CAMPAIGN EXPENDITURE: QUALIFYING EXPENSES

HC Deb 14 March 2000 vol 346 cc210-3

Mr. Grieve

I beg to move amendment No. 147, in page 120, line 30, at end add— '(f) any legal or other professional expenses incurred in respect of, or in connection with, any requirement in this Act.'.

Mr. Deputy Speaker

With this it will be convenient to discuss the following: Government amendments Nos. 25 and 35.

Amendment No. 148, in schedule 12, page 146, line 18, at end add— `(f) any legal or other professional expenses incurred in respect of, or in connection with, any requirement in this Act.'. Government amendment No. 71.

Mr. Grieve

In Committee, we were interested in the lists of expenses that would constitute campaign expenditure, or referendum expenditure, for the purpose of "notching up" to the limits that would be allowable. Certain exclusions are provided, under which expenses do not count in respect of that ceiling. They include expenses in respect of any property, services or facilities so far as those expenses fall to be met out of public funds … remuneration or allowances payable to any member of the permanent staff of the party … reasonable expenses incurred in respect of an individual by way of travelling expenses —enabling the individual to travel around his constituency, or to conduct a referendum campaign. It is noticeable that we have not discussed the expenses that will be incurred by political parties to achieve compliance with the Bill. Amendments Nos. 147 and 148 would exempt

any legal or other professional expenses incurred in respect of, or in connection with, any requirement in this Act. As I am sure the Minister will accept, there is no doubt that compliance with the Bill will place financial burdens on political parties. If, in the past, parties have relied on auditors—who may not have been qualified—to do the work on a benevolent basis, it is likely that in future they will have to pay for proper auditors and accountants. Election and referendum campaigns will involve administrative burdens, and in the case of the larger parties, that burden is likely to require the recruitment of staff to ensure complete compliance with the legislation. I hope that the Minister considers it reasonable to assume that it would be wrong to ask parties to deduct the amount involved from their campaign expenditure ceiling.

Let me issue a slight caveat in regard to my own proposals. I can envisage the possibility of the running up of legal expenses by a political party or individual defending a prosecution under the Bill, and if conviction were to follow, it might be argued that the exemption should not apply. If the Minister wishes to consider that further, I shall not stand in his way. It must be right, however, for basic, day-to-day administrative expenses that will impose an additional burden on all political parties, especially smaller parties, to be excluded, as we propose in amendments Nos. 147 and 148—which are identical, apart from the fact that amendment No. 148 applies to referendum expenses.

I know that the Minister has tabled amendments, and I welcome them. They take on board what was said in Committee about the need to raise some of the de minimis levels of expenditure to reduce the burden on political parties, and Opposition Members will support them.

Mr. Tipping

Government amendments Nos. 25, 35 and 71 are indeed concerned with increasing de minimis provision in the case of notional services. As the hon. Member for Beaconsfield (Mr. Grieve) said, the issue was discussed in Committee; indeed, he and his hon. Friends pressed the Government to increase the provision, and I am delighted to have been able to respond. Given the consensus that appears to exist, perhaps I can let the matter rest there.

Amendments Nos. 147 and 148 would add to the list of items in schedules 7 and 12 that are not to be regarded as constituting election or referendum expenses in respect of legal or other professional services incurred in connection with compliance with the Bill. When I first looked at the amendments, I thought they were drawn very widely, but I believed that I knew what their purpose was. I must be fair to the hon. Member for Beaconsfield: he gave some examples, and rightly pointed out that the Bill would place extra burdens on all political parties. I think that he—also being fair, as ever—will acknowledge that, throughout the Bill's passage so far, the Government have provided a series of stepping stones, providing for a light touch in respect of smaller parties and more rigorous enforcement in respect of those with larger incomes and expenditure.

The hon. Gentleman will recall that, earlier in the Bill, the Government allow the Electoral Commission to establish a scheme to distribute money to help political parties to prepare for the legislation. He will also recall that the amount is £500,000 for all political parties.

The hon. Gentleman rightly said that there would be teething troubles, and that the Bill would produce extra burdens; but I am not convinced that the burdens on the larger parties—dare I call them the mainstream parties?—will be as great as he suggested. All the major parties already have the benefit of legal advice, and their accounts are already professionally audited.

6.30 pm

The hon. Gentleman pointed out that, because it is new legislation, there could be recourse to legal fees. I had thought that the amendments were aimed primarily at legal fees, but now that he has drawn attention to them, they include other professional services, too.

I have looked in particular at the legal fees issue. I am not entirely convinced—although I will look at the matter again now that we have had the opportunity to discuss it and to hear the concerns—that his amendments are necessary. The advice that I have received at this stage is that legal fees in connection with referendums and campaign expenditure in a general election or local election could well not count against campaign fees at all. That is a moot area.

I am certainly of the opinion that there is a strong argument that the provision of such professional fees will not be counted against campaign expenditure, but I will look at what the hon. Gentleman has said in outlining the matter. If he will give me leave, I will look at it again in the light of his comments and write to him. If necessary, and if there are the concerns that he spells out, we will make the appropriate adjustments.

Mr. Grieve

The Minister's words are partially reassuring, but not perhaps quite as reassuring as I had hoped. I appreciate that he may not have understood the full scope of the amendment. One of the reasons for Report stage is the opportunity to discuss these matters. May I take a separate example? If I submit a tax return, I am allowed to deduct a proportion of my accountancy fees from my total income. There is an analogy here. If parties have to spend money to operate the system correctly, as the Bill demands, it will be wrong for that money to count towards their campaign expenditure.

I was thinking much more along those administrative lines than in terms of exceptional legal fees, which is precisely why I said that I could foresee a situation where, if a party got itself into difficulty and incurred legal fees because it was in trouble with the law, it might be regarded as wrong to give it such an exemption. However, that could easily be put into an amendment, if the Government applied their mind to it.

Mr. David Heath (Somerton and Frome)

I have listened carefully to the hon. Gentleman's case. I am not sure that I agree with the exemption point. If a legal case arose from the Bill, it could not possibly be construed as campaign funds. It cannot genuinely fall within the scope of campaign expenditure.

Mr. Grieve

The hon. Gentleman makes a reasonable point. I dare say the Minister will take that on board, too. When introducing these measures, I try to look at different facets of an amendment. It seemed a point that could validly be made against us. His point is perfectly valid; I am grateful to him for having made it.

Mr. Tipping

I reinforce the point that the hon. Member for Somerton and Frome (Mr. Heath) has made. The advice that I have received so far—as I say, I will look at it in the context of the debate—is that such expenditure would not count against electoral expenses—but I will write to the hon. Member for Beaconsfield (Mr. Grieve) about the matter.

Mr. Grieve

Again, I am grateful to the Minister. I would not wish to press the amendments any further, but I hope that the matter will be looked at and addressed, so that by the time the Bill gets to the other place, there can be complete clarity as to whether such an amendment is needed. If not, I hope that the Government will provide a positive response, or that the matter may be revisited at a later stage. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.