HL Deb 21 November 2000 vol 619 cc748-53

. Where any person, knowingly and with the intent of evading the reporting requirements in this Part, makes multiple donations of not less than £200 to a registered party whose aggregate value is not less than £5,000 in any one year, that person is guilty of an offence.").

The noble Lord said: My Lords, in moving this amendment, I shall speak also to the other amendments in the group. The amendments seek to further the debate in Committee on 12th October about the clause imposing an obligation on donors. On that occasion, the noble Lord, Lord Bassam, said that a provision for sanctions against donors was essential. I shall not read out what the Neill committee says; all noble Lords present know that the committee's recommendations were quite the opposite. The committee said that there should be no comeback on the donor, and that it should be entirely the responsibility of political parties.

I was rather amused at the weekend to see that some of the Government's spin doctors were saying that the House of Lords was being naughty on this Bill and that we were going against the recommendations of the Neill committee. I do not think that the House of Lords has yet done that. The Government are inviting your Lordships to go against the committee's recommendations by including this clause.

We shall no doubt hear from the noble Lord, Lord Goodhart, shortly. He, too, had concerns but was unable to support my amendment. The Government are concerned that there is a danger that a donor might split up his donations and give £200 to every constituency party. That would be considerably more than ought properly to have been reported. The noble Lord, Lord Goodhart, suggested that it could be made an offence to split up donations in that way in order to evade the reporting restrictions. My amendment has been drafted with that in mind. It would change the criteria to include deliberate, knowing, intentional evasion, rather than an accidental failure to report. It is possible that such an offence might be difficult to prove in practice. However, if someone were giving £200 to every constituency party, it would not be terribly difficult to prove. Indeed, it would not be impossible.

At present on the face of the Bill, people who give donations to a political party could be viewed as committing a criminal act just because they either forgot to report or did not realise that this clause was in the Bill. I do not expect this clause to receive widespread publicity. Therefore, it seems to me that many people may find themselves in this position. Indeed, their monthly standing order may bring them into conflict with the Bill and turn them into criminals. That is the situation that the amendment of my noble friend Lord Norton seeks to address.

I shall not continue with this point, but I feel most strongly about it as far as concerns donors. I believe that we all want people to be active in the political process; we want them to give donations. We are not talking about big donations here, nor, indeed, about small donations; we are talking about modest donations. I suggest that we do not want to criminalise donors. Neill was also very clear that he did not want to criminalise them. Therefore, the Government should listen to their own spin-doctors and abide by Neill. They should not tempt your Lordships' House by refusing these amendments or by saying that they will come forward with others on Third Reading. I am not vain enough to think that every amendment that I draft is absolutely perfect. But we should not be tempted into going against the Neill committee and receiving the ire of the Government's spin-doctors in next weekend's press reports. I beg to move.

Lord Goodhart

My Lords, I support the noble Lord, Lord Mackay of Ardbrecknish. In paragraph 4.63 the Neill report says: It should be made a criminal offence to attempt to evade or to render nugatory the statutory reporting requirements relating to disclosable donations. An obvious ruse for the purpose of evading the statute would be for a wealthy individual to give (say) £24,000 to a political party by procuring six friends or relatives to give £4,000 each (this sum in each case being furnished by the wealthy individual)". Of course, we could now raise that figure to £30,000 because it should be £5,000 each, according to the Bill. In such a situation where this is done deliberately, it is perfectly clear that there should be a burden on the donor. However, where there is an accidental failure to report, there should be no criminal liability on the part of the donor. That would be a fault of the administration of the party receiving the donation. Where there is a deliberate and conscious attempt to evade the reporting requirements, it is quite right that that should be a criminal offence on the part of the donor.

Lord Norton of Louth

My Lords, I rise to speak to Amendment No. 119A, which has been included in this group. I suspect that the Minister will have no difficulty in recognising why I tabled this amendment. I trust that he will find it helpful. It is also complementary to the amendment moved by my noble friend. As my noble friend explained, this clause imposes a requirement on those individuals who give £5,000 or more each year in small donations to make a return to the commission.

In Committee, I raised the question of how individuals were to be made aware of this requirement. It is one thing to impose a statutory requirement on registered political parties to make returns, but it is entirely another matter to impose such requirements on ordinary citizens. How are we to ensure that citizens are aware of the provisions in this clause? In Committee, the noble Lord, Lord Bassam, acknowledged that this was, as he put it, a reasonable and intelligent point". He went on to say: Clearly we shall have to give considerable publicity to the effects of the legislation. We might do so through the local authority. We might hope that that approach would be supported by the local political parties. It would be open to the electoral commission to advertise its existence—I am sure that it will want to do so—and to promote some of the factors in the scheme which require compliance by the parties and, on this occasion, by a donor".—[Official Report, 12/10/00; col. 614.] My amendment seeks to ensure that people who make donations to political parties are aware of the provisions of this clause. Rather than leaving it to some later action which may not materialise, I think it is important to make some statutory provision for publicity. I believe that my amendment has two benefits. The first is that it goes some way to ensuring that citizens are informed of their obligations under this measure and that that information is in a standard and printed form. It reduces the chances of citizens ending up in court because they gave many small donations totalling £5,000 or more to local parties and failed to inform the commission.

The second benefit is that it ensures greater awareness of the provisions of the clause without imposing a considerable burden on the political parties. It would be intolerable if the parties themselves had to shoulder the responsibility for preparing and disseminating information to donors about their legal responsibilities. As I have mentioned already, parties are under tremendous pressure and there is no case for adding to it. Under my amendment the forms for distribution to donors would be made available to the political parties free of charge.

I have considerable doubts about the clause. I am not sure that it is enforceable and I do not believe in law that is unenforceable. That brings the law in to disrepute. If the provision is to appear on the face of the Bill, we have to take steps to ensure that it is as far as possible enforceable. My amendment is a modest, but I believe important, one that goes some way to alleviating what I see as a major problem of the clause.

Lord Hodgson of Astley Abbotts

My Lords, I support my noble friend's amendment solely on the condition that he replaces the words "not less" with "more".

Lord Wedderburn of Charlton

My Lords, I make two short points. The £200 comes from the Companies Act schedule first instituted in 1967. I remember discussing with those expert in practice whether the phrase in the schedule to that Act referred to the money given exceeding £200 in aggregate. I was told that those who practised in that area had never known of such a thing. Whether that means it is a good idea to leave this loophole open, I do not pretend to know. I say to the Government that their Amendment No. 237 has a cut-off point for rather parallel purposes. No doubt they will deal with that point at the appropriate time.

Lord Bassam of Brighton

My Lords, Amendment No. 117 would insert a new clause by way of replacement to Clause 66 that would make it an offence to make multiple donations of £200 or more which in aggregate amounted to £5,000 or more with the clear intention of evading the reporting requirements set out in Part IV. I do not regard this new clause as an improvement on Clause 66. They are both directed at much the same end; that is, evasion of the reporting requirements by making multiple small donations. But the advantage of the existing provisions is that a person who chooses to make a series of small donations can do so legitimately provided he or she makes the necessary return to the electoral commission. Under the noble Lord's alternative clause, multiple small donations will not be disclosed whatever the circumstances, as there will be absolutely no requirement for them to be disclosed. I do not think that the wording helps. I cannot see how they would ever be disclosed. That is a problem. If there is to be any enforcement here, there needs to be some form of disclosure. Nothing that the noble Lord proposes would oblige that disclosure.

The new clause also appears to misunderstand the provisions of Part IV. Under this part the duty to report and disclose all donations rests with the recipient of donations; namely, the registered parties. Except in the case of Clause 66, no reporting requirement is placed on a donor. That is the only occasion where that occurs. Without Clause 66, a donor cannot be said to be evading the reporting requirements as there are no such requirements on the donor for him to evade.

As I think a number of noble Lords have identified, the potential problem lies with multiple donations of less than £200. As parties are not required to treat such payments as donations at all, donations of this order offer scope for abuse. Clause 66 as it presently stands addresses that problem. Amendment No. 117, by contrast, addresses a problem that in our view does not exist.

I turn to Amendments No. 120 to 122. These amendments would alter the nature of the offences in subsection (5) of Clause 66. If the amendments were made, the prosecution would need to show that a person knowingly delivered a report which did not comply with the requirements of Clause 66(2), knowingly failed to deliver such a report on time, or had intentionally failed to include the requisite declaration. The noble Lord is concerned that such donors may not be fully aware of the requirements of the Bill and may unwittingly fall foul of them. I can understand that. I hope that this will not be the case and that the electoral commission and the political parties which accept such contributions will do what is necessary to ensure that multiple donors are aware of the relevant rules.

I do not agree that failure to be aware of these requirements should constitute a defence. It would be a very convenient one and would effectively wholly undermine the provision. I remind the House that in order to engage the requirements of this clause a donor would need to make at least 50 payments each of less than £200 but which in aggregate would exceed £5,000. That is not a normal pattern of giving in any form. It seems reasonable to expect that a donor who goes down that road should be aware of the relevant provision of the Bill.

On the point raised on Amendment No. 119A, I am sure the commission will prepare the relevant form and provide appropriate advice on the provisions of Clause 66. I do not think that we need to write them on the face of the Bill. Clause 9 already provides adequate powers to provide advice to parties and donors. While I am always grateful to the noble Lord, Lord Norton of Louth, for his help and advice, on this occasion I do not think that we require it.

9.45 p.m.

Lord Norton of Louth

My Lords, before the noble Lord sits down, will he confirm that what is made available to the political parties would be free of charge? In other words, the cost would be met by the commission.

Lord Bassam of Brighton

My Lords, the noble Lord will appreciate that I cannot speak for the commission. I would hope that if there were any cost it would be minimal, but clearly this is one of those areas where we need to ensure that the commission is as helpful as possible.

Lord Mackay of Ardbrecknish

My Lords, I cannot pretend that I am other than somewhat disappointed with the response. The noble Lord made no attempt to explain to your Lordships' House why the Government have gone against the recommendation of the Neill committee and placed these obligations on donors. We have had a good run today, largely on the basis of trying to make the Bill as easy to operate as possible, and easy for donors to operate, because we have all agreed that political parties need donors.

Lord Bassam of Brighton

My Lords, I am grateful to the noble Lord for giving way. I apologise if I did not address that problem as thoroughly as I should have done. On reflection, I take the noble Lord's point. We are trying to make it easier for the political parties to operate in this arena. That is the reason why in this instance we have placed the obligation on the donor. It is the only occasion in the Bill where we have done that. Because of the size of the donation and the fact that the donor knows that he is making it we believe that the obligation should rest with him.

Lord Mackay of Ardbrecknish

My Lords, I understand what the Minister says. I am not sure that it justifies going against the recommendation of the Neil committee. The provision says to donors, "Be careful. If you are a donor to a political party, you may be breaking the law". I am not sure that that is a nice message we want to get across. We all want to encourage people to give donations to political parties. It is not much of an excuse that the donor is responsible only with regard to this type of donation. Unless the donor has been present in your Lordships' House, or reads Hansard— I am not sure that too many donors will do that—I suspect that most people who are likely to donate to political parties will not be aware of their obligations.

I am unhappy that the Minister has been so negative. I understand that it is not easy. My amendment may not be well worded, although the noble Lord, Lord Goodhart, who is a greater expert on these matters than I am, did not seem to be too concerned about the wording. However, in the spirit of the recent co-operation from Ministers, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 66 [Control of donations to individuals and members associations]:

Lord Mackay of Ardbrecknish moved Amendment No. 118: Page 49, line 21, leave out ("not less") and insert ("more").

On Question, amendment agreed to.

Lord Bassam of Brighton moved Amendment No. 119: Page 49, line 29, leave out ("(4) to (10)").

On Question, amendment agreed to.

[Amendments Nos. 119A to 123 not moved.]

Clause 67 [Register of recordable donations]:

Lord Bach moved Amendment No. 124: Page 50, line 15, after ("2,") insert ("3,").

On Question, amendment agreed to.

[Amendment No. 125 not moved.]

Lord Mackay of Ardbrecknish moved Amendment No. 126: After Clause 67, insert the following new clause—