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

Stephen Twigg Excerpts

Wednesday 9th October 2013 Commons Chamber

[Tom Brake]

Clause 26 sets out the test that third parties need to meet in order to incur controlled expenditure. There has been extensive comment from a number of bodies, such as charities and voluntary organisations, that the Bill will capture their ordinary campaigning activities. That was not the case. However, the Government gave an undertaking in Committee to revert to a test based on the wording of the existing legislation, which provides that controlled expenditure is only that

“which can reasonably be regarded as intended”

to promote or procure the electoral success of parties or candidates. The Government’s amendments meet that commitment.

I would like to thank the National Council for Voluntary Organisations, the Electoral Commission and others for the constructive discussion we have had in relation to the amendments. I accept that there is not total agreement on our amendments, but I know that the NCVO, for instance, is at least partially happy about the proposals we have come forward with.

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

The Deputy Leader of the House will have seen the letter today from Sir Stuart Etherington of NCVO, which states:

“Simply returning to the previous form of words does not solve the problem… In our view, the assurances given by ministers on the floor of the house that charities campaigning on policy issues will not be affected have not been met”.

[Tom Brake]

I am aware of that, but I am equally aware that Karl Wilding, the NCVO’s director of public policy, said yesterday that it is partially happy about what the Government have done and that we have made some progress. [Interruption.] Yes, I accept that it is partially happy, but it is worth remembering that one of the NCVO’s other concerns, as highlighted in its letter, is the PPERA legislation, which goes back to 2000, under the previous Government. It may be pertinent to remind the Labour party what the then Home Secretary, the right hon. Member for Blackburn (Mr Straw), said:

“In terms of the day-to-day non-campaigning part of their activity, third parties will not be caught by the provision but, if they seek to influence an election, which is the expenditure in question, our proposed arrangements are reasonable.”—[Official Report, 10 January 2000; Vol. 342, c. 41.]

That is very much our view. We are in the same place.

I know that the hon. Member for Liverpool, West Derby (Stephen Twigg) is new to his position, but I am sure that he will have been told in his briefing that, in response to a request from one of my right hon. Friends, the Government undertook to ensure that we reverted to the definition applied in the Political Parties, Elections and Referendums Act 2000. That is precisely what we have done.

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[Tom Brake]

I thank my hon. Friend for that point. That campaign was clearly run on the basis of PPERA, which is what we are reverting to. If the Royal British Legion said, “We are endorsing a candidate who has supported our position and encourage people to vote for them,” it would be caught. [Interruption.] Of course it would be caught, because it would be procuring the electoral success of a party or candidate. If it intended doing such a thing in the 2015 general election, it could choose to register as a non-party organisation and spend £390,000 across the country running that campaign. However, I question whether the Royal British Legion would want to be in such a position.

[Stephen Twigg]

rose—

[Tom Brake]

I will give way once more, then I need to make progress.

[Stephen Twigg]

Will the Minister respond to the specific point raised earlier by my hon. Friend the Member for Foyle (Mark Durkan) about the Royal British Legion campaign? In that case, what might apply in England, Wales and Scotland would for obvious reasons not apply in Northern Ireland.

[Tom Brake]

What applies in Northern Ireland could equally apply in Scotland, England or Wales. It would all depend on whether the Royal British Legion in Northern Ireland was in some way or other promoting or procuring the electoral success of a party or candidate. If it was doing that, it could be caught. If, for instance, it was promoting or procuring the electoral support of a number of candidates because a number had endorsed its message, that would also be deducted from its spend as a third-party organisation if it was promoting the electoral success of a party or candidate. As I said, I doubt whether the Royal British Legion would want to be in the position of promoting a party or candidate. That is not what it does.

[Tom Brake]

That is absolutely the point. I would make a stronger point. In all the conversations that I have had with charities, they have gone to great extremes to underline the fact that as charities they do not campaign for the electoral success of a party or candidate because the Charity Commission would stop their charitable status if they were seen to be campaigning politically. They do not do that, so the argument that the threshold or total national cap is being dropped or will in some way inhibit charities is not true.

Charities do not campaign for the electoral success of a party or candidate so the threshold would not apply and they would not need to keep details of controlled expenditure. [Interruption.] I find it hard to believe that the question is still being asked. Charities are not affected by the Bill because they do not campaign for electoral success.

The Government amendments meet the commitment we made in Committee, and I thank the organisations that we have worked with on the issue. We believe our amendments provide clarification and reassurance to charities, voluntary organisations, community groups and other campaigners that their normal engagement with public policy will not be subject to regulation as long as it cannot reasonably be regarded as intended to promote or procure the electoral success of a party or candidate.

By reverting to the existing terminology, amendment 32 achieves the aim of making the test for controlled expenditure one that has been in existence since 2000. I have seen continued comment from some organisations that the rules will prevent charities and other campaigners from making their views known. Those objections are based not on what is being done in the Bill but on the rules already set out in PPERA. Those rules have been in place for a number of elections, including the 2005 and 2010 general elections. I am sure that everyone on both sides would agree that, during those elections, charities and other campaigners were not prevented from engaging and influencing public policy.

[Stephen Twigg]

Why change it then?

[Tom Brake]

I will come to that. Others in the House will know from experience that campaigners make their views abundantly clear at election time, as they should.

In answer to the sedentary intervention from the hon. Member for Liverpool, West Derby, I should say that we are changing the controlled expenditure provisions because the Electoral Commission asked us to bring in line the controlled expenditure that applies to third- party organisations to that which applies to political parties. Do the Opposition believe that the current ability for an individual or group of organisations to spend a large amount in one parliamentary constituency is acceptable, or do they think that it should be controlled, as we do?

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[Tom Brake]

I am not aware of a list of defined organisations. If hon. Members look at the list of third-party organisations that registered in 2010 and 2005 they might be able to draw some conclusions about which annual conferences I have in mind.

As I have said, the Government believe that the amendments provide the clarity and reassurance that charities, voluntary organisations and the Electoral Commission have sought. We are aware that campaigners will want to understand how to comply with the provisions of the regulatory regime as amended by the Bill. Just as it has for previous elections, the independent regulator, the Electoral Commission, will develop and produce guidance to inform campaigners what expenditure it is likely to consider to be regulated or not regulated. The Government stand ready to support this work.

Amendment 101, tabled by the hon. Member for Nottingham North (Mr Allen), seeks, along broadly similar lines to Government amendment 32, to revise the definition of “for election purposes” to be activity which can reasonably be regarded as promoting or procuring the success of a party or candidate. However, the amendment would also introduce a new primary purpose test, which the Government cannot support. Such a test would be likely to create greater regulatory uncertainty and an obvious avenue for avoidance activity that could fatally undermine these rules, which are supported in principle by the hon. Gentleman’s party.

The concerns of campaigners and the Electoral Commission on the introduction of the draft Bill was that the revised language was untested and caused uncertainty. Our purpose in reverting to the original PPERA test is to address those concerns by reintroducing a test with which the commission and campaigners are familiar, and on which the commission has existing guidance and experience. Introducing a new and untested primary purpose test would completely undermine those benefits. Rather than having the clear test of whether the expenditure can be reasonably regarded as intended to promote electoral success there would be two tests: can it be so regarded and is it also the primary purpose? The opportunity for uncertainty and legal challenge would only be increased by the following questions. What is the primary purpose of your campaign? Is it to promote the issue or to promote those who support your issue? That is an additional test which does nothing to provide the clarity that campaigners say they want.

Perhaps more damaging is the opportunity for avoidance. The primary purpose of an environmental organisation’s advertising campaign might be claimed to be to recruit new members and encourage donations, but it might also urge support for its preferred party. It may be said that the primary purpose is to protect animal welfare, but that may be done only by encouraging support for particular candidates. Those are activities that are and ought to be regulated. The primary purpose test would drive a coach and horses through the legislation. Groups carrying out these activities have previously undertaken campaigning as recognised third parties, which is perfectly appropriate: they can campaign without restrictions. Under the hon. Gentleman’s amendment, however, all could be potentially excluded from registration. The Government have responded to concerns from the Electoral Commission and other groups that the test for controlled expenditure needs to be clear. The amendment would introduce unwanted uncertainty for campaigners.

The amendment would also create a loophole in the law that third parties could use as an avenue for avoidance and that would undermine the regulatory regime. That is not just my or the Government’s view. The Electoral Commission has expressed concerns that the amendment would introduce a new subjective element test which could lead to significant regulatory difficulty. It has also stated that it does not support an exemption for charities from these rules. I urge the hon. Gentleman not to press his amendment.

[Stephen Twigg]

May I first put on record my thanks to my hon. Friend the Member for Caerphilly (Wayne David) and the hon. Member for Norwich North (Miss Smith), who, along with my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith), have led on the Bill until now? I also welcome to his post the Minister of State, Cabinet Office, the right hon. Member for Tunbridge Wells (Greg Clark), whom I will be shadowing in my new role.

I have heard very little today to change the view I held before the debate started that part 2 of the Bill is little more than a gag on charities and campaigners which, as hon. Members of all parties have said, both today and during the Bill’s earlier stages, will have a chilling effect on our national political debate. Earlier my hon. Friend the Member for Caerphilly reminded the House that the Bill underwent no pre-legislative scrutiny, and doesn’t it show? Given that it was published just before the summer recess, it is to the particular credit of the Political and Constitutional Reform Committee, chaired by my hon. Friend the Member for Nottingham North (Mr Allen), that it was able to give the Bill a degree of scrutiny and table a number of constructive amendments in September and today. What we are left with from the Government is a half-baked set of proposals that pose a real danger of causing more harm than good. It is clear from the widespread concerns raised by charities and campaigning organisations that the lack of consultation and full scrutiny will limit their activities in practice—not in furthering political objectives, but simply in meeting their own charitable objectives.

I listened very carefully to the Deputy Leader of the House’s speeches on this and the previous group of amendments. Nothing that he said has changed the sense I had in preparing for today’s debate that part 2 is a solution in search of a problem.

As the Minister has rightly reminded us, the previous Labour Government introduced a cap on third-party spending, because we do not want to go down the American route of unaccountable organisations spending vast sums of money. We introduced the cap and have no objection to a tough cap on third-party spending. However, the big money in British politics is not third-party spending but spending by the political parties. At the last election, political parties spent 10 times more than third parties. If the Government were serious—[Interruption.] The Leader of the House heckles me from a sedentary position—I cannot quite hear what he is saying—but if he and the Conservative party in particular are serious, why do they not confront their reliance on a tiny number of wealthy donors from the City of London? There is nothing on that in the Bill, which is supposedly about getting the big money out of politics.

In the 2010 general election, political parties nationally spent £31 million; third-party campaigners spent £3 million. The biggest third-party expenditure was 4% of the £17 million spent by the Conservative party, which spent the same as all the other parties and all the third parties added together. Let us be clear: if the Government were serious about taking big money out of politics, they would consider ideas such as a reduction in the overall expenditure cap for political parties during election years and the introduction of a £5,000 cap on donations to political parties.

[Tom Brake]

Will the hon. Gentleman give way?

[Stephen Twigg]

I will give way when I have made this point. This Government—[Interruption.] Do I get a permanent commentary on my speeches from the Leader of the House? I will get used to it. The Government have wasted an opportunity to tackle the real problem of big money in politics, and thereby ripped up a cross-party approach to party political funding.

[Tom Brake]

The hon. Gentleman will know that no agreement has been reached on party funding, but the Liberal Democrats would clearly welcome one. The Committee on Standards in Public Life has said that the overall controlled expenditure cap is generous, but does the Labour party believe that it should be reduced or that it is set at the right level?

[Stephen Twigg]

I will come to that, but I am not aware of a problem. When an hon. Friend intervened, we did not get an answer from the Minister on whether there is an example in practice of the limit being too high. However, the Opposition do not have a closed mind on a proper cross-party, evidence-based debate on the matter. We do not believe the Government have done that.

[John Pugh]

One thing that puzzles me is that, during previous debates on electoral legislation in the House, Labour Backbenchers pleaded time and again with the then Labour Government to do something about expenditure in marginal constituencies—Ashcroft money. Some of them are no longer Members of the House. Why did the Labour Government not do anything?

[Stephen Twigg]

The hon. Gentleman moves the debate to party political spending, which is not addressed in the Bill. I would happily work with him and his colleagues to address party political funding—I would be delighted to do so. Perhaps we can pursue that beyond today’s debate.

In Committee, the Minister, who has led for the Government today, promised

“to ensure that, on Report, the fundamental concern of charities over the confusion that they say the Government have introduced into the definition of election materials and election purposes will be addressed.”—[Official Report, 10 September 2013; Vol. 567, c. 862.]

In reality, the Government amendments simply fail to fulfil his promise.

I refer the House to the legal opinion of Ros Baston, who has been working with a number of third sector organisations. Her legal opinion, which is one of a number of which the Minister will be aware, demonstrates why we need far more scrutiny and consideration of part 2. It states:

“Issues-based campaigning will continue to be covered by regulation. It appears that the government considers that removing the previous reference to ‘enhancing the standing’ of parties or candidates has a significant effect on the scope of what is covered…In my view, it does not…The natural meaning of ‘promote’ is to enhance the standing of, or make people think better of, something or someone…The natural construction, therefore, is that issues-based campaigning will be covered where it can be reasonably regarded as intended to encourage voters to look more favourably at candidates or parties who do or don’t support particular policies, as well as support for a specific party or candidates. This is primarily an objective test, and, in simple terms, looks at the likely effect of the activity.”

The Minister spoke of intent, but Ros Baston asks us to look at the likely effect of the activity. If an activity is likely to make people think better of parties or candidates who support something, it might be covered by the Bill, even if there are reasons for it such as awareness-raising—the hon. Member for Cheltenham (Martin Horwood) has made that point.

Ros Baston also states:

“Campaigns could fall within regulation if they…promote policies which, for whatever reason, are associated with one or more political parties or candidates”

and not others

“such as housing, welfare, a referendum on EU membership, wind farms or HS2”

and

“use MPs or candidates as active advocates of their cause”.

She continues:

“I do not consider it sustainable to argue that the campaign is not hoping that people or parties sympathetic to its cause are elected. Therefore, when it undertakes public awareness activity in the run-up to elections, it may well at some level intend to improve the chances of election for those who support their cause as well as to encourage others to join the campaign. There is, after all, no requirement in the Bill or the proposed amendments for the activity to be directly or obviously partisan, or for candidates to be named.”

The opinion goes on:

“The effect of the Bill remains that more charities and low spending campaigners will be subject to the enhanced and much more onerous restrictions. This is because the range of activities covered will increase”—

that is why it is not simply the same as the current legislation—

“and the thresholds for registration will decrease to just £5,000 in England and £2,000 in Scotland, Wales and Northern Ireland”.

We will discuss those thresholds under the next group. Furthermore, it states that the additional

“limit on spending in individual constituencies could mean that a single joint campaign on a specific issue in one area could result in further spending—local or national—being unlawful.”

Ros Baston’s final point is that the

“amendments make two changes which are of concern to campaigning organisations.”

Those relate to “market research and advertising” and to

“the definition of a ‘section of the public’, and the removal of the exclusion for material sent to ‘relevant supporters’”.

She states:

“It remains unclear as to whether the costs for research which is used in publications are included, and the government has not excluded staff costs (which are excluded for political parties). It also remains very probable that many political blogs will be covered notwithstanding the amendments. This could lead to a bizarre situation where political parties would not have to account for spending on certain types of market research, but that non-party campaigners would have to do so.”

I do not want my entire speech to be made up of the opinion of Ros Baston, but I will give one final quotation because it is an interesting and forceful opinion:

“The drafting is so vague that campaigns will have to consider whether market research will be caught, regardless of whether the results are used to produce material available to the public or to target particular members of the public. Further, there is no requirement for the research to actually be used in practice at all.”

[John Thurso]

I listened to the whole of the hon. Gentleman’s point about the legal advice because I wanted to hear exactly where it was going. Leaving aside the issues that do not relate to this group of amendments, does he agree that the amendments will take the definition back to that in the Political Parties, Elections and Referendum Act 2000, which is largely what I sought to do in Committee? The opinion of Ros Baston, which is full of conditionals such as coulds, mights and subjunctives, is a commentary on the wording of the 2000 Act. Should we not take into account what happened in 2005 and 2010, because that would show what is actually happening?

[Stephen Twigg]

I pay tribute to the hon. Gentleman, who attempted to improve this appalling Bill in Committee. However, as is made clear in the extensive quotation that I gave from Ros Baston’s opinion, she does not accept his point that the amendments simply restore the status quo because of the other changes that we will discuss later. We are merely scratching the surface of the changes that the Government are proposing.

[Mr Lammy]

Is not the point that if senior counsel extensively examines legislation and suggests that big gaps and vacuums exist within it, there will be litigation? For the third sector, that means that money that people have raised will go to lawyers and not towards the causes. That is serious. The purpose of the legislation must therefore be agreed across the House. If senior barristers are arguing against the proposals, it suggests that much litigation will follow.

[Stephen Twigg]

My right hon. Friend is absolutely right that one risk is that the Bill will result in litigation and a shift in the use of moneys that charities would otherwise use to fulfil their charitable objectives. However, I think that the situation might be worse. As I have said, nothing that I have heard today has changed my view, which has been expressed by other Labour Front Benchers, that many organisations will be gagged because they will simply stop their campaigning work owing to their fears about the legislation. [Interruption.] The Leader of the House and the Deputy Leader of the House can shake their heads, but that is what organisations fear. That is deeply unhealthy for our democracy.

In conclusion, will the Government amendments mean that issue-based campaigning will be excluded from the regulations? From Ros Baston and other lawyers it is an unequivocal “no”. Secondly, and crucial to today’s discussion, will the amendments make any significant changes to the categories of activities to be covered by regulation? Ros Baston finds that the changes will not improve the clarity of proposed regulation, and indeed are likely to result in new uncertainties. In other words, instead of making progress, the Government amendments risk making a bad situation even worse.

We have already heard about the National Council for Voluntary Organisations, which the Deputy Leader of the House said was partially happy. I invite colleagues to read the letter, dated today, from Sir Stuart Etherington, chief executive of the NCVO. He states:

“The Leader of the House suggests that at both the 2005 and 2010 election this wording has not prevented charities and voluntary organisations from campaigning and influencing policy…The Leader misses an important point. At previous elections the definition of controlled expenditure only applied to ‘election material’ (a much narrower category of activity) and expenditure thresholds were set at reasonable and workable levels. The Bill in its current form has significantly expanded the list of activities, and considerably lowered the threshold. The overall effect will therefore be that more charities and voluntary organisations will be subject to the enhanced and much more onerous rules.”

[Tom Brake]

I am afraid that the phrase I have repeated many times will get repeated again. Does the hon. Gentleman acknowledge that charities and voluntary organisations do not campaign for the electoral success of a party or candidates, and therefore will not be caught by controlled expenditure?

[Stephen Twigg]

If that is the case, why are we having this conversation and debate? If there is no issue, why have the Government brought this Bill before the House, unless there is something about which they are concerned?

As others have said, there is a real risk of a chilling effect on our national debate given the timing and rush of this Bill. The Minister has acknowledged that the Government are in a rush to get the legislation in place for the 2015 general election, and inevitably people will think that they are trying to insulate their own record, MPs and candidates from legitimate democratic criticism. A number of high-profile campaigns could have been stymied by the legislation, such as that run by the National Union of Students in 2010 on tuition fees, the equal marriage campaign by Stonewall, or, as many Members have said, the Royal British Legion military covenant campaign.

At a time when trust in politics is at an all-time low, why are the Government bringing forward a measure that could restrict the one part of our politics that is doing a good job of engaging people? As well as having a chilling effect on debate, the Bill could also allow this Government, and future Governments, to escape scrutiny on their record and policies. To pluck an example of interest to the Liberal Democrats, might it stop the National Union of Students from holding them to account for how they voted on tuition fees, stop organisations such as the excellent Family and Childcare Trust from highlighting how the Government have driven up the cost of child care for working families, or stop the Royal College of Nursing from warning the public about the impact of Government health policies?

The Royal British Legion was mentioned earlier in the debate, and its circular makes an incredibly powerful case about the weakness of the Government amendment. The Royal British Legion remains

“unconvinced that legitimate awareness-raising activities won’t be captured by the revised definition”.

The Electoral Commission’s own briefing confirms those concerns:

“activity does not have to be ‘party political’ for its costs to be regulated.”

Is it really the Government’s intention for the excellent work of organisations such as the Royal British Legion to be curtailed because of this hastily thrown together Bill? Surely it is not. Had they undertaken proper pre-legislative scrutiny—a case made powerfully by the Political and Constitutional Reform Committee—they would have discovered the problems that this clause and this part of the Bill will create.

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[Mr Tom Harris]

Each member of the EC having to monitor 50 constituencies is a breathtaking statistic. I hope my hon. Friend will also mention that that is not just for a four-week period, but for a year. In one year out of every five, those 12 people will have to do a job that cannot be done.

[Stephen Twigg]

My hon. Friend is absolutely right. My recollection is that it was not 12 people, but six, so they would actually have to monitor more than 100 constituencies each for a year.

A joint statement from the NCVO and the Association of Chief Executives of Voluntary Organisations states that the Government’s commitment to address the legitimate concerns of many charities remains welcome, but that the proposed amendments do not go far enough:

“Legal advice provided to NCVO indicates that the proposed amendments put forward by the government will mean that much campaigning activity by charities and other voluntary groups will still be covered by this excessively bureaucratic and burdensome regime.”

Sir Stephen Bubb—[Interruption.] There seems to be some dissent toward Sir Stephen on the Liberal Democrat Benches. Sir Stephen Bubb, chief executive of ACEVO, said:

“The government is clearly keen to show it is listening to civil society, but these amendments don’t prevent the Bill curbing freedom of speech around elections. The Bill greatly increases bureaucracy for civil society groups in the year before an election, by halving the spending thresholds above which organisations have to register with the Electoral Commission. It also drastically restricts civil society’s spending on public campaigns in election years. The public wants legislation that makes politics and corporate lobbying more transparent. Instead this Bill makes almost no change to lobbying rules while punishing civil society for a loss of trust in politics that is not its fault. Publishing these amendments today leaves 2 working days for civil society to consider them before they are debated in the Commons. This rushed timeframe is an object lesson in poor law-making, and will only necessitate further damage-limiting amendments after the next debates.”

I referred earlier to the important work of the Political and Constitutional Reform Committee, under the excellent chairmanship of my hon. Friend the Member for Nottingham North. Our view, which I have expressed, is that the Government amendments tabled today fail completely to meet Ministers’ promises in Committee. For that reason, we will support my hon. Friend’s amendment 101. We believe that the Government need to reconsider this whole issue and that the definition in their amendment needs to be tested widely and consulted on. Our view is that amendment 101 provides a better basis for reform than the dog’s breakfast put forward by the Government.

The Prime Minister used to talk about the big society and about how we could strengthen the role of the voluntary and charitable sector. In part 2, we have a direct assault on that sector and a sinister gag on legitimate democratic activity. It is a solution in search of a problem. Even at this late stage, I urge the Government to go back to the drawing board and work on a cross-party basis with the Select Committees and the voluntary sector. We believe that amendment 101 provides a basis on which to do that, and I urge Members on both sides of the House to support it.

[Stephen McPartland (Stevenage) (Con)]

It is a great pleasure to be given the opportunity to contribute to the debate. I welcome Government amendment 32, with its reference to expenditure that could

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

because it demonstrates that the Government listened in Committee. On Second Reading and in Committee, we discussed the concern of charitable organisations that they would be captured by a wide-ranging definition, leading to their suffering the sort of litigation that we heard about earlier. I would be interested to hear what such litigation could be. As I understand the Bill, it would not change what charities have been able to do for the past three elections. My view is simply that we are moving back towards the definition in the Political Parties, Elections and Referendums Act 2000, since when there have been three general elections.