HL Deb 24 October 2000 vol 618 cc236-54

.—(1) In section 69 (office of election agent and sub-agent)—

  1. (a) in subsection (1), for "writs, summonses and" substitute "legal process and other"; and
  2. (b) in subsection (3), for "writ, summons or" substitute "legal process or other".

(2) In section 85(4) (penalty for sitting or voting where no return and declarations transmitted), for—

  1. (a) "the writ or other process" (in both places), and
  2. (b) "a writ or other process",
substitute "legal process".

(3) In section 121(5) (presentation and service of parliamentary election petition), for the words from "as nearly" to "such other" substitute "in such".

(4) In section 136(2) (security for costs), in paragraphs (a) and (b), for "on summons, directs" substitute "directs on an application made by the petitioner".

(5) In section 184(1) (service of notices), for 'summons, notice or" substitute "notice, legal process or other".

(6) In section 202(1) (general provisions as to interpretation), after the definition of "legal incapacity" insert— "legal process" means a claim form, application notice, writ, summons or other process;".

(7) In Schedule 4 (election expenses at certain local elections in England and Wales), in paragraph 4(3) (penalty for sitting or voting where no return and declarations transmitted), for "a writ or other process" substitute "legal process".").

Schedule 17, as amended, agreed to.

Clause 132 agreed to.

7.45 p.m.

Schedule 18 [Control of political donations by companies: new Part XA of Companies Act 1985]:

Lord Mackay of Ardbrecknish moved Amendment No. 260: Page 165, line 8, at end insert ("qualifying cash donations and qualifying non-cash donations made by companies to registered parties and to other EU political parties").

The noble Lord said: I beg to move.

Lord Bassam of Brighton

Perhaps I may indicate that we are prepared to take away the fourth of the amendments relating to the de minimis threshold and bring back our own similar amendment. Perhaps the noble Lord will agree to withdraw his first three amendments.

Lord Mackay of Ardbrecknish

That is a good try by the noble Lord, Lord Bassam. I shall try to be brief in exchange for that but I have two or three points that I want to make. In fact, I shall be content if they are answered by letter but I believe that the points should be answered.

With this series of amendments, I am looking at Schedule 18. It is essential that it is clear and transparent as to which donations constitute political donations and which do not. The scope of the meaning of an EU political organisation is, I suggest, too wide and too uncertain. For example, does that include the Industry Forum of the Labour Party, the Enterprise Forum of the Conservative Party, think tanks like the IPPR or the Institute of Economic Affairs? Similarly, what is the standing of NGOs like Friends of the Earth?

Lord Eatwell

As chairman of IPPR, I should point out that the IPPR is a charity.

Lord Mackay of Ardbrecknish

I take that back, but I am making a point about think tanks and the donations from companies to think tanks. If the noble Lord waits for a few seconds, he will see the point that I am coming to.

If the scope of the new regime is not clear, there is every likelihood that there may be problems with the donations to those bodies. Companies may not wish to fall foul of the legislation because they have failed to receive prior shareholder approval for a donation to a body which they do not believe is a political organisation but they are concerned about it. So we are seeking clarification on that. In fact, perhaps the noble Lord, Lord Eatwell, has underlined the need for clarification on the subject.

That is the first point. My second point relates to Amendment No. 264. I am sorry that my noble and learned friend Lord Fraser of Carmyllie cannot be here but this issue has arisen in particular with regard to the Parliamentary Group for Energy Studies. The chairman of the group, Mr Ashok Kumar, the MP, wrote to Mr Paddy Tipping on 4th February seeking clarification as to whether those all-party groups would be treated as political organisations. Some all-party groups receive donations from companies and so on. Of course, if they are considered to be political groups, they would fall within the provisions of the Bill and would require prior shareholder approval.

In his reply on 24th March, Mr Tipping confirmed that, as the Bill was worded, all-party groups would be affected and the definition would be looked at afresh. My information is that that decision was taken last Easter, and that would exclude all-party groups from the Bill. My noble friend was told by the Minister that the Government intended to clarify the scope of Schedule 18 so that all-party groups would not be considered. But nothing much has happened and here we are, in Committee, and no amendment seems to be forthcoming.

I hope that I have made my points as quickly as possible. Schedule 18 needs a little thought and some clarification. I beg to move.

Lord Bassam of Brighton

I thought that this might be simpler than it has turned out to be. The amendments would narrow the definitions used in Part IX to exclude from the provisions of the Bill donations to political organisations other than political parties and company expenditure on advertising or promotional material. The second objective is to introduce a de minimis threshold, which we agree with in part.

We need to remind ourselves what this part of the Bill is about. The Neill committee said that it wanted a broad definition of political organisations, because otherwise companies would have undesirable scope to evade the legal requirements on political donations. We cannot support the amendments on that point.

I am not sure that we can deal with the noble Lord's points because of the way in which the amendments have been set out, but we agree that there is a good case for a de minimis threshold. We should like to introduce an amendment on Report to exclude all-party groups from Part IX. That might help. We will deal with the issue in Amendment No. 280 of a de minimis limit for company authorisation, not for disclosure. That probably addresses the issue.

Lord Mackay of Ardbrecknish

I am grateful to the Minister. We shall read what he has said and look forward to an amendment on Report, as well as any clarification that he can give on any of my other points, including the de minimis point. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 261 to 264 not moved.]

Lord Blackwell moved Amendment No. 264A: Page 165, leave out lines 35 and 36 and insert— ("(b) any organisation whose intention is to affect public support for a registered political party or referendum campaign, where intention to affect support is indicated by the criteria set out below—

  1. (i) whether the organisation gives financial support to registered parties or referendum campaigns,
  2. (ii) whether the organisation undertakes activities that are specifically aimed at canvassing support for registered parties or referendum campaigns as opposed to influencing the overall political and policy debate,
  3. (iii) whether the organisation is constrained to support policies endorsed by one political party or is free actively to develop and promote ideas independently of any political party.
  4. (iv) whether membership, subscription or equivalent status is restricted according to political affiliation or is open to all,
  5. (v) whether political parties have any role in appointing officers of the organisation.").

The noble Lord said: The aim of the amendment is to provide a possible solution to some of the issues that my noble friend Lord Mackay has just raised. I declare an interest as the chairman of the Centre for Policy Studies, which is a think tank that may be affected in some of the ways that my noble friend suggested.

There is still uncertainty about the definition of an "EU political organisation" and what requirements there might be on forward permission from shareholders. The Bill defines an EU political organisation as a registered party or, any other organisation which carries on … activities of any political nature in the United Kingdom or any other member State". "Activities of any political nature" is a broad definition. As my noble friend suggested, a number of other organisations apart from think tanks could be caught, including pressure groups or trade associations. Indeed, it is difficult to think of many organisations with a role in public life that could not be described as carrying out activities of a political nature in some way.

If the definition is not clear, it will be left to companies and their boards to decide on a case-by-case basis whether they believe that theirs is a political organisation under the terms of the Bill. If they decide on the evidence available that it is not, they lay themselves open to challenge. That creates unhelpful uncertainty and may, on the margins, discourage corporations from giving to organisations to which we might wish them to donate. The onus is on the Government to clarify the issue by setting out their intentions rather than leaving it to other organisations, and ultimately the law, to interpret.

The amendment puts forward one way of drawing the line between political organisations and others. The issue is open to considerable debate. Our intention was to include those organisations that are fronts for registered political parties, by which I mean organisations that seek to persuade people to vote for a party or candidate, but to exclude organisations that are independent of political parties and seek merely to develop policies or pursue political debate. That seems to be a clear possible dividing line. The formulation has been discussed by various think tanks and is broadly supported by, among others, the Centre for Reform, the Institute of Economic Affairs, the New Policy Institute and the Social Market Foundation and it has been discussed in broad terms with officials. The question is whether the amendment, which is meant to be helpful by setting out some criteria to define the amorphous term "political organisation", is an acceptable way of drawing the line and giving greater certainty.

Charities were mentioned earlier. Some organisations are charities and some are not. That would be one way of drawing a line, but the criteria by which the Charity Commissioners decide on charities are not necessarily the right ones in this case, any more than they are necessarily the right people to ask to delineate what is a political organisation. That is a side issue to the Government providing a clearer definition of an EU political organisation. I ask the Government to look at the words that I have used. I hope that they, or some similar form of words, will be acceptable. If the Government do not accept them, I should like to hear that they are prepared to put forward an alternative form of words to meet the same objective. I beg to move.

Lord Harris of High Cross

Before I launch into a formidable speech in support of the amendment, may I ask the Minister whether the Government intend to table an amendment to meet the anxiety that the noble Lord, Lord Blackwell, has expressed and which is shared by many people, including by the noble Lord, Lord Eatwell, and me? I understood the Minister to say that earlier.

Lord Bassam of Brighton

Yes, that is our intention. We want to retain the principles of accountability and transparency that Neill has rightly set down on this tricky set of issues. The amendment is very helpful. We cannot sign up to the wording and there are complexities, which the noble Lord has acknowledged, about what is charitable or non-charitable work. I am sure that other noble Lords will also acknowledge those problems. We should like to consider the points that have been made so far and table a government amendment to address them. I am confident that we will provide a working definition of what is "political" in these circumstances.

Given that there are three or four think tanks considering the issue, together we might come up with a workable solution that will give effect to the noble Lord's intentions, although think tanks do riot always solve problems, do they?

8 p.m.

Lord Eatwell

I hope that they do. I should like to address this issue, first, specifically with regard to think-tanks. The development of think-tanks in the UK has proceeded apace over the past decade. Some venerable think-tanks—for example, the Fabian Society and the Institute of Economic Affairs, with which the noble Lord, Lord Harris, was connected—have existed since the 1950s or even earlier and have made a major contribution to British political life.

Over the past 10 or 20 years a number of other think-tanks have developed and have, I believe, contributed significantly to British political debate. They are a positive element and most are funded by voluntary contributions of one form or another. It would be unfortunate if voluntary contributions to thinking about policy and policy affairs were limited in some way by this Bill.

Therefore, I urge the Government to consider think-tanks, which of course are necessarily political. I refer not only to think-tanks such as the Centre for Policy Studies, which is not a charity, the Institute of Economic Affairs, which, I believe, is, and the IPPR, which I chair and which is a charity. Those are clearly interested in political issues and policy. I think also perhaps of Amnesty International or even the British Red Cross, which occasionally take strong political positions and which might be caught if the Government are not terribly careful in their drafting of the Bill.

The main division which exists in the Bill at present is between charities and non-charities. Of course, a clear divide within the remit of the Charity Commission is that an organisation can be political but it must not be party political. Whether or not that is an appropriate divide, I am not sure. I am clear that think-tanks and other organisations which are not party political should not be included within the restrictions which are imposed on political funding in this Bill. That would be entirely inappropriate and the Charity Commissioners give us a clear solution to that problem.

However, some organisations are, in a way, party political. They develop ideas within a very party political context but can also provide an important spark in political debate in this country. For example, after the Second World War, the allies established think-tanks for each of the main German political parties as an important part of the democratisation process in Germany. Those research organisations, including Stiftung, with which we are all familiar, have played a tremendously important part in the development of German democracy, even though they are party political.

Therefore, I ask the Government to accept that the Charity Commissioners provide us with one step along the road to defining clearly the position of think-tanks as non-party political. I also ask them to be sensitive to the role of more party-political think-tanks, which can play an important role in our democracy today and whose funding may be placed in jeopardy if we take too hard a line on this Bill.

Lord Newby

I declare an interest as a trustee at the Centre for Reform, which, like all think-tanks, is engaged in policy development. I believe that it is important to stress that all think-tanks, particularly as they have developed, have shown an increasing willingness and enthusiasm to involve in their work people who are not members of a party, even if they come from a party background.

The Centre for Reform, for example, which not surprisingly is run by and serves to promote principally ideas which Liberal Democrats find acceptable, has recently published a book about EU enlargement. Most of the people who contributed to that publication were academics. So far as I know, they had no particular party allegiance. They were specialists in agricultural policy, foreign policy and so on. We like to think that the book that they produced helps to develop public debate on a major political issue. Therefore, I believe that it is important that think-tanks are given every opportunity to raise funds and to develop without being constrained in the same way as political parties.

The Centre for Reform was established after the last general election. We had to make a choice as to whether or not to become a charity. We decided that we would not do so on the basis that we were not absolutely sure how the Charity Commissioners would view us and that it would be easier not to be because we would be less constrained in what we did. We try very hard to carry out a great deal of work with a small amount of resource. I suspect that in that we have much in common with every think-tank in the land.

Therefore, I am wary of any proposal that will make it less easy for us to raise funds. Often we are talking about relatively small amounts of money. The Centre for Reform often approaches individuals or organisations and asks for small numbers of thousands of pounds to produce a publication, or possibly £10,000 or £20,000 to help to support a little research. In my view, anything that makes that type of fund-raising more difficult diminishes not only our ability but the ability of those who are thinking about public policy in this country to help in the development of public policy.

I, and no doubt other Members of the Committee, were heartened by what the Minister said. We look forward to discussing with him the possibility of another amendment. I believe that this is an important issue. I hope that on Report an amendment will be tabled on which we can all agree. I hope that such an amendment will make it absolutely clear that people who want to give money to think-tanks can do so without the constraints which understandably are placed on the giving of funds to political parties.

Lord Howe of Aberavon

I wish to make one comment on behalf of another comparable organisation which next year will have been founded 50 years ago to, combat the influence of the Fabian Society"; namely, the Bow Group. It is characteristic of an organisation drawn from every wing of the scattered Conservative Party and makes contributions to a wider debate in exactly the same way as the Fabian Society has done. I do not believe that it has quite the same claim to some of the more high-sounding institutions. I am not even sure if it has the same intellectual distinction as, for example, the Institute of Economic Affairs. However, it is one of many which one should handle with care.

When I spoke months ago on the Second Reading of this Bill, I was deeply apprehensive about the intrusion of this type of legislation into what I might call the "nooks and crannies" of political life and thought in this country. This is a very good example of it. Therefore, I am delighted to know that the Minister is considering all those organisations.

Lord Blackwell

I am grateful for and encouraged by the support for this amendment around the Chamber. I am also grateful for and encouraged by what the Minister said and I look forward to hearing what he has to say on Report. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 265 to 267 not moved.]

Schedule 18 agreed to.

Clause 133 [Disclosure of political donations and expenditure in directors' report]:

[Amendments Nos. 268 to 276 not moved.]

Lord Mackay of Ardbrecknish moved Amendment No. 277: Page 86, leave out lines 9 to 36.

The noble Lord said: I can be brief. This may well lead back to the previous discussion. I have a question. Here we find charitable donations, in the midst of a Bill whose Long Title does not seem to include anything to do with charitable donations. I wonder why that is here and if it is consistent with the Long Title of the Bill. I beg to move.

Lord Bach

The speaking note states that I can quickly settle the issue here. That is always rather a hostage to fortune. At present, Part I of Schedule 7 to the Companies Act, which requires the disclosure of political and charitable donations by a company in the directors' report, is framed as an integral whole dealing with both types of donation. Clause 133 redrafts that part to amend and expand the provisions relating to political donations. In doing so, it was necessary to restate separately the existing provisions relating to charitable donations. No changes of substance have been made.

The effect of the amendment would be to repeal the existing requirements on the disclosure of charitable donations by companies without replacing them. It may be that the noble Lord thought that we were imposing new charitable disclosure requirements; we are not. This is only to make the new part of the Companies Act look as it should.

Lord Mackay of Ardbrecknish

I am grateful to the Minister for that explanation, which I understand. Perhaps I may suggest that he does not give me an answer now but that he considers with his officials whether this is legitimate within the Long Title of the Bill. I understand what the Minister is doing but I wonder whether it is legitimate. However, with that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 278 and 279 not moved.]

Clause 133 agreed to.

[Amendment No. 280 not moved.]

8.15 p.m.

Lord Mackay of Ardbrecknish moved Amendment No. 280A: Before Clause 134, insert the following new clause—