Political Parties and Elections Bill

My Lords, this group of proposed amendments seeks to introduce a radical change in the regulation of political expenditure in this country. I pay tribute the noble Lord, Lord Tyler, and the, alas, not present noble Lord, Lord Rennard—whom we hope is getting better—for their passion and commitment to this particular point about national spend and constituency spend. I am unable to accept the amendments, but I hope that what I have to say will go a little way towards making the noble Lord realise that we want to move forward on this. I will not go through the amendments one by one. The noble Lord did not do so either. We recognise the broad shape of the amendments from Grand Committee. We are grateful that some rectification has been made of some of the problems and deficiencies that were identified in the previous versions of these amendments, but we have some concerns. For example, Amendment 67 would impose a five-year limit on a party’s spending but still fails to anticipate the problem of parties saving up the majority of their permitted spend until shortly before an election. In Amendment 68, we are concerned that smaller parties would face great difficulty in accurately calculating the level of their permitted spend, given that it cannot be known how many months will elapse between elections. These are small points, but I make them in case the noble Lord wants to deal with them. The transitional arrangements proposed in Amendment 70 appear to suggest that a party could spend 75 per cent of the permitted £61 million between July 2009 and the next election. That is probably a drafting error, but prescribing any figure in the manner of the amendment would be risky, given that we cannot know exactly when the election will be. Amendment 72 would require registered political parties to report annually on their qualifying expenditure under the proposed new system of spending limits, although it defines expenditure as that found in Schedule 4A to the 1983 Act. However, that schedule lists the regulated matters for the candidate’s spending limit, not the party’s campaign spending limit. That list of regulated matters is to be found in Schedule 8 to the 2000 Act. Amendment 71—and here I come to more major issues—would make two crucial changes to the list of regulated matters for candidates’ spending, as set out in Schedule 4A to the 1983 Act. First, it seeks to add spending on newsletters or similar publications, which is by the central party but relates to candidates. Secondly, it would add market research or canvassing activity to the list of regulated matters. The noble Lord, Lord Tyler, raised concerns about the current list of regulated matters for the candidate and campaign spending limits in Grand Committee. Election spending is, of course, regulated by separate limits, according to whether it is by or on behalf of a party, or by or on behalf of a candidate. This is clearly an important distinction. The noble Lord’s concern is that spending by a central party organisation, which might be specifically aimed to enhance the electoral prospects of an individual candidate, would not be recorded against that candidate’s spending limit. So we understand the point and the noble Lord’s concern, but we fear that the proposals would introduce further complexity into what is already a complex area of legislation. We are concerned that they could be difficult to understand and operate in practice and could blur the respective roles and responsibilities of the election agent, central party and local party. In the White Paper that preceded this Bill, the Government stated that they would assess whether there is clarity over which expenses count towards the party campaign and candidate spending limits. We stated that we would bring forward proposals to update the lists of regulated matters. However, such changes would be made via secondary legislation rather than in this Bill. The Government will consult fully with all the major political parties and the Electoral Commission before bringing forward proposals for change. Any proposals would then be subject to full scrutiny by both Houses. The concerns that the noble Lord, Lord Tyler, raises and the changes that he proposes to make to Schedule 4A would best be addressed during the course of that consultation and those discussions. I understand that there is due to be a meeting of party administrators and officials from my department, the Ministry of Justice. This could be a productive issue to be considered at that meeting, which I believe is due to be held later this summer. This is a complex area of legislation and any proposal for change would have to be considered very carefully if we are to avoid the unintended consequences that are always a danger of introducing changes that have not been sufficiently considered. I can give no guarantee that it will be possible to address fully the noble Lord’s concern, not least as his proposal would be a significant change and we have concerns about the practical effect of such a step. However, I reassure him that we intend to look at the lists of regulated matters, and to do so not on a solitary or party basis—although he tempts me, I shall resist the temptation to be parti pris—but on a consultative and co-operative basis. To return to the main thrust of the debate, which we are grateful to the noble Lord for raising, this group of amendments is based, in a broad sense, on the package of recommendations on spending put forward by Sir Hayden Phillips, although there are some key differences between Sir Hayden’s suggested reforms and the amendments before us today. The noble Lord, Lord Tyler, mentioned the key one. Sir Hayden proposed that the whole of term limit should be £150 million, including a general election premium of £20 million. Sir Hayden’s proposals for the treatment of smaller parties also differed, and he did not propose introducing the new controls until after the next general election. These differences are significant. We are not considering the Hayden package of reforms with these amendments, but a revised version which has not come about as the result of cross-party talks and discussion. We have constantly stated that we broadly support the approach of comprehensive spending limits as proposed by Sir Hayden. However, we have also made it clear that there are concerns about how these could be made to operate effectively in practice. I talked about a meeting of officials and party administrators. Such a meeting has not yet been arranged but we will seek—I give that promise from the Dispatch Box—to arrange a meeting of the type I mentioned to take place this summer. We have also made the case—I know that the noble Lord, Lord Tyler, is not particularly happy with this—that it is necessary to proceed in this area only on the basis of cross-party consensus. We do not think that we can introduce fundamental changes to the regulation of party funding unless all the main parties are signed up to the way forward. That requires detailed discussion between parties and scrutiny of any proposals for change. That is what the Sir Hayden Phillips talks sought to achieve. Alas, they failed to settle on proposals that all parties could support. We have always said that this Bill is not intended to be the last word on party funding issues. We hope that, in the long term, cross-party agreement can be achieved. We do not believe such agreement exists in your Lordships’ House today. For that reason, we do not believe that this Bill is the correct place to introduce such a system. I hope the noble Lord will consider withdrawing his amendments on the basis of what I have said in my reply. The noble Lord, Lord Bates, mentioned the restriction post-55 months. My right honourable friend Michael Wills said on Report in another place that CA would be restricted for the longer regulated period introduced in Clause 18. That is a matter for the House of Commons to agree, not for the Government.