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Political Parties and Elections Bill

My Lords, I am afraid I still feel that the Bill is a sad example of a terribly wasted opportunity. Ministers’ obsession with the illusory consensus has meant that they have never been able to step up to the mark and use the Bill to clean up big-money politics. Because they were so determined to do nothing to cause anxiety to the Conservative Party, they have ended up with doing next to nothing about serious reform. I think all parties said they were determined to achieve such reform, so we regret this. However, we are delighted that the consensus across your Lordships' House in support of the amendment tabled by the noble Lord, Lord Campbell-Savours, and ourselves has at least led to the blocking of a very important and dangerous loophole in the law. The amendments put before us by the Minister are certainly a considerably improved package, which we welcome very much. We in this House, across all parties, were determined to prevent multi-millionaire tax exiles from continuing to buy parties and constituencies on a scale of intervention which has hardly been matched since the corruption of pre-1832 rotten boroughs. These amendments seem reasonably effective, but in correspondence with the right honourable Mr Michael Wills, the Minister responsible for the Bill in the other place, I raised two continuing concerns, part of which have been addressed in his opening remarks by the Minister, but I want to press him on some details. First, throughout all stages of the Bill, we have been anxious to ensure that the thresholds for reporting and recording donations could be bypassed by making a series of payments, each individually below the threshold, but in aggregate greatly exceeding them. That is obviously an issue to which the Minister paid attention just now. For example, there would seem to have been a danger that a tax exile who is not a permissible donor could simply donate £7,499 on a number of occasions each year and avoid the provisions of this legislation. In his response, Mr Wills wrote in his letter that, ""multiple donations to the same political party, or same MP, which over the course of a year exceeded £7,500, must be accompanied by a declaration of the tax status of the donor, and the donor must be ROD in the UK"." ROD apparently stands for "resident ordinarily resident and domiciled in the UK". Mr Wills continued: ""This aggregation requirement applies to donations to different accounting units where those units report to the Electoral Commission via the central party. However, the aggregation requirement does not apply to multiple donations to different recipients (e.g. a party and an MP). This is because we do not believe it is fair to require donors to keep track of their interaction with different entities"." It is that latter qualification to which the Minister has just referred which really adds to our concern. I hope that the Minister will be prepared to give an explicit assurance that everything possible will be done to monitor the situation and, if necessary, to take steps to avoid any exploitation if a new loophole is discovered. We really need the Government’s intention on the record if we are fully to fulfil the intention of your Lordships' House in passing the original amendment. Incidentally, I have some difficulty with the suggestion from Mr Wills that donors may be given special treatment if they give money to several MPs. Surely their parliamentary duties are now well funded by official sources, which is something that we have all learnt over recent weeks, and there should be no special treatment for those who donate for their party-political campaigning. What would be the position if a tax exile multi-millionaire decided to give a donation below the threshold to every MP of a particular party? The implication in Mr Wills’s letter is that MPs should be treated differently from parliamentary candidates of a different party who stand against them. Surely that cannot be right. Our second area of concern has been expressed in both Houses during the passage of the Bill; that is, very proper restrictions should now be put in place to avoid any circumvention by companies controlled by those who are not permissible donors. Mr Wills tells me in his letter: ""Section 56 of the Political Parties, Elections and Referendums Act 2000 requires donations which are made on behalf of another person to be declared as such"," and referred to an "agency". It is far from clear whether the constraints of the present Bill are sufficient to make it a firm requirement that any declarations from a company in this category are as rigorously controlled as from a tax exile individual. Again, I hope that the Minister will be able to give us a firm assurance on the record that it is intended that such companies should not be used as a bypass for donations that would otherwise be illegal. There are one or two other key changes in the government amendments now before us when compared with those that were considered by the other place. For example, the Government have changed their mind about the reference to the tax year, which is going to be relevant. Previously we were told that the current tax year was unworkable as a reference point, but now we are told that it is possible. Again, perhaps the Minister can enlighten us. Having briefly identified two areas of anxiety, I must again reassure the Minister that we think the Bill is somewhat improved by these amendments. As my honourable friend David Howarth said at Third Reading in the other place, we are delighted that the artificial consensus has at last broken down on this specific issue, but we simply regret that it did not break down earlier and more generally. I think that the noble Lord, Lord Campbell-Savours, would agree that it is an important change to which we should all give a warm welcome. If all legislation were dependent on Conservative acquiescence and no reform could proceed without all-party support, where would we be? Indeed, at an earlier stage I asked the Minister whether his addiction to consensus would prevent action if his party and the Conservatives were in cahoots on a particular issue and we, the Liberal Democrats, disagreed, but answer came there none. If this Bill fully reflected the intentions of the Hayden Phillips discussions, it would have had more teeth and there would have been more chance of a general reform of the funding of political parties and elections. Nevertheless, we welcome this U-turn and believe that it strengthens the Bill.