Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Lord Bishop of Oxford Excerpts

Wednesday 15th January 2014 Lords Chamber

Moved by

[Lord Harries of Pentregarth]

34: Clause 26, page 12, line 45, at end insert—
“unless the expenditure relates to legislation before Parliament during the regulated period”

[Lord Harries of Pentregarth (CB)]

My Lords, before I focus on the first amendment—

[Baroness Anelay of St Johns]

May I assist the noble and right reverend Lord, Lord Harries? We allow some latitude, of course, at the beginning of any stage when Members are exiting the House in some large number, but may I advise any other Peer who leaves that they should not walk in front of the person who is moving the amendment? It was impossible for those on the Front Bench, who were listening to the noble and right reverend Lord, Lord Harries, even to hear the first word. I am sure that the noble and right reverend Lord, Lord Harries, may now wish to resume.

[Lord Harries of Pentregarth]

I thank the noble Baroness very much.

Before I focus on the first amendment in this group, I thank the Minister for responding to a good number of concerns raised by the commission which I have the privilege of chairing. He has responded to quite a lot of our concerns, in particular, I note, with government Amendments 41 to 44 in this group, which we are glad to see. All these issues were mentioned in the second report of the Commission on Civic Society and Democratic Engagement. The government amendments deal with issues of safety and security, particularly in Northern Ireland, extra expenses due to disability and travelling expenses, and they take out the time of volunteers. They also include translation from Welsh to English, although I note that the noble and learned Lord, Lord Morris of Aberavon, has his own amendment to include production costs as well as translation costs, and I hope that the Government will look sympathetically on that. I am very grateful on behalf of the commission to the Minister; he has taken a lot of trouble to listen.

However—and it is a big however—there remain a significant number of concerns, on which we are hoping to have a positive response from the Government. I have in my hands a petition which was started only last Thursday by the commission and, since then, has gained the support of more than 130 NGOs and 160,000 signatures from charities and campaigning groups that are still concerned about the effect of the Bill on the workings of our democratic society.

Briefly, the amendment of the noble Lord, Lord Tyler, is about the distinction between the general public and supporters. The commission put forward an amendment to try to widen out the definition of a supporter because, in a digital age, a supporter cannot simply be considered as somebody who gives money to a charity. As that petition indicates, with its 160,000 signatures, the term “supporters” now has a much wider character. Although the Government did not accept the amendment which we tabled earlier because they thought it was too wide, I hope that they will look sympathetically at that of the noble Lord, Lord Tyler.

To focus specifically on Amendment 34, my amendment concerns legislation before Parliament during an electoral period. It is absolutely fundamental to the healthy working of democratic society that people should be able to campaign quite freely, without being inhibited by too much regulation, against legislation that is going through Parliament during the electoral period. I was disappointed that the Electoral Commission, which has been helpful at a number of points in supporting our amendments, does not support this one in its latest briefing. I will examine its arguments as to why not.

The Electoral Commission says that, if the amendment were allowed, it would allow unlimited spending on what may promote or procure the election of any particular candidate or party. Secondly, it suggests that the range of topics is potentially wide, even if it is covered by primary legislation indicated by the Government. Let us take an example and test that out. In election year, the Government decide to start legislation for, let us say, a new town of 500,000 people not far from an area of outstanding natural beauty. This policy is strongly supported by the Government of the day, but is opposed by the two other parties; it is a highly political issue. Furthermore, the town will actually cover three constituencies where there is a narrow majority.

Surely people ought to be able to campaign either for or against that quite freely without an excessive regulatory burden, even during an electoral period. Otherwise, think what would happen. The Government could save their most controversial legislation until the beginning of the electoral period and bring it forward then, knowing that the opposition to it would be more muted than if it were outside the electoral period. We must remember that one year in five will be an electoral period. This will severely hamper and inhibit the proper workings of our democratic society.

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[Lord Wallace of Tankerness]

My Lords, I always know it to be dangerous when the noble Lord stands up and says he has been thinking about something—and so it was.

I took the fixed-term Parliament legislation through your Lordships’ House and I do not recall—nor, indeed, have I seen at the present time—anything that suggests there is going to be any change. Of course, that means that there still will be a period during which Governments are not allowed to do this; but I have not seen any proposal to reflect the fact that there is a fixed-term Parliament. When that period will arise will become more apparent, or more foreseeable. If I have got that wrong, although I do not think I have, I will inform the noble Lord.

[Lord Harries of Pentregarth]

I thank all noble Lords who spoke in favour of my amendments and the other amendments to which my name has been attached and I thank the Minister for his response.

The noble Lord, Lord Horam, drew attention to some of the unfortunate consequences, as he understands it, of this legislation at constituency level. However, what I had in mind was primarily what happens at the national level. He suggested that political parties would be limited in what they can campaign; but the Government, in pursuing their legislation, are not limited in the amount of money they can spend in order to get legislation through Parliament, and nor are the Opposition.

Suppose you have two third parties: one, the Countryside Alliance, which wants to campaign against a new town, and the other the National Housing Federation, which wants to campaign in favour of more housing. Why should they be inhibited by the Bill in a way that the political parties would not be inhibited? As the noble Baroness, Lady Mallalieu, pointed out, we are not talking about the post-Dissolution period, so a lot of the ill effects that the noble Lord suggested might happen at constituency level would not be allowed by this amendment, because we are talking about only legislation going through Parliament and that ends when Parliament is prorogued. Therefore I believe that this is a crucial issue that goes to the heart of our democracy.

[Lord Wallace of Tankerness]

The noble and right reverend Lord indicated, when referring to what my noble friend Lord Horam had said, that it had not been his intention to engage in constituency expenditure. Does he accept that if this is not controlled expenditure, it could lead to expenditure in a constituency up until the time when the Representation of the People Act kicks in?

[Lord Harries of Pentregarth]

I accept that there are certainly implications for what might happen at local level. However, I ask the noble and learned Lord to continue to think about it because this issue goes to the very heart of the democratic process. I very much hope that, having talked to the Electoral Commission to see whether there might be a way forward, he might give the very clearest statement at Third Reading, which would then be translated into advice for the Electoral Commission. We need something here to safeguard the fundamental rights of campaigners to campaign during this period. With that, I beg leave to withdraw the amendment.

Amendment 34 withdrawn.

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[Lord Phillips of Sudbury]

I am grateful for that. My noble friend is lucky in having had a letter. When I finished the conversation, the Charity Commission said to me that it would send a new communication forthwith to everybody who received the first one to make clear that this statement did not relate to the law as it will be after the passing of this Bill. That is just one small example of—

[Lord Harries of Pentregarth]

I am fortunate enough to have the original letter before me. I wonder what the noble Lord makes of the statement:

“We do not believe that in the best interests of public trust and confidence in charities an exemption for charities is the most appropriate method for the regulation of charities during an election period”.

There cannot be anything clearer than that. I know it is very disappointing for the noble Lord, but the Charity Commission has come out unequivocally in opposition to his amendment and I think he will have to face that.

[Lord Phillips of Sudbury]

My Lords, the noble and right reverend Lord, Lord Harries, is actually addressing a different issue in this letter. I was dealing with paragraph one. He is dealing with paragraph two, about public trust and confidence in charities, which I was about to come on to and which, if I may, I will deal with in a second.

I emphasise the fact that the Charity Commission has delivered to those in this House who are particularly involved with this issue some guidance in relation to the law—comparing electoral law with charity law—that leaves us at best in a state of some confusion. I think, as I will say in a minute, that the approximation of charity law and electoral law is now so close that to all intents and purposes it is in practical terms the same. However, as we know better than anybody on earth, the capacity of lawyers—and not only lawyers—to argue about that is infinite. When you get a letter such as this from the Charity Commission, you can see why.

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[Lord Harries of Pentregarth]

Does the noble and learned Lord not accept that the Electoral Commission has come out exceedingly strongly against this amendment? It is not just the Charity Commission but the Electoral Commission, which has a specific statutory duty.

[Lord Mackay of Clashfern]

I understand that, but I do not understand why they have come out against it, because it must be based on an understanding that charities could in fact engage in activities that are regulated by this Bill.

[Lord Best (CB)]

My Lords, I think that I shall go with the suggestion that we defer debate on this until Third Reading. I will just throw one or two thoughts into the pot that have not yet been fully explored.

Charity law is currently very much under review. The noble Lord, Lord Hodgson of Astley Abbotts, has reported on the workings of the Charities Act 2006 and the Select Committee on Public Administration has looked into the operations of the Charity Commission. Both the noble Lord, Lord Hodgson, and the Select Committee on Public Administration issued reports last year recommending changes, and the Government have accepted many of those recommendations. In addition, the National Audit Office recently issued a report calling for a reform of the Charity Commission, and the Law Commission is looking at charity law and will report this year.

It is almost certain, therefore, that there will be significant reforms to charity law in the near future, so if charities are taken out of the lobbying Bill, which is the proposition here, there will be an opportunity, if necessary, to amend charity law and to see changes of this kind in a broader and wider context at a later date. The many arguments on why charities should be taken out of this particular Bill stand on their own, I think, and although we are giving great deference to the quangos, I find the comments of the noble and learned Lord, Lord Mackay of Clashfern, and others to be compelling. Possibly we should not be debating all those details if legislation that is specifically about the future of charities, charity law and the Charity Commission is in the pipeline. It would be better to defer our debate until then, but I would be very happy to see this brought back at Third Reading.

[Lord Harries of Pentregarth]

Perhaps the House will allow me just a couple of minutes to put the opposing point of view to the noble Lords who have spoken so far. Their proposal is superficially very attractive and would be possible if the definition in Clause 26 were different. If the definition of “controlled expenditure” in the Bill said that it was expenditure whose prime purpose was the promotion, or procuring the election, of a particular candidate or party, it would be possible to take out charities. They should be taken out because, as the noble and learned Lord, Lord Mackay, rightly said, charities are not allowed to have as their prime purpose the support of political parties.

However, that is not what the Bill says. Clause 26—and we have heard it thousands of times—includes two important points, which are that you do not have to mention the name of the party and it does not have to be your prime intention. Therefore, you can campaign on an issue and still be caught by the regulation of the Bill. That is why—

[Lord Low of Dalston]

I thank the noble and right reverend Lord for giving way. Does he not agree that to be caught by the legislation the expenditure has to be “intended” to procure that effect?

[Lord Harries of Pentregarth]

The whole point of those provisions, which is where the sting is, is that you can campaign on and focus on an issue and that can be reasonably regarded as indirectly supporting a particular candidate or party, or you can even do so inadvertently. Let us be quite clear: charities are able to campaign on issues.

[Lord Phillips of Sudbury]

I am grateful to the noble and right reverend Lord for giving way, but he really cannot get away with that. You cannot inadvertently satisfy the requirements of Clause 26 when it says that you “intend” to promote or procure electoral success. Intention is not the same as inadvertence at all, and it is a very strong test. The fact that there are other matters that you are trying to advance at the same time does not get away from that test.

[Lord Harries of Pentregarth]

Then why does the Charity Commission guidance—and I have read carefully both its main guidance and its guidance in relation to the Electoral Commission—include a series of examples, just like the Electoral Commission, where charities may or may not be caught? This is a borderline area. Charities are able to campaign and to campaign vigorously, and many trustees encourage them to do so. Therefore, it is always possible for them to come within the scope of this provision.

If you take out charities, only two courses are open to you. Either you have an unlevel playing field so that you have a charity campaigning against a campaigning group which is not a charity, and the charity, if it were taken out, would be able to spend an unlimited amount of money, whereas the non-charitable campaigning group would have very strict limits on what it was allowed to spend, or the Charity Commission could set up a much stronger policing body than it has at the moment—one which would match that of the Electoral Commission.

[Lord Low of Dalston]

I am grateful to the noble and right reverend Lord and I apologise for intervening again, but does he not agree that we are continuing to get bogged down in technicalities about the interpretation of very detailed points in this clause? If the point is taken that there will be discussions before Third Reading and we can look for something more fully considered to come back then, it will make a lot of sense to put into that review the points that the noble and right reverend Lord, Lord Harries, is dealing with at the moment.

[Lord Harries of Pentregarth]

My Lords, I take the point but it was important to state the argument because some people are understandably initially very attracted to this idea. It would lift the regulatory burden, and people are attracted to the idea of taking out charities. However, there are very strong, compelling and rational reasons why this should not be done, and that is why it is opposed by the Electoral Commission, the Charity Commission, the commission that I chair, the NCVO, ACEVO and all the others.

[Lord Phillips of Sudbury]

The NCVO has taken up—

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[Lord Tyler]

As my noble and learned friend Lord Wallace has said, I and the noble and right reverend Lord, Lord Harries, the noble Baroness, Lady Mallalieu, and my noble friend Lord Cormack have a subsidiary but quite important additional amendment, Amendment 39A. I am sure that all four of us welcome the recognition that my noble and learned friend Lord Wallace has given to the fact that the 2000 Act—this is not about this Bill; it is about the 2000 Act—has caused real problems for any organisations that were encouraged to work together in what were then called coalitions. Since then, the term “coalition” has gained a different connotation, so perhaps we should talk just about “working together”. The way in which this matter was handled in 2000 has caused real concerns. I know from reading Hansard that this confusion was caused at the last minute by a government amendment during the Committee stage of the Political Parties, Elections and Referendums Bill, as it then was, in this House.

It is curious that, over the years since 2000, very few of us seem to have heard of the problems that were caused by those provisions. Neither the Electoral Commission nor the Charity Commission ever came forward and said that these matters needed review and either repeal or revision. However, we now know, because a large number of organisations have been in touch with many Members of your Lordships’ House saying that this is a real practical problem—hence the Government’s amendment, which is excellent so far as it goes. However, as I shall seek to explain in a moment, there is one additional problem which I hope my noble and learned friend will be able to say he can look at again, since, as he just said, there will be some additional clarification at Third Reading.

As my noble and learned friend has said, the new provisions should be a major help to smaller players in those joint campaigns, ensuring that others can account for their spending, but the approach in Amendment 39 does not go quite far enough. The fundamental problem with the so-called coalition arrangements in the 2000 Act is as follows. If, let us say, Friends of Earth intends to spend £300,000 on a campaign about climate change and does so in coalition with, for example, Oxfam, which contributes £25,000, under PPERA both are deemed to have spent, or to plan to spend, £325,000. Clearly, that is absurd, because that would mean that Oxfam, which had contributed only £25,000 to that campaign, might well then be precluded from doing anything else on other issues, which it is clear was not intended by the 2000 Act and which, I hope, is not something that we would intend to do today.

To prevent people working together and therefore having to multiply the spending limits under the 2000 Act by a factor equal to the number of organisations involved seems to be most peculiar. Removing the rules altogether would create another new loophole. I keep saying to colleagues in the third sector, “We’ve got to be very careful that we don’t increase flexibility for what we think is a good cause only to create a loophole for much less meritorious campaigning activity”. However, what is unfair about the rules is not that some spending on common campaigns is counted together to prevent an overall breach of the limits but the fact that spending by one organisation on one campaign can then restrict the campaigning of another organisation on a totally different campaign. In my example, Oxfam would be deemed to have spent £325,000 not just for the purposes of that climate change campaign but for all purposes. It would then be very close to the limit, which would then mean that it would have to worry about whether any of its other spending on, let us say, development targets could,

“reasonably be regarded as intended to promote or procure electoral success”,

of a party or candidate.

If that organisation’s trustees believe that the future spending could be so regarded, they would be left with a very small amount of headroom in the national spending limit even though they had contributed a relatively small amount of money to the tune of £25,000. Therefore, £25,000 spent on climate change would mean very little room left for spending on other development targets. I am sure your Lordships will see that that would not be just and right and does not meet the objectives either of the existing law or of this Bill.

Our Amendment 39A would build on the progress made by the amendment moved by my noble and learned friend Lord Wallace in setting out the principle that there should be an overall cap on spending by any one joint campaign or by any one individual organisation. However, new subsection (6B) proposed by my amendment states that,

“expenditure by a third party within the limits set out in Schedule 10 in pursuance of any matter unrelated to an arrangement and which could not reasonably be regarded as intended to achieve a purpose common to an arrangement”,

should not be so restricted by the coalition rules in PPERA 2000.

The amendment would provide for some affected organisations a silver lining in the passage of this Bill. In short, it would remove a very unjust element of the existing law which has caused quite unintended problems for many non-party campaigners. Their arrangements would be improved immeasurably. The amendment would also improve significantly what the Government have so far managed to come up with. I hope that my noble friends will recognise that the problems with the 2000 Act are considerable. This was one very specific problem that was caused to a large number of organisations. I hope therefore that before Third Reading, when, as my noble and learned friend has already indicated, there has to be some further clarification and therefore amendment of the set of amendments that he is putting before the House today, he could look also at this additional problem, which otherwise will go unresolved and continue to cause considerable difficulty for all sorts of organisations.

[Lord Harries of Pentregarth]

I, too, thank the noble and learned Lord, Lord Wallace, for the government amendment, which is a positive response to the suggestion put forward in our commission’s report, as he acknowledged. I have added my name to the amendment tabled by the noble Lord, Lord Tyler. I shall not repeat the reasons that he has already put forward, but it is an important amendment for charities and campaigning groups generally because they do a huge amount of campaigning not just with one coalition but with a whole series of coalitions. For instance, aid agencies may be engaged in a coalition on overseas aid and, at the same time, be engaged in a coalition on climate change. That is the way in which they work.

I want to make a point that has not been made so far in any of these debates. It concerns the fundamental purpose of this part of the legislation and whether it will achieve what the Government hope. The purpose of the legislation at this point is to stop front organisations drawing on large sums of money to distort campaigning, but I suggest that the legislation as we have it now will not have that effect. Let us take a hypothetical example. Six very strong anti-Europeans have dinner together. They have access to large amounts of money from various sources. They go away to different parts of the country and they decide to start six different campaigning organisations under different names. But, in fact, everybody knows that their purpose is to get Britain out of Europe. Would they be caught by this legislation? No. I have read carefully the briefing note presented by the Electoral Commission, which says that you are not working together—that is, you are not engaged in co-ordinated campaigning—if you have informal discussions with other campaigners but do not discuss your plans with them in any detail—all this party will have done is have dinner together; if you speak at an event organised by another campaigner but do not participate in other ways—they could even speak at each other’s events; and if you do not consult other campaigners about what you should say in your campaign or how you should organise it. However, it goes on to say that you can sign a joint letter together. I hope that the noble and learned Lord will take seriously the fact that the legislation as it now stands will not have the desired effect of stopping big money coming in and using front organisations. We firmly support the intent but we do not think that the Bill will achieve it.

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Moved by

[Lord Harries of Pentregarth]

45: Schedule 3, page 57, line 14, at end insert—
“Exclusions of background staff costs1AA Nothing in sub-paragraphs (3) to (5) of paragraph 1 shall be taken as extending to any expenses incurred in respect of remuneration or allowances payable to any member of staff (whether permanent or otherwise) of the third party.”

[Lord Harries of Pentregarth]

My Lords, this amendment is very important for campaigning groups and charities, but I can move it very briefly: it is quite clear and simple.

First, let me say that the charities and campaigning groups, as part of the commission, very much support the aim both of transparency and accountability, and with that aim in mind support the extension of activities that should be regulated and are set out in new Schedule 8A. This amendment is about removing the background staff costs from those activities in sub-paragraphs (3) to (5) of that schedule. They refer to press conferences and media events; transport costs, when those are directed towards obtaining publicity—for instance, a campaign bus; and public rallies and other meetings.

We agree that all those should of course be brought into regulation, but this amendment is about excluding the background cost: that is, the cost of the member of staff of the third party. That is not primarily on cost grounds, but because of the additional bureaucracy that it would involve. How do you delineate the amount of time that the staff member spends—let us say, on mounting a public rally—from the amount of staff time they spend on their campaigning work anyway?

It is easy to assess the amount of money you are going to spend on hiring the hall for a public rally; you get an invoice for that. You do not get an invoice for a member of staff or the 10% of their time spent over four weeks doing that. Therefore, we think that the best thing to do is eliminate the background staff costs from the regulated costs in those three areas. It should be noted that the Electoral Commission recommends the removal of all staff costs, at least for the 2015 election. We are not going as far as that; we refer only to the background staff costs in relation to these three activities that are being brought into regulation. I beg to move.

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[Lord Wallace of Tankerness]

My Lords, I thank the noble and right reverend Lord, Lord Harries, for his amendment, because I, too, recognise that this issue has been regularly raised in many of the meetings that we have had—as did my noble friend Lord Cormack and the noble Baroness, Lady Royall. The noble and right reverend Lord’s amendment seeks to exclude those staff costs associated with staff directly employed by a third party from the calculation of controlled expenditure for transport, press conferences and organised media events, and for public rallies and public events.

The starting point is to recognise that the PPERA Act 2000 has always required third parties to account for staff costs. I acknowledge that the Bill extends the range of activities that may incur controlled expenditure; these are the activities that the noble and right reverend Lord seeks by his amendment to remove from staff costs. The Bill seeks to retain the need for staff costs to be included. As I said, I recognise that there has been concern, first, over the unfairness of third parties having to account for these costs when political parties do not. I think that my noble friend Lord Tyler mentioned that. Secondly, there has been concern about the difficulty for third parties in calculating the staff time attributable to activities giving rise to controlled expenditure.

On the issue of third parties having to account for these costs while political parties do not, your Lordships will be aware that when Parliament passed the 2000 Act it felt that it would be transparent and proportionate for a third party to account for staff time. This was on the basis that a third party undertakes campaigning activities other than simply political campaigning, and where a third party enters into political campaigning its spending for those purposes should be fully transparent. I am sure that that was the underlying thinking behind the 2000 Act. I would at least hope that someone who is employed by the Liberal Democrats during an election is actually working for the Liberal Democrats. Indeed, I am sure that the other parties would hope the same on behalf of their staff. It is as transparent as it possibly can be.

Regarding the concerns of third parties over the difficulties associated with calculating staff time, this is an existing element of the regulatory regimes. Its operation in the last two general elections, alongside Electoral Commission guidance on this, highlighted that such costs can be accounted for without becoming overly burdensome. The Electoral Commission takes a proportionate approach in current guidance to the calculation of controlled expenditure, including staff costs, by clearly stating that third parties should make an honest assessment of the costs that need to be reported.

I have shared with a number of the groups which have come to see me since Committee the fact that we did examine whether it would be possible to put in a de minimis exemption. Quite frankly, having seen what its terms would be, it would give rise to more concern about legal definitions than it merited, particularly if we had a de minimis exemption in statute. That would make it much more difficult for the Electoral Commission to take that proportionate approach to the calculation of controlled expenditure which it has done through its guidance.

It should also be noted that with the increases in the registration threshold the smaller organisations to which my noble friend referred, be they charities or campaigning organisations, will not be subject to regulation and the need to calculate staff costs. The best way of addressing the de minimis question is by what we have done in raising the threshold and taking so many of these organisations outwith the scope of controlled expenditure altogether.

My noble friend quite properly paid tribute to the work done by volunteers, not only for charities but for so many campaigning organisations. In many respects, they are the people who make the wheels of campaigning and democracy go round. However, volunteer costs will continue to be excluded from the calculation of controlled expenditure. In Amendment 44, which the House has just agreed, volunteer costs are excluded from the calculation of staff costs by virtue of paragraph 1A(1)(c) of new Schedule 8A. They were excluded under the existing regime, but it is important to emphasise that volunteer costs will also be excluded under what we are proposing. There is a world of difference between volunteer costs, which will be excluded, and the great advantage that there can be to candidates or political parties of third parties putting paid staff into campaigning activity in constituencies, or into running media events, press conferences or rallies.

The result of the amendment proposed by the noble and right reverend Lord, Lord Harries, would be to exempt that kind of expenditure associated with paid staff being moved in at the time of an election to facilitate the electoral advantage of a particular party or candidate. It is for that reason that the Government do not feel able to accept the noble and right reverend Lord’s amendment, and I invite him to withdraw it.

[Lord Harries of Pentregarth]

I am disappointed with the noble and learned Lord’s reply. This was a very simple step that the Government could have taken to ease the regulatory burden on charities and campaigning groups. It is disappointing. He stressed the fact that staff costs were already in PPERA. With due respect, that is no good reason for continuing them, if we have an opportunity to improve that Act and make it not just workable but one which eases the burden on charities and campaigning groups.

The Minister stressed that the Electoral Commission had found it possible to regulate this, but the fact is, as he knows, that charities and campaigning groups find this whole area very burdensome. I really do not see how the Electoral Commission can possibly police this area and work out what percentage of the time has been allotted, let us say, to the mounting of a public rally. What kind of receipts or statements is it going to get from the charity concerned? I am afraid that I find it very disappointing and I would like to test the opinion of the House.

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[Lord Tyler]

My noble friend is right. He and I have relatively recent experience of these things. The normal figure is around £12,000 during the election period. As I will come to in a moment, that could be swamped under these proposals, and therefore this is an absurd anomaly. I understand why the Government have arrived at their position. Their formula sounds simple, but it may be so simple as to be unequal to the task in hand. Equally, the move in Amendment 53 to do away with different limits for constituency spending seven months before an election, and constituency spending seven days before, seems to me to lose what is an important and not particularly complex distinction in the name of simplicity—and I am not sure the Government have got this right.

I ask the Minister to consider carefully the horror story that could emerge. Imagine: a campaigning group could come into a constituency and spend £19,999.99 in the last seven days of the campaign with the aim of affecting the outcome in that constituency, and it would not need to register. A second group, unrelated to the first, could, during those seven days, do the same. It would not register. A third group, unrelated to the other two—not a coalition, not working together— could do the same. In the last few days of a campaign in a marginal constituency, just under £60,000 could be spent, completely swamping the amount permitted for a candidate and a party, which is around £12,000, in one constituency. The candidates are, as I say, limited in those final four to six weeks.

Because this spending would not be registered, it might not be revealed until after polling day. Think of the mess that that would cause to our electoral law. Because such groups, though technically in breach of the law, would not need to register, no one would be any the wiser about what they had been up to. My noble and learned friend has said that he is looking at this section with a view to some clarification, and I think he will have to agree that there is a major loophole looming in front of us. I therefore request that he look carefully at Amendment 46ZA. He may find a better solution but a solution must be found, otherwise political parties and those who will be looking at this legislation when it goes back to the other place will not have seen this particular problem, because until now the registration threshold has not been so high. It is only under the present Government’s changes in this House that it has been raised to this height.

I hope that my noble and learned friend will be able to give some reassurance to those of us on all sides of the House who are concerned about such spending that the Government are not prepared to accept this loophole.

[Lord Harries of Pentregarth]

My Lords, Amendment 46A in my name concerns the spending cap for England. First I would like, on behalf of the commission, to warmly welcome the raising of the registration thresholds by the Government. I think that has done more than anything else to reassure the smaller charities; we give the Government a very warm thank you. We also warmly welcome the raising of the spending cap for Wales, Northern Ireland and Scotland. The spending cap for England, unlike that for Wales, Northern Ireland and Scotland, has been reduced by 60%. That reduction has taken place with an increase in the number of activities to be regulated and without taking inflation into account.

It is true that not many campaigning groups and very few, if any, charities would spend a high figure coming anywhere near that. The one I have checked that does spend quite a lot of money is Hope not Hate, which campaigns against racism all over the country. It is not a charity but a campaigning group. In 2010 it spent £319,231. That is very nearly the limit for England as we have it under the Bill, which is £319,800.

There was no evidence of abuse with the previous spending caps for England, and no rationale has been given for this reduction by 60%. Even if the Government are not willing to revert to the PPERA limits for England, I ask the Minister whether he sees any scope for some kind of compromise between the drastic reduction which has been brought about by the Bill and the spending limits there were for PPERA.

[Lord Cormack]

My Lords, I will add just a few words to what I said a few minutes ago. I fought 12 general elections, in 10 of which I was elected, to go to the other place. In every one of those the expenditure that I was allowed was very clearly defined. The returns that one had to make afterwards were minutely examined, and there have been cases within our memory where candidates have been challenged on their returns because they were a little careless in submitting them. We have to be extremely careful. The last election I fought was in 2005, and if I remember rightly I was allowed to spend around £8,000 or £9,000. My noble friend says that it is now about £12,000, and I accept that—I am sure he is right. It was all very carefully defined, and we have to be careful, much as we all want to protect free speech and engagement in campaign and all the rest of it, that the expenditure of candidates who stand for particular political parties or as independents is not put into the shade by the expenditure that is allowed to campaigning organisations within individual constituencies. Although I do not suppose that my noble friend Lord Tyler will push his amendment to the vote, I hope that the Minister will reflect upon what he and I have said.

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[Lord Tyler]

My Lords, this amendment, which I am moving on behalf of a number of noble Lords in different parts of the House, deals with some small changes to a previous amendment that we looked at in Committee on constituency limits, but they are changes that I know will be very welcome to a number of organisations which have been in touch with several Members of your Lordships’ House. It received considerable support across the Chamber in Committee and has two compelling advantages to recommend it.

First, it retains the Government’s intention to have a constituency limit. That is surely central to the Bill. As I have said consistently, I strongly support that and I know that a large number of other Members of your Lordships’ House also think it is important to retain that. However, even if we were to take it out, as some have suggested, I would certainly expect that Members of the other place would need no whipping at all to put it back in, for the reasons that were advanced so eloquently by my noble friend Lord Cormack a few minutes ago. Surely even Labour MPs would want it to be put back in.

The second advantage to the amendment is that it very closely and carefully defines what the constituency limits should apply to. As many charities and NGOs, big and small, have pointed out to me and to other Members of your Lordships’ House, they are not used to dealing with constituency boundaries; they have quite a different sort of geography from those of us who are involved in politics. Therefore, trying to assess the relative effect of, say, a rally in different constituencies would be quite problematic. It would be problematic for the political parties too, and for that reason we, as politicians, are not asked to account for it.

I shall give a practical example. I once chaired a rally for the five constituencies, as they then were, in Cornwall, and it took place in one particular constituency. It just so happened that we won all five seats but that did not have anything to do with my chairmanship at that rally. However, how would the costs of that rally be allocated to each constituency? You could allocate the costs to one constituency but what about the other four? That clearly is not what this Bill is all about. It really is not possible to measure the effect of a rally, or indeed a billboard or a press conference, on the result in an individual constituency.

I have one other example. I lost a lot of hair—or, rather, most of it went grey—in two elections arranging the national tour of the battle bus for the then joint leaders. Your Lordships may remember that at one stage we had two leaders in the alliance—the two Davids—although they did not always see eye to eye. That caused me a great deal of aggro. However, how I would ever have accounted for five minutes in this constituency, 10 minutes in that constituency and an hour in that constituency if I were running a campaign on behalf of a non-political organisation is quite beyond me.

Amendment 52, on which I am very grateful for the support of the noble and right reverend Lord, Lord Harries, the noble Lord, Lord Cormack, and the noble Baroness, Lady Mallalieu, would limit the scope of the constituency regulations to just activities where people communicate with specific voters. The one advantage of this amendment is that it ties down very specifically the activities that target specific people at a specific address in a specific constituency—letters or leaflets sent or delivered to voters, or telephone calls directed specifically to them—and which try to influence or ascertain their voting intention. Other activity would still have to be accounted for but only on a national basis. Therefore, if it is the national tour of a battle bus, arranging rallies or whatever, that has to be accounted for nationally but under the more generous national limits.

What has been made clear to us by many organisations which think that they may be involved in the activities covered by the Bill is that, if they are asked to account only for those activities that specifically target specific individuals, that will make their lives a great deal easier. It will retain the central purpose of the Bill, which is to stop big-money campaigns dwarfing the limits that candidates have to adhere to—my noble friend was very eloquent on this point a few minutes ago, as was my noble friend Lady Williams—and it will mean that the additional costs of activity directed at specific candidates can be identified neatly, clearly and succinctly.

The Electoral Commission has very clearly endorsed this amendment and expressed clear support for it because it makes simpler the guidance that it will have to give and the subsequent monitoring that it will have to undertake. I beg to move.

[Lord Harries of Pentregarth]

I support the amendment for the reasons that the noble Lord has set out. Constituency limits have been of very great concern to charities and campaigning organisations. I am fully aware of the kind of concerns raised by the noble Baroness, and, as the noble Lord, Lord Tyler, indicated, this issue has also been a very great concern for the Electoral Commission because it does not see how it can regulate and enforce this area. The noble Lord’s amendment will make it far easier for charities to be regulated by the law and for the Electoral Commission to regulate it.

[Lord Cormack]

My Lords, an amendment that can produce a joint letter from the National Secular Society and the Christian Institute clearly deserves careful consideration. When they take into account that the Electoral Commission also believes that there is good sense in this proposal, I hope that your Lordships will feel likewise. I hope that we will not have to exercise ourselves by going into the Lobbies. I hope that my noble and learned friend will be able to indicate at least a significant degree of sympathy with this and, if he cannot accept these precise words, that he will undertake to come back at Third Reading next week with something similar.

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Moved by

[Lord Harries of Pentregarth]

52A: Clause 28, page 16, line 31, leave out “0.05%” and insert “0.1013%”

[Lord Harries of Pentregarth]

My Lords, Amendment 52A concerns constituency spending limits. It proposes that the spending limit for constituencies, instead of being 0.05%, is 0.1013%. I think your Lordships are well aware that campaigning groups and charities have found the regulation regarding constituencies exceedingly burdensome and the Electoral Commission has found them unenforceable. We take very seriously all that the noble Baroness, Lady Williams, has said about ensuring that big money does not come in. Nevertheless, we think that the constituency limits are too low. Raising them by this percentage, which reflects the wider percentage of caps, would give that greater degree of freedom which the charities and campaigning groups would like. I beg to move.

[Baroness Hayter of Kentish Town]

My Lords, we have Amendment 62A in this group. In order that the notes in reply can be thrown away, I give notice that I will not speak to it. Essentially, the issues were covered in the earlier group. Nevertheless, we retain our concerns about constituency limits and would very much like to have voted on the previous amendment, but there we are. However, we support the other amendment.

[Lord Wallace of Tankerness]

My Lords, the noble and right reverend Lord, Lord Harries of Pentregarth, has tabled an amendment which would raise the constituency limits from being the equivalent of 0.05% of the maximum campaign expenditure limit applied to political parties to 0.1013%. This would amount to almost £20,000—specifically, £19,753.50. As the noble Baroness indicated, we have already debated the issues on constituency limits. I have explained the necessity of constituency limits being in place. Without these limits in place, a third party could otherwise be able to focus the entirety of its spending power on a small part of the United Kingdom, outspending even candidates and parties in that location. That point was forcefully made by my noble friends Lord Cormack and Lord Tyler. It is important that those limits are set at an appropriate level and it is our view that the noble Lord’s amendment would not be appropriate.

I will not repeat the earlier points. We wish to promote accountability and transparency. Constituency limits relate to campaigning for or against a particular party and instances where a campaign is intended, or may reasonably be regarded as intended, to support groups of candidates who might hold particular views or support particular policies. Where such campaigning is subject to a national limit, it is also right that it is subject to a proposed constituency limit but we believe that that must be at a proportionate level. The comments we heard in earlier debates suggest that the limit we have set is too generous. Indeed, even my noble friend Lord Tyler might think it. However, we think that the limit we have set is proportionate, especially as we have removed the distinction between spending throughout the regulated period and spending during the period between the dissolution and election day. The limits are intended to remove undue influence, particularly by those campaigners who can afford to spend significant amounts of money. I do not believe that the noble and right reverend Lord’s proposal would be proportionate. It could allow substantial sums of money—sums, as we have heard, such as £12,000, which is the candidate’s limit. To have a third-party sum that is almost half as much again does not appear to be proportionate. I therefore urge the noble Lord to withdraw his amendment.

[Lord Harries of Pentregarth]

My Lords, I can well appreciate the noble and learned Lord’s answer to that. The issue that is continually raised by the commission I chair is the rationale for always linking third-party spending and regulation to political-party spending and regulation. That has never really been fully set out. I take the point that the noble and learned Lord has made but I hope that he will take on board the fact that there is continuing concern among charities and campaigning groups about constituency spending, and not just the spending but the regulation for campaigning in constituencies. As the noble and learned Lord knows, there is also great concern in the Electoral Commission. Even if he is not prepared to consider this amendment again, will he look seriously at Amendment 52 in the name of the noble Lord, Lord Tyler? That would help significantly. If he is not sympathetic to my amendment, I hope that he might be able to look again at Amendment 52 and bring something back in relation to it. With that, I beg leave to withdraw the amendment.

Amendment 52A withdrawn.

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[Lord Hodgson of Astley Abbotts]

My Lords, I add my thanks to those of my noble friend Lord Tyler, particularly for Amendments 81 and 89, which concern nil returns. It was extraordinarily difficult to justify to people why nil returns should be made. I am also very grateful to my noble and learned friend on the Front Bench for his reassurance about the interaction with the coalition working returns that we discussed earlier.

[Lord Harries of Pentregarth]

My Lords, while I welcome the government amendments, I draw the attention of the House to the report of the Electoral Commission on Amendments 74 to 81, 83 to 97 and 99 to 106. It says that it supports the amendments,

“which go some way to simplify the donation reporting requirements”,

but it goes on to say:

“We regret that the Government has not adopted other recommendations we have made to reduce burdens on registered campaigners further without affecting transparency”.

It indicates what these are and ends:

“We continue to recommend these changes … we now recommend two further changes to reduce burdens further”.

Will the Minister, even in the short time between now and Third Reading, have further conversations with the Electoral Commission to see whether some of its recommendations could be accepted by the Government? From the point of view of the charities and campaigning groups there is still a huge amount of regulation to be carried with the Bill.

[Baroness Royall of Blaisdon]

My Lords, I, too, welcome the amendments that have been put forward by the Government, as far as they go, but as the noble and right reverend Lord, Lord Harries, said, there is more work to be done and it would be excellent if the Government would commit to come back at Third Reading with further amendments. This might seem a bit curmudgeonly, because the Government have received plaudits throughout our debate this afternoon for having moved a long way and tabled many amendments. However, if it had not been for the noble and right reverend Lord, Lord Harries, his commission, which has also received praise this afternoon, and the excellent work that it has done, the Bill would still be the exceedingly bad Bill that it was when it arrived in our House, precisely because it was rushed, did not have proper pre-legislative scrutiny and a great deal of it was not necessary. So while I thank the Government for having listened—and they have moved—I place on record that none of that would have happened without the noble and right reverend Lord, Lord Harries, and his fellow commissioners, who undertook the consultation that the Government themselves should have undertaken in the first place.

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[Baroness Williams of Crosby (LD)]

My Lords, I will not trespass on the delicate field of remuneration; but I would like to congratulate the Government on doing what they said they were going to do in putting this excellent review in the Bill.

I will add something that I can only say because of my parliamentary background. It would be immensely helpful if it could be understood that the person who conducts a review will, in the course of doing so, consult and listen to evidence from parliamentarians of all parties engaged in the campaign. They are likely, at grass-roots level, to know more than—with great respect—most leading lawyers or leading statesmen are likely to know. I very hope that it will be indicated to the person who conducts the review that he or she will be expected to invite evidence from people who are standing for Parliament and to consider the particular evidence they would like to bring to his or her attention.

[Lord Harries of Pentregarth]

It is a great relief to be able to welcome an amendment without any qualification at all; but it might be worth reminding ourselves why a review is so essential. First, with the existing PPERA, most charities were not even aware that they were regulated; it is only recently that they have come up against it. Therefore, there are fundamental problems with PPERA that have only just been revealed, and probably we have not yet had proper time to put them right.

Secondly, we have had a very short time to think about and amend the Bill before us. As we know, there was no pre-legislative scrutiny and no six-month period for consultation—which we recommended. We have had only a very short five-week period. The commission that I chair has always made it clear that the recommendations we put forward were only for the 2015 election, because we could not see the answer to a number of issues. In particular, the issue of coalition working keeps coming up and we have not yet found a satisfactory answer to that. Therefore, it is extremely good that the review body is going to be set up and that it will be in time to watch what happens with the election. It is going to have to report within a year, which of course meets the concern raised earlier by the noble Baroness about a sunset clause. It will now have to report within a year.

I have only one question: why have the Government decided that the review should be done by one person, rather than by a committee of Parliament?

[Lord Tyler]

I very much welcome the initiative that my noble friends have taken on this. It is vastly preferable to a sunset clause, precisely because it will start at the right moment. The timing is going to be critical, as the noble and right reverend Lord and my noble and learned friend said, because it will see right through the process of the next election and beyond. For that reason it is preferable to a sunset clause.

I, too, wonder whether the precise definition of a “person” is appropriate to this, but we will have to judge it on its results. Because my noble and learned friend has put into his amendment that a copy of the report will be laid before Parliament, the process thereon is extremely interesting. If major changes are required in this legislation, we will need to know quite quickly in order that we do not run into another period of rapid digestion, as we have on the Bill.

I particularly want to underline the point made by the noble and right reverend Lord, Lord Harries, just now. We should have this review of the 2000 Act. I take some responsibility, because I sit on a little, totally informal cross-party advisory group for the Electoral Commission. We were never forewarned of all the problems with the 2000 Act that have now come to light—not least, the coalition issue to which the noble Lord has just referred. It has been 13 years; the Electoral Commission never forewarned us of the difficulties it was encountering in giving appropriate advice to organisations that wished to campaign in this field. The Minister has taken elaborate and proper precautions to make sure that the situation never arises again, and I congratulate the Government on that.

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[Lord Horam]

My Lords, the noble Lord, Lord Hodgson, certainly raises a very important point, which I am glad we are discussing, even though it is rather a late hour to do so. We should have some reassurance from the horse’s mouth: he mentioned that the Government have made various points, he has made various points and he has talked to the Charity Commission—presumably the Charity Commission for England and Wales—and the Electoral Commission. However, I remind the House and read into the record that our briefing from the Electoral Commission says specifically, under the heading, “A joint introductory guide for charities”:

“We are committed to working with the UK’s three charity regulators”—

that is, the one for England and Wales, the one for Scotland and the one for Northern Ireland—

“to ensure that charities have clear and reliable guidance about how to comply with the rules. The Electoral Commission and Charity Commission for England and Wales will produce a joint introductory guide for charities that need to understand if their activities are covered by non-party campaigning rules”.

It goes on to make various sensible points about testing its guidance, about taking campaigners’ views into account and about supporting and advising campaigners. That is all part of a process of being available in a sensible and practical way to charities and to campaigners who are not charities—which is equally important.

Given that the Electoral Commission and the Charity Commission are, I believe, working along the same lines and intend to produce joint guidance for charities and non-charity campaigners, and given the clear commitments being made, I think that it would be unnecessary to put this provision in the Bill. Neither the Charity Commission nor the Electoral Commission has the slightest doubt that it has to produce something sensible in this area. As a result of the amendments that have now been made by my noble and learned friend, there is time to do that before September, before the new arrangements kick in. While I support the spirit of my noble friend’s amendment, I think that it is unnecessary in the light of the clear commitments which have been made.

[Lord Harries of Pentregarth]

I am happy to have added my name to the amendment in the name of the noble Lord, Lord Hodgson, for the reasons that he articulated so clearly. Reading through the guidance provided by the Charity Commission, both its general guidance and its specific guidance for election periods, it is clear that it covers the same kind of ground as the guidance of the Electoral Commission—it has to give the same kind of detailed guidance—and it must make total sense for the two bodies to produce some co-ordinated guidance. I do not think that we need any reminding that guidance for future elections will be crucial. There are so many complex areas here, and this whole subject has been so raised, that charities and campaigning groups will need to be crystal clear as to what part of their activity is covered by the regulation and what is not. I am therefore very happy to support the amendment.

[Lord Cormack]

I am glad to add my name to the amendment. I was delighted to hear what my noble friend Lord Horam had to say, but I see no harm in putting this provision into the Bill. I hope that when my noble and learned friend the Minister replies, it will not just be with honeyed words but with a promise of a taste of honey.

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[Lord Wallace of Tankerness]

My Lords, this is the final group of amendments. There has been much discussion about the regulated period for third parties and whether it is indeed of an appropriate length. Many have argued that 365 days is simply too long. The noble and right reverend Lord, Lord Harries of Pentregarth, proposed in Committee that the regulated period should be shortened to six months. As noble Lords know, there are different regulated periods for different elections. For the general election it is 365 days. For elections to the devolved Administrations and the European Parliament it is four months.

What is the purpose of a regulated period? It is the time before an election within which financial limits on expenditure apply and campaigning rules must be adhered to. It is the time during which expenditure incurred for campaigning purposes must be reported. Noble Lords will know that the Bill already reduces the regulated period for the next general election in 2015, so that it will commence on 23 May 2014, which is the day after the European elections. The reason for this is that the original regulated period would have been a combined period for the 2014 European parliamentary election and the 2015 general election and would have started on 23 January 2014.

However, as the Bill makes changes that would have affected third party campaigning in European parliamentary elections, it would not have been sensible to have those changes take effect in the midst of the regulated period. The two regulated periods are therefore separated by the Bill, so its changes will take effect for the first time only for the 2015 general election.

The Government have now tabled Amendment 128, and Amendments 131 to 134, to shorten further the regulated period for third parties. These amendments will shorten the regulated period so that it commences on 19 September 2014. That is the day after the Scottish independence referendum. Although this Bill does not affect campaigners in the referendum—it is important that we make that clear—for the avoidance of any doubt and to ensure that there is no confusion, the day after the referendum has been chosen as an appropriate start date for the regulated period.

This step has been taken in response to calls from third party campaigners that they will need further time to fully understand the implications of the Bill and to ensure that they know how to comply with its provisions in the run-up to the 2015 UK parliamentary general election. I should stress that we are not reducing the spending limits to take account of the shorter regulated period. Campaigners will still be able to spend up to £319,800 in England, up to £55,400 in Scotland, up to £44,000 in Wales and up to £30,800 in Northern Ireland on promoting the electoral success of parties or candidates.

However—and this is crucial, not least as a follow-on to the previous amendment—delaying the start of the regulated period will give campaigners crucial time. The move has been supported by the Electoral Commission, to give it and the Charity Commission sufficient time to produce clear and easy to follow guidance. As has already been said, we believe that it is essential that campaigners have the clarity they have been asking for, and shortening the regulated period will allow the Electoral Commission enough time to test the appropriateness and clarity of its guidance with the campaigners themselves.

I should make clear here that only the regulated period for third parties is being amended. The regulated period for political parties will still begin on 23 May 2014, as under the existing transitional provision in Clause 42. It is also the case that for future general elections the period of one year will apply—although, given that there is to be a review, no doubt people will wish to raise this then. I just make it clear that the reduced period is for the 2015 general election.

The Government have also tabled Amendments 126, 129 and 130. These are minor and technical amendments to improve the drafting of Clauses 41 and 42. I beg to move.

[Lord Harries of Pentregarth]

My Lords, I warmly welcome this shorter regulatory period for the 2015 election, for the reasons that the noble and learned Lord stated: it will enable the Electoral Commission to prepare the guidance to educate the people who will have to conform to it. However, I express the hope that in the review, the review body will look seriously at the recommendation of the commission which I chaired, that for third-party campaigners there should be a six-month period. This seven and a half-month period is absolutely right for this election but a six-month period should be reconsidered afterwards.

Perhaps I might end on one final point. We are all very much aware that this whole process has, towards the end, been extraordinarily compressed. Normally, the Government would listen first, bring forward amendments in Committee and then report those back on Report. We did not have any government amendments in Committee. The Government listened, and I am glad that they did, but this means that this Report stage has been a kind of compression of Committee and Report all in one. The implication of this is that I very much hope that the Minister will take seriously those amendments that we did not press to a vote, while hoping that he might come back at Third Reading having thought again. Because of this very compressed period, that would be a great help to the House.

[Baroness Royall of Blaisdon]

My Lords, following on immediately from what the noble and right reverend Lord was saying about this compressed period, I particularly hope that in view of what the noble Lord, Lord Tyler, said in withdrawing his Amendment 52 on constituency limits, the Government will bring that back at Third Reading. As I understand it, the noble Lord, Lord Tyler, believes that the Government made a commitment to do so. That was the basis on which he withdrew his amendment. I do not wish to have a discussion this evening but I hope that the noble and learned Lord will look at it.