Electoral Administration Bill

moved Amendment No. 106:"Page 65, line 6, at end insert—" ““(   )   An agreement or arrangement entered into before the date of commencement of section 61 of the Electoral Administration Act 2006 which would be a regulated transaction if entered into after that date is also a regulated transaction unless it has come to an end before that date.”” The noble Lord said: My Lords, in speaking to Amendment No. 106, I also wish to speak, with the leave of the House, to Amendments Nos. 108, 110 and 113. This group of amendments is of some significance. I raised the issue Grand Committee, but I am bringing it back again, somewhat late in the evening. We welcome the Government’s proposals for disclosure of the names of lenders. There is, however, one point on which I find the Government’s proposals not satisfactory; that is, the failure to require repayment of a loan made by someone who was not at the time of making the loan a political donor. I have somewhat revised the amendments tabled at recommitment, and the first change is in Amendment No. 106. I introduced it because I was concerned about the drafting of the new Section 71F of the Political Parties, Elections and Referendums Act 2000. My first reading suggested to me that it did not have retrospective effect. In other words, a transaction already entered into was not retrospectively made into a regulated transaction. Other provisions in the following new sections of the 2000 Act in fact imply that Section 71 has retrospective effect, but it is better to have it spelt out in Section 71F itself. The amendments provide that Sections 71I and 71J, to be introduced into the 2000 Act, make any regulated transaction to which an unauthorised participant is a party void and require the loans to be repaid. Of course, I exclude—again by amendment, Amendment No. 113—any retrospective criminal liability. The Government have rightly provided that any loan by a permissible donor that is outstanding when Part 4A of the 2000 Act comes into force must be disclosed. In doing so, it overrides the confidentiality clause in the agreement. It follows from that that an outstanding loan made before Part 4A comes into force by a person who is not a political donor should be not only disclosed but repaid and, if not repaid, should be subject to action by the Electoral Commission under Section 71I. Similarly, any guarantee or security given by somebody who is not a permissible donor should be void. The deliberate use of loans to avoid disclosure is plainly contrary to the spirit of the 2000 Act. The deliberate use of loans to avoid disclosure and to enable a foreign lender to confer a benefit on a party is doubly contrary to that spirit. In those circumstances, the loan should be repayable—preferably immediately, although I would accept a delay of, say, up to 12 months—even if the lender does not wish to exercise the right to demand repayment. When I raised this argument on recommitment, the response from the noble and learned Lord the Lord Chancellor was inadequate. He said:"““We think the balance is best struck by requiring disclosure but not requiring what may wreak havoc with a party’s finances or cause significant prejudice to the individual lender””.—[Official Report, 8/5/06; col. 758.]" I cannot see how an individual lender, frankly, could suffer ““significant prejudice”” by having the benefit of repayment forced on him or her. As to the party in question, unless the loan was expressly made non-repayable for a substantial fixed period, the party has always been faced with the possibility that the loan might be called in at an inconvenient date. My amendment would simply crystallise the existing risk that the party must have taken into account. Further, the exemption of loans by foreigners could—in theory, at any rate—apply to loans made between now and the commencement of Clause 61. I accept that the disclosure requirement may make that unlikely because of the adverse publicity for any party that did that, but it is not impossible and it is plainly something that would be ruled out. It is right that there should be an obligation to repay immediately or, at any rate, within a relatively short time after Clause 61 comes into force any loans made to a political party by someone who was not when they made the loan, or at any time subsequently, a permissible donor. I beg to move.