Electoral Administration Bill

My Lords, I am sorry to find myself in a different place from that of both noble Lords, although I should say to the noble Lord, Lord Goodhart, that I have discussed this issue with his colleague in another place, who gave me a slightly different view. I accept completely what the noble Lords, Lord Kingsland and Lord Goodhart, have said about the need to ensure that the valuable work done by party treasurers, along with so many others in our community, is made possible. I accept too that those who act as honorary treasurers of one organisation may take on the same role in others. I certainly found myself in that position so that eventually I became the honorary treasurer of lots of different groups. I pay tribute to all those who help our democratic process by taking on these responsibilities at the local level. I understand the reasoning behind the noble Lord’s amendment in that he is seeking to ensure what he considers to be a greater degree of protection to treasurers and that they do not, through innocent oversight, fail to recognise their responsibilities. However, we have considered this issue carefully and we believe very firmly that the regime set out in new Section 71L provides sufficient safeguards. A registered treasurer will not commit an offence unless he knew or ought reasonably to have known as a fact that the party had entered into a transaction with an unauthorised participant. Where a registered treasurer can show that he took all reasonable steps to ascertain such matters, he will not be in a position where he ought reasonably to have known of the transaction. All that is required is to do what is reasonable in the circumstances. When it comes to taking out loans, I think it is right to ask that people should act in a reasonable manner. The noble Lord made the point that we avoid using negligence as a basis for a criminal offence, but where criminal offences are created to support the operation of regulatory offences that is not necessarily the case. Indeed, the approach we are taking mirrors the existing basis for criminal offences set out in the Political Parties, Elections and Referendums Act in respect of donations. Let me take one example. In the donations regime, where a treasurer submits a report that does not comply with the reporting requirements—for example, if he fails to report a transaction that is over the reporting threshold—an offence is committed. The treasurer has a defence if he can prove that he took all reasonable steps and exercised all due diligence. That clearly amounts to a negligence-based criminal offence and I am not persuaded that in the loans regime we should depart from the situation that we have in the donations regime. In fact, I would argue that if treasurers have two systems that are close to each other, the better off they will be in understanding their responsibilities. In addressing this question in the way that we have done, we have stuck to the spirit and letter of what we said we would do—which is to make the two regimes as compatible as possible. On that basis, I will not accept the amendment. Raising awareness of the need to take reasonable steps is a responsible and straightforward act for political parties to undertake. In doing so, political parties will encourage minimum standards of care in those responsible for their financial affairs. Again, this mirrors precisely what happens within the Political Parties, Elections and Referendums Act. There has been a heartening consensus in all that we have tried to do for greater openness, transparency and regulation, but we need to accept that there is an increased necessity for accurate and scrupulous reporting by all those involved and that we need to put in place a regime that is as straightforward to follow as possible. We believe that by mirroring what we already have in the donations regime we will fulfil that obligation. While we accept that we are placing an obligation on treasurers in terms of the necessity for compliance with the loans regime, we believe that by working with the political parties we can ensure that they will get the information so that they can comply. On the basis that we think the best approach is to mirror what we already have, I hope the noble Lord will withdraw his amendment.