Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Bach: My Lords, I was about to congratulate the noble Lord on having spotted without help from anyone else the difficulty that he sees. However, as he was gracious enough to admit, the point has come to him from another source.

Lord Mackay of Ardbrecknish: My Lords, my honesty was greatly impelled by the fact that I thought that the noble Baroness, Lady Gould, might well be aware of the source it came from.

Lord Bach: My Lords, what my noble friend says to me or does not say to me is no business of the noble Lord.

22 Nov 2000 : Column 904

I shall be as brief as I can. The amendments concern the definition of a candidate's election expenses. Clause 131 introduces new Sections 90A to 90D of the 1983 Act which set out a revised definition of election expenses. That revised definition is carried over to Section 76 of the 1983 Act, as amended by Clause 129 of the Bill, which sets limits on candidates' election expenses. The combined effect of Clauses 129 and 131 is that Section 76 of the 1983 Act no longer refers to election expenses incurred,

    "on account of, or in respect of, the conduct of management of the election".

Instead, the limits on election expenses will apply to such expenses as defined in Sections 90A to 90D of the 1983 Act; that is, expenses incurred with,

    "a view to, or otherwise in connection with, promoting or procuring the candidate's election at the election".

In the Government's view, this new formulation represents a considerable improvement on the existing rather ambiguous provisions of the 1983 Act.

The noble Lord seeks to retain the "conduct or management" formula. He is not satisfied with the old formula on its own as he wants to graft it on to the new definition in new Sections 90A to 90D of the 1983 Act. We think that there may be some confusion if that is done. We have received no representations until now about the demise of the formula. As I think is now generally accepted, to refer to election campaigning as the "management" of an election is somewhat quaint, if not archaic. In the language of today we suspect that most candidates would regard the returning officer as the person who actually manages the election.

My next point deals more closely with the point made by the noble Lord in moving the amendment. Nor is it necessary to retain the words,

    "whether before, during or after an election",

since Section 90A(2) has the same effect. That is my answer to the problem raised by the noble Lord. We think that the formula used in the 1983 Act has had its day and is in need of updating. That is why we have changed it.

Before I sit down, perhaps I may say that this is a complicated and detailed point. Although we think that we have the answer to it, I would be happy to go away with the point, talk to the officials and perhaps talk to the noble Lord again to see whether those who advise him are right or whether we are right, because we do not want to get it wrong.

Lord Mackay of Ardbrecknish: My Lords, I am grateful to the noble Lord. Such is the complexity of the matter that perhaps it would have been better if I had sent the noble Lord a letter at an earlier stage. I shall certainly ensure that the people who brought this point to my attention are made aware tomorrow of what the Minister has said. If we have to develop the point further, I am sure we can. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

22 Nov 2000 : Column 905

Clause 131 [Meaning of 'election expenses']:

[Amendment No. 216 not moved.]

Clause 133 [Corrupt and illegal practices: consequences for persons convicted of such practices]:

Lord Bach moved Amendment No. 217:

    Page 98, line 38, at beginning insert ("Subject to subsection (1A) below,").

The noble Lord said: My Lords, in moving this amendment, perhaps I may speak also to Amendments Nos. 218 and 220. These four amendments relate to the incapacities that result following a person's conviction for a corrupt or illegal practice. Under the Representation of the People Act 1983 a candidate convicted of a corrupt or illegal practice is not only debarred for a period from holding elective office but also disqualified as a voter. Having examined these provisions, as amended by Clause 133 of and Schedule 17 to the Bill, more closely, we feel that this dual sanction is difficult to justify. It is entirely proper that where a person is found guilty of an offence as a candidate one of the consequences should be a period of disqualification from holding elective office. But the sanction of disfranchisement more appropriately fits offences committed by a voter; for example, personation. These amendments make the appropriate adjustment to the 1983 Act to this end. I beg to move.

On Question, amendment agreed to.

Lord Bach moved Amendment No. 218:

    Page 99, line 7, at end insert--

("(1A) The incapacity imposed by subsection (1)(a)(i) above applies only to a person convicted of a corrupt practice under section 60 above or of an illegal practice under section 61 above.").

On Question, amendment agreed to.

Schedule 17 [Amendments relating to election petitions]:

Lord Bach moved Amendments Nos. 219 and 220:

    Page 200, line 31, after ("of") insert ("subsection (4A) and")).

    Page 200, line 43, at end insert--

("(4A) The incapacity imposed by subsection (4)(a)(i) above applies only to a candidate or other person reported personally guilty of a corrupt practice under section 60 above or of an illegal practice under section 61 above.").

On Question, amendments agreed to.

Schedule 18 [Election campaigns and proceedings: miscellaneous amendments]:

Lord Bach moved Amendments Nos. 221 to 225:

    Page 201, line 35, at end insert--

("( ) In subsection (2), for "and by a receipt" there shall be substituted "or by a receipt".").

    Page 203, line 15, leave out ("and") and insert ("or").

    Page 207, line 1, after ("3,") insert ("the form of return and").

    Page 207, line 5, at end insert--

(" . In Schedule 4 (election expenses in connection with certain local elections), in paragraph 3, for "and receipts" there shall be substituted "or by receipts".").

On Question, amendments agreed to.

22 Nov 2000 : Column 906

Clause 136 [Control of political opinion by companies]:

Lord Wedderburn of Charlton moved Amendment No. 226:

    Page 101, line 12, at end insert--("(1A) The purpose of Schedule 19 is to limit donations by companies to political parties and expenditure by companies for political purposes by way of disclosure both to shareholders and to employees as partners in the enterprise and to secure necessary and proportionate control over such expenditure in order that it should not unduly distort the democratic process and its exercise by the sovereign electorate.

(1B) Nothing in subsection (1A) creates an offence or any liability, but the terms of the subsection shall be taken into account by the court.").

The noble Lord said: My Lords, in considering how I should approach this amendment, I wondered whether I should follow a famous precedent on amendments on rights for employees and their representatives. On 3rd August 1906, at what Lord Robert Cecil complained was a late hour,

    "on a Friday afternoon at the fag end of the Session",

Sir Charles Dilke, that great Liberal statesman, moved a critical amendment to the Trade Disputes Bill for what were then called the "labouring classes". Although he moved the amendment, Dilke made no speech on it. It was left to the House, led by the Attorney-General, to debate it and he relied on the fact of the great Liberal majority that had been returned in the general election to see him through. It was made rather easier by the fact that Mr Balfour, as Hansard records, led most of the Conservative and Unionist Members out of the Chamber in protest against a breach of an alleged government guarantee that debate would end at 11 p.m. on that Friday--a guarantee that was denied by the Government.

I decided that it would be wrong and discourteous to take that course and not to say something about Amendment No. 226. I should say that I wish to speak also to Amendment No. 252. Amendment No. 226 offers a skeleton. Amendment No. 252 puts sufficient flesh on the skeleton to make it a real debate. When directors decide to make political donations from the funds of the company, it has been true at least since 1967 that they should disclose what they are doing. Indeed, disclosure has gone beyond the protection of shareholders, as any student of company law will know. Today, disclosure would include the purposes for which my party fought the election in regard to industrial relations, which my right honourable friend the Prime Minister described in his foreword to Fairness at Work as:

    "Already modern and successful companies draw their success from the existence and development of partnership at work".

In some ways this is not a new idea. Extensive literature has been published both here and on the continent concerning what many writers call "conflictual partnership", in the sense that sometimes the interests of workers, shareholders and managers are common, while on other occasions they conflict. In recognising that conflict, one has to take account of the fact that shareholders in a large public company can change their position much more easily than most of the employees simply by selling their shares and

22 Nov 2000 : Column 907

changing their investment. The conflicts of interest that do occur form the basic reason why autonomous trade unions exist in all democratic countries.

Because of the decision reached by your Lordships' Judicial Committee in the Osborne case in 1910, we have long had in place extremely strict legislation concerning the political funds of trade unions. Some have suggested that there should be an equal form of legislation for companies, with an opt-out for shareholders as regards political expenditure. I am glad that the Government have not adopted that proposal here because it is not all that practicable. Instead, the new mechanisms for the control of political expenditure in this Bill include disclosure to the shareholders and, in a new residual mechanism of control, a procedure whereby shareholders may eventually challenge the directors' donations for political purposes in the courts. In particular, they will be able to challenge a donation if it lacks the required resolution of approval in a company meeting, to which I shall return when we reach later amendments.

The amendments seek to put in place a parallel obligation on the company to disclose in good time proposed political expenditure to the employees' representatives, to consider any representations they may make and to respond to them if they so wish. The definition of employees' representatives has been taken from three of the mechanisms already known to our law; namely, representatives of a trade union recognised by the company; representatives of a trade union legally entitled to recognition of the status of bargaining agent under the new schedule to the Employment Relations Act 1999; or representatives elected by the workforce in a manner parallel to the methods permitted by the amended provisions of what are now Sections 188 and 188A of the Trade Union and Labour Relations (Consolidation) Act 1992.

These amendments do not give to employee representatives precisely equal status to the shareholders in their competence to apply to the courts for control of political expenditure. However, they leave it open to the Minister, once the system has been running for two years or more, to use powers to introduce regulations--which probably I should have drafted as affirmative orders--which would enshrine similar rights for employee representatives. However, that is a power for the future, if it is needed, as in paragraph 347K of Schedule 19 to the unamended Bill.

There is special provision for cases where the company objects to disclosure of information on the ground that it is confidential--which noble Lords will see builds on the important and most welcome innovation by the Government; namely, in the transposition of the European Works Council Directive in Regulation 24 of the trans-national information instrument, SI 3323 of 1999. In brief, this transfers jurisdiction over disputes about confidentiality to the Central Arbitration Committee, which, since 1975, under its chairman Sir John Wood, has a long history of reaching informal and sensible solutions to industrial disputes. On confidentiality, it would judge as it does in the regulations; namely, not by subjective considerations but by determination,

22 Nov 2000 : Column 908

using objective tests relating to whether the release of information would be harmful to the enterprise on objective grounds.

The central obligation of management here would be to transmit to the employee representatives within the two weeks before the relevant meeting of the shareholders the terms of the resolution proposed and any other information that it wished to give. Representatives would then have the right to ascertain the opinions of relevant workers, although there would be no power to associate any particular opinion to individuals. This is not a proposal for co-determination in the German style; it is not even a requirement of the kind one finds in Sweden and other countries for a disclosure provision which forms part of the right to bargain. It is a moderate requirement of disclosure and minimum consultation in a tradition which is peculiarly apt for our own jurisdiction, with a long tradition of consultation stemming from the Whitley Committees proposals in 1917 .

I believe that modern management agrees with the concept of partnership at the place of work, albeit that most people might precisely define it as they like. Nevertheless, there is a common core of agreement. Partnership in industrial relations must produce more than the aspirational semantics of co-operation; it must result in concrete measures.

I ask my noble friend to show some favour to this proposal. It is something which is attractive in trade union circles and, indeed, in progressive management circles as well. I hope that my noble friend will be able to give an indication that the Government will consider this as a matter that they might like to introduce themselves. I beg to move.

8.30 p.m.

Lord Davies of Coity: My Lords, I rise to support my noble friend Lord Wedderburn of Charlton in moving Amendment No. 226 and speaking to Amendment No. 252. I do this in the belief that these amendments will complement the Bill and will help to establish a fairer and more balanced situation .

For 30 years I was a trade union officer. Over those years a great deal of my time was spent attempting to establish a greater degree of co-operation within industry, and putting that into place, rather than widespread conflict. No one was more pleased than I when, in the mid-1990s, the trade union movement widely embraced the concept of partnership within industry. However, the question of partnership is a mechanism with a two-way flow. It offers rights to and demands responsibilities from the two sides of industry, traditionally described as capital and labour. Capital was reflected in the investment made by shareholders, while labour was reflected by employees contributing to the prosperity of the company.

It seems to me that, if it is to be worth while, consultation must take place with both sides of industry. That has been demonstrated in the Bill so far as concerns shareholders, but I think it should also reflect that consultation, information and notification to employees should take place. If we want partnership

22 Nov 2000 : Column 909

to be established and to work fully, that should be reflected in the legislation that we pass. We must recognise that both capital in the form of shareholders and labour in the form of employees create the prosperity that any company achieves. When it has to take decisions with regard to political donations, it is only right and proper that both sides of industry should be treated fairly; otherwise workers will think that they are not really equal partners with shareholders.

Next Section Back to Table of Contents Lords Hansard Home Page