Appendix: Government response
The Government is grateful to the Committee for its
report, which provided scrutiny of the Transparency of Lobbying,
Non-Party Campaigning and Trade Union Administration Act as it
neared the end of its Parliamentary passage. The Government acknowledges
the work that the Committee has undertaken to gather opinions
from a wide range of sources in the creation of this report and
throughout the debates in Parliament.
The Act received Royal Assent on 30 January 2014.
The Government engaged with many different organisations during
the course of the Act's parliamentary passage and introduced and
accepted a number of amendments, including several put forward
by the Political and Constitutional Reform Committee, in order
to improve the future operation of the Act's measures.
The following sections include responses to each
recommendation of the Committee, regarding Parts 1 and 2 of the
Act.
Introduction
1. The six-week pause announced by the Government
fell far short of the six-month pause for which we called in our
original report and it related only to Part 2, not to the whole
Bill, as we suggested. It is also clear that some of those who
participated in the consultation that took place during the pause
would have appreciated much more of a dialogue with Government.
Nonetheless, we are pleased that the Government decided to have
the pause. Six weeks was not long enough to solve all the problems
with the Bill, but it was at least an indication that the Government
recognised that there were problems and it was better than nothing.
During the six week period before Report Stage in
the House of Lords, the Government met with over 50 organisations
to discuss the measures within Part 2 of the Act. This period
was productive and the Government reflected on suggestions made
and tabled a number of amendments, which are discussed in more
detail in the following paragraphs.
Part 1 - Registration of consultant lobbyists
2. Our original report stated that there would
be merit in requiring lobbyists on the register to sign up to
a code of practice and recommended as a starting point that, under
the information required on the register, registered lobbyists
should have to list any codes of practice to which they subscribe.
A Government amendment that was made at Report Stage in the House
of Lords changes the Bill so that registered lobbyists will have
to record whether they have signed up to a relevant code of conduct.
We support this amendment.
The Government welcomes the Committee's support for
its amendments that will require lobbyists to declare whether
they subscribe to a publicly available code of conduct.
3. We still maintain that in order genuinely to
enhance transparency, a lobbying register would have to cover
all those who lobby professionally and all those who offer professional
advice on lobbying, whether they are third party or in-house lobbyists,
including those working for law firms, trade associations and
think tanks. We also believe that the information that the register
requires to be listed should be expanded to include the subject
matter and purpose of the lobbying, when this is not already clear
from the company's name.
As the Government has made clear, the Part 1 provisions
are designed to complement the existing Government transparency
regime and to address a specific problem - that it is not always
clear whose interests are being represented by consultant lobbyists.
The provisions are a proportionate and appropriate solution to
that identified problem. The register will enhance transparency
without restraining or hindering the important dialogue between
decision-makers and those who will be affected by policy or legislative
decisions.
4. In addition, we continue to argue that the
list of people with whom communication or advising on communication
counts as lobbying should include Senior Civil Servants and special
advisers, as well as Ministers and Permanent Secretaries. Lord
Tyler tabled an amendment at Report Stage in the House of Lords
to add special advisers to the list of people with whom communication
counts as lobbying. This amendment was made. We support the amendment
as it goes some way towards widening the scope of the Bill. We
recommend that this Lords amendment be amended to include Senior
Civil Servants. We have tabled the following amendment to achieve
this:
Agree with Lords Amendment 'Page 2, line 7, after
'secretary' insert 'or special adviser'."
When this matter was debated in both Houses, the
Government was not persuaded to alter the definition of consultant
lobbying outright in the manner suggested by Lord Tyler and the
Committee because the register is designed to complement the existing
transparency regime around the publication of ministers' and permanent
secretaries' diaries. However, we did recognise the strength of
feeling on the issue of including those who lobby special advisers
within the definition of consultant lobbying. The Government therefore
amended the Bill to introduce a power for ministers to amend the
definition of consultant lobbying to extend the scope of the register
to include communications with special advisers in the future.
5. Much of the attention in recent months has
been on Part 2 of the Bill. Part 2 is certainly problematic, but
we wish to emphasise that we continue to have serious concerns
about the very narrow scope of Part 1. Without the changes that
we recommended in our original report to broaden the register,
Part 1 of the Bill will do little to increase transparency about
who is lobbying whom and for what purpose.
We recognise that there are those that consider the
scope of the Government's proposals for a statutory register of
lobbyists to be too narrow. However, the Government's proposals
are designed to address a specific problem - that it is not always
clear whose interests are being represented by consultant lobbyists.
We are yet to see a clear articulation of the problem that would
be addressed by expanding the scope and therefore do not see any
justification for a broader register that would pose a significant
administrative burden for no clearly identifiable gain.
6. We are pleased that the Government accepted
our suggested amendment to make it clear that Members of Parliament
are exempt from the need to register as consultant lobbyists under
Part 1 of the Bill.
The Government was grateful for the Committee's suggested
amendment that clarified that the salaries or expenses paid to
Parliamentarians for the exercise of their Parliamentary duties
are excluded from the definition of payment for consultant lobbying,
with the effect that the usual activities of Parliamentarians
are not captured by the definition of consultant lobbying in the
Act.
Part 2 - Non-party campaigning
7. We are pleased that the Government has decided
not to exempt charities from Part 2 of the Bill. We do not support
such an exemption.
The Government welcomes the Committee's view that
charities should not have been exempted from Part 2 of the Transparency
of Lobbying, Non Party Campaigning and Trade Union Administration
Act 2014. The Government is of the view that the Political Parties,
Elections and Referendums Act (PPERA) 2000 correctly provides
for regulation to be dependent on the type of activities which
a third party undertakes, and not depend upon the type of organisation.
This view is also supported by the Electoral Commission and the
Charity Commissions.
8. We support exempting security-related expenditure
from Part 2 of the Bill and therefore support the Government amendment
to this effect which was made at Report Stage in the House of
Lords.
The Government welcomes the Committee's view that
security-related expenditure should be excluded from the calculation
of controlled expenditure. The Government believes that the costs
associated with organising public rallies or events which seek
to influence voting intentions should be considered as controlled
expenditure; however, it is right that costs associated with ensuring
such events are run safely should be excluded.
9. We support the Government's new clause, agreed
at Report Stage in the Lords, to reduce the regulatory burden
on minor campaigners that campaign in coalition with other third
parties.
The Government welcomes the Committee's view that
campaigners contributing small amounts of controlled expenditure
to a campaigning coalition should not be subject to overly burdensome
reporting requirements. This new provision allows a lead campaigner
to account for the expenditure of smaller campaigners. By participating
in such an arrangement, a small campaigner - in other words, one
that only incurs limited amounts of expenditure - may therefore
still campaign as part of one or more coalitions, and not have
to account for its expenditure (provided that its total expenditure
does not of course exceed the registration thresholds). This allows
small third parties to engage in the democratic process, without
fear of being overwhelmed by administrative burdens.
10. We are pleased that the Government has agreed
to shorten the regulated period for the next general election,
so that it begins on 19 September 2014 rather than 23 May 2014.
This will give third parties time to understand the new guidance
and to plan their activities accordingly. We therefore support
the Government amendment to this effect that was made at Report
Stage in the House of Lords.
The Government welcomes the Committee's support for
shortening the regulated period for the 2015 General Election.
The regulated period has been shortened to allow the Electoral
Commission sufficient time to produce clear and enhanced guidance
for the revised regulatory regime. The shortened regulated period
will also, as the Committee notes, allow third parties more time
to understand the new guidance. The guidance is of crucial importance
so that campaigners are fully aware of whether their activities
fall within the regulatory regime, and what reporting requirements
they may then have to fulfil.
The Electoral Commission has already indicated it
will produce new guidance in time for the 2015 UK Parliamentary
general election. The Electoral Commission has also previously
stated that it is committed to consulting third parties to ensure
the guidance meets their needs. The Commission will also work
with the UK's three charity regulators to ensure that charities
have clear and reliable guidance about how to comply with the
rules.
11. The Bill has been rushed through Parliament
without proper consultation or pre-legislative scrutiny. It has
been improved slightly during its consideration by both Houses,
but in the time available it has not been possible to solve all
the problems that have emerged. It is vital that the Bill is reviewed
after the next general election. For this reason, we are pleased
that the Government tabled a new clause at Report Stage in the
House of Lords to provide for a post-election review. We support
the new clause. We emphasise to the Government that evidence gathering
for the review will need to begin during the regulated period.
The Government does not accept that the legislation
has been rushed through Parliament without proper consultation.
The Government had hoped that reform of third party campaigning
would be taken forward alongside reform of political party funding.
It became clear in July 2013 that there was no possibility of
cross-party agreement to such reforms going forward in this Parliament.
The Government then took the decision to proceed with improvements
to the regulation of third party campaigning. At that stage, it
was not possible for pre-legislative scrutiny to be undertaken
as the reforms were to come into force in time for the 2015 UK
Parliamentary general election.
The Government discussed the impact of the Act's
provisions during its Parliamentary passage with many stakeholders:
over 50 of which were met during the six week period between Committee
and Report Stage in the House of Lords.
The Government provided in the legislation for a
review of the third party regulatory regime to take place, in
order to assess its effectiveness at the next earliest opportunity
- the 2015 UK Parliamentary general election. The Government welcomes
the support of the Committee for this review.
A reviewer will be appointed in good time so that
he or she has sufficient time to assess fully the operation of
the rules, gather evidence and take representations from the relevant
individuals and organisations during the regulated period.
12. We are pleased that the Government listened
to the concerns we and many others expressed about the definition
of controlled expenditure in clause 26. Reverting to the existing
definition under PPERA is not an ideal solution, because the existing
definition is itself problematic, but it is the best solution
that could be achieved in the time available. We recommend that
the person who conducts the review of the legislation after the
next general election should be charged with producing an improved
definition of controlled expenditure.
The test for controlled expenditure is now the same
as the existing test in the Political Parties, Elections and Referendums
Act 2000 - namely expenditure "which can reasonably be regarded
as intended to promote or procure the electoral success"
of a party or candidates. This test operated at the 2005 and 2010
UK Parliamentary general elections - campaigns which did not see
charities or other campaign groups prevented from engaging with,
commenting on or influencing public policy.
The Government has also clarified the definition
by removing the additional test of "otherwise enhancing the
standing of a party or candidates". The Government recognised
that this additional limb of the existing PPERA test was unclear.
This change provides further clarity and reassurance to campaigners
as to the test they have to meet in order to incur controlled
expenditure.
13. In principle, we think that staffing costs
should be regulated for both third party campaigners and political
parties. However, we note that the Electoral Commission would
support exempting staffing costs for the 2015 general election
alone, on practical grounds. We support the non-Government amendment,
which was made at Report Stage in the House of Lords, to exempt
certain background staffing costs, on the grounds of reduced bureaucracy.
We recommend that the person charged with conducting the review
of the legislation should be tasked with devising a workable proposal
for including staff costs within controlled expenditure after
the 2015 general election.
Controlled expenditure will be incurred by third
parties on an extended range of activities. Alongside election
materials, controlled expenditure will now be incurred on activities
such as market research/canvassing, public rallies and events,
press conferences and organised media events and transport. The
extended range of activities takes forward a recommendation of
the Electoral Commission in its June 2013 Regulatory Review. As
under the previous regime, staff costs will continue to be included
for third parties in their calculation of controlled expenditure.
The Act does not change this.
Electoral Commission guidance is very clear on how
staff costs should be calculated - an honest assessment should
be made. This does not mean that staff have to provide detailed
breakdowns of how their time was spent. This is not what is intended,
or what has operated for the last two UK Parliamentary general
elections. The Government believes that the inclusion of staff
costs aids transparency and is not overly bureaucratic. The review,
provided for under the Act, will look at the operation of the
whole third party regime during the 2015 UK Parliamentary general
election.
14. In our first report on the lobbying Bill we
called for clause 27(1) to be deleted so that registration thresholds
could be restored to their current levels. The Government has
amended clause 27(1), at Report Stage in the House of Lords, so
that registration thresholds are not simply restored to their
current level, but increased. We very much welcome this change
and are pleased that the Government listened to us and others.
The Government welcomes the support of the Committee
in relation to the revised registration thresholds contained within
the Act.
15. At Report Stage in the House of Lords, the
Government made an amendment to raise the maximum expenditure
limits in Scotland, Wales and Northern Ireland from those originally
proposed in the Bill. In the case of Scotland and Wales, the new
limits still fall short of the current limits, as they do in England.
The changes are an improvement on what was originally proposed.
However, we are still not clear about the rationale for altering
the current limits. We therefore recommend…[an]…amendment.
The limits outlined in the Act are at a level that
even few political parties, accounting for the same range of activities,
ever exceed. The Act's limits still allow a large amount of campaigning
to be undertaken by third parties.
The Government believes that the spending limits
in the Act are proportionate and does not accept the Committee's
recommendation that they should be raised further, almost back
to their original levels.
16. We welcome the Government amendments made
at Report Stage in the House of Lords to remove the sub-limit
on constituency spending for the period after the dissolution
of Parliament. They go some way towards simplifying the new regime.
The Government welcomes the support of the Committee
in relation to removing the limit on constituency spending for
the period between the dissolution of Parliament and polling day.
17. We continue to be concerned about the enforceability
of the constituency level limits on spending by third parties.
We see merit in the suggestion of keeping the constituency spending
limit, but restricting it to spending on election material that
is addressed to or directed to electors or households in a particular
constituency, or spending on unsolicited phone calls to electors
or households in a particular constituency. This strikes us as
a workable solution that could be enforced by the Electoral Commission.
The Government believes that the introduction of
constituency limits is an important addition to the regulatory
regime. It is an important and necessary element of democracy
that members of the public know when a third party is campaigning
in their constituency, and how much money they are spending.
The Government does not support limiting constituency
costs solely to certain activities - such as the production of
election materials. To do so would exclude activities such as
events, press conferences, rallies and business supporters, which
are all significant aspects of campaigning.
The Government disagrees that constituency limits
are unworkable. Their operation is based on existing PPERA rules
and Electoral Commission guidance that set out how third parties
should attribute their costs between the parts of the United Kingdom.
18. At Report Stage in the House of Lords, the
Government made a series of amendments to simplify the reporting
and accounting requirements. In particular, third parties that
register with the Electoral Commission but do not receive any
reportable donations during the reporting period will no longer
need to send in a nil return. We support these amendments, as
does the Electoral Commission. However, like the Electoral Commission,
we believe further changes are necessary.
Prior to the Act, recognised third parties had to
report donations of over £7,500 within the three months following
the date of poll. The Act provides that recognised third parties
will now report donations of over £7,500 to the Electoral
Commission on a quarterly basis between the start of the regulated
period and the dissolution of Parliament, and then weekly between
dissolution and the date of poll.
A recognised third party must also submit a statement
of accounts as part of their post election report to the Electoral
Commission. Individuals, who are a recognised third party, are
excluded from having to provide any statement of accounts. Additionally,
recognised third parties (e.g. trade unions or companies) who
prepare accounts under another enactment do not need to prepare
accounts if such accounts contain equivalent information, and
can be inspected by the Commission.
The Government believes these provisions enhance
transparency. However, to ease unnecessary reporting requirements
a recognised third party will not have to provide a spending return,
or a statement of accounts where they have registered with the
Electoral Commission but have not incurred controlled expenditure
in excess of the registration threshold. Additionally, where a
recognised third party does not receive a reportable donation,
they will not have to provide a donations report. The Government
welcomes the Committee's support in relation to this change which
takes forward recommendations from the Electoral Commission.
As is the current practice, under section 96 of PPERA,
a third party will have to provide a full report of reportable
donations three months after polling day. This return is submitted
to the Electoral Commission. The Government believes that the
section 96 return provides an important safeguard where a full
record of reportable donations is provided. This will allow both
the Electoral Commission and the general public to ascertain the
amount, and source of all reportable donations received by a third
party during the regulated period. The Government does not believe
that this requirement is overly burdensome - as the information
will have already been prepared by the third party, but it also
allows the opportunity for the third party to declare any reportable
donations which it has failed to declare previously.
The Government believes that to require third parties
to provide a declaration that they do not need to provide a spending
return and/or a statement of accounts adds unnecessary additional
bureaucracy for the third party.
19. We are still concerned that the Bill makes
a change to the regulatory remit of the Electoral Commission which
the Commission itself thinks could lead to uncertainty in the
regime. We are disappointed that the Government has not removed
clause 35 from the Bill.
The Government believes it is appropriate to emphasise
the importance of the Electoral Commission's regulatory role.
That is why the Act now requires the Electoral Commission to "take
all reasonable steps" (where previously it only had the "general
function") to secure campaigners' compliance with the regulatory
rules.
The Government does not believe the change in the
Electoral Commission's duties will increase the risk of legal
challenge; rather, it removes any potential misunderstanding of
what its responsibilities are. The provision also introduces a
new requirement for the Commission to set out in its Annual Report
what steps it has taken to secure compliance with the rules. This
requirement makes clear to third parties the importance of the
Commission's regulatory role.
It should also be noted that section 38 of the Act
extends the Electoral Commission's regulatory function in section
145 of PPERA to cover Part 2 and Part 10 of PPERA. This implements
a recommendation of the Electoral Commission made in its June
2013 Regulatory Review.
Conclusion
20. We continue to regard the Transparency of
Lobbying, Non-Party Campaigning and Trade Union Administration
Bill as an example of how not to make legislation. It cannot be
desirable that Parliament is put in the position of being asked
to agree a Bill that is acknowledged to be imperfect, with the
promise that it will be reviewed and improved at a later date.
The Government and Parliament have a joint responsibility to ensure
that legislation is got right the first time. This Bill should
serve as a reminder to successive Governments that consultation
and pre-legislative scrutiny are not mere formalities that can
be dispensed with if the Government chooses, but essential elements
of the process of producing good legislation. They need not take
undue amounts of time, and they add genuine value.
A balance was sought between passing the legislation
in good time to have new systems in place by 2015, and making
sure Parliament has sufficient time to scrutinise and debate our
proposals. Not every bill receives pre-legislative scrutiny. Both
Houses of Parliament debated the Bill in the usual way - with
introduction, second reading, committee stage, report stage and
third reading debates. Parliament had several opportunities to
vote and the Act was granted Royal Assent in January 2014.
The Political and Constitutional Reform Committee,
the Joint Committee on Human Rights and the Constitution Committee
of the House of Lords have all reported on the Bill; and there
has been plenty of outside commentary. The Government engaged
with many stakeholders outside government during the course of
the parliamentary passage - over 50 on Part 2 alone.
21. Significant changes have been made to the
Bill during its passage through Parliament. It is far from perfect,
but it is undoubtedly better than it was, thanks to the efforts
of parliamentarians, Committees of both Houses, the Electoral
Commission, the National Council for Voluntary Organisations,
the Commission on Civil Society and Democratic Engagement and
many others. We agree with many of the amendments that have been
made in the House of Lords. In some instances, we think amendments
to these amendments are necessary. In particular, in Part 1 we
would like to see the Bill amended to include Senior Civil Servants
within the list of people with whom contact counts as lobbying.
In Part 2, we would like the maximum expenditure limits to be
restored to their current levels in England, Scotland and Wales.
We are content with the proposed increase in the limit for Northern
Ireland. We would also like the reporting and accounting requirements
in Part 2 of the Bill to be made less bureaucratic. We will be
tabling amendments to this effect and urge Members to support
them.
The Government is grateful to all of those who contributed
to the debate on the Act, both those inside and outside of Parliament.
The Government listened to concerns and the House of Lords made
a number of amendments which improve the operation of the Act.
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