HC Deb 03 July 1978 vol 953 cc165-93

Order for Second Reading read.

10.0 p.m.

The Secretary of State for the Home Department (Mr. Merlyn Rees)

I beg to move, That the Bill be now read a Second time.

The purpose of the Bill it twofold. First, it proposes an increase in the limits of candidates' election expenses at parliamentary elections. Secondly, it proposes an order-making power to vary the limits on candidates' election expenses at parliamentary and local government elections. I shall deal with those purposes in turn, but first I should like to say a few words about the background to legislation on election expenditure.

The tradition, at least in recent years, has been for legislation on matters relating to electoral expenditure to be based on recommendations of a Speaker's Conference. Thus, the limits set by the Representation of the People Act 1948 were based on the recommendations of the Speaker's Conference of 1944 and the limits provided in the Act of 1969 were based on the recommendations of the 1965–68 Speaker's Conference.

The present limits, set in February 1974, were also based on the recommendations of a Speaker's Conference, though, as was made clear at the time, that recommendation had been produced very quickly in the context of an impending General Election. Indeed, the House may recall that the method by which that Bill was introduced in February 1974 was, to put it mildly, a little unusual. It was done through the process of a Ten-Minute Bill. As I remember, it was even done by a manuscript method.

The Government had hoped that a new Speaker's Conference on electoral law could be established to consider election expenditure generally as well as many other topics Unfortunately, it has not yet proved possible to reach agreement which the official Opposition on all the topics for such a conference; nor have they been willing to agree to the establishment of a conference to consider the undisputed topics—including election expenditure—without prejudice to the question of including the disputed topics at a later stage.

Bearing in mind that the next General Election must take place by October 1979, the Government thought it right to seek the views of the other main parties on the need for an increase in the expenses limits for parliamentary elections. I wrote to all parties in April this year. Not the least of the reasons was that I wanted to avoid what happened in February 1974. We suggested to them that an increase wase justified to take account of the fall in the value of money in recent years.

I do not think that it would be any breach of confidence to say that the response to our proposals was mixed. Some of those consulted considered that it would be right to increase the expenses limits to take more or less full account of inflation. Some felt that no increase at all was required. Most of those consulted, however, considered that there should be a substantial increase, but with more emphasis on the variable amount per elector than on the basic sum.

In the light of those views we now bring forward the proposals contained in the Bill. They would increase the expenses limits for parliamentary elections to a basic sum of £1,750 plus 2p per elector in a county constituency. The figures for a borough constituency would be £1,750 plus Lip per elector. The present figures, set in February 1974, are £1,075 plus 1½p per elector in a county constituency, or £1,075 plus ip per elector in a borough constituency.

It may be helpful if I relate these figures to a typical constituency of 60,000 electors. Under the Act of 1974 the total limits for a county constituency would be £1,675 and for a borough constituency £1,525. The new figures under our proposals would be £2,950 and £2,650 respectively.

As hon. Members will appreciate, the percentage increases will vary for different sizes of constituency, because we are dealing with a basic element which is the same for all constituencies and a variable element of 2p or 1½p per elector, which produces different sums for different sizes and types of constituency. There would obviously be other ways of arranging the increase—by giving the greater emphasis either to the basic element or to the variable element. We believe that our proposals achieve a fair balance between the needs of large and small constituencies. They also have the advantage of simplicity, which should be helpful to candidates and election agents in calculating the relevant limits in their own constituencies.

I know that there are those who argue that we should do away with the distinction between county and borough constituencies for expense limit purposes. At the same time I recognise, representing as I do a small segment of a city but a sizeable electoral population, that the greater distances generally involved in county constituencies can give rise to greater expense, and I do not think that we should abolish the distinction without a careful examination of the facts by a Speaker's Conference.

It may also be argued that no large increase is required for either county or borough constituencies since in many cases condidates do not come anywhere near their maximum. In this connection I have been looking at the figures contained in the return published in 1975 in relation to the October 1974 General Election. It is clear from that publication, as common sense would suggest, that, while in safe seats election expenditure was well within the limits, in marginal seats most candidates came very close to the maximum permitted expenditure.

In their excellent book on the British General Election of October 1974 David Butler and Dennis Kavanagh calculate that on average candidates spent 59 per cent of the permitted maximum but that in their 15 most marginal seats Conservatives reported expenditure of 95 per cent. of the maximum while for Labour it was 86 per cent. of the maximum. The Liberals are reported to have spent 93 per cent. of the maximum in their best 25 seats.

As hon. Members will know, there are very severe penalties for over-spending by candidates. In particular, the successful candidate runs the risk of losing his seat. In these circumstances the Government consider it right to make the increases proposed in the Bill to permit candidates to conduct a reasonable campaign without incurring the risk of exceeding the maximum permitted expenditure.

Before leaving this topic perhaps I should say a few words about some of the more general problems relating to election expenditure. Section 63 of the Representation of the People Act 1949 provides that No expenses shall, with a view to promoting or procuring the election of a candidate at an election, be incurred by any person other than the candidate, his election agent and persons authorised in writing by the election agent. It has been held that the present law does not prohibit expenditure incurred on advertisements which do not support a particular candidate but are designed to support, or have the effect of supporting, a particular party generally in all constituencies. I emphasise "in all constituencies". Nor does the law prohibit expenditure having the real purpose or effect of general political propaganda even though this does incidentally assist a particular candidate. On the other hand, it has been held that expenditure in a particular constituency is covered by Section 63 even if it is merely aimed at preventing one candidate's election in a contest of more than two candidates.

I recall that my hon. Friend the Member for Litchfield and Tamworth (Mr. Grocott) was given leave in May last year to introduce his General Elections (Limitation of Expenses) Bill, which was aimed at limiting expenditure by political parties and other organisations and requiring the publication of income and expenditure of such organisations incurred in connection with General Elections. I recognise that there are difficult legal and political issues involved in this aspect of the matter. It was for this reason that the Government hoped that a conference under the Chairmanship of Mr. Speaker would be able to give the question careful scrutiny.

Such a conference would also be able to consider the question of an increase in the candidate's deposit. This was set at its present level of £150 in 1918 and clearly an increase would be justified on the basis of the change in the value of money since then. At the same time, we think that consideration should be given to the related questions of an alternative to the deposit as a means of discouraging frivolous candidates, and possibly a change in the level of support required to save a deposit.

Under the present provisions there can in some constituencies with a large number of candidates be a rather small margin between winning the seat and losing one's deposit. Some of these points were raised in the short debate in the House on 15th March, when my hon. and learned Friend the Member for Leicester, West (Mr. Janner) was given leave to introduce his Representation of the People (Deposits and Nominations) Bill. The Government's view remains, however, that these are topics that can best be considered by a conference under the Chairmanship of Mr. Speaker, and I hope that it will in due course prove possible to reach agreement with the official Opposition on the terms of reference for such a conference.

It is for these reasons that the proposal on this aspect of the Bill is limited to increases in the maximum permitted expenditure by candidates at parliamentary elections. I hope that I have explained that aspect sufficiently.

I turn now to the other part of the Bill, covered by Clause 2. This provides that the Secretary of State may by order vary the maximum amounts of candidates' election expenses at parliamentary elections, certain local government elections, and certain elections in the City of London, to take account of any change in the value of money. I believe that this would be a sensible procedural change. At present, it requires an Act of Parliament to make any change, however minor, in the expenses limits for parliamentary or local government lections. It is clearly right that Parliament should retain control over these limits, but it seems inappropriate to require the full legislative procedure in those cases where changes of a very limited nature are being made.

Clause 2 therefore proposes that the orde-making power should be limited to increases to take account of inflation. The orders would be subject to the affirmative resolution of both Houses and thus Parliament have the final say. We hope that the House will consider this a sensible arrangement, bearing in mind that any substantial change in the structure of the expenses limits, either for local government or for parliamentary elections, would still require the full legislative procedure required for an Act of Parliament.

As a result of the Government's success in the battle against inflation, we hope that the need for such orders will be less in future. It is nevertheless realistic to assume that there may continue to be a need to increase the expenses limits from time to time and this clause would enable such changes to be made in an appropriate way.

As explained in the explanatory memorandum, the present proposals will have no effect on public expenditure or on public service manpower. I recognise that there are those who consider that there should be some support for candidates and the political parties from public funds. This matter was considered in great depth by the Committee on financial aid to political parties, which reported in 1976. The Government have not yet formed a view on the Committee's recommendations, which would require legislation, and, whatever one feels about it, it is an important issue that will have to be resolved, but not tonight. I am sure that the House will agree that the topics covered by the Committee would be inappropriate for this Bill.

As I have explained, the Bill is of very limited scope. The proposed increases in maximum permitted expenditure would, however, be of considerable importance to candidates in many constituencies, and I therefore hope that the House will give the Bill a Second Reading tonight so that we can avoid what happened in February 1974—in my view, an inappropriate way, although I acknowledge that it was at short notice, to proceed with this matter.

10.14 p.m.

Mr. David Howell (Guildford)

We are dealing with a Bill which, although small in purpose, obviously touches on some fundamental aspects of our politics and constitution. Although the aims may seem limited, it is right that we should look carefully at what is proposed and at what lies behind it.

Let me make clear at the start that we Conservatives support the limited purposes of the Bill. We think that it is right and appropriate that the expenses limit should be increased. We support the principle behind not merely the Bill but legislation going back to the end of the last century, legislation which has sought successively to limit the amount of candidates' election expenses which may be employed in a campaign. We have come a long way since elections were won or lost through torrents of beer and gin", to use Mr. Gladstone's description.

The question is whether this is an adequate increase. The average English constituency of, say, 65,000 electors by my calculation will be entitled to about a 77 per cent. increase over October 1974 and rather more than that over February 1974. But since February 1974 this country has been through a nightmare of inflation, which has involved retail prices rising by just under 90 per cent. My calculation is that if we were to stick to the same real values as before we should need a maximum of £2,942 for a borough and £3,253 for a county.

Of course, the Bill does not raise the maxima to those levels. Therefore, in effect we are tonight deciding to reduce in real terms the actual expenditure allowed for candidates' expenses. We are pitching it at a level below that prevailing at either the February 1974 or October 1974 General Elections. That may be right or wrong, but I am not at all sure that we should necessarily let a debate on this Bill go through the House without having made clear the reasons why we wish to reduce the expenses that a candidate may have as his or her maximum in conducting the election campaign. There may be very good arguments for it, but this is a cut. We all know that between February 1974 and now not only have costs and prices soared, but they have soared in the sort of areas covered by the kind of expenses incurred by a candidate in an election.

Mr. Edward Lyons (Bradford, West)

Rather than take the general inflation rate, which includes such things as food, would not it be more reliable to concentrate on the increase in the price of printing, for example, in order to get a truer calculation?

Mr. Howell

The hon. and learned Member anticipates me. I was just about to refer to some of the items covered by our expenses when we fight elections. One example which leaps to mind is that of telephones. A lot of telephoning goes on, and usually an office requires an extra telephone to be installed. That price has increased, admittedly not by the sort of percentage I was talking about earlier. However, in February 1974 the cost of a local telephone call at peak hour was I p for three minutes. It is now 3p for two minutes. A simple piece of arithmetic will show that that is a very large increase, indeed. The same applies to postage, over and above the free postage allowed in the free mail shots, stationery, hire of premises and all the rest.

In fact, the wholesale price index has gone up by more than 90 per cent. since February 1974. I do not think that there will be any dispute that the percentages are enormous and that on the whole, if we believed it right that a certain real value should be placed on candidates' expenses in 1974, we should have indexed the figure fairly precisely. We have not done that. We have fallen short and, therefore, in this Bill the Government have proposed that the real value of expenses should be somewhat cut. That is the position.

We support the purpose of Clause 1, but there are one or two questions that I wish to raise. The first is the gap between the counties and the boroughs. This gap has closed steadily since 1946, when the borough maximum was four-fifths of the county maximum. It is now 90 per cent. of that of the county. I do not know whether this is intentional or desirable. On the whole, I would not go along with those who say that we should even out the difference altogether. The expenses of a large county area are bound to be different. One only has to look at the cost of petrol and transport for a start. We should recognise that the gap has been steadily closing and it may be that when a Speaker's Conference comes about the differentiation between counties and boroughs can be looked at again. We can then consider whether closing the gap is intentional rather than accidental.

The next matter that I want to raise concerns the new powers available to the Secretary of State. I think that I am right in saying that it is proposed that there should be an order by the affirmative resolution procedure. This would come before the House and the Secretary of State would then propose some increased figure. Whether it would be indexed in line with inflation I do not know. If we have to travel this path of building in automatic compensation for inflation in the belief that it does not make any difference when really it does—and it is a path I view with sorrow and dislike—the Secretary of State should explain why there is to be a further cut in the real maximum for candidate's expenses.

In 1918, when it was proposed to bring down the level of expenses very sharply to tighten up the whole pattern, it was argued out in the House. Let us not hide behind the shabby curtain of inflation in putting forward proposals which are, in effect, to change the situation. If in future this new procedure were used and the maximum were not fully indexed in line with inflation, that would change the situation. That should be made explicit and clear.

We are dealing here with just one aspect of the laws governing the use of money in election campaigns. Most of that law is of nineteenth century origin and character and is none the worse for that. Indeed, one could argue that because it is nineteenth century it is in fashion at present. But it points to the need for revision.

We are bound to ask ourselves at what point an election campaign begins. This is not precisely described in the Bill. We are bound to look at the issues raised by the conduct of referenda, the way in which by-elections are conducted, and how the whole razzamatazz of by-elections is somehow coralled and squeezed into the corset of this legislation.

This is often done in a way that may satisfy legal exactitude, but everyone knows that if we were to look clearly at it afterwards, it simply would not add up. Perhaps we need to look at these things again and perhaps it should be done through a Speakers Conference on electoral law.

I do not go along with those who say that this whole area of law needs reforming. I do not hold with the mood that says that just because legislation is old it should be changed. The truth is that when all is said and done, we manage to conduct our elections with some economy and restraint. We may criticise each other on various aspects and features of the way in which our central organisations spend money and run elections, but if we compare ourselves with electioneering in other countries we sec that we manage it with a procedure and economy that others envy. It would be very unwise to discard this in the cause of some frenzied reform and a belief that, because the legislation is old, it automatically needs reforming.

On that note of reaction, if I may so put it, and against the cries of those who would reform and revise everything for the sake of reform and revision, let me repeat that we support the limited aims of the Bill. We believe that these increases, although they do not fully maintain the situation that prevailed in 1974, are at least a great improvement.

10.25 p.m.

Mr. A. J. Beith (Berwick-upon-Tweed)

The Bill is a welcome change from the undignified procedure that we have seen in the past—rushing into last-minute changes in the rules governing election expenses on the eve of a General Election. By and large this is an acceptable way of going about the matter and we must set the precedent of handling these provisions at a reasonable point in the life of a Parliament and perhaps earlier in the life of a Parliament than this.

However, I have some doubts about the order procedure. Liberal Members pressed this point in our consultations with the Home Secretary. I should have been particularly unhappy if the order procedure had been so wide open that a Minister could use it to make major variations in election expenses on the eve of a General Election on the take-it-or-leave-it basis contained in the order procedure. It would have opened the way to a party that found itself in funds to arrange a massive increase in the permitted expenses limits—or perhaps to do the reverse, although that seemed less likely. In the former case, if a large increase were proposed, those hon. Members who felt that some increase was necessary because costs had risen so far that they could not object to any increase would be unable to amend the order. If that happened at the very last minute before a General Election, it would mean that the prospects of throwing out the order and of getting it brought back in an amended form would not be open to those hon. Members.

Therefore, the limitation in the Bill that links the use of the order procedure to the effects of the change in the value of money is desirable. It may seem a slightly cumbersome procedure and rests on the opinion of the Secretary of State, but it is desirable. Furthermore, it opens up the possibility that expense limits might even be reduced, if the circumstances are different from those experienced in the past few years. We pressed for such a limitation to be in the Bill, and I am glad to find our suggestion adopted.

Printing and paper costs have increased considerably. We must accept some measure of increase in the limits of candidates' expenses, but the House must be cautious on this aspect. We do not want a democracy in which money talks and in which the ability to expend the largest amount is the determining factor in the kind of election that is fought. Therefore, we must carefully examine any proposed increase. Even though in this instance there has, in effect, been a cut because the full effects of inflation have not been felt, we must remember that we are judging this legislation against the background that the limitation is based purely on the expenditure of the candidate in the constituency and not of the party as a whole. Anybody who supposes that one can draw an effective distinction between the political consequences of the money the candidate spends in distributing his election address and the political consequences of nationally financed newspaper and poster advertising campaigns in elections is deluding himself.

The party nature of elections nowadays is such that it is a nonsense to suppose that a series of advertisements in local newspapers in a marginal constituency at national expense is not part of a local candidate's election campaign. We are judging these limitations against the background that a party which, for example, can afford to spend vast sums placing advertisements in as many women's magazines as can be persuaded to add accept them is in a position to fight an election on a completely different footing from other parties. If the Conservative Party can do that now in the run-up to an election, what can it do in an election campaign?

We must therefore ask why in legislation of this kind we are not placing limits on the total expenditure of a party in an election campaign. If we do not do that, big money will be given the opportunity to play a large part in elections, and it will be at national level that that big money is spent. If there were no limit on expenditure at constituency level and therefore the choice of where to put the money were not governed, to some extent, by that limitation, a large part of it would still be spent in the same way as it is now—in national newspaper and poster advertising and other expensive means of adding to the party propaganda. We delude ourselves if we suppose that this element can be left out of our considerations.

We are also considering the Bill against a background of no progress having been made on the recommendations of the Houghton Report on funds for political parties which referred specifically to assistance to candidates and parties and wanted its recommendations implemented by 1st April 1977. That is some time ago.

If we are anxious to have a democracy in which it is not the ability of the well-financed sections of the community to put their money into party campaigns that counts, we must consider either being very strict in the limitations imposed on party propaganda or other ways of financing political parties. What sort of democracy do we want? Do we want one in which it is big money that makes the difference in elections, or one in which, by one means or another, we ensure that the opportunity to present a case to the electorate is broadly the same for all the parties that seek to do so?

Democracy is not served if too great an opportunity is given to big money and that is the danger that we face if we put all the limitations on expenditure at constituency level, as is done in the Bill, and put none on the ability of parties with really big money—and there is only one party in this country with really big money—to do what they wish with that money at national level. We shall be making a great mistake if we do not look at this matter from both points of view.

10.32 p.m.

Mr. J. W. Rooker (Birmingham, Perry Barr)

When my right hon. Friend the Home Secretary started reeling off the percentages of the maximum that various candidates had spent, I was not sure whether he was going to list them in the order of those who came closest to spending the maximum. I have just done a small sum and found that my expenses in the last General Election campaign were 99.59 per cent. of the maximum—just £7 short of £1,470. We manage things very well in Perry Barr. We are a marginal constituency. We sought to spend the maximum possible and we achieved a successful result, though I do not know where we shall get the money to fight the next campaign on the basis of 99 per cent. of allowable expenses. Like most other Labour constituencies, we are not backed by hundreds of thousands of pounds from City and business institutions, and the trade union coffers are not exactly overflowing.

It is significant that both my right hon. Friend and the hon. Member for Berwick-upon-Tweed (Mr. Beith) referred to the problem of expenditure outside that of the individual candidate. It is also significant that the hon. Member for Guildford (Mr. Howell) did not refer to this important change which has taken place in electoral practice in recent years. The hon. Member for Berwick-upon-Tweed said that there was only one party in this country that could mount an all-out campaign with money being no object and he was certainly not talking about the Liberal Party or the Labour Party.

When. I came to the House today, I saw something on the corner of Parliament Square that caused me to raise a point of order with Mr. Speaker at 3.30 p.m. Political propaganda of a party nature was attached to the railings of this building. I did not mention the name of the organisation when I raised the point of order because, bearing in mind the time at which I raised the matter, I did not want to give the organisation free publicity. I have done some homework since then, because the matter is relevant to this Bill.

The organisation was the Campaign Against Building Industry Nationalisation —CABIN. The first point to make is that it is not Labour Party policy to nationalise the building industry as such and the campaign is therefore misconceived. Mr. Speaker made sure that that party political propaganda was removed from the railings.

When my right hon. Friend introduced the Bill he mentioned the problem of national expenditure outside individual constituencies by the parties and, more important, by organisations outside the political parties. My right hon. Friend rightly pointed out that under Section 63 of the Representation of the People Act no expenditure outside the candidate's own expenditure may be spent for a particular candidate. The only allowable expenditure is that spent by the candidate or with his approval. My right hon. Friend made the point that any such expenditure has to be of a national character: it must go all over the country.

The hon. Member for Berwick-upon-Tweed rightly takes exception to this, and so do I, but it is not the main point of my argument. Such expenditure is here with us already on the part of the pressure groups outside this House, representing all types of issues. Money is expended during a General Election. The groups get an airing for their views and try to put pressure on the candidates. This is legitimate to an extent, but I should like to see it controlled.

What is illegitimate and must he illegal is the spending of money by organisations in particular constituencies in order to sway the result one way or the other for a particular party. But I am not talking now about political parties. I am talking about organisations that spend money in a constituency in order to influence the result, and where the money is not recorded in the election expenses of the candidate on whose behalf the money is actually spent.

I have only one example that I want to give. The organisation to which I referred earlier, CABIN, stated in The Times of 19th June 1978 that it had set itself up. Sir Maurice Laing, who is the chairman of John Laing, said that CABIN would use all the resources at its command to alert the public about the threat, as it sees it, to the building industry. He said that money was no object, but that it would take a lot, with estimates of £300,000 for this year.

It is all right if the organisation wants to put advertising in the local Press in every constituency in the country, with leafleting and so on saying "This is the Labour Party policy", even though I think they have it wrong. It is fair enough to do it in every constituency. This can be done. It is money that the Tory Party will not have to record in its election expenses. Nevertheless, within the law it can be done.

What must be objectionable is the statement in the same article in The Times that 300,000 balloons will be released and the reference to space taken in local and national newspapers and intensive campaigns conducted in about 100 constitencies where it is judged that the issue could tip the electoral balance". That flies totally against the concept of limiting candidates' election expenses. For an organisation to use money from shareholders, from profits—in the case of George Wimpey, profits on which no tax was paid, as I pointed out on several occasions in the House—and to spend it in 100 constituencies, selected by their marginality, directly to attack the Labour candidate and the Labour Party can only be of direct benefit to the Tory Party. That is what is meant by where it is judged that the issue could tip the electoral balance". This must be illegal, and I want the Home Secretary to allude to this. If he cannot do so tonight, I ask him to have a word with his right hon. Friend the Attorney-General and with the Director of Public Prosecutions about a possible charge against these building companies of conspiracy to get round the Representation of the People Act 1949, because that is what is happening here.

In no way can this expenditure be properly accounted for. The Tory Party will be the direct beneficiary. It will not of course, complain about it. It wants the electoral system to be rigged so that money can buy votes, as the hon. Member for Berwick-upon-Tweed pointed out, because that is the one way in which the Tory party knows it can win. It will have unlimited resources if the need arises.

The Tory Party will be acquiescing in a campaign organised by these public relations companies on behalf of the build- ing companies. I think that the campaign is being run from a private house in Mayfair and the organisers are seeking to lobby Labour Members. I shall go to the meeting called by the organisation later in the week. I shall not be convinced one iota by the campaign but I shall listen to what the organisers have to say and see what sort of propaganda they are putting out. I hope that I shall get a few answers to the questions that I have raised tonight about the illegality of this form of campaign.

Mr. Ivan Lawrence (Burton)

What does the hon. Gentleman say about the expenses that might be incurred by trade unions working for the return of a Labour Government?

Mr. Rooker

The question is not sufficiently specific for me to answer. The trade unions operate nationally. They do not go into individual constituencies and conduct a campaign in selected areas. Trade unions officials working in election campaigns cannot be paid and they cannot hire canvassers. The money spent is registered in the returns. Such involvement is different from that proposed by CABIN, because it is national. If CABIN ran a campaign in 365 constituencies, it would be within the law. But conducting a campaign in 100 selected seats where it thinks it can tip the balance it is operating as a secondary Conservative Party.

CABIN's expenditure will not be made public. I shall be able to ask the returning officer to allow me to look at the amount spent in my constituency. After tonight I shall represent one of those marginal constituencies. We are prepared to take them, but only if everyone operates under the same rules. CABIN can look at my expenses. I want to be able to look at its expenses. I want to be able to examine all the money that is spent on behalf of my Conservative opponent.

Mr. John Evans (Newton)

Is my hon. Friend aware that any expenditue by a trade union is limited to the amount in its political fund? Is he aware that about 200 candidates at the next General Election will be sponsored by the trade union movement and that each of them will have to declare every penny spent on his behalf by a trade union? That is the requirement of the Representation of the People Act and it has been the practice for many years.

Mr. Rooker

My hon. Friend is right. He argued the case better than I did. Trade union expenditure is known. A company S and U Stores, owned by the former Member for Birmingham, Yardley, Mr. Derek Coombs—who lost his seat in February 1974, I am glad to say—and his father is being investigated by the Office of Fair Trading for breaking financial loan laws. Mr. Coombs used his employees to campaign for him and did not declare that in his election expenses. Because it is too late, the police will not prosecute. This is accepted and public knowledge in the West Midlands.

It is another example of a Tory Member with big business to back him up using his employees in an election campaign. One of the employees confessed that he would not vote Tory but the boss told him to get out in his car for a couple of weeks and do what he was paid to do. It took four years to find out about that, because correct election expenses were not returned.

We want to kill the CABIN issue before it gets off the ground. I hope that this short debate will do that.

10.43 p.m.

Mr. Roger Sims (Chislehurst)

I am disappointed at the relatively narrow way in which the Bill is drawn. The Bill seeks to take into account the effect of inflation on candidates' election expenses, but it does not deal with the other expenses that are covered in the Act.

One expense is dealt with in Section 62 of the 1949 Act and limits to £100 the personal expenses which a candidate may pay himself. This might be of academic interest because some candidates would not contribute that amount but some might be willing and able to do so. In 1949 £100 was considered to be a reasonable limit. If £100 was a reasonable figure in 1949 a substantially higher sum would be reasonable today.

I turn to the question of the work done by our election agents, to whom all hon. Members owe so much. During and after an election the agent compiles a detailed return of all election expenses which are lodged at the local town hall, in accordance with the Representation of the People Act 1949, which this Bill seeks to amend.

As hon. Members know, virtually every expenditure has to be accounted for. Section 61 of the Act provides that Every payment made by an election agent in respect of any election expenses shall, except where less than forty shillings, be vouched for by a bill stating the particulars and by a receipt. That is still the law—that for expenditure on anything more than £2 the agent has to obtain a written account and a signed receipt and attach it to his return of election expenses.

In 1949, it was obviously considered that anything less than £2 was so trivial that it need not be detailed individually. That being so, a more realistic figure now should be inserted in the present Bill or some other legislation so as to relieve agents of some of the burden of work in making their returns. Many small expenses are involved in election procedures. Nowadays, when receipts are relatively rarely given, it seems unnecessary that an agent should have to ask for a detailed account and receipt for every expense of £2 or more. I am disappointed that there is nothing in the Bill to take that into account.

I raised this matter when a similar Bill was before the House in March 1977, and I had hoped that the Home Office would take the point and do something about it at that stage. Unfortunately, even if the proceedings on the Bill had not been so rapid as they have been, precluding me from seeking to table an amendment, I suspect that I should have been ruled out of order by the terms of the Long Title if I had prepared an amendment.

I think it unfortunate that the Home Office did not feel able to take steps to meet those two relatively small points. I had hoped that it would be possible, even in the limited time available, to produce a short Bill to cover them. I am sure that it would be passed rapidly by the House, as, I trust, the present Bill will be tonight.

10.48 p.m.

Mr. Edward Lyons (Bradford, West)

The ability of many Labour Party constituency organisations to raise money has not perceptibly increased since the last General Election. Although the increases envisaged in the Bill are based on the rise in printing costs and so on, many constituency organisations have no hope of raising the £2,800 which is likely to be the new average. There are 400 Labour candidates who are not union-sponsored and, in my view, the great bulk of them will not be able to raise the maximum envisaged in the Bill.

That means that the great advantage given by the Bill must lie with the Conservative Party rather than with the Liberal and Labour Parties. This is an indication of the present Government's fairness. In spite of the advantage going to the Conservative Party, they are none the less introducing the Bill. As long as that is clearly understood, the Bill can go through.

This is being done as an act of democratic fairness, but in the Bradford area, for example, or in Yorkshire generally, I can think of hardly any non-sponsored Labour candidate whose party will be able to raise the maximum under the Bill, whereas every Conservative candidate will have no difficulty in raising the maximum. There is thus an additional advantage to the Conservatives, but they will not win all the same.

10.49 p.m.

Mr. Michael Shersby (Uxbridge)

I intervene for only about 30 seconds to say that the speech to which I have just listened from the hon. and learned Member for Bradford, West (Mr. Lyons) really was utter rubbish. As one Conservative candidate at the next General Election, I can tell him that in my parliamentary constituency I shall have great difficulty in raising the kind of money that is provided for in the Bill. That will not stop me from trying hard to do so. But it is rubbish to try to pretend that Labour Members will not be able to raise funds from their supporters whereas the Tories will. It is time that the hon. and learned Gentleman's party woke up and got cracking on its supporters. We shall do so. If one has a good case to support, people will give their support. I support the Bill.

10.50 p.m.

Mr Merlyn Rees

The Bill is about only one aspect of the matter of expenses. The hon. Member for Chislehurst (Mr. Sims) hoped that other matters would be in the Bill. I was at the Home Office in the 1960s and I am now there again. In my view, it is most important that these matters should be discussed at a Speaker's Conference. I hoped that in the past year, when there has not been agreement on one major aspect of the matter, these matters could have been discussed. What I have tried to do is to discuss the matter with all the parties, since 5th April, which is a second-best, but the best available, because we were dealing with only one issue.

There are other matters in regard to candidates' expenses. There is a matter which I think needs urgent discussion, namely, by-elections. We have not dealt with the wider issues.

The hon. Member for Berwick-upon-Tweed (Mr. Beith) talked about big money. We have had an example of that in elections within the past 15 years. We are in the age of the advertising agency, of voice training, and things of that kind—which Mr. Gladstone, Mr. Disraeli and others did not need. In the twentieth century, presentation and that kind of thing matter. There is the role of public opinion polls. Vast sums of money are involved. There is a problem about the large sums of money.

I say to the hon. Member for Uxbridge (Mr. Shersby) that it is not so much the money spent in the constituency that matters; it is the money spent outside the constituency, and the individual campaign of a Member that is important. The Burton constituency used to get a lot of mention in the nineteenth century with regard to election expenses. I believe that the brewers played a big part at that time. When Mr. Gladstone referred to gin—I have not looked up the quotation—I imagine that he had Burton on his mind.

The hon. Member for Burton (Mr. Lawrence) did not believe my hon. Friend the Member for Newton (Mr. Evans). I am not a sponsored Member, but I get £100 from the National Union of General and Municipal Workers. I pay it straight into my party. In Leeds we can believe anything about Bradford. But in Leeds we raise the money by holding jumble sales and activities of that kind. That is the way that most parties operate. Any posters which the Labour Party outside the constituency happens to put in my area have to be accounted for by me on my election expenses.

The hon. Member for Berwick-upon-Tweed is right; vast sums of money are involved. I shall come briefly to the point about CABIN from Mayfair. The only representations that I have had about Mayfair since becoming Home Secretary were from a Conservative delegation who came to see me about houses of ill fame in Mayfair. Perhaps this CABIN in the sky is one of those.

Briefly—because we have covered the ground—what the Government have done is, on one issue, to try to deal, on the narrow point, with the sums of money that are involved, the basic sum plus the extra differing sum in a rural and an urban constituency. As I argued earlier, I think that the proposals are about right. I have consulted all the parties. It would have been better had it been done through a Speaker's Conference, but I have done the best I can since 5th April. What I propose today is the result of the consultations.

The hon. Member for Guildford (Mr. Howell) talked about the gap between the counties and the boroughs. That is another matter. What I am doing now on behalf of the Government is carrying on the trend that has come out of Speaker's Conferences in recent years. This matter ought to be discussed at a Speaker's Conference.

With regard to the new powers, there is no automaticity on this matter, as the hon. Member for Guildford put it. We do not have to come forward again, perhaps in the middle of next year before the election of September 1979, with an order. We would have to consult before doing so. There is no changed method here, as the hon. Member for Berwick-upon-Tweed noticed. Indeed, we took into account some of the views put by the hon. Member and other parties on this very point. However, I believe that the most serious cases of unregistered voters arise in service areas—the towns where a large number of residents are in the armed forces—residents who also have their families. I shall not go into the detailed reasons for this more than I need. I am conscious of the rules of order. It is a limited method of tackling the problem. We are dealing only with the precise point of the expenses. We are not dealing with changed methods.

My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) raised the question of the organisation known as CABIN. As he was good enough to inform my office that he intended to raise the question, I obtained a copy of the advertisement from The Times. It says that 300,000 balloons will be released. I hope that some will be released over my constituency. I would welcome anything that would improve the atmosphere at that time in my constituency. I do not know what message will be on the balloons, but it seems from what I read here that the organisation has it wrong before it starts. It is fighting a campaign against something that is not going to happen, but it is following a very good Conservative tradition in doing that.

The organisation intends to run, in 100 constituencies, a campaign on the nationalisation of the building industries. It would be for the courts to decide, if a prosecution were to be brought, whether there had been a breach of the law. I can do no more than repeat what I said earlier; it is one thing to do that in the country as a whole but, if the organisation wishes to act in that way in selected constituencies, I suggest that it spends some of the vast sums of money that it has on consulting a lawyer before proceeding further. I do not think I should say any more about that, because a matter of fact is involved that would have to be decided in a court of law.

These proposals are modest. I think that they are right. I wish that there had been a Speaker's Conference, but there has not been. I have consulted. I hope that the Bill will be accorded a Second Reading.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Bates.]

Bill immediately considered in Committee.

[Sir MYER GALPERN in the Chair]

Clauses 1 to 4 ordered to stand part of the Bill.

  1. New Clause No. 1
    1. cc186-93