Political Parties and Elections Bill

Public Bill Committee, 4 November 2008.

Frank Cook (Labour, Stockton North)

Before we begin, I have a few points to make. Members may, if they wish, remove their jackets during the sittings. Will they ensure that their mobile phones and pagers are turned off or at least switched to silent running during our proceedings? I would hate interruptions. I will have enough difficulty concentrating on the detail myself, without there being distractions. I remind the Committee that there is a money resolution in connection with the Bill, copies of which are available in the room. Adequate notice should be given of amendments and, to be eligible for selection at a Tuesday sitting, they must be tabled by the rise of the House on the previous Thursday. To be eligible for selection at a Thursday sitting, they must be tabled by the previous Monday. As a general rule, I and my fellow Chairmen do not intend to call starred amendments.

Not everyone is familiar with the process of taking oral evidence in Public Bill Committees, so it might help if I explain briefly what is proposed so that we can all be clear about it, especially me. The Committee will be asked first to consider the programme motion on the amendment paper for which debate is limited to half an hour. We shall then consider a motion to report written evidence, followed by a motion to permit the Committee to deliberate in private in advance of the oral evidence sessions, which I hope that we can take formally to save time.

Assuming that the second motion has been agreed, the Committee will then move into private session. After it has deliberated, witnesses and members of the public will be invited back into the room and our oral evidence session will commence. That should be at about 10.30. We shall not be starting the evidence session before then. If the Committee agrees to the programme motion, it will hear oral evidence today and on Thursday, and revert to the more familiar proceedings of clause-by-clause scrutiny next week. I call the Minister to move the programme motion.

Jonathan Djanogly (Conservative, Huntingdon)

I wish to say a few words about the programme motion. The sub-committee’s deliberations were a somewhat tortuous affair. We appreciate that a number of difficulties and irregularities involved in the process made it complicated and, as you will appreciate, Mr. Cook, we put our various protests on the record. We have lingering doubts about the timetable, even though we do not intend to oppose the motion. We are worried whether there will be adequate time for the tabling of amendments. I accept that there will be several hours after the close of the final evidence session on Thursday before the rise of the House, as you said in your opening remarks, when we shall have time to table amendments. Having said that, we would have preferred a longer period in which to contemplate amendments, rather than just a few hours following the end of the evidential process. On that basis, we are reserving our position on the timetable to some extent and hope, as discussed in a sub-committee, that the Government will be open-minded if it seems that more time is required.

Alan Reid (Liberal Democrat, Argyll and Bute)

I welcome you to the Chair this morning, Mr. Cook. I have one point about the programme motion, echoing what has just been said. If, following the evidence sitting on the Thursday, we have only a few hours or, if the House rises early, no time at all to submit amendments, I ask you and your fellow Chairs, Mr. Cook, to take cognisance of that and perhaps accept starred amendments, if they arise as a result of evidence that we take on the Thursday and they ought to be debated on the following Tuesday.

Frank Cook (Labour, Stockton North)

We shall bear that in mind.

Michael Wills (Labour, North Swindon)

I shall respond briefly to those comments. As reference has been made to the informal proceedings, in keeping with the spirit in which the Government approached the informal proceedings setting the programme motion, we were determined to do everything we possibly could to accommodate the timetable of Opposition spokespeople. They had a certain amount of confusion about their diaries and we did everything that we could to accommodate them. We shall continue in that spirit. If there is a need to find further time, we shall do everything possible. The subject is important and we want to debate it properly. We would not want the Opposition to be constrained by a lack of time for tabling amendments, if we can possibly avoid it.

Frank Cook (Labour, Stockton North)

Thank you. I am sure that is helpful.

Andrew Tyrie (Conservative, Chichester)

I did not participate in the informal sub-committee, so I am not privy to any of those alleged confusions, difficulties or complexities, but it strikes me that the crucial issue, if we are to make sense of the evidence sittings, is to be given enough time to think through how to translate the evidence that we have had into amendments. I am grateful, Mr. Cook, that you will bear starred amendments in mind. It would be hugely helpful if you could give us a feel later in our proceedings, but before Thursday, what your attitude will be on the specific issue of amendments derived from evidence that may have been collected only in the hours prior to what at the moment is the deadline.

Frank Cook (Labour, Stockton North)

Like you, Mr. Tyrie, I was not able to attend the pre-meeting, but I am reliably informed that matters have been discussed in considerable detail. It is a matter for the usual channels to sort out on the way through. There is nothing cast in stone or iron here. I am sure that, with the Government’s intention to be extremely reasonable and rational, as we heard, everyone will have every chance.

Pete Wishart (Scottish National Party, Perth and North Perthshire)

I, too, welcome you to the Chair, Mr. Cook. May I ask, through you, who was invited to the sub-committee last week? How are the invitations delivered? Who from the Committee qualifies to be part of that sub-group?

Frank Cook (Labour, Stockton North)

Those who are thought necessary to conduct the proceedings are invited specifically by Mr. Speaker. I am not in a position to question Mr. Speaker from this lowly seat.

Frank Cook (Labour, Stockton North)

Copies of any memoranda received by the Committee will be made available in the Committee Room.

Frank Cook (Labour, Stockton North)

We shall now hear the oral evidence from Ministers and officials from the Ministry of Justice. Good morning, I welcome you all here today. For the record, perhaps it would be useful if you would each introduce yourselves to the Committee.

Frank Cook (Labour, Stockton North)

Thank you. Before calling the first Member to ask a question, I should like to remind all members of the Committee that questions should be limited to matters within the scope of the Bill. I call Jonathan Djanogly.

Jonathan Djanogly (Conservative, Huntingdon)

Thank you Mr. Cook. I look forward to serving under the chairmanship of yourself and Sir Nicholas over the coming weeks.

Secretary of State, would you agree that the purpose of this Bill is to deliver confidence in our electoral system?

Jonathan Djanogly (Conservative, Huntingdon)

Presumably, that ultimately goes to confidence in the electoral system?

Jonathan Djanogly (Conservative, Huntingdon)

There is indeed, Secretary of State. Given that the vast majority of alleged, or real, crimes in relation to elections occur in respect of electoral fraud—I believe that there were some 450 incidents of reported alleged crimes, of which only 40 were prosecuted in the event—why does the Bill not deal with that issue at all?

Jonathan Djanogly (Conservative, Huntingdon)

The Conservative party has maintained that that should be the main focus of the Bill for the past three years. I shall move on to the next question. How many incidents of or investigations into malpractice relating to party funding have there been over the past five years?

Jonathan Djanogly (Conservative, Huntingdon)

I totally accept that the Hayden Phillips discussions were on party funding. What is not the case is that the Bill is anything to do with the Hayden Phillips discussions. In fact, you yourself said on Second Reading that we have moved beyond Hayden Phillips and that you were looking for another way to move forward. Returning to my question, how many incidents have there been of prosecutions, or even investigations, over the past five years?

Jonathan Djanogly (Conservative, Huntingdon)

Is that not central to the Bill?

Jonathan Djanogly (Conservative, Huntingdon)

You said that the Bill relates to Hayden Phillips, which is not exactly what you said on Second Reading.

Jonathan Djanogly (Conservative, Huntingdon)

We are well post-Hayden Phillips. However, given that, I find your further point rather disturbing. You said that the figures relating to the prosecutions for party funding misdemeanours are not known to you, and I think you said that they were not relevant to our discussions. On the basis of what you said, which was that this should be about party funding rather than electoral fraud, the figures are directly relevant and the core of what the Bill is about. That is what you are seriously maintaining the Bill should be dealing with, yet you cannot provide the figures.

David Howarth (Liberal Democrat, Cambridge)

It is again very pleasurable to sit under your chairmanship, Mr. Cook.

Unlike Jonathan Djanogly, I agree with you, Secretary of State, that the heart of this Bill is donations and expenditure. The relationship of the Bill with the Hayden Phillips’ compromise, which itself draws on what the Select Committee did, is at the heart of the matter. Can you talk about the Hayden Phillips proposals? Do you agree with me that it is disappointing that, as far as I can see, you are not in a position to submit anything of the major proposals that Hayden Phillips put forward? Those proposals were: a global cap on spending to cover the entire electoral cycle at national level; a donation cap of £50,000; and a way of dealing with the vexed issue of the union relationship with the Labour party, which would separate out donations on the one hand and affiliations on the other.

David Howarth (Liberal Democrat, Cambridge)

The question now is what to do, given that the talks broke down then. Notwithstanding what you said about consensus, two things could have been done: to propose at least what Hayden Phillips proposed, and to challenge parties that were against it to explain why they were against it. One point of view is that at that point a different consensus would break out; a consensus backed by where the public is rather than where the parties are.

Secondly, you talked about the political climate. Is it not possible to say now that the political climate has changed again? We have had a new round of scandals, of possible donation scandals and so on. We have also seen the collapse of the financial sector of the economy from where a lot of donations previously came. Would now not be a good time at least to try to reopen the talks, so instead of having a tiny Bill—I shall come on to its proposals in a minute—that will do virtually nothing about such issues, we do something more comprehensive; more what the public want?

David Howarth (Liberal Democrat, Cambridge)

But the amount of state funding that might be required should be revisited in light of what has happened in the US, with Barack Obama raising hundreds of millions of dollars in small amounts in a place where there is a donation cap. It might be worth going back to the talks with the question of how much state funding there should be and how long it would need to last to get us into a completely different system, where parties supported themselves out of small donations.

Finally, may I come to what is in the Bill with regard to the return of triggering? That is the only proposal that tries to deal with those issues, and to a lot of people it seems an inadequate tool. That is because, first, it deals only with candidate spending and not with the heart of the matter, which is party spending outside elections. Parties can continue to pour money into particular constituencies, and as long as they do not refer to a particular candidate’s campaign, that spending will not be covered and therefore there is no change from the current system.

Secondly, when we had triggering previously, it led to a situation where agents would send threatening letters to one another, no case would ever go to court and no one really knew whose election expenses had started. It did not work and was generally considered unenforceable. Instead of bringing back the triggering mechanism, would it not be better to have something like the Hayden Phillips proposal, but targeted at local party spending? We could have the Hayden Phillips proposal for a national cap and, underneath that, a local cap throughout the electoral cycle. That would catch all this, targeting local spending outside elections.

Andrew Tyrie (Conservative, Chichester)

A moment ago, you referred to controls over expenditure and the Hayden Phillips process. With your permission, Mr. Cook, I will address only the party funding issues now and come back to triggering after my party spokesperson has contributed, as I think we were originally going to do and if I am able to catch your eye.

Frank Cook (Labour, Stockton North)

Yes.

Andrew Tyrie (Conservative, Chichester)

On the party funding issues, is it the case that expenditure caps form part of Hayden Phillips’ terms of reference?

Andrew Tyrie (Conservative, Chichester)

I would just like an answer to the question.

Andrew Tyrie (Conservative, Chichester)

Perhaps you would like to read them out to us.

Andrew Tyrie (Conservative, Chichester)

I do not need any more. All I am really after—

Andrew Tyrie (Conservative, Chichester)

I would just like you to have another go at finding the reference to expenditure in Hayden Phillips’ terms of reference. I have them in front of me. I am not going to read them out as you have done, but I would like you to identify the place in the terms of reference where expenditure is referred to.

Andrew Tyrie (Conservative, Chichester)

The terms of reference actually say

“to examine the case for state funding of political parties.”

James Duddridge (Conservative, Rochford and Southend East)

On a point of order, Mr. Cook. I seek your guidance on whether we should encourage witnesses to give evidence on things that have already been written, which we could have read before and which are not actually the witness’ own words. We want the people giving evidence to give evidence, not to give other people’s evidence. I seek your advice on what instruction we should give to those called before the Committee.

Frank Cook (Labour, Stockton North)

Thank you for your question. It is fairly plain to me that a question was posed to the Secretary of State and that he is giving an answer. If that means referring to other opinions and statements by other recognised agencies, the questioner must be prepared to accept the explanation being put on offer. The Secretary of State may finish.

Andrew Tyrie (Conservative, Chichester)

To clarify matters, Secretary of State, will you go back to where you felt that I was being theological? You seemed to break off into a series of sub-clauses.

Andrew Tyrie (Conservative, Chichester)

Were you participating in the talks at the time that the matter was discussed with Hayden Phillips?

Andrew Tyrie (Conservative, Chichester)

Will you just answer the question: yes or no? It was a very clear question.

Andrew Tyrie (Conservative, Chichester)

Were you at the meeting at which the leader of my party and the then Prime Minister discussed the terms of reference?

Andrew Tyrie (Conservative, Chichester)

I was at that meeting. I attended every meeting. Do you think it relevant that the then Prime Minister made it clear that the purpose of the talks was to examine state funding, caps on donations and transparency? If you read the terms of reference, you will find that they exactly match the wishes of the Prime Minister and the Leader of the Opposition in that respect. Do you accept that there has been a change of attitude by the Labour party towards the need for fundamental reform, as a consequence of the change of leader?

Andrew Tyrie (Conservative, Chichester)

He produced his interim report.

Andrew Tyrie (Conservative, Chichester)

It was the interim report with the first mention of expenditure.

Andrew Tyrie (Conservative, Chichester)

When did the talks break down?

Andrew Tyrie (Conservative, Chichester)

When we had a meeting with Tony Blair, at which you were not present, it was clear that the difficulty in the whole area would be affiliation fees. It would be the extent to which we could include trade unions and a cap on donations. That was the primary task given to Hayden Phillips subsequently. Do you agree that the talks in fact broke down because it was clear that genuine choice of whether to donate would not be given to affiliated members? It was likely that we would continue with a situation in which a large proportion of affiliated members who do not even vote for the Labour party would none the less be forced, in practice, to continue contributing to it.

Andrew Tyrie (Conservative, Chichester)

You are not accepting my interpretation of a meeting at which you were not present.

Andrew Tyrie (Conservative, Chichester)

I was asking you about affiliation fees, Secretary of State. I am trying to get at whether you feel that the question of choice on affiliation fees was crucial to the breakdown of the talks.

Martin Linton (Labour, Battersea)

The Secretary of State may be relieved to know that I am not going to ask about what is not in the Bill, nor about the history of the talks with Sir Hayden Phillips, which I am sure that we can come back to. I am interested in the issue of party funding, which I have always understood to include both income and expenditure of political parties. I regard the Political Parties and Elections Bill as landmark legislation in the field. I support some wider reform of donations and spending limits, but the Secretary of State was right to go ahead with a limited Bill, which deals with the most urgent loopholes in existing legislation, specifically those that allow unincorporated associations to make, effectively, undisclosed donations and candidates to spend without limit at least up until Dissolution.

My questions are specific, mainly designed to draw out detailed points from the Department. Would clause 8 really close the door on all undeclared donations from unincorporated associations, or oblige all donations over £200 to be disclosed? I have another couple of small points to add at this stage. I should like to know whether clause 8 will also catch donations through British companies that are foreign owned. It seems to me that if it does not catch them, that could be put right in this Bill.

I should also like to know—if the Chairman agrees—a bit more about clause 10 on triggering. There are a lot of questions about when it would come into force and what will happen to people who have already declared themselves candidates on the date this Bill receives Royal Assent. Will they have to stop handing out leaflets, or pull down websites that describe them as candidates? Can we have some of the practical details of how this Bill will work? I do not know whether I am anticipating another section of the discussion in asking that.

Frank Cook (Labour, Stockton North)

Proceed with the clause 8 interrogation. Mr. Tyrie has already indicated that he wants to come on to the triggering clause, so we can roll those together later.

Martin Linton (Labour, Battersea)

If a foreign-owned company gives a large donation to a political party, is that not regarded as an overseas donation?

Martin Linton (Labour, Battersea)

Is that not a loophole in the legislation?

Martin Linton (Labour, Battersea)

But if we were concerned to close the loopholes in the legislation, we should perhaps close that one as well.

Martin Linton (Labour, Battersea)

The company may be carrying on legitimate business, but a foreign shareholder might phone up the chief executive and say, “Will you please make a donation of £50,000 to this party?” and the chief executive would be in a poor position to say no.

Martin Linton (Labour, Battersea)

Who has to make the judgment about whether an unincorporated association is a conduit for money to political parties or a legitimate organisation? For instance, the East Surrey Business Club, the Billericay Westminster dining club and the Midlands Industrial Council just happen to have addresses that are the same as local Conservative associations, but apart from that, nothing in their titles specifically suggests that they are acting as conduits. However, it is well established that they are. Who makes that decision about whether they are conduits?

Martin Linton (Labour, Battersea)

But they would have to make a declaration under clause 8 of the Bill.

Martin Linton (Labour, Battersea)

And the declaration would have to give a list of all donations of more than £200, and who they came from.

Martin Linton (Labour, Battersea)

Would the declaration be just to the donor, or would it be a public document?

Martin Linton (Labour, Battersea)

But not publish it?

Pete Wishart (Scottish National Party, Perth and North Perthshire)

May I gently remind the Secretary of State that there are more than three parties in the UK political process? In fact, some of those political parties are now the Government of some nations, and one of them is also looking to increase its number by a quarter in the course of the next few days.

I have been very disappointed by the way in which the Secretary of State, and probably all the other political parties in the House, have tried to engage the minority parties in the House. Our involvement has been pretty woeful, and the failure to invite us to the discussions with Hayden Phillips was a big omission. However, we will leave that aside just now, especially given our particular role. I am sure that the Secretary of State is eternally grateful to the Scottish National party for highlighting the practice of people being ennobled to the House of Lords for making donations to political parties. I am sure that he is grateful also for the robust and thorough police investigations to challenge whether that was legal.

May I ask the Secretary of State where in the Bill there is any indication that that type of practice could be dealt with efficiently and effectively, and will never be allowed to happen again?

Pete Wishart (Scottish National Party, Perth and North Perthshire)

There was a recent issue in the Scottish Parliament when one of Mr. Straw’s party colleagues was found guilty of securing a foreign donation for part of a leadership campaign. A number of us in Scotland believe that foreign donations—or outside donations, if we want to term them as such—should be included in the Bill to cover Scottish elections. Surely it is right and proper that elections fought and contested in Scotland should be contested only with Scottish money. Why should money from London and Westminster, for example, be used to contest Scottish elections?

Pete Wishart (Scottish National Party, Perth and North Perthshire)

The same applies in European elections, so the same criteria could be applied, too. It would be easy to resolve. If you were registered to vote in Scotland, that would be the defining rule that allowed contributions to be made.

Frank Cook (Labour, Stockton North)

As long as it is pertinent, Secretary of State.

Jonathan Djanogly (Conservative, Huntingdon)

The point that I wanted to make, which I think you have made for me, Secretary of State, was that, compared with the relevant prosecutions for electoral fraud, this is a relatively small issue, yet electoral fraud is ignored by the Bill. You say 29, which compares with 450 for electoral fraud.

Frank Cook (Labour, Stockton North)

Thank you for that clarification.

If you have finished, Mr. Wishart, I call Eleanor Laing.

Eleanor Laing (Conservative, Epping Forest)

Thank you, Mr. Cook, but Mr. Djanogly would like to follow up a question.

Frank Cook (Labour, Stockton North)

Mr. Djanogly has just indicated to me that everything is satisfactory.

Jonathan Djanogly (Conservative, Huntingdon)

I wanted to come back on a point made by Mr. Linton.

Frank Cook (Labour, Stockton North)

You want to pick up on another point. Eleanor Laing, are you are using Mr. Djanogly as a runner?

Eleanor Laing (Conservative, Epping Forest)

Yes, Sir.

Frank Cook (Labour, Stockton North)

Run, Mr. Djanogly, run.

Jonathan Djanogly (Conservative, Huntingdon)

Thank you, Mr. Cook. Mr. Linton asked an interesting series of questions and I would like to look more at that area. If a company wishes to make a donation, what must happen?

Jonathan Djanogly (Conservative, Huntingdon)

How frequently would that resolution have to be passed?

Jonathan Djanogly (Conservative, Huntingdon)

Or at least annually?

Jonathan Djanogly (Conservative, Huntingdon)

Do you know what would have to be in that resolution?

Jonathan Djanogly (Conservative, Huntingdon)

To be more specific, would it include an amount that had to be given?

Jonathan Djanogly (Conservative, Huntingdon)

For the counter side to that, let us look at a trade union. If a trade union wants to give a donation, what does it have to do in terms of voting, or having a political fund, let us say?

Jonathan Djanogly (Conservative, Huntingdon)

I am not asking about the certification officer, with respect. I did not go anywhere near that.

Jonathan Djanogly (Conservative, Huntingdon)

I thought that the answer we had about the information not being known was delivered as though it were not relevant to the Committee. This is directly relevant to party funding issues, and I am surprised at the lack of knowledge of the Committee in relation to it.

It would be helpful to the Committee if information could be given as to how often companies and unions have to vote. I think you will find that companies have to vote annually and unions every 10 years. The form of the resolution should be analysed in relation to both. I think you will find that companies have to vote on who the money goes to and how much goes, whereas unions do not have to do either. A full breakdown of the party funding voting issues would be relevant.

Frank Cook (Labour, Stockton North)

Order. The purpose of this particular period is to take evidence from witnesses, rather than to make statements about a previous belief. I ask all hon. and right hon. Members to pose questions, rather than to make lengthy statements.

Jonathan Djanogly (Conservative, Huntingdon)

Could the Secretary of State provide that information?

Andrew Turner (Conservative, Isle of Wight)

It appears that the donor declarations will not be sent to the Electoral Commission. Such declarations do not even need to be kept for a minimum period. Does that constitute a lack of transparency? That is what the Bill is trying to get at, but what is the point of such donor declarations at such a low level?

Andrew Turner (Conservative, Isle of Wight)

I am grateful for that. Last year, the Prime Minister promised a liberty test for all new powers of entry. Why does no liberty test accompany new powers of entry for the Electoral Commission? Should we not be more careful about giving the Electoral Commission powers to go into people’s private homes?

Frank Cook (Labour, Stockton North)

We are moving towards a line after which I intend to switch the discussion to triggering. Mr. Tyrie and Mr. Linton will come in first.

Eleanor Laing (Conservative, Epping Forest)

Thank you, Mr. Cook. Anticipating what you have just said, I was intending to switch to triggering now.

Frank Cook (Labour, Stockton North)

I hope that you did not read my thoughts.

Eleanor Laing (Conservative, Epping Forest)

Mr. Cook, I would not dream of telling the Committee what you are thinking.

Frank Cook (Labour, Stockton North)

Thank you for dreaming.

Eleanor Laing (Conservative, Epping Forest)

Secretary of State, may I take you back to your opening remarks at the beginning of the Committee when you said that one of the main purposes of the Bill was to increase confidence in the electoral system? Without putting the question, I am sure that you will agree that uncertainty reduces confidence in the system and that uncertain law is bad law.

As to my concern about this area of the Bill, which we colloquially refer to as “triggering”—but I think that all members of the Committee understand what we mean by triggering—do you accept, Secretary of State, that the Bill will have a retrospective effect? How can you justify the retrospective nature of the Bill, when there are people who are now acting perfectly legally and within the law, in preparing for when an election—general or otherwise—may occur, who, when the Bill becomes law, if it becomes law in the form in which it is put before us today, will find that they have been acting illegally? The retrospective nature of the Bill makes it unfair, does it not?

Eleanor Laing (Conservative, Epping Forest)

This might be a ray of light. Are you saying, Secretary of State, that it is not your intention that the Bill should have retrospective effect, and that therefore if it transpires during the deliberations of the Committee and later in the consideration of the Bill that it will have a significant retrospective effect, the Government will accept amendments to stop that retrospective effect?

Jack Straw (Labour, Blackburn)

Yes. I do not accept that it is retrospective at the moment, but I also want to say that it is a general principle of legislation that it should not have retrospective effect, save in very specific circumstances. The principal one is where a wrong has been done to an individual, and you want to right it. Whatever benefits the Bill has, that is not one of them.

Eleanor Laing (Conservative, Epping Forest)

Indeed. Thank you very much, Secretary of State. That was very helpful. Can I take you further on the question of clarity—about the triggering rules? Again, I am concerned that if the Bill becomes law it should be clear. None of us wants another Fiona Jones case, with its ultimately tragic consequences.

Clarity in election matters is extremely important. At present, the triggering rules, as we refer to them, are not clear. What is the event that will trigger the spending of election expenses? Is it not the case that the triggering rules are designed, at present, to make it more difficult for a candidate to campaign effectively, thus benefiting the sitting MP? In my constituency, which the Secretary of State knows to be a place of wonderful political activity, as the sitting MP, I can spend £10,000 of taxpayers’ money, not on campaigning—certainly never campaigning on party matters—but on communicating with the electorate in my constituency. Meanwhile, the Labour candidate who might stand against me at the next general election will be prevented from spending money that he might have raised himself, as a result of the Bill.

Eleanor Laing (Conservative, Epping Forest)

The Secretary of State has, I think, just proved my point, which is that there is a lack clarity in this Bill. I thank him for that long and difficult answer. I appreciate that his intentions are good in the restoration of triggering, but, just by the very nature of his answer, it has become even more obvious that this part of this Bill is not clear. If we have an unclear law, we will end up with election results that are challengeable. Election results that are challengeable means that the validity of a future Government could be challengeable, and the very basis of our whole democratic process is weakened rather than strengthened.

All that I am asking here is that the triggering mechanism should be more clear than it is at present. Our interpretation of the Bill is different from that of the Secretary of State and that proves the point, which is that lawyers on both sides have a different interpretation of this. It must be clear so that the election result will be clear.

Is it not possible that there might be a candidate at this very moment, raising and spending money? It might be the Secretary of State’s mother raising money for the Labour candidate in my constituency, I hope so because we want to make sure that the Liberals do not do too well.

Frank Cook (Labour, Stockton North)

Order. Please keep within the scope of the Bill.

Eleanor Laing (Conservative, Epping Forest)

I was merely showing a great respect for the Secretary of State’s mother, who is a fine campaigner in my constituency. My real point is that, at this very moment, there might be candidates out there raising and spending money. It might be that, when this Bill comes into effect, they then find that they have spent up to the limit that will be imposed upon them. Therefore, a candidate could be in the position, after the Bill comes into force, of not being able to spend another pound on electoral matters and an electoral campaign. That would be particularly unfair, since there are far more Conservative, Liberal, Scottish nationalist and other candidates out there than there are Labour candidates, by the very nature of the Government’s majority.

Eleanor Laing (Conservative, Epping Forest)

But with respect, Secretary of State, if the commencement of the section were, let us say, more than four months before a general election, which of course is difficult to predict because no one knows when a general election is going to be—you might, but not the rest of us—there would still not be certainty. Are you suggesting that you will take steps to ensure that that part of the Bill does not come into effect until, let us say, a year or more from now?

Martin Linton (Labour, Battersea)

Tonbridge and Malling.

Eleanor Laing (Conservative, Epping Forest)

May I ask you finally, Secretary of State, whether you will therefore undertake to ensure that the Electoral Commission is able to publish its guidance and have it examined before that clause comes into law?

Martin Linton (Labour, Battersea)

Surely it could not be clearer. The Bill is intended to reinstate the legislation passed by the Conservative Government in 1983 in exactly the form that it was in then. Indeed, that applies also to the rules on MPs’ expenditure that were in force in 1983. The situation was exactly the same, and the Bill is reversing an accidental loophole to take us back to the situation that the Conservative Government passed in 1983.

There is only one area that is possibly unclear, and on which I seek the Secretary of State’s explicit guidance. Presumably, when the clause comes into force, those candidates who already have websites up describing themselves as a candidate, or who have leaflets or business cards stacked in their stationery cupboard describing themselves as a candidate, will have to amend them. It does not guarantee that any money spent before the date it comes into force can stand.

Martin Linton (Labour, Battersea)

Then they can publish 50,000?

Martin Linton (Labour, Battersea)

But surely candidates will have ample forewarning that the law is going to change. Whenever the Act comes into force on Royal Assent, that will still be several months away, at the very least, so they must be aware of the fact that the law is being returned to what it always had been before. A loophole is being closed. They have been told. People know that is going to happen. Surely it is reasonable to expect people not to print extra leaflets when they know that the law is about to change.

Frank Cook (Labour, Stockton North)

We must finish this part of the sitting by 12 noon. There can be no argument about that. I do not want to have to interrupt witnesses or Committee members, but four Committee members are seeking to catch my eye. They are, in order of registration, Tyrie, Howarth, Djanogly and Reid, so please make your questions brief, and the answers, too, Secretary of State.

Andrew Tyrie (Conservative, Chichester)

Thank you, Mr. Cook. First, thank you very much, Secretary of State, for the flexibility that you have been showing on making adjustments to the triggering clauses. I have two quick questions. Why was this not subject to consultation?

Andrew Tyrie (Conservative, Chichester)

I will take, “It was and it wasn’t”.

Andrew Tyrie (Conservative, Chichester)

I want quickly to get on to one other question. You have made it clear that the MPs’ communications allowance will not be covered by the triggering rules because it is not held to be party political. If an MP was found guilty by the Standards and Privileges Committee of abusing the communications allowance, under the Bill would they be deemed to have triggered their own campaign expenses?

Andrew Tyrie (Conservative, Chichester)

The Secretary of State is saying that yes is the answer.

David Howarth (Liberal Democrat, Cambridge)

May I come back to the retrospectivity question and put an example to the Secretary of State? It has been bothering me, and possibly other people. The issue is not what counts as an expense, but who counts as a candidate, and when. This cannot be cured by the commencement date. I shall give the example. Let us suppose that either an existing Member of Parliament or a candidate from another party has already acted as a candidate. What happens when the Bill comes into force? Will it mean at that point that what the person did previously makes them a candidate at that point, so any expenses that they incur from then count as election expenses? It is about not whether expenses before that time count, but whether they have started the ball rolling. That degree of retrospectivity ought to be ruled out.

David Howarth (Liberal Democrat, Cambridge)

In the past?

David Howarth (Liberal Democrat, Cambridge)

But what about the content? Can it make him a candidate—anything after commencement of the Act?

Frank Cook (Labour, Stockton North)

Order. We must conclude this part of the sitting. I thank the Secretary of State and his team of witnesses, and ask them to vacate their chairs to make way for Sir Hayden Phillips and Sir Christopher Kelly.

Frank Cook (Labour, Stockton North)

Welcome, gentlemen. Thank you for coming to help us in our deliberations. You have seen the pattern that we are operating today, and we hope that you find no difficulty with it. In the same fashion as before, we will start with the principal Opposition spokesperson, or have you handed over the armband?

Jonathan Djanogly (Conservative, Huntingdon)

I have indeed.

Frank Cook (Labour, Stockton North)

I see. I call Andrew Tyrie.

Andrew Tyrie (Conservative, Chichester)

The questions that I want to ask mainly concern the future, but before that, I wanted to ask one historical question of Sir Hayden. We have an accumulated literature on the matter as the result of the work that you and I did through your committee. Would you have any difficulty with publishing any of the papers or minutes summarising meetings from those talks?

Andrew Tyrie (Conservative, Chichester)

Just to be clear, you would be happy for both the minutes and the main papers put before the committee to be put in the public domain, provided that all three participating parties agreed?

Andrew Tyrie (Conservative, Chichester)

Our party’s view on publication is well known. Turning to affiliation fees, I have only one more question, which will give Sir Christopher a moment or two to think about it. Do you think that it will be possible to find an agreement for a new long-term structure for party funding and control of donations that does not provide each individual affiliated member genuine choice on an annual basis over whether to donate?

Andrew Tyrie (Conservative, Chichester)

To be clear, what exactly did that Canadian reform consist of with respect to donations by individual trade unionists?

Andrew Tyrie (Conservative, Chichester)

Thank you. Sir Christopher, may I ask you the same question?

Andrew Tyrie (Conservative, Chichester)

Do you think that in the long term it is sustainable for standards and confidence in the way that parties are funded, given your job as chairman of the Committee on Standards in Public Life, that one party should be subject to a cap with no exceptions, but another should retain a privileged collection mechanism with a unique relationship with a mass pressure group, however august it may be and however much built into our legislative process?

Andrew Tyrie (Conservative, Chichester)

But will any agreement do?

David Howarth (Liberal Democrat, Cambridge)

May I ask Sir Hayden to comment on the Bill and its contents, compared with his proposed agreement? Is it true that the Bill is a very long way from where the talks that you were brokering had reached?

David Howarth (Liberal Democrat, Cambridge)

To come back to your proposed agreement, to what extent at the time did you think that you had a consensus, particularly on the issue of expenditure caps? What place did you think that the expenditure cap had in the overall package?

David Howarth (Liberal Democrat, Cambridge)

I suppose the question arising out of it is whether in your view the talks broke down because of the failure to agree on those details, in the light of the agreement on the principles, or was there any reversal on the principles themselves by any of the parties taking part?

David Howarth (Liberal Democrat, Cambridge)

A final detail point. On expenditure caps, you will recall that the methodology you followed was heavily criticised by Mr. Pinto-Duschinsky. Do you have any response to what he said? He will be appearing as a witness later in the week.

Nick Ainger (Labour, Carmarthen West and South Pembrokeshire)

Sir Hayden, you will be well aware that it is not only funding that is important to political parties; it is also membership and volunteers, because at the end of the day, they are the people who go out and do the work. On Second Reading, a number of Members raised the issue of the new powers that would be given to the Electoral Commission, particularly those involving entering people’s homes to seek information about alleged breaches of the regulation. What effect, if any, do you think that that will have on the cohorts of volunteers on which all political parties depend?

Nick Ainger (Labour, Carmarthen West and South Pembrokeshire)

What safeguards would you recommend to the Committee, bearing in mind your support for the contentions that we must keep that great cohort of volunteers enthusiastic and not make them increasingly concerned that they may face criminal charges?

Nick Ainger (Labour, Carmarthen West and South Pembrokeshire)

Thank you. I believe that draft guidance should be presented to Public Bill Committees so that it can be examined during the scrutiny process. Do you agree that in both this area and the area covering the triggering mechanism, draft guidance should be produced by the Electoral Commission as quickly as possible so that this Committee can look at it?

Pete Wishart (Scottish National Party, Perth and North Perthshire)

I am sure that you, Sir Hayden, will agree fully that public confidence about party political donations has been shaken to its core in the past couple of years by what have been seen as abuses. The cash for honours matter, for example, has raised public concern about how public money is spent. Do you believe that the Bill addresses the big public concern about party political donations?

Pete Wishart (Scottish National Party, Perth and North Perthshire)

Part of that new mechanism could be suggested in the Bill. There is a proposal that four commissioners from the political parties should be added to the Electoral Commission. There is a difficulty with deciding who should be the fourth commissioner, who is supposed to come from the smaller parties. I have not got a clue how that could be decided, and I used to be a joint Whip for all the minority parties in the House. Do you believe that having political party representatives on the Electoral Commission would be a good thing and would help to deal with outstanding issues about which the public are concerned?

Jonathan Djanogly (Conservative, Huntingdon)

Sir Christopher, what, in your view, are the main steps that need to be taken to ensure the integrity of the electoral system?

Jonathan Djanogly (Conservative, Huntingdon)

Are you concerned that the Bill ignores electoral fraud?

Jonathan Djanogly (Conservative, Huntingdon)

Are you able to put into perspective the relevance of electoral fraud and party funding crimes?

Jonathan Djanogly (Conservative, Huntingdon)

Do you have any concerns in that regard?

Jonathan Djanogly (Conservative, Huntingdon)

As to the fact that a lot more priority is being given to party funding.

Jonathan Djanogly (Conservative, Huntingdon)

Thank you.

Martin Linton (Labour, Battersea)

Sir Hayden, I am reluctant to raise issues that are not in the Bill yet, but since they have been raised, I will seek clarification on a couple of points. First, I understand that the terms of reference of your committee include the word “funding”. I have been interested in party funding for a long time and I understand that it includes both income and expenditure of political parties. It has been put to us by the other side that you were asked to look at only income and not at expenditure. Is that how you understood your terms of reference?

Martin Linton (Labour, Battersea)

I am glad that you did.

Martin Linton (Labour, Battersea)

Thank you. On another point, on trade union affiliation, you speak as though trade unions have the opportunity to affiliate only with one party. As a matter of historical record, there were trade unions that were affiliated to the Conservative party. Opposition Members may look surprised, but I spoke to the national secretary of the National Union of Small Shopkeepers when the legislation came into force and the union was affiliated to the Conservative party. Therefore, is it right to expect an independent, non-state organisation such as a trade union that has made a decision to affiliate to a particular party also to act as the collecting agent for another party? Given that all its members are free to contribute to any party they wish, why should it be a trade union’s obligation to collect money for a party with which it does not agree?

Martin Linton (Labour, Battersea)

Thank you. I have a quick question for Sir Christopher. You express disappointment but not surprise about the fact that registration is not in the Bill. You are aware that an estimated 3.5 million people in this country are not registered, and that the experiment in individual registration in Northern Ireland led to a 10 per cent. reduction. A simple back of the envelope calculation shows that if we had the same experience in this country, we would lose 350,000 people from the electoral register. When you say that you are not surprised that people are opposed to individual registration, is that what you mean?

Eleanor Laing (Conservative, Epping Forest)

Sir Christopher has just about answered the question that I was going to put to him. It might interest our guests to know that I have tabled a new clause to amend the Bill and introduce individual voter registration. If the Government are persuaded by the deliberations of Sir Christopher’s committee, this Committee and the two Houses of Parliament, it is possible that they might also accept that individual voter registration should go ahead. Let me take you further on this, Sir Christopher. In your committee’s deliberations—I appreciate that this is before it was your committee—was a distinction made between the particular problems that occurred in Northern Ireland, which were correctly put right by the introduction of individual voter registration, and the completely different situation in the rest of the United Kingdom? That different situation would be likely to lead not to a similar reduction in those who are registered—as Mr. Linton suggested—but rather to a fairer system where those who ought to be registered are, and those who ought not to be registered are not.

Eleanor Laing (Conservative, Epping Forest)

That is very helpful, Sir Christopher. You expressed no surprise that the Government have not taken the opportunity to introduce individual voter registration in the Bill. Has anyone on your committee come forward with a good reason why the system should remain as it is, and why there should be one person in a household who effectively has the power to disfranchise others in the household?

Michael Wills (Labour, North Swindon)

Sir Christopher, may I ask two brief questions? I note that you say that, in your view, the current system is fundamentally flawed—I think that I am quoting you correctly. Will you share with the Committee the evidential basis for that? How many prosecutions are there and how geographically widespread are they?

Michael Wills (Labour, North Swindon)

Thank you, Sir Christopher. I am quite sure that we will come back in the process of the Bill to the particular measures that we have taken to protect the integrity of postal votes—I will not trouble the Committee with that at this stage. May I ask a more fundamental question that picks up on your point about principles? Are you aware that the Government actually share your view that, in principle, individual registration is a good thing?

Michael Wills (Labour, North Swindon)

I think that you are also aware that the Government share your worry that a move to individual registration could well lead to a significant decline in enfranchisement. Mr. Linton has already alluded to the fact that probably 3.5 million people in this country are not on the register who should be, as the best estimates suggest. There is a very significant degree of disfranchisement already, so we share your worry that any moves that lead to further disfranchisement are a very serious democratic problem. In moving forward on this, as everybody wants to, do you agree that it would be a good idea to take every step we can to improve the register as part of any process of moving towards individual registration?

Andrew Tyrie (Conservative, Chichester)

Is the general improvement of the register a necessary condition for getting on with introducing—

Frank Cook (Labour, Stockton North)

May I ask you to direct your speech into the microphone so that I can hear?

Andrew Tyrie (Conservative, Chichester)

I shall put my question differently since I have been given the opportunity. How quickly do you think—realistically—we can and should get ahead with the introduction of individual voter registration with voter identifiers?

Andrew Tyrie (Conservative, Chichester)

Two further questions. Just to be clear, I do not want to put words in your mouth, but I think that you have described the Northern Ireland experience in a way that suggests that you think it was a considerable success.

Andrew Tyrie (Conservative, Chichester)

And that a crucial part of that was not only individual registration but voter identifiers. You see those as coming together and needing to be together in any package.

Andrew Tyrie (Conservative, Chichester)

My last question. You have said that the combination of household registration and postal voting on demand is fundamentally flawed—toxic, one could perhaps argue, to the integrity of the system. In the absence of the reform that you would prefer and that your committee and your predecessor argued for strongly, do you see a case for withdrawing postal voting on demand and returning to the pre-existing system for postal voting, to try to bring some measure of integrity back into the system and make it less vulnerable and flawed?

Andrew Tyrie (Conservative, Chichester)

Would you be prepared to give it thought and come back to us?

Andrew Tyrie (Conservative, Chichester)

Thank you very much.

Jonathan Djanogly (Conservative, Huntingdon)

Do you think that removing the Electoral Commission’s statutory duty to encourage democratic participation and voting would allow an increased focus on the regulation of party finance and electoral administration? I put that to both of you.

Jonathan Djanogly (Conservative, Huntingdon)

I would point out that not to register is, of course, a criminal offence. What we currently have is a mass of people breaking the law. Do you think that the law should be more rigorously enforced?

Frank Cook (Labour, Stockton North)

If there are no further questions, I record our gratitude to Sir Hayden and Sir Christopher for their patience in sitting through the previous session this morning to hear our disagreements, and especially for the clarity, tolerance and good humour with which you have responded to our interrogations. Thank you very much.

Further consideration adjourned.—[Ian Lucas.]