Carry-over motion, Programme motion, Consideration of Lords amendments in the Commons
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Madam Deputy Speaker (Sylvia Heal)Labour- Quote
- I must draw the House’s attention to the fact that privilege is involved in Lords amendment 33. If the House agrees to that amendment, I shall ensure that the appropriate entry is made in the Journal. Clause 8 Declaration as to source of donation
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The Secretary of State for Justice and Lord Chancellor (Mr. Jack Straw)Independent- Quote
- I beg to move, That this House disagrees with Lords amendment 11.
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- Madam Deputy SpeakerLabour
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- With this it will be convenient to discuss the following: Lords amendment 12, and Government motion to disagree, and Government amendments (a) to (f) in lieu.
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- Mr. StrawIndependent
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- Before I deal with the substance of the amendments, Madam Deputy Speaker, I wonder whether I would be allowed to put on record my deep shock and sorrow at the death of Lord Kingsland, of which I learned yesterday. I have recently had a great deal to do with Lord Kingsland, although I did not know him particularly well before that. I talked to him only last Thursday in the context of the Parliamentary Standards Bill. I know that I speak for all Labour Members in saying that everybody who dealt with him found him utterly delightful, courteous, and firm in his opinions but ready to concede that others have opinions. I would like to send my deepest condolences to his family and friends, and to his party. The amendments arise from those moved by Lord Campbell-Savours in the other place during a well-attended debate on 15 June. At that time—I had expressed this view in this House—the Government advised the other place to vote against amendments that would have had the effect of making donations impermissible unless the donors met standard conditions for a permissible donation and, in addition, were ordinarily resident and domiciled within the United Kingdom. My noble Friend Lord Bach spoke, at Hansard column 914, about the Government’s serious concerns about the amendments on what he described as “principled, practical and legal grounds”, and set out the position of the Government. It is no great secret that that has indeed been the Government’s position. No one, least of all myself, has a difficulty with the idea that those who make donations to political parties, like those who participate more widely, should have a clear and practical connection with our democracy, not just a technical one. The issue is not one of sentiment but about the matters to which my noble Friend referred in the other place. As my right hon. Friend the Minister of State said a short while ago, we in this House have to take account of sentiment here, among all parties and on the Back Benches as well as the Front Benches, as well as sentiment in the other place. That does not mean that we simply accept every amendment that is moved, but two things were striking when the matter came before the other place. One was the extent of the alliance that led to the amendments tabled by Lord Campbell-Savours going through, and the other was the difficulty that both the Conservative and Labour Front-Bench teams, if I may say so, found in encouraging otherwise loyal party supporters into the Lobby. There has subsequently been a lot of discussion, and I understand the concern of the right hon. Member for Horsham (Mr. Maude) about the short time in which the amendments were tabled. We sought to consider actively whether there was any basis on which we could accept the principle behind the Lords amendments. However, in producing our amendments we had to acknowledge that although Lord Campbell-Savours did his best with his amendments, which are found in Lords amendments 11 and 12 and in clause 9 of the Bill as it came out of the other place, they were completely technically unworkable and complicated. I think that Lord Campbell-Savours and his supporters in this place accept that.
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Mr. Nigel Evans (Ribble Valley) (Con)Conservative- Quote
- I assume that the amendments relate not just to financial contributions but to benefit in kind. I have campaigned in American elections in the past, which would clearly have a cost. If an American student wished to come across here and campaign during the next general election for a Member of Parliament of whichever political party, would that be seen as a benefit in kind? Would it have to be registered somewhere?
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- Mr. StrawIndependent
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- I am afraid that I had no notice of that question, but I shall try to provide the hon. Gentleman with a clear answer before the end of the debate. I hope that that is helpful.
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Mr. David Drew (Stroud) (Lab/Co-op)Labour- Quote
- One of the things about which some of us on the Labour Benches feel strongest is the allegation that there has been no debate on these substantial and substantive issues. It is true that we did not have a debate about them in this place, much to the sadness of some of us on the Back Benches, but there has been forthright debate led by my hon. Friend the Member for Pendle (Mr. Prentice) about what many of us who believe in democracy want to do—outlaw those from abroad who wish to buy elections. That is why we thoroughly welcome the Government’s change of heart.
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- Mr. StrawIndependent
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- I am grateful to my hon. Friend. How much time is spent on legislation in this House is a wider issue to consider, and I hope that my hon. Friend the Member for Cannock Chase (Dr. Wright) and the Committee of Back Benchers of all parties that he is establishing will consider that in much more detail. I regret that the matter was not discussed on the Floor of the House on Report some months ago. One curiosity is that, in comparison with the time for which previous Parliaments sat, we are not sitting for fewer days or hours overall. The crucial issue is how the time is used and the balance between legislation and non-legislation.
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Bob Spink (Castle Point) (Ind)Independent- Quote
- I am sympathetic to the sentiments that the hon. Member for Stroud (Mr. Drew) expressed a moment ago. Notwithstanding reasonable Government concerns about the practicalities and enforceability of Lords amendments 11 and 12, does the Secretary of State share the public concern, as well as that in the House, about the need to restrict the definition of “permissible donors”, and to exclude people from abroad who do not participate properly and fully in our tax system? We could thus exclude people such as Lord Ashcroft, who has bankrolled the Conservative party for many years. That abuse of the electoral system must be stopped, and stopped quickly.
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- Mr. StrawIndependent
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- I understand the hon. Gentleman’s argument. Part of what concerned Lord Bach, other colleagues and me was ensuring some consistency between the regime for donations and that for more general participation in our system. As I said, the Government have decided that it is possible to accept the burden of the amendments, and I now want, if I may, to get some important points on the record, not least to take account of the point that the right hon. Member for Horsham made about the short time for tabling amendments. Lords amendments 11 and 12 refer to residence for the purposes of the Income Tax Act 2007, but residence is not appropriately or meaningfully defined. Part 14 simply sets out residence in certain specific cases. The amendments fail correctly to refer to the place where an individual is not domiciled. That risks casting unnecessary doubt on the way in which the provisions are supposed to work. The Government have therefore tabled amendments (a) to (f) in lieu of amendments 11 and 12. However, let me state from the outset that the amendments do not fully deal with the problems these the defects of the amendments in their current form cause. Should amendments (a) to (f) be agreed by the House today, the Government will table, when the Bill returns to another place, such further amendments as they consider necessary to put a fair and workable scheme in place. I am happy to make the drafts of those amendments available to members of other parties. I do not ask them to endorse them, but if they find it helpful to see them, it is our responsibility to provide them, and I happy to do that. I recognise the frustration about the time available. I also want to make it clear that any restriction on permissibility of donations—one of the major problems with the proposition—linked to an individual’s taxation status would not currently be fully enforceable without further steps being taken. Should the amendments be agreed, we would want to discuss the implications carefully with the parties and the Electoral Commission before the new restriction came into force. Before describing the amendments in more detail, I briefly remind the House of the current structure relating to donations under the Political Parties, Elections and Referendums Act 2000. Under the system that that Act introduced, political parties are not permitted to accept what are called “impermissible” donations of above £200, although the Bill raises that threshold to £500. When a party receives a donation above the threshold, it must take “all reasonable steps” to verify that it has been received from a permissible source. If it receives a donation from an impermissible source, it is required to return it in 30 days. It is an offence not to do so. The party must also report receipt of any impermissible donation to the Electoral Commission. Additionally, if a party accepts an impermissible donation, the Electoral Commission may apply to a court to seek forfeiture of an amount equal to the donation. Amendment (a) would add to the existing requirement for an individual to be registered on an electoral register by requiring that a registered party may not accept a donation from an individual unless that person is resident, ordinarily resident and domiciled in the United Kingdom in the previous year. Colleagues will know that an individual’s tax status—particularly their residence status—can change from year to year. It is therefore almost impossible to establish somebody’s tax status, and particularly residence status, in the middle of a tax year. For that reason, we have alighted on the previous year, although we are open to arguments about whether that approach is correct.
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- Bob SpinkIndependent
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- Has the Justice Secretary considered making that requirement more onerous, by requiring registration for tax purposes to have taken place, say, in the previous three or five years?
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- Mr. StrawIndependent
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- We have not, and I think that there would be objections to that. There is the category of resident, ordinarily resident and domiciled, but people may have been domiciled here but resident abroad, and may then have returned. I understand what the other place was driving at and what this place is driving at, but we have to ensure that the regime that we put in place is proportionate, although I will come to that in a second.
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Mr. Geoffrey Cox (Torridge and West Devon) (Con)Conservative- Quote
- I wonder whether the Secretary of State could help me. Is it correct that amendment (a) will mean that people who are British citizens and entitled to vote in a British general election may not donate to a political party for which they intend to vote?
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- Mr. StrawIndependent
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- It is certainly the case that the effect of amendment (a) could be that somebody registered as an overseas voter under the provisions of the Representation of the People Act 1983, as further endorsed, would be able to vote in an election but not give donations.
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Pete Wishart (Perth and North Perthshire) (SNP)Scottish National Party- Quote
- Does the Secretary of State believe that there is any merit in applying the same principle to elections in Scotland? If it is not right and proper for those who are not on the electoral register in the UK to buy elections or influence results, surely the same principle applies to elections in Scotland. I know that the Secretary of State will say that this is all about the UK, but surely the same principle must apply to Scottish elections.
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- Mr. StrawIndependent
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- The same principle will apply to Scottish elections. I do not follow the hon. Gentleman’s point, unless he is seeking to erect an iron curtain between us and Scotland. [Interruption.] The right hon. Member for Wokingham (Mr. Redwood) says that the hon. Gentleman wants to exclude English donations. I suspect that there is an element of that—perhaps he would have an ethnic test as well.
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- Pete WishartScottish National Party
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- Just to clarify for the Secretary of State, the point is quite straightforward: the same principle that he is trying to apply to the rest of the UK should also apply to Scotland. If someone is not served by the Scottish Parliament—if they are not registered to vote and not domiciled in Scotland for the purposes of Scottish elections—why should they be able to influence or buy election results in Scottish elections?
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- Mr. StrawIndependent
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- That is like suggesting that unless one is domiciled, resident, ordinarily resident and registered to vote in Blackburn, it is not possible—[Interruption.] Hang on, it is exactly the same—[Interruption.] The hon. Member for Ribble Valley (Mr. Evans) mentions his constituency. In fact, I do get donations from Ribble Valley, because that is where the people who have done really well move to. They cannot buy houses expensive enough in my constituency, but they carry on wishing to support me, and I am very happy to take their support, including their money.
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- Pete WishartScottish National Party
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- That is trivialising it.
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- Mr. StrawIndependent
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- It is not trivialising it—in fact, someone might move, surprisingly enough, south across the border to Carlisle. Why on earth should they not be allowed to donate—[Interruption.]
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- Madam Deputy SpeakerLabour
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- Order. Could we apply the usual rules of debate?
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- Mr. StrawIndependent
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- I will draw this exchange to a close, but just say that it illustrates that the hon. Member for Perth and North Perthshire (Pete Wishart) does not even concede the idea of a Union. He simply wants Scotland to be a foreign country. That is his business, but it is not where the majority of the Scots are on that matter, and it is certainly not where the majority of those who live in the United Kingdom are. On residence, we looked closely at whether the wording, which seeks to right the technical defects in Lords amendments 11 and 12, provides the right results. We would want to be sure in finalising the drafting of the relevant clauses that the overall approach was proportionate—a point that I was trying to reflect in my answer to the hon. and learned Member for Torridge and West Devon (Mr. Cox). Domicile is a common-law concept. Our understanding is that large numbers of people may be non-domiciled in those terms, but still pay full UK income tax. If Lords amendments 11 and 12 were aimed not at such a category, but more at those who seek to restrict their tax liabilities through their residence or domicile status, we would need to think about whether amendment (a) should be revised with that aim in mind. We will certainly listen carefully to the debate today. Given that a person’s right to freedom of association, as enshrined in article 11, is in play, we should not be complacent about the potential ECHR implications of any proposals in this area. One potential option to address that issue—it is only one option—would be to specify that recipients of donations would be required only to satisfy themselves as to an individual’s taxation status for donations above £7,500, rather than the £500 threshold. The result would be that the restriction would target only those who donate significant sums of money—that is, amounts that require that the fact of the donation be made public. Anyone wanting to make a smaller contribution would not be subject to the new requirement, with the result that the proposal would not operate as an absolute bar on a potentially large category of donor. Also, setting the permissibility threshold in relation to taxation status only at the level of the amount at which donations must be reported to the Electoral Commission would plainly be much easier for political parties to operate. There is a consensus on that, and long may it continue. We have sought throughout to ensure that the changes made to the Bill take account of the impact that the regime for party funding has on the volunteers who staff our parties. Our very good officials and the Electoral Commission sometimes forget this, but as I have told them, our political parties are not staffed by career civil servants, but by volunteers. They are not paid and they do not get expenses; they do what they do because they believe in it. We need to honour them and respect that.
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- Mr. CoxConservative
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- I wonder whether the Secretary of State has considered not only article 11, which he mentioned, but article 10, which guarantees freedom of political expression. If a British citizen entitled to vote in a general election is not also entitled to donate to the party of his choice, that raises serious questions about whether he is being denied the opportunity freely to express and implement his political opinions.
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- Mr. StrawIndependent
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- I think that we are going to have quite a good argument about that one. I heard what the hon. Member for Huntingdon (Mr. Djanogly) said about a consensus, and we have achieved a high level of consensus. People have criticised the time that the Bill has taken, but at least it is a lot better than it was when it started. I hope that we can continue in that vein.
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- Mr. EvansConservative
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- There seems to be a lot of thinking on the hoof here, and I am not sure how well thought through any of this is. However, the Lord Chancellor just mentioned the figure of £7,500. Is that in totality—that is, the amount that goes to the centre—or could an individual give £7,500 to 646 constituencies?
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- Mr. StrawIndependent
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- Typically, those sums are aggregated over a year. If I am wrong, I will let the hon. Gentleman and the House know, but the limits cannot easily be evaded, so that if the limit is £7,500, it is £7,500 given by one donor in any one year to a party.
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- Mr. EvansConservative
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- To a party?
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- Mr. StrawIndependent
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- Yes, I think that that is correct. Otherwise, it would be very easy to evade the limit.
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- Bob SpinkIndependent
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- I recall that when we debated the Bill a few months ago, I argued that even £500 was too liberal and too high a limit for reporting. Surely the Secretary of State cannot now be arguing that £7,500 is the right level or that it is an amount that volunteers might give to the party without having a personal agenda of seeking to influence policy or buy elections.
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- Mr. StrawIndependent
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- We are seeking to deal with the issue of proportionality. My view is that setting the minimum limit at £7,500 will deal with the issues that were of concern, as it turned out, to Members on almost all sides in the other place, without imposing an unnecessarily stringent burden on individual parties that is difficult to enforce. The lower the limit, the greater would be the likelihood of administrative headaches for parties, and the greater the risk of potentially damaging mistakes. That is where I am coming from on this issue. May I also say to the hon. Gentleman that, at the moment, what a local party treasurer has to do is relatively straightforward? They simply need to check that the person in question is registered to vote or, in the case of a company, to check that it is registered in this country. Even in that context, there was a complaint against my party and, therefore, indirectly against me, although the Electoral Commission did not find that we had acted dishonestly or dishonourably in any way. An error was made by my party treasurer, and such errors are made by others as well. The inherent difficulty—there is nothing that we can do about this—is that, at the moment, the information that a treasurer needs to check is on a public record. They need to check whether someone is on the electoral register. Having established someone’s identity, it is relatively straightforward to check whether they are on the electoral register or the name of the company. People’s tax records, however, are confidential to Her Majesty’s Revenue and Customs. Moreover, I recall that the Revenue holds tax records for only 9 million people, out of an adult population of about 40 million. It does not keep the other people’s records. Why should it? Only about 9 million people complete an income tax return. The rest pay their taxes through the pay-as-you-earn system. There are overwhelming objections to providing access to the Revenue’s database, but even if there were none, that database would not reveal whether someone was resident, ordinarily resident and domiciled in this country. The only way is to impose a requirement on the donor to self-declare. The party can then check that they have filled in that box. We are also looking actively at tabling amendments in the other place to ensure that, when a party treasurer has acted reasonably to check those things, they cannot then be found guilty of an offence, save in exceptional circumstances when there is evidence that they have been acting in collusion to perpetrate a fraud.
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John Mann (Bassetlaw) (Lab)Labour- Quote
- I am a little bemused about where all the treasurers with these problems will be. I have examined every set of accounts for the past four years for every constituency party on the Electoral Commission’s website, and I can inform my right hon. Friend that there are very few local parties across the House that receive such large donations, either from abroad or from this country. This is not a problem that my treasurer has faced. It is not a problem in any Labour constituencies or for the smaller Opposition parties. There is only one party that has this problem: the Conservative party. Is not the point of the measure that it is about democracy and fairness in our system? My right hon. Friend is being far too generous to these people who are undemocratically funded by overseas donors.
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- Mr. StrawIndependent
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- I am sorry to disagree with my hon. Friend, but the issue of proportionality—[Interruption.] I also apologise for my cough. The issue of proportionality affects all the parties. I have not been through every declaration made by all the parties, but, at the last election, as in previous ones, my party self-evidently declared donations above the declarable limit.
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Mr. Francis Maude (Horsham) (Con)Conservative- Quote
- Does the Justice Secretary share my gratitude to the hon. Member for Bassetlaw (John Mann) for making it absolutely, nakedly clear that this is a blatant piece of partisanship, which the Justice Secretary has been bounced into accepting by his Back-Bench colleagues? After all, he was reported in The Guardian only at the beginning of last week as having told members of the parliamentary Labour party that they were going to be whipped to vote against these amendments tonight. Just what has happened in the meantime to make him change his mind?
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- Mr. StrawIndependent
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- The right hon. Gentleman should not always believe everything that he reads in the newspapers. In fact, that is not what I said, but let us leave that aside. It is perfectly plain that the Government position on this has changed, and I have sought to set out the reasons why. I do not agree with my hon. Friend the Member for Bassetlaw (John Mann) that this is just about one party. It palpably is not, which is why I find the approach of the Conservative party slightly surprising. It is about trying to get a regime for party funding settled and straight. We have made a lot of progress on this, but we need to make a little more. My right hon. Friend the Minister of State made the point to the House—and, indirectly, to the right hon. Member for Horsham (Mr. Maude)—that, if the Conservatives had been that exercised about this matter in the other place, they might have ensured that rather more than 40 of their party’s 200 Members there had turned up to vote. As I understand it, they were on a free vote for most of that evening. The truth is that a wide range of Cross Benchers, members of no party and others, voted for the amendment moved by Lord Campbell-Savours.
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Mr. John Redwood (Wokingham) (Con)Conservative- Quote
- Will the right hon. Gentleman give way?
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- Mr. StrawIndependent
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- Of course—not least so that I can have a cough.
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- Mr. RedwoodConservative
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- I am pleased to give the Secretary of State an opportunity to sort out his cough; I hope that he will soon feel better. Will he tell the House the position in European law? Presumably, the Bill means that in European elections—and a European referendum, if we held one—no one could intervene to fund the campaigns from the continent, for example. That does not cause me any trouble, but I wonder how it squares with European law.
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- Mr. StrawIndependent
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- I shall have to come back to the right hon. Gentleman on the question of European law, and I will do so. My recollection is that the same rules on donations apply to elections for the European Parliament as to any other elections, notwithstanding the fact that there is some difference in the franchise, as he will be well aware. The legislation governing donations to political parties and regulated donees in Northern Ireland rightly enables Irish citizens to make political donations to those parties and donees. We would not want to alter that arrangement, and the intention of subsection (b) of proposed new subsection (2ZA) is therefore to make clear our desire that Irish citizens will retain the ability to donate to political parties and other authorised recipients in Northern Ireland. The Government will table further amendments to clarify the intention underlying the subsection in due course. Amendment (a) would also insert new section 54B into the Political Parties, Elections and Referendums Act 2000. That would require an individual making a donation above £7,500 in any given year to provide to the donee a declaration affirming that they satisfy the requirement to be resident, ordinarily resident and domiciled in the UK for tax purposes in the preceding year. That declaration requirement will sit alongside the requirement to provide a declaration as to the source of the donation, as required by proposed new section 54A of the 2000 Act. Amendments (b) to (f) are consequential amendments. They ensure that the permissibility and declaration requirements relating to residence, ordinary residence and domicile that I have described are carried through to regulated transactions such as loans, and to donations to other regulated donees under the 2000 Act—that is, regulated individuals such as MPs, members associations, third parties and permitted participants in a referendum. Any change to the requirements regarding permissibility of donors is significant, as parties are under a duty to comply with any new restriction. The current requirement for an individual to be registered on an electoral register offers a simple test. If the amendments were accepted, political parties and the Electoral Commission would need to be able to satisfy themselves that a donor met a new permissibility requirement. I have already explained the problems inherent in trying to ascertain someone’s tax status. I note that the Electoral Commission, in its briefing ahead of these debates, has commented in detail on the difficulties of enforcing the permissibility requirement set out in Lords amendments 11 and 12. It commented on a particular effect of those amendments—that “in many cases it is likely to be difficult for the political party or regulated person who has received a donation to confirm whether the donor is permissible under the Bill’s definition”, or not. Other concerns were set out and the Electoral Commission ended by saying that the Government “should address these issues”.
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Dr. Nick Palmer (Broxtowe) (Lab)Labour- Quote
- I am grateful to the Justice Secretary both for giving way so frequently and for his willingness to help in the effort to clean up our political system. It is surely an important principle that British politics should not be substantially funded from overseas. Does he agree that the Electoral Commission does not oppose the change, as is sometimes reported, but says simply that the House will need to consider the consequences carefully? That could be addressed by requiring, for instance, the donor to give a legally binding declaration.
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- Mr. StrawIndependent
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- It is a matter of record that the commission has said that its role is to apply the law in carrying out its regulatory remit and to advise Parliament and others whether the proposals for changes to the law are workable. It sets out its concerns on page 5 of the latest briefing. It goes on to state: “If Parliament wishes to change the test that the 2000 Act uses for the permissibility of individuals”, it should address the issues raised in some detail, which we have sought to do in the amendments and will continue to do when the matter goes back to the other place. I have already set out the problems presented by the records of Her Majesty’s Revenue and Customs—as a result of the PAYE system, a large number of taxpayers simply do not have tax records, so there must be self-declaration. If the amendments are approved, it will take some time—I cannot provide an exact timetable—to ensure that regulations are brought in and guidance is established so that the provisions are workable and political parties, not least party workers at the local level, know where they are. Overall, I believe it is possible to make the sentiment behind these Lords amendments workable. That is what we have sought to do.
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- Mr. CoxConservative
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- I hope that the House forgives me, but at the moment I am struggling to understand the rationale for the amendment. The Secretary of State has provided no justification for it. If someone is entitled to vote in a general election, what is the rational connection between participation in the tax system—someone might be abroad for a few years, working as an expatriate—and not being allowed to donate? If the Secretary of State would address that fundamental issue, I am sure that the House would be grateful.
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- Mr. StrawIndependent
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- It is a matter of judgment, but all parties have stated their desire to see big money taken out of politics and to see foreign donations removed from politics. My starting preference was to get an examination in the round of the connection that was needed by people who were otherwise British citizens before they could participate to a greater degree in our politics—[Interruption.] I am responding to the hon. and learned Gentleman’s point—by way of donations or standing for and sitting in Parliament. However, that was not to be. If the hon. and learned Gentleman looked at the contribution of Lord Neill of Bladen to the debate in the other place on 15 June, he would be struck by the fact that Lord Neill, who was the Chairman of the Committee on Standards in Public Life, which produced the original plan that fed into the 2000 Act, now says that he supports Lord Campbell-Savours’ amendments. He voted for them and explained why in a short but powerful speech. I understand the argument that the hon. and learned Gentleman is making—it would be fair to say that I have made it myself—but the truth is that others not just of one party, but of all the parties and none, take a different view, which we have to take into account. I thus support amendments (a) to (f).
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Mr. Jonathan Djanogly (Huntingdon) (Con)Conservative- Quote
- May I first support the Secretary of State’s kind words about Lord Kingsland, who was a truly fine gentleman? He was caring, charming and a good lawyer; he was always fair in debate and rational in his approach. I have always enjoyed working with Lord Kingsland, who will be sadly missed by colleagues. Our thoughts are with his family. We can see the outline purpose of the Government amendments on clause 8’s permissible donor provisions, but the fact remains that the clause will be extremely hard to implement. We feel that it could be unreasonable to impose requirements that are so difficult to meet, particularly when the consequences are so draconian. It may be an infringement of an individual’s right to freedom of expression; it is most likely to be contrary to European law; it would contribute to the isolation of UK citizens living abroad; it is contrary to regulatory principles; and it links political rights to taxation. Furthermore, it does not correctly address a mischief that the Political Parties, Elections and Referendums Act 2000 aimed to address—namely, a clarification of the rules on party donations. The Electoral Commission was concerned that those it regulates will not be able to comply with these proposals in their current form and that the resulting law will likely be unenforceable in practice. It has called on the Government to review clause 8, so the Minister might wish to report on the Commission’s view in his reply. The change of Government policy over the past few days and the provision of these amendments only today are simply unacceptable. As my right hon. Friend the Member for Horsham (Mr. Maude) said, is it not true that only last Monday the Secretary of State told Labour Back Benchers that the Government proposed to impose a three-line Whip today to overturn these provisions? The Secretary of State said that that was not quite the case, but he did not answer my right hon. Friend’s question about what had happened in the meantime. This is legislating on the hoof, and we do not much like it.
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- Dr. PalmerLabour
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- Does the hon. Gentleman feel that freedom of speech implies a freedom to donate money, which is a peculiarly American interpretation of the idea of freedom of speech? It is the idea that “money talks”.
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- Mr. DjanoglyConservative
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- The roundabout answer to that is no, but I shall explain why later in my remarks, at which point the hon. Gentleman might like to contribute again. Let me explain why we believe that these provisions will not work. The permissible-donor provisions would impose a three-prong test, which all political parties would have to perform before accepting any political donation. The first test—whether the donor is on the electoral register—was introduced precisely because it was straightforward and easy to implement and to check. When the Political Parties, Elections and Referendums Act was enacted, Parliament chose to use a formulation that would have included, in the category of permissible donors, individuals who were eligible to be on the electoral register—recognising the difficulties that any other formula would create. Registered parties are entitled to a free copy of the electoral register in hard copy or in electronic data from the relevant registration officer for the purposes of complying with the controls on donations. It is therefore relatively straightforward to check whether a donation is from a permissible donor under section 54(2)(a), as currently in force. The two further tests proposed, following the Lords amendments, are not quite so straightforward. The first test relates to residency. According to paragraph 2455 of the explanatory notes to part 14 of the Income Tax Act 2007—that gives some idea of the volume of our current tax legislation— “The question whether or not a person is UK resident is primarily to be determined in accordance with case law. A limited number of statutory rules either supplement or disapply the case law rules in specific circumstances.” There is no statutory definition of “residence”. The tests for residence are based on a mixture of legislative interpretation and case law. In addition, Her Majesty’s Revenue and Customs has published guidance in HMRC 6 that outlines its view and interpretation of the legislation and case law, which is intended to help people to determine their residence status. There is no register of UK-resident individuals. It would therefore be necessary to provide individuals with information in an attempt to enable them to determine whether they are resident in the UK, and then to require them to make a declaration that they are resident at the time they make a donation. The Secretary of State quite properly mentioned the problems that treasurers would have in verifying residency details. In some circumstances, it may not be possible to establish with certainty whether a person is UK-resident on the date when he or she makes a donation. It is conceivable, albeit unlikely, that people could make a donation to a political party at a time when they believed themselves to be resident in the UK, but it could be determined at a later date that they were not. Such a situation might arise as a result of one of the different tests for determining a person’s residence that are summarised in HMRC guidance, which may combine an individual’s intention with average-day counting over a four-year period to determine whether the individual is UK-resident. Let me give an example. Those who spend 183 days or more in the UK in a tax year will always be treated as UK-resident. However, those who spend less than 183 days in the UK in a tax year but come to the UK with the intention of spending, on average, at least 91 days, and then spend an average of 91 days or more per tax year over a four-year period, will be treated as being UK-resident from the tax year in which they first came to the UK. If their intention fails and they leave the UK earlier than expected, they may not be treated as UK-resident from the date on which they first came to the UK. It would clearly be impossible to determine with certainty until the end of the four-year period whether a person should be treated as UK-resident according to that test, and that may affect the validity of a donation made to a political party during the period. Another question that might arise is whether there would be any tracing rules that would prevent non-domiciled or non-UK resident husbands or wives, for example, from giving their UK-resident and domiciled spouses money to donate to a political party. Has the Minister considered that issue?
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David Howarth (Cambridge) (LD)Liberal Democrat- Quote
- I am finding it difficult to envisage the practical circumstances in which the hon. Gentleman’s example would apply. It seems to me that people making a claim to the tax authorities would know what they had claimed to be their resident or non-resident status. I cannot imagine circumstances in which someone would say to the tax authorities “Yes, I am resident” and then, strangely, turned out to be non-resident. I cannot see what tax advantage there could be for the taxpayer in such circumstances.
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- Mr. DjanoglyConservative
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- If, after what I have said, the hon. Gentleman will not accept that the individuals concerned, not being tax advisers, might themselves encounter practical difficulties in understanding all this, as a corporate lawyer he is not in touch with Joe Public. Furthermore, given that people’s circumstances may change during the four-year period, his original statement may be wrong. The third prong of the test in the permissible donor provisions is domicile, a notoriously slippery concept to anyone who has had to deal with or advise on it. Political parties will have to determine, in relation to every political donation, whether a person is a non-domiciled UK resident. HMRC recently issued new technical guidance on domicile, consisting of 42 pages. The introduction stresses the difficulties inherent in the determination of domicile. HMRC states: “It is vital to remember that domicile is primarily a matter of common law. The decisions of the courts in the UK and other jurisdictions provide a set of guiding principles, but each case will depend on its own facts”. It also states: “As domicile depends on the facts of an individual’s life, each case is unique.” Many people will never have had cause to consider the question of where they are domiciled. In general, the only people who will have had cause to consider it will be those who are resident in the UK and who have substantial foreign income or gains in respect of which they would like to claim the remittance basis of taxation, or those who have been involved with certain family law issues that may require their domicile to be considered. Such persons are likely to be confined to a relatively small proportion of the total number of individuals who have come from abroad and settled in the UK. It is therefore likely that not only would the vast majority of people never have considered the question of where they might be domiciled, but they would not be familiar with the test for determining domicile. As there is no register of UK-domiciled persons, the political party in receipt of a donation would probably need to ask the donor to make some form of declaration that he or she was so domiciled. Domicile is a general law concept, and is therefore not defined in statute. Given that many people are likely to be unfamiliar with the general law concept, it would be necessary to provide some form of guidance on what domicile means, and how people could determine where they were domiciled in order to make the relevant declaration. It is clear from the guidance notes published by HMRC that it is not necessarily straightforward to determine domicile in all cases, and it is arguably unreasonable to require political parties to make the complex and intrusive inquiries that they would have to make to ascertain whether a donor was non-domiciled. Let me explain the tax issues in slightly more detail. It is not absolutely clear what would be meant by income tax liabilities to be determined on the basis that the individual was domiciled. That applies more to the Government’s latest amendments. Under current rules, an individual’s income tax liabilities are affected by domicile only if the individual elects for the remittance basis of taxation. The election can only be made by non-domiciliaries, but can be made on a year-by-year basis. Is it intended that a resident non-domiciliary who has not elected for the remittance basis in the previous tax year should be eligible to donate, or are such people ineligible because they were non-domiciled although, for that year, they chose not to elect for the remittance basis of taxation? I think that the Minister ought to make that clear, as the issue is open to misrepresentation.
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- Dr. PalmerLabour
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- I have been listening attentively to the hon. Gentleman’s speech for nearly a quarter of an hour. He has been saying, basically, that it is all very difficult. Does he agree in principle that it is undesirable for British politics to be financed from abroad?
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- Mr. DjanoglyConservative
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- Not in all contexts—absolutely not. Many non-domiciliaries—those with no significant foreign investments, who are likely to constitute the great majority—will not have given any thought to their domicile status. The only residual concern, if the restriction relates to an actual claim to the remittance basis, is that the claim does not need to be made until the individual files his tax return. That may not be until 31 January, following the end of the tax year which is 10 months through the donation year. The exception will be that many individuals will not take the decision until close to the filing date because they will need to calculate whether the election is to their advantage. They may not have the financial information to enable them to do that until some way through the year. There is, therefore, a clear possibility that an individual might make a donation in the expectation that they would not be claiming on the remittance basis, but at a later date decide to make a claim. Would a donation in that context have to be repaid? Would someone commit an offence in making a declaration that they expected to be true at the time it was made? Once they had made a donation, would they be prohibited from claiming on the remittance basis? If a declaration that is given in good faith is wrong or turns out to be incorrect, is the effect still that the party will have received a donation from an impermissible donor and the donation will therefore be subject to forfeiture? The party, however, will not be guilty of an offence even if the declaration was made in bad faith if it can show that reasonable steps were taken to verify that the donation was permissible and that the treasurer believed that the donation was permissible, assuming the defence in the Bill is passed. What is considered to be reasonable is likely to depend on the circumstances of the donation and the individual donor. For example, are there factors that might suggest residence outside the UK? A party may ask to see an individual’s tax return. In addition to potential confidentiality issues, the clause might give rise to timing issues. Parties might have to consider repaying donations once a tax return is available making it clear that, contrary to previous expectations, the donor is not permissible. This might be one of the reasonable steps required. A check for Irish nationality might require sight of a passport. It is not clear whether that will be sufficient.
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- John MannLabour
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- The hon. Gentleman suggests that parties might take the complicated step of asking to check people’s tax returns. Currently, when he and his party receive a donation to the Huntingdon dining club, for example, do they check the donor’s bank statements to see whether they have also donated to Ribble Valley dining club, for instance, or Horsham dining club, in order to ensure that the maximum amount currently allowed under criminal law has not been breached? I suggest to the hon. Gentleman that they do not.
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- Mr. DjanoglyConservative
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- I do not know what individual associations do. What I am doing is explaining that this will be pretty unworkable without some serious thought going into it, and I do not think I heard anything from the Secretary of State that addressed that.
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- Mr. RedwoodConservative
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- As we have been reminded by the Secretary of State, the voluntary tradition in all British parties is an important part of what we do and, in that sense, it makes our democracy special. What my hon. Friend is saying, however, is that all this is complicated and difficult and that no one who is sensible would want to be a voluntary treasurer and have to sign off on this kind of thing. That would apply to Labour and the Liberal Democrats as well as to Conservatives.
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- Mr. DjanoglyConservative
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- My right hon. Friend makes a very basic, and yet very effective, point that will be reality.
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- David HowarthLiberal Democrat
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- I am still having difficulty following the hon. Gentleman’s argument. He argued very strongly for the introduction of the reasonable excuse defence across a lot of offences in this area, but he now seems to be saying that the reasonable excuse defence is too complex to apply. Will he make up his mind about which side of the argument he is on?
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- Mr. DjanoglyConservative
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- I have to say that I never had the opportunity to apply the reasonable excuse defence to these measures, but we will have to do some more thinking about this for the reasons I have just given.
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- Mr. EvansConservative
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- In my halcyon days, I was vice-chairman of the Conservative party, looking after Conservatives abroad. I wonder how that will work now, because we will be campaigning in places such as Marbella and Majorca to get people to register and participate in elections, but at the same time we will tell them, “For goodness’ sake, don’t you dare give any money whatever to reinforce your democratic rights that you will be exercising at the general election, because you will not be permissible.”
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- Mr. DjanoglyConservative
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- My hon. Friend makes an important point, which I shall return to later. The provision will put off people who live abroad—regardless of why they want to live abroad—from becoming engaged in party politics. To that extent, it is an exclusive, rather than an inclusive, set of provisions, and a poor set for that reason. On the overall tax position, I have tried to explain that this is complicated stuff, as the Secretary of State also said. It is very poor and unacceptable that we were given these six pages of Government amendments only this morning and expected to come here and present on them in an expert and advised fashion. It seems that the Government amendments’ broad impact is to tighten the residency test and introduce a declaration requirement for donors above £7,500. While the latter is certainly a move in the right direction, we still have many other concerns. As to the specifics of the amendments, however, there was no way that we could have had time to study them, so we will have to revisit them in the Lords. Returning to the principles behind the permissible donor provisions of clause 8, we believe that it is unreasonable to impose requirements that are so difficult to meet, especially when the consequences of not meeting them are so draconian. That point was also made by the Electoral Commission. The prohibition on the acceptance of impermissible donations and the duty to return any such donations within 30 days of receipt are subject to criminal and civil enforcement regimes. The party and the treasurer are guilty of an offence if the donation is not from a permissible donor and is not sent back to the donor within 30 days of receipt. The court has the power to order forfeiture of an amount equal to the donation. Section 56(1) of the Political Parties, Elections and Referendums Act 2000 provides that “all reasonable steps must be taken forthwith by or on behalf of the party to verify (or, so far as any of the following is not apparent, ascertain) the identity of the donor, whether he is a permissible donor, and (if that appears to be the case) all such details in respect of him as are required by virtue of paragraph 2 of Schedule 6 to be given in respect of the donor of a recordable donation.” However, it is true that the Political Parties and Elections Bill provides “a defence to prove that— (a) all reasonable steps were taken by or on behalf of the party to verify (or ascertain) whether the donor was a permissible donor, and (b) as a result, the treasurer believed the donor to be a permissible donor.” In view of the guidance from HMRC as to the complexity of the concepts of residence and domicile and the detailed inquiries that need to be made to ascertain the latter in particular, it is not clear what would constitute “reasonable steps” for these purposes. Primary legislation cannot be challenged on the grounds that it is unreasonable, but if it were considered unreasonable, that would support an argument that the provision was an infringement of human rights. I think that the Secretary of State acknowledged that earlier.
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Martin Linton (Battersea) (Lab)Labour- Quote
- Is not the problem that has led to the need for the amendment that the Conservative fundraising effort for many years has been directed not at people in this country, but at Spain, South Africa and Hong Kong? Is it not enough for the hon. Gentleman’s party that people living in those countries should be able to give up to £7,500? People have often tried to give £1 million, £2 million or £3 million to the Conservative party. They will not be able to do so in future.
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- Mr. DjanoglyConservative
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- I hope that hon. Members in general will agree that I am trying to advance a reasoned and considered argument, but if the hon. Gentleman just wants to make party political trashy remarks, he can do so; that is up to him. The answer, by the way, is no. We also think that the permissible donor provisions of clause 8 may be an infringement of an individual’s right to freedom of expression, as my hon. and learned Friend the Member for Torridge and West Devon (Mr. Cox) suggested in his intervention. The case of Bowman v. the United Kingdom of 1998 showed that the European Court of Human Rights would step in to protect the right to freedom of expression even in the case of UK primary legislation designed to regulate the conduct of elections. In that case, it was found that the spending limit on third parties, which was £5 at that time, imposed by section 75 of the Representation of the People Act 1983 was an infringement of the right to freedom of expression under article 10 of the European convention on human rights. As that right is a qualified right, the Court went on to look at whether the spending restriction was prescribed by law, pursued a legitimate aim, and was necessary in a democratic society. In considering the latter condition, the Court looked at whether the means employed were necessary and proportionate to the aim pursued. It found that the limit was not necessary or proportionate, and the UK Government subsequently amended the legislation to raise the limit. It is generally established that the right to give a political donation is part of the right to freedom of expression. Clearly the amendment would be a restriction on that right. A court would therefore have to look at whether the restriction was necessary and proportionate to the aim pursued. We cannot pass legislation that restricts an individual’s freedom of expression, particularly when we have not been provided with any evidence on whether such a restriction would be necessary and, importantly, proportionate to the aim pursued. We must also consider the EU law implications of the amendment. According to article 18 of the Maastricht treaty, citizens have a right to move and reside freely within the territory of any of the member states, subject to the limitations and conditions contained in the EU treaty and secondary legislation. The European Court of Justice has defined Union citizenship as the “fundamental status” of Union citizens. Union citizens have a conditional right of residence, and a limited right to equal treatment. Article 19 of the treaty provides that Union citizens residing in a member state different from that of nationality have the right to vote, and to stand, in the local elections of the state where he or she is residing, under the same conditions as nationals of that state. My right hon. Friend the Member for Wokingham (Mr. Redwood) elaborated on that point in his intervention. It appears that the effect of the amendment, which would be to prohibit persons not resident or domiciled in the UK from making a political donation—and therefore possibly infringe their right to freedom of expression—could run counter to the basic principle of the free movement of people. That point was effectively expounded on by my hon. and learned Friend the Member for Torridge and West Devon. Indeed, the Secretary of State referred to possible ECHR issues connected with the amendment. The next problem is that the permissible donor provisions of clause 8 do not correctly address the mischief that the Political Parties, Elections and Referendums Act 2000 aimed to address—arguably it blows a hole through it. The “mischief” at which section 54 of the 2000 Act is aimed, is that of “foreign donations”. There appeared, at the time the legislation was passed, to be particular concern about donations from foreign Governments and donations from individuals and persons who had no direct relationship or involvement with the United Kingdom. Section 1 of the Representation of the People Act 1985 permits overseas British citizens to vote in a parliamentary election if they are registered on an electoral roll, were resident at a UK address within the last 15 years and registered at that address or were too young to be registered but a parent or guardian was registered at that address. Therefore, the requirement in the 2000 Act that an individual be on the electoral roll already incorporates a test of connection, or involvement, with the United Kingdom.
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- Mr. EvansConservative
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- Let us envisage a happy scenario: we have a general election and the Conservative party wins it. We do not repeal this legislation—if it becomes law—and we then fulfil our manifesto commitment to give the people of the UK a vote on the Lisbon treaty, which they were promised but on which Tony Blair reneged. The Bill would prevent British residents who have lived abroad for 10 years from coming back to the UK to campaign actively in, or give money to a campaign on, that referendum. Is that correct?
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- Mr. DjanoglyConservative
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- That could most certainly be the case, and that is a good example of some of the problems with the amendments and the underlying provisions. In the same debate in the other place, Lord Campbell-Savours said: “I had a conversation with the Justice Secretary Mr Jack Straw about the matters raised in the next paragraph and he raised exactly these issues with me. Paragraph 2 states: ‘The amendments would create an anomaly in rules regarding democratic participation. The amendments would allow a non-UK taxpayer to stand for election, collect and receive political donations, vote in elections and potentially sit in a democratically elected body. But the same individual would be barred from donating money—even to their own campaign. There is no coherent reason for this discrepancy’”.—[Official Report, House of Lords, 30 April 2009; Vol. 710, c. GC143-44.] How nicely put. So why have the Government so fundamentally changed their mind on this issue? We agree that there is a question as to whether it is reasonable to allow someone to vote in an election, and even to stand in an election, but not to make a donation to the political party for which he or she is voting. That would tend to suggest that the purpose behind the amendment is not to provide greater protection against foreign influence, as a person who holds public office is intrinsically likely to wield greater influence than someone who gives a political donation. The Legislative and Regulatory Reform Act 2006 introduced statutory principles to which persons exercising regulatory functions should have regard. While Parliament is not bound by those principles, it is arguable that, when making legislation that has a regulatory function, it should take them into account. The principles are set out in section 21(2) of that Act: “(2) Those principles are that— (a) regulatory activities should be carried out in a way which is transparent, accountable, proportionate and consistent; (b) regulatory activities should be targeted only at cases in which action is needed.” Because of the difficulties that performing the new tests would entail, it is arguable that the proposals, even as now amended, would be disproportionate. The increased resources that political parties and the Electoral Commission will need to apply in order to meet the proposed new requirements will not have been considered in the impact assessment. Will the Minister now update the impact assessment before this returns to the other place? I hope that the answer to that is yes. The provision is also disproportionate to the aim of the original legislation, which is to impose restrictions on “foreign donations”. Individuals who are on the electoral register have a connection with the United Kingdom, and therefore should not fall within the category of impermissible donors. The Electoral Commission has stated that if these permissible donor provisions are agreed in their current unamended form, those whom it regulates will be unable to comply with the resulting law, which is therefore unlikely to be enforceable in practice. The Electoral Commission is particularly concerned that the Bill does not provide donation recipients with a right to obtain reliable information—for example, from HM Revenue and Customs—about the donor’s tax status. Whether its concerns have been addressed by the Government amendments is something that we will wish to consider carefully before this Bill returns to the Lords. In the current climate of voter apathy, dwindling party membership, and an increasing disinclination to participate in the political process, is this the right message to send to those UK citizens living abroad who may be affected by the amendment? We should be encouraging people to get involved with democracy and not provide barriers to getting involved in the political process. The reality of modern life is that many people do need to live and work abroad. Are we really saying, in this age of globalisation, that some of our most industrious people—those who get out around the world and promote our country in foreign lands—should be rewarded by having their political tights removed in such a way? If the provisions go through, will future laws seek to impose yet further restrictions on political donations? By shifting the link between voting and donating to one based on tax status, is there a risk of establishing a principle that political rights should be in some way based on making a contribution to the state through taxation? We cannot just allow political rights to be linked with taxation without a proper and full debate on the issue. The strongest argument against the provisions is that it would be very difficult for individual donors, for the political parties and for the Electoral Commission, in some circumstances, to establish whether they were in compliance with the new requirements because of the legal complexity of the concepts of residence and domicile.
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- Mr. CoxConservative
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- My hon. Friend is making a very powerful critique of the Government’s proposals. May I respectfully disagree with him on the strongest argument? The strongest argument, surely, is that there is a fundamental inconsistency between allowing somebody to vote in an election and not allowing them to donate?
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- Mr. DjanoglyConservative
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- Yes, my hon. and learned Friend makes a fair point. I will not start weighing up the relative merits and demerits of the points that I have been making, but I hope that they are all relevant. We will need properly to review the Government amendments to consider how things will change. In addition, the parties and the commission would have to create new procedures and devolve additional resources in order to be in a position to ascertain or verify the residence and domicile status of donors. The new restrictions, we feel, would almost certainly be an infringement of the right to freedom of expression, which must be shown to be necessary and proportionate to the aim pursued. Taking that aim to be to prohibit foreign donors, it is arguable that the existing law already achieves that purpose by limiting donors to those on the electoral register. Since a connection with the UK is necessary in order to be on the electoral register, the amendment is therefore not necessary. However, if the aim, as intimated in debate in the other place on 30 April, is to attack the tax status of certain specific donors or to prevent undue influence on parties from large donors, it is arguable that both of those aims are better pursued through other measures, and that this particular measure is not proportionate in those contexts. The proposals would seem to run counter to the EU principle of free movement of people. They would alienate UK workers and residents abroad, breach regulatory principles, potentially link political rights with taxation and be extremely difficult to implement. They are certainly bad law. I say again that the Bill, with these proposals—whether or not they are amended by the Government—no longer carries cross-party support. We shall review these provisions in the detail that they deserve and return to them in the other place.
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- David HowarthLiberal Democrat
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- May I, too, express my sadness at the death of Lord Kingsland? He always made calm, rational, accurate and perceptive contributions to debates in the other place and he will be sadly missed by those in all parties there and in this House. The hon. and learned Member for Torridge and West Devon (Mr. Cox) is right that the question is whether there is any difference between the right to vote and the right to donate. If he is right, what is going on here makes a fundamental breach with that principle. However, I think that there is a difference between participating with one’s own voice—and counting as one as an elector in an election—and seeking to influence the opinions of other electors through the use of money. They are different things. The principle behind the amendments and the original proposal in the House of Lords is simply that those who seek to distance themselves financially from this country by using their tax status to reduce their tax liability have, by that very act, distanced themselves from monetary participation in politics. That is different from participation as a voter. It seems absolutely crucial to make that distinction, especially as the Government have now introduced proposals—about which I am fairly relaxed—that mean that the rule applies only when the sum of £7,500 is involved. That is a very large donation, in my view. I do not think that there can be any question about whether there is a violation of rights to participate in associations—an article 11 argument—because there should not be any fundamental right to participate in organisations that it costs more than £7,500 to join.
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- Mr. DjanoglyConservative
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- Is the hon. Gentleman saying that somebody who decides to go and work abroad and to become non-resident is giving up his right to participation? I think that he said that or came very close to saying it.
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- David HowarthLiberal Democrat
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- No, in fact, I said the opposite. That is why I differ from the hon. and learned Member for Torridge and West Devon, who is saying that the right to participate and the right to donate are absolutely linked. I am saying that they are not. That is my answer to the hon. Member for Huntingdon (Mr. Djanogly). I am not denying that people who go abroad have the right to vote, but I am saying that those who go abroad and then seek to change their tax status to reduce their liability distance themselves from monetary aspects of the political system of this country in a way that should lead to a restriction on their right to influence others through money.
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- Mr. RedwoodConservative
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- Does the hon. Gentleman then apply the same logic to media groups owned outside the United Kingdom that have an influence on campaigns in Britain? Is he seeking to ban them, too?
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- David HowarthLiberal Democrat
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- I fear going along the lines that the right hon. Gentleman wants me to, but the answer is yes. A fundamental problem in the politics of this country is that foreign-owned media groups are so influential. However, that is not the issue before the House at the moment. I do not think that the article 10 point raised by the hon. Member for Huntingdon works. His argument was that there is no legitimate purpose in the restriction. If that were right, it would be equivalent to the £5 limit on third party activity in the Bowman case. I disagree with him, however. There is a legitimate purpose. It is the purpose that was put forward in the Bowman case, which is the need to protect the equality of arms between different candidates—in other words, as the Secretary of State said, to keep big money out of politics. That is a legitimate aim and the European Court of Human Rights recognises it as a legitimate aim. The Court said that the provisions in the Bowman case went beyond that and amounted to a bar on any expression by Mrs. Bowman at all. That cannot possibly be the case with this proposal, because, first, it applies only to donations and, secondly, it applies only to donations of more than £7,500.
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- Mr. CoxConservative
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- I have enormous respect for the hon. Gentleman, who is a thoughtful contributor to such debates, but I find his distinction “convenient”, if I can put it like that. The truth of the matter is that his argument would have more intellectual respectability if he were arguing for a cap on all donations. It is inconsistent and irrational, however, to single out a single class who are entitled under the law to vote, who are British citizens and who have a powerful connection with this country and to deny them the right to donate while allowing it to the hon. Gentleman or to me.
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- David HowarthLiberal Democrat
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- The hon. and learned Gentleman is correct—I do seek a limit and a cap on all donations. If he is arguing that I am supporting this proposal because it is the thin end of the wedge, he is also right. I hope that it is. If there are any inconsistencies of the sort that he describes, I hope that they are resolved in a way that broadens the regulation so that it applies to more and more people.
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- Mr. CoxConservative
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- The hon. Gentleman suggests that this is a merely a restriction on donating. This is a matter of freedom; this is a matter of the free expression and the full implementation of expression of one’s political opinions. If I have worked hard by getting donations down the street or however I have acquired my money, I should be entitled to put it behind my political opinions.
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- David HowarthLiberal Democrat
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- The hon. and learned Gentleman is right to make that point, but it is one with which I fundamentally disagree. This really is the heart of the matter, and I am glad that we have reached it. The view that money equals freedom in all circumstances is one that, as far as I can tell, only the US Supreme Court takes. I have great respect for the US Supreme Court, but very few other political systems take that view to that extremity. Every other political system tries to balance the expressive part of spending money on a campaign—supporting a candidate by making a donation that the candidate uses to make their case—and the interest of equality of arms in the political system so that we do not have political system that depends on who has the richest donors. If one is to balance the two, one can conclude that the provisions are justified. Moreover, one must take the view that, to balance the two, one must be in favour of a cap on donations of any sort at all. The hon. and learned Gentleman seems to be arguing against any sort of donation cap under any circumstances; otherwise donors might be told that they cannot express themselves any more by making a donation above £50,000, £10,000 or £7,500. There must be a limit.
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- Mr. CoxConservative
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- As the hon. Gentleman seeks to characterise my argument, let me say at once that I might well support of a general cap on donations, but it would have to be done fairly and consistently, and the problem with the measure is that it is not fair and consistent. It may well be said that a proportionate limit on all donations allows for the freedom that I have described, while making allowance for the points that he makes, but it cannot be done piecemeal. The suspicion would be that it is ad hominem, targeted deliberately at a specific target and done for naked political reasons.
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- David HowarthLiberal Democrat
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- But the hon. and learned Gentleman cannot argue that money equals speech and then argue for a cap. That is entirely inconsistent.
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Kelvin Hopkins (Luton, North) (Lab)Independent- Quote
- I agree entirely with the hon. Gentleman, but the association between money and freedom is a freedom only for rich people, not for poor people, and the whole point of democracy is that our freedoms should be equal.
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- David HowarthLiberal Democrat
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- The hon. Gentleman makes the very important point that if we were simply to equate money with political freedom, the rich could donate vast amounts to their parties and get an enormous advantage over the poor, even if the poor were donating a higher proportion of their income to their favoured parties. That cannot possibly be a political system that counts as fair and just.
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- Mr. CoxConservative
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- The hon. Gentleman mentions poor individuals, but those who are in positions not of individual wealth band together; they form unions; and they make donations worth millions to political parties. If we cap those donations as well, that is fair and fine.
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- David HowarthLiberal Democrat
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- The hon. and learned Gentleman tempts me to go down a different route, but if he returns to the amendments proposed on Report in the Commons, he will see that my party made a proposal that would have dealt fairly with the union link with the Labour party, but I do not want to go down that route, because it is not before us tonight. Let me conclude by pointing out a couple of difficulties in the present draft of the Bill. First, it is not clear whether the legislation would be easily evaded simply by using companies as a conduit for donations. There appears to be an inconsistency between two parts of the way in which the provisions work. They start simply by talking about whether individuals satisfy particular tax status rules, but the declaration part of the provisions talks about whether that individual has caused a donation to be made. That seems to be different. Whether an individual is a permissible donor based on their tax status is one question; whether the person has caused a donation to be made is a second question. One can cause a donation to be made without being a donor oneself: one can use a company as a conduit or agent. The Government have got things half right. In the declaration provisions, they are getting there—it is about causing donations—but they need to think about whether the provisions themselves, not just the declarations provisions, should cover people causing donations to be made. In fact, in previous debates on this matter, we proposed, without any vote being called, provisions that would, in effect, equate the individuals who control companies with those companies. That would have the effect of changing the entire position. Let me end by talking about consensus. Throughout the debates on the Bill, for almost a year, the Government have said that it is not possible to make any further progress with the Hayden Phillips proposals, with the cap on donations that would apply to everyone, with global spending restrictions and with a fair resolution of the relationship between the Labour party and the unions, because there was no consensus. In effect, the Conservative party had a veto on any progress on those matters. We now reach this late stage on the Bill and—the hon. Member for Huntingdon must be right about this, because he makes it so, by the very fact that he objects—the Government have broken that consensus. I very much regret that the Government have wasted the opportunity, throughout the rest of the debates on the Bill, to break the consensus in a far more general way and, to take one of the points made by the hon. and learned Member for Torridge and West Devon, to produce a comprehensive settlement of the party funding issue in a way that would have satisfied the public, even though it might not have satisfied the parties.
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- Mr. StrawIndependent
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- To suggest that the reason that we did not make progress on the Hayden Phillips proposals was simply that the two main parties did not agree is to parody what happened. The simple fact is that, among many other objections to implementing the Hayden Phillips proposals, is an overwhelming one that illustrates that there is no consensus with the public and that the Liberal Democrats refuse to acknowledge but is correct: the Hayden Phillips proposals are predicated on a high level of state funding. I do not believe that there is a consensus for tens of millions of pounds of additional public money to be used to support the political parties at the moment. That is the fundamental problem.
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Mr. Deputy Speaker (Sir Alan Haselhurst)Conservative- Quote
- Order. After that little exchange, we had better come back to the amendment.
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- David HowarthLiberal Democrat
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- Thank you, Mr. Deputy Speaker. I do not accept what the Secretary of State says; I do not think that he has got the Hayden Phillips proposals right anyway. Turning back to the proposals before the House, I am glad that the consensus on this matter has been broken. I simply regret that it was not broken earlier.
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Mr. Gordon Prentice (Pendle) (Lab)Labour- Quote
- So far this has been a conversation between lawyers. I am not a lawyer, and I want to alert the House and the people outside to what this is all about. It is about very rich people buying elections. We can listen to the exchanges between lawyers until we are blue in the face, but that is what it is about—multimillionaires who live abroad buying elections. I congratulate my friends on the Front Bench on listening to Labour Members and to my friend Lord Campbell-Savours, who moved my amendments in the House of Lords. I am grateful to Lord Campbell-Savours and to my friend the Member for Battersea (Martin Linton), who has championed this issue for many years. When the tax exile amendments, if I may use that shorthand, were tabled in the House of Lords, more Labour peers voted against the Labour Government than voted for them—there was a majority of 22, including two former general secretaries of the Labour Party, Lords Sawyer and Whitty. That was the extent of the alliance. My friend the Justice Secretary said, in his opening remarks, that the Government were listening to the alliance—it was a huge alliance. Many of us think that the Government should have addressed the issue of the super-rich buying elections years ago.
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- Mr. RedwoodConservative
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- How does somebody buy an election? Did Labour buy its victories in the last few elections?
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- Mr. PrenticeLabour
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- I am going to come to that point. I want to address the issue of consensus. Lord Bach, who led for the Government in the other place, said: “Any changes should command…consensus…this has been an overriding objective for the Government throughout the passage of this Bill.”—[Official Report, House of Lords, 6 May 2009; Vol. 710, c. GC239.] I take a different view. I think that on this issue it would be impossible to reach consensus with the Conservative party. It was never going to agree to turn off the tap that feeds millions of pounds from tax exiles into the party coffers.
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Mr. Graham Stuart (Beverley and Holderness) (Con)Conservative- Quote
- Will the hon. Gentleman give way?
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- Mr. PrenticeLabour
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- No, I will not.
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- Bob SpinkIndependent
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- Will the hon. Gentleman give way?
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- Mr. PrenticeLabour
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- If I am going to give way to the hon. Gentleman I will have to give way first to the hon. Member for Beverley and Holderness (Mr. Stuart).
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- Mr. StuartConservative
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- I am grateful to the hon. Gentleman for giving way. As he is aware, the latest figures for Labour party funding show that 80 per cent. comes from the trade unions, and we know what impact that gives them on our national life. It was Conservative Members who proposed a £50,000 cap on donations, and it is grossly unfair to suggest that there was no possibility of reaching a consensus with us. The Labour party cannot carry on with its downright corrupt situation with the trade unions and blame us for any failure.
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- Mr. PrenticeLabour
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- We take what the hon. Gentleman says with a shovelful of salt because in an earlier intervention he referred to the communications allowance and, from memory, I think he said that Labour Members voted themselves that allowance. In 2007-08, 158 Conservative Members claimed that allowance, and the shadow Cabinet collectively claimed a total of £185,000 through it.
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- Bob SpinkIndependent
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- rose—
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- Mr. Deputy SpeakerConservative
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- Order. Before the hon. Member for Castle Point (Bob Spink) is allowed an intervention, we should remember what is in the terms of the amendments that we are discussing. These wider exchanges are not very helpful when a number of people still want to speak and we do not have all night at our disposal.
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- Bob SpinkIndependent
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- I am very grateful for that advice, Mr. Deputy Speaker. I congratulate the hon. Member for Pendle (Mr. Prentice) on having done democracy a fantastic service with his long-standing campaign that he is now winning. In the end, right will out. The hon. Gentleman has been fighting to secure our democracy and remove the abuses of party political and election funding. We see those on the Conservative Front Bench squirming, trying to stop the amendment being made, and we all know why: they want to continue the abuses. They want to continue to allow Lord Ashcroft and others who live abroad to abuse the system and fund political parties unfairly and in an unbalanced manner.
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- Mr. PrenticeLabour
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- I thank the hon. Gentleman for that point. Why are the amendments needed? I restate this fundamental truth: it is possible to buy an election. I invite colleagues to visit www.gordonprenticemp.com and click on the blue rosette to find out exactly how much money is being spent in my constituency. There has been a cascade of money over the past two years. [Interruption.] It is not about Gordon Prentice holding on to the Pendle seat; it is about rich individuals pumping millions of pounds into constituencies across the country and buying the next general election. Lord Bach said in the other place that expenditure outside the short period before an election is effectively deregulated. If a rich individual wanted to spend £1 million, £2 million or £5 million a year in a constituency, nothing in the law as it stands would prevent them from doing so. These multimillionaires, some of whom have written books about their tactics, live in their tax havens and influence our politics by bankrolling political parties and buying elections, and their actions pollute our democracy. It is scandalous that Conservative Members, with their lawyerly language, tell us that there are higher considerations that we must take into account. There are no higher considerations. After its experience with the Conservative peer Lord Laidlaw, the House of Lords Appointments Commission now makes tax status a determining factor in deciding whether to elevate someone to the House of Lords. Why does the Appointments Commission do that? It was because Lord Laidlaw, a former vice-chairman of the Conservative party and a self-confessed tax exile living in Monaco, told the commission prior to his elevation in 2004 that he would bring his tax affairs onshore, and then he refused—he reneged on that promise. But he still gave £3 million to the Conservative party and over £100,000 to a candidate for the mayoral elections in London. The Conservative party did not consider that to be tainted money and handed it back; no, it held on to those millions from Lord Laidlaw. Of course, it is not just Lord Laidlaw; there are other Lords as well. Let me finish on this point, in case I am straying out of order: we have heard that there is to be a £7,500 threshold for donations to political parties. Multimillionaires and others who want to give a lot of money to political parties will have to sign a declaration that they are a permissible donor, which will include a reference to their tax status. It will be a criminal offence for them knowingly to give an inaccurate or false declaration, and I say three cheers for that. If they knowingly mislead the wider public, the political party and, indeed, Parliament, they can be sent to jail. These declarations are not new. When we stood, all of us, for election to the House of Commons we had to sign a declaration, which went to the returning officer, saying that to the best of our knowledge we were not disqualified from sitting in this place because, for example, we were a peer or had a criminal record. The idea of asking someone to sign a declaration is well established. The Member for Huntingdon (Mr. Djanogly) raised a few canards earlier. He said—I have heard this until I am blue in the face—that the proposal is hard to implement. Of course it is, but I look to my friends on the Front Bench and to the brainpower of the civil service to close the loophole; that is what we want them to do. We heard from the Member for Huntingdon that the proposal is contrary to European law; well, let that be tested in the courts. We are absolutely doing the right thing. I shall vote for the Government tonight, and I urge all my friends to join me in the Lobby to make sure that the provision gets on to the statute book.
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- Mr. RedwoodConservative
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- We heard the authentic voice of Labour in that speech from the hon. Member for Pendle (Mr. Prentice), who has insulted the British electorate in a big way. I do not believe that it is possible to buy an election in the way that he suggests. No matter how many millions the Conservative party might have spent in 1997 if the rules had been different, we would have lost. No matter how much money Labour spent in the European elections this year, they would have lost. The British public are quite able to discern what they want and who they want, and they are not driven by the biggest-spending party on any given occasion. The hurried and perhaps botched amendments that we are considering worry me for both general and specific reasons. I think that they are botched because, as the Justice Secretary kindly admitted, he will have to return to them in the other place, as he knows that they do not deal with all the matters that are coming out in this rather short debate, and that will come out as further consideration is given to the Bill. That shows the danger of legislating in such haste, after quite a long period in which proper consideration could have been given, both in the Chamber and in more general consultation. My general concern about the new proposals is that they are part of a drift to ensnare our politics in so much legalese and complexity that it puts off many amateurs who would otherwise be involved and be able to participate. I referred in an intervention to the plight of a party treasurer of whatever party. It is difficult enough to conform with the Political Parties, Elections and Referendums Act 2000. We have seen all parties get into difficulties—inadvertently, I am sure. I am sure that they are trying to comply. Even that legislation has proved quite demanding and quite complicated, but as we have heard from Front Benchers of both main parties, it has the merit that all that the treasurer or other responsible official has to do is prove that the individual is registered to vote in this country and is on the electoral roll. There is a roll to which they can refer, and which is reasonably accessible, to establish that they have had due diligence. The proposals before us involve considerably more complication, in that three separate tests would be applied, and then a person would have to try to ascertain whether all the forms had been accurately filled in. I understand that there is to be self-certification by the individual seeking to make the donation, and that is where the burden will lie. As my hon. Friend the Member for Huntingdon (Mr. Djanogly) explained, that individual could genuinely be unsure, or they might make a perfectly accurate declaration, but the facts and circumstances might change subsequently. Given the speed with which events can occur during an election campaign, it would be quite possible to imagine members of different parties making mistakes. There would be a long legal process afterwards to try to sort it all out. In a fast-moving democracy that relies on volunteers and voluntary donations, it would seem to be bad law to make things that complicated. The danger is twofold. First, it means that politics becomes about the process of politics, and it means that individuals and parties hurl allegations at each other in a way that can only damage the general reputation of politics and drag all parties further downwards. If, under clause 8, one party finds something wrong with somebody’s declaration, the natural reaction of the other parties will be to find things wrong with the alternative party or parties, through the declarations. They would then throw allegations—perhaps fair, perhaps unfair. That will become part of a process of making politics about whether parties stick to the box-ticking letter of the law, rather than about the big issues that concern constituents and enliven political debate and general elections. When we get into that kind of snare or trap, we will find that all parties will want to go for more state funding instead. As the Justice Secretary has rightly said, that would be exceedingly unpopular with voters of all dispositions at the moment. However, the more it is made difficult for individuals, companies and trade unions to put their money into political parties on a voluntary basis, the more the political parties will seek other ways of finding state funding—and at a time when the state does not have any money and is having to borrow it all. The public would think that that was extremely unreasonable.
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- Kelvin HopkinsIndependent
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- The simple answer to all that is to have a savage cut in permissible spending on elections.
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- Mr. RedwoodConservative
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- I have rather more sympathy for that view. I have said that I favour a tighter cap on election spending, affecting all the major parties. It would be much easier to control any problems that parties may see in the current system through spending controls, rather than through donation controls. That would be easier to police. We know that it is quite possible to police a spending control because there is one in place at the moment; such a control applies to each one of us when we seek re-election, and applies at the national level to each major party. There have not been too many problems with those spending caps. That is a productive and sensible suggestion. I cannot see why we need also look at limiting categories of people who are allowed to donate. As hon. Friends have said, if someone is entitled to vote in an election, surely they should be entitled to back their vote with a donation. If someone is allowed to run for office in an election to gain even more influence, what is to stop them making a donation to support their or someone else’s campaign? The whole thing is quite absurd if looked at from the outside. It makes sense only if one goes down the route taken by the hon. Member for Pendle and reveals the raw politics behind the rather elegant legal debate that we have had, for most of the time, this afternoon. I urge the Government to think again. Such changes cannot be made without consensus. They relate to the system of election for all parties, and they need to be seen to be fair by all parties involved, but that clearly is not so with this Bill. Such changes cannot be made in haste, and the latest, very chunky, amendments that we are considering have been drafted very quickly, in a way that not even the Government think is reasonable.
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Mr. Geoffrey Clifton-Brown (Cotswold) (Con)Conservative- Quote
- As always, my right hon. Friend makes a cogent and logical case. Does he not agree that the logic of his case extends to those people, whom all political parties have recognised, who live abroad and have resided in this country within the past 10 years—the period has been varied, but it is currently 10 years—and who are entitled to vote? They ought also to be entitled to give a political donation, if they wish.
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- Mr. RedwoodConservative
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- That is exactly my view, and the view shared, I think, by most Conservative Members. I recommend it to the Government, because they will have supporters in a similar position—supporters who will feel cut out by the unwillingness of the legislation to allow them to participate fully in the way that other legally registered British voters can by virtue of residence. It is a dangerous principle to say that someone has to pay tax in a country to participate in its politics. There are all sorts of people in our country who, for good reasons, do not pay tax. Full participation cannot be linked to taxpaying. It is rather divisive to say otherwise, and I find it surprising that that view is taken by the Labour party, which normally stands up for people without much money who do not pay tax for that reason. It is strange to apply the argument in one direction but not in the other, when it comes to the issue of taxation. The American democracy may well have been based originally on the principle of no taxation without representation, but we do not want the principle that there can be full participation only with taxation. That would be a very odd principle indeed in a society where some people do not pay tax for good reasons. I hope that the Government will take the proposals away and think again. We know that they will think again, because their Front Benchers have promised that other amendments will be necessary to try to make sense of the inadequate amendments before us. I repeat what was said in an earlier exchange: it is quite wrong that something so important and fundamental to our democracy—issues relating to the participation rights of a wide range of British people—should be handled in such a way, at the last minute, without proper time for consideration of the amendments, without a further attempt to create consensus across the Chamber, and without proper discussion of the final amendments, which needs to take place.
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- Martin LintonLabour
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- I thank my hon. Friend the Member for Pendle (Mr. Prentice) for raising the issue in his original amendment, Lord Campbell-Savours for tabling the amendment and winning the vote in the House of Lords, and my right hon. Friends on the Front Bench, who have shown great wisdom in accepting the amendment. They are right to say that it raises practical difficulties, but those are not insuperable. The Political Parties, Elections and Referendums Act 2000 set the test that a donor should be registered for voting purposes, not resident for tax purposes. That was not my preference, but that test was set because it was the simplest. For most people it amounts to the same thing—to be registered, they must be resident in this country. However, it is possible to be registered as an overseas voter, for which I fought hard at the time. Although we should protect the right of UK citizens who live abroad to vote in UK elections for a limited period, it was never intended that that should act as a loophole for people who go abroad to escape tax liabilities to continue to enjoy the right to bankroll British elections. People who go abroad for tax purposes should not interfere in our elections. If they do not pay our taxes, why should they have any part in determining those taxes? The right hon. Member for Wokingham (Mr. Redwood) cited the American slogan, “No taxation without representation,” and said that the reverse would be unfair—no representation without taxation. We are not arguing for no representation without taxation, but we are arguing that if people do not pay the taxes of the country, there is no reason why they should seek to invest millions of pounds in trying to win the election. Whether money in an election works or not—I have written a book on the subject—is not the point. It is clearly intended that it should, and sometimes, clearly, it does.
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- Mr. Graham StuartConservative
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- I wonder whether the hon. Gentleman realises what an unedifying sight it is to see two Labour Members in marginal seats who, despite the vast expenditure given to them over the years by the taxpayer to spend in their areas, cannot bear the idea that candidates from Opposition parties should have relatively small amounts to be able to have any part-time help to put out any form of communication to the electorate. It is clear that Members on the Government Benches think that Labour, like some monster, should be able to roll on while those in Opposition should be able to spend and do nothing.
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- Martin LintonLabour
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- The hon. Gentleman should keep his speech for when he is called. What he said has nothing to do with what I was saying. I seek a level playing field, justice and fairness in elections. That is my sole motivation. I do not do so because of any personal problems in my constituency. Let us investigate the principle of taxation and influence in the electoral system. It is no accident that it was the House of Lords that passed the amendment. Their lordships were the first to see a clear connection between paying taxes and the right to be a Member of this legislature. As my hon. Friend the Member for Pendle mentioned, the House of Lords Appointments Commission recently announced that it will not accept any new peers who are not resident for tax purposes. That test, being resident for tax purposes, should have been in the 2000 Act. It is now being introduced by the House of Lords Appointments Commission. Indeed, the other place is debating a Bill that could lead to tax exiles being deprived of their titles, which would be only right. Lord Laidlaw has already been forced to take leave of absence from the House of Lords after failing to abide by a pledge to move his tax affairs onshore. He was appointed on the understanding that he would pay tax in this country, but he has not done so. Their lordships see a clear connection between paying taxes and influencing elections. I do not understand why hon. Members are so slow to see that connection. The House of Commons has been through a very difficult time in the past few months over the expenses scandal, with many MPs being publicly and humiliatingly disgraced—some rightly, some wrongly. Our job now is to audit MPs’ expenses and see whether we can identify and punish wrongdoing and clear other MPs of the dark clouds of suspicion that hang over the whole of Parliament. It is our job to clean up politics, and the amendment is a part of that. It will not do MPs of any party any good to vote against the amendment or even to speak against it. That throws us right back into the morass from which we are trying to escape.
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- Mr. Clifton-BrownConservative
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- The hon. Gentleman has acknowledged that he supports the system of overseas voters. Why, therefore, does he discriminate against those voters in the amount that they can give to political parties?
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- Martin LintonLabour
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- Of course somebody who goes abroad temporarily to work should retain the right to vote if they wish to retain it. They will also have the right to donate up to £7,500 to an election campaign. I do not think that that is any great infringement of their democratic rights. They know that by going abroad, they put themselves in a position where they cannot maintain the right to influence elections in this country indefinitely. They know it is time-limited, and the amount of money that they may donate to political parties in this country can also be limited. Finally—this perhaps is a consensual point to end on—I strongly believe that we should introduce gift aid for small donations to political parties, so that the money that might come out of the political system through the amendment can be put back in through a fair system of tax exemption on donations. I tried, with my hon. Friend the Member for Pendle, to table an amendment to the Finance Bill that was originally tabled in the House of Lords with support from Conservative and Liberal Democrat peers. It was the subject of consensual all-party agreement, and it would help to put back into the political system the money that is being taken out. It is far better to rely on a large number of small donations than to rely, as we do at present and which we are trying to change, on a small number of large donations.
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- Mr. Graham StuartConservative
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- It is a great pleasure to follow the previous speakers, especially the hon. Members for Pendle (Mr. Prentice) and for Battersea (Martin Linton), two notoriously narrowly held Labour seats. No one in the House or outside will be fooled by the passion with which Members in such marginal seats view the relatively small funding, as I said in my intervention, given to those trying to oppose the Government and putting themselves forward for election. The vision for Labour Members, it seems, is to ensure that the trade unions can continue to buy influence within the Labour party. In the last returns, 80 per cent. of the funding of the Labour party came from the trade unions, yet the Government find themselves in negotiation with those trade unions time and again. They want that to happen while barring those who are entirely eligible to vote from being able to back their preference by funding it in the way that others in this country do. While hon. Members are seeking to bar, through the amendment, people who live abroad from contributing as residents do, they are happy to see funding from Lord Paul, for instance, whose companies bought the Armstrong Group, with many of my constituents losing their pension fund because it was put into liquidation to escape the pension liabilities that the company owed.
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- Pete WishartScottish National Party
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- The hon. Gentleman has twice mentioned the relatively modest sums secured from such funding. For the benefit of the House, will he indicate how much that is?
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- Mr. StuartConservative
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- I am not entirely aware of the sums. Lord Ashcroft is the demon in the minds of Labour Members, who sit there nursing their marginal seats, knowing that the electorate is coming for them. It is that knowledge that drives them on. In their fevered imagination, they see Lord Ashcroft, like some great grey figure hanging over them, sentencing their seat to lose to the Conservatives. To help slay Labour Members’ demons, I should say that Lord Ashcroft’s donations are far less than those of Lord Sainsbury. We hear about corruption from the Labour party, but a man who was serving as a Minister in the Government gave millions of pounds to them. What about the conflict of interest there? Did we hear the hon. Member for Pendle on his feet day after day campaigning with the hon. Member for Battersea against that conjunction? No, we did not. Lord Ashcroft’s donations are on the public record. They are easy to find, a fraction of what Lord Sainsbury has given to the Labour party and, when broken down by constituencies, amount to a number of tens of thousands of pounds that have simply allowed for the employment of part-time staff and for communication with the electorate—upon which so much of our politics depends. Do I feel embarrassed or am I squirming about that? Quite the contrary: I am delighted that Lord Ashcroft, somebody of such public spiritedness who set up Crimestoppers and has been such a great philanthropist, also recognises the damage that this Government have done to this country. That is why I am so proud to have him as one of our many supporters. We, the Conservative party, are reliant on Lord Ashcroft for a tiny fraction of our income when compared with the income of the Labour party, the massive majority of which comes from the trade unions.
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- Mr. Gordon PrenticeLabour
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- Will the hon. Gentleman give way?
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- Mr. StuartConservative
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- In order to be brought back to the measure that we are debating, I shall give way to the hon. Gentleman.
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- Mr. PrenticeLabour
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- I have a simple question: can the hon. Gentleman tell us whether Lord Ashcroft is a UK resident for tax purposes and has been since his elevation to the peerage in 2000?
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- Mr. StuartConservative
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- I can tell the hon. Gentleman straightforwardly that I have absolutely no idea; it is entirely a matter for Lord Ashcroft. The situation tonight is most unedifying. Ministers recognised that the Lords amendments had no proper place in the Bill but, to throw red meat to the likes of the hon. Gentleman and the hon. Member for Battersea and try to buy off rebels, have decided to allow clause 8 to go forward—despite the fact that it will not work in practice. The hon. Gentlemen are clearly fixated by people of great wealth who might want to donate to political parties, but anybody of any great wealth will of course have companies in which they are major shareholders, and, unless we want to restrict British companies that trade fully in this country also from participating in and supporting British politics, which seems to be the view of the hon. Member for Cambridge (David Howarth), we will find that the clause will be completely ineffectual. I imagine that the Secretary of State, when he discussed it with his colleagues, decided that, like so much of the Government’s current legislation, it would not work but, if it appeased Labour Members on the far Back Benches for a while, would be a price worth paying—even if it were of no real moment. We need to clean up politics, but we need to recognise the real demon that afflicts our political system. The real demon in political funding is not Lord Ashcroft or any of the other thousands of people who donate to the Conservative party; it is a Labour party that is entirely dependent on funding from the trade unions; and a Labour party whose Ministers sit down with Warwick agreements 1 and 2. It is that relationship which is utterly corrupt, indefensible and should be the subject of legislation, not this partisan effort by the Government today.
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- Mr. CoxConservative
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- I am going to steer away from partisan rhetoric, because there are some fundamental points that must be considered. I have in mind, particularly, the gauntlet that the hon. Member for Cambridge (David Howarth) so thoughtfully threw down to me, regarding what might be the legitimate objective of the Government’s amendments. It has caused me a degree of reflection, because what was striking in the Secretary of State’s account of the reasons for the amendments was the almost complete absence of a substantive justification. Indeed, I asked him to give one, saying, “What is the rationale for linking the right to donate to the obligation to pay taxes in this country?” Hansard will show his response, but, as I recollect, he said, “Well, I have made the same argument as you have.” I have not heard a more half-hearted—indeed, a more apologetic—defence of an amendment since I have been a Member, which I accept is not a very long time.
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- Mr. RedwoodConservative
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- Does my hon. and learned Friend think that the weakness of the argument is the reason there are now no Labour Back Benchers in the Chamber in their seats? Does he think that they are ashamed of the proposal?
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Mr. Kevin Barron (Rother Valley) (Lab)Labour- Quote
- That is not true!
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- Mr. CoxConservative
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- One has just appeared. I must say that I have been reflecting on my right hon. Friend’s point as we have been debating.
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- David HowarthLiberal Democrat
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- The rational connection is money: the prospective overseas donor has deliberately distanced him or herself from the obligation to pay full tax in this country and, possibly, uses that money, which they have saved in tax, to influence the political system in this country. That seems to me to be a rational connection. It does not go far enough for me, but it is sufficient for the measure before us.
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- Mr. CoxConservative
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- I should understand that, were it a reason for preventing somebody from voting, but the argument is that a British citizen has a sufficiently substantive connection with what is going on in this country to be allowed to vote and to stand in an election, but not to donate. The suggestion that there is somehow a moral or rational justification for the measure, based on the fact that somebody does not pay taxes in this country, does not fulfil the requirement that the hon. Gentleman knows the European Court of Human Rights would impose—namely, a rational justification for the intrusion into the right. We need a legitimate objective. The measure has to be rationally connected with the objective and to be no more than is necessary to achieve it. We know that large numbers of people who are not in the Labour party’s bête noire category, but are relatively modestly affluent, will be prevented from donating. The Secretary of State for Justice proposes a limit of £7,500, but that is an arbitrary figure, plucked from nowhere. Why not £15,000 or £20,000? Why not £30,000? The figures that the Labour party objects to are in the millions, but relatively modestly affluent people who feel strongly may wish to donate £7,500, £10,000, £15,000, £20,000 or £30,000. Frankly, if we allow somebody to vote and stand in an election, and if they are a British citizen who feels strongly about the fate and destiny of their country, how can it conceivably be rational to prevent them from supporting their own campaigns or those of the party that they support? It simply makes no sense to me at all, and I am fortified in that opinion by the fact that the opinion of the Secretary of State for Justice is the same.
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- Mr. Graham StuartConservative
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- Is my hon. and learned Friend, like me, bewildered by the Liberal Democrat approach to the issue? It seems so anti-European. We are in a single market, where people are encouraged to move across Europe and where people are—in the Liberal Democrat vision, at least—one polity. Yet people who have used that freedom, which we all support and agree with, find themselves artificially restricted because of partisan points of view.
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- Mr. CoxConservative
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- My hon. Friend will forgive me if I do not stray down that particular avenue. I am trying to engage with the hon. Member for Cambridge, who gave a thoughtful and impressive speech. He deliberated carefully and pieced his way through with careful fidelity to principle, and it is in that spirit that I want to try to answer.
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- Mr. RedwoodConservative
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- If the Government are worried about the issue, should they not say that nobody who wishes to be a Labour peer should give the Labour party any money? On the Government’s theory, it would be wrong to give a peerage to anybody who had given money, would it not?
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- Mr. CoxConservative
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- My right hon. Friend may well be right. I want to concentrate on whether the proposed measure would have an impact within the context of the Human Rights Act and article 10, which is about freedom of expression. Unlike the hon. Member for Cambridge, I think that that is a real issue. The European Court of Human Rights has plainly considered that the right to donate, to put your money where your mouth is, is encompassed within article 10. One therefore has to answer this question: why single out those who live and are taxed abroad if we are allowing them to vote? The hon. Gentleman has given the reason; he says that tax exiles do not pay taxes in this country and that—I think this a little fanciful—the money that they save could be deployed for the purposes of donation. It is therefore, he says, perfectly legitimate to require that such people should be part of the tax system. I say with respect to the hon. Gentleman that placing so invasive a restriction on an individual on so flimsy and artificial a footing is not consistent with the principles that he upholds as a liberal. I sympathise with those principles because personal, individual freedom is a fundamental principle about which all in the House, from whatever political tradition, should be concerned; I know that there are Labour Members who feel as passionately about that as I do and the hon. Gentleman does. In considering what principle and the freedom of the individual require, we should not give credence to the convenient and expedient arguments articulated with great elegance and some sophistication by the hon. Gentleman. The hon. Gentleman’s position would have been far more principled, and would have had more of the integrity that he ordinarily evinces in the House, if he had said that the measure looks like what it is. It is, regrettably, a capitulation by the Secretary of State to pressures with which he does not agree; he has adopted a measure in which he has no confidence. He has put it before the House for reasons that the rest of us can only guess at. The principled approach would be to do precisely what the hon. Member for Cambridge said the Secretary of State should have done, and I completely agree: if a measure such as this is to be moved, it should be moved as part of a comprehensive settlement and on the basis of principle, not partisanship. I have great respect for the Secretary of State for Justice, who is an urbane and civilised member of the Government and for whom one can only have considerable respect. However, on this occasion he has come to the Dispatch Box and, in a sense, declined to give a substantive rationale or justification for the measure. When challenged, he said that he had used the same argument as his challenger—and he said that so half-heartedly and apologetically. That does not, I am afraid, attract confidence that the measure has the substance, solidity and soundness that it ought to have if the House is to feel obliged to vote for it.
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- Mr. StrawIndependent
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- With the leave of the House, Mr. Deputy Speaker, I should like to respond to the debate. It has been characterised by two distinct kinds of speeches. The hon. Members for Huntingdon (Mr. Djanogly) and for Cambridge (David Howarth) and many—but not all—contributors from my side have sought to address the issues in a relatively measured way. There have also been some hyperbolic and partisan performances. I am only too well aware that if we scratch the surface, the issue of party funding arouses great tribal feelings. Whenever two or three Labour Members gather together, it does not take long for a peer’s name beginning with “A” to fall from their lips; equally, a particular kind of Conservative Member will foam at the mouth at the very mention of trade unions. I understand that, which is why my general view has always been that we have to recognise the tribal nature of the issue and the fact that people feel strongly about it, and in a partisan way. However, we should also do our best to secure as close a consensus as possible on the issue. We have a great interest in the fortunes of our own parties, but we are also the trustees of our democracy. The ground rules for that democracy are set here, and we have to hold back a bit in case we descend to the position arrived at in parts of the United States. In those areas, even the setting of boundaries is the subject of the most extraordinary partisanship; how the boundaries are set would make even Mr. Gerry Mander blush. In general, we avoid that here but it is important that we should. To underline a point made by the Minister of State, Ministry of Justice, my right hon. Friend the Member for North Swindon (Mr. Wills), Conservative Members’ hyperbole about the issue sits rather oddly with their behaviour—or rather lack of it—in the other place. The simple fact is that 80 per cent., or four out of five, of the peers who take the Conservative Whip—there are just over 200 of them—failed to vote against Lord Campbell-Savours’ amendment when it was before that House in the middle of June; they could muster only 40 Members altogether. That leads me to feel that some of the opposition to this measure, particularly given the amendments that we are now introducing, is, to a high degree, quite synthetic.
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- Mr. CoxConservative
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- The Secretary of State, almost certainly for reasons of forensic and rhetorical flourish, is misrepresenting and mischaracterising the policy of the party to which I belong. As he knows very well, our policy is to replace the schedule to the Human Rights Act with a new Bill of Rights based on British rights, devised and drafted here. There is nothing wrong with that, and many eminent people from many parts of the political spectrum support it.
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- Mr. StrawIndependent
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- I look forward to seeing further particulars of that proposal, especially as the other bit of the Conservatives’ policy is that they apparently remain committed to the convention. How the devil one is able to draft a new schedule that is consistent with the convention without its ending up being the same as the convention defies me.
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- Mr. CoxConservative
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- Will the Secretary of State give way?
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- Mr. StrawIndependent
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- No, because I think I would be brought back into order if I did so. The hon. Member for Ribble Valley (Mr. Evans)—he is not here, but it is important that I correct the record—asked whether aggregate donations would breach the limit. Although I did not say so in terms, I said that I thought that the current law was that donations were aggregated. However, that is not the case. At the moment, there is no requirement to aggregate multiple donations in one year. We are considering whether such a provision would be needed, and that will require a great deal of consultation down the track—not for this Bill. In any case, there are some practical problems as regards aggregating donations. That is an existing issue that is not affected directly one way or the other by the provisions in this group of amendments. I hope that that is helpful. I also hope that my note is correct; otherwise, I will end up having to correct the record again. The hon. and learned Member for Torridge and West Devon—I apologise again for my cough—asked about proportionality and whether these provisions are consistent with the provisions of articles 10 and 11. At the moment, there is no ban on any non-permissible donor giving up to £200, soon to be £500. We are proposing that, for these purposes, restrictions on a non-permissible donation apply only at £7,500, so somebody could play an active part in British politics from abroad while giving up to that amount. Overall, the restriction is relatively proportionate.
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- Mr. Graham StuartConservative
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- The Secretary of State’s clarification again shows how important it is to take time to get such legislation right. I have calculated on my BlackBerry that someone who wanted to give money to a particular party in every constituency in the country could give £4,844,354 a year and apparently not be restricted in any way. That cannot be right, and it must prove my point.
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- Mr. StrawIndependent
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- I think that someone would soon notice that, and that on the whole people do not operate in that way.
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- Mr. CoxConservative
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- You need a Fisherman’s Friend.
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- Mr. StrawIndependent
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- I think I need more than that. I am going to stop now; I think that would be wise, in the interests of my cough, if nothing else. I commend the amendments that stand in my name. Lords amendment 11 disagreed to. Lords amendment 12 disagreed to. Government amendments (a) to (f) made in lieu of Lords amendments 11 and 12.
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- Mr. Deputy SpeakerConservative
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- I must draw the House’s attention to the fact that privilege is involved in Lords amendment 33. If the House agrees to that amendment, I shall ensure that the appropriate entry is made in the Journal. Before Clause 21
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- Mr. Deputy SpeakerConservative
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- With this it will be convenient to consider Lords amendments 34 to 47, 50, 96 to 98,105 and 106.
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- David HowarthLiberal Democrat
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- I appreciate the need for flexibility, but will the Minister say a bit more about what sort of body he has in mind? Simply requiring the power to be given to a corporation sole might mean that it ends up being given to the Secretary of State, or to a bishop. He must say a bit more than simply about the need for flexibility.
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Mrs. Eleanor Laing (Epping Forest) (Con)Conservative- Quote
- I intervene merely to reassure the Minister that we have agreement on those matters.
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- Mrs. LaingConservative
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- I understand the Minister’s point about 2014 and the amount of work that has to be done, but if matters happen to move more quickly than he anticipates, will the Government take steps to bring forward the date for full introduction to, for example, 2013 or 2012, if that is possible and practical?
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- Mrs. LaingConservative
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- I do not disagree with the Minister. I understand his point and I simply wish to reassure him and the House that we also have the integrity of the register and its comprehensiveness as a top priority and would not wish to rush through any scheme in a way that might harm that integrity or, indeed, the perception of integrity.
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- David HowarthLiberal Democrat
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- I am slightly concerned about the order-making power’s breadth. To give a specific example, will the Minister confirm that, in line with what the Home Secretary said a few days ago, the Government have no intention of using the power to make identity cards part of the system?
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- Mrs. LaingConservative
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- Conservative Members do not disagree with the Government in any respect on Lords amendment 33. It is unfortunate that, owing to time constraints, the issue was not debated on Report in the other place, but we are able to explore some aspects of it this evening. We have already raised the working of the Electoral Administration Act 2006, and I have sought reassurances from the Minister about the data protection arrangements relating to the position of the CORE keeper. We are pleased to note that unauthorised disclosure is now to be an offence, but what security support will the Government give the CORE keeper to avoid such a breach of the rules and the legislation? I am sure that Ministers are well aware—as are we all—of some of the dreadful data losses that the Government have suffered. The larger government becomes, the more risk there is of data losses. The information that we are discussing is very sensitive, and we are anxious to ensure that there is no chance of data loss—or rather, given that accidents happen, that the chance of data loss is minimised as far as possible. That can be done if the Government provide the right safeguards at the outset. Can the Minister give us any more information about the timetable for the establishment of the CORE keeper, and for the CORE scheme to be fully up and running? We appreciate the importance of the anti-fraud work that it will provide. We have already debated the cost of the scheme, and I have been told that the overall cost will probably be about £4 million. Perhaps the Minister will be able to bring the House up to date. However, we will not oppose Lords amendment 33. Let me now deal with the really important amendments. Conservative Members are delighted that they are before us, even at this very, very late stage. We Conservatives have been calling for individual voter registration for four years and more. The Government have promised it on many occasions. This may be difficult to believe, but even on Third Reading of this Bill the Government were still only making promises and had proposed nothing substantial at all. We appreciate, however, that the full panoply of the amendments was brought forward in the House of Lords, and we are delighted to have them before our House now.
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- Mrs. LaingConservative
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- I appreciate the points the Minister is making—and I am grateful to him for giving us Conservatives credit for having pushed for many years for these necessary amendments. He brings up the issue of the comprehensiveness of the register, but I have to say that I have never considered that anyone in this House, or anyone concerned in any way in promoting and safeguarding democracy, wishes anything other than to have a register that is as comprehensive as possible. How could anybody possibly argue that the register should be anything but comprehensive? Of course it is a sine qua non of a proper democratic system that the register should be comprehensive. If I have not argued for that feature, that is because I took it as a foregone conclusion that we all want the register to be comprehensive.
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- Mrs. LaingConservative
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- But I agree with the Minister on that point, and I always have done. However, some Members on his Back Benches—sadly they are not there now, or, indeed, on any other party’s Back Benches—have sought to suggest that Conservatives for some reason do not want a comprehensive register, but that is simply not true. I am very pleased to have the opportunity to put it on the record once and for all that we agree with the Government that the accuracy, comprehensiveness and integrity of the register and of the system is paramount. That is one of the reasons why we will not oppose the timetable the Minister has suggested this evening. I do not intend to vote against these Government amendments because I fully appreciate the Minister’s argument. I always have appreciated it, and I believe that it is right to take this matter forward carefully and step by step. None of us wants to see a system introduced that would in any way undermine the integrity of our democratic system. I know that the Minister can get quite exercised on that point, usually when he is goaded by his Back Benchers, and I will reassure him—one more time—that I agree with him 100 per cent.
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Mr. Christopher Chope (Christchurch)Conservative- Quote
- I am sorry to rain on my hon. Friend’s parade, but does she accept that to delay this until 2015, which is effectively three general elections from now, does not show the sense of urgency that would be required, for example, by the Council of Europe’s Monitoring Committee of one of the emerging new democracies?
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- Mrs. LaingConservative
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- What a pleasure it is to have a Back Bencher intervene, and we all welcome my hon. Friend to his place. He makes an extremely good point. If a new system were being implemented for the first time in an emerging democracy, it would be surprising if the Government got away with saying, “Well, yes, but it will take us a good five years to implement this.” My hon. Friend’s point is well made, and it is one that I have made many times, as the Minister has just said. However, I balance that with the fact that the Electoral Commission, electoral registration officers and others who will be involved in the implementation of the Government’s current plans are concerned that this should not be rushed, but taken step by step to ensure that the integrity of the system is protected—and not only protected, but seen to be protected, so that there is no perception of harm being done to the system. Since the Minister and his colleagues started to take steps to implement the individual voter registration system for which we have been calling for many years, we have seen progress. What a pity it is that the Government had not started the process five years ago, because it would now have been implemented. I understand and share the Minister’s concern for the comprehensiveness of the register, and that is one of the reasons why we have called for action on this matter for many years. It is a pity, as my hon. Friend will agree, that the Government had not commenced work on this project long ago. If they had done so, we would have a far better system in place for whenever the next general election may be. I may also reassure my hon. Friend if I say that we are determined that if it appears that the practicalities to which the Minister has referred can be overcome on a shorter timetable than that currently set out, that should happen. Unfortunately, that would mean making changes in primary legislation, but I am sure that a future Government, of whatever colour, could—if it turns out to be possible—bring implementation forward sooner than the Minister currently envisages.
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- Mrs. LaingConservative
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- I can assure the Minister and the House that any future Conservative Government would never take risks with the democratic process. They would take absolutely no risks with the integrity or comprehensiveness of the register or with its accuracy. I take the Minister’s point about the 2012 census. At that point, when we have the results of that census, the Electoral Commission can consider those results and weigh up the work that it and electoral registration officers will have been doing by then and it might well be possible to make judgments. I also agree with the Minister that it would be difficult to introduce a new system shortly before a general election. There should be other ways of testing the system along the way to ensure that the accuracy, integrity and comprehensiveness of the register and the system are always utterly watertight. I hope that that reassures the Minister on that point. I was about to say that it is unfortunate that although these matters were properly considered in another place, this House has not had a chance to examine the Government’s proposals. To be fair to the Minister, however, we discussed the principle of individual voter registration in Committee. As a result of the amendment tabled in my name and that of my right hon. and hon. Friends, we were able to examine that issue and ensure that the principles of individual voter registration were properly examined in this House. I see no dissent around me. We are all agreed that the current system is part of an antiquated electoral system that depended on the pater familias of each household determining who within that household should have a vote. That, along with many other aspects of our electoral system, is old-fashioned, outdated and no longer reflects the way in which Britain in the 21st century ought to be governed. We are very pleased that we are taking these matters forward this evening. There have been many criticisms, to which my hon. Friend the Member for Christchurch (Mr. Chope) alluded, of the way in which matters are currently conducted within our electoral system. It is unfortunate that we find ourselves, at this stage in the development of our democracy, with such an old-fashioned system of registration. However, may I ask the Minister what steps he has taken with the Electoral Commission and electoral registration officers to ensure that in 2010, when they have to start this process, there will be no more delays? The Minister clearly has milestones in mind. Will he undertake to report to the House on progress, so that we can tell whether the momentum that he has now built up and the enthusiasm that he has instilled in his fellow Ministers still exist and that matters are properly moving ahead? I am sure that he will be the first to say that there has been delay on this issue over the years. Now that we have got to this point of enthusiasm and unanimous support in Parliament, I hope that he will not be deterred in the work that he has begun, because the bureaucratic side of the implementation of such a system can sometimes hinder its progress. We are all agreed in principle, so let us ensure that the practicalities do not stop us. I hope that the Minister will consider a few other issues when he considers registration generally. Service registration is uppermost in our minds. Will he undertake to look again at the disgraceful disfranchisement of servicemen and women who are in theatres of conflict over recent years? According to the latest figures, possibly only 65 per cent. of service personnel are registered. At a time when people are daily risking and losing their lives in the service of this country, it is simply not right that the Government’s change to the rules on service registration has made it more difficult for people in the armed forces to register. Surely it should be made much easier for people in the armed forces to register. I agree entirely with the Minister about people who are in vulnerable situations—he mentioned the low registration among people who have problems with literacy and among certain communities in our country—but does he agree that, whatever steps we as a Parliament take, people who are serving in the armed forces and their families should be helped to register, not deterred from registering? The Government have agreed to increase by order the renewal period for registered service personnel to five years. Again, we have brought up that subject more than once over the past year or so. We strongly welcome the fact that the Government have indicated that they will take steps, but when will the Minister introduce that order? I can assure him and the House that, when he does introduce it, we will support it and help service personnel to register properly to vote. I am pleased that the Minister proposes to make progress with voluntary registration in the first instance. Again, will he undertake to report to the House on how voluntary registration is working and, likewise, on the voluntary provision of personal identifiers? All those elements are important in undertaking this difficult enterprise and in ensuring its success, as are the reports of the Electoral Commission. Will the Minister undertake to return to the House to allow it to discuss the Electoral Commission’s reports, so that we might know how the enterprise is progressing and what more hon. Members on both sides of the House can do to make sure that this vital change in the very basis of our democratic system is introduced as soon, as accurately and as comprehensively as possible and to ensure the integrity of the system? Normally, at this point, Government Back Benchers jump up to challenge the Opposition’s bona fides. I find that I am trying to play both parts here, since no Government Back Bencher—[Interruption.] I beg the Minister’s pardon; his Parliamentary Private Secretary is present. No other Government Back Bencher is present in the House. I would not like it to be thought that Conservative Members had done anything other than won the argument. If I were to be challenged on the point, I would say yet again that our top priority is the integrity of the system, and the accuracy and comprehensiveness of the register, and we will do all that we can to help the Government to introduce this vital new system, which we have supported for many years.
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- David HowarthLiberal Democrat
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- There are two sub-groups in this group of amendments. The first is about the CORE scheme and setting up a body to run that scheme, and the second is perhaps the politically more important problem of individual registration. I should say at the outset that in general terms I support what the Government are doing and have no intention of calling a Division on any of these matters. I am very pleased that the Government have made considerable progress on individual registration. On the matter of who is to run the CORE scheme, I suppose that it might be thought a little awkward that, at a time when all political parties are saying that there are too many quangos, we propose to set up another one. However, I understand the motive for doing so. It is agreed in all parts of the House that the Electoral Commission needs to focus its activities and certainly should not be taking on new ones. My only concern, which I mentioned in an intervention on the Minister, is that the proposal simply sets up the mechanism for transferring the function to a new body, and it does so in general terms, so that the new body could be almost anything—a corporation sole or another public authority. All the good things that the Minister rightly mentioned about the need for security and independence are not provided by the proposal; they are simply his intention. I have a slight worry that yet again what we are putting in statute is simply a mechanism and, in future, some other Government might use that in a way that the current Minister does not intend. I cannot see many sinister uses to which the provision might be put, but I want to put it on the record that the way in which the matter is being dealt with is not ideal. The point about the second, crucial matter of individual registration, which the hon. Member for Epping Forest (Mrs. Laing) made several times, is that if it is done properly it is not a threat to the comprehensiveness of the register. The Minister also made that point. It increases the integrity of the register and that of the elections themselves. The validity and credibility of democratic elections depend both on the register being comprehensive and on its having a great deal of integrity. If the register is not comprehensive, it is not the electorate who are making a choice but some subset of the electorate. If it is not secure and we cannot be sure that the people whose votes are being counted are electors, that people are not voting more than once or that there is not fraud going on, equally there is a threat to democratic credibility. We need both comprehensiveness and security, and I am pleased that the Minister intends the approach that he has chosen to produce both. I am delighted that the Government have moved such a long way from their starting point, which can be characterised as them saying, “Well, there are risks in doing this, so we shouldn’t do it.” There are always risks, but the point is to minimise them and move forward in a way that should produce a good result all round.
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- Mrs. LaingConservative
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- It would if those young people were Conservative or Labour voters.
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- David HowarthLiberal Democrat
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- All that I can say to the hon. Lady is that that is not our experience. The fundamental point—the point of fairness—is very clear. There needs to be a process of voluntary identifiers. It should be tested, and any distorting effects should be corrected. After that, the system should be made compulsory. That is what the Government are proposing. The only disagreement is about the time scale, and how long the process should take. I accept what the Minister says—that there are various important milestones, that we should not rush the process and that we should not take any risks—but as I understand it, in the House of Lords, the proposal was not that the timetable should definitely be shorter. It was simply that, if the Electoral Commission were of the opinion that the move to compulsory registration could take place earlier than 2014-15 without the risks that the Minister mentioned coming into play, there should be a power to allow that to happen. I do not think that anybody was suggesting that the timetable be artificially shortened, or that any risk be taken with the comprehensiveness of the register. All that was suggested was that there be a careful process by which the timetable could be shortened if that turned out to be a safe thing to do. One can imagine circumstances in which that would be the case. A system using the three identifiers that have been suggested—the signature, the national insurance number and the date of birth—might turn out to work well, and there might be no need to use any other identifiers. The problem of the reduction in numbers on the electoral register might turn out to be manageable in a shorter period, with the result that there was no need for any further experiment. At that point, one can imagine the Electoral Commission saying, “This is all working very well. We can take a year or 18 months off the timetable.” That was all that was being proposed; nothing of the risky nature that the Minister suggested was put forward. When the move to compulsory registration is made, either through the Government’s present scheme or through the scheme as it emerges under a future Government, I do not think that we will be in any danger of taking excessive risks. I have only one other point to make, and it could be made on a whole range of Lords amendments before us. I am slightly worried about the breadth of the order-making power in Lords amendment 38. That order-making power allows the Government to vary the kinds of identifier that might be required—or asked for, in the voluntary part of the process. The Minister said that there might be technological changes that bring in other opportunities. I am worried that those technological changes include ID cards. One of the problems with the ID card scheme is that Ministers say, “We have no intention of bringing it in compulsorily,” but it turns out that their version of “voluntary” includes such things as getting a passport, as if the right to travel abroad were simply a matter of discretion or, as the proposal appears to allow, voting. I seek an assurance from the Minister that the Government do not see requiring the use of an ID card as part of a voluntary identifier scheme. With that caveat and with some disagreement with the Government on the absoluteness of their attachment to the 2014-15 timetable, I am content with the amendments proposed by the House of Lords.
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- Mr. ChopeConservative
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- I shall say a few words about the timetable relating to individual voter registration. I have taken an interest in the subject over the years, and have had conversations with the Electoral Commission. We all know that the Electoral Commission was extremely frustrated by the way in which the Government seemed to be blocking its suggestions that moves were needed towards individual voter registration. To put the matter in context, at the end of last month I was a monitor on behalf of the Council of Europe at the general election in Albania. One of the polling stations that I visited was in quite a large town—not Tirana, but probably the second or third largest town in Albania. While my colleague and I were making it clear that we were monitoring the voting process, a woman came up to us. She was hysterical—that is an accurate way to describe it—because she said that her son, who had died three or four years previously, had been put back on the register by the Government. That is the allegation that the woman made. For her, that was part of a conspiracy. She thought that it was the means by which the Government were putting people on the register and, knowing that they would not be able to vote, using their nominees to vote for them. This is a serious matter. That little cameo illustrates how seriously it is taken in an emerging democracy. In the course of monitoring that election, I said to some of our Albanians, I hope not too condescendingly, “Well, you are only a relatively young democracy.” The response I got was, “No, we are a very old democracy. We’ve been going at it for over 18 years.” Given that the Electoral Commission had been requesting the move to individual voter registration for some time, and the fact that we have had experience of what can be achieved in Northern Ireland, I am not satisfied that we need to wait for two more general elections before we can implement the measure. That seems to be the effect of what the Minister is suggesting. I accept that it is too late to introduce individual voter registration for the next general election, which I hope will be even sooner than the Government fear it will be. However, I do not give up hope that we might be able to introduce individual voter registration in the general election after next. I hope that when my hon. Friend the Member for Epping Forest (Mrs. Laing) is the Minister charged with that, she will take it on her shoulders to ensure that, as an incoming Government, we accept that where there’s a will, there’s a way, and that there is a strong will on the part of the British people and among most Members of the House of Commons to have a better system. That system will incorporate the principles embodied in individual voter registration. We may want to wait until the 2011 census, but is that absolutely essential? Individual voter registration could be linked to the issue of individual voter apathy. My 19-year-old daughter is now on the electoral register, but she did not put her name on it; I did. If the question of whether she wanted to place her name on the electoral register had been put to her, it would have raised her awareness and the issue of responsibility. We in this House often bemoan the low participation rate of relatively young voters in our electoral process, but that may be because we are too patronising. We say, “There’s no need for you to register yourself, sonny; we’ll deal with that.” Then, we present them with the fait accompli close to the election and ask, “Are you going to go out and vote?” Contrary to some of the concerns that Government Front-Benchers have expressed, I think that there could be a significant positive to the process. We would be promoting individual responsibility among young adults, so that they were more aware of the issues involved in participating in elections and in our democracy. I hope that nothing my hon. Friend the Member for Epping Forest has said today from the Opposition Front Bench will preclude an active campaign by an incoming Conservative Government to try to accelerate the process so that we can have individual voter registration at the general election after next.
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- Mr. ChopeConservative
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- In that case, will the Minister accept the suggestion made by the hon. Member for Cambridge, who said that the best impartial judge of whether those criteria had been satisfied was the Electoral Commission itself?
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- Madam Deputy Speaker (Sylvia Heal)Labour
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- With this it will be convenient to discuss Lords amendments 2 to 8, 51 to 65 and 99.
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- Pete WishartScottish National Party
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- The Minister knows that I have an interest in this issue. Is there any reason whatsoever why the three main parties exclusively will have the opportunity to nominate three commissioners, and yet the minority parties—the parties of government of all the other legislatures throughout the United Kingdom—will have the opportunity to nominate only one? Is it not the case that the House of Lords, like this place, has looked at these issues solely through the Westminster prism and forgotten about the new multi-legislature UK in which we now live?
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- Pete WishartScottish National Party
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- One from a smaller party.
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- Mrs. LaingConservative
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- The Minister will be delighted to know that I do not intend to oppose any of these amendments. He has made a good case for the Government’s changing their mind yet again on how the electoral commissioners with political experience should be appointed or elected. It is extraordinary that we started with one position in the Bill, then the Government tabled an amendment to which we agreed, and then suddenly last week in the House of Lords the Government tabled another amendment and the Bill was amended again. In the interests of openness, democracy and time, I will agree with the Minister.
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- Mrs. LaingConservative
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- I agree that the Minister has attempted to achieve consensus. I thought that we had achieved it on the matter until, suddenly, he wanted to achieve a different consensus at the 11th hour in the House of Lords. However, in the spirit of consensus and out of respect for the Electoral Commission, which, for good reasons, set out a new position on the matter, I completely support what he says. Again, I take the point that the hon. Member for Perth and North Perthshire (Pete Wishart) made so eloquently. I understand his position and have some sympathy with it, but I am afraid that I agree with the Minister’s comments, which I will not reiterate because of time. I want to consider Lords amendment 54, which, as the Minister said, my hon. Friend the Member for Huntingdon (Mr. Djanogly) covered in Committee and in other proceedings. Before the Bill was amended in Committee and on Report, the amendment would have extended the Electoral Commission’s powers of entry under the Political Parties, Elections and Referendums Act 2000 to other bodies and individuals such as donors and, indeed, Members of Parliament. That would not be right, so we fully support the amendments that the Minister has introduced because they mean that due process will be followed and that consent has to be obtained from a magistrate before the Electoral Commission can enter and inspect premises. The Electoral Commission has acted perfectly reasonably since it has had such powers under the 2000 Act. There is no reason to think that it would do anything other than that in future, but the amendments, with which we all agree, mean that it and the system will be better protected in future. In the spirit of consensus, with which we are concluding our consideration, I do not wish to take up the House’s time on the other points that the Minister made, all of which are now non-contentious.
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- David HowarthLiberal Democrat
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- None of the matters that we are considering is now enormously contentious, but I want to make one or two comments, especially about clause 5 and Lords amendment 54. The hon. Member for Epping Forest (Mrs. Laing) is right that we have gone back and forth on clause 5 about political commissioners. It is a difficult and delicate subject, because introducing an expressly political element into the Electoral Commission will always be difficult when its tradition has been non-political and deliberately distanced from politics, for obvious reasons. However, we all agree that the commission could do with a more experienced, perhaps more down-to-earth element in its membership. That requires overcoming some difficulty in appointing the political commissioners. I remain slightly nervous of the party leader route for appointing political commissioners. It is obviously better for party leaders to propose three nominees rather than one because that means that we are not dealing with direct patronage, with which I have some difficulty. I am still unclear about exactly how the process will work from there. What will the precise procedure be for deciding which of the three is to be appointed? I would prefer a much more open procedure, similar to that for other public appointments, whereby something like open competition is introduced. In an ideal world, I would prefer more open competition for the posts. That is my first worry. Why have the Government rejected a rather more normal process of appointment in such cases? The second point is the one that the hon. Member for Perth and North Perthshire (Pete Wishart) is quite right to raise over and over. We now live in a multi-legislature, multi-political system polity—we have the Scottish Parliament, the Welsh Assembly, the Northern Ireland Assembly and the London assembly. Our political system is far more complex than it was 20 years ago. It seems odd, to say no more than that, that the ruling party in a very important part of this country—Scotland—will not be represented on the commission. I made the following point in Committee and I repeat it now—indeed, this fundamental problem would have been dealt with by a perfectly sensible amendment that the hon. Gentleman tabled on Report, but it was not voted on, even though other amendments that were not debated were voted on. Why should we not transfer responsibility for Scottish elections to Scotland? Should that not be part of the devolution settlement? Why is a UK body responsible for specifically Scottish elections? I do not understand why that should be the case, and I urge the Government to think about it further. On Lords amendment 54 and the warrant procedure, I can see what the Government are doing and what Members of the House of Lords were doing, but I am a bit confused about how the system will work in practice. In particular, it is a condition of obtaining a warrant that “permission to inspect…has been requested by the Commission and has been unreasonably refused” by the person against whom the inspection request was made. However, how is it to be decided whether the refusal was unreasonable? The application appears to be for a warrant, which is issued ex parte, with only one of the parties present. Warrants are granted by magistrates in living rooms. My wife is a magistrate and she has granted warrants in our living room. Granting a warrant is not a formal court procedure, with both parties present. Without both parties present, how is it to be fairly decided that the refusal was unreasonable? I fear that the provisions have not been fully thought through. Nevertheless, I accept the need for safeguards—indeed, safeguards in this area are important—and I welcome all the other amendments.
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- Pete WishartScottish National Party
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- It will not surprise the Minister that I wish to return to the question of political commissioners, although I can assure him that this will be the last time that he and I debate it across the Chamber. The Minister’s answer to my intervention was totally inadequate. It is just not good enough to say that because we are a smaller party in this House we should not get a proper look-in when it comes to the arrangements for the Electoral Commission. The commission has responsibilities and obligations not just to this House, but to every devolved legislature across the United Kingdom, as the hon. Member for Cambridge (David Howarth) noted. We are in great danger of allowing the Electoral Commission to become the plaything of this House. However, it must properly reflect the new United Kingdom, with all its devolved institutions, and the reality of the Scottish Parliament and the Welsh and Northern Ireland Assemblies. My question for the Minister, which I hope he will spend some time answering—that is, if he is prepared to listen to it—is this: why is it right that the three main London-based parties have the opportunity to nominate three commissioners and the smaller parties, as he calls them, have the opportunity to nominate only one? He may refer to the smaller parties in this place, but let me remind him that we are the Government in Scotland, in one of the major legislatures in the United Kingdom. The Democratic Unionist party has a share in a coalition in Northern Ireland and Plaid Cymru, our colleagues on these Benches, has a share in power in a coalition in Wales. We are the Governments of the rest of the United Kingdom.
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- Mrs. LaingConservative
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- I am grateful to the hon. Gentleman for giving way, because he knows what I am going to say. Even though this is not the position of his party, on whose behalf he speaks so eloquently, does he accept that this is the Parliament of the United Kingdom, which still exists for the rest of us?
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- Pete WishartScottish National Party
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- It is with a due degree of anticipation that I listened to that contribution, and I am not disappointed or surprised by the hon. Lady’s comments. Of course this is the United Kingdom Parliament, but all I am saying—and I hope that she will accept this—is that the Electoral Commission has obligations and responsibilities beyond this House. It is unfortunate that the House of Lords refused to recognise that, just as this House has done. Once again, they are viewing these matters exclusively through a Westminster and House of Commons prism, and after all these debates we have moved no further forward. I do not know how the role of the fourth commissioner, who is to be allocated to the minority parties, is to be determined. I still believe that they will have to be allocated to the Democratic Unionist party, as the largest minority party. That would be right and proper. Certainly, if the Scottish National party were the largest minority party and we did not secure that commissioner, I would be very disappointed. The commissioner will have to go to the largest party; there is no other basis on which that matter can be determined. That is not good enough, however. We have failed to come to terms with the new reality of the UK. It is disappointing to see from these amendments that the House of Lords has not recognised the reality of a multi-legislature, multi-party UK. I hope that the Minister will spend a couple of minutes considering these questions, and that he will try somehow to reassure me that the new Electoral Commission, through the electoral commissioners, will be able to deal adequately with these issues and to look out for the whole of the UK and not just this House.
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Mr. SpeakerSpeaker- Quote
- With this, it will be convenient to discuss Lords amendments 10, 13, 28 and 66 to 68.
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- Mr. DjanoglyConservative
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- Clause 8 creates a new responsibility for donors to political parties to clarify the source of donations. Following the Government’s recent amendments made in the other place, donors giving more than £7,500 will be required to make a declaration of whether another person is providing them with any money or other benefit worth more than £7,500. The impact of the measure will still be widespread and costly—even if not quite so much as before—in terms of time and money for parties at local level, which is where such burdens are most heavily felt. Political parties need sufficient funds to fulfil their democratic functions. However, there is a paradox at the heart of party politics in the United Kingdom: although there is recognition that political parties are key in mobilising local political activity and are a central vehicle in implementing civic engagement, the membership of political parties, the turnout at elections and the trust and confidence in politicians are at an all-time low. That has major implications for the financial management of political parties. Modern centralised campaigns have resulted in escalating—
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