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

Lord Tyler Excerpts

Tuesday 28th January 2014 Lords Chamber

[Lord Wallace of Saltaire (LD)]

My Lords, as noble Lords will recall, Amendment 1 was moved by the noble Lord, Lord Tyler, on Report in this House and agreed to by a majority of 18 votes.

Amendment 1 would extend the scope of the register to those who lobby special advisers, in addition to those who lobby Ministers and Permanent Secretaries. Our colleagues in the other place recognised the objective of the amendment and, indeed, expressed some sympathy with the motives of those who had supported it. They concluded, however, that the case had not been made to extend the scope in this way at present, but recognised that discussions regarding the inclusion of those who communicate with special advisers will continue. They therefore proposed what I believe is a pragmatic and constructive response to the noble Lord’s amendment. The amendments in lieu proposed by the other place would introduce a power for the Minister to amend the definition of consultant lobbying provided for by Clause 2 to, subsequently, and if necessary, include communications with special advisers. Such a power would enable Ministers to extend the scope as suggested if and when they are persuaded in this Government or the next of the case for doing so.

As I have observed, the other place was not persuaded that the case for such an extension had yet been made. That is because it recognises that the register is intended to complement the existing government transparency regime. Both systems—transparency and the register—are intended to enhance the transparency of the key decision-makers, the Ministers and Permanent Secretaries, and those who communicate with them. The other place confirmed this view that the Government’s focus on key decision-makers is appropriate and proportionate. We accept that lobbyists make communications to government other than directly to Ministers and Permanent Secretaries. Ultimately, however, it is for Ministers and Permanent Secretaries to be responsible for the decisions taken within their departments.

While special advisers may provide advice, they are not decision-makers. It is Ministers, not special advisers, who are ultimately responsible for the actions of their departments; and it is Permanent Secretaries who are the officers accountable to Parliament for the performance of those departments. It is therefore only right that Ministers and Permanent Secretaries—not special advisers—are the main focus of the meeting reporting system, and the main focus of the register.

Special advisers are defined by the Constitutional Reform and Governance Act 2010, which includes the requirement that they are a person,

“appointed to assist a Minister of the Crown after being selected for the appointment by that Minister personally”.

That Act also provides for a statutory code for special advisers that makes clear that they may not,

“(a) authorise the expenditure of public funds; (b) exercise any power in relation to the management of any part of the civil service of the State; (c) otherwise exercise any”,

statutory or prerogative power.

As that code makes clear, the employment of special advisers adds a political dimension to the advice and assistance available to Ministers. They are an additional resource for the Minister, providing assistance from a standpoint that is more politically committed and politically aware than is available from the permanent Civil Service. The Government do not, therefore, intend that communications with them be captured by the meeting reporting system, nor by the register.

The other place recognised that the amendment proposed by this House would dissociate the register from its main objective, which is to complement the existing system by extending the transparency we apply to decision-makers to those who seek to influence them. They agreed by a substantial majority of 53 that Lords Amendment 1 be disagreed with, and replaced by the proposed Amendments 1A and 1B. In so doing, they have proposed a constructive compromise that would allow the scope of the register to be expanded to capture communications with special advisers, if the case is that it should do so.

The amendments in lieu should assuage the concerns of those who have asked that we do not eliminate the possibility of expanding the scope if justified in the future. I hope therefore that noble Lords will reconsider their position, and recognise that the amendments in lieu represent the most pragmatic and proportionate approach to this matter at present. I beg to move.

[Lord Tyler (LD)]

My Lords, I am grateful to my noble friend Lord Wallace of Saltaire for his explanation of the position. I am delighted to see him back in his normal very active role on the Front Bench, and acknowledge immediately the efforts that he has made with my noble and learned friend Lord Wallace of Tankerness to find solutions to some of the problems with which we have all been grappling over what seems to be now many months, but certainly many weeks.

The government amendment in lieu precisely describes the situation we are now in. This House rightly insisted that better transparency arrangements should apply to meetings by lobbyists held with special advisers. Those arguments are well rehearsed, and I do not intend to repeat them. The amendment in lieu simply reflects the fact that there was no majority in the other place to reject out of hand the amendment we passed in your Lordships’ House. Liberal Democrat MPs would not vote to do that. Equally, the other part of the coalition has not yet been prepared to shine a light on spads’ activity at this stage. So Motion A accepts the principle that transparency for special advisers’ meetings is desirable, and there is clearly no practical problem in extending the transparency principle in this direction, or else it would have been spelt out in the amendments in lieu.

The Motion also accepts that the Commons does not desire this extension yet. It leaves the matter open until there is a government majority in the other place to switch on the provisions; I await that day with bated breath. It would obviously be helpful to hear from the opposition Front Bench whether the party opposite can commit categorically to switching on the transparency arrangements in the amendment, if and when Labour is in any way involved in the next Government.

However, the Liberal Democrat position is quite clear. We agree with the Prime Minister that,

“sunlight is the best disinfectant”.

We would introduce the pine scent of transparency to the work of spads right now; apparently, he does not want to do so quite yet. I shall support the amendment in lieu, and I thank my noble friends for working so hard behind the scenes to secure it.

--- Later in debate ---

This limited amendment makes it harder to abuse the electoral process, meeting the Government’s main objective, and makes it easier for campaigners to stay within the rules and to know that they are doing so. I beg to move.

[Lord Tyler]

My Lords, I regret the position that we seem to have reached now on constituency limits. Your Lordships’ House may recall that I proposed a very simple amendment on this issue in Committee and on Report. I suggested then that only election materials directed at electors or households in particular constituencies, or telephone calls to electors in those constituencies, should count under the specific constituency limit. That was very simple.

The Government argued that that approach was too simple and excluded too much activity, particularly the potential for handing out leaflets in a town square. The noble and right reverend Lord, Lord Harries, has been diligent in attempting to deal with that problem, but I think that in the process we have been sent round in a circle. Sending information to a household is an easy test, because it is easy to know where a household is and therefore in which constituency its occupants are likely to vote. However, handing out information in a public place is different, as has been indicated, because people move around and could be from all sorts of different constituencies.

In the amendment in the name of the noble and right reverend Lord, Lord Harries, we are faced with a further test: can it reasonably be inferred that the third party selected the relevant electors or households, or both, or otherwise distributed the material wholly or substantially to contact electors in the particular constituency or constituencies and not a wider section of the public? In other words, did the organisation, in doing what it was doing, mean to do it? That is quite a difficult question for anyone to answer, let alone the Electoral Commission. I am still not convinced by that and I am particularly not convinced about it in relation to election materials that are sent to households. It is perfectly clear that such materials would be constituency campaigning, and no extra test should need to be applied for such campaigning to count under a constituency limit. So this is a muddle.

The Bill as it stands says that,

“the effects of controlled expenditure are wholly or substantially confined to any particular constituencies or constituency if they have no significant effects in any other constituency or constituencies”.

I had hoped that the issue of so-called “significant effects” could be done away with—it is extremely difficult to adjudicate on that—but neither the amendment nor the Government’s position appears to do so. The amendment adds the additional test I referred to just now, and I certainly do not think that it helps in terms of clarity and transparency.

I want to put on record again my continuing concern that in raising the threshold for registration, which was welcome on a national basis, we have got ourselves into a further muddle on the application of constituency limits. This is a classic case of unintended consequences resulting from a late-stage concession.

Mr Andrew Lansley, the Leader of the Commons, put this very clearly in the other place just last week:

“Campaigners may now spend the entire constituency limit of £9,750 at any time during the regulated period, or just in the last few weeks before the election if they so wish. That makes it less restrictive and easier to comply with”.—[Official Report, Commons, 22/1/14; col. 352.]

What he did not acknowledge is that campaigners who are spending entirely in just one or two English constituencies could still spend up to just below that limit—£9,749.99—in each of the two constituencies and not even register because the threshold is £20,000.

A trade union, a maverick millionaire with an anti-European bee in his bonnet or, even, another group wanting to influence the outcome in a marginal constituency could spend serious money without anybody knowing until it was too late. So much for transparency and accountability. Under the radar, such intervention could take place without either the amount spent or who paid for it being disclosed. That remains a mistake, an unfortunate loophole weakening these measures in the Bill.

At Third Reading, I set out a simple way in which to improve the position so that those campaigning in one or two constituencies would have to register at £5,000 or, if that was thought to be too low, at least at a lower figure than the £9,750 spending limit. That would have made for the continuum that I described in that debate, where registration occurs at point X and the limit on spending occurs at point Y. The Electoral Commission, on whose advice we have to rely in matters of this sort, specifically advised that X and Y should not be in the same place, and I very much regret that the Ministers in both Houses have not been able to address that point.

These issues can really now only be dealt with in guidance from the Electoral Commission, and I wish it luck with that. As my noble and learned friend Lord Wallace of Tankerness said earlier, we look forward to some very substantial round-table discussions, and I hope I may be able to play a small part in them because I think this is an extremely important issue.

The introduction of a constituency limit on non-party expenditure is an extremely important principle, and really the most important measure in Part 2. I am sure Members of the other place, when they are faced with very considerable sums of money being invested in trying to unseat them, will agree with that. I welcome it for the fact that it is here in the Bill, even though I think there were two improvements that could still have been made to it. I believe those issues will now be central to the post-legislative review of the Bill after the 2015 election. I look forward to that review.

[Lord Cormack (Con)]

My Lords, this is a case of confusion worse confounded, so I am very much in sympathy with the points made by my noble friend Lord Tyler in that respect. I thank my noble and learned friend Lord Wallace of Tankerness. He has been exemplary in the way that he has sought to respond and consult, but he has been in a bit of a straitjacket for two reasons.

First, as has been said so often during the course of this Bill, if ever a Bill needed pre-legislative scrutiny it was this one, but it did not get it. That decision was taken probably at a pay grade above that of my noble and learned friend Lord Wallace of Tankerness, but it was a mistaken decision.

The other problem that we face, and here I make a plea to the Minister, is that we passed these amendments in this House last week and within 24 hours they were reversed in another place. That is no way to treat your Lordships’ House. There should have been wider consultation and discussion. Clearly, my noble and learned friend Lord Wallace of Tankerness had fruitful, although not totally successful, discussions with the noble and right reverend Lord, Lord Harries. For that we should all be grateful, because the noble and right reverend Lord did so much with his commission and in other ways to try to improve this Bill. However, those discussions, however well meant and however protracted, were not enough. There should have been a proper opportunity for real discussion before we had to face the answer from the other end of the corridor. This is no way to treat your Lordships’ House.

As far as this particular series of amendments is concerned, we now have to rely on those round-table discussions. I am glad that the Minister felt that that was a useful suggestion and am grateful to him for acting on it and discussing it with the Electoral Commission already. I hope that those discussions will take place and that they will take place soon, but that they will not be rushed, because this is an extremely complex and difficult situation.

I know very well why the Minister said what he said this afternoon, and I also understand the argument elegantly put by my noble friend Lord Tyler. This is complex. All of us who have stood for election to the other place, or indeed for election to local councils, know that the distribution of leaflets is an inexact science. When you are doing it outside a shopping centre or a railway station or other places where people congregate, you have no idea to whom you are giving the leaflets and which constituency they come from. You have a rough idea that most of them may come from your own constituency, but many of them will not.

Let us have these discussions. Let us hope that they are fruitful. Let us hope that they can build upon the imperfect base that this Bill provides for them. Therefore, let us move on this afternoon.

--- Later in debate ---

[Lord Harries of Pentregarth]

I was aware of the noble and learned Lord’s point, and I was going to come to it. I take that point—he said quite unequivocally that he did not expect campaigning groups to log all those small items—but the fact is that they are expected under the Bill to take staff costs into account. That is what the Bill states. If they are expected under the Bill to take staff costs into account, presumably they are expected in some way to provide a note of what those costs are. They have to go about that in one way or another, and that involves a lot of scrutinising of the cost of what they do and adding it up.

This is a bureaucratic nightmare. It is no accident that the Electoral Commission is reluctant to support the Bill on this particular issue. It is no wonder that political parties have resisted taking staff costs into their accounts for this very reason of complexity.

This amendment does not have any bearing on the situation about which some politicians have expressed concern, in which a third party may want to second staff to work for a party or a candidate. That is not a situation regulated by third-party rules. Such costs would either count towards a party’s spending limit or a candidate’s spending limit, depending on the timing and nature of the secondment. Ensuring appropriate enforcement, rather than changing the rules, is the appropriate response to such concerns.

This amendment does nothing to frustrate the Government’s purpose of trying to prevent big spenders from distorting elections through third-party campaigns, and it is one that matters very much to charities and campaigning groups, because of the regulatory burden. I beg to move.

[Lord Tyler]

My Lords, on this final group of Commons disagreements, I am much more at one with the noble and right reverend Lord, Lord Harries, and much more dispirited that the Government have not been able to move on this issue. Again, it does seem a relatively minor difference between what the noble and right reverend Lord has been suggesting and what my noble and learned friend has been saying about the way the Bill is intended to be explained and implemented by the Electoral Commission.

The noble and right reverend Lord, Lord Harries, and his assiduous commission originally suggested that no staff costs should be included in election expense returns submitted by non-party campaigners. I did not agree with that and I do not now, since some of those costs—for example, in relation to producing and distributing election material—are significant. I think we are all at one on that now, and they could be very significant in particular circumstances. Those costs are already regulated under the Labour Government’s Political Parties, Elections and Referendums Act 2000, and rightly so. Non-party organisations have had to account for those in both the 2005 and the 2010 general elections.

Staff costs in relation to canvassing could also be very relevant to election outcomes in particular circumstances. Clearly paying people to canvass in a way that could promote or procure the electoral success of a party or candidate is significant. The amendment therefore seeks to exclude staffing costs from consideration only when it comes to organising press conferences and rallies and in relation to transport, as the noble and right reverend Lord, Lord Harries, has said. I do not know if my noble and learned friend can give adequate reassurance now on those points. I heard what he said just now, but I hope he may be able to go into some greater detail about the guidance that will be given to campaigners. Perhaps he can say that despite what the Bill says, somehow the incidental costs of someone travelling to a rally or booking the room for a press conference will not be included. However, I do not see where the de minimis provision is in the Bill. How will the Electoral Commission guidance deal with this level of detailed accountancy and audit?

[Lord Rooker (Lab)]

On that point, bearing in mind that if people are campaigning there must be an opposing view, what is to stop a fourth party in an election demanding of the campaigning group all the detail of its expenditure, if there is nothing in the legislation to prevent it? There is no de minimis, as the noble Lord rightly says. What is to stop the trouble-maker who is opposed to the third party campaigning from forcing that issue on to the third-party group? There is nothing in the legislation. Surely guidance cannot deal with that.

[Lord Tyler]

I understand the point that the noble Lord is making, and I think he shares my anxiety that, at this very late stage, there is not a clear indication of how that might happen. As he will know better than me having contested even more elections than I have, and with greater success of course—I had a few at council level that were more successful—in the heat of a campaign it is going to be very difficult for any organisation to adjudicate on these matters, be it the Electoral Commission or anyone else. I am afraid that this is a fact of life. It is one of the reasons that I referred to some problems that will undoubtedly occur at the latter stage of an election campaign. I am not sure whether the noble Lord was in his usual place then.