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Tuesday, 5 May 2009.
Political Parties and Elections Bill
Bill Main Page
Copy of the Bill
Explanatory Notes
Amendments
6th Report from DPC
4th Report from JCHR
Committee (3rd Day)
3.30 pm
The Deputy Chairman of Committees (Baroness Gibson of Market Rasen): If there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung, and resume after 10 minutes.
97: After Clause 9, insert the following new Clause—
““Reasonable excuse” in relation to certain offences under the 2000 Act
(1) The 2000 Act is amended as follows.
(2) In section 47 (failure by registered party to submit proper statement of accounts to Commission)—
(a) in paragraph (a) of subsection (1), after “are” there is inserted “, without reasonable excuse,”;
(b) in paragraph (b) of that subsection, after “is” there is inserted “, without reasonable excuse,”;
(c) subsections (2) and (3) are omitted.
(3) In section 65 (submission of donation reports to Commission)—
(a) in subsections (3) and (4), after “commits an offence if” there is inserted “, without reasonable excuse,”;
(b) subsection (5) is omitted.
(4) In section 71S (submission of transaction reports to Commission)—
(a) in subsections (4) and (5), after “commits an offence if” there is inserted “, without reasonable excuse,”;
(b) subsection (6) is omitted.
(5) In paragraph 12 of Schedule 7 (failure to deliver donation report)—
(a) in sub-paragraph (1), between “is” and “not delivered” there is inserted “, without reasonable excuse”;
(b) in sub-paragraph (2), after “which” there is inserted “, without reasonable excuse,”;
(c) sub-paragraph (3) is omitted.
(6) In paragraph 12 of Schedule 7A (failure to deliver transaction report)—
(a) in sub-paragraph (1), between “is” and “not delivered” there is inserted “, without reasonable excuse,”;
(b) in sub-paragraph (2), after “which” there is inserted “, without reasonable excuse,”;
(c) sub-paragraph (3) is omitted.”
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bach): In moving Amendment 97, which proposes a new clause after Clause 9, I shall speak also to Amendments 136 to 138. They would re-formulate some of the offences in the Political Parties, Elections and Referendums Act 2000 so that they allow adequate account to be taken of the reason for the breach of the Act at the time that an assessment is made about whether an offence has been committed. Debates in another place indicated the widespread concern that, although it is right and proper that the
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It is helpful in this context to note that the Electoral Commission’s proposed approach to the use of its new investigatory powers and civil sanctions, published in January 2009, suggests that the commission considers the public interest as a material factor in determining whether to proceed with a particular case. Notwithstanding this helpful confirmation of approach, some of the reporting requirements in the 2000 Act are formulated without any prior consideration being given to why non-compliance occurred; that is, the late submission of a donation report is in itself an offence. Consideration of why non-compliance happened is left to a separate defence which can subsequently be demonstrated by that showing,
That is a high test, requiring a person to show that “all” reasonable steps and due diligence have taken place. Further, this particular defence might be unnecessarily narrow. It suggests that at least some steps have been taken or considered which do not deal with a case where a person for a good reason mistakenly concludes that no report needed to be delivered. For these reasons, we were persuaded by the debates in another place that the existing position included an unhelpful formulation that could result in some inadvertent breaches being pursued without there being a proper examination of why the breaches occurred. These amendments provide that offences of late and incomplete reporting of donations and loans—by parties, regular donees or treasurers—are only committed if the breach is “without reasonable excuse”. In parallel, they remove the defence of taking,
Because each case is different, it is impossible to be prescriptive about what will and will not be viewed as a “reasonable excuse”. A reasoned judgment will of course have to be made on the facts of each case and the relevant circumstances. However, I can say that “reasonable” imports an element of objectivity here: not just any old excuse will do. This approach ensures that there is flexibility to take account of any reason given for non-compliance without meaning that all a person has to do to avoid liability is to make up an excuse that sounds vaguely plausible.
I stress, for the avoidance of doubt, that the effect and intention of these amendments is not to absolve regulated persons of guilt for all unintended errors. It might well be that a really bad breach of the requirements of the Act, even if not deliberate, does not have a reasonable excuse and as such still constitutes an offence.
While we are sympathetic to concerns about the commission pursuing those who did not intend to breach the Act, we are equally clear that the public interest demands a stringent and well enforced regulatory regime. Any more blanket excuse that would allow unintended errors to go unpunished would risk incentivising ignorance of the law, which would over
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I am pleased that the commission has welcomed this approach. In its latest briefing on this Bill, the commission states:
“The Commission believes the proposed new defences are more proportionate, providing greater protection to those we regulate and more certainty to the Commission”.
Our amendments strike the right balance between the twin aims of helping to ensure that inadvertent errors with good reason are not punished and ensuring that the regulatory system is not undermined by absolving of the consequences of their actions all those who did not intend to commit a breach. I beg to move.
Lord Bates: We welcome this amendment. The arguments that I shall deploy are very much those we have deployed in this Grand Committee, and in Committee and on Report in another place, for a defence of innocent mistake. This amendment goes very much towards that.
When the Minister responds, it would be good if he drew a line under what is potentially covered by a “reasonable excuse”, in terms of objectivity, that would not be covered by an amendment on an “innocent mistake”. Is there a major difference on a philosophical or legal point that we are missing? If so, it would be good to understand what that is in terms of the reach. As regards adjudicating objectively on when a reasonable mistake has been made, the Electoral Commission would be helped enormously if it included members with recent experience of political activity.
I appreciate that the Minister may be unable to respond today, but we have been talking about achieving a system of regulating and declaring donations in which the public can have confidence. The objective is not necessarily to be seen to be dishing out hard sentences or penalties for mistakes, but is very much to give the public confidence in their system. To what extent, therefore, does he feel it appropriate for the commission to have a role in providing training and education to people who have made an innocent or reasonable mistake in the completion or late submission of forms? Is that something that the commission could respond to in a way that says, “Yes, we will not levy a civil penalty”—perhaps not a criminal penalty—provided that the person undergoes training to ensure that a level of competence can be established. That would of course mean that a serial offender would have one less argument in their defence. I offer that not as a new idea, but one which has been used by the police, for example, who can offer someone a safe driving course instead of a penalty when they have slightly exceeded the speed limit. Something like that would give integrity to the system and I shall be interested to hear the Government’s response. Otherwise we welcome the changes, which are in line with the arguments we made in another place.
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Lord Neill of Bladen: Is the choice of language, “without reasonable excuse”, based upon a settled body of case law in other statutes where the words have been used, or are we out in open seas? By using it in different contexts, you are going to get different interpretations. For example, on the issue of failure to deliver a proper statement of accounts, it could be a fairly good answer to say, “They were scrutinised by a firm of chartered accountants of high standing and it made a mistake. We only submitted them”. The excuse for not making a full report by a particular date may be of a different order from where you are relying on the expert evidence of someone like an accountant. How solid is this as statutory language?
Lord Bach: I am grateful to both noble Lords who have spoken on this matter. First, on the points raised by the noble Lord, Lord Neill, time will tell how solid it is. It represents a difference from the standard that has applied up until now, which is, as I said in opening, a harder standard. We are trying to avoid unnecessarily convicting too many putative defendants of offences. “Reasonable excuse” means there is a need for the reason for failure to be considered; inadvertent breach would not necessarily be, and often might not be, a reasonable excuse. Innocent mistake provides a much more blanket defence, absolving all inadvertent breaches. If a treasurer is ill and therefore cannot get his returns in on time, that might constitute a reasonable excuse, but a blanket defence of innocent mistake would not incentivise understanding and compliance with the law. All breaches, if unintentional, would not be punishable.
The noble Lord asked about settled case law in this field. We have all met the phrase, of course, in a number of Acts of Parliament. There is no settled case law in the context of the 2000 Act, but there are many other offences within that Act which contain the language. We are using consistent terminology that will make it easy for the commission to decide more fairly, on the facts of each case, whether or not an offence has been committed. We will have to wait and see whether it will work more satisfactorily than the present higher test. I am comforted, to some extent, by the fact that the commission prefers this choice of language to that which exists at present.
I thank the noble Lord, Lord Bates, for his welcome of the amendment in principle. He asked for an example. At the most basic level—I have already used one about someone being ill—an example could be a treasurer whose spouse is taken suddenly ill. If there is a requirement on him or her to get the return off rapidly but he or she fails to do so because other matters are obviously more important at the time, he or she would commit the offence unless there was a defence of reasonable excuse. That circumstance might be considered by the commission to be a reasonable excuse for the returns arriving 24 hours later than they should otherwise arrive. We can all think of examples.
The noble Lord, Lord Bates, asked an interesting question about whether the commission can provide education training. The first question to ask is whether there is an offence. If there is no offence, that is more difficult, except on a voluntary basis, although I am sure that the Electoral Commission will give guidance
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3.45 pm
Lord Bates: My request for an illustration or example related to the difference between what might be termed a reasonable excuse and an innocent mistake.
Lord Bach: I use again my basic example of the treasurer whose spouse suddenly becomes ill. It may not have been an inadvertent mistake on his part; it may be at the back of his mind that he should be sending off the return but he does not get round to it because there are other, more important things with which to deal. On the other hand, there is the treasurer who does not have it in his mind at any stage when he should do. That is the difference.
98: After Clause 9, insert the following new Clause—
“Control of donations to members associations: responsible persons
(1) Schedule 7 to the 2000 Act (control of donations to members associations etc) is amended as set out in subsections (2) to (4).
(2) In paragraph 1(9) (meaning of “the responsible person”), for paragraph (b) there is substituted—
“(b) otherwise, the person who is the responsible person by virtue of a notice in force under paragraph 1A.”
(3) After paragraph 1 there is inserted—
“Appointment of responsible person by members association with no treasurer1A (1) A members association which does not have a treasurer—
(a) may appoint an individual to be the responsible person in relation to the association by giving notice to the Commission;
(b) shall do so within the period of 30 days beginning with the date on which the association—
(i) accepts a controlled donation which is a recordable donation for the purposes of paragraph 10, or
(ii) receives a controlled donation falling within paragraph 6(1)(a) or (b),
if a notice under this sub-paragraph is not in force on that date.
(2) A notice under sub-paragraph (1)—
(a) must be signed on behalf of the members association;
(b) must contain a statement signed by the individual to be appointed as the responsible person confirming that the individual is willing to be appointed.
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(3) A notice under sub-paragraph (1) must state—
(a) the name and address of the members association;
(b) the full name of the individual to be appointed as the responsible person;
(c) the individual’s home address in the United Kingdom, or (if there is no such home address) the individual’s home address elsewhere.
(4) Subject to the following provisions of this paragraph, a notice under sub-paragraph (1) (“the original notice”)—
(a) shall be in force as from the date on which it is received by the Commission, but
(b) shall lapse at the end of the period of 12 months beginning with that date unless the members association or the responsible person gives the Commission a notice (a “renewal notice”) that they both wish the original notice to remain in force.
(a) has the effect of extending the validity of the original notice for a further 12 months beginning with the time when it would otherwise have lapsed (whether under sub-paragraph (4)(b) or on the expiry of a previous extension under this sub-paragraph);
(b) must be received by the Commission during the period of one month ending at that time.
(6) A renewal notice must either—
(a) confirm that all the statements contained in the original notice, as it has effect for the time being, are accurate; or
(b) indicate that any statement contained in that notice, as it so has effect, is replaced by some other statement conforming with the relevant provision of sub-paragraph (3).
A renewal notice must be signed on behalf of the members association and by the responsible person.
(7) The members association or the responsible person may, at any time after giving the original notice, give the Commission a notice (a “notice of alteration”) indicating that any statement contained in the original notice, as it has effect for the time being, is replaced by some other statement—
(a) contained in the notice of alteration, and
(b) conforming with the relevant provision of sub-paragraph (3).
(8) A notice of alteration must be signed—
(a) on behalf of the members association, and
(b) by the responsible person or, in the case of a notice substituting a different individual as the responsible person, by that individual.
(9) A notice under this paragraph ceases to have effect on receipt by the Commission of a notice terminating it (a “notice of termination”)—
(a) given by and signed on behalf of the members association, or
(b) given and signed by the responsible person.
(10) On receipt of a notice of termination given by the members association or by the responsible person, the Commission must inform the other party as soon as is reasonably practicable (unless the notice was signed both on behalf of the members association and by the responsible person).
(11) A reference in this paragraph to a notice being signed on behalf of a members association is to the notice being signed by the secretary of the association or by a person who acts in a similar capacity in relation to the association.
(12) A notice under the Schedule 7A version of this paragraph also has effect as a notice under this paragraph.
The “Schedule 7A version” of this paragraph means this paragraph as it applies, in relation to controlled transactions, by virtue of paragraph 1(7A) of Schedule 7A.
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1B A members association commits an offence if—
(a) it is subject to the requirement in paragraph 1A(1)(b), and
(b) without reasonable excuse it fails to comply with the requirement.”
(4) In paragraph 12 (offence of failing to deliver donation report), in sub-paragraph (1) and in sub-paragraph (2), for paragraphs (a) and (b) and the words following paragraph (b) there is substituted—
“(a) in the case of a regulated donee other than a members association, the regulated donee is guilty of an offence;
(b) in the case of a members association, the association and the responsible person are guilty of an offence.”
(5) In Schedule 20 to the 2000 Act the following entry is inserted at the appropriate place—
|
“Paragraph 1B of Schedule 7 (failure by members association to comply with requirement to appoint responsible person) |
Lord Tunnicliffe: Government Amendments 98, 105, 139 and 140 introduce new requirements for members associations. Government Amendments 139 and 140 are consequential.
Members’ associations are a formal category of regulated recipient, or donee, under the 2000 Act. This means that they are required to report donations and loans to the commission in a similar way to political parties. These associations are diverse and can have fairly loose structures—the legislation does not require specific posts or organisational arrangements. Indeed, the definition of what is and is not a members’ association is pretty broad. It is defined as an organisation “composed wholly or mainly of members of a political party” that is not a party or party accounting unit.
This loose arrangement is desirable as it allows a multiplicity of bodies to organise and flourish. A quick glance at the Electoral Commission’s registers indicates that organisations as diverse as the Conservative Christian Fellowship, Progress and the Liberal Democrat parliamentary party have all reported donations in their capacity as members associations. This diversity is a feature of our democratic system. Members’ associations should be encouraged, and nothing we propose is intended to hamper their existence or radically alter what is required of them.
However, it has come to our attention that, in the event of a members’ association failing to comply with the reporting requirements which attach to it, it might not always be possible to ascertain who is responsible for that failure. After all, the legislation in its current form does not require the members’ association positively to identify to the commission who is responsible for dealing with its donations. Moreover, it is not possible to sanction the association itself in the event of a failure not resulting from the actions of an individual. This situation cannot be acceptable, given the importance of a robust and enforceable regulatory system. As such, these amendments propose measures to clarify the liability of members’ associations in the event of failures to comply with the reporting requirements applying to them.
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