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After months of investigation, we are now starting to learn the results of the Electoral Commission and police investigations into allegations about Conservative election expenses at the 2015 General Election.

It’s a somewhat complex affair (readers might find my explainer discussion with Sky News helpful). To put it as simply as possible, this is about a number of distinct but related alleged breaches of election law:

  1. Failure to declare national campaign spending;
  2. Incorrectly declaring some spending as national when it was in fact local campaigning activity;
  3. Under-reporting the true levels of local campaign spending in some areas as a result of 2);
  4. Potentially having exceeded the limits on local campaign spending in some areas as a result of 3).

The first of these has come to a head today – but it could prove to be the least painful. The Electoral Commission has identified £104,764 which should have been declared on the national campaign but was not, due to administrative errors. The Commission also found that, due to human error, spending on the Battlebus2015 aspect of the campaign had been under-declared by £63,486.83 – some of which should have been declared as national spending and some local (of which more later).

Both errors are a breach of the rules, and the Conservative Party has been fined £70,000. Its Treasurer, Simon Day, has been referred to the police – though of course we don’t know if he will be charged or found guilty, given any offence would require him to be proven to have “knowingly or recklessly” misreported and the CPS are yet to make any decision about their next steps.

That reporting failure is embarrassing and uncomfortable – particularly for Day – but it essentially ends there for the Party, in that the national campaign was well below the legal spending limit and there is no accusation that that limit was exceeded.

More politically troublesome, and liable to drag on at least for several weeks, is the question of whether spending was incorrectly allocated as national when it was in fact local. Legally, it’s a three-part question: were any MPs’ local spending returns incorrect; did the true levels of spending in any seat therefore breach the legal spending limit; and did any MPs knowingly submit incorrect returns?

If the Electoral Commission is right when it says that a proportion of spending reported as national was local, then some MPs’ spending returns will be incorrect. That would be bad – the law should be followed, obviously – but not as bad as it could be.

Various of the MPs involved in the investigation say they underspent their local limit by a good margin, and therefore if the spending is reallocated then they aren’t at risk of having breached the limit. One reason CCHQ is particularly worried about the implications in South Thanet is that spending already reported for the short campaign in the constituency came very close to the limit, and the amounts being discussed as potentially misallocated are more than enough to put the campaign over the top.

The issue causing the most anger among MPs is the question of whether those subject to the allegations misreported their spending knowingly. That’s a crucial legal distinction, which marks the boundary between innocent error and criminal behaviour.

MPs acted on the advice of CCHQ, which offered them Battlebus and other assistance in target seats and assured them that it was a legitimate national expense and therefore wouldn’t trouble their local spending limits. CCHQ was responsible for designing and delivering that targeting strategy, and it made the call that it was legally compliant to do it this way. CCHQ’s statement this morning says as much:

“MPs in constituencies visited by the battlebus would have no reason to consider whether it should be included in their local return – they were directed that the bus would be visiting as part of CCHQ’s national spending.”

To many parliamentarians, that statement seems too little and too late. Some of them have faced months of reputational damage, police interviews under caution and even potential prosecution on the basis of what has turned out to be an incorrect interpretation of electoral law by CCHQ. Why, they ask, didn’t the Party intervene immediately to say: “Our mistake – we advised these candidates that it was fine to do it this way, so hold us responsible”?

In short, they feel that the Party got them into this mess but has been reluctant to help them get out of it by taking responsibility for its error.

This isn’t solely a Conservative issue. The Lib Dems and Labour have been notably quiet on the topic, for the very good reason that they have both been in trouble about accurate reporting of their spending, too. But CCHQ’s handling of the investigation into MPs has now become a problem for the Government.

No-one needs reminding that May has a big job to do with a small majority. The National Insurance row, rebellion and retreat illustrates how vulnerable the Government’s programme is to disruption. And Brexit is much more controversial and complex than any National Insurance change.

Successfully steering through these choppy waters is about more than getting the right policy. It requires the leadership to retain the support, loyalty and good will of the Parliamentary Conservative Party. When MPs defend a policy publicly, only to have the Government perform a u-turn straight afterwards (or, in the case of Desmond Swayne, between sending their supportive article to the local paper and its publication), they get hacked off. When Ministers, like Rory Stewart, are confronted live on air with the ditching of a policy they have just been supporting, they feel annoyed and colleagues who are watching question the decision-making of those in charge.

The Conservative Party’s mishandling of these election expenses allegations is therefore very dangerous. They can’t afford for MPs to be prosecuted, or for by-elections to be ordered, as their opponents hope. It’s a developing process, and those threats might never come to pass. But even so, the Party could still do itself serious damage by losing the faith of its MPs. Unless they are reassured and better defended, the Government could limit its legal wounds to bruises and scratches but suffer a mortal wound politically.

114 comments for: With election expenses, as with NICs, the Government cannot afford to alienate its own MPs

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