Electoral Administration Act 2006 (Regulation of Loans etc.: Northern Ireland) Order 2008

rose to move, That the draft order laid before the House on 11 March be approved. The noble Lord said: The purpose of the order is to introduce provisions for the regulation of loans to political parties in Northern Ireland. The order mirrors measures currently in place to regulate donations to political parties in Northern Ireland, and noble Lords may find it helpful if I set out the background to the legislation that we are considering this evening. Noble Lords may recall that the Political Parties, Elections and Referendums Act 2000 created a regime for the regulation of donations to UK political parties. However, the scheme did not extend to Northern Ireland at that time because special arrangements needed to be made in relation to donations to Northern Ireland political parties. For that reason, the Northern Ireland (Miscellaneous Provisions) Act 2006 amended the provisions of the 2000 Act to allow for Irish citizens and prescribed Irish bodies to make donations to Northern Ireland political parties. It also contained arrangements for the Electoral Commission to hold reports on donations confidentially until 2010. That Act contained the broad outline of the special arrangements that were needed in Northern Ireland. However, the detail of the scheme was set out in secondary legislation: the Political Parties, Elections and Referendums Act 2000 (Northern Ireland Political Parties) Order 2007. That order set out the conditions that Irish citizens and bodies must meet to donate to Northern Ireland political parties. It also set out the steps taken by the Electoral Commission to verify that reports on donations are accurate during the confidential reporting period. Noble Lords may also recall that the Electoral Administration Act 2006 created a new regulatory regime for the making of loans to political parties across the UK. As with donations, further legislation will be required to ensure that the loans regime operates effectively in Northern Ireland. That is precisely why we are here this evening. As with the donations regime, the Northern Ireland loans legislation must be introduced in two stages. The order before us this evening is made under Section 63 of the Electoral Administration Act 2006 and will set out in broad terms the special arrangements that will apply in Northern Ireland. The detail of how the regime will operate will be set out in a second order that we would lay subject to the House approving the order this evening. Noble Lords may—as everyone else associated with this does—understandably ask why two orders are required. We have consulted the Joint Committee on Statutory Instruments on the matter, and have concluded that two orders must be made in sequence. That is because the power to make the second order is contained in the order before us. It is not possible for the material in the second order to be made directly under the original statute. The order before us will allow Irish citizens and prescribed Irish bodies to make loans to Northern Ireland political parties. We intend to set out the conditions that an Irish citizen or body must meet to make a loan to a Northern Ireland political party in the second order—which, of course, will be debated in your Lordships' House. Those arrangements will acknowledge the special place that the island of Ireland and the Republic of Ireland occupy in the political life of Northern Ireland. The order also addresses potential concerns relating to the possible intimidation of persons and businesses that wish to make loans to Northern Ireland political parties. Northern Ireland has rejected the path of violence and embraced a peaceful and democratic future. However, a small minority still uses violence and intimidation to attempt to achieve its ends. These individuals must not be allowed to undermine the people of Northern Ireland’s right to participate in the democratic process. For this reason—as with the regulation of donations— the order provides for legitimate loans to the Northern Ireland political parties to be reported to the Electoral Commission in confidence. The confidentiality period is temporary and will end in 2010. The period may be extended by order with Parliament’s approval, but we hope that that will not be necessary. During the confidentiality period, the Electoral Commission will verify reported transactions and will release information contained in a report if, "““it believes on reasonable grounds that the regulated transaction was entered into with an unauthorised participant””." The steps that the commission must take to verify information contained in reports on loans will be set out in the second order. This order represents a step forward from the current unregulated state of affairs regarding loans to the Northern Ireland political parties towards a level of accountability that the rest of the UK now enjoys. It also acknowledges the important relationship between the people of Northern Ireland and Ireland and protects those who would wish to contribute to political parties in Northern Ireland from the potential threat of intimidation and violence. For those reasons I hope that the order will be supported this evening. As I said, much of the detail of how it will work will be covered in the second order which we will lay as soon as we can. Discussions are on-going and drafting technicalities are being dealt with. However, there will be no undue delay on our part in laying the order before the House so that it can be fully debated. I beg to move. Moved, That the draft order laid before the House on 11 March be approved. 14th report from the Joint Committee on Statutory Instruments.—(Lord Rooker.)