My Lords, these are technical amendments to Clause 11 on the control of donations to members’ associations. The amendments do not materially alter the policy intentions here: rather, they are intended to ensure that the clause is as clear as it can be and that the procedure to be followed when giving a notice for the purposes of these provisions is easily understood. As has been helpfully noted in previous debates, members’ associations are often voluntary organisations and we must make sure that provisions regulating them are free of the potential to confuse.

Specifically, Amendment 32 seeks to add clarity to the process of making an alteration to an existing notice appointing a responsible person. The amendment explicitly states that a notice of alteration takes effect from the day it is received by the commission or from a particular date specified in the notice. Previously, the clause did not explicitly state when a notice of alteration would take effect, which could have led to a potential dispute over the date on which the appointment took effect. This could be unhelpful: for example, in a case where it is not clear who is acting as the responsible person for a members’ association on a particular date, which could be important if called into question as part of an investigation.

Amendment 33 clarifies that a notice appointing a responsible person has to be in force for a minimum of 12 months from the point that a donation is received or a loan entered into which triggers the requirement to appoint a responsible person. This was already implicit in the provision given in Clause 11(4)(b), which states that a notice appointing a responsible person,

“shall lapse at the end of the period of 12 months’.

But it was not explicit that the notice appointing a responsible person could not be terminated before 12 months had elapsed. This amendment puts that requirement beyond doubt.

This is a small but important clarification, given that one of the key benefits of the policy-reforming regulation of members’ associations is the fact that an identifiable individual will be responsible for complying with the requirements of the Political Parties, Elections and Referendums Act 2000 and liable for any failures to comply with that Act. The benefit of this policy is increased by retaining that individual in post for a significant period. If the members’ association could appoint somebody when it receives a reportable donation and then terminate that person’s appointment immediately, the benefits of the policy would be significantly reduced. It is also worth noting that the requirement does not prevent a change in the responsible person in-year; the provisions in the Bill already allow for a notice of alteration, altering any details of the responsible person. I hope that noble Lords will agree that these amendments represent sensible clarifications of this clause.

Amendment 34 is a technical amendment concerned with Clause 12 on compliance officers. Specifically, it relates to the way in which a holder of elective office, or the compliance officer himself, may inform the Electoral Commission of an alteration to the arrangements under which the compliance officer has been appointed. The Bill already provides a notice of alteration procedure which allows any necessary changes to be made, including the appointment of a new officer. It also enables the commission to be kept up to date when a compliance officer’s details, such as their home address, change during the period for which he or she is appointed. I will not speak at length as the amendment is simple and I hope that it will be welcomed, bringing as it does a little additional clarity to new paragraph 18(7) of Schedule 7 to PPERA, as inserted by the clause. This is the provision for giving an alteration notice to the commission. This amendment mirrors that to Clause 11.

This amendment will add an additional line clarifying the proper effect of a notice of alteration by plainly stating that an alteration contained in a notice takes effect from the date of receipt of the notice by the commission. Alternatively, it will take effect on a date specified in the notice. I hope that this clarity could help to avoid potential disputes over responsibility that could arise: for instance, if the commission was investigating a donation received during a period of transition between individuals in a compliance officer role. I hope that this clarification will be welcomed.

I turn now to Amendments 35 through 37 and 40 through 63. Clause 16 of the Bill and Schedule 4 to the Bill propose to put in place new regulations applying to donations from unincorporated associations—UIAs. These provisions would require unincorporated associations donating more than £25,000 in a calendar year to any recipient or combination of recipients regulated by PPERA, including political parties, to be subject to a new reporting regime, requiring them to give details to the Electoral Commission of those that had given significant sums to the association. A significant sum in this sense means a sum of more than £7,500. The amendments that I have tabled will extend the scope of this regime so that it covers situations where unincorporated associations exceed the threshold by means of giving a loan instead of, or in addition to, a political donation.

I regret that loans were not covered when we originally tabled these provisions. However, I am keen to ensure that we do not leave any loopholes that could ultimately jeopardise our objective of the transparency regime for unincorporated associations—that of bringing much greater transparency to the source of political funding. Without the amendments before us today, I fear that Clause 16 and Schedule 4 as they stand could give rise to situations where UIAs choose to give loans to parties and regulated donees rather than donations, to avoid the additional disclosure requirements. Let me assure noble Lords that I am also anxious to ensure that the provisions do not place an unnecessary and disproportionate regulatory burden on unincorporated associations.

I will explain the detailed effect of the amendments and in so doing set out the ways in which we have sought to minimise the burden of the requirements. I will talk in detail only on the substantive amendments in this group, rather than trying to address each amendment individually in detail. It is worth my saying at the outset that these amendments do not fundamentally alter the underlying policy or the detailed requirements applying to unincorporated associations. There are two exceptions to this, however. One is the key change that means that loans from these associations to regulated entities now fall within the new regime and have to be counted by an unincorporated association when calculating whether the £25,000-plus threshold—and the ensuing reporting requirements—has been triggered. The second is that we wish to make it clear that the statutory instrument that defines what sorts of gift have to be reported by an unincorporated association may include loans of money to unincorporated associations in excess of £7,500.

Amendments 35 and 36 to Clause 16 clarify that the scope of these provisions has been broadened so that loans as well as donations made by unincorporated associations may trigger the reporting requirements. This is done by replacing the word “donations” with the term “contributions” or “political contributions”. The majority of the amendments in this group are intended to carry through this change. Amendment 37 relates to the powers available under Section 62 of the Electoral Administration Act 2006 to allow the Government to put in place a regime for regulating loans to third parties and permitted participants in referendums. The amendments make it clear that those powers may amend Schedule 19A to ensure that such loans would be counted as “political contributions” and would count towards whether the £25,000-plus threshold had been exceeded.

Amendments 40 to 46 flow on from the broad effect of Amendments 35 and 36 by providing that, where a UIA’s “political contributions” exceed the £25,000 threshold in a calendar year, it will be required to notify the Electoral Commission of that fact within 30 days. A UIA could exceed the threshold in several ways, such as by the making of a single donation or loan or by the making of several donations or loans over the recordable threshold, whether they are to the same recipient or to different recipients. As before, the result of exceeding this threshold is that the requirement to report gifts received by the association in question will then kick in.

Amendment 47 defines “political contributions” for the purposes of the additional reporting requirements on UIAs. The provisions as drafted already mean that relevant donations from UIAs to registered parties, regulated donees, recognised third parties and permitted participants can trigger the additional reporting requirements. The amendments that I have tabled mean that, in addition, the reporting requirements can be triggered by relevant regulated transactions, such as loans to parties or controlled transactions such as loans to regulated donees.

Amendment 51 clarifies that in the case of loans or other regulated or controlled transactions, the value of the contribution that counts toward an assessment of whether the £25,000 limit has been reached is the actual money loaned or liability discharged. This differs from the 2000 Act, under which the value of the loan or other regulated transactions is taken to be the value contained in the regulated transaction under which the loan, credit facility or security is made. This means that, for example, a political party, in declaring a loan to the Electoral Commission, is required to declare the maximum amount that can be drawn down under the terms of the loan. By contrast, the proposal here is to look at how much money is actually lent. The latter approach is justified in Schedule 19A to the 2000 Act, which is inserted by Schedule 4 to the Bill, because, in our judgment, the provisions ought to be as straightforward and easy to operate as possible.

This is particularly true given that UIAs are not otherwise directly regulated by the Electoral Commission. This straightforward approach will mean that UIAs will have certainty, knowing as they will that all outgoings from them to political parties or other regulated recipients, whether in the form of donations, loans or a combination of both, could trigger the requirement on them to provide additional information about funds they have received.

Amendment 63 extends the ability of the Secretary of State to define the meaning of “gift” in secondary legislation so that it can include loans and securities received on non-commercial terms by an unincorporated association. Unincorporated associations that trigger the reporting requirements under the terms of the new transparency regime will be required to report gifts to them in excess of £7,500. By virtue of this amendment, regulations may provide that those gifts might comprise donations or loans at preferential rates. Provisions setting out the detail of how unincorporated associations should value such gifts—that is, how they should decide whether a gift is worth more than £7,500 and should be reported—will be made in the same regulations after the passage of this legislation.

Requiring UIAs to provide information about loans they receive as well as donations is necessary since failure to require such information might result in UIAs seeking “loans” to avoid having to reveal any information about their supporters. That would clearly run counter to the objectives of the unincorporated association provisions, which have already been agreed. However, in drafting this sort of provision in regulations, we will of course be mindful that the resulting provisions must be well understood so that the reporting requirements can be complied with, without undue further burdens or complexity being imposed.

I believe that Clause 16 and Schedule 4 will bring additional transparency to large donations to political parties and other elements of the system. Since these provisions, which bring much desired greater transparency to donations from unincorporated associations, were tabled on Report in another place, I am pleased to say that they have commanded a broad political consensus, especially in this House. I hope that we can proceed on a similarly consensual basis on the amendments that I have tabled which make the scheme more transparent by removing the potential incentive for UIAs to change behaviour to avoid the additional reporting requirements. I commend all the amendments to the House. I beg to move.

My Lords, I think that we are all grateful not just to the Minister this evening for explaining the rationale behind the amendments but also to his team for writing to us and explaining the background. Although these issues may not seem as controversial as some of those which we have discussed earlier, they are very important because they close some potential loopholes. If we have learnt nothing else from the way in which this whole issue has been addressed over the years—not just in this Bill—it is that attempts to find loopholes constantly cause us concern, and I am sure that there will be greater ingenuity in future.

We should congratulate Ministers and their team on the way in which they have tackled the particular problems of unincorporated associations both in Clause 16 and, perhaps even more so, in Schedule 4. I notice, for example, that Amendment 47 contains very careful explanations of how loans can be used in a way which is clearly just the same as a donation and which in the case of an individual donor would be treated in effectively the same way as a donation. It is entirely right that the Minister is spelling out, for example in new sub-paragraph (2)(b) and (d), the ways in which, if the amendments were not incorporated in the Bill, these loopholes could be used as a way of getting around the spirit of the Bill.

My Lords, I, too, am grateful to the Minister for taking so much trouble to explain to the House the 27 amendments in some 14 minutes—and also for writing to us, setting out the various government amendments, including these, that would come before us. I think that the letter was sent by his colleague, the noble Lord, Lord Bach, on 9 June. We are grateful for the clarity that the Minister has added to matters. He might have got away with a slightly shorter introduction to these amendments by using the letter that he had already sent out; but no doubt he felt that it was important to get it all on the record; and no doubt, should a Pepper v Hart situation arise, it will be useful to have the full and considered response of the Minister to the amendments. We have no objection to the amendments, we are grateful for the explanation and we look forward to seeing them in the Bill.

My Lords, I thank both noble Lords for the support that they have given to however many amendments it was—27. I fear that it was necessary for me to read into the record the various reasons. I did it as quickly as I could. If I had gone faster, it would have taken more time. I am assured by officials that “contribution” is sufficient to cover all relevant matters. I am assured that it is defined as “loans and donations” by government Amendment 51. I beg to move.