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I am afraid that the Bill has been fudge. Despite its great rhetoric, and despite the procrastination, it has failed to address the practical issues of fundraising and how to engage with a wider audience in politics.

6.10 pm

Lord Goodhart: My Lords, I start by declaring an interest as a donor whose constituency donations exceed the reporting threshold and whose national donations exceed the recording threshold. I speak on the Bill mainly because I was a member of the Committee on Standards in Public Life at the time of its report on the funding of political parties, which laid down the framework for the later legislation. I pay tribute here to the noble Lord, Lord Neill of Bladen, for his effective chairing of that committee.

I was also on the Front Bench for my party during the passage of the Political Parties, Elections and Referendums Act 2000 through this House, and for that of the Electoral Administration Act 2006. In view of the history of that legislation and the gaps that have appeared, I strongly support this Bill.

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Two matters are of particular importance: first, the increasing transparency, particularly by requiring unincorporated associations to disclose the source of donations made through them; and, secondly, a provision not yet in the Bill but promised by the Government, as the noble Lord, Lord Bach, has done, to bring about individual registration by electors throughout Great Britain. Electoral fraud is indeed an increasing problem and has undoubtedly affected some results, particularly in local government elections. Individual registration with identifiers would make fraud much more difficult to achieve. It needs to be brought forward more quickly than is now proposed by the Government, although I obviously recognise that it would take some time to achieve.

There are several other useful provisions in the Bill. I welcome, among others, the greater power to obtain relevant information, and the powers to impose civil penalties; on this, I am afraid that I disagree with the noble Lord, Lord Neill. The threat of criminal penalties has deterred many party members from accepting offices in their local parties that would place them in danger of acquiring a criminal record. Criminal penalties should be reserved for deliberate and conscious breaches of the law, and not for breaches caused by ignorance or incompetence, which are better dealt with by civil penalties.

I also welcome the extension of the size of the Electoral Commission by adding four members nominated by political parties. My experience over six years on the Committee for Standards in Public Life persuaded me that having members with front-line knowledge of the workings of the political system was useful to the committee, and it would also be useful to the Electoral Commission. However, we also need to clarify the method of selection of the fourth political member. By an odd coincidence, I have recently been on a mission to Sri Lanka for the International Bar Association, where we discovered that failure to spell out what was, in that case, the method of electing the sixth party nominee to their constitutional commission had stymied the whole operation. We must therefore give some greater indication in the Bill of how the fourth member will be selected.

I support some proposals in the Bill in principle but not in detail. In these, I agree to a considerable extent with the Electoral Commission. The Bill proposes in Clause 13 to increase the permissibility and recording thresholds from £200 to £500. While I accept that some increase may be desirable, that seems to me to be altogether too high. I suggest that the increase should be from £200 to £300. That would tally with the 50 per cent increase in the reporting thresholds provided for by Clause 13.

Clause 14 limits free candidacy expenses for general elections occurring more than 55 months after the previous general election. This is good in principle but, as my noble friend Lord Tyler pointed out, four of the last general elections have taken place only four years after the previous general election. Four years seems to have become the standard length of life of a Parliament if the governing party expects that it is likely to be re-elected. This suggests that a limitation on constituency spending should preferably operate

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throughout the life of a Parliament and, in any event, should at least come into force at a much earlier date than that proposed by the Bill; I suggest that that should be not later than 42 months after the previous general election, so that it would be there after three and a half years. Then there is the question of the withholding of the home addresses of candidates. I am not persuaded that we need it at all, except in cases of a real security threat, as the noble Lord, Lord Brooke, pointed out.

Finally, there are provisions that should be in the Bill but are not. Of these, much the most important, which has had support from a number of other speakers, is the cap on donations. This was not recommended by the Committee on Standards in Public Life’s fifth report, but developments since then have made it clear that it is necessary. Indeed, it is essential that parties are to be given a reasonably level playing field. The present system enables a party with wealthy supporters to run more expensive campaigns and to be more active outside the campaign periods. More important even than that, some contributions in recent years have been so huge that party policy can be altered by the promise of more money or by the threat of withdrawing financial support in the future.

Wealth can quite legitimately be used to buy fine houses, great works of art or yachts and Rolls-Royces. However, it is contrary to the spirit of democracy to allow wealth to buy political influence, so we need to add a cap on donations to the provisions on the existing cap on spending. That should apply with or without a consensus.

Another provision that should be in the Bill, or perhaps in the forthcoming Finance Bill, is tax relief for small donations. This was proposed in the Committee on Standards of Public Life’s report, but was not adopted. We have in this country for years recognised that donations to charities are a matter of public interest and should have tax relief through gift aid. However, modest donations to political parties are also very much in the public interest and should be encouraged. This has already been recognised in principle, although not many people appreciate this, by exempting bequests to political parties that have two or more members in the House of Commons from inheritance tax liability. The same principle should apply to donations by the living. The simplest method would be to use the gift aid system with some changes. In particular, there would be a cap on the size of the annual donation that could qualify for relief—I would suggest no higher than £1,000—and higher-rate taxpayers could not set off their donations against their higher-rate tax liability as they can in the case of gifts to charities.

This is an important Bill. It has many good features. There are some which could and should be improved, and a few which ought to be here and are not. I wish the Bill well.

6.20 pm

Lord Clinton-Davis: My Lords, the real issue of this Bill, as I see it, is how we can galvanise our democratic electoral system so that greater numbers of our people feel that their participation in elections really matters.

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We are facing a grave crisis—a crisis that affects all our political parties. We do not have an easy way out of this, but we have to face the situation together. Unfortunately, I do not think this Bill—or any Bill—can really do this. I am not suggesting for one moment that we should not consider what is being proposed. There are certain advantages in this Bill, but it is not a complete answer—or any answer—to the underlying problems that we face. The noble Lord, Lord Bates, was in my view unduly optimistic about the contribution that Members are able to make in the political process. That is an issue which confronts all parties but, as I have said, I do not think that any Bill can answer that problem.

I became involved in politics a long time ago—before the 1945 election. Some Members—very few in this House—will appreciate the significance of that. I became involved at a time when people really cared: the turnout in 1945, 1950 and 1951, and even in 1955, was enthusiastic and energetic in a way that few of us would say has happened since. I have been a member of the Labour Party for a very long time; the decline in voting is an issue that confronts all parties, if you care about the democratic system, as I do. I remember in that time—64 years ago—that people flooded into the election canvassing rooms. They really cared not only about casting their vote, but that other people should cast their vote, too. How can we resuscitate that situation? Is it possible? I repeat, it affects us all.

We are not facing up to the real problems. The real problem is that people want to feel that they can really effect change, something that many people think is impossible to achieve at this time. Despite what I have said, this Bill by and large represents an advance. It is also capable of becoming even more benign, within the limitations that were spelled out by my noble friend Lord Bach. I hope that in his wind-up, he will give the House further and better particulars of what discussions have taken place with the Electoral Commission and others about the proposals in the Bill, and about some of its shortcomings. The essential goals that we should seek to attain, as the Electoral Commission urges, are how we can modernise and strengthen the electoral registration system to make it more meaningful as far as ordinary people are concerned, and how we can introduce individual electoral registration. I would hope that we can see some worthwhile changes in this Bill.

The Electoral Commission is clearly concerned about the effect of the Bill’s proposals about reporting donations and loans. Despite improvements contained in the Bill, the risk remains of a lack of confidence, as expressed by the Electoral Commission,

Is there validity in this concern? What is the Minister’s response?

The Electoral Commission welcomes the changes devised by the Government to Clause 2 and Schedule 1, establishing that the Government are in listening mode and that this new procedure is a significant improvement on what we have now. I submit that the Electoral Commission is right when it suggests that statutory requests for information and explanations should be dealt with similarly to requests for documents, thereby

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extending the new court order procedure. As the Electoral Commission argues, such a procedure would enable an investigation to be effective. It strongly recommends—I think that it is absolutely right in this—that a civil court procedure is to be preferred to a criminal prosecution for not complying with a statutory request. What is the Minister’s response to this modest proposal?

I turn to Clauses 4 and 7, concerning electoral commissioners. It was submitted in the House of Commons that the fourth nominated commissioner should provide a voice that would otherwise be unheard, for parties with fewer or no seats in the House of Commons. What is the Minister’s view about this? It is essential that that issue should be faced.

So far as donations are concerned, Clause 13 increases the permissibility and recording threshold from £200 to £500. I share the concern of the noble Lord, Lord Maclennan, about this. Why have we come to that conclusion? There is a need to take account of the inflation that has occurred since 2000—that makes sense—but it is absurd to change the amount to £500. What justification is there to change it from £200 to £500? Although I think that there should occasionally be a review of the situation, we should react adversely to this particular proposal.

I turn to candidates in parliamentary elections. The Electoral Commission considered that voters should be able to have sufficient information to identify a candidate’s links with his or her constituency, and the Minister indicated that there will be certain changes. Will there be any changes as far as that is concerned, and what is the general purpose which the Minister prescribes? It is quite insufficient to enable only candidates, some others closely identified with the candidate and representatives of the Electoral Commission to have access to the candidate’s full address. What is suggested is that the returning officer should identify the candidate’s home address. I think that that represents a demonstrable improvement on what has gone before. However, there needs to be further discussions with the Electoral Commission and the discussions should not be confined to that issue. It would be enormously beneficial to do that and I humbly commend the proposal.

I hope that what I have said is not wholly negative and that the Minister will take some account of it. I await his reply with bated breath.

6.22 pm

Lord Greaves: My Lords, I agree with a great deal of what the noble Lord, Lord Clinton-Davis, said, particularly the first four or five minutes of his contribution, when he was talking about the need to enthuse and involve people in the democratic political process. That is a major problem for all of us who are involved in political activity and who care about active democracy. I very much agree with what he said about that. It has also been said by other noble Lords in this debate.

I should start by declaring some interests. I notice that the noble Baroness, Lady Jones, declared that she has been a member of the Labour Party for 30 years. I am not sure that we should declare that level of interest. However, I worked out when I first joined the

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Liberal party and regret to say that it is almost 50 years ago. When I heard the noble Baroness’s remark, I thought “What it is to be young like her and some other noble Lords”.

I am an elected member of Pendle Borough Council, which is an electoral registration authority. I have also been an election agent for many hundreds of candidates over the years; indeed, I am an election agent for a candidate in a by-election at this very moment. My noble friend Lord Tyler was bragging, I think, that he has stood in 12 elections and won half of them. If I have my arithmetic right, I have stood in 20 and won 80 per cent of them. However, I defer to my noble friend because he got elected to the House of Commons, which I failed to do on several occasions.

I want to talk about two nitty-gritty issues: individual registration and postal voting. On individual registration, I join those who welcomed the announcement made at Report stage in the House of Commons. We look forward with interest to see what the government amendments actually say. I join those who have urged the Minister to ensure that the amendments are here in time for Committee stage, when they can be thoroughly discussed and properly gone over without the constraints of the more formal procedures on Report.

I, too, join my noble friend Lord Goodhart in expressing concern that it will take eight years before the system comes in if all the hurdles are passed. That seems a very long time. Like him, I understand that there are many interesting and intricate hurdles to be passed before it can be brought in, and indeed that it will cost money. But eight years is a long time. Looking round your Lordships' House, I think that some of us may not be here in eight years. The way things go, projects like this slip—they do not speed up once a timetable has been put in place. The Government say eight years but it might be 10 or 12 years—who knows?—unless someone puts a bit of oomph behind it. I believe that electoral registration is necessary in principle. I think that it is necessary to help stamp out some kinds of electoral fraud that do or can take place.

The noble Lord, Lord Neill of Bladen, talked about the different culture in England, Scotland and Wales as opposed to Northern Ireland. He may be right. If people were asked which part of the United Kingdom would most easily take to such changes, I do not think that most would necessarily choose Northern Ireland first. It has undoubtedly been a success in Northern Ireland and there is no reason at all why it cannot be a success here. If the Government are putting forward a timetable for this, let us have some pilots. Let us pilot individual registration in different parts of the United Kingdom, or in England, Scotland and Wales, and see what the difficulties and results are in practice without trying to overcome possibly very real hurdles or making assessments on the basis of what might happen. I have not always been in favour of the concept of piloting in elections in other areas but it really could happen in electoral registration. Pilots could go ahead in some areas in two or three years. Those could identify, thrash out and resolve the difficulties and that experience could then be used.

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I do not believe that individual registration will on its own stamp out fraud through postal voting; I shall explain why in a minute. However, I do believe that it is vital to stamp out possibilities for personation at polling stations. Not a great deal of publicity is given to personation at polling stations, but there is evidence that it exists on an unacceptable scale in some parts of the country. I suppose that one case of someone personating another elector would be an unacceptable scale, but I am referring to a scale at which elections can be changed. For example, I have quite a bit of information from my honourable friend John Hemming MP that personation is a problem in Birmingham. I believe that it is a problem in at least one town in Lancashire, though fortunately not in the areas where I am politically active.

In principle, individual registration is right because people ought to be responsible for their own votes. The noble Baroness, Lady Jones, who brings some youth to the Chamber—compared with some of us, at least; and she can read Hansard to see what that is all about—referred to the “head of household”, a description that has not actually been used, at least since the Electoral Administration Act of two or three years ago, to which my noble friend Lord Goodhart referred. The truth of the matter now is that the electoral registration form for a household is filled in and sent back by whoever bothers to do it—whoever picks it up and decides to fill it in. This is utterly and totally unacceptable, particularly in multi-occupancy housing, where the person filling in the form may be someone whom you do not know much about. That is not an acceptable practice. The idea that there is a male head of household is outmoded in even the most conventional households. Individual registration is right in principle and has benefits in practice.

I do not want to say a lot about postal voting. The first time that I tried to tell your Lordships about some of the problems of postal voting was when we were discussing the European Parliamentary and Local Elections (Pilots) Bill back in 2003, and I recounted some of the utterly unacceptable practices in relation to postal voting and what became known as “warehousing” of voting in the infamous case in Birmingham. At that time, many noble Lords around the Chamber did not really believe me. How could this level of electoral fraud and malpractice in British politics be practised and be quite so prevalent in some areas? We now know, partly from the court cases to which the noble Lord, Lord Neill, referred, that this problem is widespread and totally undermines the democratic process in those areas. There is absolutely no point in beating about the bush; most organised postal vote fraud is in areas where there are large south-Asian communities. There is a cultural problem there and there is no point in pretending that that is not the case, because it is. Unless we tackle the problem at its roots in those communities, we will not sort it out.

Postal voting, by its very nature, is not and never can be secure. My answer would be to start by saying that there should be no postal voting, and then by asking who really needs it. My bottom line, or perhaps my top line, would be to return to the system that existed before 2000, but I would restrict its use to

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people who needed it for medical reasons or reasons of disability because they physically could not get to the polling station to vote. In this modern day and age there are other ways of providing voting facilities for people who are simply away from home.

In the future, it should be possible to arrange to cast your vote anywhere in this country, given the computer and communications systems that exist nowadays. Obviously, that would have to be organised and thought about carefully, but such a system is possible. Systems of advance voting, were used in America before the presidential election, when many of us discovered to our astonishment that in some areas between 25 and 30 per cent of the electorate had already voted before polling day—but they had voted in a polling station.

I was not in favour of pilots for postal voting because I was not in favour of postal voting on demand, but pilots for advance voting systems could be looked at in this country to provide a means by which people can vote, even if they will be away on polling day.

So there are other ways of doing it. We should look at other ways of voting that are secure. The problem with postal voting is that you can never guarantee whether the person who has had the voting paper sent to them has filled it in and sent it back. Even if identifiers are used and verified, and even if there is individual registration, that problem does not fundamentally change. In particular, you cannot guarantee, even if the correct person is filling in the ballot paper, that there is not someone standing next to them making sure that they are voting the right way. Even if that does not happen, you cannot prevent people doing what someone did to me at the last election—they knocked at my door and said, “Can I give you our postal vote?”. I said, “If it’s sealed up I shall take it back, but I really don’t see why you can’t just post it”. They said, “Oh no. We want to show it to you to make sure that you know that we voted for your man”. That is inherently possible in postal voting and it totally and utterly undermines the secrecy of the ballot box.

Like the noble Lord, Lord Neill, and others, I think that this Bill misses an opportunity to turn back the clock from 2000 and place much greater restrictions and security measures on postal voting.

6.46 pm

Lord Pearson of Rannoch: My Lords, I start by declaring an interest in this Bill in that I am trying to raise money for UKIP, the UK Independence Party. I have only two brief points to make. The first is to support the Electoral Commission, as other noble Lords have done, in its recent briefing paper, which is nervous about increased thresholds for donations that do not need to be declared. As the commission has said, the proposal to increase the declarable threshold to £500 may mean that any cumulative series of donations which are individually worth less than £500 will be legal, regardless of where they come from, and will not need to be reported to the commission for publication.

As a fundraiser, I confess that I find this a rather attractive proposition, but it cannot be right if we wish to identify substantial donors to our political parties. I fear that the commission must be right when it suggests

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that this proposition may result in large donors making regular donations of just below £500, perhaps even by standing order. I should have thought that that must defeat the object of the present Act and of this Bill. I submit that this may be an area to which we may wish to return in Committee. One could of course require the cumulative totals of small gifts to be declared when they reach £7,500.

My other suggestion is that we should perhaps revisit the requirement for a large donor to be on the electoral roll. I have to tread rather delicately here, which noble Lords may think is not my strongest suit, because my party is in dispute with the commission about this area. However, I welcome the words of the noble Baroness, Lady Jones, when she referred to the burdens placed on amateur activists and donors, who may make technical and sometimes innocent mistakes.

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