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Control of Donations and Regulation of Loans etc. (Extension of the Prescribed Period) (Northern Ireland) Order 2013

Volume 742: debated on Tuesday 29 January 2013

Considered in Grand Committee

Moved By

That the Grand Committee do report to the House that it has considered the Control of Donations and Regulation of Loans etc. (Extension of the Prescribed Period) (Northern Ireland) Order 2013.

Relevant document: 15th Report from the Joint Committee on Statutory Instruments.

My Lords, this order was laid before the House on 5 December 2012. Put simply, it will extend the period in which donations and loans to political parties in Northern Ireland can be made confidentially.

Noble Lords will no doubt be aware of the significant difference in the rules that apply to political parties in Northern Ireland compared with those elsewhere in the UK; namely, that donor and lender identities be kept confidential. Otherwise, the rules governing the reporting of donations and loans in Northern Ireland are the same as those that apply elsewhere in the United Kingdom, as set out in the Political Parties, Elections and Referendums Act 2000. It is the Government’s firm intention, set out in our January 2011 consultation response, to modify the law in the primary legislation to be introduced when parliamentary time allows and to make more information available about donations and loans to political parties in Northern Ireland. We intend to publish draft legislation on this matter next week.

The draft Bill will create a power to expand what can or must be disclosed by the Electoral Commission. The power will allow us to permit information about past donations and loans—the amount, the nationality of the donor; whether they are a corporation or an individual—to be published, but not information that reveals identities of donors. In relation to future donations and loans, the power will allow us to increase transparency incrementally. If and when it is appropriate to do so, the Government are committed to achieving full transparency of donations and loans, consistent with the position in Great Britain. However, that Bill is for another day.

As far as this order is concerned, the reason for extending the current regime on donations and loans is simple. The existing legislation providing for confidentiality of donations and loans made since 1 November 2007 falls on 28 February. The Secretary of State for Northern Ireland has considered carefully whether it would be appropriate to allow the current arrangements to lapse. While there is a strong case for increasing transparency about donations and loans to political parties in Northern Ireland, she came to the conclusion that it is right to extend the current regime for two reasons.

First, the identities of those who made donations or loans during the prescribed period—that is, since 1 November 2007—would be revealed if we were to let the provisions lapse without introducing primary legislation to provide retrospective anonymity. The guidance given to donors and lenders at the time they contributed did not make this clear and it would be wrong to release their identities retrospectively when they had a reasonable expectation at the time the donation or loan was made that this would not be the case. We therefore need to introduce primary legislation to provide for continuing anonymity for donations and loans made since 1 November 2007 until it can be made clear to donors and lenders that, if they choose to make a donation or loan, their details could potentially be published.

Secondly, the general threat level in Northern Ireland remains at “severe”. As recent events have shown all too clearly, there remain those who are willing to use violence against individuals with whose political views they disagree. PSNI statistics show that there has been no general reduction in the incidence of violence or intimidation since this matter was last considered in 2010. Indeed, in light of recent events in Belfast, it is highly likely that the overall number of incidents will have increased. Any decision to publish the personal details of donors and lenders will need to be made by the Secretary of State taking into account up-to-date information about the risk of intimidation of donors and lenders at any given time.

As I have set out, I believe that there is room to increase the transparency of the donations and loans regime without compromising the security of individuals or businesses. However, this requires the introduction of primary legislation to allow the donations and loans regime in Northern Ireland to be amended in a way that creates future transparency while protecting those who have made donations in the past. At present, the regime does not allow for that flexibility. The Secretary of State is only able to decide between maintaining and removing the current regime.

I am sure we all agree that transparency and accountability in matters relating to the financing of political parties are important to ensure that fraud and corruption can be avoided. The publication of donations and loans made to political parties supports democratic decision-making by enabling the electorate to know how and by whom candidates and elected officials are funded. However, we need to consider the security of individuals and businesses in Northern Ireland, and to ensure that we do not create a deterrent to political donations that damages the ability of political parties to contest elections and unduly restricts the choice available to voters.

This decision has not been taken lightly. We all wish that the situation in Northern Ireland had improved sufficiently that the measure would not be necessary. The Electoral Commission was consulted prior to the order being laid. It confirmed that it was content with the proposal to extend the prescribed period on the basis that forthcoming legislation will address the question of protecting the identities of those who have made donations and loans since 2007, and that no further extension of the prescribed period will be necessary.

I have the greatest respect for those who argue for the utmost transparency in electoral finance in Northern Ireland. The Government agree that a transition to the system used in Great Britain is essential. However, we believe that the transition to that system will be managed most effectively through a gradual increase in transparency, reflecting a security situation that is still very difficult.

The existing legislation will fall on 28 February, and the provisions ensuring that reports of donations and loans in Northern Ireland remain confidential need to be extended for a further period to allow time for primary legislation to be introduced. The order will extend the current regime to allow for this. I hope that noble Lords will agree this piece of legislation. It will enable us, in time, to increase the transparency of donations and loans in Northern Ireland. I commend the order to the Committee.

My Lords, this order is plainly necessary, and I thank my noble friend for explaining it so fully and clearly. As she said, it would be entirely inappropriate to make changes that would oblige the political parties of Northern Ireland to divulge to the public at large full details of their donations and loans when the state of politics in the Province is so unstable and the security situation so fraught. In today’s volatile circumstances, those Northern Ireland parties that feel strongly that the identities of their donors and lenders should continue to be protected must remain free to protect them—certainly for the time being. I know that that remains the view of the Ulster Unionist Party, which is the party to which I have always felt closest during the 45 years in which I have taken a keen interest in Ulster’s politics. This interest was sharpened in the late 1970s when I worked as an adviser to Airey Neave.

At the same time, unionist principle demands that as soon as possible the same general arrangements for the disclosure of donations and loans should apply throughout all parts of our country. That, rightly, is the Government’s aim, as it was the aim of their predecessors. Understandably, the independent and highly regarded Electoral Commission, to which my noble friend rightly paid tribute, is pressing for that aim to be accomplished as soon as possible. In 2010, a full consultation exercise took place in the Province. Research carried out by the commission last year suggested that only 7% of the public there favour the retention of confidentiality, with nearly two-thirds supporting disclosure and over 30% declaring themselves happy with either. Nevertheless, I am sure that the Government are right to hasten carefully and slowly in this matter. As in so many other areas, decisive action needs to follow the emergence of widespread consensus among the local parties in accordance with the principles of the Belfast agreement. It does not exist at the moment.

Let us hope that, proceeding with patience and understanding, our Government are able to move forward on the basis of consensus when this order expires at the end of September next year. In the mean time, those Northern Ireland parties that wish to publish information about their donations and loans, and have the agreement of those involved, are of course at perfect liberty to do so. Such steps may well help hasten the overall pace of change.

Much controversy naturally attaches to the question of retrospective disclosure when this order is replaced by new legislation in due course. The Electoral Commission, the advice of which is valued so highly, is all for it, while retaining the confidentiality of information that would enable individual donors and lenders in years gone by to be identified. For my part, I am deeply sceptical about the expediency of any retrospective disclosure. Would it not be best to draw a line under earlier years and apply new rules of transparency and disclosure from the point at which they are introduced?

I support the order wholeheartedly. Along with my noble friend Lord Bew, who cannot be here this afternoon, I look forward eagerly to the forthcoming legislation that will replace it, providing for fuller transparency in future.

My Lords, I support the forthright comments of my noble friend Lord Lexden. He mentioned a period of 45 years. My period of nearly five and a half years in Northern Ireland was luckily not connected too much with financial provisions in politics; I got into quite enough trouble with agricultural financial provisions.

I seem to remember taking part in this debate the last time we discussed this, probably in 2010. I take on board everything that has been said by my noble friend Lord Lexden about the need to continue being discreet, secret or reasonable about donations and where the money comes from. I hope nothing much has changed gravely in that time.

Might the Minister be kind enough to explain the significance of the date of 30 September 2014? It seems odd. Is it the end of what is expected to be the parliamentary Recess? Is the Assembly going to be dancing with delight? Are we to be in here? I am curious as to why that particular date was chosen— “19 months”, as it is spelled out.

The Minister could write to me later on the second line of the Explanatory Note. It starts with, “Special provisions”, et cetera, and then refers to,

“loans and donations made to political parties and,”—

I love this phrase—

“other regulated recipients (such as members of political parties and holders of elective office)”.

I am curious. Has anything changed since this last was defined, or is anything new? Would I be a recipient as a past officeholder in Northern Ireland? Would I be regulated as a recipient? Fortunately, I would keep my oar out of Northern Ireland political donations. I would be grateful for guidance from my noble friend as to what has changed, particularly since we last discussed this. Again, can she clarify to me the significance of 30 September 2014? I hope that I shall still be around, active and not brain dead, in your Lordships’ House. When we come to discuss this again, I hope to be able to congratulate the Minister, my noble friend Lord Lexden and all those who come to speak. I am grateful for the Minister’s clear exposition this afternoon.

My Lords, I, too, thank the Minister for her clear and full explanation of the order. I think that it was appreciated by everyone. The forthright contribution made by the noble Lord, Lord Lexden, and the fascinating speech made by the noble Lord, Lord Lyell, which took us down memory lane, did no harm to our discussions. I think that everyone in this Room understands why the legislation was passed in the first place, and while there is a desire for uniformity throughout the United Kingdom, the kingdom is also flexible and realistic enough to know when it has to bend, when it has to manoeuvre, and when it has to bring forward different legislation for different parts of the country. Unfortunately and tragically, this legislation was necessary, and indeed most folk would deem that it is still necessary. The Minister has mentioned the recent events which serve to underline the fact that when it comes to measures like these in Northern Ireland, the word to use must be “caution”. We have to be very careful that we do not introduce any unintended consequences.

Let me state right away that the Official Opposition support the Government in their position on this order. We hope, of course, that we can move as quickly as possible to a situation of full transparency regarding these donations, but nevertheless it is clear that that will have to be a gradual process. As has been mentioned, the Electoral Commission is much respected and the Opposition is practically foursquare with its views on the order. We want to see it amended as soon as possible so that voters can see how parties are funded, but as I mentioned earlier, caution must come first. I also welcome the announcement about the timing of the draft Bill to see how quickly it is envisaged that we can move forward.

When it comes to the draft Bill, I want to put one inquiry to the Minister today. Will that Bill raise the issue of double-jobbing? I am not quite sure about all the intricacies, but I have been told to put the question and to get a response. As I say, we support the order and the retrospective principle contained in it. It is only right that there should be retrospection, apart from any information that would enable donors and lenders to be identified. It has to be a mixture of innovation and caution. In Northern Ireland matters, that is always the right thing to do.

Public opinion research shows consistent support for the introduction of transparency into the funding of political parties in Northern Ireland. The Electoral Commission has informed me that the most recent survey, carried out in December 2012, found that 62% of the respondents felt that information about who donates to political parties should be made available to the public. Some 7% said that it should remain confidential while 31% did not mind either way. That sounds like a familiar figure. We need to deal with this situation so that the Electoral Commission is not legally bound to publish something. We would like to see a fully transparent scheme, but surely we all understand why we are moving slowly on it.

In conclusion, as I have said, the Official Opposition support what the Government are doing here. Our Front Bench Members have discussed these matters with the Government and we are prepared to support an extension of the prescribed period, it is hoped for a final time, having received the assurances announced by the Minister that very soon there will be moves to bring Northern Ireland into line with the rest of the UK in terms of transparency around political donations. There needs to be a change, but we acknowledge that there is no agreement between the political parties in Northern Ireland about thresholds and the amount of information to be made available on individuals, security matters and other issues. However, they are not drawbacks or obstacles but opportunities to further advance the situation in Northern Ireland so that it comes more into line with the rest of the United Kingdom. We support the order.

I thank all noble Lords who have contributed to this debate and welcome the fact that the order has received so much support. I shall endeavour to answer as many points as I can.

The noble Lord, Lord Lexden, accepted that there should be a move to full transparency in time, and I believe that that feeling is shared around this Room. Both the noble Lord, Lord Lexden, and the noble Lord, Lord McAvoy, pointed to the 2010 consultation, in which two-thirds of respondents supported disclosure and transparency. I liked the comment that we should proceed with patience and understanding.

I believe that it was the noble Lord, Lord Lexden, who made the important point that political parties can publish, if they wish, these details. It is my understanding that the Alliance Party has commenced that process. Once some political parties start to publish, I believe that others will follow—the Alliance has started; others will follow—and I hope that that will hasten the eventual move to full transparency.

Several noble Lords referred to retrospective disclosure. To avoid confusion in relation to whether disclosure will apply to past donations or future donations made during the extended prescribed period—that is, until September 2014—we intend to provide that the identities of those who have made donations or loans in the past without knowing that their details might be released are not published when the prescribed period ends. People donating now, during the current prescribed period, will not find their names and details published. Retrospective disclosure is therefore addressed and dealt with and will not apply.

The Government are, however, committed to the disclosure of other information which would not identify donors. That information might include whether the donation came from a corporation or an individual, the nationality of that individual and the amount of the donation, but none of those would identify the name or address of the individual.

It is important to emphasise that the Electoral Commission does very rigorous checks in Northern Ireland on donations and loans. Although the general regulations on disclosure to the Electoral Commission are the same as those in the rest of Britain—beyond the publication, of course—the checks that the Electoral Commission does in Northern Ireland are more rigorous than in the rest of Britain. In other words, it goes to greater lengths to satisfy itself on the genuineness of the information that it is given.

The noble Lord, Lord Lyell, asked about the significance of 30 September 2014. Its significance is that it is the earliest possible date. The Electoral Commission requires that the system moves to greater transparency as soon as possible. That needs primary legislation. The estimate is of how quickly primary legislation can go through this House and the other place and, following that, how quickly the regulations can be implemented. Responses to the Electoral Commission are made quarterly and that is the end of the quarter when this can reasonably be expected to happen. As I said, and as noble Lords will have noted, a draft Bill will be published next week.

The noble Lord, Lord Lyell, also asked about the definition of “regulated recipients”. It is defined in Schedule 7 to the Political Parties, Elections and Referendums Act 2000. It applies throughout the country, including Northern Ireland. It covers members of political parties, members of associations and holders of elected office, so I think that it probably would apply to the noble Lord in his previous life and career.

I am pleased that the noble Lord, Lord McAvoy, has pledged his support. It is important that we have the widest possible support, particularly cross-community support in Northern Ireland. I am pleased that he accepts that the process will be gradual. He asked a specific question about whether double-jobbing would be addressed in the draft Bill. The issue was covered in public consultation last year and, although I cannot at this stage reveal the contents of the draft Bill, it is clearly on the agenda of the Secretary of State for Northern Ireland.

I am pleased that the order has received such a warm welcome, which I hope will ensure its speedy acceptance in the Chamber next week.

Motion agreed.