The Kelly Committee requested Sir Paul Judge and I to attend to give oral evidence as part of their inquiry into political party funding. After the hearings, I was sent this copy of their transcript of the session.

ROBIN TILBROOK (CHAIRMAN, ENGLISH DEMOCRATS PARTY) AND SIR PAUL JUDGE (JURY TEAM)

SIR DEREK MORRIS: Good afternoon, gentlemen. Thank you very much for coming in to give evidence to us. As I mentioned I am standing in for Sir Christopher Kelly who has unfortunately not been able to complete the rest of today’s hearings. He will be reading the record of this meeting in detail though. For that record could I ask you briefly just to introduce yourselves?

ROBIN TILBROOK: Robin Tilbrook. I am the Chairman of the English Democrats party.

SIR PAUL JUDGE: Paul Judge. Officially leader and treasurer of the Jury Team.

SIR DEREK MORRIS: Thank you. You have sent us an opening statement which I will not ask you to read out. We will certainly put that into the record. I think the points to do with small parties and Hayden Phillips on the one hand and to do with the honour system on the other will probably come up in question. The other point is a rather more detailed technical point which I think you take and the Committee will consider.

SIR PAUL JUDGE: Yes, it is one that is not usually covered in things of this nature. It has been mentioned several times over the years but the previous governments of the day have never actually taken the action that is suggested.

SIR DEREK MORRIS: On the face of it, it does seem to be an anomaly so we will certainly look at that.

As you would expect we have a number of questions; some to do with donations, expenditure, state funding, and so on but I will start with some more general questions. A lot of what we are doing is based on the main parties but whatever we do it is important it makes sense and is fair and reasonable for small parties so it is very useful that you have come along with that perspective. What is your general view of the current state of party political financing of the current regime in the UK?

ROBIN TILBROOK: So far as the general state of party finance is concerned I think it is probably linked to the general health of the main political parties. I was born in the late 1950s and we had a Conservative Party which had 2.5 million paid up members. It is now claiming membership of about 300,000 but if you look at their accounts the amount of money they are actually receiving from subscriptions would suggest a much smaller number of paid up members than that and that is almost certainly the largest membership party of all. What is happening is partly a product of the fact that the main political parties have moved away from engagement with what the public actually wants.

SIR DEREK MORRIS: Why do you think that might be?

ROBIN TILBROOK: I think they become more and more remote from what people want on the street and the fact is that the system does encourage that remoteness. There is not much of a link between public support and financial health of the political party and obviously the more money the party receives from the state the worse that is going to be.

SIR DEREK MORRIS: One thing about a political party is not only that it has policies but if it wants to implement them then it needs to get into power and like any good business it needs to connect with its electorate. It is strange that it should have become so remote.

ROBIN TILBROOK: Another bit of evidence of the remoteness is the increasing numbers of people that simply do not bother to vote. That process will be progressively worse if the parties continue down the direction they are currently going. One of my great fears about the process of trying to increase regulation over fundraising is that this is going to be used as an opportunity to gerrymander the funding of political parties which might pose a competition for the main parties. I do not want to see a situation like we have in Belgium where the establishment parties use the funding system to make life as difficult as possible for the Flemish Nationalists.

SIR DEREK MORRIS: We might explore that in more detail in a moment. Paul?

SIR PAUL JUDGE: Yes, I agree with all that Robin has said. I think the issues of political funding are part of the wider symptom of people’s disinterest in politics, especially political parties. They do not want to give to these organisations. They will give to charities but they do not have an imagery of political parties as entities that they wish to give to. Even major parties have subscriptions of £10 or £15 a year – 1 DVD sort of thing – but people are not even prepared to pay that amount. So I think it is part of the wider lack of interest and I think the issue of non-voting – less than two-thirds in the general election – to find a way that that 40+% of people are also represented is absolutely key to getting a more vigorous democracy.

SIR DEREK MORRIS: So the present regime is one which is wholly dependent on donations, although there are significant amounts of public money that do go to parties. What particular problems does that create for small and in particular new small parties?

ROBIN TILBROOK: Speaking for the English Democrats those interested in getting the party up and running have obviously donated to the organisation of the party. It would be essential for small parties to be able to continue to operate for there to be no cap on what individuals within the party could give to the party. Certainly the suggestion I have seen talked about of £50,000 as a maximum cap I would regard as an attempt by the establishment parties to make it impossible to compete with them.

SIR DEREK MORRIS: Just before we look at potential reforms I am keen that this Committee understands what the impact – for good or bad – is on small parties at the moment. Are there particular reforms that you think would be right and appropriate that you see as being desirable because of legitimate interest and position of small parties?

SIR PAUL JUDGE: In terms of private funding – individuals, organisations funding – we know it is very concentrated amongst the large parties. Typically Electoral Commission will report 200-odd donations of more than £5,000; some of £500,000 or whatever. This is a very concentrated grouping across all three parties therefore one is looking for that level of donation.

It is very difficult because of the publicity issues and time given to small parties and alternative views, specifically under the Broadcasting Regulations which are based on the electorate and vote under the last equivalent election. In the 2009 European elections UKIP were given a substantial amount of coverage. They were promoted by the BBC to have similar coverage to the other parties because they got 2 million-odd votes in the previous election, and you can clearly see that it moved their share from 7% to 19% within the week that that happened. Similarly when the BNP were promoted to a higher publicity level by Helen Bowman at the BBC, they went up sufficiently and ended up with two MEPs. So I see it more as the publicity side. People do not want to give because they know it is very hard to get the exposure.

ROBIN TILBROOK: If I can just come back from there. I would fully support that. I do not think the problem is the ability to raise money; I would regard that as part and parcel of the whole inevitable situation as to what would happen for a smaller party. But it is true that the possible impact that the small party might be able to make is not based upon the policies that it is putting forward or the approach it is adopting; it is based on other rules around the broadcasting and the way the media operates.

There is a rule that none of the newspapers will accept an advert from a political party except at full card rate whereas if you were trying to advertise nappies you would be able to get a similar advert for very much less.

SIR PAUL JUDGE: That is related to the rules because if they were to give a discount they could be accused of giving a benefit in kind or a benefit in cash indeed to the relevant party. I have discussed the publicity issue with senior people at the BBC – the Director General, the Political Director, etc – and they realise that they do not represent the 40% of people who do not vote but they have not been able to find a formula by which they could activate the other views; whether it is Question Time or the other similar programmes which the BBC run. They are very much locked in to this “looking backwards” system rather than looking forward despite the fact that one of their objectives is innovation in the Royal Charter.

SIR DEREK MORRIS: In this context if you look at the last 40, 50 years it has been very clearly a process of power moving away from the two main parties and you see that both in terms of the percentage of the vote they get but also in the plethora of new parties that have been able to emerge and sustain themselves.

SIR PAUL JUDGE: Certainly in Scotland, Wales and Northern Ireland there is truth to that because the political situation has changed; nationalism has become stronger so people like Plaid Cymru, SNP have obviously done well in those areas. Within England there has been very little other than UKIP and to some extent more recently the BNP, each of which are essentially single-issue parties. We do not have a vigorous democracy in the terms of new parties being encouraged by the total plethora of rules that there are such as publicity. If only three car manufacturers were allowed to advertise their cars on television then probably the sale of those cars would continue to outstrip the sales of the other cars.

ROBIN TILBROOK: I think there is an actual advertising strategy from big businesses to advertise in order to try and raise the hurdle so the small businesses cannot come into that area of the market. In a sense what we have at the moment is something along those lines but it is done by regulation.

SIR PAUL JUDGE: In the commercial world many changes in market share and whatever it is happen because of companies coming from abroad and that is intrinsically not possible with political parties because they would not be acceptable for quite reasonable reasons. So in fact the commercial idea does not work and there has to be other real encouragements to get new views in.

ROBIN TILBROOK: It is true that the proportion of the electorate that are voting for the two or three main parties has been going down but that has not affected their power as such when elected because as we saw with the last Blair general election he got a historic landslide majority with the votes of 21.6% of the electorate.

SIR DEREK MORRIS: I think you take us into areas which are perhaps beyond the remit of this Committee. I suppose the basic reason we are here is because there are widespread concerns about what might be labelled the big donor culture of financial parties. Do you perceive that to be a problem? And if so a problem in reality or a problem of perception only?

SIR PAUL JUDGE: It is undoubtedly a problem firstly of perception. There is no question that all the surveys about trust in politics show that this is an issue where the public believes the system to be corrupt. There has been quite a lot of fuel to encourage that view. The issue with Bernie Ecclestone and Mosley on the advertising on cars; the times when the House of Lords Appointments Commission has turned down various people; the times when things have not been reported properly, both by MPs, the Mayor of London and others. So there have been plenty of newspaper stories in the last five or ten years which would make the average person be rather suspicious of this whole process so I think there is no question in terms of public perception.

In terms of the reality I think we have a pretty uncorrupted system but because of the power which does lie with the governing party in particular it is very hard to know to what extent any influence may be arising because we have very few checks and balances. I do not think there is any example of corruption in a pure sense but donations to parties I think there is some evidence, certainly shown through the honours system – the House of Lords issue which I mentioned in the paper – that money does talk in terms of those appointments. And if it does talk in terms of those appointments then it may talk in other ways.

As well as sitting here in my current role 15 years ago I was Director General of the Conservative Party and I handled all this stuff. I remember well when John Major was Prime Minister there was considerable sleaze around at the time. But I have to say that I never found a single example of policy being perverted in any way. There was a very strict Chinese Wall. I cannot speak now to that but the treasurer’s department, as it then was, operated in extreme secrecy – perhaps too much secrecy – but certainly the politicians were not told where the money was coming from.

SIR DEREK MORRIS: In the absence of any clear evidence of actual wrongdoing, would you accept the argument the present arrangement with large donors certainly creates the scope for it to be a problem? I think you have already said it certainly creates the perception that there is a problem and that the existence of the scope and the perception is enough to mean we have to do something. We cannot really duck it simply on the grounds there is no evidence of actual wrongdoing.

SIR PAUL JUDGE: I completely agree. It is a poison in the political system, there is no doubt. And because the public generally do not want to give to political parties, they have ended up with this very small number who finance very large parts of the political activity.

OLIVER HEALD: I was going to ask Sir Paul: one of the things we are looking at is what the motivation of donors might be. You are in a good position to comment on that because you have been a major donor to the Conservative Party; no doubt you are funding the Jury Team to an extent and of course you are also a charitable benefactor having set up the Judge Business School and other projects. Do you want to comment on what your own motivation has been at particular times and also your experience of other donors who you know well?

SIR PAUL JUDGE: I do believe the honours element is quite important and when one looks at the list of past donors to both of the major parties it seems quite clear that they have advanced in those terms over the years. Certainly the treasurers of the Conservative Party have traditionally become Lords, for instance, and obviously on the Labour side, Lord Levy is a well-known example in an equivalent position, and indeed a number of the Liberal Democrat major donors are now in the Lords. I think that has become a real issue which is why I mentioned it in my opening statement just to make sure it was covered.

I do not think they do it for political reasons in the sense of wishing to get a policy adopted, and this is the other side of the coin. I mentioned the Ecclestone case, and that perhaps is a bit less certain in those terms, but I think generally I do not think the people are trying to specifically get a policy in place but they may be wishing to get access to ministers or shadow-ministers and to try and get a point across. Quite often on an industry basis, whether it is private equity or healthcare or whatever it may be, and that is then very dangerous I think because governments can be accused of moving their policies in a broad sense. Not to help a particular individual but certainly to help a business area with which that individual is concerned and, therefore, by extension eventually to help the individual.

ROBIN TILBROOK: I have a slightly different view on some of the points that Paul has made. On the question of corruption I do not fully accept that our system is corrupt in the sense of bribes, and so on. I do think it is corrupt in another sense inasmuch as it is not a very democratic system and that the corruption that people regard as a corruption or debasement is the fact that political parties they feel simply cannot be trusted to live up to their manifestos. Therefore in effect the corruption that people are complaining about is that the politicians are lying about things and not being honest and honourable about the policies that they put forward in elections and they are not delivering on those.

The nearest we get to corruption in a sense of money changing hands that concerns people is the question of appointments to the House of Lords. Personally I am not concerned if other honours were being sold. The question about the House of Lords is the most important one because they are members of our legislature and, therefore, their system of becoming members of the upper chamber I think your average American would think we are nuts to have people appointed to the Lords on the basis of either past political involvement or having made a large contribution to the ruling party.

SIR PAUL JUDGE: If I may clarify, the take he then describes which is the inherent corruption in the way we do politics, I entirely agree with – the manifestos is the classic example – but that is not, in my mind, linked to the funding question; it is just the way we have to be now.

SIR DEREK MORRIS: In the House of Lords what you suggested in your opening statement was that if someone had donated more than £50,000 over 5 years that they would not be eligible. What of the point that there may be individuals who, through their experience and career, have got much to offer the House of Lords but they are also successful and wealthy and they donate, because you really want to preclude them?

SIR PAUL JUDGE: Then they would be candidates to be appointed by the Appointments Commission; not candidates to be appointed by the party leaders.

SIR DEREK MORRIS: So does that suggest there might be an alternative route to dealing with this problem which would be all such appointments would be by that committee and they could look at recommendations from parties but in sanctioning an appointment would need to state publicly – in the case of somebody who had made a bit donation – that this appointment would certainly have been made in the absence of the donation.

SIR PAUL JUDGE: And, as in most cases of the Appointments Commission, they would sit as a crossbencher might be another provision. But I think it needs to be separated from the political leaders because that is where the inherent perception of corruption is.

ROBIN TILBROOK: Our position would be slightly different because we would like to see the House of Lords fully elected.

SIR PAUL JUDGE: That is a further development.

SIR DEREK MORRIS: Again you are slightly outside our remit. I would like to move on to some of the specific ideas for reform. As background to that could answer some background questions about your respective organisations, in particular what size you are and what sort of party membership and how much money do you get and from what sorts of sized donations, just so we have a feel for where you are coming from.

ROBIN TILBROOK: We have currently got a membership of just under 3,500 and I would say the subscriptions just runs the administration of the party. It is not sufficient for the number of leaflets that would be needed in terms of campaigning or paying for party election broadcasts to be made, and so on.

SIR DEREK MORRIS: So for that you are entirely dependent on donations?

ROBIN TILBROOK: We are, yes.

SIR DEREK MORRIS: And they run at what sort of level in recent years?

ROBIN TILBROOK: I am in some difficultly in saying exactly because I have not ever really done the books but I think speaking personally I have probably put in something like £150,000 into the party. I should think there are several others who have put in getting towards £50,000 and there are probably quite a number of others who put in £10,000 to £20,000.

SIR PAUL JUDGE: We have much smaller party membership of a few hundred because, knowing the difficulties of doing that, we approached it in a different way. But I made a donation of £50,000 to kick the thing off. I have also made some loans to the party. We have had one or two donations in the tens of thousands and then quite a few of £5, £10, £15, £20, £50 level.

SIR DEREK MORRIS: Okay, that is helpful. One proposal that Hayden Phillips talked about and a number of people giving evidence to us have referred to is the potential for a donation cap, for example, of £50,000. Some have talked about much more restricted levels down to perhaps £1,000 or £2,000. What are your views on those two very different levels of donation cap?

SIR PAUL JUDGE: We, in our policy statements, supported the Hayden Phillips ideas. He had done a lot of work and talked to everybody. You can play around with the figures but it is as good a number as any. I think £50,000 is a reasonable number. That is not going to be sufficient to influence almost any major policy decision but it is a fair amount for somebody to give. We already have reporting requirements above £7,500 for central gifts and so anything above £7,500 would be reported and a cap of £50,000.

One semi-technical point: it is not very clear from the Hayden Phillips report what is meant by £50,000. Does that mean per year or per parliament or per five years? I think clarity as to what one was actually talking about would be helpful. But he proposed that it comes in from 2012. Unfortunately the other parties have not been able to agree those recommendations. When we made that, looking at his report, it was fuelled by the cash for peerages issue in 2006 and he was dealing essentially with only the major parties. He really did not mention the minor parties. It is not perceived to be a problem for the extremely obvious reason that the minor parties do not have any power so there is no point in influencing them because it is not going to get you very far.

So when we wrote it we said the Hayden Phillips report recommendations on capping donations to political parties which received government funding should be accepted and enforced. So you want to do it for the ones where there is possibility of policy influence either through being in government or the individual MPs. But for new parties I think the need to encourage new ideas overrides that so if somebody wants to have a go, like James Goldsmith did 20 years ago with the Referendum Party, then I do not think that should be stopped because if you had a £50,000 cap on a new party it could be very difficult to get going.

SIR DEREK MORRIS: So your borderline for coming within that cap would be receipt of state funding?

SIR PAUL JUDGE: Or some similar measure but that seems to be a pretty clear measure.

SIR DEREK MORRIS: When you say that for those in receipt of public funding that a cap of £50,000 sounds about right, as you say, Hayden Phillips might not have been very clear but what do you mean by that? Do you mean £50,000 per annum or £50,000 within 1 parliament?

SIR PAUL JUDGE: I would have thought within one parliament because most people do make a single donation. It is fairly rare for people to make two big donations. There are exceptions like David Sainsbury but it is comparatively rare.

ROBIN TILBROOK: I think I would be against that actually. I do not think there ought to be a cap and I think that what we are in danger of having here is an attempt to block off competition. I think the motivation of not having overseas donations from the Commonwealth was introduced by the Labour government with the primary aim of trying to make life difficult for Lord Ashcroft to give money to the Conservative Party and I regard that as a fundamentally corrupt way of thinking about politics. It is a gerrymandering type of idea and I think the talk of having a limit of £50,000 is more about trying to block off, for instance, UKIP being a threat than it is about trying to clear up public life in this country.

SIR DEREK MORRIS: A limit of £50,000, absent any other change which we will come back to, would very substantially reduce the funding of both the major parties.

ROBIN TILBROOK: It would also very substantially reduce the chances of any other party becoming a threat to the main parties. What the main parties would undoubtedly do if there were a limit to donations is that they would take more money off the taxpayer.

SIR PAUL JUDGE: Which highlights the point about the government funding of parties or some distinction of existing parties with some form of power against the parties which are not yet in that position.

ROBIN TILBROOK: And of course if they were taking more money off the taxpayer the whole problem of parties not sticking to their word in terms of the manifesto and becoming detached from what ordinary voters want would be far worse.

SIR DEREK MORRIS: Forgive me if this is wrong but supposing the regime that Sir Paul has described was in place, is it not the case that the two main parties would see a very substantial reduction in funding absent, as I say, other changes, but under those rules your own party would not be affected?

ROBIN TILBROOK: If what Sir Paul says was implemented that would be correct but I have to say my trust that that would be what would happen would be very limited because I think the parties who were being asked to regulate themselves by the way they dealt with the legislation, it would be too tempting a target to have the opportunity to block off all competition.

SIR DEREK MORRIS: In terms of what this Committee might recommend – and this is entirely hypothetical – if it were that there should be a donation cap of £50,000 but that it would not apply until such time as a party was in receipt of state funding, would that not allay your concerns that this was just being used as a way to see off new competition?

ROBIN TILBROOK: If that was what happened then obviously I would not have the same concern. I think the average person on the street would still have a great deal of concern at the idea that the funding gap would be made up from milking the taxpayer for more money for those political parties. If money is removed from one area of funding it has to be found somewhere else, and if that is the taxpayers’ picking that up, I think that would be fundamentally wrong.

SIR DEREK MORRIS: Sir Paul, if we had such a regime with a cap it clearly would cut in half current funding for the major parties; it could easily do that. How would you see that problem being addressed in the regime that you propose?

SIR PAUL JUDGE: Hopefully it will be part of re-establishing trust with the political parties which is a long-term project of which this is one aspect of the work that you are doing. But it is important that people do have faith in the political parties because they generally are not corrupt but nevertheless the perception is that they are and, therefore, people do not want to give to them. By making them appear more wholesome and taking away this continuing series of criticisms about funding then that is likely to encourage more people to give and from a much wider base. If you could get 10,000 people to give £1,000 that is £10 million so that will fill the gap.

SIR DEREK MORRIS: Would you, perhaps in the future, see increased state funding as part of the solution?

SIR PAUL JUDGE: Norman Fowler, then Party Chairman, presented the Home Affairs Select Committee in 1994; this was a question that was then being addressed. I have never personally thought it was a good idea mainly because the electorate are absolutely against it and every opinion poll has said, “We do not want our tax money supporting ‘that lot’” to put it in vernacular terms.

SIR DEREK MORRIS: Mr Tilbrook, if we were to accept the argument that there should not be a cap on donations for the reasons you have said how then should we, as a society, try to deal with what I think we all agree is certainly a perception that big donors can and do buy access, maybe influence and perhaps honours?

ROBIN TILBROOK: I do not think it is the sense of policy, and so on being bought that is the point most people are concerned about. It is that fact that the main parties are not trusted to deliver on what they say they are going to do in elections. The “populist positioning policies” that parties come up with in the run-up to an election, which they have no intention of implementing, that is the area which I think people are increasingly concerned with and it is the area that has led to a dramatic drop in the numbers of people willing to join political parties. People join political parties because they want to do something about politics; they are not going to give money to a political party even if they think it is not in any way corrupt simply because of the lack of financial corruption. I think people who get involved with politics want to achieve something. The lack of accountability of politicians once elected is a severe problem I think. I think the proposal of recall would actually do more to address that than any amount of tinkering with regulation of what funding political parties could have.

SIR DEREK MORRIS: In effect you see the problem and, therefore, the solution in a rather different dimension.

ROBIN TILBROOK: Yes.

SIR DEREK MORRIS: Thank you. David?

DAVID PRINCE: Thank you. Can I talk about expenditure? You said you were broadly in favour of the Hayden Phillips’ recommendations which did talk about reducing and capping expenditure. Are you in favour of expenditure caps and do you think they should be reduced even further? A lot of people have suggested to us that parties spend more than they need to for campaigning and there is scope for a substantial cutback in party spending.

SIR PAUL JUDGE: For the general election there is a limit in the order of £20 million which is not unreasonable. We are very fortunate that we do not have broadcast political advertising because that is what perverts it in America and a number of other countries. Because of that the capability to spend is comparatively lower than the billion dollars that would be spent on a presidential candidate, etc.

The issue of newspaper and poster advertising having to be at full cost does cause problems and if the Electoral Commission or others could agree that it has to be a commercial rate but it does not have to be a full cost rate, that would indeed bring expenditure down on posters and newspaper advertising and things like that which would help everybody.

Away from general elections for by-elections the limits are still pretty complex. I think they could be simplified but I do not think the actual quantum is going to make much difference to anybody. There is complexity between the party and the candidate and who is spending what. It is just a pain to fill in all the various forms basically. But I do not feel that there is a strong need to make big changes on the expenditure side other than those.

ROBIN TILBROOK: The only area that I perhaps flag up in response is the expenditure on by-elections. We have not done a huge amount in by-elections apart from using the Royal Mail free delivery in a parliamentary by-election and our results in by-elections mostly show that, to be fair. The fact is that the main parties do spend a tremendous amount of money on the by-elections and they are allowed to, of course, by the rules and people who are subjected to a by-election get enormously fed up with vast amounts of leaflets being stuffed through their letterbox and people hammering on the door at all sorts of hours. People get absolutely fed up with the whole thing and having more restriction on what could be spent on by-elections probably would reduce some of the ridiculous amounts of impact that ordinary residents have to put up with when there is a by-election.

DAVID PRINCE: Some people have said to us there should be a substantial shift; that people should be allowed to spend a great deal more at local level but I am not hearing either of you suggesting that.

SIR PAUL JUDGE: We know that both the major parties have said they hope to reach the marginal voters seven times during the election. As we know our MPs do not change very much, even when there appears to be great swings. It is most unusual for 20% or more to actually lose a seat. For 80% once you are there and you wish to stay, you are there for as long as you like. Therefore in those 20% of the constituencies there is typically 10% or 20% of targetable floating voters. So if it is 10%, you have got 10% of 20%. That is 2% of the 45 million electorate so those 900,000 voters – poor people – get bombarded with stuff. I do not know of a way in which you could easily regulate that because during a general election it is all happening so fast but it is a consideration. A big chunk of the money goes to a very small number and the posters are put up obviously in the marginal constituencies. It is all perfectly legitimate but the concentration now with all the computer-aided postcode targeting is so strong that it is just a consideration. I need somebody to think through how that could be dealt with but much of that money goes on a very small number of the voters.

ROBIN TILBROOK: As a suggestion there could be a limit on what could be spent in each constituency. We have the national figure but you could not spend more than a certain amount on that one constituency.

SIR PAUL JUDGE: The practical difficulty is that most of that is targeted from the party headquarters; not by the local campaign constituency headquarters.

ROBIN TILBROOK: Paul is absolutely right that if you are unlucky enough to be in a marginal, you do get bombarded, particularly if you are thought to be a potential swing voter in a general election. That is more of an annoyance rather than a useful way of encouraging engagement in politics.

DAVID PRINCE: Sir Paul, I think you indicated earlier on regarding advertising rates that at least the full cost rate does guard against any perception or reality of benefits in kind. I suppose commercial rate would be much more difficult to regulate and control. There is a balance to be struck there, is there not?

SIR PAUL JUDGE: There would and that is why the newspapers go to that extreme because then they cannot be criticised. But as the many marketing matrixes show what the cost per thousand was, if you have the advertisement for the washing powder on the left page and the XYZ Party on the right page they should be broadly similar. Clearly if you gave the political away for almost nothing then that would be a benefit in kind but the measure really should be the commercial rate. I happen to be the President of the Chartered Institute of Marketing and everybody knows that the price that is on the card is never the price that anybody pays in the advertising industry.

ROBIN TILBROOK: We regularly use a broker who sets up our advertising. When he first got involved with us he was absolutely amazed to find we were having to pay multiples of what he would normally expect to be charged for a similar type of advert. It is actually quite a punitive difference.

SIR PAUL JUDGE: Just a thought that came to me: it could be at a charity rate or something like that might be a way of having it.

DAVID PRINCE: It is an interesting point and not one I think that we have had put to us before which is why I wanted to come back to it. May I move on to state funding. Do you receive any form of state funding at the moment?

ROBIN TILBROOK: No.

DAVID PRINCE: Do you have a view on the unfairness of that given your relative size and the arrangements that are now in place?

ROBIN TILBROOK: I think actually when I said no to that question the caveat would have to be put in that of course we do get the free delivery of the Royal Mail – that is a subsidy in effect – and also not having to pay for the party election broadcasts which is another subsidy in another way because it is basically a free advert, is it not? You have to pay for the production of it but you do get a free advert. We only get the one if we qualify as opposed to the establishment parties which are more likely to get quite a number of them. One would have to say there is a little element of subsidy already but not as much as is available to the bigger parties. Apart from that we do not get any other subsidy at all.

SIR PAUL JUDGE: That is clearly true for us as well, yes.

DAVID PRINCE: Just to be clear, are either or both of you ideologically opposed to increased state funding or do you think the funding reforms can be carried out in ways that do not involve it and it is undesirable from an electoral point of view?

ROBIN TILBROOK: I would not class it as purely ideological. I think most people are very hostile to the idea of still more funding. Whenever I have talked about the amount of funding that the establishment parties already get people are generally absolutely furious to learn of the kind of money they are getting. I think if they thought there was going to be more money that would encourage still more people to be furious with the way the system operates rather than to engage with it which is the premise on which we have been discussing reforms, is it not? It would not improve public engagement; it would make people more fed up with the current system.

SIR PAUL JUDGE: The state funding at the moment is probably more than the average person believes but I am sure your research staff have given you the various polls and things which show people are much against the idea. If it were to be extended though it would have to be extended on the basis of the electorate; not the voters. If it is just to bolster those who already have power and influence then I think that would be entirely wrong. At the moment the formula relates to number of MPs and number of votes and the short money and things like that. It does not provide any money for the 40% of the electorate who did not vote. If there were to be a pot of £10 million if you add everything together, if that represents those who voted in the general election, one would think there would be another £6 or £7 million for the people who did not vote which perhaps the Electoral Commission or someone of that nature would distribute amongst the other parties.

DAVID PRINCE: What are your views on a gift aid approach; tax relief such as gift aid? Would that make it more acceptable to channel more state funding in? Do you think it is worth the effort?

SIR PAUL JUDGE: From a pure point of view it is proper that there be gift aid in a sense because it ceases to be your income is the same argument that has existed for 300 years on charities. You get your income, you give some of it away to a charity, then it is not your income so you should not be taxed on it is essentially the base point and I see no reason why that should not apply for political donations as well. There could be a difficulty with higher rate tax so it might have to be limited to lower rate tax otherwise it would look like the rich were getting more influence again, etc. But if it was limited to lower rate tax it would be a more acceptable form of state funding because it would be following the money rather than following the number of MPs or number of votes.

ROBIN TILBROOK: I would start from the perspective that gift aid was not actually state funding. It is a giving up of some of the tax take, which is not quite the same as state funding, if I understand what you mean by gift aid correctly, so I would not be opposed to that at all. I think that would be a useful thing to happen. Going back to the question earlier about state funding we have to bear in mind the fairly appalling example of the way Belgium operates its rules on political parties. Its manipulation of the state funding rules and also capping private donations which establishment parties use to try and cut off competition; in this case the Flemish Nationalists. Because they are challenging the idea of Belgium they are then regularly finding they are being told they are no longer recognised as a political party and therefore do not receive any state funding. And their rule is now that you are not allowed to give any money to a political party so the only way a political party can get funding is by state funding. So you have, in effect, a manipulation by the Belgium establishment to try and prevent democratic political expression of views that they do not approve of.

SIR DEREK MORRIS: If there is a document you can send us with some detail on that it would be very useful. Denise?

DAME DENISE PLATT: I want to turn to the regulatory framework. As small parties what is your view of the current framework?

SIR PAUL JUDGE: It is not bad. We fill in our forms for the Electoral Commission. They are still all rather higgledy-piggledy; the date is written in different ways on different forms and nobody has ever gone through it and tried to make it easy to fill in. I think that is one thing. The categories of expenditure cause a lot of problems because they are different for by-elections, general elections and annual accounts. There is absolutely no reason for them to be different; it wastes a lot of accounting time recoding everything and for small parties that is a real pain. I have already mentioned the reporting of by-elections and the anomaly and that is because the PPRA 2000 Act is fairly clear but the candidate part of it stems from an earlier Act and it has never been put together. If one compares it with the Charity Commission, which is broadly a similar thing, it is probably no worse.

DAME DENISE PLATT: Okay, it could be a bit more coherent.

ROBIN TILBROOK: I agree that it is not coherent in that you have forms from the Electoral Commission and also forms from the Returning Officers; they do not match each other in any sense. I personally regard it as a bureaucratic rigmarole that actually does not really achieve very much. It is not particularly painful to comply with it once you know that you have to but what does it actually achieve? I think that is rather difficult to say.

SIR PAUL JUDGE: The Northern Ireland question: you have to report separately for Northern Ireland. We do not do anything in Northern Ireland so we just do a nil return but for accounting and all the rest of the annual accounts it all has to be done twice. Assuming we believe the peace settlement in Northern Ireland is now with us it seems to me that there is no reason why the Northern Ireland aspect should be a completely separate register. We do not do that for Scotland or Wales. It was done because there are different disclosure requirements because people were worried that if somebody gave £10,000 to a party somebody might come around and shoot them and all that sort of thing. But assuming we believe that is now gone then it seems to me totally duplicative to have a separate register for Northern Ireland.

ROBIN TILBROOK: I thought there was a rule on foreign donations in order to keep Sinn Fein on board.

SIR PAUL JUDGE: Yes, you can donate from Ireland to Northern Ireland. You cannot donate from Ireland to Great Britain.

DAME DENISE PLATT: Yes, we have been and taken evidence in Northern Ireland. So what you say is not unfamiliar from things that we have heard. The issue about the Returning Officer documentation and the Electoral Commission documentation: we have received evidence from Returning Officers who feel that there should be one set of documentation that goes straight to the Electoral Commission online. Would that be something you might support?

ROBIN TILBROOK: On the basis of where we are at the moment some of our candidates would need somebody else to file that for them because they would not be online and I suspect that would be true of all political parties in the end. Somebody would have to do it. If you have bureaucracy within the political party of election agents, and so on then maybe they would support that but if it had to be online as a rule then I think that would be a slight problem but if there was the system that you could do it online and you could post it in, then that would ensure that even those candidates without agents or internet access could still do it.

SIR PAUL JUDGE: Yes, online should be an option but not compulsory but I think the majority would do it but there will always be exceptions and I think sending it to the Electoral Commission makes a lot more sense than sending it to the Returning Officer who really has no idea because these things happen so rarely. It is meaningless for them to have it.

DAME DENISE PLATT: That brings me to my next question: we have received evidence that the regulatory burden about reporting donations and expenditure is too onerous for small parties.

SIR PAUL JUDGE: These small parties must have huge numbers of donations so they are very lucky I guess!

DAME DENISE PLATT: You do not have enough to make it onerous?

SIR PAUL JUDGE: Sadly we do not have that problem!

DAME DENISE PLATT: We have also heard that parties without central compliance functions feel disadvantaged. It all comes down to the definition of small though, does it not?

SIR PAUL JUDGE: Yes, if it could be simplified and make the candidate, the by-election, the general election, the European election and the normal running all using the same codes and things, that would make it much, much easier.

ROBIN TILBROOK: It would probably be helpful if there was an effort to stand back a bit and try and work out what actually needs to be reported and what is just bureaucratic mumbo-jumbo to make life difficult. Very small parties are going to find that it is onerous. Once you start to have people volunteering to be the treasurer then at that point it might not be quite such a problem.

DAME DENISE PLATT: Do either of your parties have a compliance officer?

ROBIN TILBROOK: We have a party treasurer.

SIR PAUL JUDGE: We have an auditor obviously.

DAME DENISE PLATT: What changes would you like to see to the regulatory framework in addition to simplifying it?

SIR PAUL JUDGE: I think having an Electoral Commission is a good thing, like having a Charity Commission is a good thing. It should just be made as user friendly as it can be.

ROBIN TILBROOK: The problem I see with the Electoral Commission is we have this fairly expensive structure but it has virtually no teeth. If you have a problem, for example, with the returning officer being awkward about something, you ring up the Electoral Commission and they say, “They should not be doing that but we cannot do anything about it”. We have a website run by a UKIP supporter which calls itself the English Democratic Party. There is no such registered party and because there is no such registered party the Electoral Commission says, “We cannot do anything about it”. I think it is probably rather expensive and not really achieving a great deal but I think part of the reason why it was introduced was partly about transferring power from the local parts of the party to the centre. So we now have a single national nominating officer and that means that local parties can no longer get their own candidate forced through against the wishes of the centre of the party.

DAME DENISE PLATT: So that is power over how local elections are run; more power than currently?

ROBIN TILBROOK: For instance, if we had a coherent election administration system where returning officers were part of the Electoral Commission system you have then some organisation nationally that is holding the election system to account. That obviously would be of some use and you would not get different practices occurring in all sorts of different parts of the country, and when you have a question of impartiality of how an election was being run locally you have an organisation that can easily step in.

DAME DENISE PLATT: And somewhere to make a complaint.

ROBIN TILBROOK: Yes, and you would have some independent body whose job it was to run elections.

DAME DENISE PLATT: Okay, thank you very much.

SIR DEREK MORRIS: Is there anything you want to say to us that has not been elicited by our questions before we close? Right, thank you very much for coming along. That concludes this hearing and indeed our hearings for the day.