Political Parties and Elections Bill

As the Bill stands, clause 8 creates a new requirement for a donor to make a declaration in respect of donations for a sum exceeding the specified threshold. The intention behind the clause, and the related schedule 3, is to clarify the source of donations. Essentially, transparency is the goal. Schedule 3 makes changes analogous to those made by clause 8 in relation to donations made to individuals and members' associations so as to recognise third parties and permitted participants. Although we support the goal of transparency, earlier in the Bill's passage we had many concerns about the provision. In particular, we were concerned to ensure that small donations were not subject to a potentially burdensome and demanding declaration system. After much negotiation and effort, we have, thankfully, made great progress since then, particularly in increasing the thresholds for declaration from the low original sum of £200. In this day and age, using that sum was particularly out of touch. The Government have also removed the unworkable requirement that parties verify the donation. In combination with the £200 threshold, that requirement would have made the administration of donations almost impossible. It was agreed by all, including the Electoral Commission, that amendments increasing the thresholds and removing the verification requirement were the way forward. Again, the verification requirement would have placed a great burden on local and national party officers alike. Of greatest concern was the potential impact on local party officers. As the Minister said, they are frequently volunteers, and we felt that the Bill in the form considered in Committee risked permanently discouraging those at the grass roots of politics from engaging with the political system. Even for lawyers or experts in money laundering, the requirement would have been almost unworkable, let alone for busy unpaid local volunteers. When the Bill went into Committee, any donation of more than £200 would have come within its ambit. That would have resulted in approximately 100,000 declarations being required in relation to Conservative party donations alone, leading to an administratively unworkable work load. As a result, we felt that the political system would be damaged, rather than enhanced. After much effort in Committee, the thresholds were increased to £5,000 at national level and £1,000 at local level. We still had concerns, however. It is a simple fact that political parties need funds to fulfil their democratic roles, and the thresholds are still set at a lower level than we had expected. Fortunately, the Government have come back again and admitted that the clause is still deficient, and have tabled these amendments that we are discussing today. Government amendments 94 to 111 and new clause 19 are a response to widespread objections to the surprisingly low thresholds for declaration originally proposed in the Bill. The Government amendments increase the sums to £7,500 for donations made nationally and £1,500 for donations made locally. I shall return to the thresholds in discussing our amendments. I can confirm that we are reasonably satisfied with the national threshold, but that we have tabled amendments to increase the local threshold from the £1,500 proposed by the Government to the more appropriate figure of £3,000. We had considered increasing this figure to match the national threshold, as that would have been simpler for all concerned, but £3,000 is where we are at on this issue. New clause 19, which addresses the so-called "permissibility threshold", serves two important purposes. First, it introduces further consistency to the 2000 Act by amending relevant sections so that the figures are in line with the proposed increased thresholds in amendments 94 to 111. Secondly, it increases the recordable threshold to £500 from £200—another improvement. As it stands, part IV of the 2000 Act imposes restrictions on the sources of donations; it prevents certain foreign and anonymous donations to political parties and makes registered parties subject to reporting requirements when in receipt of donations of more than a certain value. The new clause serves to amend the relevant sections of PPERA, specifically in part IV, and the related schedules 7, 7A, 11 and 15. The Act specifies which payments or services to a party are not to be regarded as a donation and are therefore not subject to any requirements—any donation of £200 or less is to be disregarded. The new clause amends the sum, increasing it to £500. Accordingly, any donation of £500 or less would not be subject to the regime. The increased figure serves a number of goals, and the threshold, generally, is a significant one. Principally, the increased sum aims to reduce administrative burden—a reduced strain will be placed on parties in relation to less financially significant sums. The sum should also prevent donors of smaller sums—those up to the more realistic figure—from being discouraged from contributing money. I am thinking of, for instance, ticket prices for attending local fundraising events. It is important that less significant sums donated in that manner are not caught up in the complexities of this Bill. Again, I stress that we should be encouraging engagement at the grass-roots level of politics; by having a higher level, we carve out individuals who are involved at the base level of politics and who are in no way targets of the legislation. It is sensible to remove entirely from any such conversation those lower sums. I am sure that all hon. Members will be aware that the voluntary levels of party structures and local fundraising are normally entirely divorced from the more complex upper echelons of party funding. Furthermore, as the Minister has pointed out, it should not be forgotten that the PPERA provisions that set the £200 level were debated almost a decade ago. Given the time lag, there is a need for a more valid and fair level at which to disregard the potentially oppressive PPERA restrictions. Although we approve of increasing the threshold, we remain concerned that £500 is not enough. That sum is still very low in the grand scheme of party financing, and for the reasons I have highlighted, extra caution should be exercised to ensure that minor donations do not end up falling within the ambit of this substantial and intimidating—for individuals—legislation. Although we appreciate that the Government have attempted to address these widespread concerns, new clause 19's changes to part IV of the 2000 Act may not go far enough; a greater sum of £1,000, for example, might be more appropriate. As the Minister said, this is a matter of judgment and balance. The potential for excessive burden does not extend solely to the donor; in particular, I draw hon. Members' attention to the potential for requirements to be placed on local volunteers in relation to small donations that nevertheless remain above the proposed level of £500. The accounting rules are extremely technical and complex, as is even the guidance produced on the rules. In addition, we need to consider the fact that, because of the voluntary nature of local associations, many of those responsible for accounting are volunteers. Again, I suggest that it is sensible to remove entirely the possibility of an unnecessary burden being placed on donors and volunteers; extending the threshold to a sum such as £1,000 would ensure that there was far less room for doubt.