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Political Parties and Elections Bill

I must confess that I did not entirely follow all of that debate, because much of it seemed to be about Clause 14, rather than this group of amendments, but I can see why the ideas might have been brought together. I shall speak to the amendment and the other amendments in this group. In response to my noble friend Lady Gould, we—or, I should say, the Government in the form of my noble friend Lord Bach—shall respond to her points when he speaks in the debate on Clause 14 stand part. This group of amendments seeks to effect a profound shift in the regulation of political spending. They would replace the current system which regulates what parties can spend for election purposes in the 365 days prior to the date of election and, separately, what candidates can spend for election purposes in the period between the dissolution of Parliament and the date of election, although noble Lords will be aware that the Bill makes changes to the regulation of candidates’ expenditure. The amendments appear to be based on the recommendations put to the parties by Sir Hayden Phillips in 2007, although they differ in several key respects from his proposals. We have previously stated our broad support for the comprehensive package of measures proposed by Sir Hayden, including his recommendations on the control of political expenditure. However, I must inform noble Lords that we are not minded to accept the proposed amendments. Many concerns and questions remain about how a system of all-encompassing spending limits such as those Sir Hayden proposed could work in practice. The amendments bring a number of these concerns into sharp focus. Upon close consideration, the proposed new clauses would, if enacted, have a number of unintended and undesirable consequences. Amendment 115 would introduce an all-encompassing annual limit of £20 million on the amount that a political party can spend during each 12-month period after a general election. This differs markedly from Sir Hayden’s proposals. He recommended a whole-of-parliament spending limit of £150 million, with an additional general-election premium of £20 million. No such top up is provided for in Amendment 115. The amendments appear to be intended to apply to the majority of spending by a party for electoral and non-electoral purposes. As a result, we are concerned that parties would face great difficulty in meeting running and campaigning costs in the year of a general election. Amendment 116 proposes that the level of the annual limit should be reduced for smaller parties, which it defines as those who contested fewer than 100 seats at the previous general election. Again, this differs markedly from Sir Hayden’s proposals that the whole-of-parliament spending limit for smaller parties should be pro-rated only according to the number of seats being contested at the forthcoming election. Under this amendment, the spending limit for smaller parties would be calculated through use of a formula taking into account the number of seats previously contested, the number of seats to be contested at the next general election and the number of months between elections. It is not clear how a smaller party can be expected to know, potentially years in advance, how many seats it intends to contest at the next election and how many months away that election is. We are therefore concerned that smaller parties would face great difficulty in calculating their annual spending limits. We believe that the proposals in this amendment could disadvantage newer parties by taking into account seats contested at the previous election. There is also a risk that a party could field candidates in a high number of seats at one election to earn the full £20 million spending limit in the following years. It could then choose to contest only a small number of target seats, yet would be permitted to spend very large sums of money in doing so. Amendment 114 seeks to impose a local pre-candidacy limit of £50,000 in any year, although it would regulate spending by a party, not an individual who goes on to become a candidate. The amendment goes on to state that, after the dissolution of Parliament, the existing candidate spending limit set out in the Representation of the People Act would then apply. There is perhaps some confusion on this point and it may be helpful if I set out clearly how the current legislation works. The distinction between spending by or on behalf of a party and spending by or on behalf of a candidate is crucial. Current legislation regulates these types of spending separately, and we are concerned at any measures that would blur or confuse that distinction. The candidate spending limit is often referred to somewhat misleadingly as the "local spending limit". That implies that it is intended to regulate all spending which takes place within a given constituency. This is not the case, however. It regulates only spending which is by or on behalf of a candidate for the purposes of the candidate’s election. This has been the clear understanding since the famous Tronoh Mines judgment of 1952. Spending on campaigning by a political party, even where that spending is focused on or targeted at a particular constituency or area, should be counted against the separate limit which regulates all party expenditure in the year before a general election. That limit has been in place only since the passage of the 2000 Act. Before that Act, such spending was entirely unregulated, and the period before the regulated 365 days remains unregulated. It may be the intention of noble Lords to seek to prevent political parties targeting their campaign expenditure at constituencies. If that is the aim, I suggest that the clause should not be labelled as a "pre-candidacy limit". As it refers only to spending by parties, it does nothing to prevent spending ahead of dissolution by individuals who go on to become candidates, unlike Clause 14. The focus on more marginal seats is an inevitable consequence of our electoral system. Indeed, in any electoral system it is inevitable that parties will seek to concentrate resources and effort where they feel they have the greatest prospect of electoral success. We do not, in principle, see any reason to seek to prevent that, as it is a legitimate feature of our democratic system.