Referendum legislation needs to rein in the regulators

Referendum legislation needs to rein in the regulators

29th March, at 11pm, was Brexit hour: the point at which – so the British people had been promised for the past two years – we would finally be leaving the EU. As we all know, that did not happen.

For longer than those two years – indeed, for almost three – Vote Leave, having led the campaign for Brexit and the referendum having been won on 23rd June 2016, has been subjected to a sustained campaign of what can only been seen as attempted retribution and harassment. Many of Vote Leave’s former employees found it hard to get jobs after the referendum, and some later lost the jobs that they had succeeded in landing. Vote Leave’s donors, out of the blue and 18 or more months after the event, were hit by HMRC with millions of pounds of tax bills, because they had patriotically donated (precisely as had been envisaged by the referendum law, which said nothing at all about taxing those donations) to the Leave campaign.

Both the Electoral Commission and the Information Commissioner conducted interminable, repeated investigations in an apparent effort to find something – anything – wrong with Vote Leave’s conduct; and thus, however unfairly and glancingly, to seemingly do their bit to delegitimise the result. Numerous marginal figures published – indeed continue to publish – wild conspiracy theories, such as Vote Leave’s alleged (and entirely fantasised) connection with Cambridge Analytica, Russian bots and the like. All were refuted decisively (but the mud stuck, of course). On top of all this, the Charity Commission attacked those charities which had, since June 2016, dared go anywhere near seeking to discuss how to make Brexit work for the UK.

The Leave side of the campaign was, from the beginning, always the underdog. All major political parties; most media; the larger businesses and their trade associations; the metropolitan consensus – all were in favour of Remain. The Remain side spent at least 50% more than the Leave side, in and just before the campaign – some £19 million (or £28 million if you count David Cameron’s infamous taxpayer-funded leaflet from the Government), compared to Leave’s £13 million.

Vote Leave always had to scramble for money, and looked in the main to self-made businessmen and entrepreneurs to support them – people who by definition could demonstrate they had a realistic view of how business and the economy truly worked – while Remain relied on donations from rent-seeking large corporations and US banks; the major political parties; and, interestingly, the children of self-made businessmen (who bequeathed them vast wealth, including non-taxed Trust Funds) – the Lisbet Rausings, the David Sainsburys… Few of these demonstrated any understanding of the true drivers of economic growth and business success.

Since the referendum was won, up to this point Vote Leave has had to raise and spend over £1 million spend in defending itself, in particular from unending attacks from the regulators. The money was spent primarily on legal fees and on outside forensic investigators, hired to disprove wild allegations. Disproving those allegations did not help us: each time we refuted one wild claim, a different one popped up, fed by irresponsible and untrue allegations from sources that ranged from the usual dubious types, through to those as apparently respectable as parliamentary Select Committees. At the same time, one after another Leave entity found itself complaining of the opaque and confusing electoral law – the Political Parties, Elections and Referendums Act (PPERA) – whose lack of clarity allows the regulator to find, at whim, any campaigner guilty of this or that offence; slapping arbitrary – large or small – fines on those it decides to find guilty.

Being sure that one has properly obeyed electoral law becomes, with PPERA, a crapshoot. This was illustrated by the decision of Lord Justice Leggatt to find against the Electoral Commission in his judgement last year, when he agreed with a claim by a Remainer group that – contrary to the advice Vote Leave was clearly sent during the referendum by the Electoral Commission, in May of 2016 – a donation from one campaign to another must be counted, confusingly, as an expense to the donor as well as an expense to the recipient. If Leggatt’s judgement is left to stand, it says that the Electoral Commission was completely wrong in how it, the alleged authority, interpreted PPERA, and that it was completely wrong in the advice that it gave to Vote Leave. If, on the other hand, Leggatt’s judgement gets overturned, it means that one of the most senior judges in the country allowed himself to get totally confused as to what PPERA said.

Either way, it confirms that PPERA is not fit for purpose – and that thus, no campaigner can rely on the courts to protect them from the Electoral Commission’s overweening behaviour. The consequences of PPERA’s ambiguities have been severe for Vote Leave: it has allowed any ill-wisher to claim, as some now gleefully do, that we broke the law – even though Vote Leave had been, throughout the referendum, run with excruciating care and focus on proper good governance and compliance, as Gisela Stuart pointed out so eloquently on The Andrew Marr Show yesterday.

Last week, as we passed Brexit Day, 29th March, Vote Leave found itself – nigh three years on from the referendum – still embroiled in numerous legal actions. The previous week, the Information Commissioner had found that Vote Leave had failed to prove that we had permission to send some two hundred thousand text messages. The basis for their allegation was that Vote Leave could not prove permissions – because we had deleted the data. The ICO had only started their investigation on this point 26 months after the end of the referendum (why they waited so long, they have failed to say). Their own good practice advocated swift deletion of data, and Vote Leave’s privacy policy, accessible to all on our website, said that data would be deleted at most after 24 months.

The ICO had, over the previous almost three years since the referendum, attempted numerous different claims against Vote Leave before then, writing no less than 46 times to us. Each time we had decisively rebutted those claims. This new allegation was best interpreted as a sign of how desperate the regulators appeared to be to pin something, anything, on Vote Leave. In a Kafkaesque decision, the Information Commissioner ignored sense and reality and found a way, despite Vote Leave’s clear proffered evidence that our website had secured the necessary permissions, to claim we had broken the rules, fining us no less than £40,000 for not having retained data – data that their best practice told us should have been (and it was) deleted.

Of course, the ICO’s finding was misreported across the largely Remainer media, many of whom wrote that we did not have permission from individuals that we texted (as opposed to our not being able to prove that indeed we did have the permission). But our privacy policy on our website, which we did send to the Information Commissioner several times, clearly showed that we did. Matthew Elliott has written elsewhere of the Orwellian nature of the ICO’s finding against us. To repeat: all we were fined for was for not being able, years after the event, to produce data, that best practice says we should have deleted – which was what we had done. We suspect that had we not deleted the data that would prove we had permission, we would have been fined for not deleting it. Anything, we suspect, to find against us.  

Lord Justice Leggatt’s decision showed how uncertain anyone can be of success in fighting back against regulators’ findings. The law is uncertain; the regulators’ powers are considerable; the judiciary would have a natural and understandable desire to support the statutory regulator. Were Vote Leave to have taken all its cases through to the bitter end, and had we then lost, our calculations told us that the Directors would be landed with a total bill of as much as £1.3 million. If we won, we would recover only a portion of those costs, and would still be faced with the possibility of the regulator taking the matter further into the Appeal Court – as they have done with Leggatt – thus driving the cost to Vote Leave, of proving that we carefully kept within the law, to even higher levels.  

Vote Leave’s donors, despite the vindictive tax bills, had been saintly, post-referendum, in supporting Vote Leave over almost three years, as we scrambled to pay that £1 million in legal costs, forensic investigations and other defensive activities. Over time, however, they became reluctant to throw good money after bad, particularly as other urgent Brexit needs developed. They had seen the referendum’s mandate – to leave the EU – diluted and potentially wrecked. With regulators, tax authorities and the courts, the donors had seen questionable decision after questionable decision going against Vote Leave. The totally inappropriate and highly questionable “gift tax” charges by HMRC were charges that had never been laid on donors in previous referendums; they bore all the marks of a vindictive punishment on these donors, for their having dared go up against the Establishment in their patriotic support of the Leave side of the referendum.

From Vote Leave’s side, the weight of forces was clearly, just as it had been in the referendum, against us. The Electoral Commission, in fighting us, could run up whatever bills it chose. It has its own large legal department; it hired the ‘Treasury Devil’, Sir James Eadie – the QC the government reserves for its most high-profile cases; it hired the City firm of Fieldfisher with numerous solicitors who appeared in court alongside Sir James, flanked as he was by two junior barristers. Vote Leave consisted solely of four individuals – three directors and Matthew Elliott – all of whom had worked since 2016 for no pay of any sort; all of whom had considerable responsibilities elsewhere; all of whom felt they were being pulled away, by this constant Remainer attack, from doing more productive work on behalf of achieving Brexit.

With donors who are justly resentful of what is happening, and dubious of the value of fighting on, we were forced to conclude that the £1.3 million would be challenging to raise. At the same time, we could see that given our experience thus far, a positive result from spending all that money was uncertain, despite our clear case that Vote Leave had fought a fair campaign and had taken every possible step to make sure we did not break any law (far more careful steps, we believe, than were taken on the Remain side – but then, being of the Establishment, it seems that Remain didn’t have to take such care as we did).

The way the law works as to how regulators have to conduct themselves means that both the Information Commissioner and the Electoral Commission were required to give Vote Leave a few weeks’ notice of their intention to fine us, giving Vote Leave time to put in representations to the regulators as to why their initial findings were, in our view, wrong. In both cases, we did that: for the Electoral Commission, we put in a 400-page rebuttal of their case, and for the Information Commissioner, we also offered a lengthy rebuttal. It is remarkable that readings of the Final Reports of both regulators shows that they took more or less zero account of the points in our rebuttals.

To be quite clear: we have paid the fines, after years of fighting this matter, because the weight of forces, in particular the financial burdens and risks, were heavily against Vote Leave. We absolutely deny that we had a ‘common plan’ with BeLeave. That excellent and individualistic campaign, run by the talented, creative and insistently independent Darren Grimes – praised by all for his campaign, including as it happens being profiled during the referendum by the BBC – had its own entirely different messages from Vote Leave’s. Claims that we have ‘admitted’ breaking the law are Remainer fantasies.

So, regulators are free to find as they will, against whom they like, aided by unclearly drafted legislation, and ignoring representations by those they regulate; acting as policemen, judge, jury and executioner altogether. The only way to challenge their rulings is through impossibly expensive court procedures. Regulators can incur whatever costs they like in pursuing their chosen target. Their investigations can repeat on the same point and can go on for years.

All this means something is wrong with referendum law in particular, but also is wrong with the way in general that regulation is set up in this country. Every month, or even week, it seems, Britain is called upon to establish a new regulator for this or that. In every case, there is an understandable reason why the regulation is being called for. But nobody gives much thought to the downside of what is becoming a massively regulated society: what costs does regulation impose? What kind of person, with what kind of bias, becomes a regulator? What loss to democracy is there, when unelected regulators increasingly take the place of Parliament and the judiciary?

In the case of Vote Leave, the question comes sharply into focus when talk continues of there being a second referendum on Brexit. If a second referendum were (disgracefully in my view) to come into being, which crazy civilian would ever be prepared to become a Director of the Leave side in that referendum, when the potential, indeed likely, penalty for winning would be that for three or more years after that second referendum, one would be defending oneself from attack after attack, up to and including referral to the police, on a law where no-one can agree on what it says?

Who would donate to the Leave side, when one’s reward would be to receive a tax bill on top of that donation (as well as a full expectation that even if your side won, the result would be suborned later on)? Who will be prepared to be employed by that Leave campaign, when it can be expected that finding a job after that will be difficult, and attack after attack will be made on your personal character?

At Vote Leave, we concluded on 29th March that we had done what we could; it would be inappropriate to carry on with the legal fight. We have paid the regulators’ fines, but purely because that was far less expensive than to fight the matter in court.

Parliament needs to be extremely careful, when and if it ever writes legislation for a referendum on any matter of this sort, to come up with a far clearer law – to legislate that donations to the referendum will not be taxed; to specify clearly when and how donations can be made from one campaign to another; to spell out that a donation is not an expense (any other interpretation would be madness); and, above all, to provide better protection – akin to what is afforded in electoral law – to those who, honourably and patriotically, answer the call of the Government to run a campaign which argues a case opposite to the Establishment’s bias. Such protections were not, it is now clear, afforded to those who answered, in 2015, the call of the Government to fight the Leave side of the last referendum.