It’s that man again, as they say.
Despite the urgings of the noble Lord, Lord Hodgson, on this clause I shall take a little time, because it is a fundamental issue of principle, whether intended or not. I have tried to stress to the Minister that sometimes, though consequences may be unintended, they are serious in their effect. I want to go through why I believe it is unclear what the purpose of Clause 27 is. There does not appear to be a problem to solve. Spending by non-party campaigners in support of a political party is already highly regulated under the targeted spending rules and counts against the party’s spending limits. I do not believe this clause has been really thought through and it risks substantial unintended consequences that could include silencing independent trade unions and interfering with the right of the Labour Party to set its own rules and order its own business.
Of course, we have had previous debates about tying up small, largely voluntary organisations with close associations with particular parties in red tape and scaring off civil society organisations working with politicians and parties. I urge the Government to think again on this clause and to replace it with recommendation 21 from the Committee on Standards in Public Life, to shine a light on non-party spending authorised by political parties. They should be looking to lift the red tape burden on civil society organisations, not add to them, so that we can get the balance right when it comes to election campaigning.
What is this clause for? We have targeted spending rules already; parties already have to account. The clause brings big changes and risks substantial unintended consequences. My noble friend Lord Kennedy and I have had meetings with the Minister. My noble friend and I worked together in the Labour Party, I as general secretary and he as finance director, and we had a statutory responsibility for reporting and accounting properly for all our expenditure, including third-party expenditure. We are both very keen to know what misbehaviour this clause is attempting to stop. Some may have concerns that non-party campaigners give political parties two bites of the cherry, but this is not really the case with the targeted spending rules brought in in the lobbying Act.
Third-party expenditure in support of a party already has to count towards the party’s election expenses. The third party cannot spend more than £31,980 in England, £3,540 in Scotland and £2,400 in Wales in support of a political party without clear written authorisation, which must be lodged with the Electoral
Commission. This expenditure must then be declared by the third party in its return and, crucially, must also be included in the return of the relevant political party and count towards its expenditure. A trade union campaign for the Labour Party therefore already counts against Labour’s limits. Parties cannot artificially inflate their limits by seeking support from a third party. So there is not really any evidence of the need for this clause. What is it intended to stop? Has anyone provided examples of this behaviour?
Certainly, my noble friend Lord Kennedy and I have sought this information. Tell us what it is, because we may actually share the concern and want to seek ways of putting an end to it. As I say, we think the better way is to have greater transparency. Of course, there is a theoretical possibility that a political party could work with a third-party organisation and ask it to co-ordinate campaigns against its political opponents. This would not be covered by the targeted spending rules, but there is no evidence that this is taking place and, were it to take place, it is highly unlikely that the party would enter into a formal joint campaigning relationship with such an organisation. I suspect it would be very much an arm’s-length relationship, possibly deniable, and therefore not caught by this clause. I think it is worth bearing that in mind.
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This clause disadvantages transparency, basically. It disadvantages long-standing, open relationships, particularly the ones Labour Party has, and will do nothing to stop fly-by-night wheezes—people who are operating on the edges of a campaign, who we know are there but are very difficult to pin down. It will not address those issues and will have unintended consequences, particularly for those organisations with long-standing, formal, transparent links to a political party. I am talking, as I have referenced in a number of debates, about the Labour Party, which was established at the beginning of the last century as a federal party. It had no individual members; it was made up of members of trade unions. It was not until 1921 that individual membership was brought in, but it did not exclude those individual members of affiliated unions. It was a federal party and remains so to this day. The party has a formal link, which could be caught by this clause.
If we knew what this clause was attempting to stop, we might not be so suspicious about its intentions. However, as it stands—to come back to the test that the noble Lord, Lord Balfe, mentioned—in the hands of a very hostile Government it could be used in a way that would completely undermine the structure and organisation of a major political party: the Labour Party.
What should replace this clause? There should be transparency, instead of unnecessary, unfair regulation that has not been thought through. As I say, the targeted spending rules are already there, expanding their limits by working with third-party organisations, but they could be much more transparent. Parties currently have to declare the spend of third parties incurring expenditure in support of them, but while it must be included in their return and account against
their limits, there is no requirement for it to be labelled as targeted spend. This makes identifying where parties have entered into such arrangements with non-party campaigners difficult.
In its 2021 report Regulating Election Finance, the Committee on Standards in Public Life made a clear recommendation to increase transparency in the reporting of targeted spend. Recommendation 21 states:
“Parties should be required to identify what is spent by third parties as targeted spending on their behalf. The government should introduce a specific reporting category for targeted expenditure that non-party campaigners have spent in relation to an authorisation given by a political party.”
The noble Lord, Lord Hodgson, made the same recommendation in his review of the lobbying Act in 2016, in which he said in recommendation 16:
“There should be no change to the targeted spending provisions. However, political parties should have to distinguish what was spent by third parties as targeted spending on their behalf.”
I completely concur. Let us have more transparency, as the Minister has repeatedly said throughout this Bill, that puts the bureaucratic burden on the parties and not on civil society organisations.
I do not think we want to tie up non-party organisations with any more red tape than is already there. This amendment to delete Clause 27 and implement recommendation 21 from the Committee on Standards in Public Life puts an additional reporting burden on political parties, not on other organisations. Parties would have to ensure that their return accurately accounts for authorised targeted spend and by whom it was incurred. This is about getting the balance right on regulation.
It is important to be mindful of the role of non-party campaigning in the broader ecosystem of our democracy and pre-election spend. As the committee made clear when it first concluded that spending limits for non-party campaigners would be necessary, there is nothing wrong with individuals and organisations sending out explicitly political messaging in advance of and during an election campaign. Picking up on another theme that has run through our debates on this Bill, the Committee on Standards in Public Life said on page 95 of its report:
“On the contrary, a free society demands that they should be able to do so … The right to campaign is also protected by law through the right to freedom of expression. This should act as a check on ensuring that regulation strikes the right balance.”
One of the points made by the noble Lord, Lord Hodgson—I hope that I will continue to reflect some of the positive things he has said and recommended throughout this Bill—is that we should make sure that the third-party rules are fit for purpose, not make them more complex and chilling and put off the very thing the Committee on Standards in Public Life said we should promote: the role of civil society and democracies in other countries, as I have repeatedly said in this Chamber. This country spends a substantial amount of money trying to ensure that civil society can exist in other countries, to promote that principle, yet in our domestic legislation we seem to be putting up more and more barriers. This chilling effect around third-party campaigning and this self-censoring element are the most frightening parts of this legislation. That fear of breaking the rules will have the consequences we have described.
The rules are complicated and hard to understand. The definitions are vague and require detailed guidance from the Electoral Commission. The vast majority of organisations we are talking about do not have politics as their primary purpose, as I said in our discussion on the previous clause. They have volunteers. Many are run by volunteers, as the noble Lord, Lord Hodgson, spoke about at Second Reading. He also said:
“First, the regulatory period before elections take place, which is set at 12 months, is arguably too long. The rules governing joint campaigning are arguably too complex.”—[Official Report, 23/2/22; col. 281.]
Again, I agree with him. We should be able to facilitate participation in our democracy, not put up more barriers that present a huge regulatory burden to our civil society organisations. We should look to reduce red tape.
I stress specifically what Clause 27 could mean for affiliated unions. It could be an attack on their freedom of expression. Trade unions are independent organisations in their own right. Being affiliated to the Labour Party does not change that. They are entitled—and they do so—to campaign in their own name and on their own priorities, in the same way as any other civil society organisation. If unions affiliated to the party are deemed liable for Labour Party campaign expenditure because of the party’s governance structure, they risk losing their right to campaign in their own right. This clause risks denying those unions with formal organisational links to the Labour Party that freedom of expression. Unions are entitled to take a public view on politics in their own right as independent organisations. Their affiliation to the Labour Party cannot be allowed to silence their voice.
That silence is caused by the fact that trade unions are extremely regulated in their ability to campaign politically, independent of the Labour Party. Their political funds are extremely regulated. They are required to report every year on how that money is spent, and those records are published every year. If this clause unintentionally means that they can be caught up by this “joint campaigning”, they risk losing all of those funds being allocated as spend to the Labour Party.
One issue is that there is no legal definition of what constitutes joint campaigning. There is a risk that the interpretation of “joint campaigning” by the Electoral Commission could be broadened in the future, particularly if its independence is in question—another element of the Bill that we have spent some time on. Nothing in law prevents affiliated unions, many of which have representatives elected to the Labour Party’s national executive and who are involved in the process of agreeing the manifesto, potentially being held accountable for substantial amounts of the campaign expenditure of the Labour Party—that is what we are talking about in this clause. Given that unions are entitled to spend £390,000 in their regulated period and the party can spend £20 million, it is theoretically possible that unions could breach their own spending limits due to their form of affiliation to the Labour Party. Clause 27 puts at risk the right of the Labour Party to set its own rules and order its own business. There are extremely serious potential consequences that I do not believe the Government have given any consideration to. They have not thought through the consequences of this clause.
So what are we talking about? One of the things that this can impact on is affiliated unions’ ability to campaign against the far right. One of the many campaigns that unions have conducted has precisely been in the workplace, attacking racist and fascist parties and ensuring that working people are not sucked into that particular ideology. If unions’ expenditure is soaked up or used up by the Labour Party expenditure, they will not be able to campaign on their own terms in campaigns that are politically important to their members. Unions have a proud history of anti-racist and anti-fascist campaigning, including at election time.
An important theme in the Bill is the disproportionate effect or impact on Labour and organisations that advocate for a vote for it. No other political party has close constitutional ties with separate independent organisations in the way that the Labour Party is formally linked to the trade union movement. This risks silencing organisations that advocate a vote for Labour. It is disproportionate and it has a partisan impact that changes our democratic principles. More importantly, it is a further break in the consensus that we have had for many years on fundamental changes being subject to consultation across all political parties. It has not been thought through, and it is extremely dangerous.
Although we may be the only political party with those formal links with trade unions, other organisations may also be disproportionately hit by this clause. It would have unintended consequences for all political parties. The majority of the groups are volunteer-run and could suddenly find themselves tied up in red tape, having to account for expenditure by their political party if they are deemed to be in joint campaigning arrangements. I give the examples of the Conservative Christian Fellowship, Women2Win—an important organisation that funds constituency parties and candidates—the Conservative Animal Welfare Foundation and LGBT+ Conservatives, which I know campaigns for particular candidates. Other examples are the Tory Reform Group and even the Liberal Democrat Christian Forum, the Liberal Democrat Disability Association, Christians on the Left and the Fabian Society—I could go on.
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