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House of Lords Hansard
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Third-party Election Campaigning
13 September 2018
Volume 792

Motion to Take Note

Moved by

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To move that this House takes note of Part II of the Transparency in Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 and the effect it has had on third-party election campaigning.

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My Lords, everyone is clear and in total agreement that third-party campaigning during election periods should be controlled by legislation—that is, campaigning by non-political bodies such as charities and pressure groups should be limited in the amount of money that they spend, as political parties are. However, there was widespread agreement among your Lordships that Part 2 of the lobbying Act, which sought to do this, was hurried and ill-thought-out legislation with no prior consultation. In response the campaigning groups most affected by it, of all types and views, came together to form the Commission on Civil Society and Democratic Engagement, which I had the privilege of chairing. After extensive consultation with the sector around the United Kingdom, it produced four reports showing clearly the chilling effect the legislation would have on legitimate campaigning.

As a result, a number of amendments in this House were pressed to the vote. One in particular came to be accepted: that the legislation should be reviewed in the light of the experience of the 2015 general election. This was done by the noble Lord, Lord Hodgson of Astley Abbotts, who produced his very thorough and balanced report in March 2016. He made 29 recommendations but I will focus only on the six which are of most concern to the sector, plus an issue which has come to the fore as a result of the snap election last year, which revealed the retrospective nature of the legislation in such circumstances.

Recommendation 4 of the noble Lord’s report concerns how we judge whether a campaign is political. Many charities and pressure groups see it as an essential part of their remit to campaign, not least at election times. Being non-political, they are quite rightly prohibited from campaigning for a particular party or candidate. But how do we judge whether a campaign on a particular issue is party political in this way? The legislation as it stands uses the test of whether a campaign could be “reasonably regarded” as supporting a particular party or candidate. The noble Lord regarded that as unsatisfactory because it can create uncertainty in a third-party campaigning group about who this hypothetical observer might be and what they would judge to be reasonable. It can and has led them to be overtimid for fear of infringing the law, thus putting a damper on proper civil engagement. The noble Lord argued that this test should be replaced by the “actual intention” of the person undertaking the activity. Do they actually intend to support a particular party or person? The notion of intention is of course a complex one, both philosophically and legally, and the Electoral Commission was not happy about this new definition. However, I believe that the noble Lord, whom I am glad to say is down to speak next, will show how the points made by the Electoral Commission can be answered satisfactorily.

Recommendation 5 of his report concerns the public who are being addressed in a campaign. Members of an organisation who are sent material in the ordinary course of the year are not included in this category as far as registered electoral expense is concerned. In other words, organisations can continue to communicate with their members without that counting as part of their controlled expenditure during the election period. However, in this time of digital communication and social media, who counts as a member? Do committed supporters? My plea to the Government is that when they review the Act in the light of the noble Lord’s recommendations they genuinely consult the sector on this, as well as in other areas, of course. With the advent of the general data protection regulation, people now have to agree to receive information from organisations, and that may provide a category of exemption wider than paid membership but narrower and much clearer than “supporter”.

Recommendation 6 in the noble Lord’s report concerns the length of the regulated period when all expenditure on campaigning has to be accounted for. At the moment this is 12 months, a long period that involves third parties in a disproportionate amount of extra work and expenditure. The noble Lord recommended that the period should be four months, which would bring it in line with elections to the devolved institutions and the European Parliament. I am glad to say that that is supported by the Electoral Commission.

There is an added uncertainty and burden in relation to the regulated period if there is a snap election, as there was in May. For the last 60 years, May has been the month of Christian Aid Week, when Christian Aid engages 20,000 churches and over 50,000 supporters in active volunteering, including knocking on doors to fundraise for the world’s poor. As Christian Aid has said:

“As the Lobbying Act unexpectedly swung into force because of the snap election, it created a red tape nightmare to cover our largest communications and fundraising activity of the year. We faced difficult calculations about whether the costs of certain materials counted in the regulated period, and whether those would have to be withdrawn or replaced at short notice and great expense. We had to create a huge amount of additional bureaucracy to monitor activities, to make sure Christian Aid Week was not seen as political. We spent a huge amount of staff time managing and recording all of this, just in case there was an accusation of being party political. We had many inquiries from supporters like: ‘Can we invite an MP? Can we organise a hustings? We’ve invited the sitting MP already, do we have to invite every candidate in the area?’ Even though MPs have been invited to their local churches for years to show their support, and the vast majority of hustings happen in churches at every election. The Lobbying Act is allegedly not intended to prevent normal charity campaigning activity, but in practice we found that it is cumbersome, unclear, high risk, and had a definite chilling effect—and thereby prevented our normal activity from being carried out”.

Recommendation 10 concerns staff costs, which have to be included in what counts as controlled expenditure. This is quite right if a staff member is employed to work full-time or mainly on a campaign, but what about the scores of people in an organisation who over a 12-month period, as it is at the moment, might have spent a small amount of time in relation to it? The result of the present legislation is an expensive bureaucratic nightmare. The noble Lord, Lord Hodgson, recommends that incidental costs and those below a certain de minimis threshold be excluded, with the Electoral Commission providing guidance as to how that should best be assessed.

Recommendation 17 concerns joint campaigning. This is another area that matters very much to the sector, for obviously it is much more efficient and effective for campaigning groups to work together if they can. However, at the moment, if they do so, each is liable to have the total expenditure attributed to it as part of its controlled expenditure. The noble Lord, Lord Hodgson, recommends that in a joint campaign there should be a designated lead campaigner, with minor campaigners being named but not obliged to register individually unless they individually exceed the spending limit, and that regulation in this area should be clear and simple to adhere to.

Let me give one example of what is involved in complying with the Act as it stands. Friends of the Earth’s declared regulated spend on campaigning activity in the 2017 general election was £43,000. However, although this included staff costs contributing to or undertaking regulated activity, it excluded—as is allowed—staff costs spent on complying with and reporting on the requirements of the Act. The complicated and time-consuming compliance requirements came at considerable financial cost. Friends of the Earth reckons that it diverted considerable resources—donated by members of the public—away from environmental campaigning, awareness raising and advocacy into bureaucracy. It estimates that these staff compliance costs ran to just over £17,000.

There is a similar story from the Quakers, who say that they had spent over the threshold limit for registering six months before the snap election was called, so when it was suddenly called, that expenditure became non-compliant. It is nonsense that the legislation is retrospective in that way.

Since the noble Lord’s report came out, two House of Lords Select Committees have come out strongly in favour of it. The Select Committee on Charities did so because campaigning is part of the lifeblood of so many charities. It stated that the recommendations,

“are eminently sensible and will provide reassurance to charities that they will not face censure for carrying out ordinary campaigning activity during election periods”.

The Select Committee on Citizenship and Civic Engagement did so because campaigning on important issues is obviously a fundamental feature of civic engagement.

Why have we not had the Hodgson report before this House? The Government have given two reasons. They are, first, because of the Electoral Commission’s doubt about the recommendation on the test of what is political from “reasonably regarded” to “actual intention”. As the noble Lord, Lord Hodgson, will show, this doubt can be met. The second reason is because of the shortage of parliamentary time, but it is essential that we have improved legislation in place in time for the next election, set for 5 May 2022. The present legislation involves third-party campaigners in a disproportionate amount of time and expenditure trying to conform to it, and it causes areas of uncertainty about whether they are conforming to the law, which may inhibit them from campaigning.

Earlier this year, the Sheila McKechnie Foundation released a report which strongly endorsed the earlier findings of the Commission on Civil Society and Democratic Engagement. It found that 68% of charities had changed their campaigning as a result of the Act and 51% said that it had affected their ability to achieve their mission. The report found that those who really lost out were the vulnerable and marginalised people whom charities worked with and supported, whose voices have gone missing from the political debate as a result.

To sum up, before the next election it is essential to: first, revise the purpose test, so that only spending on activities intended to influence voter choice are regulated, making it easier for campaigners to work out whether their activity is regulated; secondly, reduce the regulated period from 12 to four months; thirdly, change the retrospective nature of the rules so that they come into force only when a snap election is called; fourthly, improve the joint working rules so that no organisations have to report total costs, taking up the suggestion of the noble Lord, Lord Hodgson; fifthly, remove all indirect staff costs, so that campaigners have to count only activity that is wholly or mainly engaged in the campaign; and sixthly, consult seriously with third parties on how, in the age of social media and GDPR, “membership” can best be defined in a way that does not further inhibit or burden third-party campaigners.

My Lords, there are important things to be done irrespective of Brexit, and one of them is improving the ill-thought-out and chilling legislation of Part 2 of the lobbying Act. I beg to move.

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My Lords, the noble and right reverend Lord, Lord Harries, has been kind enough to say some complimentary things about my review, and so I return the compliment by congratulating him on giving us the chance to debate this important topic. I also note the leading role that he has played, both personally and within the group that he led, before, during and after the passage of the Bill. I will come back to quite a lot of what he covered later on in my remarks, so I will turn to my main thrust and not answer some of his points directly at this point.

My review of Part 2 of the rather clumsily named Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act was a statutory requirement—as the noble and right reverend Lord has pointed out—imposed by Section 39 of the Act. Admirably supported by a team from the Cabinet Office, over the course of a year I visited all the devolved Administrations and, during the 2015 general election campaign, visited several constituencies to see whether the provisions of the Act particularly pinched. We spent quite a lot of time looking at joint campaigning along the line of HS2, which had considerable local opposition, and took a great deal of evidence from individuals and bodies, several of whom have contributed briefings to your Lordships’ House for the debate today. I was very grateful to them all. My concluding report, published as Command Paper 9205, ran, I regret to say, to 99 pages.

I have a couple of general points first. One unexpected aspect of the evidence I received was how many people thought this was an entirely new Act. Of course, it is not an entirely new Act; it merely revises Part VI of the Political Parties, Elections and Referendums Act 2000. So the framework—not the detail—for regulating third-party lobbying had been in place for some 15 years. In many cases, people did not appear to understand this and their reaction to the Act was possibly, in part, as a result of not understanding what had always been required of them. Secondly, PPERA was passed in the year 2000; it is common ground among all of us that political campaigning in the year 2000 was light years away from where we were in 2015. The whole of the social media movement and industry barely existed in 2000, but now plays an increasingly important role and, unless I am much mistaken, will become even more dominant in the future as data mining—the ability to identify individual citizens’ preferences—becomes more widespread and effective.

The fundamental principle that guided my review—summarised on page 14 of my report—was to ensure that public trust and confidence in the integrity of our electoral system was maintained while, at the same time, not shutting off the historically rich diversity of public participation and involvement in our elections. The weight of evidence that I received was overwhelmingly that these twin objectives could not be maintained without an up-to-date statutory framework. I therefore saw no grounds for proposing the repeal of Part 2 of the Act. Most commentators on Part 2—and indeed the noble and right reverend Lord, Lord Harries, himself—focus on the charity and voluntary sector. That is fair enough, but Part 2 does not apply just to voluntary groups; it applies to every organisation—commercial or otherwise—some of which may have more obscure origins and objectives. I am afraid that the charity and voluntary sector, which I greatly admire and support, is not peopled entirely by angels. While the overwhelming proportion of charities behave properly, there are outliers who behave less well. We have seen examples of this in recent years. It is these outliers who set the political weather.

Much has been made by the noble and right reverend Lord, Lord Harries, of the so-called chilling effect of Part 2 of the Act. We need to be careful to distinguish between a novelty effect and a chilling effect. In 2015, the first general election at which the Act was in force, individual groups found it hard to get consistent advice from their lawyers, the Charity Commission and, most importantly, the Electoral Commission. Indeed, in my review, I made a number of specific recommendations as to how the role of the Charity Commission could be made more user-friendly, particularly in respect of smaller campaigning groups. In my view, the passage of time and greater experience will smooth away some of the edges of the so-called chilling effect. Nevertheless, the title of my report, Third Party Election Campaigning Getting the Balance Right, indicates that I did not conclude that everything in the garden was rosy.

During the rest of my remarks, I want to draw the Government’s attention to three major areas which, in my view, require urgent attention. In large measure, I am running in parallel with what the noble and right reverend Lord, Lord Harries, has been saying. The first is the intent test. I concluded that the provisions of the Act should be focused solely on what I called electoral campaigning—activities intended to influence individual voting choice in the run-up to and during a general election campaign, at a time when the general public are, so to speak, switched on to the electoral process. This activity is distinct from what I called advocacy—the business as usual of a particular campaigning group. It is also different from political campaigning—direct approaches to political parties, MPs or Members of your Lordships’ House.

As the noble and right reverend Lord, Lord Harries, has pointed out, the statute currently catches any activity which can be reasonably regarded as intended to procure electoral success. The challenge is that what can be reasonably regarded may change from person to person and over time. An example may help illuminate my point. Suppose you run a small charity which opposes the export of live animals. In the midst of a general election, a number of calves are found dead on a ship in a channel port. You find yourself in the middle of a media storm, trying to balance achieving your charity’s strategic objective of banning the export of live animals, while avoiding the electoral implications of the statements you may be making. This is not an easy balance to achieve and one where actions taken under extreme pressure during a general election campaign may appear less well thought through at subsequent, calmer and more reflective times.

Happily, there are two possible solutions. First, the Representation of the People Act 1983, which covers local elections, has a test of intent which has stood the passage of time. It could easily be transferred to this Act. If this approach did not appeal to the Government, it would also be possible to establish a code of practice which would be approved by Parliament, compliance with which would provide a statutory defence. In my view, adopting either of these approaches would end the argument about chilling once and for all.

My second point concerns an area where the provisions of the Act are, in my view, too loose. This is the issue of what constitutes a member. As the noble and right reverend Lord, Lord Harries, pointed out, the members of an organisation can quite rightly be communicated with without falling foul of the provisions of the Act. The Electoral Commission has devised what it calls a “committed supporter”, which in my view is insufficiently clear. In an age of social media, it is too easy for an organisation to mail thousands of individuals at near zero marginal cost, inviting them to tick a box to become a committed supporter. Indeed, it is possible to consider that in due course you will have a negative pledge: if you do not tick a box, you will be considered to be a committed supporter. My report therefore suggests that a much higher degree of commitment is needed, which I describe as a “constitutional member”, and I suggested various yardsticks by which that could be measured.

My third and final point concerns imprints. Noble Lords will be familiar with the requirement for political parties to put an imprint on all their printed material—published by so-and-so at such and such an address for such and such a candidate. In my view, third-party campaigners who have registered with the Electoral Commission under Part VI of PPERA should be required to disclose this fact on all relevant material together with their internet and social media pages. Surely the general public are entitled to be put on notice where individual third-party campaigners are undertaking a particular degree of electoral activity at election time. Transparency demands no less.

To conclude, naturally I was pleased that my report was generally well received by the voluntary sector, the legal profession, the Charity Commission and, with the proviso that the noble and right reverend Lord, Lord Harries, mentioned about the intent test, by the Electoral Commission, as well as at least initially by the Government. I have been disappointed that government support has subsequently gradually ebbed away.

As my report went to the printers, the Law Commission produced a heavyweight study on general electoral law, outlining a good many deficiencies, inconsistencies and confusions which needed remedying. In an increasingly cynical age, it must be more than ever important that our fellow citizens have confidence and trust in all aspects of our electoral system. I therefore still treasure the hope that the Government will, in due course, find time to pull both these reviews together and so give the country an electoral system fit for the modern age.

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My Lords, I am sure that the whole House would like to put on record how much it appreciates the fact that that the noble and right reverend Lord, Lord Harries of Pentregarth, has introduced this debate. He has a long-standing commitment to the charitable sector and has been a steadfast representative of it in the issues that we are discussing. I have a personal reason to be grateful to him, because when he was Bishop of Oxford I was a member of his diocese, and in the early 1990s he asked me to chair the diocesan board of social responsibility. That board was made up of the most committed people working in the front line of social challenge, and it was a stimulus and a challenge to work with such people.

We also have every reason to be grateful to the noble Lord, Lord Hodgson of Astley Abbotts, because he too has been a steadfast ally of the voluntary sector and has brought a lot of wisdom and good guidance to bear, as we have heard this afternoon. He always speaks in constructive and helpful ways about the problems that confront us.

I declare an interest: for a great deal of my life, I have been heavily involved in the charitable sector, both professionally and voluntarily as a trustee. I will give a few examples because I think my background will help the House understand how strongly I feel about these issues. I was glad to work with the noble Baroness, Lady Stern, when she led Nacro, and to serve on the Nacro board; incidentally, my noble friend Lord Christopher was chairman of the board at that time. I have also been privileged to work as general secretary of the International Voluntary Service, director of Oxfam and director of VSO, as well as being president for six years of the International Council of Voluntary Agencies, which brings together organisations involved in voluntary activity from across the world, with its headquarters in Geneva.

The relationship between the role of charities and the issues of politics is terribly important. I have formed a strong view that, in many charities large and small, there has been an outstanding cadre working for those bodies and serving the public. They have been outstanding intellectually, in their moral commitment and in their effectiveness. I saw how the Civil Service, for example, came to enjoy working with the charitable sector, discussing and evaluating issues that faced us and working out the best way forward. What has happened, it seems to me, is that charities have matured and grown up. I am not sure that this was not always true. Was Wilberforce campaigning or was he administering a charity? Of course he was campaigning, and in many ways he was very active in his interface with politics, including mainstream politics.

What charities—both leaders and ordinary people in charities—have come to understand is that it is not good enough just to minister to those in need: the casualties and the victims. If one was not using the experience gained by doing that to speak out and help the public and society as a whole to understand the nature and origins of the problems with which charities are dealing, and their need to raise funds, one was in many ways betraying their very objectives. I do not put it too strongly when I say that, by the time I had finished my professional work in the charitable sector, I had become totally convinced that responsible campaigning—I emphasise “responsible”—was one of the most effective ways of serving those we sought to serve.

The most effective charities had a very special contribution to make because they spoke not just with intellectual and moral force but with the authority of engagement and experiences. How many people who tell us what is wrong with charities have themselves ever really engaged in the work in which the charities are involved? Of course, some have, and that is very good, but I suggest that more could.

If I had the opportunity, I could spend some hours giving examples to show why I personally became so engaged in this work. I remember once, after a long overnight bus journey, ending up in a dusty township in Brazil in the early dawn. There was a quiet stillness about the place. I was with the field director and as we looked up, perhaps a bit sleepily, we saw a great banner around the spire of a church. I asked for a translation and it said, “Prison bars will not prevent the truth escaping”.

When I got into discussion with the people there, I asked what it was all about, and it was clear that there was a lot of strong feeling in the community. Poor peasants had been working on land on which they had worked for a long time but a greedy landowner—“land-grabber” would be more appropriate—recruited some toughies to drive them off their land. With no social security and no other means by which they could make a living, what were they to do? They were taken before the local judge, who told them that they had to get off the land. However, they had no alternative but to stay if they were to exist, so they went back to work the land. They were then taken before the judge again and the leaders were thrown into prison.

People noticed that some of the judge’s land had cattle on it that looked awfully like the cattle that had been on the land-grabber’s land not long before. We sat down with the community and asked, “What do you really need at this juncture?”. They said that what they really needed were the bus fares to get to the provincial capital so that they could take their case to the provincial court. The field director and I did some work on the back of envelopes and so on, and thought that we could just about assure that they had the bus fares to get to the provincial court. Imagine my joy when I got back to Oxfam’s headquarters in Oxford and received a telex saying that the provincial judge had released the men, they were back on their land and the local judge was in prison.

That illustrates the nature of what real charity is facing, and is a particular example; but I think also of the Bishop of Chiapas in Mexico, who did such valiant work with the people of Chiapas, who were constantly being harassed by the authorities. He said to me, “You can’t be neutral in a situation like this; you have to stand up and be counted”. He continued, “I believe that solidarity is the real meaning of charity. How far are we really speaking with and for these people, as distinct from about them, to them and at them?”.

That is what mature charities, large and small, working domestically, nationally or internationally, have discovered—that to be true to their purpose, motive, cause and objectives, they must speak out in a democratic society and share what they have come to learn.

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My Lords, in view of the strictures of the noble Lord, Lord Judd, on those of us who may not understand charities, perhaps I should start by declaring that I have been a trustee of one musical charity for some considerable time and have been the chair of a musical charity that concerns not just musical performance but education and some campaigning for improved musical education. When I was chair of the trustees I did my best to observe the rules for which, as a Minister, I had been responsible; namely, that one should not serve for too long as chair of trustees. I made speeches on the sad decline of music teaching in schools and the need to reverse it. That is advocacy; that is one side of the line between advocacy and party-political campaigning. I think that actually the line is not too difficult to see.

This is familiar territory for me. I recall many long discussions with the noble and right reverend Lord, Lord Harries, and the Commission on Civil Society and Democratic Engagement when, as a Minister, I piloted the transparency of lobbying Bill through the Lords five years ago. We argued then that they were misinterpreting the purposes and potential impact of the Bill, which was concerned to protect the integrity of the electoral process from incursions of money from outside, and from single-issue groups targeting specific candidates and parties on the scale that we were already observing in other countries, most evidently in the United States. We had witnessed that in previous British elections, after all; for example, I remember the fox-hunting lobby vigorously working to unseat a particular Liberal Democrat MP several elections ago, which contributed to her defeat.

The Act was not aimed primarily at charities. It was aimed at all third-party campaigners from all political perspectives and social and economic interests. Reviewing comments from the NCVO, the Electoral Commission and others on the impact of the Act so far, I am struck by the frequency of references to “misplaced” or “erroneous” perceptions, “exaggerated” fears, or even—from the review by the noble Lord, Lord Hodgson—“fundamental misunderstandings” from the charitable sector. The NCVO reiterates in a comment from 2017 that:

“The growing potential for third parties to improperly influence elections by spending lots of money on advertising means that we do have to regulate non-party campaigning”.

The noble Lord, Lord Hodgson, noted in his review—I hope he will not mind my quoting it—that,

“a number of third parties appeared not to have appreciated that Part 2 of the 2014 Act was not a ‘new’ piece of legislation, rather an expansion and tightening of the rules already existing under Part 6 of PPERA. In meetings held in the course of this review, more than one organisation recognised that they probably should have done more to consider their legal obligations at the time of the 2010 General Election under the pre-existing regime”.

During the lengthy discussions on what became the 2014 Act, I became increasingly sceptical about the motivations of some of those resisting the legislation. I recall being told in a meeting with staff from several leading development charities that they did not want to have to register because, “That would tell the little old ladies who give us money that we are a campaigning organisation as well as working for the poor in the third world”. I did not yet know that some development charities were also bending the rules in pursuing those little old ladies for funding. If they are campaigning organisations, they should be transparent about that and not attempt to hide it from those whom they pursue so hard for funds. I also remember charity executives admitting then that they had never bothered to read the Political Parties, Elections and Referendums Act 2000 or to understand what obligations they had under it.

My conviction that large charities need careful regulation—however benevolent their underlying objectives may be—was sharpened further when I served on the inquiry into charitable fundraising two years later. We listened to the head of one major charity explain to us why his charity ignored the Telephone Preference Service—because the need is so great, we were told—and another admit that he had never looked into how the commercial telephone agency that his charity employed to fundraise operated. As the House of Lords Select Committee on Charities declared:

“Accountability and transparency are essential for charities to ensure they function properly”.

I welcome the proposals in the review of the noble Lord, Lord Hodgson, and regret that the Government have not found time to introduce some amendments to the legislation. I hope that the Minister will be able to tell us that the Government will do their utmost to find time for the modest amending Bill required during the next Session. Here, as in so many other policy areas, all other measures are currently consumed by Brexit.

It is clear that we need to revisit and adjust the regulations covering political campaigning on a regular basis to keep abreast of what the Russians call “new political technologies”, which are transforming campaigns, such as data mining, as the noble Lord, Lord Hodgson, suggested, the use of targeted social media and other forms of online campaigning and advertising. We saw the use of those techniques in the 2016 referendum and the difficulties that the regulators face in keeping up with what is going on. We also saw in that referendum a classic example of a regulated campaign organisation getting around the rules by transferring surplus money to a third-party campaign.

We have not yet resolved the issues raised by questionable behaviour during the 2016 referendum campaign, including the use of data mining and social media. That demonstrates the weaknesses of the UK’s regulatory structure for campaigning. Continuing changes in political technologies and the exploitation of new media make it clear that we will have to revise and tighten the rules further.

There are other changes in charities and electoral regulation that we need to consider. The absence of a legal obligation for transparency in reporting significant sources of income allows foreign donors, companies with strong economic interests and others to fund think tanks and educational and religious charities that promote their vested interests without the British public understanding what is happening. That has been an issue with some Muslim charities in the past. It is still a live issue with libertarian think tanks.

I recall an article on funding for the Conservative Party that remarked that non-British sympathisers who wished to donate to the party are frequently advised to give their money to right-wing think tanks instead. That way, they could gain influence and credit with influential insiders without having to declare their donations. But many of these think tanks in effect act as third-party campaigners in British politics or even as lobbyists for the multinational companies and foreign billionaires who fund them. The Institute of Economic Affairs, for example, does not publish its sources of income, but publishes papers against further restrictions on tobacco and in favour of cuts in corporate taxation.

I would love to know where the funding for the TaxPayers’ Alliance and the Global Warming Policy Foundation has come from, and in particular how much of their funding has come from wealthy right-wingers across the Atlantic. I note that the Global Warming Policy Foundation has an affiliated US funding foundation, while the Koch brothers, who are politically engaged American billionaires, are reported as having funded at least some of the activities of the TaxPayers’ Alliance. However, their websites and annual reports do not tell me more. Transparency in funding should be required of them, too, as influential players in the British political debate. This calls for legislative changes the next time Parliament addresses charity regulation and third-party campaigning.

The register of third-party campaigners for the 2015 election campaign is a useful indicator of the case for regulation. It includes bodies that campaign for right-wing and for left-wing causes; Conservative Supporters Ltd and the Conservative Muslim Forum are classic third-party bodies, with the Independent Schools Council, Hope Not Hate and various animal rights groups on different sides of that impassioned debate. These and many other groups contribute constructively to our public debate, but there is a line between advocacy in the public sphere and the targeting of particular candidates and parties that is not too difficult to identify and which the Electoral Commission should rightly police.

I accept and regret the fact that both the Electoral Commission and the Charities Commission are underfunded for the regulatory tasks they are asked to fulfil. I note that innovation in campaigning techniques is running ahead of regulation and needs to be revisited regularly to keep up, perhaps through a parliamentary inquiry after every general election. I hope that the Minister will take that back to the Cabinet Office to consider. I also accept that some elements of the transparency of lobbying Act would benefit from amendment, in the light of experience so far and in the light of the helpful review by the noble Lord, Lord Hodgson, in particular on the reduction in the regulated period from 12 to four months. But I also contend that the chilling effect which the commission chaired by the noble and right reverend Lord, Lord Harries, warned of has not emerged and that the case for transparency and regulation of third-party campaigning by right-wing and left-wing bodies and from both domestic and foreign sources remains strong.

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My Lords, I too congratulate my noble and right reverend friend Lord Harries of Pentregarth on obtaining this important debate. Throughout the passage of the 2014 Lobbying Bill through this House, my noble and right reverend friend was a tireless champion of the voluntary sector, and his having tabled this Motion shows that his commitment has not dimmed.

I was heavily involved in that debate, not least because I was extremely concerned about the effect that some of the provisions in Part 2 of that Act could have on voluntary sector organisations working within the criminal justice system. The aim given to the system by Prime Minister Tony Blair was to protect the public by preventing reoffending. The voluntary organisations play a major part in this, carrying out more than 50% of the work done with offenders. Much of that work is done by small, localised organisations working both in prison and in the community on behalf of the local public. They have nothing to do with party politics; nor are they organised in political constituencies. That is why I and others questioned the demands of the 2014 Act, which seemed to many to be a panic measure adopted by the coalition Government against lobbyists from America and the trade unions before the 2015 general election. For some reason, voluntary sector organisations were swept up in the resulting maelstrom, even though so many of them campaign only to tell the public what they are doing in order to raise funds for their work. This is a 365-day requirement and has nothing to do with general elections.

I can well remember meeting with the then Leader of the House, the noble Lord, Lord Hill of Oareford, and accepting his undertaking that the issue would be revisited after the 2015 general election, particularly those sections which have affected the voluntary sector, once the Government had had an opportunity to evaluate their involvement or otherwise. Based on his undertaking, I did not press to a vote an amendment that was debated during ping-pong.

The fact that my noble and right reverend friend felt it necessary to bring forward the Motion suggests that the Government have not taken full account of the recommendations in the report of the noble Lord, Lord Hodgson of Astley Abbotts, nor listened to the voice of the voluntary sector. The result is that many organisations feel that, far from the sector not understanding the legislation—as is alleged to be the view of many Ministers and officials in the excellent brief provided by the Sheila McKechnie Foundation—too many Ministers and their officials do not understand the voluntary sector. I have felt this to be the case ever since the Ministry of Justice claimed ownership of any organisation to which it awarded a contract. In many spheres of government activity—such as health, justice and immigration, to name but three—voluntary sector organisations are essential partners but not owned by the ministry that employs them. That would violate the aim of any organisation and render its trustees liable to litigation being taken against them.

Therefore, I strongly support my noble and right reverend friend in this latest attempt to ask the Government to think again about the implications of the Act for the voluntary sector, certainly that part of it which has nothing to do with the jurisdiction of the Electoral Commission. The voices of voluntary sector organisations need to be heard, particularly if they are partners in any government activity, because unless they are allowed to speak out about the problems they face, no Minister or official will be aware of the problems and be able to take action to mitigate them. I suspect that the authors of the Act did not fully realise the implications of what they were doing to the voluntary sector, but they can no longer claim such ignorance in view of what was said during its passage, particularly in this House and in the report of the noble Lord, Lord Hodgson of Astley Abbotts. I plead with the Minister to listen to those voices now, particularly the wise words of my noble and right reverend friend in moving the Motion, and agree to take back the need to revisit the parts of Part 2 of the Act that affect the voluntary sector—particularly those organisations that do not qualify for the strictures of the noble Lord, Lord Wallace of Saltaire, as was enunciated so clearly by the noble Lord, Lord Hodgson of Astley Abbotts.

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My Lords, it is a pleasure to speak on this subject. I thank the noble and right reverend Lord, Lord Harries, for securing the required time.

Many of us in this place will remember the big society initiative. Indeed, some of us had the chance to work on the plans and be consulted beforehand. The initiative failed but it hammered home the point that civil society and the charity sector have an enormous role to play in our society, both with a support function and as an outlet for voluntary activity. However, charities should be extremely wary of a number of things. Political campaigning is one of them. I have been disappointed recently to see a number of charities go beyond their remits to engage in political campaigns, using donations from members of the public and government grants to do so.

Recently, there has been a collapse in trust in charities in this country. The recent survey on trust in charities and the overseas development sector revealed a fall in the proportion of adults who said that they trusted charities “a great deal” or “quite a lot” to 54%, compared with 60% a year earlier. I find this a saddening state of affairs. British people still trust charitable sectors, but not to the extent that they will turn a blind eye to abuse and injustice. Recent scandals involving Oxfam and Médecins Sans Frontières have brought shame on the sector; trust must be rebuilt. Charities ought to focus on their charitable activities, rather than attempting to become similar to think tanks in producing policy reports, lobbying and running campaigns during elections and referenda.

The advantage of the Act is that it gives the public confidence that charitable institutions are being regulated on a similar basis to private enterprises and think tanks that might have an interest in voting behaviour and the influencing thereof. Indeed, it encourages charities to focus on their original mission and, when they do attempt to make political interventions, to be careful about how they go about it. This is particularly important in the case of elections.

There has been much talk recently here and in the other place about the overspending by both sides in the European Union referendum. That strikes a cautionary warning about the influence of money in our elections. Greenpeace and Friends of the Earth, which were quoted by my noble friends, were fined for running undeclared campaigns during the 2017 election, and the Electoral Commission noted that the manifesto scorecard published on Greenpeace’s website was a political judgment and liable to influence voting behaviour.

My sympathy is with charities when it comes to the actual legislation. It is true that the wording used can be unclear and confusing and, reading as a lay man, I would struggle to advise a third party on what they could do. This is a particular problem for the smaller charities, which may wish to bring up entirely legitimate and apolitical points but cannot for fear they might fall foul of the legislation. If clearer legislation cannot be produced in amended form, it would be a magnanimous gesture for the Government to lay out in clear English the precise rights and obligations of third-party organisations.

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My Lords, I am delighted to take part in this debate. In response to the point made earlier by the noble Lord, Lord Judd, I suspect every Member of this House is involved in a number of charities and I have also been a full-time employee of a major charity in the past—so I have an awareness of their concerns and current interests.

We are enormously indebted to the noble and right reverend Lord, Lord Harries of Pentregarth, not just for securing this debate but for his leadership of the very important group that looked from outside Parliament at the work we were undertaking in preparation for the original Bill, and then through its passage and beyond. The four commission reports to which he referred are extremely important and I am glad that much attention is being paid to them today.

I am also extremely conscious of the importance of the work by the noble Lord, Lord Hodgson of Astley Abbotts. Noble Lords may recall that there was huge support across the House for the proposition built into the Bill that there should be a review. I acknowledge the success that the House had in doing that. I think that the Commons had not even thought that that might be useful and necessary; we thought that it was and we were fully justified by the very effective report that the noble Lord, Lord Hodgson, produced. In it he emphasised, as he has again today, the importance of the word “transparency”. That did not appear in the Bill’s title by accident. It is the purpose of the legislation. It might well be said that we need more transparency in other areas of politics—I shall come back to that—but that was a very important motivation.

The noble Lord said that it was important that the public—all of us—should be aware of exactly who third-party campaigners are and what they are spending. It has again been emphasised to your Lordships today that this is not a new concept. It was not suddenly thought in 2013-14 that it was desirable to do this; it went right back to PPERA in 2000. As my noble friend Lord Wallace of Saltaire, who was also involved in that process, emphasised, a great deal of thought went into trying to get the balance right. The fact that we did not get it completely right first time, as implied by the title of the review by the noble Lord, Lord Hodgson, may well indicate how important it is for your Lordships’ House and Parliament generally to undertake post-legislative scrutiny just as much as pre-legislative scrutiny. This is a classic case.

It would be worthwhile very quickly to refer to the excellent brief from the Lords Library on this debate, which summarises neatly the recommendations of the report from the noble Lord, Lord Hodgson, which are:

“A revision of the statutory definition of regulated activity. The report argued that the current definition of regulated activity captured activity that could be ‘reasonably regarded’ as intended to influence voters, which created ‘too much ambiguity’ about what expenditure on campaigning activity was regulated. Therefore, the statutory definition should be changed to ‘one of actual intention’ … A reduction of the regulated period before a general election from twelve months to four … Clarification on how staff costs should be regulated to ensure that work undertaken on electoral campaigning that is ‘incidental’ to a person’s normal job does not count … Registration with the Electoral Commission which is published on their website should provide greater transparency about each individual third party campaigner, and therefore more information should be provided as to the purpose of the campaign, where that campaigning is planned to take place, and broad estimates of likely expenditure … The Government and the regulator to monitor the use of social media to ensure that the regulatory framework continued to strike the right balance”.

All those recommendations are valid. They meet a number of the points made by the noble and right reverend Lord, Lord Harries, but they go beyond that. They open some very important questions about the integrity of our political process, especially in relation to social media. As a number of colleagues have said, life has moved on quite a long way since 2000—and even since 2014. While those recommendations echo some of those from the noble and right reverend Lord’s commission, a number of issues go beyond that which should now be taken seriously into account as the Government prepare for the next Session, which one hopes will not be dominated by the complete traffic jam of Brexit.

I am not sure that we have all yet taken full account of the changing circumstances to which the noble Lord, Lord Hodgson, and my noble friend Lord Wallace of Saltaire referred. For example, it is important to look back to some of the discussions that took place in 2014. For example, I recall my then noble friend Lady Williams of Crosby, who is an acknowledged expert on US politics because of her role at Harvard and a number of other roles on the other side of the Atlantic, warning of the increasing influence of a small group of right-wing billionaires in American politics outwith the party system. Indeed, since then I have read with huge interest the extraordinary book Dark Money, which is analytical and takes forensic interest in the way money is used in the United States. The Koch brothers, to whom my noble friend Lord Wallace referred, are among a number of people who have invested huge sums of money seeking to influence American politics outwith the party system.

Since 2014, we have had three important developments: Trump; the 2016 EU referendum, to which reference has been made; and the extraordinary increase in the amount of money invested between 2015 and 2017 in social media messages. Unsolicited campaign messaging in social media has exploded. Some say—I have heard the noble Lord, Lord Young, say it in the past—that we have no direct evidence that this is all very influential. Well, if it is not influential, it is an extraordinary waste of money.

On this side of the Atlantic, the increase in the amount of money invested by the political parties and by the campaign groups in the referendum in 2016, has been astronomical. It has gone from a few hundred thousand pounds in the case of the Labour Party to millions; and it has gone from millions to doubling millions in the Conservative Party—and, as my noble friend Lord Wallace said, we still do not know precisely how much money was spent by campaigning groups in the 2016 EU referendum. If all that expenditure had no impact on the result of the 2015 election, in the referendum of 2016 and in the election of 2017, the donors who provided all that money—whence I know not; in some cases, it was clearly foreign money—must surely believe that their money was wasted.

As has already been said, it is extraordinary that we have not caught up with the need for imprints on all messages to all voters that come via social media in the way that there has to be with written material. I understand that that was a requirement during the referendum on Scottish independence. Having learned the lesson that it was important then, why did the Government not insist on such an addition for the elections and the referendum that have taken place since? I understand that the Electoral Commission recommended that about 10 years ago, so it at least was ahead of the game.

I will refer briefly to two further issues, because we should take them into account during this one opportunity that we are likely to have in the immediate future to debate these important concerns, to which all Members have referred. Members of your Lordships’ House may recall that Lady Williams and I suggested at quite an early stage of the Bill that we should at least examine whether its provisions should exclude charities. A number of colleagues here today have said how it is charities that seem to have been most affected by the so-called chilling effect. We argued that, since charities are already subject to the requirements of the Charity Commission, there was a perfectly valid argument for saying that they should be excluded from the legislation and treated differently—and if it was necessary to improve or update the charities legislation, and the role and responsibilities of the Charity Commission, so be it.

We undertook to pursue this with coalition Government Ministers at the time, who were sympathetic to that view. However, the charities seemed ambivalent as to whether that would be to their advantage. Other organisations from a very different background, some of which my noble friend referred to—a rather more right-wing background, if I may put it that way, that was much more comparable to what was going on in the United States—were only too pleased to keep the charities with them. It gave them a degree of extra respectability; it was a sort of human shield for some of their less desirable activities.

I do not know whether the charities still feel that they should be subject to this legislation; clearly, if it was going to be a matter for review and amendment, we should look at it again. The Sheila McKechnie Foundation, which provided us with an excellent brief—not least because it was very brief: just two pages—made the point that the Act as it stands:

“Makes it harder for charities to pursue their mission”.

It reduces the abilities of charities and—a key point:

“The effects of the Lobbying Act on how charities approach campaigning can’t be isolated from other policies and opinions that reduce the ability of charities to speak out”.

It would appear that its representations are actually just about charities. If that is the case, we should be open and honest about this and say that it is an issue that may need to be addressed in due course. I very much accept what the noble Lord, Lord Judd, said about charities. I have been active in support of charities over many years and continue to be, particularly charities concerned with international development in Africa and Asia, and I entirely understand the point he made.

There is one other issue I will refer to briefly, because I think it is important: it has been referred to obliquely by other noble Lords. I believe that it is about time we made sure that there was an even playing field between non-party campaigning and party campaigning. The present restrictions on party campaigning are clearly no longer fit for purpose in the present world of social media. We have had a number of discussions in your Lordships’ House and in the other place on this issue. We really need to look at it very seriously. I know that there is a problem of time, but in due course I hope that we will get to a Session when we are not completely tied down by Brexit legislation—and it will be important, for reasons that have already been advanced, that all this legislation is reviewed before the next general election.

It is simply not true that there is effective transparency on national expenditure in constituency campaigns. The two regimes that apply, and the difficulties that the Electoral Commission and even the police have in dealing with what should and should not appear in the reports of constituency candidates and their agents, are clearly matters of real concern that affect the whole integrity of our electoral process. Similarly, I have already mentioned the lack of effective transparency on unsolicited campaign material, and the vast increase in expenditure with very little identification of where it is coming from and who is paying for it. For all we know, the biggest single investors, in terms of time and staff, in the British electoral process at the moment are some Russian guys: it is extraordinary, the way we have allowed that to happen. It is being examined very carefully, of course, in the United States, with no conclusion. It is being examined by the DCMS Select Committee in the other place, but we have not yet had an authoritative response from the Government.

Reference has been made to the extent to which non-party campaigners are suffering from a disproportionate impact. That is due partly to the fact that the clarity of the law in terms of party campaigners has not been completely resolved: it is still work in progress, it is unfinished business and it is urgent. There is a need for thorough parliamentary review and reform, to apply not just to the non-party campaigning activities that are important to this country’s democratic health but to party campaigning as well. I have a Private Member’s Bill that might go some way towards that, as the noble Lord, Lord Young, knows. Maybe, one day, there will be a chance to get to Committee on that Bill.

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My Lords, first, as other noble Lords have done, I thank the noble and right reverend Lord, Lord Harries of Pentregarth, for tabling this Motion for debate today. I bring to the attention of the House that I am involved as a trustee of two charities. The first is the United St Saviour’s Charity, which works with disadvantaged communities in north Southwark and has been doing so, following a bequest, since 1541. I am also involved with the Millwall Community Trust, which has not been around for quite as long but again works with communities, with young people, young men and women, in the boroughs of Southwark and Lewisham and helps them develop important skills. It is recognised as one of the earliest and most successful football charities. Neither of those charities engages in any activities that are covered by Part 2 of the Act we are debating today.

We have had the benefit of two general elections to see how the Act has operated—to see both what was stated to be the intention of the Act and the reality of the powers contained within it being in force. That benefit can inform our debates very well today. We have also had the benefit of the review undertaken by the noble Lord, Lord Hodgson of Astley Abbotts, which was set up by the Government and published in March 2016.

The Bill that became the Act was introduced into Parliament by the noble Lord, Lord Lansley, when he was in the other place as the Leader of the House of Commons. I am reminded that we were told and Members of the other place were advised, among other things, that the Bill would assist in making transparent who is lobbying whom and for what. It is fair to say that it did not turn out quite like that. The Bill was described on various occasions as hurried, badly drafted, sinister and partisan. It had a very limited focus and effect on lobbying and, as we know, was often referred to as the gagging Bill.

The Motion before us turns our attention to Part 2 of the Act, which concerns non-party campaigning. This is an area where there can be no doubt that the Act has had a major effect on the campaigning activities of charities. The noble Lord, Lord Lansley, had also told the other place:

“The Government’s clear view is that nothing in the Bill should change the basic way in which third parties campaign and register with the Electoral Commission”.—[Official Report, Commons, 3/9/13; col. 181.]

I contend that that clearly is not what happened and that we now find ourselves in a most regrettable position.

There have been rules about what third parties can do in elections since the introduction of the Political Parties, Elections and Referendums Act 2000, as the noble Lord, Lord Hodgson, made clear in his remarks. I agree with his comments about how campaigning has changed and am delighted that the noble Lord, Lord Young of Cookham, has agreed with me many times that our laws governing elections are not fit for purpose. I hope that we see action soon from the Government to address these major failings since, as the noble Lord, Lord Tyler, said, life has moved on. I also agree with the suggestion about having imprints in all social media now. The world has changed dramatically; we need to know who is putting this stuff out and why, and how we can get in touch with them if we need to deal with any issues of wrongdoing. It is really important that we know who is doing what.

Part 2 of the Act reduced considerably—by approximately two-thirds—the maximum overall spending limit, while widening the range of expenditure that has to be accounted for in the spending limit. It also introduced the concepts of constituency spending and targeted spending. The regulated period is one year before the general election but, as we saw last year, the Fixed-term Parliaments Act has been shown to be a weak, flimsy and easily-got-around piece of legislation. It is ridiculous and unfair that a charity campaigning on an issue could quite easily, through no fault of its own, have spent to the legal maximum before it was aware there would be a general election. How can it possibly plan like that? It is ridiculous.

It is worth pointing out that the inclusion of staffing costs in the overall expenditure limit is particularly unfair and quickly eats it up. I am sure it is particularly galling for charities and campaigners to realise that staffing costs are omitted from the national spending limits of political parties. If those costs were included, I suspect that one or two parties would find that they had spent their national campaign budget before they had actually started campaigning. Again, that is very unfair on the charities.

Overall, the Act has made it considerably harder for charities to campaign on the very core issues which are their reason for existing in the first place. My noble friend Lord Judd was absolutely right to tell the House about the engagement and experience of charities and the important work they do. The noble Lord, Lord Wallace of Saltaire, made points about accountability and transparency, which I am happy to agree with—with the caveat that Part 2 of the Act went too far and had a damaging effect on third-party campaigning.

I also agree with the noble Lord’s comments about certain think tanks. As he said, the TaxPayers’ Alliance and the Institute for Economic Affairs, to name but two, are somewhat opaque about where their funding comes from. They spend considerable time giving their views in the media but are less open about where their funding comes from. The sooner that they are required to declare where they funding comes from, the better—that would be a welcome move.

It is right, normal and legitimate and should be welcomed in a healthy, democratic country that organisations will engage in the democratic process. The Act has damaged that and made it much harder. Registered charities cannot endorse or support a political party or candidate anyway; that is illegal. Many noble Lords made reference to the Sheila McKechnie Foundation report and the excellent work that it has done on the impact of the Act. It found that people’s voices go missing from debate, and that is not healthy.

I agree with the noble Lord, Lord Ramsbotham, when he asked the Government to think again about the effects of the Act on legitimate campaigning undertaken by the voluntary sector. The noble Lord, Lord Suri, is right that where charities, people who work for them or volunteers have done wrong they must be held to account—we would all agree with that—but, as the noble and right reverend Lord, Lord Harries, and my noble friend Lord Judd said, campaigning for change is a perfectly legitimate role for charities to undertake.

Let us be clear that campaigns and campaigners can be irritating, especially for Governments and people in power, but that is of course part of their role. It does not mean that they should not be heard. Charities feeling that it is harder to pursue their mission, or those organisations working on politically sensitive and controversial issues being particularly at risk, is not a good place for us to be. Smaller organisations are affected by the impact on coalition working, and that again is again very concerning.

It is very hard for charities to ensure that they remain on the right side of the requirements of the Act, and that has understandably led to many of them taking a very cautious approach and, in some cases, avoiding activity where there is any question of uncertainty. This has resulted in significant resources of time and money being diverted to compliance work rather than their core activities, and in some cases campaigns have stopped completely. As I have said, I think that is all very regrettable and damaging to civil society, but it is part of a wider set of activities that the Government have embarked on in recent years.

During this debate a number of noble Lords have referred to a review conducted by the noble Lord, Lord Hodgson of Astley Abbots. This was a government commitment to review Part 2 of the Act after the 2015 general election, which was very welcome. The noble Lord spent a lot of time on his review, which was published in March 2016. When it was published, it was broadly welcomed by the charity and voluntary sector and by the Government. The House of Lords Select Committee on Charities described the recommendations as eminently sensible and recommended that the Government implement the review in full.

As we have heard, the proposed reforms sought to address the problem that the noble Lord identified with this part of the Act, which he believed—and I agree with him—failed to get the balance right. The noble Lord did not suggest that this part of the Act should be repealed but sought some sensible changes: a shorter regulatory period, from 12 months to four months, to help campaigners; clarification about what happens in the context of a snap general election—of course, a year later we had one, which we had to deal with; and clarification about joint working. The reforms sought to deal with some of the problems that have been identified as causing charities and the third sector real problems today.

In a recent speech Matt Hancock, the Secretary of State for Digital, Culture, Media and Sport, said:

“I want to see civil society recover its confidence to speak into our public life. The greatest social and political changes in our history have come about because independent people formed associations to press for change. If that means respectful criticism of government, so be it. … The business of civil society is society, and within the limits of charity law, you have the right to campaign, to persuade the public, and to press for change in the systems which affect the life of this country”.

I agree with every word of that quote, but it is frustrating that Matt Hancock is saying that at the same time as the Government confirm that they are not intending to legislate for any of the reforms that the noble Lord, Lord Hodgson, put forward.

What is the reason given? We are told that it is pressure of time in Parliament. I have been a Member of this House for only eight years, but I can confidently say that this is one of the quieter periods for legislation that I have experienced in that time. I also think that if the Government brought a Bill forward to implement the noble Lord’s reforms, it would get a very positive reception here. It would certainly not get bogged down in lots of amendments, as the Government might fear; I think it would have a very easy passage in this House. It would actually be a very positive experience for us all to have the opportunity to get away from Brexit and talk about something else, so the Government might find that such a Bill was very welcome.

I very much endorse the noble Lord’s recommendations. I also think it is really important to remove staff costs from activity that counts towards the spending limit. As I said, political parties would be really badly affected if that applied to their national campaigns in the regulated period before a general election. It is also plainly unfair that a snap general election could cause a charity to be in breach of spending limits and be at risk of sanctions primarily because it did not have a crystal ball to anticipate the calling of a general election. It is fair to say that most of the Cabinet did not know a general election would be called last year—we heard reports of them being shocked before the Prime Minister came out to announce it to the world—so why should a poor little charity have any idea what is going to happen in terms of a general election?

I very much thank the noble and right reverend Lord, Lord Harries of Pentregarth, for bringing his Motion to the House today and enabling us to have this important debate.

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My Lords, I congratulate the noble and right reverend Lord, Lord Harries, on his choice of subject and on the speech that he made in introducing it. I thank all noble Lords who have taken part; they have brought to the debate not just their experience of when the legislation went through but their experience in many voluntary sectors. For example, the noble Lord, Lord Judd, mentioned his experience at Nacro and Oxfam as well as some of the umbrella bodies that speak for the voluntary organisations. Many other noble Lords drew on their own experience of working in the voluntary sector. I cannot hold a candle to what some noble Lords have done in this field, although I chaired a housing association for some seven years before I became an MP.

I also thank the noble and right reverend Lord for his significant contribution to the development of third-party campaigning rules, including as chair of the Commission on Civil Society and Democratic Engagement, which closely monitored the changes to third-party campaigning and published a series of useful reports before and after the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 was passed.

We have heard much today about the important role that third-party organisations play in society. The Government recognise the invaluable contribution of third-party organisations and will continue to provide support and guidance to ensure that such organisations can meet their charitable aims. As a number of noble Lords rightly pointed out, the charitable aims include not just meeting the direct needs of the group that they seek to help but raising the profile and seeking to change the law. As the noble Lords, Lord Wallace and Lord Ramsbotham, and others have said, that is absolutely in line with their charitable objectives.

The Government published the Civil Society Strategy on 9 August, setting out how they will support charities and social enterprises. This includes plans to create a cross-government group to work with civil society and a renewal of the Government’s commitment to the compact principles. These are the principles that govern the relationship between the social sector and the Government. We are committed to embedding open policy-making across departments, giving civil society significant opportunities to achieve policy change, and are currently developing a commitment to this as part of the UK’s next national action plan for open government. We have also provided additional funding for third-party organisations. In 2018 the Government have doubled charitable donations through the UK’s Aid Match scheme, which pledges £1 for every £1 donated. Twenty-five charities across the UK will have their charitable appeals for 2017 and 2018 boosted, raising a total of £66 million.

When preparing for this debate, I read all four reports from the Commission on Civil Society and Democratic Engagement chaired by the noble and right reverend Lord, Lord Harries. I found them highly informative, providing a comprehensive insight into the key concerns around third-party campaigning. I also reread the significant contributions by my noble friend Lord Hodgson, which I will come to in a moment. I also read the contributions which both of them have made to our debate on the subject, including when the noble and right reverend Lord, Lord Harries, tabled amendments to the Act.

I thank my noble friend Lord Hodgson for his significant contribution to the third-party campaigning rules. His report has been referred to by many speakers, and I reread it last night. I understand that my noble friend has been in regular correspondence on third-party campaigning rules with Cabinet Office Ministers and will shortly be meeting the Minister for the Constitution to further discuss his report.

Third-party campaigners play an important part in the political process. Our democracy is strengthened by people campaigning for what they believe in, whether or not they are a candidate or political party. Voluntary organisations, charities, civil society and trade unions all play their part. I say that as someone who fought 10 general elections which were informed and enlivened by third-party campaigners. I recall, in particular, the campaign against the Newbury bypass, when I was Secretary of State for Transport and the candidate for North-West Hants. Digging a small bypass across my lawn was, I think, taking enthusiastic campaigning a little too far.

Much of the campaigning undertaken by such third parties is conveying their views about policies and issues. Under charity law, charities have the right to undertake campaigning and political activity where it supports their charitable aim, where trustees consider it to be an effective use of charitable resources, and provided that they do not engage in party politics. Electoral law does not change this. I listened with interest to the speech of my noble friend Lord Suri, but it is of course for the Charity Commission to act if there is a breach of charity law in the way that he implied.

The rules on third-party campaigning apply only to expenditure undertaken for electoral purposes. These rules exist to give the public more confidence in the way third parties interact with the political system. They ensure that campaigning is transparent and prevents any individual, company or organisation exerting undue influence on an election. Without these rules, our political system would be open to unknown groups spending unknown amounts of money on unknown activities to influence an election. I was interested to hear what the noble Lord, Lord Wallace, said: that it was not difficult to see where the line should be drawn. I am grateful for his broad support for the legislation which he helped to put on the statute book.

The Electoral Commission has a duty to provide advice and guidance to third-party campaigners to ensure that they understand the rules and are confident about campaigning. The commission has a series of guidance documents for third-party campaigners on its website. This includes information on registering as a third-party campaigners and guidance on reporting expenses to the commission.

The commission is currently working on a new guidance document with the Association of Chief Executives of Voluntary Organisations, the NCVO and Bond, the UK network for international development organisations. That guidance will cover areas of particular concern to smaller, issues-based campaigners. This includes the application of the purpose test to issue-based campaigns and the application of the third-party campaigner rules at an unscheduled UK parliamentary general election. The commission aims to publish this guidance early next year, and I can tell noble Lords who have taken part in this debate that I will ensure that all the contributions and suggestions they made during this debate are taken on board by the Electoral Commission.

Regulation of third-party campaigning at the constituency level has existed for a long time. The Representation of the People Act 1983 brought together in one place the legislation regulating third-party expenditure in parliamentary and local government election campaigns in individual constituencies.

The regulation of expenditure on campaigning activities by third parties on a national level has been a more recent occurrence. In 1998, the Committee on Standards in Public Life was tasked with reviewing the funding system and recommended reforms to political funding and spending. These recommendations were introduced by the Political Parties, Elections and Referendums Act 2000.

PPERA contains provisions on the regulated activity and registration of third-party campaigners, the spending rules for third-party campaigners, the rules on donations to third-party campaigners and the reporting of third-party campaign spending to the Electoral Commission. As the noble Lord, Lord Wallace said, that provided the framework for Part II of the 2014 Act, which was introduced in response to a 2013 Electoral Commission review of political parties and election finance law. I do not think that any noble Lord has suggested that Part II should be repealed. I was interested to hear what the noble Lord, Lord Tyler, said: that a lot of thought went into the construction of that Act, although they may not have got everything spot on.

The review suggested that the rules on third-party campaigning should be changed to reflect the scope of rules for political parties. It also called for a review of the implications of the campaign spending limits set by PPERA. These proposals become Part II of the 2014 Act.

The Bill’s passage through this House was paused for six weeks between Second Reading and Committee, to enable further consultation on the Bill. The Government made a number of amendments on Report—including, significantly, raising the threshold for registration, and therefore taking a number of smaller organisations outwith its scope, and requiring a review to examine the functioning of the whole system of regulating non-party campaigning. Subsequently, my noble friend Lord Hodgson was called upon to produce his review on third-party campaigning regulation, published, as we heard from the noble Lord, Lord Kennedy, in March 2016.

The 2014 Act brought greater transparency to when third parties campaign in an election. It required relevant expenditure on such campaigns to be recorded and disclosed more fully. A number of reports evaluated the effects of the 2014 Act on third-party campaigning. In September 2015, the Commission for Civil Society and Democratic Engagement published its report, Non-Party Campaigning Ahead of Elections. In his report, my noble friend reviewed the campaigning rules and found that it was,

“far from clear the extent to which it was the reality of the legislation’s provisions rather than the perception of what restrictions they imposed, which affected organisations’ behaviour”.

This makes sense. Nothing within the 2014 Act was intended to change the basic way in which third parties campaign and register with the Electoral Commission. In its briefing for this debate the Electoral Commission said:

“We continue to work with the charity and voluntary sectors and other campaigners to ensure that they understand the rules and are confident about campaigning. In particular we are working on addressing the misplaced perceptions about the rules that might cause a ‘chilling effect’ amongst campaigners”.

The Electoral Commission commented on the rules in one of its reports on the 2017 election. In November last year it published its report, Political Finance Regulation at the June 2017 UK General Election. The Electoral Commission said:

“For the most part, we are pleased to observe that parties and other campaigners intended to, and did, comply with election spending and funding rules”.

I shall try to deal with some of the points made during our debate. The rules for joint campaigning were raised. Working together with other organisations on common causes is a well-established feature for most civil society organisations, charities and trade unions, and it is important that when it happens at an election, the rules on third-party campaigning capture this activity.

The rules on joint campaigning prevent undue influence by ensuring that spending limits are respected and that they cannot be evaded by a joint campaign falsely claiming to be separate campaigns. My noble friend Lord Hodgson spoke about those who were not angels and what he called outliers, who are all too ready to abuse the spending rules. Joint campaigning rules are important to ensure transparency about which groups are campaigning together on a particular issue and what they are collectively expending.

The issue of snap elections was raised. Whether we will have more snap elections after the result of the most recent one, I am not sure. The regulated periods for elections are clearly set out in PPERA. Also, with the passing of the Fixed-term Parliaments Act 2011, the start date of regulated periods in advance of scheduled general elections should be known with greater certainty than was the case before, so unexpected general elections—it says here—should be less frequent.

I was also asked whether the regulatory period should be changed from 12 months to four months. The regulated period for third parties is the same as for political parties, and having any difference between the two is likely to increase the complexity of election law. If one did that, one would need an amendment to require an anti-avoidance provision to prevent third parties being used as fronts for a political party or campaigner during any period where third-party campaigners were not regulated but political parties were.

The noble Lords, Lord Wallace and Lord Kennedy, raised the issue of transparency of income for campaigning charities. Your Lordships’ Select Committee on Charities published a report in March 2017 called, Stronger Charities for a Stronger Society. It stated:

“We do not believe that significant additional regulation of the sector through increased mandatory reporting requirements would be desirable, as this would be a substantial bureaucratic burden on smaller charities”.

Of course, the Charity Commission has done much in recent years to improve the information publicly available about charities and is now consulting on changes to its annual return, which would further increase charities’ transparency.

In a nutshell, the 2014 Act did not target charities and has never prevented charities or other organisations from campaigning in line with the law. In the 2017 general election, 68 charities registered as third parties with the Electoral Commission, which was an increase from 2005, when 25 charities registered. The Act, piloted so capably by the noble Lord, Lord Wallace, is about giving the public more confidence in the way third parties interact with the political system. It makes the political system more accountable and prevents opaque and unaccountable groups spending large sums of money attempting to influence the political system.

My noble friend Lord Hodgson suggested a number of changes to the 2014 Act. I am happy to say that we are making progress with one of them: the suggestion that imprints should be required for electronic material as well as on printed material for third parties. We recognise the growing number of campaigners using social media to convey their message to the public—a point well made by the noble Lord, Lord Tyler. On 29 July this year, the Cabinet Office launched an open consultation, Protecting the Debate: Intimidation, Influence, and Information, which seeks views on proposed changes to electoral law, including the inclusion of imprints on digital campaign materials. The consultation will close at midnight on 22 October. We have doubts about implementing my noble friend’s package of recommendations and we have made it clear—I understand my noble friend’s disappointment—that we will not legislate on this. During our debate, a number of noble Lords have suggested that we need to further revisit the legislation in the light of the experience in recent elections. My noble friend was keen that his recommendations be taken forward as a single package.

To take one of those recommendations, a principal one, perhaps—to amend the definition of “regulated activity”—the Government agree with the Electoral Commission that no amendment to this definition is required. The commission believes that the current definition works well. It covers spending which can reasonably be regarded as intended to promote or procure electoral success. I say to my noble friend that I have made detailed inquiries about this and I am advised—and I am bound to say that I agree—that moving to a test of actual intention would be difficult to regulate and enforce. He made the point that this phrase occurs within the Representation of the People Act 1983 and asked why it could not simply be moved across. The intention test in that Act is appropriate for candidate spending and referendum campaigning since, in those cases, it is obvious that the candidate or campaigner has that intention. It is not suitable, however, in the case of third-party campaigners, who have a different background. Their campaigning may be issue-based and one cannot simply transpose that provision across.

A number of general points were made by the noble Lords, Lord Tyler and Lord Kennedy, about broader confidence in the electoral system. I say to both of them and to the House that the Government will be working towards a comprehensive programme of reform over the next few months and years to ensure that our electoral system is fit for purpose and enhances confidence in our democratic institutions. Finally, I assure noble Lords that we are committed to ensuring that third-party campaigners can continue to play a meaningful role in the democratic process. We need to strike a balance between, on one hand, the rights of people and organisations to campaign and, on the other, maintaining the integrity of the electoral process by having transparency of expenditure. We believe that the current legislation does this, but we will continue to work with the Electoral Commission, voluntary organisations and charities to ensure that the legislation is fully understood and clarified, where necessary, so that the crucial balance that I referred to is maintained.

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My Lords, I thank all noble Lords who have spoken. In particular, I repeat my thanks to the noble Lord, Lord Hodgson, for his excellent report and I also thank the Minister, who has obviously put a lot of careful reading, planning and thought into his contribution to the House today. This debate has brought out the importance of bringing this legislation back and looking at it again as soon as government business allows. There is not only the report of the noble Lord, Lord Hodgson, but contributions such as that made by the noble Lord, Lord Wallace of Saltaire. There may very well be areas that are not properly covered and which need tightening up. This has accentuated the importance of bringing the legislation back.

It has been suggested in some quarters that the third-party campaigners suffer from misconceptions or exaggeration. Perhaps this is true in some cases, but it is a very good principle to listen to the people most fully engaged in work on the ground. There is no doubt that they feel very strongly—as revealed in the reports of the commission that I chaired, and by the McKechnie Foundation—that the legislation works in a disproportionate way upon them. What bears this out is the recommendation of the noble Lord, Lord Hodgson, himself. Nobody could be more objective in his approach. He has a very well-balanced report. It is entitled Getting the Balance Right but his main thrust is that, at the moment, the balance is not right. I very much hope that the Government will think again at some point and look at Part 2 of the lobbying Act as soon as Brexit allows, and certainly before the next general election.

Motion agreed.