My Lords, one of the problems with the Bill is that the Government failed to make any changes at all to their proposals when the Committee on Standards in Public Life published its recent report, Regulating Election Finance. The whole purpose of setting up the CSPL was to meet Sir John Major’s aim of cleaning up the reputation of politics, including political finance. It now seems that the Government want not only to control the watchdog responsible but to make sure that it has no teeth. I believe the Government have a significant conflict of interest in this matter.
The CSPL report recommended that the Electoral Commission should be able to levy increased fines for serious electoral offences. It proposed a comprehensive package of measures to improve enforcement, which included decriminalising some offences and addressing an enforcement gap in the regime covering candidate spending. There are some matters that are best dealt with by regulators such as the Electoral Commission, which must be able to enforce fines, rather than necessarily by the police and criminal courts. As the commission itself says, there could be more proportionate ways for the commission to deal with breaches of political finance law.
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In 2000, when some of us sat through 11 days of debate in this House on what became the Political Parties, Elections and Referendums Act, we knew that all the parties were very nervous about having a new regulator and having to comply with new regulations. The maximum fine for parties was therefore set at a very low level. With hindsight, 22 years later, a fine of £20,000 may be seen as a very modest level of taxation for a multi-million-pound offence that could alter the result of a general election or a referendum.
In considering the appropriate level of fines, we should look at regulatory models such as that for the Information Commissioner’s Office. Since 2010, the Information Commissioner’s Office has handed out £23.5 million in fines to organisations found to have been breaking the law on rules about spamming or failing to look after consumer data.
There are two tiers to the level of fines that can be imposed by the Information Commissioner’s Office. The higher maximum amount is £17.5 million or 4% of the total annual worldwide turnover in the preceding financial year, whichever is higher. The higher maximum amount can also apply to any failure to comply with any of the data protection principles, any rights an individual may have under Part 3 of the Data Protection Act or in relation to any transfers of data to third countries. There is also a standard maximum if there was an infringement of other provisions such as administrative requirements of the legislation. The standard maximum is £8.7 million or 2% of the annual worldwide turnover in the preceding financial year, whichever is higher.
Parliament has agreed to a regulatory body such as the ICO being able to regulate organisations through the imposition of penalties on this scale. I believe the political parties must also be respectful of election law rules and, in particular, those concerning donations and election spending. The present limit of £20,000 for a regulatory body is clearly woefully inadequate. Amendment 19 in the name of the noble Lord, Lord Young of Cookham, proposes what I consider a modest increase, to £50,000, in the level of fines that can be imposed by the commission. Amendment 18 in the name of my noble friend Lord Wallace of Saltaire would put the regulation of political parties more in line with that imposed by other regulatory bodies such as the Information Commissioner’s Office. I beg to move.