European Union Referendum Bill — House of Lords, 2015-11-18
Topic: Government Operations
Joyce Anelay (Conservative, Centre-right): My Lords, Amendment 14, tabled by the noble Lord, Lord Jay, relates to the controls that apply to donations received by campaigners. I was asked about the European Commission. As I explained in Committee, one of the technical issues is that permitted participants in these matters are individuals and bodies that intend to spend more than £10,000 on campaigning during the referendum period and so register with the Electoral Commission. The European Commission cannot be a permitted participant. If it were to spend money outside the campaign and in Europe, there are controls over where it can give that money and how it can give it. For example, there is a prohibition on accepting donations of more than £500 from an ineligible source, so people cannot accept money from it I was going to try to reduce the amount that I would read out at this late hour, but it looks as though I am being sucked back into doing exactly that. Perhaps I ought to try to address more closely Amendment 14 itself. In considering the amendment, two questions have to be asked: is there a problem, and, if yes, does the amendment provide the solution? To the first question the answer is not straightforward, which is why the noble Lord tabled the amendment. He has done so after discussion with the Electoral Commission. It may come as a bit of a surprise to see this briefing from the Electoral Commission at such a late stage, particularly because I notice that my noble friend Lord Forsyth has been trying to get other information and has not been given the opportunity to obtain that. All I can say is that this briefing from the Electoral Commission that we have all seen arrived at about quarter to 12 in noble Lords’ in-boxes yesterday. The Electoral Commission has suggested that the rules are unclear. As I remarked earlier, it is 15 years since PPERA became an Act. Over that period, all the conditions which the Electoral Commission now calls into doubt have been operating. Therefore, it is rather a surprise that these matters have been raised at this stage, but there you go The conditions in PPERA applied for the AV referendum and were replicated, through an Act of the Scottish Parliament, for the Scottish independence referendum, and nobody called them into question then. Indeed, at that stage, guidance from the Electoral Commission itself clearly and accurately explained the rules to campaigners in Scotland. Furthermore, the commission’s own report on the Scottish independence referendum noted that it provided, "a model that can be built on for any future referendums" Despite that, as noble Lords will note, the Electoral Commission’s briefing supports this amendment because the commission now has concerns about the rules. We have to take those concerns seriously because that is the whole point of trying to have rules upon which a fair referendum is to be based. The concerns relate to the fact that PPERA does not prevent campaigners accepting donations before they register as permitted participants, if the donation would have been impermissible after registration. If noble Lords consider that this is a problem, it must then be asked: is Amendment 14 the solution? Here the answer is clearly no for three reasons. First, it goes too far. The amendment would apply to donations received by any individual or organisation, regardless of whether or not they are, or later become, a permitted participant. At any point prior to the referendum, anyone, regardless of the size of the donation or the amount they will spend, could commit this new criminal offence. This really would be a sledgehammer to crack a nut Secondly, the amendment is unworkable. It would create an offence of allowing the use of money received from an impermissible source to meet referendum expenses. Currently, the rules do not require campaigners to track what each pound received is spent on. This is for a good reason, as attempting to do so would be a herculean task in administrative time. It would only ever create an arbitrary link between money in and money out. I find it difficult to imagine how that might be accurately assessed. How would anyone be able to prove that the £1,000 a campaigner received from a particular source was the exact same £1,000 spent on referendum expenses several months later? How could it work for charities and other organisations that receive donations from all over the world for different reasons? Clearly, that matter would have to be looked at if the amendment is to be put right but, as the amendment stands, it does not work The fundamental changes that Amendment 14 would introduce would begin to unstitch the fundamental principles that apply in PPERA, in particular the purposes of having a referendum period and permitted participants. These are all concepts which, to date, have been accepted by Parliament and endorsed by the Electoral Commission, and have provided the framework for well-controlled referendums in the UK The Government had questioned the whole issue of the potential for concern over donations received prior to registration. That is the kind of questioning one has to do. That is why we have required reporting ahead of the poll in the Bill, following the approach taken at the Scottish independence referendum. Where PPERA provides only for permitted participants to report on donations after the poll, the Bill also requires them to report publicly before the poll on donations received. That has two benefits. First, registered campaigners must be transparent about the sources of their funding before the vote takes place. More significantly in this context, the reports must detail reportable donations received during a set reporting period, even if received prior to that campaigner becoming a permitted participant—because you can change from being a campaigner to being a permitted participant—provided the donation was for the purposes of meeting referendum expenses during the referendum period This gives a flavour of how complicated this issue is. This approach works within the existing framework and maintains a proportionate approach to controlling campaign funding. Given the concern over the influence of overseas funding, we believe that having to report all these matters immediately prior to the referendum would act as a deterrent in most cases, even though the rules do not seek to regulate everybody at all times. It does mean that if you become a permitted participant, money received prior to that point from a source that would be impermissible once you had registered would have to be publicly declared before the referendum took place I come back to the underlying principle that it is important to ensure that there is transparency and that the transparency requirements imposed by pre-poll reporting are as effective as they can be. In the light of the noble Lord’s concerns, I give an undertaking that the Government will look again at how the controls on pre-poll reporting work to deliver the appropriate level of transparency, balanced with a sensible compliance burden. We will consider these matters but they are complicated and technical. I cannot promise to come back with something that actually works but we will do our best In coming up with its proposals, the Electoral Commission has diagnosed what it now sees to be a problem but has not found the solution in its amendment. I therefore hope that at this stage, with the commitment I have given to look at this very closely, the noble Lord, Lord Jay, will withdraw his amendment. Of course, I undertake to work with him between now and Third Reading to see what can be achieved on these matters.