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Political Parties and Elections Bill

My Lords, I beg to move Motion A, that this House do not insist on its Amendments 11 and 12, to which the Commons have disagreed, but do disagree with the Commons in their Amendments 12A to 12F in lieu and do propose Amendments 12G to 12N in lieu of those amendments. These amendments propose to add to the permissibility and declaration requirements relating to donations and loans from individuals. They respond to the amendments tabled by my noble friend Lord Campbell-Savours in this place, which were well supported across a wide spectrum of the House. They were debated extensively in another place a week ago, and I believe that, in their revised form, they strike an appropriate balance between addressing the concern that is clearly so well supported and ensuring the new restriction is fair and proportionate. These amendments propose to add to the existing criteria in the 2000 Act that govern the permissibility of individuals making political donations or loans. They provide that individuals giving or loaning more than £7,500 to a political party or other regulated recipient must be resident, ordinarily resident and domiciled in the UK for the tax year in which the relevant donation or loan is made. This requirement applies irrespective of whether the donation or loan exceeds the threshold singly or in aggregate over the course of a calendar year. Individuals must make a statement that they are resident, ordinarily resident and domiciled in the UK and provide this along with their donation or loan. Making a false statement is a criminal offence, and a party cannot accept such a donation without the requisite declaration. This requirement is additional to the existing requirement for individuals making political donations or loans to be on a UK electoral register. Importantly, however, the additional restriction applies only to more significant donations or loans: those above £7,500. The existing permissibility requirement of inclusion in an electoral register remains in force at the lower threshold, currently £200, but it is proposed to increase it by this Bill to £500, as I have already mentioned. We propose the new restriction to apply to the higher threshold of £7,500 for reasons of fairness and proportionality. That is key and largely addresses a significant concern the Government had with the amendments tabled by my noble friend. As I outlined in debates in Grand Committee and on Report on this Bill, we were concerned at the low level of the restriction in my noble friend’s amendments, which in our view amounted to an unfair restriction on individuals’ ability to participate in our democratic system. Setting the threshold at £7,500 is much fairer, allowing, as it does, an individual who is not resident, ordinarily resident and domiciled in the United Kingdom to retain the ability, albeit in a newly restricted way, to make donations as a way of participating in our democratic system. The higher threshold also has the important advantage of reducing the burden of compliance for political parties and donors. Enabling an individual who does not meet the new permissibility requirement still to make significant donations that do not exceed £7,500 in a calendar year deals, in our view, with any concern of the sort that was expressed by Members of the opposition in the other place about the compatibility of these proposals with EU law and the ECHR. I should briefly outline how the amendments work in respect of aggregation of smaller donations towards the £7,500 threshold. The amendments propose to require donations above the recordable threshold—£500, as proposed by the Bill—to the same donee to be accounted for where in aggregate they exceed the £7,500 threshold. This means that if a donor gave a series of donations of £2,000 to a political party, the fourth such donation would need to be accompanied by a declaration and the donor would need to be resident, ordinarily resident and domiciled in the UK at the time of making that donation. We have considered whether it is feasible to have a more stringent requirement for the aggregation of all political donations and loans regardless of the recipient, but we have concluded that this would be unworkable in practice, and would impose an excessive burden on donors and more importantly on parties and other recipients. In addition, such a proposal would depart significantly from the way in which the 2000 Act currently requires aggregation to work in the reporting of donations and loans. This is particularly true given that political parties would have no means of ascertaining what other political donations an individual had made, and as such whether or not a declaration was required. I stress that the amendments do not provide for parties, the Electoral Commission or Her Majesty’s Revenue and Customs to access tax data to verify the accuracy of the residence and domicile status declarations, and as such there is no provision here for the enforcement of the requirements by the Electoral Commission or HMRC. Frankly, it has not been possible to devise such provisions in the time available, given the new onerous and costly data-holding and data-sharing requirements they would be likely to create. More importantly, we believe that it would be challenging to do so in a way that was consistent with the important principle that, without a criminal offence, an individual’s tax data are a confidential matter between him or her and HMRC. As such, were an individual to lie in a declaration, it would be for law enforcement agencies to investigate. Given the difficulty that parties would have in probing the accuracy of declarations, and in recognition of the largely volunteer nature of our political parties, the amendments propose that where the party, ""had no reasonable grounds for thinking that the statement was incorrect"," receipt of a declaration would be treated as meeting the requirement in Section 56(1) of the 2000 Act for a party to take reasonable steps to verify the permissibility of donations. If a party had concerns about the accuracy of a declaration, it could seek further information from the donor on a voluntary basis. This might include, for example, a letter from an accountant. If the party had concerns that the donor was not resident, ordinarily resident and domiciled for tax purposes, the party should not accept the donation. In line with the Electoral Commission’s overarching guidance-giving role, this new requirement might be an issue on which the commission might usefully give guidance. My right honourable friend the Secretary of State for Justice outlined the specific considerations that apply to Northern Ireland, and these provisions address that by ensuring that the requirements do not apply to Irish donors making donations to Northern Ireland parties under Section 71B(1)(a) of the 2000 Act. I hope that these amendments will be accepted by the House. We believe that they are a proportionate and effective way of giving effect to the will of Parliament, as clearly expressed in the Division in this House in response to the amendments moved by my noble friend Lord Campbell-Savours. I beg to move.