My Lords, the reason for the Clause 18 stand part debate is that we should not let this important change in legislation pass without some significant scrutiny. The principle of notional expenditure might appear at first to be simple, but it is not quite so simple in the era of massive national party spending.
The original intention of election law concerning notional expenditure was always about making sure that spending limits were not circumvented by donations in kind. Before the Political Parties, Elections and Referendums Act 2000, there were limits only on expenditure by appointed election agents, or those they authorise, on behalf of their candidates. These people knew that money might not change hands for notional expenditure, covering things such as the use of a donated office for the campaign HQ or office equipment such as a photocopier, or significant discounts might be applied for their provision.
The value of the notional expenditure—what is effectively donated to the campaign—must be included in the candidate’s expenditure limit. If this was not the case, people supporting candidates could provide offices, staff, leaflets, posters and advertising free of charge to the campaign of their choice, and these materials would not be subject to the limits on candidate expenditure.
The legislation passed in 2000 brought in the concept of national party spending limits to try to create a more level playing field at national level. Before then, the parties understood that spending on a national campaign had to be just that: national spending spread evenly across the whole country, covering things such as newspaper advertising, billboards and party election broadcasts.
However, with a national party spending limit of £19.5 million, the parties no longer feel obliged to spend what they can evenly across the whole country. They have increasingly decided to target their national party spending at marginal seats. This might have brought them into conflict with the law. We have seen what was supposed to be national advertising on billboards and in local newspapers targeted largely at marginal consistencies. The 2000 legislation intended to cap unfair financial advantage nationally, but inadvertently
it might have had the opposite effect and accelerated the arms race in party expenditure at elections. Parties have since decided that their national campaigns can produce direct mail, leaflets, Facebook adverts et cetera, targeted largely at marginal constituencies.
The supposed clarification of notional expenditure in Clause 18 is there to say that, from now on, the candidate or the election agent is not responsible for such expenditure if they have not specifically authorised it. This might seem a reasonable principle at first glance, but it means that the costs of materials that might benefit their campaign do not have to be included in the tightly restricted spending limits for candidates in constituencies. National parties can now target their direct mail at specific voters in specific marginal seats. They pay for leaflets for those constituencies, and they pay for their distribution either commercially or by paid volunteers. National campaigns can swamp the efforts of individual candidates to make their case.
When the Conservative Party went over the top in 2015 by paying for the bussing in of hundreds of party workers in marginal seats, employing them to canvass and deliver leaflets, putting them up in hotels and paying for their meals, there was a national outcry, led by “Channel 4 News” and the Daily Mirror, among others. It appeared that the marginal seats that might have brought the Conservative victory had actually been bought.
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There were many investigations by an overstretched Electoral Commission and various police forces to see whether the law had been broken, but only one constituency campaign resulted in a prosecution. In the constituency of Thanet South, the Conservative Party narrowly defeated Mr Nigel Farage, then of UKIP. The noble Baroness, Lady Wheatcroft, referred to the resulting court case on our first day in Committee. Three people were charged in connection with that campaign, but it was no surprise to me that the successful candidate, Mr Craig Mackinlay—MP, as he became—and his election agent were acquitted, but the Conservative campaign HQ official was convicted.
My understanding of election law was always that the candidate and their election agent could not be held responsible for what they were not responsible for. I have therefore not been convinced that the specific clarification previously sought either in Craig Mackinlay’s Private Member’s Bill or in this Bill is necessary for the purpose stated. In proposing his Private Member’s Bill, Mr Mackinlay stated that
“the Representation of the People Act 1983 needs to be amended so candidates and agents can go about their business without risk of prosecution.”
However, nobody should be exempt from the law, and it is only in conducting lawful business that you should be exempt from prosecution. It is not, as claimed, a question of clarification being needed.
What is proposed appears to be a significant change in election law. Clarity was provided by the courts, as it should be, and in this case by both the Supreme Court judgment and Southwark Crown Court. The sentencing statement of Mr Justice Edis set out an important principle. He said:
“The law governing the maximum permitted amount which a candidate can spend, or which can be spent on behalf of a candidate, in a General Election exists to ensure a level playing field and also to limit the extent to which the electorate can be manipulated by costly and sophisticated systems designed to spread a message on behalf of a candidate in a Parliamentary election.”
The court saw no justification for any claims of confusion or lack of clarity. It upheld a crucially important democratic principle.
We discussed the principle in this place two years ago. On 13 February 2019, the noble Lord, Lord Young of Cookham—whom I am pleased to see in his place, and whom I tried to notify that I was going to mention this—replied as a Minister from the Dispatch Box to a Question of mine about that court case, and the importance of maintaining a level playing field in constituency campaigning. He said:
“I entirely agree with the principle that the noble Lord has just enunciated. I was looking at the Corrupt and Illegal Practices Prevention Act 1883, which enshrined the principle to which he referred. The preamble states that, ‘If its provisions are honestly carried out, the length of a man’s purse will not, as now, be such an important factor … and the way will be opened for many men of talent, with small means, to take part in the government of the country, who have been hitherto deterred from seeking a seat in the House of Commons by the great expense which a contest entails’. That principle is timeless, even if the language may not be.”—[Official Report, 13/2/19; col. 1842.]
What I am seeking to ensure is that this timeless principle for everyone who stands for Parliament is not dealt a fatal blow by what is described as a “clarification”.
In the debate on this Bill in the other place, Mr Craig Mackinlay explained that this clause does what he wanted in his Private Member’s Bill. However, in a letter to Lord Tyler, late of this House, of 3 July 2019, the Electoral Commission’s chief executive, Mr Bob Posner, said that these proposals
“would risk allowing parties to spend what they like (subject to their national limits) on promoting their candidates in key marginal seats, which would also undermine the candidate spending limits that aim to provide a level playing field for campaigners”.
We will no doubt be told shortly that the clause is a “necessary clarification” about notional expenditure. But clarification has already come from the Electoral Commission, which issued guidance about notional expenditure based on the Supreme Court ruling. This appears to have been effective in advising candidates and agents in the most recent general election. There was no repetition of the South Thanet court case because parties, candidates and their agents learned from it.
A wide-ranging Elections Bill such as this requires within it some means of ensuring that the strict limits on candidate spending in a constituency are not simply circumvented by national party spending, which is deemed to be exempt from the limits of what is authorised by the candidate or their agent.
First, will the Minister confirm that he still accepts the timeless principle of a level playing field in constituency election campaigns, as set out by his predecessor and noble friend Lord Young of Cookham in February 2019? Secondly, will he please explain what is in this Bill that will ensure that this principle is adhered to? Thirdly, if he accepts the first principle, will he confirm that there is no justification for increasing national
expense limits beyond those presently applied, as no party other than his own could possibly spend more than is presently allowed?
An Answer to a Written Question of mine yesterday suggested that the Government were intent on increasing these limits by the rate of inflation since 2000, or by about 79%. I fear that this clause, as it stands, would make it much easier for a party able to spend around £36 million on a general election, as opposed to around £20 million at present, to direct that expenditure towards the purchasing, in effect, of marginal constituencies. I beg to move.