. They spent right up to that limit and Labour was only able to spend something like £11 million. Yet the bang for buck for the Conservative Party simply wasn’t delivered. There is some relationship but it is by no means perfect. The argument that you can buy an election doesn’t quite work as well here, partly because of the very sensible restrictions that we have on what money can be spent on. Our campaigns can’t buy airtime, whether it is referendum or election campaigns. Airtime is only provided through party election and referendum broadcasts. That is what keeps our costs down.

Professor Birch: I would just add this. The other thing to bear in mind is that in the United States most of the candidates are not very well known to the electorate and the political parties don’t play such a large role. People’s views are more likely to change when the options before them are unknown and they have to inform themselves to make a decision.

In the UK, when most people vote in elections on the basis of a political party, they are less likely to be swayed by the types of things that money might buy. Likewise in a referendum, some people might be somewhat unclear as to what devo-max means, but people in Scotland have had a long time to think about the question of independence. They have been asked about it before. So we could anticipate that money would have less of an impact on that decision than it would, say, in a typical US election campaign.

Q979 Pamela Nash: I was going to come back on your comments there, Professor Fisher. I don’t think anyone would say that money was the only element in an election campaign, but, using the examples that you used, if you had a candidate with a lot more money and a candidate who didn’t but they both had the same amount of volunteers doing the same amount of work-when you equalise every other part of that campaign-the money is going to make a massive difference.

Professor Fisher: It depends how you spend it. You can spend money wisely or unwisely.

Q980 Pamela Nash: If they each spend it wisely, if one has more money, that is going to make a huge difference.

Professor Fisher: It could potentially make a difference; absolutely. The point I wanted to stress is that there is not a simple pattern that suggests that if you spend £x you get x votes. Of course the power of the argument is terrifically important, particularly in the context of a referendum on independence, which I assume in the Scottish context is a very emotive topic where there will be people with quite entrenched opinions who are unlikely to be swayed. Campaigning is usually about getting your own people out rather than persuading others. In this context-and, forgive me, I am not up on the most recent polls in Scotland-unless there is a huge group of undecideds, the money is unlikely to make as much difference as we might expect.

Q981 Pamela Nash: If we take the argument out, that is obviously established at the start of the campaign and different elements will affect it; but on the undecideds, if every other element is similarly matched, then the money could potentially make a difference to the result.

Professor Fisher: Forgive me, I am not suggesting for a moment that money is irrelevant. Of course you have an information advantage, effectively, if you have more money, but there is a point at which the spending could deliver diminishing returns. This was one of the arguments, for example, in the last election. If you are swamped throughout the unregulated period with glossy booklets about the candidate from x party, there comes a point at which this is unlikely to make much of a difference.

Q982 Chair: But that last point is simply not true surely. If you look at the Ashcroft money, for example, there are a whole string of Labour candidates that believe it was Ashcroft money that beat them more than anything else.

Professor Fisher: Forgive me, Chair, but believing is not the same as evidence.

Q983 Chair: That’s true; okay, that is a not unreasonable point. If you look at the correlation between Ashcroft money and activity and all the rest of it and the results of the election, people who were involved in the election presumably had a fair view of what was having an impact upon the electorate in which they were competing. I am not clear if you are saying that it had no impact whatsoever.

Professor Fisher: I am not making that point. What I am saying is that it is very difficult to make the argument that, if you are able to spend x more than the next party or the next campaign, you will automatically deliver that advantage.

Chair: That’s true.

Professor Fisher: That is not to say that you shouldn’t regulate money. In a sense money is one of the only things you can regulate, but it can be offset by all the other things that go into an election campaign.

Q984 Chair: It was clear that the Tories spent more in Scotland per successful candidate than anybody else because they got one. No matter how much you spend trying to market rotten fish, people are not going to buy it, without making that an exact parallel. I understand that, but I think you have tended to take an extreme position on this on the basis that I have not yet come across anybody campaigning for my party who does not feel that a campaign would be improved by having more money. In my constituency, for example, the SNP, who had very few volunteers, were paying people to deliver leaflets.

Professor Fisher: That’s illegal.

Q985 Chair: They were paying people to deliver leaflets as distinct from us delivering them with volunteers. Had they not had that money, the leaflets would not have gone out. It is not true to say that it does not have an impact. There is then the question of whether having leaflets out there makes any impact, but I find it difficult to imagine that there has not been a regression or some sort of mathematical stuff done somewhere.

Professor Fisher: Forgive me, it is not an extreme position; if anything, it is a moderating position. The point I am trying to make is that it is not a simple relationship between the amount you can spend and the support you get. For sure, you have to have money in an election campaign. No reasonable person would argue that you don’t need money.

Q986 Jim McGovern: I want to go back to the point I made earlier about my experience in America. It wasn’t only the Congressman who told me that the candidate who spends the most money generally wins. Every politician, every researcher and everybody I met said that the stats proved that. It is not an exact science, but in general the campaign that spends the most money-

Professor Fisher: In general, in the States, that is true.

Q987 Jim McGovern: And in the UK, I would think.

Professor Fisher: I am afraid that the evidence doesn’t always support that finding.

Jim McGovern: As I said earlier, it is not an exact science, but general trends would suggest that the campaign that spends the most money will usually win.

Professor Fisher: It is not as simple as that.

Jim McGovern: Maybe I am being simplistic. I don’t know; I don’t intend to be.

Professor Fisher: No; I am not suggesting you are.

Q988 Chair: Professor Birch, do you want to argue against anybody?

Professor Birch: Not on this point, no. I defer to Professor Fisher; he has much more expertise on campaign moneys than I do.

Q989 Chair: Let’s drag ourselves back to the referendum. Relating to money, there is the question of the multi-option question. In those circumstances, where there are two pretty well defined positions-separation or part of the Union; it might have knobs on it and all the rest but the gist of that is known-if a third option enters the fray, which is unknown, then surely the question of having money to be able to publicise is exceptionally important, along with questions of raising and spending and so on. That takes us back to the question of where that money is coming from, should it not all be clear and all the rest of it. Since you have come in first a couple of times, maybe I could ask you, Professor Birch, whether or not you have an observation on that.

Professor Birch: Before you define the organisations you have to know what is being campaigned on. Without knowing exactly what the ballot paper is going to look like, what the structure of the ballot is going to be and how the questions are going to be set out, it is impossible to define the entities that would be doing the campaigning. For example, if you had several different questions on the ballot, then there would be different permutations and combinations of answer. It would make sense to have a campaigning group for every possible permutation of responses rather than a campaigning group for Yes on this, No on this, Yes on this and No on this. The outcome of the whole process is not simply the answer to one question; it is the answer to a combination of questions. So before you start regulating the groups you need to define the questions because, before that, you can’t even define what the groups might be.

Q990 Chair: We had a discussion about that earlier. Under the dead Frenchman option-de Condorcet-we had a discussion about Yes, Nos and all the rest of it, but we came to the view that you just identified of how many options there were and then there was one campaigning organisation for each option. If you had devolution, devo-max, devo-lite and separation, you would have four campaign groups even though you might have six questions to pose against each other. That was comprehensible rather than having every possible option of Yes/No, No/No, Yes and all the rest of it. We took that view, and we were also anxious about the question of how you then organise the spending to make sure that each of those, particularly the lesser known options, was able to reach out. Again, there was the question that those options that have had a long period of time to campaign would be better known; if there are tight limits, they will not be able to get their case across as well, and therefore the period ought to be much longer to make sure that there are controls. Does all that not seem reasonable to you?

Professor Birch: When it comes to actual campaign spending, the point zero should be the point at which the options on the ballot are determined. You can only really identify an organisation as being on a particular side when you know what the sides are. From that point, when the options are determined and you determine which types of organisations are going to be recognised, then it would make sense, as I said before, to regulate the spending for longer than 16 weeks. I do agree with you on that. But, if some organisations have been in existence longer simply because they happened to form in anticipation of there being a particular option on the ballot before that option on the ballot had been decided, there is not very much you can do about that really. Have I misunderstood your question?

Q991 Chair: No, I am just following that up. But what you could say is that, as soon as you know what the options are on the ballot paper or the campaign group, regulation will apply. It obviously depends on the regulation. I can see the reservation about saying that the regulation will give you a limit of spending, but, if the regulation was that you have to take no foreign money, for example, and you have to be honest about where you got your money from, there is no reason why that should not apply as of now. There is a Yes side and a No side, however you describe them, at the moment. If something else evolves, that rule would then apply to them as from the time they set up. Does that seem feasible to you and in line with good practice, or is there a reason why something like that should not be done?

Professor Birch: The organisations would, first, have to apply to whoever is regulating the election-for example, the Electoral Commission-and be given the designated status as the recognised organisation. Once they have that status, then my view is that it is a political question as to how long the regulatory period is. There might be a danger that some organisation might delay applying to get that designated status so that they could spend more money for a while.

Q992 Chair: In which case they should be regulated as soon as they exist or at least give an undertaking that they will be honest. I understand the point about regulation. I think the Electoral Commission were quite understandably loth to be involved in regulating people before they knew what was involved. But I can see no reason why we as a Committee, for example, should not call on all the sides who are involved to be honest and above board and say, "We will voluntarily take no foreign money and be honest about all our outgoings and incomings." Can you see any difficulty about that?

Professor Fisher: There is a legal difficulty. This was something that came up prior to PPERA. Prior to 1999, political parties had no legal status. They only became legal entities with the introduction of the list system for the European elections in 1999. Once that hurdle had been crossed, PPERA was in effect able to regulate the affairs of the parties throughout the electoral cycle in terms of who could provide donations. The Yes and No groups, as far as I am aware, have no legal status. You would have to confer upon them a legal entity.

Q993 Chair: Yes, but only if you were going to have them legally regulated. If it was a question of honour, openness and principle-

Professor Fisher: Yes, of course. Before PPERA was introduced that is precisely what Labour and the Liberal Democrats did. They voluntarily declared their donations in excess of £5,000 once a year in their annual report. So there is some precedent for that. I am not sure whether it provides a satisfactory answer. It might provide ammunition for one side over another if one side did it and another side didn’t, but in terms of regulation it would not have-

Q994 Chair: But is that in itself not a step forward? There may be some political opprobrium if one side does it and the other side doesn’t because the suggestion is then, "You are not being open; you are not being honest. What have you got to hide?" It is a question of trying to keep people honest voluntarily.

Professor Fisher: Yes, there is some virtue in that. Attempts to get political organisations to behave in that way up until now have not been terribly successful.

Q995 Chair: I think you possibly underestimate the impact of this Select Committee in making recommendations. I would have thought that, if we made a recommendation about people being open as from now, other campaign groups would then have to justify why they were not doing it or why they were accepting foreign money or such and such. I don’t want to prejudge what we might come out with.

Professor Fisher: The same sort of argument has been put in terms of the opposition to caps on donations. The principle that has been put forward by some who are opposed to it is that parties should take a voluntary stance that they won’t accept a donation over x. That sort of argument has been rejected simply because it wouldn’t be enforceable.

Q996 Chair: That is right, but people get the opprobrium and the adverse impact depending on the extent to which it sticks. If it is seen by some to be a scam by one side to favour themselves, then it is not seen to be fair. The idea that everybody should declare what they are getting and nobody should take foreign money seems to me-

Professor Fisher: I don’t see any harm in making that recommendation. It is just whether the recommendation-

Q997 Chair: That is a less than ringing endorsement of it though, isn’t it?

Professor Fisher: If the recommendation is that both sides should be honest and above board, it seems a perfectly sensible thing to do. Whether it would achieve the outcome that you are after is open to question.

Q998 Chair: Since you are both experts in malpractice of one sort or another, if I can put it that way, is there anything in particular here that you have identified in this referendum that we ought to be wary of, that you ought to be warning us about, trying to identify or saying, "Here is something you haven’t thought of"?

Professor Birch: I am a bit concerned about the proposal that has been put forward by the Scottish Government not to have any public funding of the campaigns of the two sides. This is something Professor Fisher probably wants to comment on as well. In some research that was conducted not long ago it was found that in election campaigns, where there was public funding of political parties, they were in general held to have a higher level of legitimacy than those in which everyone just gets as much money as they can. I would be very concerned if there were no public funding for the different lead organisations in the campaign. The basis for the level playing field is giving each organisation an opportunity to get its message across. That is one thing that I am quite concerned about.

Q999 Chair: Would the money from the public purse be the maximum spend or could parties or organisations, in your view, supplement that themselves?

Professor Birch: It is probably unrealistic to say that they wouldn’t be able to supplement that themselves. There is no tradition of putting that type of cap on only allowing public money and not allowing any private money. My personal view is that it would be best if election campaigns were largely funded out of public money but I don’t think that is realistic. You would have to allow them to raise some private funds. I don’t think it would really be acceptable to the British public to say, "No, it is just the public money."

Q1000 Chair: Do you accept that, Professor Fisher?

Professor Fisher: Absolutely. The point about grants was embedded in PPERA to try and ensure at least some equity. You can never ensure a completely level playing field.

Q1001 Chair: What is the next point?

Professor Birch: The next concern I have is about the way the electorate is informed about the different options on the ballot. When PPERA was first put forward, the Electoral Commission was given a number of functions, but informing the electorate of the different options in a referendum was not one of them. Obviously the Electoral Commission can inform people about how to vote and so forth, but actually giving substantial information about the different options in a referendum has been regulated subsequently in the legislation that has been passed to regulate individual referendums. In the referendums last year the Electoral Commission was given slightly more powers to tell the electorate a little bit about the different sides.

The Electoral Commission is still relatively reluctant in comparison with electoral commissions and electoral authorities in other countries to inform the public about the substantive implications of the different possible outcomes in a referendum. There was a Venice Commission Council of Europe report out several years ago-a code of good conduct for referendums-that said it is best practice for electoral authorities to inform the public about the different options and the different outcomes in a referendum.

This is often done in other countries by providing booklets. I can think, for example, of the United States and Switzerland, where they have a lot of referendums, and New Zealand, which has had referendums recently. In the UK you could envisage the booklet being included as part of the Freepost sent out with the referendum address. It is neutral information provided by the Electoral Commission or potentially by Government-by some neutral body; it could be a commission of experts or somebody who is perceived as neutral, but typically the Electoral Commission-about the implications of the different outcomes. It is more than just a sentence or two; it is a few paragraphs.

I am aware that the Electoral Commission has been reluctant to adjudicate in cases where claims have been made by one side or another in a referendum that what some people have said is factually inaccurate. Certainly there is precedent for that type of intervention as well. That is a difficult situation and I am not sure exactly what my view is on that. Certainly when it comes to providing factual, neutral information, and more than just a sentence, on what the implications of the different outcomes would be, that is certainly beginning to be considered as best practice internationally, and I would see that as important.

Q1002 Chair: I want to explore that a little before I come to your colleague. It is unlikely that this referendum is going to sneak up on people unnoticed. The press coverage is going to be enormous, the campaign is going to be enormous, and there is going to be a huge amount of debate about what things actually mean. The SNP are being delightfully vague on a number of things about what the consequences of separation might be. Surely it is then very difficult to say that objectively this is what will happen. As I understand the SNP proposal, you would have a decision for separation and then you would have a period of negotiations. You cannot determine beforehand how those negotiations will work out. Therefore, how can you possibly put objective information in a booklet?

Professor Birch: Inasmuch as there is objective information, it should be possible to put it in a booklet. What is an independent state or a separate state? I was thinking more of devo-max. What exactly would this be? You would not want to include speculation because there is always going to be speculation about the outcome of a referendum. That clearly would not be appropriate to put into some kind of booklet, but a clear indication of what is being proposed by each side is something that would be relevant to include and to inform the electorate.

Q1003 Chair: Is there any evidence that anybody actually read the booklet about the AV referendum or that it had an impact? There was one, wasn’t there? I was involved in the campaign and I cannot quite remember it.

Professor Birch: The Electoral Commission is probably better placed to answer that question than I am. The report that they issued after that certainly suggested there was a dramatic increase in public awareness of the referendum following the various different efforts they made to inform the public, including the booklet and televised information about how to vote and so forth. Their activity, combined with what was going on in the media-

Q1004 Chair: A lot of their activity about telling you how to vote and telling you there was an election was one thing; telling you what it was about was something different. The argument will be, "Everybody in Scotland knows this is going on. We don’t need any guff from civil servants or somebody else that is likely, by definition, to be so bland that it is going to be useless. So therefore why should we bother?" I am not quite sure what your response would be to that accusation.

Professor Birch: It is different from the referendum we had last year on the electoral system. As you say, the electoral system is very difficult for most people to understand, including scholars of electoral systems. Independence or separation is in some senses clearer, although when it comes to something like devo-max there is more ambiguity. It would be desirable to have a body that could potentially police what is said during the campaign.

Q1005 Chair: Surely devo-max, which by definition requires the agreement of the rest of the United Kingdom in a way that independence doesn’t, is unknown; it is an unknowable. Unless you have the negotiations before the vote, you will have a clear idea about what the proponents of devo-max might want but you have no idea whether it will be agreed. Therefore, separation is very much a pig in a poke and devo-max is, if anything, a smaller pig in a bigger poke. You have even less idea of what it actually means.

Professor Birch: Maybe that is what should be in the booklet then. Anyone who proposes a referendum is always facing an uphill battle because the other side that is in favour of the status quo can always try to provoke fears and say, "Oh, if you vote for this, then this would happen, this would happen and this would happen." If it is something that is going to be negotiated, then perhaps some of those fears are groundless. The electorate should be very clear as to what they are voting on.

Q1006 Chair: That is right, but with devo-max it would be "don’t know; don’t know; don’t know; don’t know; don’t know; to be resolved; don’t know; some time; maybe." Therefore, that would bring the whole thing into disrepute. I am sorry, I do not want to be unduly harsh, but I know that, if I go out and propose this, this is the sort of thing that bad people will raise with me. Therefore, it is only fair that I take it out on you at the moment. I will turn to Professor Fisher.

Professor Fisher: On this point I would disagree with Professor Birch for two reasons. First, it seems to me that, if there is a dispute over potential outcomes, that is something that should be settled through campaigning. What we saw in the AV referendum last year was that the No campaign put forward some arguments, which may or may not have been based in fact, and the Yes campaign was simply unable to counter them because they were very bad at campaigning. I don’t think having an interventionist commission would have made any difference.

The other thing that is pertinent here is that, if you are advocating that sort of Commission, it would require a fundamental shift in the Government’s position on the role of the Commission, which has been in place for around 10 years now. In the early years of the Commission, it was both a regulator and, in effect, a research organisation. From the mid-2000s the message was very clear that it should stick solely to regulation and the promotion of voting.

Q1007 Chair: But that objective can be achieved by just getting somebody else then; I understand your point.

Professor Fisher: But why? The implication there is that you would have a regulator in a general election to say, "Labour is lying about this, the Conservatives are lying about this and the Liberal Democrats are lying", or whatever. That seems to me to be the job of good campaigning. The idea that you have to regulate against negative campaigning seems to me to be perverse.

Q1008 Chair: I take it you disagree.

Professor Birch: There are a lot of other things that you could not regulate. I agree with Professor Fisher that most things have to be settled through dialogue, debate and so forth, but there might be factual statements made in the course of a referendum campaign that are simply inaccurate. It would be desirable to have some means of dealing with that. When you have an election campaign where individual people are standing for office, they are protected by defamation laws. If something is inaccurately said about them when they are campaigning, they can appeal under the defamation legislation to protect themselves. That is not true in a referendum campaign.

Q1009 Chair: Channel 4 did a fact check. A number of stations did that sort of thing. Is that not a speedier mechanism?

Professor Birch: Yes, I agree in most cases. That is why one of my suggestions might be that it would be desirable to have televised debates on the referendum so that the allegations that are made can be countered by the other side immediately. That would be the best way to try to air differences of view as to what the implications are.

Q1010 Chair: I presume you have a long shopping list of items. You have given us two. Give us the next one.

Professor Birch: Chair, I didn’t come with a manifesto; I came mainly to answer questions. Televised debates were the other thing that I thought would be desirable.

Q1011 Chair: I think you will find it hard to keep them off the television.

Professor Birch: I am here to answer questions.

Q1012 Chair: The question is, do you have any suggestions that we ought to be taking account of? There is not much point in us just asking you things because there will be ideas that you, in your wisdom, will know of that we don’t. We are therefore trying to flush them out of you. Are there any other proposals that you think we ought to be taking account of, both to encourage good participation but also to stop bad people getting up to mischief?

Jim McGovern: Chair, you have possibly answered your own question about the effectiveness of leaflets, booklets and so on, when you said that you were involved in the campaign but you could not remember what was in the booklets.

Chair: I could then; I could at the time, you see. I don’t need to carry it in my head.

Professor Birch: The other issue I was thinking about before I came today was the number of different questions on the ballot paper and how you deal with that. I can’t say I have a view on that, but I thought perhaps the Committee might be interested in the experiences of different countries and how they deal with that issue.

There are some jurisdictions such as, for example, New Zealand, in some of the referendums they have had on electoral reform, and also the US state of Washington, that ask first whether the voters prefer the status quo or change. Then in a separate question they ask them, if they have voted for a change, which of the various options they want. There would be two separate questions. In some cases only the people who have actually voted for a change are eligible to answer the next question as to which option they want. In other cases, regardless of whether they have voted for a change, they are able to give an opinion on which of the options they prefer. That is one way of organising a ballot when you have more than one option.

The other way is obviously preferential voting, where you say, "My first preference is this; my second preference is this; my third preference is this." That deals with the dead Frenchman issue in the best way possible. Certainly the Scottish electorate is accustomed to preferential voting, having STV for local elections. That is another way of doing it.

Another option is to vote Yes/No on different questions. The question that has the greatest number of Yes votes would win. It would be an odd situation if you had Yes/No on independence and then Yes/No on devo-max. Say the Yes/No on independence got 52% support and Yes/No on devo-max got 53% support, and the Scottish electorate, having voted by a majority for independence, got devo-max because that had slightly more support. That would seem to me a strange result.

Q1013 Jim McGovern: It has been suggested that the solution to that might be two referendums.

Professor Birch: Yes; that would be the other solution.

Q1014 Jim McGovern: It would possibly be a procedural and bureaucratic nightmare but that has been suggested a few times.

Professor Birch: The first vote would be for a change in the status quo and then in a separate referendum some months later-which has been done in New Zealand-you vote on the different options if the outcome of the first referendum is for change.

Q1015 Chair: The converse to that is that, if you have opinion roughly divided a third, a third and a third between status quo, devo-max and separation, in the first vote, if it is change or no change, you then have two gangs against one gang and then the two gangs fight it out between themselves. Whichever of the three options has the two others posed against is likely to lose.

Professor Birch: That is why preferential vote is probably the most effective in sorting that out.

Q1016 Chair: I don’t know whether you have looked in your work at the way the Speakership was determined here when Michael Martin was elected Speaker. That was a wonderful mechanism if you were Michael Martin because he became the nominee and then every other candidate was posed against him. If you supported any other candidate, then you would support Michael Martin against any other candidate, if you see what I mean, until your candidate came up, and then you would vote for him. A lot of evidence has come forward to us indicating that the way in which the ballot paper is constructed can help determine the result. We are conscious of that and that is why we are going to see the Electoral Commission and what they propose.

Professor Birch: The research that has been done on this question of strategic voting, which you are probably familiar with, which is voting instrumentally to try to engineer the outcome you want, is that the best way of avoiding that is by allowing people to vote for all of the options that they would accept. If you have, say, five options on the ballot, four options or three options, they can have as many votes as they want. They could use three votes for all three of them if they want, or two votes or one vote. It is called approval voting.

The research in electoral systems shows that that is least vulnerable to that type of strategic voting. However, giving people more than one vote is not a familiar form of voting to most people in the UK and might be confusing. They would say, "It’s not one man, one vote because some people can exercise two votes." Potentially, from an electoral system design point of view, if you asked academics what the best way of sorting out that problem would be, that type of voting system would probably be the best. That is the system we use in my university; we use that system where I work in my department because we are all academics.

Q1017 Chair: How many spoiled votes do you have?

Professor Birch: However, I am not sure that system would be acceptable to the electorate and it might be quite confusing. You are probably going to have to come up with a system that is not perfect. The question is how you want to trade things off and what things you are prepared to give in on in order to develop a system that is easy for the electorate to use.

Chair: We are aware of the principle of losers’ consent, whereby you make sure that those who lose are happy with the result. I would have thought the most likely body to have that sort of support is the Electoral Commission coming back, however they determine it, and then it will be seen to be somebody who is neutral, above the fray and all the rest of it. We are reasonably settled in our view on that.

Q1018 Jim McGovern: Although Professor Birch has said that the people of Scotland are quite used to multiple-option voting and STV, even at the recent local government elections I was present at the count and the number of spoiled papers was just phenomenal and very sad. People were putting two "X"s, which was ruled did not show a first preference, and so it was a spoiled paper. It was fairly obvious who the two candidates were that they wanted to vote for, but it was a spoiled paper because they did not put "1" and "2" but two "X"s. I tend to slightly disagree with you when you say that Scottish people are very familiar with the system and are comfortable with it. I don’t think that’s the case.

Professor Birch: As the Chair said, the Electoral Commission will do research.

Q1019 Chair: Do you want to comment on all that, Professor Fisher?

Professor Fisher: I have some other comments, actually.

Q1020 Chair: What are your other ones?

Professor Fisher: On the "how many questions" argument, it does seem to me that there is scope for tremendous uncertainty in the outcome if you have more than one question on this particular referendum. The only reasonable way of organising this to avoid confusion among the electorate and to avoid strategic voting would be to have two referendums, with the second one applying only if independence was rejected. It seems to me that there would be considerable problems if you put two questions on the ballot paper.

Q1021 Chair: I understand your point about independence being rejected. If you have three gangs, so to speak, you are now inviting the two other gangs to line up against the independence gang and to beat it, and then you end up with the status quo or devo-plus. Whichever one is the gateway issue is at a disadvantage, it seems to me.

Professor Fisher: Potentially, yes, but the stakes are so high. To go back to the example you posed earlier, let’s say you have a third, a third and a third, with two questions together. You could very easily argue that there was no legitimate case for any of the options taken. It seems to me that this would produce more uncertainty.

Q1022 Chair: That is where the dead Frenchman option presumably comes in, because people then have to choose between the other alternatives that they do not favour. I am not entirely familiar with that.

Professor Fisher: It is a good theoretical proposition. I am not sure it is necessarily a practical one for an issue as important as this-whether the country remains part of the United Kingdom.

Q1023 Jim McGovern: In your opinion, the most straightforward way to get a definitive answer would be one question?

Professor Fisher: One question and, depending on the answer to that question, you could then move to a second one on devo-max. There are political issues here of course. Let’s say independence was rejected by 60% or 70% of the people. It would seem to me that you could not have a devo-max one within three or four years.

Q1024 Chair: What I am not clear about is why you would need to have a devo-max referendum at all in those circumstances. You had a referendum to establish devolution, but then all the other transfers of power to the Scottish Parliament have been done by a process of haggling and without a referendum. Given that devo-max is, first, multifaceted and, secondly, it is unclear what the reaction of the rest of the United Kingdom will be to each of the individual proposals, seeing it as a package does not do justice to some of the elements.

Professor Fisher: That is a very fair point, yes. You could make the case that the referendum should only be on independence or not and then treat the so-called devo-max as a process of negotiation. There is an argument to be had for that, yes.

Q1025 Chair: That is the devo-plus people’s position because we had them in front of us. They are saying that they disagree with some elements of devo-max but they see it as being divided into different categories of power, which could be settled over different periods, and all of them could be done by a process of haggling and arrangements. Rather than the Big Bang theory, it was a growth theory.

Professor Fisher: There is certainly room for that point of view. I accept your point that it doesn’t follow from having a referendum on independence that you must also have a question or indeed a separate referendum on whether devolution should be extended. That is a very fair point.

Jim McGovern: The Prime Minister is on record as saying that if Scotland rejects separatism there will be room for negotiation for further powers for the Scottish Parliament.

Q1026 Chair: There is a wonderful phrase from you which I have not heard before that said, "There’s room for that point of view", which is damning by faint praise, I suspect.

Professor Fisher: No, not at all.

Q1027 Chair: Professor Birch, do you have anything to say on those observations?

Professor Birch: Yes. The other option would be to have a referendum on the status quo. "Do you want to retain the status quo or would you prefer change?" Then that would be followed by a separate referendum with different options for change. Ideally, there would be only two different options for change.

Chair: That comes back to the two gangs against one gang. One of the two options could be a haggling option, and, if you agree to that, it is the pig in the poke argument, isn’t it? It is a wee pig in a big poke because you don’t know what devo-plus is unless you have gone down the road of the negotiations.

Q1028 Jim McGovern: How could you possibly put on a ballot paper what change would mean?

Professor Birch: Perhaps that would have to be better defined rather than just being an invitation to initiate negotiation. There would have to be a more concrete proposal on the table.

Q1029 Chair: Professor Fisher, you have more on your shopping list.

Professor Fisher: Yes. I have mentioned the issue of diaspora before, which relates to unregulated periods.

Q1030 Chair: On diaspora I would ask you for observations on one thing. This is the question of foreign money really, isn’t it?

Professor Fisher: Depending on where you draw the line of what is "foreign"- whether it starts south of Jedburgh or whether we are talking outside the United Kingdom.

Q1031 Chair: I think we understand that issue. One thing that has been suggested to us is that the separatist armed forces would be open to anybody that wanted to join them who was in the existing British armed forces. It would seem reasonable, and we have had it suggested to us, that anybody who would be eligible to die for Scotland should at least be able to vote on whether that country should be created. That would mean that those in the armed forces who would be eligible to join the Scottish armed forces would get a vote. Do you have any observations on that? Is there any parallel for anything like that?

Professor Fisher: Off the top of my head I can’t think of one. It strikes me that we are talking about a relatively small number of people.

Q1032 Chair: I suppose it is everybody in the British armed forces. We will have to check, but my understanding is that you obviously have a division of assets if you have separation and there is the question of the people in the forces.

Professor Fisher: Presumably it would apply to the Scottish regiments and not the-

Q1033 Chair: Why not? There is not a Scottish Air Force at the moment. With the Scottish regiments, there are some Scots in them and a large number of Fijians. There are some English people in them. There are some Scottish regiments that are based in Scotland. There are some Scottish regiments based in Germany. There are some English regiments that are based in Scotland who will be on the electoral register. There will be some Scots in English regiments. There is no Scottish Navy. There is no Scottish Air Force. My understanding is that those who want separation have said that anybody who is in the British forces who wants to join separate Scottish forces would be able to do so. The argument then is, if they potentially join and maybe die, should they be entitled to vote?

Professor Fisher: I don’t think there is such a problem. Theoretically, someone could decide that if Scotland became independent they would like to move there, but we would not give them the vote. It is reasonable to work on the basis of residence. Whether or not somebody might or might not in the future wish to make a particular decision does not seem to me to be a reason to give them the vote.

Q1034 Chair: Coming back to the question of Scottish regiments, if a Scottish regiment is based in Scotland they would get a vote for residence, but if a Scottish regiment was based in Catterick, say, they wouldn’t.

Professor Fisher: Did they vote in the Scottish Parliament elections?

Q1035 Chair: It would depend upon whether they were registered in Scotland. It is a question of whether these are exceptional circumstances, given that it is the creation of a state.

Professor Fisher: I don’t know the answer to that.

Chair: That has the merit of honesty.

Professor Birch: I do have a view on that. It is not particularly on what I think about service voters but just in general. I think that, if you start tinkering with the franchise, you get into the situation again of having special regulations simply to govern this referendum that don’t govern other types of elections and other referendums. That is very dangerous because there is the perception that somehow the rules are being fiddled and are not legitimate. If there is a change made to the rules that normally govern referendums, people might start to wonder why that is. They might wonder, "Why did they do that? Maybe they are trying to influence the outcome."

I would think that, as happened with the Welsh referendum last year on the extension of the powers of the National Assembly for Wales, you would want to use an existing franchise and not tinker with it in any way. That is what you would normally expect to happen. The national franchise used would be the franchise for the Scottish Parliament and the Scottish local elections, which is what happened in Wales last year.

This links in with the idea of voting at 16. I personally believe that voting at 16 is a good idea in general for elections. However, in this case it is not desirable to tinker with the franchise because there would be a perception by some people that that change was being made in order to benefit one side and to change the outcome, not to mention the logistical problems of what you would do about 15-year olds who were about to turn 16 and therefore weren’t on the register and the changes to the electoral registration system anyway. It would be a logistical nightmare to have voting at 16.

In general, it would be very dangerous to make any special provisions for this referendum because of the perception that they were being made with the intention of changing the outcome.

Q1036 Pamela Nash: I completely agree with the existing franchise, but how do you choose which franchise it is, because there are different ones existing in Scotland already? You mentioned the Scottish parliamentary one, but that excludes other people in the UK who are going to be affected. Why not the general election franchise?

Professor Birch: Again, if we talk about the precedent from other elections that have happened in parts of the UK, there was provision for an Assembly in the north-east. That referendum happened several years ago. There was the Welsh extension of the National Assembly of Wales election that happened last year and the referendum for that. They were both conducted on the basis of the electorates in those areas that would have been affected.

I agree that potentially there is an argument for allowing anyone in the UK who is on the electoral register to be able to vote. However, that would be very unusual internationally. I don’t know of any case when there has been an independence or a separation referendum in which the entire country was allowed to vote. Normally it is only people who live in that particular bit that want to break off that are allowed to vote. It would be highly unusual.

Q1037 Chair: Following up Pamela’s point about having two existing electoral registers in Scotland, one is for the Scottish Parliament and the other is for the general election. The argument would be that the general election one applies to elections to the state. Since this is an issue affecting the future of the state, surely it is more appropriate to have the state election register used rather than the local government election one.

Professor Birch: Yes, but the electoral register for local government is also the electoral register for the Scottish Parliament. Inasmuch as it is the Scottish Parliament that now has a mandate to conduct this referendum and would presumably-

Q1038 Chair: They have the mandate but not the powers. The powers are reserved to Westminster under the referendum that took place in 1997, if I remember correctly. This is a point that is disputed. We are clearly of the view that the powers reside with Westminster and Westminster will give permission to the Scottish Parliament to have it under a section 30 notice and so on and so forth. There is the issue of the mandate as well. The argument is that it is not going to be an overwhelming mandate with only 23% of Scots having voted for the SNP; a bigger number voted for Westminster parties. The water is muddied. It seems to us that the question of the state, and the future of the state, using the same ballot paper as the elections to the state is one that is perhaps worth considering.

Professor Birch: I do accept that view and I think it is a valid argument. Ultimately it is a political decision, but, again, any deviation from the precedent that has been set with-for example, the referendum that happened last year in Wales-might potentially lead to some suspicions that the different provisions for this Scottish referendum were being established with a view to affecting the outcome. That consideration would need to be balanced against the chance of one-

Q1039 Chair: Would you accept that the Welsh referendum was a different thing?

Professor Birch: All referendums are different things.

Q1040 Chair: Yes, very good. Let me come back to the initial referendum that was set up for the Scottish Parliament when that was established. My understanding is that that was the general election register rather than the local government register because they had a choice there. We have made the point. The Welsh one was not about the creation of a state and therefore it is not an exact parallel. The Welsh one and the north-east one I can see as being similar because it was within a state. We have explored that.

Professor Fisher, are there any points you want to raise?

Professor Fisher: I echo Professor Birch’s points about not tinkering, not least because I am opposed to lowering the voting age as well. I think it is a bad idea on two counts: the tinkering and giving 16-year-olds the vote.

I would raise the issue of something that the Electoral Commission has been concerned about, which are games around designation. That was an issue in the Welsh referendum. If one side chooses not to designate itself, then the other side can’t be designated, and therefore that lowers the maximum spend for both sides during the regulated period. If you have this relatively short regulated period of 16 weeks and there has been lots of spending beforehand, then potentially there is an issue. That is something you ought to look out for. The Electoral Commission certainly flagged that up.

Q1041 Chair: I do not see that there is going to be a difficulty about having the Better Together side and the independence side being recognised because they are clear. It is a question that presumably comes in if there is a third option.

Professor Fisher: No. Let’s say there is just one question-

Q1042 Chair: If the third option gang, as it were, decided not to be designated-

Professor Fisher: None of them would be.

Q1043 Chair: That is right; that is the point. Most people listening to this debate would think that that is not likely to be a real problem in Scotland because the Yes and the No sides are pretty well clearly identified. But if there is a third option and it chooses not to be designated then it would be.

Professor Fisher: It is a problem even if there are two. Even if you have a recognised Yes and No side, and let’s say the Yes side decides not to designate, then neither side can be designated and neither side can spend a higher sum in the regulated period. Hypothetically, if the Yes side has spent a considerable sum in the unregulated period, it therefore gets an advantage. You need to be careful about that.

I would echo the point on grants. I can see no reason why the Scottish Government wants to remove something that was caught in PPERA. Finally, there is the point that has not really been tested in any previous referendum in this country as far as I am aware. It is the issue of the period in which the Government cannot issue information about the referendum.

As I understand it, that is currently 28 days before the ballot. If, for the sake of argument, the Scottish Government presented a very biased opinion in a short regulated period, there might be some concern about the extent to which Government were trying to sway the electorate in one way or another. In the AV referendum that did not occur because, of course, the Government themselves were split through the coalition, but you can see the potential for this happening.

This is one of the reasons why this 28-day embargo was introduced following the Fifth Report of the Committee on Standards in Public Life. There were concerns, particularly from one member of that Committee, that that is precisely what happened in the 1975 referendum on Britain’s continued membership of the European Economic Community. There was a desire to limit what Government could do to try and shape how people vote. That has not yet been tested. It currently stands at 28 days. If there is a short regulated period, you might want to look at how the Government behave in the period from the start of regulation to minus 28.

Q1044 Chair: "You might want to look at" is a recommendation, I take it? Are you recommending that?

Professor Fisher: It is something that is untested and would require careful observation.

Q1045 Chair: "Observation" implies that you only look at it afterwards. You are not suggesting that we do something beforehand?

Professor Fisher: You would have to change PPERA.

Q1046 Chair: If we want to make recommendations, it will be on a whole number of things.

Professor Fisher: Here then is the argument. If there is a concern that the existing Government are firmly on one side of this referendum question, then it would be reasonable to ask whether or not they would be able to provide fair and impartial information for a period beyond the existing 28 days.

Q1047 Chair: That could be the restricted or regulated period.

Professor Fisher: It could be, yes; that is quite feasible.

Q1048 Chair: That is helpful. We will produce a whole number of recommendations, not all of which, regrettably or otherwise, we will have the power to implement. Some of it will be a question of whether things are fair and honest. If recommendations are being made and they are accepted by people in general, and then somebody breaks them, there will be accusations.

Professor Fisher: This is the first referendum since regulation where this sort of issue has occurred and it strikes me as a potential problem.

Q1049 Chair: My colleagues do not appear to have any further questions. As we always ask our witnesses, are there any answers that you have prepared to questions that we have not asked you or anything else that you feel we have not touched on that you think we should?

Professor Fisher: There is something I raised at the beginning. Select Committees and, indeed, Governments that legislate on these things should resist the temptation to try and regulate against all eventualities because you will never be successful. The point of the exercise is to ensure, as far as is possible, some sort of parity in the contest. You will never have a level playing field. Some groups are wealthier than others and some groups are simply more popular than others, but you can create some sort of equality of opportunity. You should not get into the realm of trying to close down every possible loophole. Fundamentally, these are voluntary organisations that are making a case to try and persuade the public one way or another. It is politics that should win out rather than law. That would be my general point. Look at the lessons that can be learned from the Wales and AV referendums, such as the designated groups and the length of the regulated period. Do be aware that, despite the legislation being in place now for eleven and a half years, we are still relatively new to regulating referendums in this country. So, in a sense, you will miss something.

Q1050 Chair: Professor Birch, do you have any final points?

Professor Birch: There has been talk in the Electoral Commission of possibly publishing campaign donations before elections. I don’t know what Professor Fisher thinks of this, but it seems to me that this would make a lot of sense, especially if there is an extended designated period. What is the point of knowing after an election or a referendum has finished who has given all the money? If you know afterwards, you could say, "I wish I had voted the other way", but you can’t vote the other way. It is transparent but it is transparency when it doesn’t matter any more. I know the Electoral Commission is exploring possibly requiring publication of donations before the poll and that would seem to make an awful lot of sense.

The other thing that is very difficult to regulate but you might perhaps be interested in considering is media regulation. You can regulate the broadcast media much more easily than you can regulate the print media. I am not familiar with the Scottish press. I would not know which newspaper would be on which side in this. Certainly it is accepted that newspapers will put forward a particular view. There is nothing you can do to stop that. There is nothing you can do to stop them massively increasing their circulation if they want to get their view across by giving out free copies of their newspaper on the streets and advocating one particular view. Sometimes people choose their newspaper because they like the sports coverage or the book reviews, not because they agree with the particular political position of the newspaper. Sometimes you might be swayed by that.

There is relatively little that you can do about that, but it seems to me that that is all the more reason for encouraging the broadcast media to give ample opportunity for televised debates and other such opportunities for the two sides to have an equal opportunity to put forward their view and so that there can be opportunity to counter the claims that the other side is making. There will then be a balance at least in the broadcast media, recognising that there is never going to be a complete balance in the print media.

Q1051 Chair: We are conscious of the point about balance in broadcast media. There have been quite a number of rows in Scotland so far with allegations flying about on whether programmes such as Newsnight Scotland are fair and balanced, and who takes what agenda. We are well on top of that.

The point maybe that I could come back and seek clarification from you is about the money for the extended period. We were discussing with the Electoral Commission, possibly before you came in, whether or not that will be monitored. I think they thought it was a good idea but not by them. We are not entirely clear where this group of wise virgins can be found who can monitor these sorts of things. We might end up just calling for voluntary disclosure by the groups, even though there is not a formal regulator to whom this would be given.

In your experience, do you think it would work if we just simply called for voluntary regulation or disclosure of all foreign donations or any donations above a certain limit and so on?

Professor Fisher: There is precedent for it, which I described before, with two parties in the mid-1990s, but it would not give you that much transparency. Those two parties engaged in voluntary declaration but on an annual basis. This is going back to Professor Birch’s point, which I entirely agree with. If declaration is going to be meaningful, it needs to be periodic declaration in order to give voters an opportunity to see where the money is coming from. It would be a suggestion that all sides could sign up to, but it would need to be more than saying, "We will declare it." It would have to be a declaration such as, "We will not take money from voters not registered to vote in either the United Kingdom or Scotland; and we will declare the sources of our donations over £7,500 every quarter or every six months", whatever it is.

Q1052 Chair: I was thinking of either monthly or quarterly.

Professor Fisher: It is quarterly outside the final short election period for parties. That is already something of an administrative burden for professional organisations. Going back to the point again, these groups are still voluntary organisations. You are not legally imposing but still imposing a burden on them of declaration. I think quarterly would be legitimate. Once you get to the regulated period, of course you could increase it to monthly, but that increases the cost. You would need a compliance officer then.

Q1053 Chair: I want to clarify the point about the £7,500 limit. On the principle of "Many a mickle makes a muckle", which is a Scottish phrase that means lots of small sums add up to a big sum, my understanding of United States’ politics would be that on occasions there are lots of small donations that come in that have been big donations but broken up. Is £7,500 therefore not too large a sum?

Professor Fisher: It is the sum that is used at the moment under PPERA, as amended. It was originally £5,000.

Q1054 Chair: We were not aware of that. You don’t have any principled reason why you settled on £7,500?

Professor Fisher: Not a principled one. It is simply that that is the existing practice. I think there is a problem if you go too low, inasmuch as there is an argument that it is an invasion of privacy.

Q1055 Chair: What would you define as too low?

Professor Fisher: Anything below four figures.

Q1056 Chair: Anything below £1,000?

Professor Fisher: Yes. The purpose of the transparency is to see if big money is influencing this. With the best will in the world, I can’t afford to give £2,500 away.

Chair: Oh come on.

Professor Fisher: I am a public sector employee. But, if I could, my £2,500 would make very little difference to the outcome of the referendum. It is really about trying to get a handle on whether or not organisations-in this case designated groups-are being bought or whether or not one individual or one group is having a disproportionate influence. Whether or not you and I make donations of maybe £4,000 seems to me to be neither here nor there. If we want to spend our already taxed money on that, it seems legitimate, and it is legitimate to keep it private. It would be difficult to make the case to put the declaration limit lower for a national election. If you are talking about a constituency election the limit is lower, but this is a national level election.

Q1057 Chair: Professor Birch, do you have any observations on that?

Professor Birch: No; I have no further views. I agree with Professor Fisher on that.

Chair: Thank you very much for coming along and sharing your expertise with us. I am sorry that we were slightly late in starting. If you have any observations that upon reflection you want to let us have, please let us know. Quite often people go away and think, "If only I had told them such and such", or, "What I really meant to say was this." By all means be in touch with us. Thank you very much.