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As the Electoral Commission puts it in its own briefing:

“The Commission’s main focus is already on electoral systems—encouraging and explaining voter registration and providing information on how to take part in elections. The amendment would allow the Commission to continue to provide some information on systems of government and democratic institutions where this is important in explaining the relevance of the democratic process, while also providing a clearer focus”.

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I am grateful to the Minister for having listened to the case advanced in Committee and for bringing forward the amendment. My amendment, Amendment 27, seeks to ensure that reports from the Electoral Commission, made under Section 6 of the 2000 Act, are responded to by the Secretary of State in writing within six months or for there to be an explanation of why it has not been possible to do so.

The amendment has the support of the Electoral Commission and enjoyed cross-party support in Grand Committee. The only resistance came from the Minister, who argued that for the Secretary of State to have to write and explain if a response was not forthcoming after six months would impose a bureaucratic burden. The reaction to that argument from other Members of the Committee persuaded the Minister of the need to reconsider. He has clearly done so. I therefore welcome the commitment of the Government to respond to commission reports within six months. It delivers what I sought to achieve in my amendment.

Perhaps the Minister would confirm that the commitment extends to reports made by the commission under Section 5 of the Act as well as Section 6. My amendment was confined to Section 6, but the commission has said in its briefing that it would welcome the commitment covering reports made on elections and referendums. If the Minister is able to confirm that, it will be extremely helpful.

I commend the Minister for the constructive responses to both the amendments I moved in Committee. What he has brought forward meets the points I advanced. I think these changes help the Electoral Commission in fulfilling its core purposes.

Lord Pearson of Rannoch: My Lords, is it in order for me to ask a question about Amendment 26 as well? If the European Commission is not going to be encouraged to educate the British people about the European Union, then who is? It is a very sad fact that elections to the European Parliament—

Lord Tunnicliffe: My Lords, I am not going to respond to a question in the noble Lord’s second speech as this is Report stage.

Lord Pearson of Rannoch: My Lords, once again the political establishment has got out of revealing to the British people what they were voting for on 4 June.

Lord Henley: My Lords, I agree with my noble friend Lord Norton that we are grateful that the Government have responded positively to his Amendment 27. I presume that my noble friend accepts that his amendment is no longer necessary as the Government have given an assurance that they will respond within an appropriate time, ideally six months, to any report from the commission. It might not necessarily have been a good idea to have had such a provision on the statute book; it is very prescriptive, although it is improved by proposed new subsection (2). But as my noble friend put it, we are very grateful that the Government have responded positively to the amendment he moved in Committee.

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6.30 pm

Lord Tunnicliffe: My Lords, I thank noble Lords who participated in the debate. On the first question asked by the noble Lord, Lord Pearson, the Electoral Commission is independent and would determine which issues to include in its reports. Section 5 of the 2000 Act requires the Electoral Commission to report on the conduct of elections and we would expect those reports to cover all relevant issues.

I can see no reason why my assurance should not apply to Section 5 as well as Section 6. However, I have to speak with some care; perhaps the best way to leave this is to say that I can see no reason why not. I will write to the noble Lord confirming that, or not, and if he is dissatisfied he can of course bring the matter up at Third Reading.

Amendment 26 agreed.

Amendment 27 not moved.

Amendment 28

Moved by Lord Pearson of Rannoch

28: Before Clause 8, insert the following new Clause—

“Permissible donors

(1) In section 54 of the 2000 Act (permissible donors) is amended as follows.

(2) In subsection (2) paragraph (a), after “register” there is inserted “(or eligible to be registered in an electoral register)”.

(3) After subsection (7) there is inserted—

“(7A) Where a registered party accepts a donation from an individual who is eligible to be registered in an electoral register, the treasurer of the party shall report the donation to the Electoral Commission, together with the reasons for accepting the donation.”.”

Lord Pearson of Rannoch: My Lords, noble Lords may recognise the first part of this amendment as the same which the Conservative Party tabled to the Political Parties, Elections and Referendums Bill in Committee in your Lordships' House on 12 October 2000, as reported at cols. 550 to 571 of the Official Report. This followed the recommendation of the report of the noble Lord, Lord Neill, which gave birth to that Bill, that a party should have been able to accept a donation from someone whom it knew to be eligible to be on the electoral roll, even if they were not in fact on it.

Lord Mackay of Ardbrecknish, who moved the amendment, cited people who might not want to be on the electoral register for security reasons, students who failed to register or others who were moving round quite a bit who were inadvertently missed off for those and other reasons. He repeated, and I repeat now, that the object of that Bill, and this one, was and is to prevent foreign and anonymous donations, not to penalise innocent donors without good reason.

The Government, in the shape of the noble Lord, Lord Bassam of Brighton, did not accept these arguments, saying:

“It would ... be no easy matter for a registered party to establish whether a donor whose name did not appear on an electoral register was nevertheless entitled to register”.—[Official Report, 21/11/00; col. 695.]

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It might be or it might not be; that is what this amendment seeks to address. Lord Mackay pressed his amendment to a Division, and lost. This is, of course, inconvenient to my case, but I point out that the Division took place at about 7.15 pm and, going by the noble Lords who supported it, it does not appear to have been Whipped by the Conservatives.

Since then, a case has occurred which I submit justifies the Neill report’s original recommendation, and therefore reconsideration of this amendment, especially with its proposed new subsection (3), to which I shall return. I alluded to the case in question at Second Reading and in Committee in the hope of eliciting a lighter and more reasonable touch from the Electoral Commission, but without success. The story is, briefly, this. The largest donor of UKIP—my party—gave some £370,000 in a year when he had let his house and been inadvertently left off the electoral register. He had been a bona fide resident taxpayer all his life, had donated as such in previous years, and has indeed done so since. So the party knew that he was a permissible donor but did not realise that he had been left off the electoral roll, without his or its knowledge, for one year only. I should have thought that that qualified as a reasonable excuse within the spirit of the Minister’s Amendment 97, which he so eloquently moved and spoke to in Committee on 5 May at cols. GC 167 to 171 of the Official Report. It was, after all, obviously an innocent mistake.

In this respect, I note also the Minister’s latest circular on the Bill dated 12 June on the commission’s enforcement policy in which he says that it is suggested that,

The noble Lord went on to say that alternatively the commission might believe that an individual or organisation needed to improve its capacity to comply with the law and would then set up some form of training. I should have thought that either course of action was pretty obvious in this case.

In its latest briefing on the Bill, the commission says that it does not support the amendment, because the proposal,

That is where proposed new subsection (3) of the amendment comes in. If a treasurer receives a donation from someone who is not on the electoral roll but whom he knows is eligible to be on it, then he may accept the donation but he must report it to the commission, together with the justification for his certainty. I think that I am right in saying that the donation is likely to be more than £7,500 and therefore worth taking just that little bit of trouble over.

I have to say that the Electoral Commission has behaved in a completely different way. It took the United Kingdom Independence Party to court, where it lost. The judge found, all the same, that £18,000 of the donation which had to be repaid was bona fide and should have been allowed. Not content with having lost in court, the Electoral Commission has now gone for judicial review, and the case is being referred back

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to the court. Further than that, the commission has made it clear that, if necessary, it will take the case to the High Court, which is something that the donor in question and UKIP cannot possibly afford. I do not call that a light touch. However, I think that this amendment should help. If a treasurer knows that a donor is permissible, it is not difficult to justify that to the Electoral Commission.

There is one other point that I should bring to your Lordships’ attention. I believe that I am right in saying that the Bill does not change the present Act’s provisions about legacies to political parties, so bequests can be accepted from anyone who was on the electoral register at any time within five years before death. Someone could live abroad in a tax haven for up to five years before he dies and still leave a large sum to a political party. This means that physical presence on the register in the year of donation does not always apply. I suggest that it should not apply, as the amendment proposes. I am not criticising the legacy provisions, but mention them in support of the amendment, which I trust your Lordships will be able to accept.

Lord Anderson of Swansea: My Lords, there may or may not be anomalies in respect of legacies, but I fail to follow the noble Lord’s reasoning. He seeks to make a general case out of a particular problem that affects his party. As I understood it, he suggested that the individual in question had let his house. If that be the case, he would not in any event be resident and presumably not eligible to be on the register. The noble Lord said that the treasurer would accept money when he knew that someone was eligible. That begs many questions. How does he ascertain whether someone is eligible? There are proper tests. It is, frankly, too difficult and the noble Lord strives too hard to make a general point out of a particular matter, which not only affects his own party but is now, in any event, the subject of litigation.

Lord Neill of Bladen: My Lords, I declare an interest in that I was the chairman of the standards committee when it produced its original report on political parties. Another Member present, the noble Lord, Lord Goodhart, was with me on the committee. We indeed used such language. We may have created the term “permissible donor”, but we then had to define it, which we did as including people who were on the electoral register or were entitled to be on it. I am not addressing any particular case; the noble Lord, Lord Anderson, has argued about the amendment that the noble Lord, Lord Pearson of Rannoch, has spoken to.

In life there could obviously be reasons why somebody’s name was not on the register. The simplest example is of somebody who thinks that they have sent in the document that will procure their registration but it has been lost in transmission. A second easy example would be of some administrative error by officials, meaning that someone had not been registered, although the document was duly received. It may even be a case where somebody has been negligent and should have taken a step but did not. In all these cases, the underlying policy is being complied with. The money comes from somebody who could have been on the register but for this error or fault, call it what you will.

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I ask your Lordships and the Minister to think again about this provision. What is urged against it is that it means a difficult inquiry into whether someone is entitled. It really hinges on whether they can produce proof that they were entitled to be on the register when they gave money to the local party. The party can then take the money and send the report to the commission. There is no sidestepping supervision. There will be supervision, but in the rare circumstances where this may happen it seems perfectly reasonable to allow the text as originally proposed by the committee.

Lord Henley: My Lords, the noble Lord, Lord Pearson, takes us back in history to the 2000 Act, whose passage I do not clearly remember. If, as he assures me is the case—I have not had a chance to check—my late friend Lord Mackay of Ardbrecknish moved an amendment similar to this one, it must have been a jolly good amendment. I am glad that he pressed it to a Division. I must confess that I was Chief Whip at the time and I cannot remember what instructions were issued to my late friend—not that he would necessarily always take them—on that occasion. Again, the noble Lord, Lord Pearson, assures us that the vote was at 7.15 pm and, from his examination of the Division List, it does not look as though I tried too hard to assist my late friend in securing the successful passage of that amendment. Obviously, in the event, we were unsuccessful.

More seriously, I take the point made by the noble Lord, Lord Neill of Bladen, about how easy it is to make an error that will leave one off the electoral roll. I am, like many noble Lords, entitled to put myself on the electoral roll in two places: at home in Cumberland and where I live in London when I attend your Lordships’ business. This year, purely for administrative reasons, because I happened to be away at the crucial period, I failed to put myself on the electoral roll in London. I believe that I have now been put on it. Certainly, I have written to Westminster City Council and am assured that this is being corrected. It is just an example of how easy it is to make a small error of the sort that could leave one off the electoral roll. The noble Lord, Lord Anderson, says that in the case cited by the noble Lord, Lord Pearson, the individual had let his house. Therefore, he ought to have been living somewhere else or out of the country. He should have known. However, it is easy to move from one home to another and forget that you have not registered in the second place, having let the first home. One should not dismiss the idea out of hand in the way that the noble Lord, Lord Anderson, did. I certainly give a degree of qualified support to the first part of the noble Lord’s amendment, particularly since, as he said, he copied it from one moved by my late friend Lord Mackay of Ardbrecknish.

6.45 pm

Lord Bach: My Lords, this amendment relates to the permissibility requirements surrounding donations made by individuals. I make it quite clear that, in what I have to say, I am not referring in any way to any case that may be pending on this matter. Currently, the 2000 Act requires that, to qualify as a permissible donor, an individual must be registered on an electoral register. Parties may accept donations of over £200

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only if they are deemed permissible under the terms of the 2000 Act, although noble Lords will be aware that this threshold is to be raised to £500 under provisions in Clause 17 of the Bill. If a party receives a donation from an impermissible source, it is required to return it within 30 days; it is an offence not to do so. Additionally, if a party accepts a donation that is impermissible, the Electoral Commission may apply to a court to seek forfeiture of an amount equal to the donation. Any amount forfeited is paid into the Consolidated Fund.

Let me respond to Amendment 28, which concerns the existing requirement in the 2000 Act. As the House knows, the Act is based largely on the recommendation made in the fifth report of the Committee on Standards in Public Life, then chaired by the noble Lord, Lord Neill of Bladen, who has already spoken in this debate. The House and the country owe a huge debt of gratitude to the noble Lord, Lord Neill, and the committee’s members. The Government agreed with the vast majority of the report’s recommendations, but on individuals to be regarded as permissible donors we differed slightly from what was recommended. The Neill report, as we have heard from the noble Lord, recommended that a donation could be properly received from a person who was on the register or eligible to be on the register. We disagreed with that recommendation and set out why in our response to the Neill report:

“Checking that a particular donor appears on the electoral register offers a test that is both conclusive and simple to administer. It would be far less straightforward for political parties to verify that a donor not appearing on the register was nevertheless entitled to do so. It is in the interests of the parties to have available a test which offers certainty as to the eligibility of a donor”.

Our view has not changed over the years. Political parties have an obligation to ensure that the donations that they receive above the threshold are permissible. We should not look to add a further measure that would increase the administrative burdens on parties. We are concerned that the measure proposed by the noble Lord, Lord Pearson, would do that.

That view is shared by the Electoral Commission, as the noble Lord, Lord Pearson, frankly admitted in moving his amendment. In commenting on this amendment, the commission said:

“The proposal to widen the scope for permissibility along eligibility to register would create additional burdens and present uncertainty for regulated entities in confirming permissibility of donors”.

I hope that the noble Lord, Lord Goodhart, will forgive me for mentioning him. The noble Lord, Lord Neill, has pointed out that he, too, was a member of the committee at that time. When this matter was considered in the debates on the 2000 Act, the noble Lord, Lord Goodhart, said:

“The Government put that forward—this was stated in their reply to the Neill committee—because administratively it is a relatively simple matter to check who is in fact on the electoral register, but it is much more difficult to find out whether someone who, let us say, sends a cheque drawn on a British bank in a letter from an address in London is in fact eligible to be on the register. It is not of course difficult for anyone who is eligible to be on the register to put themselves on the register. For that reason, the Neill committee, when this proposal was put to it, did not object to it being brought forward in the form in which it is brought forward by the Government”.—[Official Report, 12/10/00; col. 546.]

I am sorry not to have spoken to the noble Lord earlier and told him that I intended to use his words.

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Lord Goodhart: My Lords, I have no objection to the noble Lord using my words. If I said it then, I am sure that I meant it.

Lord Neill of Bladen: My Lords, perhaps I should point out that I had ceased to be chairman of the committee when it was referred back for the Bill.

Lord Bach: My Lords, I am grateful to both noble Lords. With great respect, we think that the noble Lord, Lord Goodhart, was correct on that occasion, just as he is tonight.

The noble Lord, Lord Pearson, seeks to draw an analogy between what his amendments would achieve and the reasonable excuse provisions elsewhere in the Bill. I am afraid that we do not see a clear link between these provisions and the amendment. The government amendments introducing a defence of reasonable excuse in relation to the obligation to report would not give parties carte blanche. We do not think that it would be wise to water down the important obligation to verify the permissibility of donations above the recordable threshold, nor does the Bill seek to do so. It goes without saying that I will not speak about specific cases.

It is for those reasons that we cannot accept the noble Lord’s amendment. The recurrent requirement for an individual to be registered in an electoral register offers a test that is simple to operate for all concerned and we do not want to change that.

Lord Pearson of Rannoch: My Lords, I am grateful to all noble Lords who have spoken, including the noble Lord, Lord Anderson, who rightly said that I was making the general out of the particular. However, that is what often happens. This is a particular case, but other examples have been mentioned by the noble Lord, Lord Neill, and others. The general does exist and this case merely proves it.

I am grateful to the noble Lord, Lord Henley, for what I took to be support for this amendment, but I certainly do not intend to press it to a Division. I can see that there is little flexibility from the Government on this point, which is a pity. The amendment would not make life more difficult or complicated for treasurers. If a treasurer knew that the person could be on the electoral register, he would merely have to give reasons for that knowledge to the Electoral Commission. There is no difficulty about it at all. However, I can see that the amendment will not be accepted, so I do not want to take up more of your Lordships’ time. I trust that what is on the record may be useful for the future and I beg leave to withdraw the amendment.

Amendment 28 withdrawn.

Clause 8 : Declaration as to source of donation

Amendment 29

Moved by Lord Campbell-Savours

29: Clause 8, page 7, line 14, at end insert—

“(1A) In section 54 of the 2000 Act (permissible donors), in subsection (2)(a), after “register” there is inserted “who is resident in the United Kingdom for the purposes of Part 14 of the Income Tax Act 2007 and is not a non-domiciled United Kingdom resident”.”

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