Commons Sitting of 16 February 2000

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS

    CITY OF LONDON(WARD ELECTIONS) BILL (By Order)
    Order for further consideration, as amended, read.
    To be further considered on Wednesday 1 March.

Oral Answers to Questions
  WALES
  The Secretary of State was asked—
  WALES

    Climate Change Levy
    Mr. Christopher Gill: What recent discussions he has had with the First Secretary with regard to the climate change levy. [108908]
    The Secretary of State for Wales (Mr. Paul Murphy): I meet the First Secretary weekly and we discuss a range of issues. However, lead responsibility on the climate change levy as a tax measure lies with the Chancellor of the Exchequer and the responsibility for negotiated agreements lies with the Department of the Environment, Transport and the Regions.
    Mr. Gill: Will the right hon. Gentleman assure the House that he will make the strongest representations to the Chancellor of the Exchequer to persuade him that, if he goes on imposing stealth taxes on our industries, he will make them uncompetitive? Is it the right hon. Gentleman's intention to do that to important industries ranging from aluminium to horticulture, and to treat them as he has treated the pig industry and see them go into terminal decline?
    Mr. Murphy: The hon. Gentleman will be aware that the National Assembly for Wales has a responsibility in those matters. It contacted 20 major energy users and businesses in Wales, and they expressed general support for the aims of the levy.
    Mr. Barry Jones: I thank my right hon. Friend for agreeing to visit Shotton steelworks in the near future. When he meets my steelworker constituents, they will tell him of their great interest in the levy. Does he agree that our steel industry faces considerable competition overseas and that the scale and nature of the levy, and the way in which it is pitched, organised and
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    assessed, are of great importance for employment in the industry throughout Britain? Does he agree also that this great steelworks is the scene of much productivity and success? There will be a warm welcome for him when he visits my constituency soon.
    Mr. Murphy: I very much look forward to visiting my right hon. Friend's constituency a week on Friday, I think, and particularly to visiting Shotton. I assure him that his points about the steel industry are very well made.
    Mr. Nick Hawkins: Was not the Minister's reply to my hon. Friend the Member for Ludlow (Mr. Gill) disingenuous in the extreme? The Government have committed themselves to the levy and, after the embarrassment that they have suffered in the past week on Welsh Assembly matters, I should have thought that the last thing that the Minister would want to say is that this is all down to the Welsh Assembly. Why does not he accept that the responsibility lies with him and his colleagues to make sure that no more stealth taxes hit British industry?
    Mr. Murphy: Welsh questions is not the place to raise those general matters when I was dealing with a specific question asked of me in my capacity as Secretary of State for Wales. The hon. Gentleman must understand that devolution means devolution.

    National assembly (Budget)
    Mr. Jon Owen Jones: What discussions he has had with the First Secretary about the budget for the National Assembly for Wales for 2000–01. [108909]
    The Secretary of State for Wales (Mr. Paul Murphy): I meet the Assembly First Secretary weekly to discuss a range of issues.
    Mr. Jones: When my right hon. Friend next meets the First Secretary, will he convey my heartfelt congratulations on his appointment, and those of my constituents? Will he tell the First Secretary that the overwhelming majority of my constituents share Labour's priorities and that they will be delighted to hear of the increases in the Assembly budget for next year, in particular the 7.5 per cent. increase in the money that can be spent on health and social services and the more than 10 per cent. increase in money for education? My constituents will be delighted with that expenditure increase, and I hope that he will convey those thoughts to the new First Secretary.
    Mr. Murphy: I will indeed convey those thoughts to the new First Secretary in Cardiff. Everybody in Wales will be grateful for the emphasis that the National Assembly budget has put on education and health. It is important for Members of this House to understand that the National Assembly is a new institution; that the people of Wales voted for devolution, and that we wish the new First Secretary well, as indeed did all parties, including the Conservatives, when they met yesterday to ensure that my hon. Friend the Member for Cardiff, West (Mr. Morgan) was made First Secretary. We ought also

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    to put on record our thanks to my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) for the way that he worked in establishing the Assembly.
    Mr. Richard Livsey: Does not the new First Secretary have a keen interest in private business and a clear understanding of its operation? We hope that matters relating to objective 1 match funding will be included in the budget, as well as projects that will be pursued to obtain objective 1 moneys for the poorest parts of Wales. Will the right hon. Gentleman ensure that the private sector is fully engaged in that process so that new initiatives can be taken for job creation in Wales for the benefit of the people in those poor areas?
    Mr. Murphy: The hon. Gentleman has a good point. He will be aware that the First Secretary was—indeed, as far as I am aware, still is—the Assembly Secretary on economic and European matters. As such, he has spent a great deal of time in the past month dealing with the issue. I very much appreciate the hon. Gentleman's points, particularly on the schemes for objective 1 funding, and especially those concerning small and medium-sized businesses.
    Sir Raymond Powell: When my right hon. Friend next talks to the First Secretary, will he remind him that this House decides the expenditure given to Wales? Given that, as I understand it, we are proposing an increase of £474 million in the Welsh Assembly's budget, we do not want in 12 months' time to witness again the scene in the Assembly last week. Opposition Assembly Members, particularly Plaid Cymru and perhaps the Liberals, should be reminded that we in this House decide on the money and that, therefore, we shall still have some control over what we grant to them.
    Mr. Murphy: My hon. Friend is right when he says that the people of Wales and, indeed, Members of this House, would not want a regular repeat performance of what occurred in Cardiff last week. I think that everybody would agree that, first, Wales needs stability in the three years remaining of the Assembly's term, and, secondly, the Assembly should deliver the services affecting people's lives, such as eduction and the health service, with which the devolution settlement charged it. He is also right in saying that this House of Commons determines the block grant, although I am sure he would agree that distribution of that grant in Wales is a matter for colleagues in the National Assembly.
    Mr. Nigel Evans: This is the first Welsh questions since the "fun and games" in the Welsh Assembly last week, as the Prime Minister called it. We wish the hon. Member for Cardiff, West (Mr. Morgan) well in his new position. At least he is unlike his predecessor, the right hon. Member for Cardiff, South and Penarth (Mr. Michael), who was like a puppet on a string. We hope that those strings have been cut well and firmly.
    In his discussions with the new First Secretary, what representations has the Secretary of State received about objective 1 status funding?
    Mr. Murphy: Yesterday, the hon. Gentleman's party in Cardiff warmly welcomed my hon. Friend the Member for Cardiff, West (Mr. Morgan) as the new First Secretary.
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    The hon. Gentleman's colleagues in Cardiff might have been a little more generous about the way in which my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) has worked.
    The hon. Gentleman will be aware that we have entered the spending review on objective 1 status. It will take place between now and July, and concern matters of high importance to Wales. We shall continue to work here in government on that spending review.
    Mr. Evans: The Secretary of State will be aware that it is not only politicians who are interested in what is going on with objective 1 status. For instance, CyberCall in Cardigan stated this week that it was appalled at the antics of politicians and that all that it is interested in is ensuring that sufficient funds are made available so that Wales wins objective 1 status. We are talking about 400 jobs going to one of the most disadvantages areas of Wales. Given that the Prime Minister said that he would not let Wales down, will the Secretary of State assure companies such as CyberCall, and the people of Wales, that they will receive match funding, so that jobs can go to the most disadvantaged areas of Wales?
    Mr. Murphy: The hon. Gentleman will know that, in all the years that his Government dealt with structural funding, they had to go through the process. He will also be aware that, in this very House of Commons a week or so ago, the right hon. Member for Horsham (Mr. Maude), the shadow Chief Secretary to the Treasury, poured scorn on structural funding and said that we should not have it at all in this country. The hon. Gentleman must make up his mind whether he wants objective 1 funding.

    Children in Care
    Ms Julie Morgan: What discussions he has had with the First Secretary about children in care in Wales. [108911]
    The Parliamentary Under-Secretary of State for Wales (Mr. David Hanson): My right hon. Friend the Secretary of State has regular discussions with the First Secretary, and I have had discussions with Jane Hutt, the Assembly Health and Social Services Secretary, about children in care. Following the publication yesterday of the North Wales child abuse report, we will, of course, be discussing with the Assembly, in the coming weeks and months, the report and the recommendations that it contains.
    Ms Morgan: I thank my hon. Friend for his reply. Will he assure the House that every means will be used in the legislative process to ensure that a children's commissioner for Wales is set up; that the commissioner's remit will cover every aspect of children's lives, and all children, including children in care; and that the necessary legislation will not preclude any children in Wales?
    Mr. Hanson: I welcome my hon. Friend's commitment to a children's commissioner in Wales and her campaigning work on that. She knows that the Labour party went into the Assembly election with a commitment to establish a children's commissioner, as did other parties. We now await considered Assembly deliberations on the role and scope of the children's commissioner.

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    In due course, the Government, through the ministerial task force, will examine the Assembly's recommendations and those of Sir Ronald Waterhouse. I hope to make an announcement shortly.
    Mr. Robert Walter: The House was appalled yesterday at the report by Sir Ronald Waterhouse. As a member of the Select Committee on Health looking into abuse of child migrants, I know from personal experience how harrowing it is to take evidence from the victims of child abuse.
    The House will welcome the tight deadline set for locating the 28 missing child abusers, but can the Under-Secretary assure the House that, if those individuals have not been located by the deadline, he will make available the extra resources needed to carry out a search? Can he also assure the House that, if the abusers are employed in local authority child care posts, he will not tolerate any concealment or cover-up by those authorities—as happened in Clwyd—to protect the interests of insurance companies?
    Mr. Hanson: As the hon. Gentleman is aware, the Department of Health and the National Assembly today issued a list of names to local authorities and health authorities in England and Wales, to ensure that, by 5 pm tomorrow in the case of the Department of Health and by 5 pm on Friday in the case of the National Assembly, all those names have been checked against employees. That has been done to protect children who are potentially at risk because those people may be working in local authorities and health authorities. Matters of resources are for the Department of Health and the National Assembly, but the hon. Gentleman can be assured that the Government intend to protect children. We will take the necessary action vigorously, and we will ensure that the recommendations are examined vigorously also.

    Health Service (Financing)
    Mr. Ted Rowlands: When he next expects to meet the First Secretary to discuss the financing of the health service in Wales. [108912]
    The Parliamentary Under-Secretary of State for Wales (Mr. David Hanson): My right hon. Friend the Secretary of State regularly meets the First Secretary to discuss a range of issues affecting Wales, including health matters, and I have regular meetings with the Assembly Health and Social Services Secretary. The issues discussed, of course, include the funding of the NHS in Wales, but any decision on the allocation of health funding within Wales is a matter for the National Assembly.
    Mr. Rowlands: When my hon. Friend meets the First Secretary, will he underline the deep concern felt in north Glamorgan about the state of our acute health services and the fact that we have not been able to make key consultant appointments? Is he aware that Bro Taff is claiming that it has a projected deficit of £18 million and therefore cannot make such improvements? Given the large amount
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    of extra resources to be put into the health service, will he make sure that those resources go to the communities suffering the greatest need and deprivation?
    Mr. Hanson: My hon. Friend raises important points. I will ensure that his strength of feeling about deprivation and allocation of resources is conveyed to the Health Secretary, Jane Hutt. I can tell him that the resource increases are significant. This year in Wales, the national health service will receive £2.8 billion, a 7 per cent. increase of £182 million over resources last year. That reflects real commitment by the Government, matched by partnership with the Assembly.
    Mr. Lembit öpik: Will the Minister discuss with the First Minister or the Health Secretary in the Assembly the prospect of holding a review of bed spaces in Wales, in line with the review being held in England?
    Mr. Hanson: I shall certainly draw that issue to the attention of the Assembly Secretary for Health and Social Services, but I stress that it is a matter for the National Assembly, which has to make the decisions. That is the position.
    Mr. Denzil Davies: Will the Secretary of State examine the crazy system of financing health authorities in Wales, whereby the authorities are deemed to have large deficits, which have arisen through providing health services? They are told to wipe out their deficits, but they can do that only by wiping out health services. Will the Secretary of State reconsider that system and institute a root and branch investigation into it?
    Mr. Hanson: My right hon. Friend makes important points. The Government's commitment to increasing health expenditure in Wales and elsewhere in the United Kingdom has been made to ensure that we provide better public services at the sharp end. I shall discuss my right hon. Friend's point with the Assembly Secretary for Health and Social Services.

    Railway Services
    Mr. Elfyn Llwyd: What representations he has received on the railway services available in Wales; and if he will make a statement. [108913]
    The Secretary of State for Wales (Mr. Paul Murphy): I have received no representations on railway services in Wales. However, I have regularly discussed transport in Wales with the First Secretary and the Assembly Cabinet.
    Transport generally is a matter for the National Assembly, although railways remain the responsibility of central Government, working closely with the Assembly on matters affecting Wales. I am keen to continue dialogue with the Assembly and Cabinet colleagues to determine how best to meet the transport needs of Wales.
    Mr. Llwyd: I thank the right hon. Gentleman for that reply. One of the National Assembly's duties is to prepare

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    an integrated and sustainable transport policy. How is it possible to do that when the Assembly has no input into policy on the railways?
    Mr. Murphy: That is not quite right. Under the Transport Bill, which is going through the House, the Department of the Environment, Transport and the Regions will accept that the Assembly has an interest in those matters. The Assembly will be consulted on the appointment of a member of the Strategic Rail Authority, which, in addition, will be compelled by law to consult the Assembly on its strategies. Nothing prevents the Assembly from discussing, or spending money on, the infrastructure of transport in Wales.
    We can best deal with the problems of the railways in Wales through partnership between central Government and the National Assembly.
    Mrs. Betty Williams: Will my right hon. Friend press the case for travellers between Holyhead and London? We are confronted daily with poor stock, bad punctuality and the attendant problems of such a service. The service has been neglected for far too long and I encourage my right hon. Friend to press our case strongly to the First Secretary of the National Assembly.
    Mr. Murphy: I understand my hon. Friend's points. I have travelled on that line on several occasions, and I fully accept her case. The Assembly is committed to investing £500,000 next year in the north Wales coast rail service to improve line speeds.

    Unemployment
    Mr. Gareth Thomas: What recent discussions he has held with the First Secretary on the level of unemployment in Wales. [108914]
    The Parliamentary Under-Secretary of State for Wales (Mr. David Hanson): My right hon. Friend meets the First Secretary on a weekly basis to discuss a range of issues, including the level of unemployment in Wales. I am pleased to note that, between the general election and December 1999, the seasonally adjusted count of claimants of unemployment-related benefit has fallen from 81,800 under the Conservative Government to 59,200 under the Labour Government. That is a fall of more than 27 per cent.
    Mr. Thomas: I am grateful to my hon. Friend for that response. Do not those figures reflect the Government's success in implementing the new deal and the working families tax credit, and encouraging sustainable growth and low inflation? Does my hon. Friend accept that the minimum wage has had a major impact on Wales? Far from creating more unemployment, it has had a genuine impact on, and is of real benefit to, many ordinary people in Wales.
    Mr. Hanson: Unemployment is at a 20-year low. In my hon. Friend's constituency of Clwyd, West, unemployment has fallen by 17 per cent. since the general election. The Government are making great strides to help create jobs and a climate for employment in Wales. The minimum wage is a valuable component, which ensures that people in Wales have decent pay. I am pleased to tell
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    my hon. Friend that the One2One telephone company has announced the creation of 1,000 jobs in Merthyr in the constituency of my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). That is good news for Wales, and for the Labour Government's handling of the economy in Wales.
    Mr. Simon Thomas: Does the Minister agree that objective 1 resources are one of the best ways to create well-paid jobs in a constituency such as mine? Will he therefore join the First Minister in Wales and bust a gut to make sure that objective 1 money is additional to the Welsh block grant?
    Mr. Hanson: I welcome the hon. Gentleman to his first Welsh Question Time. He is aware of the situation, as we discussed it extensively during his by-election. There is a process, and the Government are following it. He will have to wait and see, but objective 1 was secured by the Government and it will deliver real employment prospects for the people of Wales. Discussions and consideration have been undertaken.
    Mr. John Bercow: Given that unemployment has risen in Wales by 4,000 relative to the same quarter last year on the International Labour Organisation count, and that Business Strategies predicts an increase in unemployment of 7,000 consequent on the Government's stupid and malicious energy tax, when will the Minister abandon his smug complacency and own up to the massive damage that is being inflicted on the Welsh economy by their tax and regulatory policies?
    Mr. Hanson: On 1 May 1997, 81,800 people were unemployed. In December 1999, the figure was 59,200, which is a fall of 27 per cent. Labour government is working, the people of Wales are working and investment is being brought in. The Conservative party, which would scrap the new deal and is just about content to have the minimum wage, would damage the economy of Wales dramatically.

    Livestock Industry
    Mr. Owen Paterson: What discussions he has had with the First Secretary on the prospects for the Welsh livestock industry. [108915]
    The Secretary of State for Wales (Mr. Paul Murphy): I have regular weekly meetings with the First Secretary and we discuss a wide range of issues, including the Welsh livestock industry. I am acutely aware of the problems facing the farming community and the agriculture industry in general.
    Mr. Paterson: The prospects for livestock farmers are so bleak in Wales that some will have an annual income this year of only £2,000, according to the Ministry of Agriculture, Fisheries and Food. How can the Secretary of State look them in the eye and justify squandering £26 million of British taxpayers' money on a fancy new building for the First Secretary?
    Mr. Murphy: The hon. Gentleman, who represents an English constituency, will be aware that all Welsh Members, save a very small number, represent

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    constituencies with farming interests and all of us, including those who represent the south Wales valleys, know the problems that farmers face and the crisis that they are in. The number of actions that the Government have taken in the past year shows how seriously we take the farming crisis. For example, we gave more than £15 million in hill livestock compensatory allowance, introduced a cattle passport and deferred the charges and reduced the regulatory burden on farmers. The Assembly has taken a host of actions. He should be aware that the future of farming lies in the relationship between the Government and the farming industry and we must consider it on a long-term basis.

    Pig Farming
    Miss Anne McIntosh: What recent discussions he has had about pig farming in Wales with the First Secretary. [108916]
    The Secretary of State for Wales (Mr. Paul Murphy): I meet the First Secretary on a weekly basis and we discuss a wide range of issues.
    Miss McIntosh: Has the Secretary of State discussed the Prime Minister's commitment to find money for English pig farmers and will that money be extended to Welsh pig farmers? Does he share my concern that the new First Secretary may not be in post very long if such funds are not found?
    Mr. Murphy: I sincerely hope that the First Secretary will be in post for a very long time. The last thing that we want is another change. There are relatively few pig farmers in Wales and only 1.6 per cent. of Welsh farms are pig and poultry farms, but the work that my right hon. Friend the Minister of Agriculture, Fisheries and Food is undertaking on behalf of the pig industry applies just as much to Wales.

    Agriculture
    Mr. Michael Fabricant: When he will next meet the First Secretary to discuss the state of agriculture in Wales. [108917]
    The Secretary of State for Wales (Mr. Paul Murphy): I meet the First Secretary on a weekly basis and we discuss a wide range of issues, including Welsh agriculture.
    Mr. Fabricant: It is all very well for the Secretary of State to tell my hon. Friends the Members for Vale of York (Miss McIntosh) and for North Shropshire (Mr. Paterson) that he knows all about the problems that Welsh farmers face. The dairy and livestock industry in Wales—[Interruption.] Labour Members obviously do not care a damn about them. Those industries have experienced a drop in income of more than 40 per cent., pig farming is almost on the point of collapse and in Ceredigion, where more than 21 per cent. of the population work in farming, people have shown what they think of the Labour Government. When will the Secretary of State stop saying that he knows about the problems and do something?
    Mr. Murphy: I live in, and represent, a Welsh constituency, and all of us who represent Welsh
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    constituencies have a great interest in the fanning industry and in its success. I have just told the House of the various measures that my right hon. Friend the Minister of Agriculture has taken. Those measures apply in Wales and, in addition, the National Assembly is doing a great deal to help the farming industry.

  The Prime Minister was asked—
  PRIME MINISTER

    Engagements
    Ql. [108936] Fiona Mactaggart: If he will list his official engagements for Wednesday 16 February.
    The Prime Minister (Mr. Tony Blair): This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Fiona Mactaggart: Is the Prime Minister aware that probably the greatest cause of crime in Britain today is drugs? In the small town of Slough alone, 43 problem drug users arrested in the past two months will be responsible for 5,000 crimes in the four to six weeks during which they wait for treatment. I spoke to Slough's police commander today, and he said that we need to do two things: provide better education to prevent young people from turning to drugs, and faster treatment for those problem users. May I tell the police commander that the Government are as serious as he is about drugs, and will deliver both those things?
    The Prime Minister: There is no more serious problem than the link between crime and drugs. The Government have already introduced minimum sentences of seven years for drug dealers, mandatory drug testing, and new drug treatment orders. An extra £220 million is going into a strategy to fight drugs. The number of seizures of both hard and soft drugs is up. We are now looking into the establishment of drug courts, which are already being piloted in Wakefield. We welcome the new campaign being launched by the Metropolitan police, which has dramatically increased the lead on drug dealers, and has resulted in 700 extra people being arrested just in the past two weeks. We are determined to fight the drug menace at every level through tougher measures in the law, better provision in the courts, better education in our schools and better treatment for drug offenders.
    Mr. William Hague: The whole country and all parts of the House will have been shocked and saddened by the catalogue of abuse in many care homes uncovered by the Waterhouse report, which was published yesterday. We now know that hundreds of the most vulnerable children in our society were cruelly betrayed. The inquiry has come up with many sensible recommendations, as we always hoped it would. Can the Prime Minister give the House and the country a clear timetable for responding to this report, and for action,

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    particularly in regard to the creation of a children's commissioner for children in care for all parts of the United Kingdom?
    The Prime Minister: It is, indeed, an appalling situation and an appalling catalogue of terror and tragedy inflicted on some of the most vulnerable children in our society. All parts of the House will be anxious to take action as soon as possible to act on the recommendations of the report. The Care Standards Bill and the Children (Leaving Care) Bill give us an opportunity to do so. We shall respond as soon as we possibly can.
    The Care Standards Bill provides for a children's rights director in England and a similar post in Wales. We are obviously considering all the recommendations, and the issue is being taken forward by a ministerial task force. We shall implement the recommendations as soon as we possibly can, and I believe that we shall do so with the support of the whole House.
    Mr. Hague: I am grateful for that reply. A children's rights director is not necessarily the same as a children's commissioner, but we all look forward to that proposal.
    On an even more urgent aspect, the Prime Minister will be aware that 28 people were named in the report as being involved in cases of abuse but whose whereabouts are unknown. Will he assure the House that all resources will be made available to find those people, to have their cases properly investigated, where appropriate to bring them to justice and to ensure that they never work with children in care again?
    The Prime Minister: Of course we will do that. It is necessary for us to do that. Moreover, under the Crime and Disorder Act 1998 there are now new provisions in respect of sex offenders, which should give us some assistance.
    The post of children's rights director will be a senior post within the National Care Standards Commission. The commission as a whole will be able to drive forward the process of raising the standard of care in homes, and there will be a specific children's rights director. We will implement all the other recommendations in the report as soon as we can.
    Helen Jones: I agree with what the Prime Minister has said about children in care, but will he now turn his attention to a specific group of national health service staff? Does he agree that the valuable contribution made to the NHS by midwives has not been properly recognised, and that the implementation of clinical grading by the last Government led to serious problems of recruitment and retention? Bearing that in mind, will he tell us what the Government will do to develop the role of midwives, and to make best use of their expertise? Will he ensure that we have policies not only to attract new recruits, but to keep experienced midwives in the profession?
    The Prime Minister: I am pleased to pay tribute to the work of registered midwives. The number of midwives fell by some 1,000 under the last Government, but there are now more than 33,000 practising midwives, the most for three years. Last year alone, the number of applications for midwifery training rose by 50 per cent.,
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    and the number of widwives intending to practise has risen by 1,000. Action is being taken. Moreover, figures will soon show that there are more nurses and doctors in the system, and, having talked to the Government's cancer adviser two days ago, I can tell the House that there are now 50 per cent. more cancer specialists in training.
    It will take time to deal with some of the problems, but they are being dealt with.
    Mr. Charles Kennedy: Has the Prime Minister seen the reports in today's press that the entrepreneur James Dyson, who is to commit a significant sum involving a substantial number of jobs, is likely to invest that sum in China, Hong Kong and Malaysia because of the strength of the pound and the uncertainty over the Government's commitment to the euro? Does the Prime Minister not recognise that, if we are losing investment opportunities of that kind, the Government need to make the case for the euro and promote the cause of Europe more strenuously?
    The Prime Minister: I will not comment on the particular case, which involves a decision that a particular person must make. I think that the important thing is to join the euro only in circumstances in which it is economically beneficial to the country, and that is precisely why we have set out the economic tests and conditions. The test should surely be British jobs, British investment and British industry: that is a sensible test. We should not rule out joining the euro for political reasons, which is the position of the Conservative party, but neither should we be in a position whereby we join regardless of the economic conditions. That, surely, is to the best benefit of the whole of British industry.
    Mr. Kennedy: Surely the Prime Minister must engage more seriously, given the serious campaign that has been launched by the leader of the Tory party. If ever there was a case of dodgy goods falling on to the back of a truck, that is it.
    Does the Prime Minister not recognise that sentiment is slipping away from the sensible pro-European case, and that those of us in all parties who have shared a platform—including the former Tory Chancellor, the former Tory Deputy Prime Minister, himself, myself and others—must redouble our efforts to make the case, and to win in our vital national interest?
    The Prime Minister: The case that I want to make is the case of the Government, and the case of the Government is that we should apply the test of the economic conditions. That is the sensible test, and I believe that it is the position of the vast majority of British people. They want the test to be one of Britain's national interest. The test is British jobs, British industry and British investment, and the people believe it is right that they should have the ultimate say in a referendum. That is why I disagree so profoundly with the position of the Conservative party. As for the Liberal Democrats, I am never sure whether or not they disagree with our position, and are saying that they would join on a basis other than the economic conditions.
    I shall be emphatic. It will be done on the basis of the British national interest—that is the right test—not the ideology of anti-Europeans, or those who want to join

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    the euro regardless of the economic conditions. It will be done according to them because that is the right thing for Britain.
    Ms Hazel Blears: I am delighted that the Government's new crime fighting fund will mean that Greater Manchester police are able to recruit an extra 378 officers to tackle crime on the streets, but crime and disorder have left many inner-city communities deeply damaged. Will the Prime Minister confirm that the Government will help local authorities such as Salford, especially their social services departments, which have to pick up the pieces, to care for children and their families and help to rebuild those communities?
    The Prime Minister: We shall support local government and other players too in the inner cities who are trying to put together imaginative programmes to regenerate the inner city. That is why we are putting more money into education, more money into health and more money into fighting crime in areas such as Salford.
    It is also why we are offering the new deal to some of the people in areas that are represented by my hon. Friend and many other hon. Members where there are high levels of unemployment. Where there is a doubt about whether work pays, we are offering a 10p starting rate, plus the working families tax credit. We are also offering, of course, better child benefit, so that we support families. That is the right way: acting both on the regeneration problems in inner cities and on the individual problems of people, to bring hope to communities and constituencies such as those of my hon. Friend.
    Mr. Peter Bottomley: May I ask the Prime Minister a non-partisan question following his statement on drugs? He had the meeting this morning with Keith Hellawell. I have no doubt that he has now had a chance to see the letter that I sent him two days ago, at the request of my constituents who are providing voluntary and statutory services for drug misusers.
    Given the problem of people in jail, where, 18,000 times last year, prisoners were detected using drugs, and there were only three prosecutions, would it be possible for the Prime Minister to co-ordinate the efforts of the Department of Health, the Home Office and the Department of the Environment, Transport and the Regions to ensure that those concerned with providing day centres outside prison do not find themselves martyred and sent to prison in the way that the Wintercomfort two were? In a positive way, without interfering in the judicial process, which is not appropriate across the Floor of the House of Commons, will he call together those involved in the statutory services and the voluntary ones, so that those who do follow the guidelines do not find themselves at risk of being prosecuted?
    The Prime Minister: It is entirely sensible, obviously, to ensure that the strategy is a common one that works across all the different agencies. I have not yet seen the letter that the hon. Gentleman sent to me. I shall reply to it in due course, but may I say that, as a result of the new measures that we have introduced on drug testing in prison, the number of those who have had positive mandatory drugs tests in prison has fallen from
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    24.4 per cent. three years ago to 18.3 per cent. now. That is some help that is being given: better treatment, better testing in prisons.
    The same has to be done effectively in the community as well. That is why we are introducing the mandatory drug testing treatment orders. We will be able to reach a situation, when the new Bill goes through, which I hope the hon. Gentleman and other members of his party will support, that will allow us—in circumstances where the police charge someone who is a drug addict and who, if they are allowed back out on bail, will simply commit more criminal offences—to give proper treatment.
    That requires the treatment to be available, but it also requires the police to have the powers. Those two things going together is the best way that we are going to tackle this particular problem. I agree with the hon. Gentleman. It is one that causes concern in every single constituency in the country, but I was very heartened by the meeting that I had this morning. I thought that the strategy that was outlined by Keith Hellawell was exactly right. It will take time, but it will work.
    Ms Debra Shipley: Will my right hon. Friend, in view of yesterday's horrifying report, draw to the attention of employers of child care workers that not only are they required by law to vet their employees now, but, if they have even suspicions of abuse, they are required under the Protection of Children Act 1999 to report them and to investigate them? No longer are they allowed to let someone retire early, to leave, or simply to dismiss them on some other grounds. That is the law now.
    The Prime Minister: It is important that people realise that they have such a duty and that, if they simply pass the problem on to someone else, some other organisation or some other body, it is children in the end who will suffer. One thing we have learned about these cases over a long period is that, of course, we have to investigate any inquiries very carefully, but we must ensure that, when those inquiries are made and they do find abuse, we act upon it.
    Mr. Richard Allan: The Prime Minister may be aware of recent reports that the United States company Myriad Genetics is seeking to patent the genes indicating susceptibility to breast cancer, which could result in British women being tied to using expensive tests from a single US company. Given reports, last September, that the Prime Minister was holding negotiations with the US president on how to keep the human genetic sequence in the public domain, will he tell us not only how those negotiations are going, but particularly whether he agrees with Bill Clinton's comment, last week, that such genetic patents should be kept narrow—so that only specific uses of the genetic code are patented, rather than the code itself, which belongs to all of mankind?
    The Prime Minister: The hon. Gentleman is somewhat overstating the matter of negotiations on genetic issues. We have not had any negotiations with the American Government on those issues, which of course are important. The most important thing that we have done is to introduce the National Institute for Clinical Excellence, which can evaluate drugs. We now have a proper, independent way of evaluating and ensuring that we make

    945
    an assessment on the proper evidence. We have no interest in the particular issue to which the hon. Gentleman refers, other than to ensure that people get the best treatment possible. We have no more interest in one specific drug than another.
    Ms Rachel Squire: Does my right hon. Friend agree that sub-post offices—of which there are nearly 20 in my constituency, in villages such as Blairhall and Saline—provide a vital community service, as they are often the early warning system when an elderly or disabled person does not call in as usual for their pension or newspaper? Given the Government's commitment to building strong communities, does the Prime Minister agree that sub-post offices can not only be at their heart, but need the support and encouragement of us all?
    The Prime Minister: Of course, they will get that encouragement and support. They are an important local network and focal point for communities. It is important, obviously, that we carry on introducing the new automation procedures—which will not force people to accept benefits in cash, but allow benefit to be paid into a bank account.
    There has scarcely been a more hypocritical campaign than that of Conservative Members on this issue. Might I remind the House that it was the previous, Conservative Government who signed the contract for the automation? Had we cancelled the contract on coming to power, it would have cost hundreds of millions of pounds. Conservative Members—I got the figures out this morning—closed 3,000 post offices when they were in office. We shall do our best to support rural post offices, but we will not pay any attention to the hypocritical cant of the Tories.
    Mr. Eric Forth: With which of the recent pronouncements on the future of Europe uttered by the Prime Minister's friend and nominee, Mr. Prodi, does the Prime Minister disagree?
    The Prime Minister: We have set out our position in our own White Paper, which I commend to the right hon. Gentleman.
    Mr. Hilary Benn: Is the Prime Minister aware that there are currently six countries that execute juvenile offenders, including the United States of America, where, earlier this month, in Oklahoma, Sean Sellers was put to death for crimes committed when he was 16 years of age? Given that the Government oppose the use of the death penalty in all circumstances, will my right hon. Friend urge those six countries—and other countries that retain capital punishment—to introduce a moratorium on its use, because its barbarity and potential for injustice has no place in any country that claims to call itself civilised?
    The Prime Minister: We oppose the death penalty in all circumstances, and we have ratified the death penalty
    946
    protocols—not only to the European convention on human rights, but to the international covenant on civil and political rights. That position will not change.
    Mr. William Hague: The last time that I asked the Prime Minister about failing to keep his promises, he had to admit that police numbers had fallen by 1,000, but he assured the House that
    "police numbers will rise again."—[Official Report, 15 December 1999; Vol. 341, c. 265.]
    Will he read out to the House the latest figures for police numbers, published a few days ago?
    The Prime Minister: We have made it clear that police numbers have come down. Police numbers will rise again as a result of the additional money over and above the plans that we inherited from the Conservatives, which will allow us to recruit 5,000 extra police. Those are 5,000 police who, had we maintained the plans that the right hon. Gentleman agreed when he was in the Cabinet, would not be recruited.
    Mr. Hague: What is wrong with reading out the numbers? They are here in the Home Secretary's parliamentary answer. Some Ministers answer questions even if the Prime Minister will not. The Prime Minister said that the figures would rise again. The latest figures show that the number of police has now fallen by 1,700 since he became Prime Minister. Crime is rising again and police numbers are falling.
    At the same time, I asked the right hon. Gentleman about meeting his promises on health. He said that in-patient waiting lists were falling. Will he read out to the House the latest figures on in-patient waiting lists?
    The Prime Minister: In relation to crime—[HoN. MEMBERS: "Answer !"I Do the Conservatives want the answers or not? Police numbers fell under the previous Government, during the time that the right hon. Gentleman was in office. Crime doubled. It increased faster than in any other western country. The chance of being a victim of crime trebled. The number of convictions and the proportion of convictions fell. The numbers of rapes, robberies and young offenders all rose. That was his record on crime.
    In relation to waiting lists, they are 50,000 below the level that we inherited from the Conservatives. If the right hon. Gentleman is complaining about the numbers now, presumably he would like to condemn even more the time that he was in office.
    Mr. Hague: All that is waffle. The accurate answer is that since the Prime Minister said that in-patient waiting lists were falling, the number has gone up by 36,000. There is no point in him shaking his head. That is the figure from the Department of Health. Out-patient waiting lists are a quarter of a million higher than when he took office. The assurances that he gave from the Dispatch Box on 15 December—only nine weeks ago on health and police numbers have already turned out to be complete and total rubbish.

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    The Prime Minister also said in the House last year that he would deal better, more effectively and more quickly with asylum claims. Will he give us the latest figures for the number of asylum seekers?
    The Prime Minister: The figures are 50,000 below the level that we inherited. There are more nurses in the health service than when the right hon. Gentleman was in office. There are more doctors in the health service. Waiting times are coming down and we have put massive new investment into the health service.
    In respect of asylum, it is true that, like every other major European country, we have been hit with more asylum claims. That is why, from this April, we are introducing a wholly new procedure on asylum. That procedure was opposed by the Conservatives. The right hon. Gentleman attacks us on asylum. Yes, there is a problem, but we are dealing with it in the face of his opposition.
    Mr. Hague: On this as well, the Prime Minister will not give us the figures. With his head for figures, no wonder it is taking him five days to count all those mayoral votes on his own. When he said last May that he would deal better, more effectively and more quickly with asylum claims, the backlog was 76,000 asylum seekers. Now it is 103,000. We have always known that he was not keeping the promises that he made at the last election. Now we know that he has not even kept the promises that he made in the House throughout last year. Waiting lists are higher when he said that they were going to fall, police numbers are lower when he said that they were going to rise and the asylum backlog is growing when he said that it was going to fall. Are not those facts the conclusive evidence that he is all mouth and no delivery?
    The Prime Minister: Again, the right hon. Gentleman is wrong. Now, as a result of the additional resources that we have put in, the immigration department is close to achieving 4,000 asylum decisions a month. That figure will rise to 8,000 a month by the late spring. The new rules will then come in and we shall be able to deal with asylum seekers more effectively.
    In respect of health and crime, it is absolutely true that we need to do even more about waiting lists and police numbers. However, all these measures require the expenditure of money. The one group of people who cannot claim that any more money should be spent is the Conservative party, which is saying that it will put the tax guarantee before any increase in public spending. In case the right hon. Gentleman should doubt that—[Interruption.]
    Madam Speaker: Order. The House must come to order.
    The Prime Minister: Just a few weeks ago, the right hon. Gentleman said that the tax guarantee meant that the Conservatives would not increase public spending. So he cannot complain about the need for more police; they cost
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    money. He cannot complain about the need for more nurses; they cost money. He cannot complain about the waiting lists; reducing them costs money. He cannot complain about asylum seekers; it costs money to deal with them. Yes, it is true that every single promise that we made—on getting waiting lists down, getting class sizes down and increasing police numbers—will be met by the next general election, as we said they would be. The public know that whereas we will invest more in public services, the right hon. Gentleman, through his tax guarantee, will cut public spending. The tax guarantee is a boom and bust guarantee and an NHS cuts guarantee. That is the difference between the two parties. However much the right hon. Gentleman wants public spending, Labour will put in the investment and the Conservatives would take it out.
    Mr. Geraint Davies: Does my right hon. Friend agree that the growth of the internet has brought with it a growth in at-home shopping and working and that those trends will lead to a reduction in the demand for office space and shopping space? As a result, there may be a new renaissance in building new homes in new townscapes that will be environmentally sustainable and economically effective, using the technologies of the new century.
    The Prime Minister: It is important that we drive through the internet revolution and make sure that people have access to computer technology. When we came to office in 1997, around one in 10 schools were linked to the internet. By 2002, more than 23,000 schools will be connected, with computer training available to 400,000 teachers. We already have 15,000 schools online. In addition, we shall be giving people special help to take computer courses. In last year's Budget, we set a target for a national network of 1,000 computer learning centres—one for every community in Britain. That is one reason why the number of people in employment is 800,000 higher than it was when we took office.
    Dr. Michael Clark: Is the Prime Minister aware that the rumour that there will be a big increase in stamp duty on house purchase is being received with dismay in my constituency and elsewhere? Does he accept that this would push up the cost of purchasing a house in the south-east, where house prices are already expensive, and that it would reduce national mobility, particularly for those in the north who wished to move to the south? What would the purpose be of such a move, apart from being just another increase in taxation?
    The Prime Minister: I shall treat that as an early Budget submission. I would have thought that the hon. Gentleman's constituents were glad of an economy in which economic stability has been delivered, and we have 800,000 extra people in work, which stands in sharp contrast to the situation in the early 1990s—the last time the policies now advocated by his leader were pursued; they resulted in interest rates of 10 per cent. for four years or more, interest rates at 15 per cent. for one year or more, and literally millions of jobs lost.

Points of Order
3.30 pm
Mr. Tam Dalyell: On a point of order, Madam Speaker. In view of the resignation now of Mrs. Jutta Burghardt, the United Nations food programme director in Baghdad, and previously of Hans von Sponeck and Denis Halliday, two very senior international civil servants, on matters of principle over what is happening to the children of Iraq, have you had any request for an answer to Question 18 to the Prime Minister, or any request from the Foreign Office to make a statement?
Madam Speaker: The hon. Gentleman is taking a little advantage. I have seen his question on the Order Paper and, like many others, it was not reached. To answer him factually, I have not been told that any Minister is seeking to make a statement today.
Sir Raymond Powell: On a point of order, Madam Speaker. My point of order is directed to you and is not a bogus point of order.
Madam Speaker: That makes a change.
Sir Raymond Powell: Last week, you commented in reply to a point of order that you are in daily and weekly conversation with the Presiding Officers of the Welsh Assembly and the Scottish Parliament. Could you use your influence with, and attachment to, the Presiding Officer of the Welsh Assembly to share some of your knowledge and experience gained over the years, especially of being an impartial Speaker—as every right hon. and hon. Member applauds and appreciates? Could you take him to your bosom and convince him that it is a necessity when he is presiding to be impartial and not to show his Welsh nationalist connections? Those connections showed last week in the Assembly debate, and most people in Wales were absolutely disgusted at the attitude that the Presiding Officer took.
Madam Speaker: And I thought that was going to be a genuine point of order. Of course I am in touch from time to time with the Presiding Officers of the Scottish Parliament and the Welsh Assembly, but I always wait to be invited before giving advice. I think that that is a wise way to proceed.
Sir David Madel: On a point of order, Madam Speaker. I wish to seek your guidance on answers given by the Foreign Secretary yesterday on the intergovernmental conference. In relation to Cyprus's application to join the European Union, he said:
"The principle of freedom of movement will certainly apply to all applicant countries when they succeed in becoming members."
However, in a later answer, he said:
"Freedom of movement between the Republic of Cyprus and the occupied northern sector would apply only if Turkey simultaneously joined the European Union."—[Official Report, 15 February 2000; Vol. 344, c. 778–81.]
That is a contradiction, and I wondered whether at 7 o'clock we could take a little break and have a statement from the Foreign Secretary
Madam Speaker: Order. The hon. Gentleman is a longstanding Member and he knows full well that that is a matter for argument and is by no means a point of order.

Welfare of Racing Greyhounds
3.34 pm
Mr. Jim Fitzpatrick: I beg to move,
That leave be given to bring in a Bill to make provision for the welfare of racing greyhounds at all tracks in the United Kingdom; and for connected purposes.
I am grateful for this opportunity to bring to the attention of the House a matter in which I have taken a special interest in the past couple of years.
In 1998, two of my constituents—Mrs. Pudney and Miss Pudney, who regularly write on animal welfare matters—brought to my attention some of the problems associated with the greyhound industry, which is otherwise known as a sport. First, they told me that a great many very young greyhound puppies are destroyed each year when they fail to make the grade, and that many others are discarded after they have peaked at an early age. Secondly, they highlighted the plight suffered by other greyhounds when their racing days in the UK are over. I should like to thank my constituents for raising those matters with me, and I shall return to them in a moment.
In addition, I want to raise the matter of the health and welfare of dogs at UK tracks. This is a problem at both licensed and unlicensed tracks, but it is the unlicensed tracks that give the greater cause for concern.
I must declare an interest in this matter. In the past seven years, my family and I have taken in two dogs from Battersea dogs home. Scruffy has now gone to the great kennel in the sky, but Kajan was Westminster dog of the year this year. Both knew a thing or two about greyhounds: although neither belong to that breed, there were many greyhounds with them at Battersea—indeed, far too many.
Individuals and groups concerned with greyhound welfare have told me about the number of greyhound puppies that are bred each year. The figures suggest that 75 to 85 per cent. of greyhounds racing in the UK are bred in Ireland, which also supplies the US, Spain, the United Arab Emirates and other countries. In 1998, my noble Friend Lord Williams of Mostyn, the Minister who was responsible for this area of animal welfare, informed me in correspondence that the
"destruction of healthy greyhound puppies is, of course, to be regretted."
That may be Government understatement, but unfortunately that was as much as my noble Friend was able to say. Some estimates suggest that several thousand dogs are routinely destroyed each year. That gives some idea of how early in the life of a greyhound the problems begin to arise.
So what is life at the tracks like for the dogs? I am sure that many people innocently assume that, because greyhounds run very fast, it is no hardship for them to do so, and that, given that they do not have to jump high fences and that they have no one on their backs, they probably do not have a bad life, all told. I am afraid that closer inspection shows that that is not the whole story.
In the greyhound industry, 33 tracks are registered by the National Greyhound Racing Club, greyhound racing's

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judicial body, which registers dogs on their tracks and controls the racing rule book. However, 35 tracks are outside NGRC control, and there is no identifiable representative body for the independent tracks—or flapping tracks, as they are known.
Under NGRC rules, all registered tracks must have a veterinary surgeon in attendance when greyhounds are racing, but that rule does not apply at independent tracks. The Royal Society for the Prevention of Cruelty to Animals—which I believe has the respect of all hon. Members—has stated that
"it is important that animals hurt or injured during racing receive swift and adequate veterinary attention to minimise their suffering".
The RSPCA also set out a number of items on a check list. First, common standards of track design should be improved to ensure that dangerous bends do not cause unnecessary injury to dogs. I believe that those improvements should also cover track surfaces. Secondly, the organisation states that track kennels must be inspected and licensed by local authorities. No legislation exists to allow local authorities to control the welfare of racing greyhounds, and their only responsibility is in respect of gaming and betting. The RSPCA also states that the frequency of races should be restricted.
Thirdly, the RSPCA has stipulated that a vet must be in attendance at all races, and that that should be funded centrally by the racing organisations, rather than by the track owner, as is currently the case at NGRC races. Fourthly, and most importantly, the RSPCA states that tracks without veterinary provision should not be allowed to operate.
I believe that that check list from the RSPCA is the very least that the sport or industry should be made to adhere to, and I assume that the NGRC would agree. There is a good case for introducing legislation to regulate the whole industry, and the time has come for a review. I feel that the House can do something more positive to protect greyhounds during their racing lives.
The dogs have a number of champions besides my constituents. They include Annette Crosbie of Greyhounds UK, the National Canine Defence League and its members, and a retired vet by the name of Paddy Sweeney, who has done much to highlight the situation in respect of racing conditions. I should like to record my thanks to Mr. Sweeney in particular for his work in this area.
Mr. Sweeney pointed out that NGRC rules give vets no complete power or authority at the licensed tracks. Vets can advise promoters or managers, but the rules do not state that that advice must be accepted. So where profitability is threatened, vets can be given short shrift if they endeavour to act in the best interests of the racing dog.
Paddy outlined an example in which atrocious conditions one winter's night at a track led trainers to plead with the vet to intercede for them. The vet telephoned the manager of the track to ask that someone go along to inspect it. There was no immediate response, but I am informed that the next day the vet received a letter terminating his contract. As matters stand, it sometimes appears that even when vets are present, it is more to reassure the public than because they are on active duty. I sincerely hope that that is not the case.
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I want to address what happens to the dogs when their racing days in this country are over. We all know the saying, "A dog is for life, not just for Christmas." For our purposes, we need to bear it in mind that a greyhound is for life, not just for the duration of its racing and money-making years. Unsurprisingly, the various groups with a concern or interest in the matter disagree as to the nature of the problem and its relative severity. However, no one could contend that no problem exists.
The Retired Greyhound Trust, established to ensure the welfare of post-racing dogs, was deemed by the Select Committee on Home Affairs to be grossly underfunded. It can find homes for only about 1,500 greyhounds out of the total of 10,000-odd which retire each year. Some are put down; others are exported from the United Kingdom. Those dogs have usually ended their racing life in this country. Whatever the fate of exported greyhounds, I take this opportunity to advocate support, in the Bill, for greatly increased resources for retired greyhounds.
I am pleased to report that in 1991 a Home Affairs Committee report recommended:
"track owners and both on and off-course bookmakers should be required to donate a part of their profits to the Retired Greyhound Trust. The NGRC/BGRB should take the lead in this."
New legislation could address that matter. However, I am aware that the BGRB is actively seeking agreement to increase the funding of the trust to £1 million a year. The sooner that that can be done, the better.
Furthermore, £2 billion a year is bet on greyhound racing. A levy on betting, similar to that which applies to horse racing, would provide a fund for improving tracks, veterinary support and greyhound welfare. The Government have yet to give their endorsement, regarding this as a commercial activity. However, it might be time to rethink that perspective.
I conclude by reminding hon. Members that the dog has been called man's best friend. That may not be politically correct, and my cat-loving assistant, Debbie, would disagree. However, greyhounds make great pets, especially for pensioners. Greyhounds are renowned for their mild and friendly nature and, as they are very lean, they do not take a lot of feeding. That makes them economic as well as affectionate.
The Bill is very timely. We will be able not only to say that a dog is for life, not just for Christmas, but that a greyhound is for life, not just for its money-making sporting ability.
Dogs give service as workers, pets and friends, but greyhounds serve also as entertainers for us. It is time we recognised their role by taking this matter forward in the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. Jim Fitzpatrick, Mr. Nigel Griffiths, Mr. Ian Cawsey, Mr. Tony Banks, Angela Smith, Mr. Keith Darvill and Dr. Nick Palmer.

Welfare of Racing Greyhounds
  WELFARE OF RACING GREYHOUNDS
  Mr. Jim Fitzpatrick accordingly presented a Bill to make provision for the welfare of racing greyhounds at all tracks in the United Kingdom; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 7 April, and to be printed [Bill 70].
  Orders of the Day

    Political Parties, Elections and Referendums Bill
    [2ND ALLOTTED DAY]
    (Clauses 1 to 18 and 95 to 120, Schedules 1, 2 and 11 to 14, New Clauses and New Schedules relating to Parts I and VII)
    Considered in Committee [Progress, 14 February].
    [MR. MICHAEL J. MARTIN in the Chair]

  Clause 95

    REFERENDUMS TO WHICH THIS PART APPLIES.
    3.44 pm
    Mr. Robert Walter: I beg to move amendment No. 36, in page 60, line 37, leave out from "Ireland" to end of line 39.
    The First Deputy Chairman: With this it will be convenient to discuss amendment No. 44, in page 60, line 39, at end insert—
    'or
    (d) any two or more local government administrative units in England and Wales.'.
    Mr. Walter: I do not intend to dwell long on the amendments, which are relatively simple. Conservative Members are conscious of the fact that the measure provides for referendums to be held not only nationally, but in England, Wales, Scotland or Northern Ireland, and in any of the regions, as defined by the regional development agencies.
    It may come as no surprise to the Committee that Conservative Members see nothing magical in the areas of the RDAs. Elsewhere and on other occasions, we have pointed out that we are not entirely happy with the concept of RDAs—not least because we are not entirely happy that government should be organised on such a basis, although regional boundaries must be drawn somewhere.
    That does not mean, however, that there is always a community of interest in a particular region. For example, my constituency is in Dorset, which is linked to the south-west region, but my constituents have little in common with the electors of Tewkesbury or Truro—save the fact that we all catch the train from either Waterloo or Paddington to reach the area.
    Through the amendments, we want to provide the Electoral Commission with the power to regulate referendums held in smaller areas in multiples of local government areas—not in individual local government areas, because those are covered elsewhere. It would thus be possible to hold a regional referendum in, for example, Devon and Cornwall on an issue that was pertinent to both counties, but not to only one of them, and certainly not to the whole south-west region.
    One could envisage a referendum being held on an issue that affected both sides of the Severn estuary; that might include the local government units in the former county of Gwent, in Gloucestershire and in Somerset.
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    To give the Electoral Commission the flexibility to consider local referendums in areas that do not necessarily coincide with those covered by the RDAs or the home nations would be a worthwhile addition to the Bill.
    Mr. Andrew Stunell: The amendments are rather mismatched. The first would delete one category of referendum. That is a mistake, because we need the widest possible range of options to ensure that the area in which opinions are sought, whatever its boundaries, comes within the purview of the Electoral Commission. As we want to bring all such matters under the control of the commission, it seems perverse to remove one category of referendum.
    The second amendment is sensible. As the hon. Member for North Dorset (Mr. Walter) pointed out, it will sometimes be appropriate or expedient to hold referendums in more limited areas. He hinted at a Severn estuary referendum or at others that might cross current regional boundaries. I represent a constituency with the east midlands region on its southern boundary, but it is firmly placed in the north-west. It is less than 10 miles to the Yorkshire and Humberside region. The hon. Member for High Peak (Mr. Levitt) is in the Chamber, and we share a constituency boundary even though our constituencies are in different regions. One can imagine that a referendum on the Peak district national park or related issues would necessarily cross regional boundaries. [Interruption.] The hon. Gentleman is holding up several fingers, but I cannot interpret what they mean.
    Amendment No. 44 would allow for something that is not constrained by the nations and states of the United Kingdom, or by the economic regions. It would thus be a useful addition to the Bill. Unfortunately, any vote would be on amendment No. 36. I hope that the Government will reject that, but that they will give serious consideration to amendment No. 44, which would build in a level of flexibility that would allow the Electoral Commission in reasonably foreseeable circumstances to exercise control and be the effective monitoring body, without the need to resort again to primary legislation.
    Dr. Norman A. Godman: I shall be brief. I agree with much of what the hon. Member for Hazel Grove (Mr. Stunell) said about the two amendments.
    Regional referendums can be important. The Committee may recall a referendum on the merits of the public ownership of water authorities that was held some years ago in the Strathclyde region. It attracted about 1 million respondents, 98 per cent. of whom said that they wanted water services to remain under local authority control. The potency of that response deterred the then Tory Government from privatising the water boards in Scotland.
    I wish to ask my hon. Friend the Minister a question. It might be a little precipitate, but it was prompted by something that the hon. Member for North Dorset (Mr. Walter) said. Have there been any discussions with the Scottish Executive, the Northern Ireland Executive—we all know about the problems there—and the Welsh Executive about the conduct and commissioning of referendums? For example, if referendums are held in Northern Ireland once the Executive is reinstituted—

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    I hope that that will take place soon—or in Scotland and Wales, am I right in thinking that it will be the respective Executives rather than the Westminster Government who will have the authority to call the referendums?
    The Parliamentary Under-Secretary of State for the Home Department (Mr. Mike O'Brien): The distance between us is very small, even though I will not accept the amendments. I do not agree with amendment No. 36, but I shall give some consideration to amendment No. 44, albeit not on this Bill. As I shall explain, there is a way of dealing with the issue other than trying to amend the Bill.
    Clause 95(1) specifies the referendums to which the provisions of part VII apply. It is not ultimately an exhaustive list, in the sense that future legislation providing for referendums to be held throughout areas or combinations of administrative units not specified in the clause could provide for the controls set in this part to be applied fully or in part to those referendums. That is not the only way in which we can manage the division of areas for referendums. We could decide in later legislation to do it differently. All that we are providing here, for the sake of convenience, is a template that we may or may not choose to use.
    A case in point would be referendums on directly elected mayors under the Local Government Bill, which will make provision for the Secretary of State to make regulations as to the conduct of such referendums. It is intended that those regulations should apply, with necessary modifications, to a number of the provisions in part VII, having regard to the particular circumstances of those local referendums.
    Clause 95(1)(c), which amendment No. 36 would delete, allows the provisions of part VII to be applied to a referendum held throughout an English region. Such referendums are not by any means an immediate prospect, but the Government intend to introduce, possibly in the next Parliament, legislation to allow people, region by region, to decide in a referendum whether they want directly elected regional government. The Government's judgment is that the part VII provisions would apply fully to such referendums. We might as well put them in place, because this is convenient legislation in which to do so, and it will provide for simplicity later.
    Those referendums would be held on matters of significance, and each would involve a substantial electorate. Given that regional referendums are a genuine prospect, it makes sense to take this opportunity to make it clear that these controls would apply to those referendums.
    Amendment No. 44 would apply the part VII provisions to referendums held in two or more local government administrative units in England and Wales. I am not persuaded that we need to put that into the Bill. We have made no presumptions that the boundaries for any future regional government in England need necessarily follow those of the existing administrative regions; that is, the Government office boundaries.
    We have said that in time we shall introduce legislation to allow people to choose whether they want regional government. How we would deal with referendums cutting across regional boundaries should be a matter for that legislation. It is no use trying to prejudge the boundaries that we would use, when it may be some time
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    before we will want to call those referendums. The Bill is convenient and simple and gives us a legitimate basis for proceeding with those referendums.
    We are not closing the door on the ideas put forward by the hon. Members for North Dorset (Mr. Walter) and for Hazel Grove (Mr. Stunell), and I hope that, with the reassurances that I have given, the hon. Member for North Dorset will feel able to withdraw the amendment.
    I say to my hon. Friend the Member for Greenock and Inverclyde (Dr. Godman) that there have been discussions with the Scots and Welsh about how to proceed with the legislation. As we get used to devolution, it is becoming natural for us to consult and discuss with our colleagues in the Scottish Parliament and Executive and the Welsh Assembly and Executive the changes that are taking place. I hope that he is satisfied with that reassurance.
    Mr. Walter: I thank the Minister for his response. I am slightly—I would not say entirely—reassured that he has taken on board our points, particularly on amendment No. 44. On the basis that he seems to accept their spirit and suggests that they should be incorporated in other, later legislation, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    4 pm
    Sir Patrick Cormack: I beg to move amendment No. 45, in page 61, line 13, at end add—
    '(6) The exact number, nature and wording of

    (a) the question or questions, and

    (b) the possible answers to each question

    in a referendum or other poll to which this Part applies shall be determined after consultation with the Commission; and any views expressed by the Commission shall be published.'.
    The First Deputy Chairman: With this it will be convenient to discuss the following amendments: No. 46, in clause 97, page 61, line 33, leave out from beginning to 'the' in line 34 and insert—
    `The date of the poll in the case of any referendum to which this Part applies shall be fixed by the Commission, and'.
    No. 48, in clause 101, page 63, line 34, leave out 'after consulting the Commission' and insert—
    'on the recommendation of the Commission'.
    Sir Patrick Cormack: In responding to the previous group of amendments moved by my hon. Friend the Member for North Dorset (Mr. Walter), the Minister used some interesting turns of phrase, of which I made a note. He talked of, "We might as well put in place", "It will be convenient" and "It makes sense." I hope that he will respond to amendment No. 45 in a similar spirit, because it would make sense and be convenient to implement the provisions suggested in it and the consequential amendments that we have tabled.
    There was much talk on Monday, when we debated previous clauses, of the role of the commission and of the Speaker's Committee that will oversee its work. However, there seems to be no place for the commission in the crucial, central part of the Bill on drafting questions on referendum forms. The amendments would ensure a

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    specified, proper and official place for the commission. It should be consulted on the drafting, so that it may be satisfied, beyond doubt, that the wording is not loaded.
    Members of Parliament are called on more than others to fill in questionnaires day after day. Frankly, I make a practice of refusing to do so.
    Mr. Mike O'Brien: So do I.
    Sir Patrick Cormack: I am glad that the Minister takes the same line. His apt sedentary intervention underlines the need for the amendments.
    It is easy to load a question, thereby almost directing the answer. The commission should be consulted and any views expressed by it published, so that people may take due note of what it has said.
    Mr. John Bercow: The Committee knows that my hon. Friend's eloquence is legendary. Do I interpret him correctly if I say that, without the amendments that he is eloquently advocating, the danger is that the commission would be nothing but the Prime Minister's hapless glove puppet?
    Sir Patrick Cormack: I am always reluctant to allow any colleague to put words into my mouth, particularly when they come from my hon. Friend's silver tongue. If we do not incorporate the amendment, the danger is that we shall have an emasculated commission, which, at the very point of delivery, cannot exert influence or even express an opinion.
    In a sense, therefore, my hon. Friend is right. We are concerned about the commission. We want it to have due and proper influence on the way in which questions are worded. We want its views to be known to all so that, if there is conflict or doubt, those who are called on to vote on any issue will know what the commission has said.
    I hope that there is common ground between parties that the commission should be a respected body, whose general impartiality and approach is never questioned. If the commission is to have such a reputation and to maintain it through the years, it must have influence at such a crucial point.
    The Minister has acknowledged, not only in his sedentary intervention, but in the context of the Bill, that there is some force to my argument, so I hope that he will accept the amendment. Even in the new clause, which we shall debate later and which I therefore cannot debate now, and which is so draconian, there is a specific reference to the commission and a role assigned to it. How much more important it is, then, to assign a role to the commission in clause 95.
    Mr. Martin Bell: I shall be brief. The independents have not been widely consulted on this measure. Indeed, regrettably, they have not been consulted at all. The Parliamentary Secretary said that it was his belief that independents were usually Conservatives in disguise. That is not always and invariably the case.
    I support the amendment, because I believe that the Bill contains some anti-democratic elements, of which this provision is one. The commission's independence is
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    paramount, as it is in the nature of political parties—all political parties—to take power or to hold on to power. It will be extraordinarily difficult to safeguard the independence of the commission and its right to speak for and protect the interests of all the people in the country, who may not necessarily belong to a political party but who have profound political interests. Therefore, I support the amendment.
    Mr. Stunell: The Liberal Democrats support the thrust of the amendment.
    The three national referendums most likely to be held over the next few years are all on issues on which I would want the answer to be yes—Lords reform, the European Union and proportional representation. However, my strong desire for a positive result when those referendums are held does not blind me to the fact that those who set the questions have tremendous power to determine the outcome.
    Every politician, I suppose, wants to win by fair means or foul, but I want to win primarily by fair means.
    Hon. Members: Primarily?
    Sir Patrick Cormack: Having enunciated that novel—or perhaps traditional—Liberal Democrat policy, will the hon. Gentleman explain the ratio?
    Mr. Stunell: I am glad to have livened up the debate somewhat. The difficulty in discussing the Bill, as I said in a previous debate on the Floor of the House, is not that Members of Parliament are too poorly informed to discuss it—a fault that sometimes arises, if I may say so—but that we are too well informed to discuss it properly.
    Regardless of the passion with which we want a particular outcome in politics, we have a duty to ensure that the processes used to reach decisions are fair, proper and balanced, not just to produce the desired outcome, but to ensure a fair opportunity for alternative views to be expressed and heard.
    The point made by the hon. Member for Tatton (Mr. Bell) is one that we may not want to state on the Floor of the Chamber, but which we would certainly admit elsewhere—that is, that politicians never want to give up power. They will take power and hold on to it. I do not exclude the Liberal Democrats or any other political party from that. Perhaps the hon. Member for Tatton would allow me to say that even independents, once elected to the House, are sometimes tempted to stay. They may resist that temptation, and the Bill is about resisting temptation.
    The intention of the amendments, if not their precise wording, is right. They reserve to the commission some of the fundamental decisions about how referendum questions will be phrased and put to the public. That is a proper reservation of power and duty to the Electoral Commission.
    I understand the Government's thinking. I understand that there is a certain amount of expedience in this Parliament and, in their mind, in the next Parliament and possibly for the next thousand years. They will set the questions. However, a day will come when they will not set the questions. They might then wish that the Electoral Commission had a bigger role than that for which the Bill provides.

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    As a Liberal Democrat, I seldom get to set the questions. Although I support a specific outcome, I am well versed in the need for safeguards against power. I urge the Government to look favourably on the amendment's intention, if not the precise wording.
    Dr. Godman: I have been a Member of Parliament for 16 years, but I never thought the day would come when I found myself in some agreement with a Conservative, the hon. Member for South Staffordshire (Sir P. Cormack); a Liberal Democrat spokesman, the hon. Member for Hazel Grove (Mr. Stunell); and an Independent Member, the hon. Member for Tatton (Mr. Bell). I may get into trouble, but they have raised important points of principle about setting a fair question or series of questions in a referendum.
    I was sorry to hear the hon. Member for South Staffordshire say that he never fills in questionnaires. Much empirical social science research uses questionnaires as a methodological tool. Not all questionnaires should be dismissed out of hand, because they can elicit useful information for public bodies and others. I was therefore sorry to hear him adopt such a dogmatic position. I throw the occasional questionnaire away, but such documents should be examined on their merit.
    I hope that the Minister will take cognisance of some of the mistakes made by Governments in the Irish Republic, which has much more experience of referendums than we have. In recent years, as the Minister knows, there has been huge controversy about setting questions in referendums in the Irish Republic. For example, there was a recent referendum on the controversial issue of abortion, and controversy surrounded setting the question for the referendum on divorce.
    Mr. Bercow: I agree with the thrust of the hon. Gentleman's comments. Does he agree that one useful test of the fairness of a referendum question is whether the wording is acceptable to a professionally commissioned opinion pollster?
    Dr. Godman: I am being too agreeable this afternoon. I agree that setting the question—whether in a social science research questionnaire, of which I have some experience, or, more importantly, in a referendum—is very important. It is essential therefore that, whichever party is in power, the electorate perceive referendum questions to be fair and above board. In 10 or 15 years' time, we may have a referendum in Scotland on whether to be independent or to maintain the United Kingdom, if I can call it that. As the hon. Member for South Staffordshire said, there is nothing worse than a loaded question. We are dealing with a smart electorate, who are much more intelligent than some hon. Members—none of whom are present today, of course—believe.
    Irrespective of political differences, we all owe it to the electorate to ensure that, when we conduct referendums at regional level, or in Northern Ireland, Scotland or Wales, we can say, "Yes, a fair set of questions is being asked." I agree with the Opposition that the commission could vet the questions that are to be asked in a referendum by a party in power.
    Mr. Mike O'Brien: The debate, including the Freudian speech of the hon. Member for Hazel Grove (Mr. Stunell),
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    has been useful. However, I do not necessarily share his cynical view that politicians hold on to power. It could be argued that, given our unwritten constitution and the power of the Executive, abstinence from the abuse of power might sum up the whole of British constitutional history, at least in recent centuries. Perhaps we could argue that academically on another occasion.
    4.15 pm
    I am sorry that the hon. Member for Tatton (Mr. Bell) feels under-consulted on the Bill. If he wants to meet to discuss its terms and how it might be better framed, I should be more than happy to do so. The hon. Member for South Staffordshire (Sir P. Cormack) made a well-argued case for the question in any referendum to which part VII applies to be set after consultation with the Electoral Commission. Let me say up front that the Government want to reflect on that proposition. I agree that the commission must be seen as impartial and above the fray, and that it is possible to frame questions to achieve a certain result.
    I welcome the fact that amendment No. 45 requires that a referendum question should be determined after consultation with, rather than on the recommendation of, the commission. It must be right that it is ultimately for Parliament to decide the wording of a referendum question. Part VII does not replace the need for separate legislation to authorise the holding of a particular referendum. That legislation will need to determine in particular the wording of the question and the date of the poll. Those are important issues for Parliament to consider.
    Mr. Bercow: I note that the Minister said that, ultimately, it should be for Parliament to decide the question. Does he accept that if the commission recommended a particular question and the Government of the day sought to persuade Parliament to accept an alternative form of words, the least that the Government would owe Parliament and the British public would be an explanation of their reasons for rejecting the recommendation?
    Mr. O'Brien: The Government listen carefully to Parliament and the Home Office has shown repeatedly that it listens to debates in the House with care and notes the strength of the arguments. We reflect on those arguments and are prepared to change our view if they are good, but sometimes they are not so good and we tell people where to get off.
    If the wording of the question were left entirely to the Electoral Commission to determine, the House would be denied its proper role, which it should retain. The Government, therefore, would not agree to the question in a referendum being set or approved by the commission. However, consultation is an entirely different matter. Given the commission' s wider role in ensuring fair play in the conduct of a referendum, I can see merit in the argument made by the hon. Member for South Staffordshire. However, it is worth noting that the Neill committee made no proposals on the commission's involvement in setting a referendum question. That matter was considered in the November 1996 report of the Commission on Conduct of Referendums, chaired by Sir Patrick Nairne, but even it recognised that the wording of the question had to be for Parliament to

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    decide. I have listened carefully to the points made in the debate and we want to reflect on the matter. The hon. Gentleman made some sound arguments in favour of the proposition and we shall consider them. In the meantime, I ask him not to press amendment No. 45.
    The proposal in amendment No. 46 would not fit properly into our constitutional arrangements or the scheme set up by the Bill. Other countries have systems in which the Government or a certain number of citizens can require a referendum to be held. Alternatively, the constitution of the country concerned may require a referendum to be held to approve any constitutional change. In such a system it would be natural, and probably inescapable, for all the arrangements for holding the referendum to be put in the hands of a body equivalent to the Electoral Commission, which we are establishing in the Bill.
    However, our system is not of that variety. It has almost invariably been the practice in the past, and seems likely to remain so in the future, that Parliament legislates for a particular referendum on a case-by-case basis. The proposed date on which the referendum would be held is an integral part of the proposition that is presented to Parliament, which Parliament adopts, alters or rejects.
    There is no denying that the date on which a referendum is to be held is itself a political matter. Having it on one date may have consequences that having it on another date would not. Passing that matter over to the Electoral Commission would not transform it from a political to an apolitical question; it would simply mean that a decision of a political character, or at least with heavy political overtones, was being taken by the Electoral Commission rather than by Parliament. That would open it to criticism from political parties, which may feel themselves advantaged or disadvantaged in some way. We do not think that that would be a sensible arrangement or would benefit anyone.
    This issue would be all the more difficult for the Electoral Commission because the amendment provides no criteria to guide it. The only guideline is the one already in the Bill, which provides for a minimum 28-day interval following the determination of applications for designation. The amendment does not, for example, say that the poll is to be held as soon as is practicable thereafter.
    What are the Opposition after? Are they seeking a device to delay a referendum taking place? Well, we shall see. They say that the amendment is to prevent the Government of the day from putting into a Bill a date for a referendum that will best suit their own purposes. However, with no criteria to guide the commission, the obvious implication is that it is expected to ensure that the date of the poll does not unduly favour the Government side, which means that, relatively speaking, it favours the other side. That is asking too much of the commission, and is wrong in principle under our system. Trying to take what is, in many ways, a political decision out of the realm of political debate is not a sensible approach.
    Mr. Bercow: So the Government are motivated by charity.
    Mr. O'Brien: The Government are motivated by the highest standards of national interest and concern.
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    Clause 101(3), to which amendment No. 48 relates, is concerned with the possibility that a referendum question may admit more than two possible outcomes. In such circumstances, it may be open to question whether a permitted participant should be designated in respect of each of the possible outcomes. It is conceivable, for example, that one or more of the possible outcomes would be nonsensical.
    An example of that was the 1997 poll on Scottish devolution, in which voters were presented with a two-part ballot paper and asked, first, to indicate whether they agreed or disagreed that there should be a Scottish Parliament, and, secondly, whether they agreed or disagreed that such a Parliament should have tax-varying powers. There were four possible outcomes, at least one of which—no to a Parliament but yes to giving it tax-varying powers—was meaningless in terms of the referendum campaign. Subsection (3) sets out a mechanism whereby it could be directed that no permitted participant be designated in respect of such an outcome.
    The question is how such a decision is arrived at. Subsection (3) requires that the commission be consulted. As amended by amendment 48, such an order could be made only on the recommendation of the commission. In practice, it seems very unlikely that there would be much difference either way. It is difficult to envisage the circumstances in which there could be any real dispute as to whether a particular outcome merited the designation of a permitted participant.
    In principle, I believe that this subsection should remain as it stands. The provisions of part VII start from the premise that the key decisions on whether and when a referendum is held, and the question of policy that the referendum is intended to resolve, are matters for the Government of the day and for Parliament. It is for the commission then to oversee the conduct of the referendum to ensure that, above all, it is fair. Although it is entirely right to consult the commission on the matter, it does not seem right to take that decision entirely out of the hands of the political arena, of the Chamber and of Parliament. I stress the role of Parliament in deciding these matters, as any order made under clause 101(3) is subject to the affirmative resolution procedure.
    In view of what I think the hon. Member for South Staffordshire would agree was a sympathetic response to the amendments—at least on amendment No. 45—I hope that he will feel able to withdraw them.
    Sir Patrick Cormack: Ah! The Minister says he hopes that I will feel able to withdraw "them". Well, I am perfectly content to withdraw amendment No. 45. The Minister has given a sympathetic and understanding answer; I believe him to be a man of his word, and I expect an amendment along the lines of amendment No. 45, giving the commission the role that he and I both want it to have, to be tabled on Report. If my inference is correct, we shall not press the amendment to a Division at this point, but, if the Minister does not table a similar amendment on Report, we shall do so then.
    Mr. O'Brien: I want to reflect and consider. Obviously, consultations will be necessary. We spoke earlier of the need to consult devolved Executives, for instance. I am not giving the hon. Gentleman an undertaking; I am saying that I am very sympathetic, but wish to consider the matter

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    further and undertake the proper consultations that I am sure he would want me to undertake before proposing such a measure.
    Sir Patrick Cormack: It is early in the afternoon, and I am a man of infinite charity. I am therefore prepared to accept what the Minister has said in regard to amendment No. 45, but I must make plain our belief that my point—echoed, briefly but eloquently, by the hon. Members for Tatton (Mr. Bell), for Hazel Grove (Mr. Stunell) and for Greenock and Inverclyde (Dr. Godman), and by my hon. and silver-tongued Friend the Member for Buckingham (Mr. Bercow) in his interventions—is important, and that the amendment is important. We want to return to the issue on Report if the Minister does not, and it is only right to give the Committee notice of that.
    The Minister gave an elegantly forensic response to amendment No. 46, but a response that was wholly unsatisfactory to us. There are worries about the timing of referendums, and the Minister was honest enough to admit that timing can influence outcome. Let us look back to the two constitutional referendums that took place in the autumn of 1997. I cannot prove and do not know, but strongly suspect, that, had Wales voted on the same day as Scotland, the result might well have been different. A week later, the result was too close to call: it was so marginal as to be equivalent to a result demanding a recount in a marginal seat. We had the tiniest possible majority for the Welsh Assembly.
    Nothing that I say should be taken to mean that I want to rerun that referendum. Constitutionally speaking, we of course accept that a majority is a majority, and we are doing all in our power to make the Welsh Assembly work; but the concept was not embraced with universal enthusiasm in the Principality. Half the people voted, and of those, nearly half said that they did not want it. I think that, if people had not been to some degree influenced by what I accept was a much more decisive result in Scotland in the previous week, we might well have seen a different result in Wales. That experience underlies our amendment.
    The Minister sought to argue, in a pleasant and plausible manner, that the commission should have no say in the fixing of the date, but we nevertheless believe that it should have a real part to play, for all the reasons that I sought to advance in support of amendment No. 45—reasons with which hon. Members on both sides of the Committee agreed. We want the commission to be widely respected throughout the country. We want it to have a real role, which we think can be complete only if it can influence both the wording of the question and the date.
    4.30 pm
    Therefore, although I am prepared, for the reasons that I have advanced, to withdraw amendment No. 45 and will not press amendment No. 48 to a vote because the argument is finely balanced. We do not agree with the Minister, but we do not seek to divide the Committee on every amendment. We believe that there is a point of real substance in amendment No. 46. The Committee should be given the opportunity to vote on it. At the appropriate time, therefore, I would wish to call a Division on amendment No. 46.
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    I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Clause 95 ordered to stand part of the Bill.

  Clause 96

    REFERENDUM PERIOD
    Question proposed, That the clause stand part of the Bill.
    Mr. Dominic Grieve: I do not want to take up the Committee's time, but we should widen the discussion a little to look at what clauses 96 and 97 contain, in the absence of amendment No. 46 which we discussed earlier. Clause 97 is of particular concern.
    As the Committee will be aware, the whole purpose of the legislation is to establish a set of ground rules. It provides for fairness between the respective parties participating in a referendum campaign. As some of the clauses concern the provision of funding to one side or another, fairness is essential—above all, fairness for a campaign to get off the ground to put its case.
    Clause 97 is linked to clause 96. There are two provisions. Clause 96 provides for a period not exceeding six months from when the draft of an order comes in to the date of a poll, but, crucially, clause 97 provides that
    "the date so fixed shall not be earlier than 28 days after the end of the period"
    in which the various parties participating in the campaign have been identified. If it were taken to its absolute conclusion, the 28-day period would be very short.
    After designation, I would find it hard to imagine getting a national campaign off the ground with funds in only 28 days. I think that the Minister would agree that that is the absolute minimum period in which a referendum campaign could properly take place and be described as fair, yet clause 97 will not apply to a referendum where the date of the poll is specified in the Act.
    The explanatory notes put it in a way that the Minister might say is a little disingenuous:
    "Nonetheless, the expectation in such cases will similarly be that there will be at least 28 days for campaigning following the designation of campaign organisations."
    That fills me with some concern. We are enacting complex legislation, some issues in which have taken up much time upstairs in Committee and which we have tried as best we can to speed through, yet we are left with a clause—clause 97—that the Minister would have to agree could be circumvented at will by a Government who wished to do so. All they would have to do would be to designate in the Act that the period concerned was reduced to 10 days, five days or four days. What is the purpose of the Bill if it is not to set a fair framework? Yet, as things stand, what I have outlined could easily happen: it will not matter how much funding is provided to the campaign that the Government do not like because, in reality, the campaign will never have an opportunity to get off the ground.
    I should therefore be grateful if the Minister could comment on that issue as we debate the two clauses, but particularly clause 97. It might also give him pause for thought in relation to amendment No. 46, to which my hon. Friend the Member for South Staffordshire (Sir P. Cormack) spoke earlier and which was dismissed

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    rather out of hand by the Minister as being "unnecessary". The Minister said that those are political decisions—of course they are political decisions—but the whole purpose of the legislation is to remove party politics from, and introduce a note of fairness into, proceedings.
    Sir Michael Spicer: I am listening very carefully to my hon. Friend's comments. I wonder whether his interpretation of the Bill is such that he believes that the 28-day period specified in clause 97 is relevant also to the powers that the Government would have to intervene and to make their case? Is it part of the quarantine period that the Government would have applied in communicating their own point of view? If so, such a period is not only very short, but highly relevant.
    Mr. Grieve: My hon. Friend has a good point. The clauses are complex, but the Minister may care to enlighten us. Certainly there is a whole series of mechanisms of interlinked timings. Part of that is the quarantine for the Government, which would run up to the time of the referendum. I would assume, therefore, that that is the time in which the umbrella organisations are up and running and the Government have no part in the proceedings. If I am wrong about that, the Minister will enlighten me.
    The point I was making—my hon. Friend has rightly just added another element to it—is that, if in fact we are leaving open the opportunity for the House or a Government using their majority to specify in an Act a shorter period, one might well ask why on earth we are being bothered with passing this complicated legislation with all these rules. Without so much as altering this Bill or having a debate on whether its provisions should be changed, it would be possible for a Government who wished to do so completely to circumvent the purpose that the legislation is designed to achieve. That is a matter of concern.
    Why bother to have the Electoral Commission's input into referendums if the Government could, with a short wave of the hand, simply introduce a referendum Bill stating that these clauses will not in reality have effect?
    Mr. Mike O'Brien: We are considering clauses 96 and 97. In clause 96, we are ensuring that we establish a basis for subsequent clauses, in part VII, such as those providing for the designation of umbrella groups and for expenditure restrictions. Those later clauses lean heavily on the concept of there being a defined referendum period in which the provisions will apply.
    The purpose of clause 96 is to establish how the referendum period is to be calculated. The main provision is in subsection (4) and applies to the great majority of cases in which the date of a referendum poll is specified in a Bill. It is an important point. Parliament will decide the date of the great majority of referendums. Therefore, the length of time for a campaign will be a matter for political discussion in this place.
    If a Government were to seek to introduce a Bill attempting unfairly to constrain the period for the public to consider a debate, the public would make a judgment
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    on the integrity and proper behaviour of that Government. Anyone who sought to manipulate the electorate in quite that way would undoubtedly be judged by the electorate.
    Mr. Grieve: Is it not the purpose of this legislation to impose a little fetter on the Government's ability to do that, or have I completely misunderstood why I have spent the past four weeks upstairs in Committee?
    Mr. O'Brien: The hon. Gentleman knows well—he is a lawyer; he knows perfectly well—that the Bill cannot bind a future Parliament or prevent another Bill from being introduced that makes entirely different provision. He also knows that any Government who introduce legislation on a referendum will in all probability be raising a highly politically charged issue, and that the electorate will be very well briefed on the way in which the Government are handling the matter. If it is clear that a Government are seeking to fix the referendum—in other words to fix the voters—the electorate will not be terribly pleased. Any Government would be well aware of that.
    Any future Bill providing for a referendum could override this Bill. However, we believe that a minimum campaigning period should be 28 days. General election campaigns can be of a similar length. In the past—although not in 1997—Prime Ministers have often concluded that 28 days is highly adequate for the electorate to decide which way they want to vote in a general election. I suspect that that view has not escaped the minds of Conservative Prime Ministers in the past couple of decades.
    Sir Patrick Cormack: The hon. Gentleman puts his case with disarming charm, but he knows that when a Government have a huge majority, as his Government currently enjoy, they can get away with whatever they want. We do not have a written constitution providing for qualified majority voting and a two-thirds vote in Parliament before a constitutional issue can be decided. If the Government decide that they are going to do something and they have a majority such as the present Government's, they can do it. That is why we are anxious for amendment No. 46, which we shall shortly press to a Division, to be inserted in the Bill and why we take the line that we do on these clauses.
    Mr. O'Brien: That brings me back to the first point that I made in reply to the hon. Member for Hazel Grove (Mr. Stunell). I disagreed with his cynical view about politicians and suggested that it was arguable that the history of our unwritten constitution was one of abstinence from the abuse of power by various Governments, taking cognisance of the fact that they are answerable to the electorate who will form a view about how they behave. They have to behave reasonably and deal with the electorate in a way that commands broad support. Every Member of Parliament is aware that a Government's majority—and their seat—can be taken away by the electorate. The majority in the Commons may be big or small, but even with a majority of one, a Government have power if they can carry the House. The size of a majority is not the issue. The issue is whether a Government can command support. Every Member of Parliament has to deal with their constituents and will be aware of the how the public will view the Government if the Government seek to abuse their power.

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    One can hold all sorts of paranoid views about any Government, but Governments have to manage the political debate in a way that commands support in the country, as we seek to do. No doubt, in their own way, previous Governments sought to do the same, however well they have managed it. No Parliament can bind another. Some of the concerns expressed by Opposition Members are not of the real world.
    Mr. Stunell: The Minister has missed the central point of the argument. Politics in this country is comparatively free of the abuses seen in some other democracies—and certainly in non-democracies—not because we have a better class of politician, but because we have a strong framework of regulation. The point of the Bill is to ensure that we have a strong framework for referendums, which are a new constitutional development. We are good because we are made good, not because we are good by intention. I hope that the Minister understands that that is how the system works. It is important to get these rules and regulations right, so that in 10 or 15 years we can still say the same thing.
    4.45 pm
    Mr. O'Brien: I am afraid that the hon. Gentleman has not quite understood the nature of the debate between the two Front-Bench spokesmen about whether everything has to be in the Bill so that it can become the basis of all future referendums. The reality is that Parliament makes laws. We do not simply have a system of regulations; we have a Parliament that is answerable to the electorate and a Government who have to respond to the electorate and are ultimately dependent on the electorate for their future.
    Mr. Richard Shepherd: Will the Minister give way?
    Mr. O'Brien: I shall give way when I have finished this point.
    Conservative Members have suggested that the Bill must somehow cover everything. That is not necessary. We have to ensure that the Bill provides a basis, a template or a foundation for future referendum campaigns so that, broadly speaking, we know how they should be conducted. The detail will be decided by the House in the normal way—by the passing of a Bill. The broad-based political debate will take place then. That is why the concerns that have been raised about clauses 96 and 97 are unfounded.
    Most of the arguments were based on the idea that a referendum campaign will last for 28 days. As I have said, 28 days is not a short time for a general election campaign. The Bill envisages that, at least in normal circumstances, there should be at least a further 14 days for preparing the various umbrella groups that might be needed. As there will probably be a fixed date, there will be months of lead-in time to any referendum.
    Referendums do not appear from nowhere. Many of them have gestations of many years. Indeed, it is arguable that we are now into a long gestation period in respect of deciding whether to join the single currency. Almost invariably, there is a long time to consider such issues.
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    The hon. Member for Aldridge-Brownhills (Mr. Shepherd) asked me to give way.
    Mr. Shepherd: I would rather make my own speech.
    Sir Michael Spicer rose—
    Mr. O'Brien: Then I shall give way to the hon. Member for West Worcestershire (Sir M. Spicer).
    Sir Michael Spicer: Will the Minister explain the Government quarantine period? Are the 28 days the period during which the Government may not interfere, get involved financially or proselytise? Does he envisage a further period, or will he say that that is a matter for a future Bill, in which case what is the point of this one?
    Mr. O'Brien: The quarantine period is covered later in the Bill, when we shall debate whether the Government could use their influence over civil servants. I must be careful what I say as I am conscious that you will rule us out of order, Mr. Martin, if we discuss a clause that we have not reached. We shall have the opportunity to debate the quarantine period, but our view is that it should be the same as it is during a general election campaign. It has never been a matter of great controversy in the past and I suspect that it need not be in future.
    We believe that clauses 96 and 97 provide a framework. They do no more than that, and issues relating to the conduct of future referendums will be dealt with at the time by legislation that will determine the detail of those referendums.
    Mr. Shepherd: The Minister is quite right to say that Governments come and go and that the British public can take a view on whether they wish to continue with an Administration. The 28 days may be appropriate for that. However, the Minister will also be perfectly well aware that referendums are an attempt at a permanent settlement, and are therefore different in character from general elections. I cite that fact that because my party—that is why I support it so vigorously—is concerned about the position of the pound.
    In the treaty that will be put to the British people—if the Government fulfil their pledge and the conditions are met—it is intended that the judgment taken by the British electorate should be irrevocable and for all time. "Irrevocable" and "irreversible" are the actual words of the treaty. In a general election, the British people can say whether they wish to continue to be governed by new Labour, but after a referendum the terms are set in concrete. The point that my Front-Bench colleagues have made is valid, and the Minister should reflect on his counter-argument that a referendum campaign is equivalent to a general election campaign, because of the nature of the referendum decision. That is why I support my right hon. and hon. Friends on the issue.
    Question put and agreed to.
    Clause 96 ordered to stand part of the Bill.

  Clause 97

    DATE OF POLL
    Amendment proposed: No. 46, page 61, line 33, leave out from beginning to 'the' in line 34 and insert—
    'The date of the poll in the case of any referendum to which this Part applies shall be fixed by the Commission, and'.—[Sir Patrick Cormack.]
    Question put, That the amendment be made:—
    The Committee divided: Ayes 176, Noes 323.

    Division No. 78]

    [4.51 pm

    AYES

    Ainsworth, Peter (E Surrey)

    Fox, Dr Liam

    Allan, Richard

    Fraser, Christopher

    Amess, David

    Gale, Roger

    Ancram, Rt Hon Michael

    Garnier, Edward

    Arbuthnot, Rt Hon James

    George, Andrew (St Ives)

    Atkinson, David (Bour'mth E)

    Gibb, Nick

    Atkinson, Peter (Hexham)

    Gill, Christopher

    Baker, Norman

    Gillan, Mrs Cheryl

    Baldry, Tony

    Gorman, Mrs Teresa

    Ballard, Jackie

    Gray, James

    Beggs, Roy

    Green, Damian

    Beith, Rt Hon A J

    Greenway, John

    Bell, Martin (Tatton)

    Grieve, Dominic

    Bercow, John

    Hague, Rt Hon William

    Beresford, Sir Paul

    Hamilton, Rt Hon Sir Archie

    Blunt, Crispin

    Hammond, Philip

    Boswell, Tim

    Hancock, Mike

    Bottomley, Rt Hon Mrs Virginia

    Hawkins, Nick

    Brady, Graham

    Hayes, John

    Brake, Tom

    Heald, Oliver

    Brand, Dr Peter

    Heath, David (Somerton & Frome)

    Brazier, Julian

    Heathcoat-Amory, Rt Hon David

    Breed, Colin

    Hogg, Rt Hon Douglas

    Brooke, Rt Hon Peter

    Horam, John

    Browning, Mrs Angela

    Howarth, Gerald (Aldershot)

    Bruce, Ian (S Dorset)

    Hunter, Andrew

    Bruce, Malcolm (Gordon)

    Jack, Rt Hon Michael

    Burns, Simon

    Jackson, Robert (Wantage)

    Burstow, Paul

    Jenkin, Bernard

    Butterfill, John

    Johnson Smith, Rt Hon Sir Geoffrey

    Cash, William

    Chapman, Sir Sydney (Chipping Barnet)

    Kennedy, Rt Hon Charles (Ross Skye & Inverness W)

    Chidgey, David

    Key, Robert

    Chope, Christopher

    King, Rt Hon Tom (Bridgwater)

    Clappison, James

    Kirkbride, Miss Julie

    Clark, Dr Michael (Rayleigh)

    Kirkwood, Archy

    Clarke, Rt Hon Kenneth (Rushcliffe)

    Lait, Mrs Jacqui

    Lansley, Andrew

    Clifton-Brown, Geoffrey

    Leigh, Edward

    Collins, Tim

    Letwin, Oliver

    Colvin, Michael

    Lewis, Dr Julian (New Forest E)

    Cormack, Sir Patrick

    Lidington, David

    Cotter, Brian

    Lilley, Rt Hon Peter

    Cran, James

    Lloyd, Rt Hon Sir Peter (Fareham)

    Curry, Rt Hon David

    Llwyd, Elfyn

    Davey, Edward (Kingston)

    Loughton, Tim

    Davies, Quentin (Grantham)

    Luff, Peter

    Davis, Rt Hon David (Haltemprice)

    Lyell, Rt Hon Sir Nicholas

    Donaldson, Jeffrey

    MacGregor, Rt Hon John

    Duncan, Alan

    McIntosh, Miss Anne

    Duncan Smith, Iain

    MacKay, Rt Hon Andrew

    Evans, Nigel

    Maclennan, Rt Hon Robert

    Faber, David

    McLoughlin, Patrick

    Fabricant, Michael

    Madel, Sir David

    Fallon, Michael

    Malins, Humfrey

    Feam, Ronnie

    Maude, Rt Hon Francis

    Flight, Howard

    May, Mrs Theresa

    Forth, Rt Hon Eric

    Moore, Michael

    Foster, Don (Bath)

    Moss, Malcolm

    970

    Nicholls, Patrick

    Syms, Robert

    Norman, Archie

    Tapsell, Sir Peter

    Oaten, Mark

    Taylor, Ian (Esher & Walton)

    O'Brien, Stephen (Eddisbury)

    Taylor, John M (Solihull)

    Öpik, Lembit

    Taylor, Matthew (Truro)

    Ottaway, Richard

    Taylor, Sir Teddy

    Page, Richard

    Townend, John

    Paice, James

    Tredinnick, David

    Paterson, Owen

    Trend, Michael

    Pickles, Eric

    Tyler, Paul

    Portillo, Rt Hon Michael

    Tyrie, Andrew

    Randall, John

    Viggers, Peter

    Redwood, Rt Hon John

    Walter, Robert

    Rendel, David

    Wardle, Charles

    Robertson, Laurence

    Waterson, Nigel

    Roe, Mrs Marion (Broxboume)

    Webb, Steve

    Ruffley, David

    Welsh, Andrew

    Russell, Bob (Colchester)

    Whitney, Sir Raymond

    St Aubyn, Nick

    Whittingdale, John

    Sanders, Adrian

    Widdecombe, Rt Hon Miss Ann

    Sayeed, Jonathan

    Wilkinson, John

    Shephard, Rt Hon Mrs Gillian

    Willetts, David

    Shepherd, Richard

    Willis, Phil

    Simpson, Keith (Mid-Norfolk)

    Wilshire, David

    Smyth, Rev Martin (Belfast S)

    Winterton, Mrs Ann (Congleton)

    Soames, Nicholas

    Winterton, Nicholas (Macclesfield)

    Spelman, Mrs Caroline

    Yeo, Tim

    Spicer, Sir Michael

    Young, Rt Hon Sir George

    Spring, Richard

    Streeter, Gary

    Tellers for the Ayes:

    Stunell, Andrew

    Mrs. Eleanor Laing and

    Swayne, Desmond

    Mr. Stephen Day.

    NOES

    Ainger, Nick

    Cann, Jamie

    Ainsworth, Robert (Cov'try NE)

    Caplin, Ivor

    Alexander, Douglas

    Casale, Roger

    Anderson, Donald (Swansea E)

    Caton, Martin

    Armstrong, Rt Hon Ms Hilary

    Cawsey, Ian

    Ashton, Joe

    Chapman, Ben (Wirral S)

    Atherton, Ms Candy

    Clapham, Michael

    Atkins, Charlotte

    Clark, Rt Hon Dr David (S Shields)

    Austin, John

    Clark, Paul (Gillingham)

    Banks, Tony

    Clarke, Charles (Norwich S)

    Barnes, Harry

    Clarke, Rt Hon Tom (Coatbridge)

    Barron, Kevin

    Clarke, Tony (Northampton S)

    Bayley, Hugh

    Coaker, Vemon

    Beard, Nigel

    Coffey, Ms Ann

    Beckett, Rt Hon Mrs Margaret

    Cohen, Harry

    Benn, Hilary (Leeds C)

    Coleman, Iain

    Benn, Rt Hon Tony (Chesterfield)

    Colman, Tony

    Bennett, Andrew F

    Connarty, Michael

    Benton, Joe

    Cook, Frank (Stockton N)

    Bermingham, Gerald

    Cooper, Yvette

    Berry, Roger

    Corbyn, Jeremy

    Best, Harold

    Corston, Jean

    Betts, Clive

    Cousins, Jim

    Blackman, Liz

    Cox, Tom

    Blears, Ms Hazel

    Cranston, Ross

    Blizzard, Bob

    Crausby, David

    Blunkett, Rt Hon David

    Cryer, Mrs Ann (Keighley)

    Boateng, Rt Hon Paul

    Cryer, John (Hornchurch)

    Borrow, David

    Cummings, John

    Bradley, Peter (The Wrekin)

    Cunningham, Jim (Cov'try S)

    Bradshaw, Ben

    Dalyell, Tam

    Brinton, Mrs Helen

    Darling, Rt Hon Alistair

    Brown, Rt Hon Nick (Newcastle E)

    Darvill, Keith

    Brown, Russell (Dumfries)

    Davey, Valerie (Bristol W)

    Browne, Desmond

    Davidson, Ian

    Buck, Ms Karen

    Davies, Rt Hon Denzil (Llanelli)

    Burden, Richard

    Davies, Geraint (Croydon C)

    Burgon, Colin

    Davis, Rt Hon Terry (B'ham Hodge H)

    Butler, Mrs Christine

    Campbell, Alan (Tynemouth)

    Dawson, Hilton

    Campbell, Mrs Anne (C'bridge)

    Dobbin, Jim

    Campbell, Ronnie (Blyth V)

    Donohoe, Brian H

    971

    Doran, Frank

    Jowell, Rt Hon Ms Tessa

    Dowd, Jim

    Kaufman, Rt Hon Gerald

    Drew, David

    Keeble, Ms Sally

    Eagle, Angela (Wallasey)

    Keen, Alan (Feltham & Heston)

    Eagle, Maria (L'pool Garston)

    Kelly, Ms Ruth

    Edwards, Huw

    Kemp, Fraser

    Ellman, Mrs Louise

    Kennedy, Jane (Wavertree)

    Ennis, Jeff

    Kidney, David

    Etherington, Bill

    Kilfoyle, Peter

    Field, Rt Hon Frank

    King, Andy (Rugby & Kenilworth)

    Fisher, Mark

    Kumar, Dr Ashok

    Ftzsimons, Loma

    Ladyman, Dr Stephen

    Flint Caroline

    Laxton, Bob

    Flynn, Paul

    Lepper, David

    Follett, Barbara

    Leslie, Christopher

    Foster, Rt Hon Derek

    Levitt, Tom

    Foster, Michael Jabez (Hastings)

    Lewis, Ivan (Bury S)

    Foster, Michael J (Worcester)

    Lewis, Terry (Worsley)

    Fyfe, Maria

    Liddell, Rt Hon Mrs Helen

    Galloway, George

    Linton, Martin

    Gapes, Mike

    Lock, David

    Gardiner, Barry

    Love, Andrew

    George, Bruce (Walsall S)

    McAvoy, Thomas

    Gerrard, Neil

    McCafferty, Ms Chris

    Gibson, Dr Ian

    McCartney, Rt Hon Ian (Makerfield)

    Gilroy, Mrs Linda

    Godman, Dr Norman A

    McDonagh, Siobhain

    Godsiff, Roger

    McDonnell, John

    Goggins, Paul

    McGuire, Mrs Anne

    Golding, Mrs Llin

    McIsaac, Shona

    Gordon, Mrs Eileen

    McKenna, Mrs Rosemary

    Griffiths, Jane (Reading E)

    Mackinlay, Andrew

    Griffiths, Nigel (Edinburgh S)

    McNamara, Kevin

    Griffiths, Win (Bridgend)

    McNulty, Tony

    Grocott, Bruce

    MacShane, Denis

    Grogan, John

    Mactaggart, Fiona

    Gunnell, John

    McWalter, Tony

    Hall, Mike (Weaver Vale)

    McWilliam, John

    Hall, Patrick (Bedford)

    Mahon, Mrs Alice

    Hamilton, Fabian (Leeds NE)

    Mallaber, Judy

    Hanson, David

    Marsden, Gordon (Blackpool S)

    Harman, Rt Hon Ms Harriet

    Marsden, Paul (Shrewsbury)

    Heal, Mrs Sylvia

    Marshall, David (Shettleston)

    Healey, John

    Marshall, Jim (Leicester S)

    Henderson, Doug (Newcastle N)

    Marshall-Andrews, Robert

    Henderson, Ivan (Harwich)

    Martlew, Eric

    Hepburn, Stephen

    Meacher, Rt Hon Michael

    Heppell, John

    Meale, Alan

    Hesford, Stephen

    Michie, Bill (Shef'ld Heeley)

    Hill, Keith

    Miller, Andrew

    Hinchliffe, David

    Mitchell, Austin

    Hodge, Ms Margaret

    Moffatt, Laura

    Hoey, Kate

    Moonie, Dr Lewis

    Hood, Jimmy

    Moran, Ms Margaret

    Hope, Phil

    Morgan, Ms Julie (Cardiff N)

    Hopkins, Kelvin

    Morley, Elliot

    Howarth, Alan (Newport E)

    Morris, Rt Hon Ms Estelle (B'ham Yardley)

    Howells, Dr Kim

    Hughes, Ms Beverley (Stretford)

    Morris, Rt Hon Sir John (Aberavon)

    Hughes, Kevin (Doncaster N)

    Humble, Mrs Joan

    Mountford, Kali

    Hutton, John

    Mudie, George

    Iddon, Dr Brian

    Murphy, Denis (Wansbeck)

    Illsley, Eric

    Murphy, Jim (Eastwood)

    Jackson, Helen (Hillsborough)

    Naysmith, Dr Doug

    Jamieson, David

    Norris, Dan

    Jenkins, Brian

    O'Brien, Bill (Normanton)

    Johnson, Alan (Hull W & Hessle)

    O'Brien, Mike (N Warks)

    Jones, Rt Hon Barry (Alyn)

    O'Hara, Eddie

    Jones, Mrs Fiona (Newark)

    O'Neill, Martin

    Jones, Helen (Warrington N)

    Organ, Mrs Diana

    Jones, Ms Jenny (Wolverh'ton SW)

    Pearson, Ian

    Pendry, Tom

    Jones, Jon Owen (Cardiff C)

    Perham, Ms Linda

    Jones, Dr Lynne (Selly Oak)

    Pickthall, Colin

    Jones, Martyn (Clwyd S)

    Pike, Peter L

    972

    Plaskitt, James

    Starkey, Dr Phyllis

    Pollard, Kerry

    Steinberg, Gerry

    Pond, Chris

    Stevenson, George

    Pope, Greg

    Stewart, David (Inverness E)

    Pound, Stephen

    Stewart, Ian (Eccles)

    Powell, Sir Raymond

    Stinchcombe, Paul

    Prentice, Ms Bridget (Lewisham E)

    Stoate, Dr Howard

    Prentice, Gordon (Pendle)

    Straw, Rt Hon Jack

    Prescott, Rt Hon John

    Sutcliffe, Gerry

    Primarolo, Dawn

    Taylor, Rt Hon Mrs Ann (Dewsbury)

    Prosser, Gwyn

    Purchase, Ken

    Taylor, Ms Dari (Stockton S)

    Quinn, Lawrie

    Taylor, David (NW Leics)

    Rammell, Bill

    Temple-Morris, Peter

    Rapson, Syd

    Thomas, Gareth (Clwyd W)

    Raynsford, Nick

    Thomas, Gareth R (Harrow W)

    Reed, Andrew (Loughborough)

    Timms, Stephen

    Reid, Rt Hon Dr John (Hamilton N)

    Tipping, Paddy

    Roche, Mrs Barbara

    Todd, Mark

    Rogers, Allan

    Touhig, Don

    Trickett, Jon

    Rooker, Rt Hon Jeff

    Truswell, Paul

    Rooney, Terry

    Turner, Dennis (Wolverh'ton SE)

    Ross, Emie (Dundee W)

    Turner, Dr Desmond (Kemptown)

    Rowlands, Ted

    Turner, Dr George (NW Norfolk)

    Roy, Frank

    Turner, Neil (Wigan)

    Ruane, Chris

    Twigg, Derek (Halton)

    Ruddock, Joan

    Tynan, Bill

    Russell, Ms Christine (Chester)

    Vis, Dr Rudi

    Ryan, Ms Joan

    Walley, Ms Joan

    Salter, Martin

    Ward, Ms Claire

    Sarwar, Mohammad

    Wareing, Robert N

    Savidge, Malcolm

    White, Brian

    Sawford, Phil

    Whitehead, Dr Alan

    Sedgemore, Brian

    Wicks, Malcolm

    Shaw, Jonathan

    Williams, Rt Hon Alan (Swansea W)

    Sheerman, Barry

    Sheldon, Rt Hon Robert

    Williams, Alan W (E Carmarthen)

    Shipley, Ms Debra

    Wills, Michael

    Simpson, Alan (Nottingham S)

    Winnick, David

    Singh, Marsha

    Winterton, Ms Rosie (Doncaster C)

    Skinner, Dennis

    Wise, Audrey

    Smith, Rt Hon Andrew (Oxford E)

    Woolas, Phil

    Smith, Angela (Basildon)

    Wright, Anthony D (Gt Yarmouth)

    Smith, Miss Geraldine (Morecambe & Lunesdale)

    Wright, Dr Tony (Cannock)

    Wyatt, Derek

    Smith, John (Glamorgan)

    Snape, Peter

    Tellers for the Noes:

    Southworth, Ms Helen

    Mr. David Clelland and

    Squire, Ms Rachel

    Mr. Graham Allen.

    Question accordingly negatived.
    Clause 97 ordered to stand part of the Bill.

  Clause 98

    PERMITTED PARTICIPANTS
    Mr. Walter: I beg to move amendment No. 47, in page 62 line 1, after "individual", insert—
    `registered in an electoral register'.
    The purpose of the Bill is to introduce into our political life a sense of financial propriety and of transparency, and to raise the standards of political life. One of the purposes underlying the Bill is to remove foreign donations from our political life.
    The clause as drafted allows an individual—without qualification—a company, or an unincorporated association to be a permitted participant in a referendum. Such an individual, as a permitted participant, could spend £500,000, out of his own pocket, in a referendum campaign, pursuing the case of one side or the other.

    973
    There are a few leaks in the Bill and that is one of them. The Government plugged it in their original draft of clause 48, which covers permissible donations to political parties. The definition of permissible donors includes
    "an individual registered in an electoral register".
    Neill's original recommendation for that provision was that it should also include
    "those who are eligible to be put on an electoral register in the United Kingdom".
    In Committee, my hon. Friend the Member for Beaconsfield (Mr. Grieve) and I tabled an amendment to try to reincorporate the original Neill recommendation, but it was not accepted because the Government wanted to keep the original wording.
    Clause 81 deals with those who could be registered third parties in an election campaign. In Committee, we found that a third party could simply be an individual. Again, my hon. Friend and I tabled an amendment to expand the provision to include the words
    "an individual registered in an electoral register".
    That is the crux of amendment No. 47.
    I imagine that the Parliamentary Secretary, Privy Council Office will respond to the debate. I do not want to make his speech for him, but I shall refer to his answer, which he gave me outside the Committee, as to why our amendment to clause 81 in Committee was—and possibly why this amendment will be—unacceptable, even though it would have plugged a worrying leak.
    The Minister's letter to me stated:
    "Turning to clause 81 you correctly inferred that it was possible for a foreign national to be a recognised third party in an election. As I indicated in Committee we have not sought to prohibit foreign nationals resident in the United Kingdom from spending their own money in their own name in order to express their opinion and by extension influence the outcome of an election."
    He then came to the crux of the matter. The letter continued:
    "To do so would be a contravention of Article 10 of the European Convention on Human Rights (which provides for the right to freedom of expression including the freedom to impart information). It is one thing to prevent a foreign national donating money to a political party or other organisation to help it to further its political objectives, but it is quite another thing to place absolute restrictions on the ability of a person to publicise his or her own views."
    The problem with that interpretation of the European convention is that the people mentioned in the clause are not those who spread their thoughts around the country in the furtherance of a political idea without supporting a specific candidate for election. The clause refers to registered permitted participants who may be on one side or other of the question on the referendum paper. They are much more closely involved in the process and in securing the outcome of the referendum. If we draw an election analogy, it is almost as though they support a specific candidate in a general, Assembly or parliamentary election.
    I will be interested to find whether the Minister will again pray in aid the European convention on human rights. I am not sure whether a permitted participant even has to be resident in the United Kingdom. He could simply stay at Claridge's or the Savoy for the duration of the campaign and use the hotel as his registered office with the Electoral Commission. He could spend £500,000 taking out advertisements in national newspapers in
    974
    favour of the yes or the no vote in a referendum. If he got a few chums to do the same thing, we could be talking about a significant amount of money from foreign sources being committed to one side or the other of a referendum campaign.
    The Bill clearly seeks to exclude foreign financing of our electoral and political processes. Therefore, I suggest that the Government should consider the amendment seriously if the Bill is not to develop an enormous leak, with parcels of up to £500,000 coming into our electoral process from foreign sources. In other circumstances, such as the financing of political parties or of individual candidates at general elections, that would be considered impermissible.
    To stick with the spirit of the Bill and the Neill report, which is to exclude foreign money from our electoral process, I commend the amendment to the Committee. It would add after the word "individual" the phrase
    "registered in an electoral register".
    That would ensure that permitted participants in our referendum campaigns are citizens of the United Kingdom, the Commonwealth or the Irish Republic and are part of the United Kingdom electoral process to the extent that they are registered in an electoral register and prevent foreigners from distorting the result of a referendum in this country.
    Sir Michael Spicer: I wish briefly to support my hon. Friend's argument. If the Bill is left untouched, it will contain the leak that he described and foreign people might become involved in our referendums. Under a wicked Secretary of State, that might mean the foreigners whom he likes best for the purposes of a campaign.
    Clause 98(1)(b)(i) refers to an individual
    "by whom a notification has been given under section 99".
    Sub-paragraph (i) is the only one referred to in the explanatory notes, but sub-paragraph (ii) adds
    "in the case of whom any other prescribed requirements are satisfied".
    The Bill then states:
    "for this purpose 'prescribed' means prescribed by regulations made by the Secretary of State after consulting the Commission."
    5.15 pm
    We have here the old problem of the Secretary of State having far too many powers and the commission far too few. That is by the by, but unless the amendment is made or assurances are given by the Government, not only will foreigners be able to take part in referendums, but the Secretary of State will be able to choose which foreigners he will allow to take part and which he will ban from taking part. The amendment seems innocent and unimportant but it could be very important. I hope that the Government can reassure us.
    The Parliamentary Secretary, Privy Council Office (Mr. Paddy Tipping): As the hon. Member for North Dorset (Mr. Walter) said, the amendment covers ground that the Standing Committee has already covered a couple of times, particularly on clause 81, when a similar amendment was discussed. He and the hon. Member for West Worcestershire (Sir M. Spicer) said that they are worried because there is a leak in the Bill. I shall try to reassure them on the point about the Secretary of State.

    975
    In a referendum campaign, participants who want to spend more than £10,000 will have to have a dialogue with, and be recognised by, the Electoral Commission. That recognition will then be prescribed by the Secretary of State, so whether he is wicked or benign, he will act on the commission's advice, and it is not a question of him prescribing his friends or enemies.
    Sir Michael Spicer: Advice will be given, but it may not be accepted, and ultimately the Bill leaves it to the Secretary of State to decide whether to take the advice.
    Mr. Tipping: The prescription is recommended by the commission and there is no intention that the Secretary of State should not take the prescription. I can see that the hon. Gentleman is unhappy with that answer, and while we are still in Committee, I shall have another look at the wording of the Bill. He makes a fair point that the Secretary of State should not be able to prescribe his friends and enemies. I am confident on the point, but I shall consider the wording.
    The hon. Member for North Dorset said that he was not going to make my speech for me, but in effect he did when he took the Committee through my letter to him of 12 February. For the record and for members of the Committee, I shall repeat what I said. I stated:
    "we have not sought to prohibit foreign nationals resident in the United Kingdom from spending their own money in their own name in order to express their opinion and by extension influence the outcome of an election"—
    or referendum. I went on to say:
    "To do so would be a contravention of Article 10 of the European Convention on Human Rights (which provides for the right to freedom of expression including the freedom to impart information)."
    The hon. Gentleman said that there is a difference in the Bill between clause 48, which we have discussed and which deals with money being given to a political party by a foreign source, and this part, on which I am advised that article 10 would prohibit the Government stopping foreign donations or involvement in a referendum campaign.
    Mr. Walter: Will the Minister give a little more clarification on that point? If article 10 of the European convention prohibits such action under the right to freedom of expression, would it not prohibit the Government limiting the expenditure to £500,000?
    Mr. Tipping: I am not exactly sure what point the hon. Gentleman is making. Under the Bill, a foreign national—or, to use his phrase, a foreigner—could participate in a referendum by incurring expenses up to any sum that he desires.
    The hon. Gentleman presses me on article 10 of the convention. We have looked at the issue again since he raised it in Committee upstairs, and I shall take him through some more of the legal advice. The very same issues were examined by the European Court of Human Rights in the Bowman judgment, which, as he knows, informs part of the Bill. The implications of the judgment are considered in paragraphs 10.51 to 10.71 of the Neill report.
    The court held that the existing £5 limit on third-party expenditure in section 75 of the Representation of the People Act 1983 was so low that it amounted to an
    976
    unjustified restriction on freedom of expression. I am advised that the court would undoubtedly take the same view of any prohibition or undue restriction on foreign nationals resident in the UK incurring controlled expenditure under part VI or referendum expenses under part VII.
    The hon. Gentleman described—I shall not argue with him—a foreign national who is resident in the UK spending large sums of money in the referendum campaign. That clearly is a possibility. How far it will translate into reality and whether, if I may use the phrase, the person would bring his mates to participate, is moot.
    Legal advice is very clear. The Government have sought to—and through clause 48 will—stop political parties receiving money from foreign sources. I think that the phrase that we used upstairs was firetight or watertight; there was some doubt about the correct phraseology. The possibility has been plugged and secured.
    I sense the hon. Gentleman's unhappiness on the matter. I feel some uncomfortableness across the Chamber, but I have presented the reality. Article 10 prohibits us accepting the amendment as drafted. I have tried to reassure him, but I suspect that I have not. Having discussed the matter under clause 41 and clause 81 and in this debate, I shall not be able to reassure him further. He may wish to return to the issue.
    Mr. Walter: The Minister has not reassured me. In fact, as the debate went on, I became more worried by the provision. It appears—he has not said anything to reassure me otherwise—that although we can limit the amount of money that an individual permitted participant who is a UK citizen spends to £500,000, a permitted participant who is not a UK citizen and not on the electoral register could spend what he liked.
    So, foreigners—I use the term advisedly, because we are talking about foreigners participating in our democratic process—may register as permitted participants and spend whatever they like on ensuring the outcome of a referendum that they, rather than United Kingdom citizens, want. Indeed, under the European convention, they may not even have to register as permitted participants.
    I suspect that I should be taking this debate elsewhere; this Bill will not overrule European Court judgments or supersede the treaty that established the European convention on human rights.
    What we have discovered is a leak. Although we can control the amount of money given to political parties, we cannot control the amount spent by third parties in the political process, or the amount spent by permitted or even non-permitted participants in a referendum campaign.
    Mr. John Hayes: Is not that ironic, given the fact that there is likely to be heightened interest from abroad in elections in this country, and certainly in referendums? Surely we should be exerting more control and having more sensible and enlightened regulation, rather than freeing up the process. That is nonsense. Are we not travelling in entirely the wrong direction?
    Mr. Walter: I am grateful to my hon. Friend, who put the case more succinctly than I had. The Bill is supposed to enable us to clean up our act with regard to foreign

    977
    donations, yet outside the registered political parties and the candidates nominated in elections, foreigners can come into the country and spend whatever they like to achieve the outcome of an election or referendum that best suits them.
    We may have a referendum in the not too distant future, although I suspect not during this Parliament, when foreigners may well have a vested interest in the outcome, and may want to make a contribution to the debate in the form of large cheques, while watching the outcome from their suite at the Savoy.
    The situation is worrying, but the objections that I have raised are outside the scope of the Bill, so I reluctantly beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Question proposed, That the clause stand part of the Bill.
    Mr. Grieve: The Committee has noted that a series of amendments dealing with the participation of European Union institutions was not moved. In view of the Minister's comments in reply to my hon. Friend the Member for North Dorset (Mr. Walter), one can understand why.
    The Minister would reply that such a fetter on the activities of any organisation was redundant, because although such an organisation could not become a permitted participant under our rules, it could continue as an independent operator to spend any amount of money to further a particular cause. I am sure that the Minister will confirm that.
    Some interesting questions arise, which it may be worth flagging up in the debate on clause 98 stand part, as they will feature later in our deliberations.
    Clause 111 places a ceiling limit on expenditure by the permitted participants in referendum campaigns. The aim is to prevent a free spending competition to determine the outcome of a referendum. We did the same upstairs in Committee in relation to elections. It is an important issue. If I understand correctly the answers that the Minister gave my hon. Friend the Member for North Dorset on amendment No. 47, it is clear that there is no mechanism whereby a ceiling can be imposed on spending money to influence a referendum result. All people need to do if they fail to become a permitted participant is to become a loose cannon participant. A foreign organisation cannot be prevented from doing that; it can spend any amount of money it likes.
    Mr. Martin, the House must face the inequalities that such a system is likely to introduce.
    Mr. Graham Allen (Vice-Chamberlain of Her Majesty's Household): Mr. Martin has gone.
    5.30 pm
    Mr. Grieve: I apologise, Sir Alan. You appeared in the Chair so magically that I was not as conscious of your arrival as I should have been.
    Let us take an example that the Minister might consider fair. Let us consider a referendum that involves a national interest and an international dimension. One side has no international support, and its members would say that they
    978
    stood for the national interest; the other side is backed by an international interest. The national participants will be fettered; they will have to be permitted participants. Those who are not will be unable to contribute. The national participants will also be fettered in the amount of money that they can spend because clause 111, which is intimately linked to clause 98, places a ceiling on their expenditure.
    There will be no such problem for the international participants. Spending will be capped for the national campaign and the permitted participants who are based in this country, while the sky will be the limit on the expenditure incurred by international participants, whose impact on a referendum campaign could be as great as that of national participants, in terms of taking out advertisements and distributing literature.
    Will the Minister tell the Committee how the clause will work in practice? His reply to my hon. Friend the Member for North Dorset calls into question the clause and the provisions that deal with referendums. We are about to create an extraordinarily unequal system. Far from putting a ceiling on expenditure and properly regulating participants, we will create a system that regulates some participants, who have the misfortune to be British nationals, and allows international participants to do as they please. I wonder whether the Government have taken that on board.
    I appreciate that we are considering a difficult subject and that the creation of an unequal system was not the intention when the Neill committee reported or when the Government first considered the measure. However, a coach and horses have been driven through the Bill's provisions on referendums. The problem is different from those we faced over elections. I would therefore be grateful for the Minister's view on whether clause 98 should remain in the Bill and on whether the Government will go back to the drawing board and return with fresh suggestions.
    Dr. Julian Lewis: I want to reinforce the comments of my hon. Friend the Member for Beaconsfield (Mr. Grieve). When we considered other provisions in Standing Committee, we were worried about the framing of clauses that might be deemed to be motivated by the circumstances of a specific, wealthy individual donor. Today, we are considering a clause which could be regarded as tailor-made to allow the European Union, as an international body, to overwhelm completely, through the money that it spends on propaganda, the strict limits on such expenditure that the Bill imposes on individual parties that may campaign on the referendum question at issue.
    What would be the point of having such strict limits on the sums that the national parties on either side of the argument would be allowed to raise and spend—for example, in a referendum on the single currency—if the European Union, as an international institution and in support of those who wanted Britain to join, could outspend the whole lot of them put together, and multiplied by an untold factor? That would not only drive a coach and horses through the restrictions, but show up the entire system as skewed.
    At Prime Minister's Question Time a couple of weeks ago, I raised the issue of public money being spent by each side in a referendum campaign—for and against—

    979
    and he went to considerable lengths to try to reassure me and the House that the system is fair. This country faces the possibility of a referendum on the single currency—which will determine what happens to our political and economic independence, perhaps irrevocably—and the parties are being told that they can spend only up to certain limits. However, the EU and its institutions could outspend the lot of them.
    I do not know why my hon. Friend the Member for Blaby (Mr. Robathan) and my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) were unable to move amendment No. 14, but I am sure that it has nothing to do with the merits of the case. If the Bill is to include meaningful provisions on referendums, the Minister must show the same consideration, fairness and concern on the Floor of the House as he manifestly showed in Committee—time and again, I am delighted to say.
    Sir Michael Spicer: My hon. Friends and I are not displaying paranoia and we feel strongly that the European Union would clearly have a strong vested interest in the outcome of a referendum on the single currency. There is no question about that, so the issue is whether it is right and proper for it to be able to become directly or indirectly involved—financially, in particular—in that referendum.
    If the clause is not amended or if the Government do not give us the assurance that they will think again, the EU could become involved in two ways. If it was a permitted participant, it would be allowed to spend up to the limit of £500,000 or whatever, which is unacceptable in itself, or it could stay out and, as it would not be a permitted participant, the restrictions in the Bill would not apply. That is particularly worrying because under these arrangements "prescribed" means
    "prescribed by regulations made by the Secretary of State after consulting";
    and the Minister has said that consulting means no more than that. The Secretary of State would not have to take the advice he was given and ultimately would determine who was and was not a permitted participant. He could decide not to allow the EU to be a permitted participant and, as my hon. Friend the Member for Beaconsfield (Mr. Grieve) said, it would be allowed an unlimited run of expenditure and involvement in the campaign from the sidelines.
    I am grateful to the Minister for saying that he will consider prescription and how it works—he was extremely helpful—and I hope that in this context, as in others, he will give the commission greater independence vis-a-vis the Secretary of State. However, that is a separate issue.
    I hope that the Minister will consider this point. Whatever side of the argument one is on, it clearly would be wrong for a body outside this country with a direct interest in the result to be allowed for one reason or another—there are at least two opposite reasons—to be a participant and deeply involved in a referendum under the terms of the clause.
    I hope that the Minister, in the spirit in which he responded earlier on this matter, will agree to consider this issue carefully; specifically, the question of not allowing the European Union to become involved directly or indirectly through companies or unincorporated associations, or by giving money on the side to permitted
    980
    participants. That could completely distort a future referendum campaign—or referendum struggle—and it would be in the interests of democracy to consider this matter carefully.
    Mr. Hayes: I want to refer particularly to the comment of my hon. Friend the Member for West Worcestershire (Sir M. Spicer) about the possible involvement of commercial organisations. Some multinational companies will have a vested commercial interest in the outcome of such a referendum campaign, and would have a great deal of money to commit to a campaign in their self-interest. I am particularly concerned that we are loosening the regulation in that respect, whereas we should be tightening it.
    This provision is expressly against the will of the Neill committee. All hon. Members who value democratic fairness and political decency will be intimately familiar with pages 160 to 170 of the Neill report. When Neill studied this issue, he referred to the 1975 referendum campaign, when we voted to stay in the European Union. The report explicitly states that the Britain in Europe campaign
    "vastly outspent the National Referendum Campaign, by a factor of one to 20 … There is also the danger, if there is lavish spending on one or more sides, that the impression will be given that the Yes and No campaigns are trying to 'buy' people's votes."
    Buying people's votes is one thing, but the buying of people's votes by organisations which are outside this country, which do not necessarily have this country's national interests at heart and which may, in addition, have a commercial, financial or pecuniary interest in the outcome of any such campaign is entirely undesirable. It is certainly not in the spirit of the Neill report or in the best interests of good democratic practice in this country.
    I am surprised that the clause does not address the matters considered by Neill. I am also surprised that the Government want to be associated with a measure that will be perceived outside the House as a diminution of good, fair, democratic politics.
    Mr. Desmond Swayne: It would be perverse for a Bill that is specifically aimed at excluding the possibility of foreign donations to our political process and which seeks properly to limit the permitted participants' ability to spend, at the same time to leave international participants entirely unrestrained in the amounts that they can spend. Those concerns are not academic: they are very real, given the prospect of a referendum early in the next Parliament. It certainly has not escaped my notice that the European Union is taking a more elaborate interest than hitherto—
    Mr. Tipping: I just want to clarify the point that the hon. Gentleman made. He said that individuals could give unlimited amounts of money. His hon. Friend the Member for Beaconsfield (Mr. Grieve) referred to that as well. I remind him that clause 110(2) makes it a criminal offence for anyone to give more than £10,000.
    Mr. Swayne: I am aware of that provision in clause 110. I was more concerned about institutions, such as the European Union, than about individuals.
    As we have now raised the prospect of a referendum, it is clear that the European Union is taking more than a close interest in the politics of participant member states.

    981
    5.45 pm
    Let me say in passing that I support the British Government's view of recent events in Austria, and therefore, by implication, the view taken by most other European member states. I am, however, deeply alarmed by the view of those events taken by the European Commission. Members of the Commission are, of course, civil servants. My fear is that a similar interest will be taken in any referendum that we might hold in regard to our own national interests, especially a referendum on whether we should join the single European currency. The issue will undoubtedly be of great interest to the European Union, and I very much fear that it will be able to spend without limit in attempting to influence us.
    Dr. Julian Lewis: Spend our money, that is.
    Mr. Swayne: Indeed; but there will be those who spend their own money as well. My hon. Friend the Member for South Holland and The Deepings (Mr. Hayes) mentioned companies, and we already know that companies—foreign companies—have been lining up on both sides of the argument, threatening us with the withdrawal of investment should we decide not to go into the currency, or with the prospect of uncompetitiveness should we decide to do so. Companies on either side of the argument might seek to put their money where their mouth is, and I do not believe that that would be healthy for the British democratic process—although I think that the totality of expenditure would be swamped by the European Union's potential to spend in this respect.
    Let me take the Committee a step further, to the prospect of another referendum. It would be entirely legitimate for us to hold a referendum on the question of continued membership of the European Union; it is, after all, some 25 years since we held such a referendum. I am sure that you, Sir Alan, like me, would not espouse some form of African democracy: "one man, one vote … once", which would not allow future generations to decide the matter. Clearly, such a referendum would be hugely significant to the European Union itself.
    What assurance can the Minister give that the Government have thought the issue through? What limit can be placed on the European Union's ability to spend what is, as my hon. Friend the Member for New Forest, East (Dr. Lewis) pointed out, our money, to influence our decisions on our national interest?
    These are hugely important issues, and I hope that the Minister will be able to reassure me.
    Mr. Martin Bell: I shall be brief.
    I am aware that the Parliamentary Secretary, Privy Council Office, thinks that most Independents are Conservatives in disguise. This is rather embarrassing for me, because there has been a great deal of merit in what Conservatives have said today.
    Mr. Tipping: I said that, in my experience, most Independents were Conservatives in disguise. There are, of course, exceptions.
    Mr. Bell: We hope to enlarge the Minister's experience shortly.
    The Bill and the Neill report are about purging the British political system of the corruption of money, and we should not need too much persuasion of the need for
    982
    that. I envisage a difficult situation if a referendum is held binding the British people more or less in perpetuity. There appears to be an imbalance, in that money is flooding in from one side rather than the other.
    Mr. Swayne: Is the hon. Gentleman aware of the bitter taste left in many mouths by the hugely disproportionate spending on the occasion of the 1975 referendum, when the "yes" campaign was able to outspend the "no" campaign by a factor of 20 to one?
    Mr. Bell: I am well aware of it. That is precisely the kind of imbalance that the Bill tries to address. No referendum will work, or will be seen to be democratic, unless the losing side accepts its validity: that is the test of a referendum, and we must ensure that the Bill meets it.
    Mr. Tipping: These points are extremely important. The first substantive point to make is that, in any referendum campaign, it will not be possible to ensure that both sides are equally balanced. There are discussions about that. Many hon. Members on both sides of the Chamber feel that, in fairness—
    Dr. Julian Lewis rose
    Mr. Tipping: Let me make just a bit of progress.
    Both sides should be evenly balanced, but we all live in the political world and we know that that will not be possible. Different organisations, individuals and participants will want to contribute, and one side of the argument will try to develop resources. One of the Bill's provisions is to ensure that there is a second side—that the commission has resources to enable an opposition campaign to go forward—but we must recognise that individuals, parties and companies can collectively work together, spend and campaign. Given that, one of the Bill's important provisions is to place a cap on what parties, companies or individuals can spend. As the Neill committee put it in relation to the general election, it is a way to reduce the arms race.
    Dr. Lewis: I am glad that the Minister has given way at this point. What is the point of placing a cap on what the parties on either side of a referendum campaign can spend if the institutions of an international organisation such as the European Union do not face such a limitation?
    Mr. Tipping: I know that the hon. Gentleman gets excited by Europe—he tried to intervene after three or four sentences. I shall come to the point about the European Union, which is extremely important and excites the hon. Gentleman and some of his colleagues. We need to be aware of it, to look at it, to act rationally on it and to engage in some grown-up politics; we should not engage in yah-boo politics about the EU and the euro. The more mature consideration and debate on such matters are, the better. He and the hon. Member for West Worcestershire (Sir M. Spicer), who takes important, long-standing and strong views on European matters, are rightly making those points.
    Mr. Grieve rose
    Mr. Tipping: I give way before I get to the EU.
    Mr. Grieve: Perhaps I can spare the Minister from necessarily focusing on the EU, which is but one example.

    983
    There is a need for clarification and I should be grateful if the Minister could provide it as soon as possible. Clause 110 says that those who are not permitted participants will commit a criminal offence if they spend more than £10,000 to influence the campaign. Does that apply to foreign nationals or institutions, or would that breach the European convention on human rights?
    Mr. Tipping: It applies. I made the point—I will do so more substantively in a moment—to the hon. Member for New Forest, West (Mr. Swayne). I reminded him that there is a criminal offence. Anyone who spends more than £10,000 and is not a permitted participant is committing a criminal offence.
    Mr. Walter: The Minister will forgive me for intervening. He has used article 10 of the European convention on human rights. I have managed to get a copy from the Vote Office, and it says:
    "Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers."
    Does that not mean that the Bill contravenes the convention?
    Mr. Tipping: No. It reinforces my points to the hon. Gentleman during an earlier debate. He has quoted article 10, which reinforces all my points. I know that he did not like those points, but it reinforces them. Article 10 guarantees rights and freedoms, but, as I have said, the £10,000 restriction applies to individuals.
    I shall not address amendments Nos. 14, 15 and 16, which were not discussed, but come to the issue of the EU. Hon. Members ask fairly: how we can ensure that the EU does not become involved? I say at the outset that this is an enabling Bill. It is not designed to set up a referendum on the EU. We are not at that stage yet, and we may not reach that stage for some time—if some hon. Members have their way, we shall never reach that stage. It is an enabling Bill that sets out the context—my hon. Friend the Under-Secretary of State for the Home Department called it a template. The Bill is not about a campaign for the euro.
    Hon. Members say to me, "How can we ensure that the EU does not become involved in these matters?" The EU can, of course, run information campaigns. Indeed, it does run such campaigns. Some of us may not like some of what it says in those campaigns, but it has the right to say it.
    When, or if, we get to a referendum campaign on the EU, the best way to be sure that the EU will not become involved is to look at the Bill and to be aware that it is a matter for the British people, the British Parliament and British parties. It is inconceivable that the European Commission, the European Parliament or others will become involved in a campaign because they know that it would be counterproductive.
    Mr. Andrew Miller: My hon. Friend is coming to the point that I want to raise. If one followed the logic of Opposition Members' claims that the Commission is an unpopular institution and their figures on the popularity of the euro, it would play right
    984
    into their hands if the Commission were to spend a penny piece on supporting such a change, so it is a complete and utter red herring.
    Dr. Julian Lewis rose—
    Mr. Tipping: The hon. Gentleman will have to intervene on me, rather than on my hon. Friend. I can see that he is getting excited again. We are a long way from the referendum campaign, although I am looking forward to it. I can see that he is looking forward to it, too; he can hardly contain himself. My hon. Friend, however, is right.
    Dr. Lewis: I assure the Minister that he has not seen me even begin to get excited. Does he expect us to think that he is naive enough to believe that the European Commission would directly stand up and dish out the currency, whichever particular brand it was using, and intervene in the campaign openly? Of course it would not. It would operate by channelling funds through all sorts of intermediate institutions and pressure groups. Bodies would spring up like mushrooms, apparently independent but covertly funded by our money to defeat the interest of our people.
    Mr. Tipping: I should hate to see the hon. Gentleman consumed by passion. We see him getting excited tonight, but, when he becomes passionate, that will be a sight for someone—perhaps behind closed doors. I shall develop my hon. Friend's point. Rather than being naive, we are fully aware of the political reality, which is that if the EU itself, or through its agents, companies or some shadowy organisation, became involved, that would work against it. It is absolutely clear that referendums, whatever the questions concerned, are about the British people deciding. That is the purpose of a referendum, and that is why we are going down this route. I know that that reassures neither the hon. Gentleman nor some of his hon. Friends.
    6 pm
    Mr. Hayes: I have no desire to see either the Minister or my hon. Friend the Member for New Forest, East (Dr. Lewis) excited. The Minister underestimates the Committee's intelligence when he says that the Bill is only enabling legislation and not specific provision for a specific referendum. Surely he will acknowledge that the framework and tone that are established in the Bill, and the messages and signals that are broadcast by it, are vital. The Bill is an opportunity to get the matter right, even if there will be subsequent legislation on a specific situation.
    Mr. Tipping: The hon. Gentleman has not followed the debate as closely as some other Opposition Members have. I repeat that the Bill is enabling legislation. It is a new and important step forward and a building block. Before any future referendum, a new Bill will have to be considered by the House. Later in our proceedings on this Bill, we shall discuss the design of some of those Bills. Nevertheless, it is absolutely clear that the wording of any question and, in many cases, the election date, will have to be decided by the House.
    Sir Michael Spicer: The Government keep hiding behind the idea that this is only an enabling Bill and that we must wait for the great Bill, whenever it arrives. However,

    985
    this Bill is very specific on many matters, such as the number of days to polling day and the permitted sums. As the Bill is littered with such detail, it is not good enough to pursue the point that it is only enabling legislation.
    If the Minister thinks that it would be wrong for European institutions to become involved in a British referendum, and given the amount of detail that the Bill already contains, what does he have against incorporating in the Bill safeguards that would seem to deal with his own concerns about the involvement of institutions from abroad?
    Mr. Tipping: As I said—and as my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) said—I just cannot see that happening. If there were a referendum on, say, the euro, I do not believe that the European Union would become involved. It would be counterproductive for it to do so. As I keep telling the Committee, such a matter is for the British people to decide, and they would not take kindly to other organisations becoming involved in it.
    The hon. Member for West Worcestershire says that we should make provision in the Bill to address that issue—there is an issue, and I do not dismiss it lightly—but the correct time to address it is when, if ever, we have to debate the design of a European single currency Bill, not now. I appreciate that hon. Members want to demonstrate their European credentials and Euro-scepticism and to express their dissatisfaction with Europe, but that future debate is the time for them to do that. This Bill is quite simply enabling legislation.
    The hon. Member for South Holland and Deeping—
    Mr. Hayes: The Deepings. My constituency is right next door to the Minister's.
    Mr. Tipping: I know where the constituency is located—I often campaign down that way—and it is not quite next door to my constituency. Nevertheless, the hon. Gentleman asked about the position on companies. There will be a cap—£500,000 on the sums that companies can contribute.
    As I said at the beginning of a this debate, partly in reply to the hon. Member for Tatton (Mr. Bell), those of us who are in politics realise the excitement and passions that certain issues can arouse. We also certainly know that, in any referendum campaign, the two opposing sides will not be equally armed. The sides will look to different sources for money, and anyone who thinks that, in any issue, both sides could raise equal sums is living in cloud cuckoo land.
    The Bill tackles that situation by placing caps on the sums that individuals, companies and parties can spend. The Bill will not create a level playing field, but it will at least keep spending under control.
    Mr. Shepherd: The Irish Republic examined that problem, and I should imagine that the Home Office has spent much time examining that experience. The Irish Republic seeks equality of funding in national referendum campaigns, and its policy has had an impact on the outturn of a series of referendums on the European Union. In the most recent referendum, the policy achieved a much more equal balance in the vote turned out.
    986
    The point of my intervention is to support my hon. Friend the Member for West Worcestershire (Sir M. Spicer). This is a framework Bill which is trying to create the ground rules to ensure fairness. It seems not unreasonable, therefore, to expect that some of the contentions that my hon. Friend mentioned should be dealt with in the framework. Specific matters could be identified and dealt with in subsequent legislation introduced by the Government—who, after all, are the initiating force in a referendum. They initiate a referendum only because they themselves have a view on the matter. The rules—in the framework Bill—should work to ensure fairness.
    Mr. Tipping: The hon. Gentleman makes a fair point. I thought that he was going to try to persuade me that different parties should have the same sums to spend on referendums.
    Mr. Shepherd: They should have an equal sum.
    Mr. Tipping: I have extracted the hon. Gentleman's view. However, I do not think that that objective is practically achievable. He asked whether European and international comparisons have been made: they have been made. He also pursued me on whether the Bill is template and framework legislation: it is.
    One important aspect of the Bill—we shall have an opportunity to discuss it in a later debate—is the provision, in clauses 4 and 5, for the Electoral Commission to review both the legislation's operation and how referendums are working.
    It has been acknowledged on both sides of the Committee that we are addressing new and difficult issues. Nevertheless—to reply to the point made by the hon. Member for West Worcestershire—the way to tackle those issues is to acknowledge that this is a template and framework Bill and to consider it in the light of experience. The Electoral Commission, for example, will have to respond after each election by producing a report. That issue is being addressed.
    The time for discussion of Europe and funding from Europe, a subject that is clearly taxing hon. Members, is when—at some point in the future, or never, if some people have their way—the House considers a referendum Bill on that matter.
    I hope that the Committee will agree to clause 98 standing part of the Bill.
    Mr. Grieve: I hope that the Minister will accept, from the long time that we have had discussing the Bill upstairs in Committee, that the Opposition have tried to take a non-partisan and constructive approach to the legislation. However, in his last remarks, the Minister sounded like Mr. Micawber, waiting for something to turn up in the future, rather than looking for something to solve his problem. As my hon. Friends the Members for West Worcestershire (Sir M. Spicer) and for Aldridge-Brownhills (Mr. Shepherd) said, this is supposed to be a framework Bill. Yet, everything that I have heard in the debate suggests that the framework is flawed.
    To clear up some anomalies—the Minister will correct me if I have it wrong—foreign organisations will be able to register under clause 98, and there is nothing to stop them from doing so. If they do so as individual organisations and companies, they will be able to spend

    987
    £500,000 in participating in a referendum campaign. That is notwithstanding the fact that Lord Neill, at paragraph 12.51 of his report, says that he considers that the arguments on the funding of political parties apply equally
    "to the funding of referendum campaigns, especially since these are likely to be concerned with major constitutional questions. We believe, therefore, that the same rules about 'permissible sources' that we recommend should apply to political parties and others in connection with foreign donations should also apply to individuals and organisations, including political parties, taking part in referendum campaigns."
    The Minister has had to accept that that cannot happen. The Bill goes further, because even foreign individuals and organisations who do not register as permitted organisations can spend £10,000 each. If an external organisation were divided into its constituent members, it could spend hundreds of thousands, if not millions of pounds in a referendum campaign. I am not concerned specifically about a referendum on the single currency. That could apply to any referendum.
    The Minister knows that we have approved of other parts of the Bill, but the whole of this part on referendums is badly flawed.
    Mr. Shepherd: The Minister said that the commission could review the arrangements, but that would be a post mortem. The critical events would already have happened. The commission would have no status in what could be an enormously important referendum.
    Mr. Grieve: I entirely agree with my hon. Friend. We cannot support the clause and we intend to divide the House on it. It is the benchmark of a series of clauses that set up an edifice that is supposed to reflect Lord Neill's recommendations. Due to circumstances outside the Government's control—European law and the European convention on human rights—it is proving impossible to do that. This whole part of the Bill needs to be taken back to the drawing board. We should seriously consider dispensing with it until we have got it right.
    Question put, That the clause stand part of the Bill:—
    The Committee divided: Ayes 334, Noes 146.

    Division No. 79]

    [6.12 pm

    AYES

    Ainsworth, Robert (Cov'try NE)

    Betts, Clive

    Alexander, Douglas

    Blackman, Liz

    Allan, Richard

    Blears, Ms Hazel

    Allen, Graham

    Blizzard, Bob

    Armstrong, Rt Hon Ms Hilary

    Blunkett, Rt Hon David

    Ashton, Joe

    Borrow, David

    Atherton, Ms Candy

    Bradshaw, Ben

    Atkins, Charlotte

    Brake, Tom

    Austin, John

    Brand, Dr Peter

    Banks, Tony

    Breed, Colin

    Barnes, Harry

    Brinton, Mrs Helen

    Barron, Kevin

    Brown, Rt Hon Nick (Newcastle E)

    Bayley, Hugh

    Brown, Russell (Dumfries)

    Beard, Nigel

    Browne, Desmond

    Beckett, Rt Hon Mrs Margaret

    Bruce, Malcolm (Gordon)

    Beith, Rt Hon A J

    Buck, Ms Karen

    Benn, Hilary (Leeds C)

    Burden, Richard

    Benn, Rt Hon Tony (Chesterfield)

    Burgon, Colin

    Bennett, Andrew F

    Butler, Mrs Christine

    Benton, Joe

    Byers, Rt Hon Stephen

    Berry, Roger

    Campbell, Alan (Tynemouth)

    Best, Harold

    Campbell, Mrs Anne (C'bridge)

    988

    Campbell, Rt Hon Menzies (NE Fife)

    Gerrard, Neil

    Gibson, Dr Ian

    Campbell, Ronnie (Blyth V)

    Gilroy, Mrs Linda

    Caplin, Ivor

    Godman, Dr Norman A

    Casale, Roger

    Godsiff, Roger

    Cawsey, Ian

    Goggins, Paul

    Chapman, Ben (Wirral S)

    Golding, Mrs Llin

    Chidgey, David

    Griffiths, Jane (Reading E)

    Clapham, Michael

    Griffiths, Nigel (Edinburgh S)

    Clark, Rt Hon Dr David (S Shields)

    Grocott, Bruce

    Clark, Paul (Gillingham)

    Grogan, John

    Clarke, Charles (Norwich S)

    Gunnell, John

    Clarke, Rt Hon Tom (Coatbridge)

    Hain, Peter

    Clarke, Tony (Northampton S)

    Hall, Patrick (Bedford)

    Clelland, David

    Hamilton, Fabian (Leeds NE)

    Coaker, Vemon

    Hancock, Mike

    Coffey, Ms Ann

    Hanson, David

    Cohen, Harry

    Harman, Rt Hon Ms Harriet

    Coleman, Iain

    Harvey, Nick

    Colman, Tony

    Heal, Mrs Sylvia

    Connarty, Michael

    Healey, John

    Cook, Frank (Stockton N)

    Heath, David (Somerton & Frome)

    Cooper, Yvette

    Henderson, Doug (Newcastle N)

    Corbyn, Jeremy

    Henderson, Ivan (Harwich)

    Corston, Jean

    Hepburn, Stephen

    Cotter, Brian

    Heppell, John

    Cousins, Jim

    Hesford, Stephen

    Cox, Tom

    Hinchliffe, David

    Cranston, Ross

    Hodge, Ms Margaret

    Crausby, David

    Hoey, Kate

    Hood, Jimmy

    Cryer, Mrs Ann (Keighley)

    Hope, Phil

    Cryer, John (Hornchurch)

    Hopkins, Kelvin

    Cummings, John

    Howells, Dr Kim

    Cunningham, Rt Hon Dr Jack (Copeland)

    Hughes, Ms Beverley (Stretford)

    Hughes, Kevin (Doncaster N)

    Cunningham, Jim (Cov'try S)

    Hughes, Simon (Southwark N)

    Dalyell, Tam

    Humble, Mrs Joan

    Darling, Rt Hon Alistair

    Hutton, John

    Darvill, Keith

    Iddon, Dr Brian

    Davey, Edward (Kingston)

    Illsley, Eric

    Davey, Valerie (Bristol W)

    Jackson, Helen (Hillsborough)

    Davidson, Ian

    Jamieson, David

    Davies, Rt Hon Denzil (Llanelli)

    Jenkins, Brian

    Davies, Geraint (Croydon C)

    Johnson, Alan (Hull W & Hessle)

    Davis, Rt Hon Terry (B'ham Hodge H)

    Jones, Mrs Fiona (Newark)

    Jones, Helen (Warrington N)

    Dawson, Hilton

    Jones, Ms Jenny (Wolverh'ton SW)

    Dobbin, Jim

    Donohoe, Brian H

    Jowell, Rt Hon Ms Tessa

    Doran, Frank

    Keeble, Ms Sally

    Drew, David

    Kelly, Ms Ruth

    Dunwoody, Mrs Gwyneth

    Kemp, Fraser

    Eagle, Angela (Wallasey)

    Kennedy, Jane (Wavertree)

    Eagle, Maria (L'pool Garston)

    Kidney, David

    Ellman, Mrs Louise

    Kilfoyle, Peter

    Ennis, Jeff

    King, Andy (Rugby & Kenilworth)

    Etherington, Bill

    Kirkwood, Archy

    Feam, Ronnie

    Kumar, Dr Ashok

    Field, Rt Hon Frank

    Ladyman, Dr Stephen

    Fisher, Mark

    Laxton, Bob

    Fitzsimons, Loma

    Lepper, David

    Flint, Caroline

    Leslie, Christopher

    Flynn, Paul

    Levitt, Tom

    Follett, Barbara

    Lewis, Ivan (Bury S)

    Foster, Rt Hon Derek

    Lewis, Terry (Worsley)

    Foster, Don (Bath)

    Liddell, Rt Hon Mrs Helen

    Foster, Michael Jabez (Hastings)

    Linton, Martin

    Foster, Michael J (Worcester)

    Livsey, Richard

    Foulkes, George

    Llwyd, Elfyn

    Fyfe, Maria

    Love, Andrew

    Galloway, George

    McAvoy, Thomas

    Gapes, Mike

    McCafferty, Ms Chris

    Gardiner, Barry

    McCartney, Rt Hon Ian (Makerfield)

    George, Andrew (St Ives)

    George, Bruce (Walsall S)

    Macdonald, Calum

    989

    McDonnell, John

    Ross, Emie (Dundee W)

    McGuire, Mrs Anne

    Roy, Frank

    McIsaac, Shona

    Ruddock, Joan

    McKenna, Mrs Rosemary

    Russell, Bob (Colchester)

    Mackinlay, Andrew

    Russell, Ms Christine (Chester)

    Maclennan, Rt Hon Robert

    Ryan, Ms Joan

    McNamara, Kevin

    Salter, Martin

    McNulty, Tony

    Sanders, Adrian

    MacShane, Denis

    Sarwar, Mohammad

    McWalter, Tony

    Savidge, Malcolm

    McWilliam, John

    Sawford, Phil

    Mahon, Mrs Alice

    Sedgemore, Brian

    Mallaber, Judy

    Shaw, Jonathan

    Marsden, Gordon (Blackpool S)

    Sheerman, Barry

    Marsden, Paul (Shrewsbury)

    Sheldon, Rt Hon Robert

    Marshall, David (Shettleston)

    Shipley, Ms Debra

    Marshall, Jim (Leicester S)

    Simpson, Alan (Nottingham S)

    Marshall-Andrews, Robert

    Singh, Marsha

    Martlew, Eric

    Skinner, Dennis

    Meacher, Rt Hon Michael

    Smith, Rt Hon Andrew (Oxford E)

    Meale, Alan

    Smith, Angela (Basildon)

    Merron, Gillian

    Smith, Miss Geraldine (Morecambe & Lunesdale)

    Michie, Bill (Shef'ld Heeley)

    Miller, Andrew

    Snape, Peter

    Mitchell, Austin

    Southworth, Ms Helen

    Moffatt, Laura

    Squire, Ms Rachel

    Moonie, Dr Lewis

    Starkey, Dr Phyllis

    Moore, Michael

    Steinberg, Gerry

    Moran, Ms Margaret

    Stevenson, George

    Morley, Elliot

    Stewart, David (Inverness E)

    Morris, Rt Hon Ms Estelle (B'ham Yardley)

    Stewart, Ian (Eccles)

    Stinchcombe, Paul

    Morris, Rt Hon Sir John (Aberavon)

    Stoate, Dr Howard

    Stuart, Ms Gisela

    Mountford, Kali

    Stunell, Andrew

    Mowlam, Rt Hon Marjorie

    Sutcliffe, Gerry

    Mudie, George

    Taylor, Ms Dari (Stockton S)

    Mullin, Chris

    Taylor, David (NW Leics)

    Murphy, Denis (Wansbeck)

    Taylor, Matthew (Truro)

    Murphy, Jim (Eastwood)

    Temple-Morris, Peter

    Murphy, Rt Hon Paul (Torfaen)

    Thomas, Simon (Ceredigion)

    Naysmith, Dr Doug

    Timms, Stephen

    Norris, Dan

    Tipping, Paddy

    Oaten, Mark

    Todd, Mark

    O'Brien, Bill (Normanton)

    Tonge, Dr Jenny

    O'Brien, Mike (N Warks)

    Trickett, Jon

    O'Hara, Eddie

    Truswell, Paul

    O'Neill, Martin

    Turner, Dennis (Wolverh'ton SE)

    Öpik, Lembit

    Turner, Dr Desmond (Kemptown)

    Organ, Mrs Diana

    Turner, Dr George (NW Norfolk)

    Pendry, Tom

    Turner, Neil (Wigan)

    Perham, Ms Linda

    Twigg, Derek (Halton)

    Pickthall, Colin

    Tyler, Paul

    Pike, Peter L

    Tynan, Bill

    Plaskitt, James

    Vis, Dr Rudi

    Pollard, Kerry

    Walley, Ms Joan

    Pond, Chris

    Ward, Ms Claire

    Pound, Stephen

    Wareing, Robert N

    Powell, Sir Raymond

    Webb, Steve

    Prentice, Ms Bridget (Lewisham E)

    Welsh, Andrew

    Prentice, Gordon (Pendle)

    White, Brian

    Prescott, Rt Hon John

    Whitehead, Dr Alan

    Primarolo, Dawn

    Wicks, Malcolm

    Prosser, Gwyn

    Williams, Rt Hon Alan (Swansea W)

    Purchase, Ken

    Quinn, Lawrie

    Willis, Phil

    Rammell, Bill

    Winnick, David

    Rapson, Syd

    Winterton, Ms Rosie (Doncaster C)

    Raynsford, Nick

    Wise, Audrey

    Reed, Andrew (Loughborough)

    Wright, Anthony D (Gt Yarmouth)

    Reid, Rt Hon Dr John (Hamilton N)

    Wright, Dr Tony (Cannock)

    Rendel, David

    Wyatt, Derek

    Roche, Mrs Barbara

    Rogers, Allan

    Tellers for the Ayes:

    Rooker, Rt Hon Jeff

    Mr. Mike Hall and

    Rooney, Terry

    Mr. Greg Pope.

    990

    NOES

    Ainsworth, Peter (E Surrey)

    Jackson, Robert (Wantage)

    Amess, David

    Jenkin, Bernard

    Ancram, Rt Hon Michael

    Johnson Smith, Rt Hon Sir Geoffrey

    Arbuthnot, Rt Hon James

    Atkinson, David (Bour'mth E)

    Key, Robert

    Atkinson, Peter (Hexham)

    King, Rt Hon Tom (Bridgwater)

    Baldry, Tony

    Kirkbride, Miss Julie

    Beggs, Roy

    Lait, Mrs Jacqui

    Bell, Martin (Tatton)

    Lansley, Andrew

    Bercow, John

    Leigh, Edward

    Beresford, Sir Paul

    Letwin, Oliver

    Blunt, Crispin

    Lewis, Dr Julian (New Forest E)

    Boswell, Tim

    Lidington, David

    Bottomley, Peter (Worthing W)

    Lilley, Rt Hon Peter

    Bottomley, Rt Hon Mrs Virginia

    Lloyd, Rt Hon Sir Peter (Fareham)

    Brady, Graham

    Loughton, Tim

    Brazier Julian

    Lyell, Rt Hon Sir Nicholas

    Brooke, Rt Hon Peter

    MacGregor, Rt Hon John

    Browning, Mrs Angela

    McIntosh, Miss Anne

    Bruce, Ian (S Dorset)

    MacKay, Rt Hon Andrew

    Burns, Simon

    Maclean, Rt Hon David

    Butterfill, John

    McLoughlin, Patrick

    Cash, William

    Madel, Sir David

    Chapman, Sir Sydney (Chipping Barnet)

    Malins, Humfrey

    Maude, Rt Hon Francis

    Chope, Christopher

    Mawhinney, Rt Hon Sir Brian

    Clappison, James

    May, Mrs Theresa

    Clark, Dr Michael (Rayleigh)

    Nicholls, Patrick

    Clarke, Rt Hon Kenneth (Rushcliffe)

    Norman, Archie

    O'Brien, Stephen (Eddisbury)

    Clifton-Brown, Geoffrey

    Ottaway, Richard

    Collins, Tim

    Page, Richard

    Colvin, Michael

    Paice, James

    Cormack, Sir Patrick

    Paterson, Owen

    Cran, James

    Pickles, Eric

    Curry, Rt Hon David

    Portillo, Rt Hon Michael

    Davies, Quentin (Grantham)

    Randall, John

    Davis, Rt Hon David (Haltemprice)

    Redwood, Rt Hon John

    Day, Stephen

    Robertson, Laurence

    Donaldson, Jeffrey

    Roe, Mrs Marion (Broxboume)

    Ross, William (E Lond'y)

    Duncan, Alan

    Ruffley, David

    Duncan, Smith, Iain

    St Aubyn, Nick

    Evans, Nigel

    Sayeed, Jonathan

    Faber, David

    Shepherd, Richard

    Fabricant, Michael

    Simpson, Keith (Mid-Norfolk)

    Fallon, Michael

    Smyth, Rev Martin (Belfast S)

    Flight, Howard

    Soames, Nicholas

    Forth, Rt Hon Eric

    Spelman, Mrs Caroline

    Fox, Dr Liam

    Spicer, Sir Michael

    Fraser, Christopher

    Spring, Richard

    Gale, Roger

    Steen, Anthony

    Garnier, Edward

    Streeter, Gary

    Gibb, Nick

    Swayne, Desmond

    Gill, Christopher

    Syms, Robert

    Gillan, Mrs Cheryl

    Tapsell, Sir Peter

    Gorman, Mrs Teresa

    Taylor, Ian (Esher & Walton)

    Gray, James

    Taylor, Rt Hon John D (Strangford)

    Green, Damian

    Taylor, John M (Solihull)

    Greenway, John

    Taylor, Sir Teddy

    Grieve, Dominic

    Townend, John

    Hamilton, Rt Hon Sir Archie

    Tredinnick, David

    Hammond, Philip

    Trend, Michael

    Hawkins, Nick

    Tyrie, Andrew

    Hayes, John

    Viggers, Peter

    Heald, Oliver

    Walter, Robert

    Heathcoat-Amory, Rt Hon David

    Wardle, Charles

    Hogg, Rt Hon Douglas

    Waterson, Nigel

    Horam, John

    Whitney, Sir Raymond

    Howarth, Gerald (Aldershot)

    Whittingdale, John

    Hunter, Andrew

    Widdecombe, Rt Hon Miss Ann

    Jack, Rt Hon Michael

    Wilkinson, John

    991

    Willetts, David

    Young, Rt Hon Sir George

    Wilshire, David

    Winterton, Mrs Ann (Congleton)

    Tellers for the Noes:

    Winerton, Nicholas (Macclesfield)

    Mrs. Eleanor Laing and

    Yeo, Tim

    Mr. Peter Luff.

    Question accordingly agreed to.
    Clause 98 ordered to stand part of the Bill.

  Clause 99

    DECLARATIONS AND NOTIFICATIONS FOR PURPOSES OF SECTION 98
    Question proposed, That the clause stand part of the Bill.
    Mr. Walter: I do not wish to prolong the debate on organisations that are designated as permitted participants in a referendum campaign. Clause 99 deals with declarations and notifications for the purposes of clause 98. I wish to alert the Committee to what I see as more evidence of the problems in the Bill with regard to those who might well decide that they are or want to be permitted participants, but are not normally regarded as citizens of the United Kingdom or are not normally resident here.
    Clause 99(4)(a) states:
    "A notification under this section must—
    (a) if given by an individual, state—
    (i) his full name, and
    (ii) his home address in the United Kingdom".
    I imagine that, for the purposes of his home address in the United Kingdom, a hotel or a friend's address would be perfectly acceptable so long as he signed the notification.
    In respect of a company, the name and the address of its registered office is required. To some extent, that brings companies within the scope of the Bill. None the less, there are no specific provisions, despite those in respect of permitted donors to political parties, that relate to a company
    "registered under the Companies Act 1985 or the Companies (Northern Ireland) Order 1986, and … incorporated within the European Union, which carries on business in the United Kingdom."
    There are no such provisions in clause 99 in respect of the declarations and notifications that have to be made.
    If a notification is
    "given by an unincorporated association",
    it must state

    "(i) the name of the association,

    (ii) the address of an office of the association in the United Kingdom".

    So one might well receive a notification from the good burghers of Calais who wished to participate in a referendum campaign and had a branch office in Dover. That would be sufficient for them to be permitted participants. If the limits in the Bill applied to them, as foreigners, they would be entitled to spend £500,000.
    In the previous couple of debates on amendments to clause 98 and clause stand part, we have emphasised the fact that the Bill allows for an enormous leak which will permit foreign individuals, companies, unincorporated associations and other bodies to participate in our
    992
    democratic procedures without necessarily being United Kingdom nationals. It is a worrying provision and it is highlighted yet again in clause 99.
    Question put and agreed to.
    Clause 99 ordered to stand part of the Bill.
    Clauses 100 and 101 ordered to stand part of the Bill.

  Clause 102

    APPLICATIONS FOR DESIGNATION UNDER SECTION 101
    Mr. Stunell: I beg to move amendment No. 13, in page 64, line 28, at end insert—
    '(5A) In making any designation of a permitted participant under section 101(2) or (4) the Commission shall have regard to

    (i) the separate levels of support for each of the permitted participants which have given notice under section 99(1)(b) or section 99(3)(b) that they propose to campaign for the same outcome, and

    (ii) evidence submitted to it by any permitted participants relating to their principal reasons for campaigning for that outcome.

    (5B) Where the Commission is satisfied that more than one permitted participant has demonstrated

    (a) substantial support, and

    (b) a distinct "principal reason" for campaigning for the same outcome, and

    (c) that it would be unreasonable to refuse designation under section 101(1),

    it may designate 2 or more permitted participants for assistance under section 103.
    (5C) Where the Commission makes any designation under subsection (5C) above, they shall make such an apportionment of eligibility for assistance between the designated permitted participants as they think fit.'.
    The Chairman of Ways and Means (Sir Alan Haselhurst): With this, it will be convenient to discuss amendment No. 12, in clause 103, page 64, line 40, at end insert—
    '(2A) Where more than one designation has been made under section 102(5B), that amount shall be apportioned in accordance with section 102(5C).'.
    6.30 pm
    Mr. Stunell: I refer hon. Members to clause 101(1), which states:
    "The Commission may … designate permitted participants as organisations to whom assistance is available".
    We have a small language problem here in that there are designated organisations and permitted organisations. I do not claim that the Bill is ambiguous, but it is easy to become ambiguous when one is speaking about them.
    Clause 101 establishes that the designated participants that meet certain criteria may receive financial assistance, and the decision on that will be made by the Electoral Commission. Clause 102, to which amendment No. 13 relates, deals with how permitted participants will be designated. Clause 102(5) provides for a situation in which designated participants make competing applications to become the organisation that will receive assistance. The special use of language in the Bill means that it is possible to lose sight of the fine distinctions between the two types of body, but a person, political party or organisation that fulfils certain criteria can

    993
    become a designated participant, which allows them to take part in the process. Beyond that, one or more of those designated participants can then apply to become an organisation that will receive assistance.
    The amendment would extend the options available to the Electoral Commission when deciding between competing designated participants who wished to become the organisation eligible to receive assistance. The Bill, as drafted, provides the commission with two options—it can establish which of the permitted participants has the greatest popular support, or, if it is not satisfied that any of the applicants adequately represents those campaigning for a particular outcome, it can make no award. In other words, the commission has to make an all or nothing choice if there are competing demands for support.
    The amendment would give the Electoral Commission more flexibility so that it could consider a third option. For example, in the feasible prospect of a referendum on the United Kingdom's joining the euro, it is likely that several bodies that are opposed to joining will compete to become the designated organisation. At one end of the spectrum of those opposed to joining will be the Socialist Workers party. Its reasons for opposing it might be complex and various, but they boil down to the argument that the euro is a capitalist plot that should be resisted at all costs. At the other end of the spectrum will be the so-called Democracy movement, which is equally ferociously opposed to the euro, essentially because it is a communist plot. Perhaps somewhere in the middle will be a large body of Conservatives, some of whom are what I call quitters and some of whom are stayers but all of whom are committed at the moment to opposing joining the euro.
    As the Bill is drafted, all three of those umbrella bodies would be able properly to participate in the campaign, but it would be for the Electoral Commission to decide which body would receive financial support for making its case in the campaign. If people are confident that their factional view is likely to be seen as the majority view among those seeking a particular outcome, they would not have to worry because the commission would designate them and they would receive the money. However, there is a problem if—perhaps in some future referendum—the forces that want one particular outcome are all strongly motivated and strongly supported, and it is not so evident which should receive the financial support of the commission.
    At the limit, the commission could toss a coin and say that the money would go to, for example, the SWP; or the commission could be unable to make up its mind, because there was too much controversy or uncertainty, and allocate no money to one side of the argument. While it may not be too helpful to pursue the specific case of the euro referendum to its logical conclusion, because people will argue that it is unlikely that the SWP would receive the money, I use it as an illustration of the fact that people can have fundamentally different reasons for supporting a particular outcome in a referendum. In some cases, it may be appropriate and proper for them to form an umbrella body that can qualify for support, but on other occasions that will not be possible.
    Let us suppose that the line of thought represented by Lord Shore, the right hon. Member for Chesterfield (Mr. Benn), the hon. Member for Bolsover (Mr. Skinner)
    994
    and the SWP was the ascendant view in popular opinion as we approached a referendum on the euro. I put it to Conservative Members that they would not be happy if all the money to support the no campaign went to that faction and none went to the Conservative faction.
    Another likely future referendum is on stage 2 of the reform of the House of Lords. It is possible that some might want to vote against the reform package, their opposition being based on the fact that they wanted a wholly elected House of Lords and that what was being offered was a miserable and unworthy compromise. Some others might also be strongly opposed to the reforms because they wished to return to the hereditary principle. As the Bill stands, those two factions would either knock each other out, with the Electoral Commission making no grant, or one of them—if it could establish some ascendancy in its views—would be supported and the other would not.
    We have said several times in previous debates that the Bill is fundamental. It is the first reworking, in detailed and substantial form, of legislation that goes back 117 years, and we do not know how frequently it will be updated in the future. We heard earlier that it is a framework Bill on which other legislation dealing with referendums will be based. Therefore, the issue that I have drawn to the Committee's attention requires careful consideration. It may be that the examples I have mentioned—of the referendums on the euro and the House of Lords—are not appropriate, but it seems likely that over the next few generations the situation I have outlined will arise. If so, the absence of a third option in the Bill will be a drawback that will have considerable consequences.
    Amendment No. 13 would require that before the commission could adopt any sort of third-way approach, it would have to be satisfied that each alternative choice had substantial support. The Bill uses the phrase "to the greatest extent" to describe the necessary level of support, but that might be only 36 or 37 per cent. Alternative factions, with other views, might achieve support levels of 30, 32 or 33 per cent.
    The amendment retains the need for support to be substantial: it would not mean that some crackpot from Hazel Grove could turn and claim a share of the money just because he said that he had a distinctly different way of looking at things. It also requires that there be a "distinct 'principal reason''' for seeking the same outcome. If those two conditions were met, the amendment would give the Electoral Commission the authority to split the amount of financial support given to those supporting a particular outcome—but only if it would be unreasonable not to do so.
    The amendment would also provide that the split of the financial support available should be decided by the Electoral Commission. Amendment No. 12, to clause 103, is the consequential amendment that would implement that requirement.
    Amendment No. 13 would prevent a difficulty that is certainly possible in theory, and which I submit is quite feasible in real life—namely, that it is possible for there to be more than one completely distinct and separate reason for wanting a particular outcome. I do not know how many such reasons for wanting a particular outcome it might be possible to have, but I suggest that three is a practical limit. The amendment would prevent money

    995
    going to an organisation that enjoyed only 35 per cent. support, when a larger number of people—the collective total of those who support the same outcome—would not get anything. It would also prevent the outcome whereby no money would be given to anyone simply because the Electoral Commission had lost patience with them all.
    The amendment would remove unfairness and prevent the undesirable and undemocratic outcome that such unfairness might produce. It would provide a third-way alternative for the Electoral Commission when it was deciding how to allocate resources in a referendum campaign. It is designed to ensure that those resources are not fragmented and that coherent and separate arguments opposing or supporting a particular outcome are taken into account.
    The amendment would safeguard democracy. I hope that the Minister will bear in mind the fact that the Bill puts in place a framework that will last for a long time. Many different circumstances will arise, and the circumstances in which there will be distinct and separate principal reasons should be a factor that the Electoral Commission takes into account when allocating resources.
    Mr. Walter: I am rather concerned about amendment No. 13, which I call the chaos amendment. The hon. Member for Hazel Grove (Mr. Stunell) described the third way and where it leads. I suspect that I am beginning to find out where it leads. This delightful amendment sums up my understanding of the Liberal Democrats, especially when they campaign in elections. For them, the desired outcome is clear—that Liberal Democrats should get elected. However, they believe it reasonable to use different—even conflicting—arguments to get to the same point.
    That propensity reminds me of a story arising from some local council elections in Dorset. In one village, a lady who had recently moved in complained that there were no street lights. The candidate told her that his party was going to make sure that street lights were installed. However, when the lady in the next house told him that she had heard that his party was going to put in street lights, he told her that she was safe and that his party had no intention of going against the village's tradition of not having them.
    6.45 pm
    Mr. Miller: The same thing happened in my constituency.
    Mr. Walter: I am pleased that it does not happen only in Dorset.
    The amendment is worrying because, instead of allowing for the designation of one umbrella organisation on each side of the argument, it would allow several such umbrellas to exist. People would then run around looking for cover under the umbrella that most suited them. Under clause 103 and schedule 3, designated organisations will get £600,000. The precedent for that was set in the 1975 referendum, and the amount has been uprated to allow for inflation.
    However, designated organisations are also allowed to send an address to every household or elector, so if there were more than one designated organisation, which organisation would send the address? Would those messages be sent to only a third of the available households or electors, or to every other one?
    996
    Under the amendment, would the designated organisations get the use of public rooms free of charge? If there were several such umbrella organisations on each side of the argument, that would come to an awful lot of rooms.
    How would the broadcasting authorities cope with referendum campaign broadcasts? For instance, umbrella organisations that support a single currency from capitalist and socialist points of view, respectively, might both seek time for referendum broadcasts. However, one organisation may fear that the broadcast made by the other might kill off the case for the single currency for all time.
    The Bill's provision that only one umbrella organisation should receive the grant from Government is the correct approach. The Electoral Commission may wish to knock heads together to determine which body should receive the money, or it may leave it for the relevant groups to work out for themselves. However, such an approach would not preclude other points of view being expressed, as the Bill allows political parties and other bodies to participate in the referendum process. The Bill means that the commission will have to deal with only one body on each side of the argument, and we are content with that.
    Mr. Tipping: The hon. Member for Hazel Grove (Mr. Stunell) struggled with the language when he spoke to his amendment. The matter is difficult, but he made it clear that his intention was to find a third way when it comes to funding. The amendment departs from the Bill's provision that the Electoral Commission will designate money to one umbrella organisation on each side of the referendum campaign, and would instead provide that there might be more than one such organisation on each side. The Government would strongly oppose taking that line. The essence of the Neill committee's proposal is that there should be one organisation on each side of the campaign. The committee's work in Wales persuaded it that a grant of £600,000 and facilities should be available to enable a minimum campaign to be run.
    As the hon. Member for North Dorset (Mr. Walter) said, the real advantage of an umbrella organisation is the mailshot—I had better be careful what I say about mailshots in view of last night's debate on election expenses for the mayor of London and the assembly—the free use of rooms and the right to broadcast. It is difficult to see how those resources could be shared among competing claims. The hon. Member for Hazel Grove said that the Electoral Commission would face a difficult task in identifying the umbrella organisation when there were competing demands.
    The hon. Gentleman's amendment states:
    "Where the Commission makes any designation under subsection (5C) above, they shall make such an apportionment of eligibility for assistance between the designated permitted participants as they think fit."
    It is unclear how the Electoral Commission could be unable to identify an umbrella organisation and then do a more sophisticated analysis, in what the hon. Member for North Dorset called a chaotic situation, to identify the share-out within the umbrella group.
    The Government have always recognised that it will not always be possible for everybody to work together under an umbrella group, and the hon. Member for Hazel Grove gave us some examples. However, the Bill does

    997
    not prevent that from happening. It will be possible to have an umbrella organisation and groups working alongside it, which are not part of it, and have a slightly different view. That is the plurality of the situation.
    It must be right to have only one umbrella group on either side. It is also right that others who want to participate will still be able to do so. There are rules in the Bill governing that. However, they will not have a right, unless they are part of the umbrella campaign, to a share of the public resources—the £600,000, the right to broadcast and the free mailshot. The hon. Member for North Dorset said that the financial pot will lead people to bang their heads together. I am not sure whether the Electoral Commission will be banging heads together. The prospect of substantial sums of money will, after a lot of discussion and some heartache, force bodies to work together as part of an umbrella organisation.
    To have an umbrella organisation on each side of the argument must be the way forward. It is what the Neill committee recommended, and it is the approach that the Government would like to adopt to avoid a chaotic situation. With that, I ask the hon. Member for Hazel Grove to reflect on his amendments.
    Mr. Stunell: I shall not talk about the intricacies of street lights in Dorset. However, I once made an issue out of two Conservative leaflets in my constituency—one was strongly in favour of a road, and one was strongly against it. They seemed to be distributed in adjacent areas, depending on what it was thought people in each area would like to hear. No one has a monopoly on distributing leaflets or talking to electors with what is sometimes called a forked tongue.
    I apologise to the House and the Hansard reporters if I got my "permitted participants" and "designated organisations" mixed up at various points in my speech. I hope that my intention was clear; in any event, the Minister has clarified what I was trying to say, and I thank him for that.
    I freely concede that there are some difficulties. My amendment may not be comprehensive enough in its scope and precise enough in its detail to achieve its objective. I understand the point that is being made. I am less happy, however, with the view that the scenario that I have described is unlikely or that if it does occur, it is not greatly to be feared. We are setting in place framework designation that is designed to last for a long time. The intention of my amendment is to provide a seldom-used but available alternative in a particular set of circumstances. However, I understand the Minister's reluctance to proceed, and recognise that there is no support for the proposal elsewhere in the House. Having aired my case, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Mr. Grieve: I beg to move amendment No. 49, in page 64, line 32, leave out "shorter or".
    This is a small amendment that can be considered without having to consider some of the wider issues that were before us earlier. Nevertheless, it cannot be completely divorced from those issues, because it
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    concerns the power that clause 102 gives the Secretary of State to vary the periods that are provided for in that clause. It may be worth setting out briefly what this part of the Bill aims to do.
    Certain organisations may become designated organisations and receive funding, so there will be competition among various organisations to become so designated. All permitted participants will be eligible for designation, and will doubtless be rooting to be the designated group and receive the funding. Clause 102 provides:
    "A permitted participant seeking to be designated under section 101 must make an application for the purpose to the Commission."
    He must provide statements saying that he adequately represents those campaigning for the outcome of the referendum. He must make his application within 28 days, beginning with the first day of the referendum period. Thereafter, the commission will have to get to work and, with considerable rapidity—given that dozens of organisations may be vying for designation—decide within 14 days which of the applications should be determined favourably or otherwise.
    If there is one application in relation to a particular outcome of the referendum, the commission will designate that applicant unless it is not satisfied that the applicant adequately represents those campaigning for that outcome. If there is more than one application in relation to a particular outcome, which I venture to suggest may well be the case, the commission has to make almost a judgment of Solomon between the various organisations. It must pick the one which appears to represent, to the greatest extent, those campaigning for that outcome, unless it is not satisfied that any of the applicants adequately represents those campaigning for the outcome.
    It is a complex and bureaucratic process, which will undoubtedly attract much public comment. One can envisage circumstances in which members of organisations may become upset and angry if they do not achieve designation. That is the task given to the commission.
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    The clause sets out an extremely tight timetable, which is linked to the rest of the timetable for referendum periods. As the Home Office Minister pointed out earlier, in reality there may be a long preliminary period for most referendums, during which all the parties would vie for position. Everyone would know that the referendum was due to be held, so no one would be taken by surprise. However, the measure is framework legislation and it must take account of contingencies, some of which might include circumstances when a referendum is sprung on an unsuspecting electorate by a Government. One example—dare I offer it to the Parliamentary Secretary, Privy Council Office?—might be that of a Government who had been promising a referendum for a long time, who lulled the electorate into a false sense of security because the referendum never seemed to happen, and then suddenly announced that it would take place immediately.
    If that were to happen, it would create an immense logjam. Indeed, in those circumstances the 28-day period for designation might be too short. Similarly, the poor old commission might be hard put to find the time to choose between competing organisations. It strikes me—and the official Opposition—as astonishing that in subsection (6)

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    we give the Secretary of State the power to make by order a variation in the 28 and 14-day periods to make the period not only longer, but, if he sees fit, shorter.
    That appears completely crazy. I can understand the need for a longer period, but I cannot fathom how a shorter period could be just. The mere fact that the measure includes that provision gives me some cause for anxiety. Technically, it would allow the Secretary of State to move, by order, that the period for the submission of designation could be limited, for example, to six or seven days—let alone the absurdity that it might be reduced to 24 hours. One consequence of that would be that individual organisations seeking to be the designated party in a referendum campaign would be hamstrung because they would have insufficient time to mount their case.
    I should be grateful if the Minister would explain the justification for providing a shorter as well as a longer period, although I can well understand why a longer period might be provided.
    Mr. Tipping indicated assent.
    Mr. Grieve: The Minister nods.
    However, if we consider the matter realistically, a period of 28 days to put in a designation request and 14 days for its consideration is the bare minimum. In that case, the Committee can safely tell the Government to adopt the amendment and delete the possibility of a shorter period because, in practice, that shorter period could never happen. At least, it could never happen if a Government were acting properly.
    Although I have confidence even in the Government of whom the Minister is a representative, one has to look ahead, in framework legislation, to possible occasions when that might not be so. In those circumstances, unless the Minister can offer me some clear examples of why he thinks that the existing provision is useful, I urge him to reconsider the matter. If he thinks that my remarks make some sense, will he adopt the amendment or, at least, assure me that he will consider it?
    Mr. Tipping: I was struck by the hon. Gentleman's comment that provisions were needed so that contingencies could be taken into account. He rightly pointed out that, in this case, the contingency is the power of the Secretary of State to provide for a longer or shorter period than the 28 or 14 days. I shall not go over the provisions in the measure because he explained them so well.
    As the hon. Gentleman pointed out, the argument for a longer period is that there will be much pressure on the commission. According to the provisions set out in the measure, the quickest time in which a referendum could take place is 10 weeks. Usually, there would be far more notice than that. There may be a case for some flexibility and for a longer period because of the difficulties that the commission might face. That is why provision for a longer period has been included.
    Sir Michael Spicer: Will the Minister clarify whether it is possible that the use of the 28-day period in clause 102 would cause the designated 28-day period in clause 97 to run out? Is it possible that the umbrella group might never be formed during the referendum period?
    Mr. Tipping: That is certainly not the intention of the measure. It provides money and resources to umbrella
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    groups—for the first time, £600,000 will be available, as well as free mailshots and so on. The intention clearly is not to stop the formation of umbrella organisations.
    Sir Michael Spicer: I accept that that is not the intention, but is it a possible outcome that the 28-day period mentioned in clause 97 would be the same 28-day period mentioned in clause 102? If so, the commission would run out of time for designation.
    Mr. Tipping: I think that the hon. Gentleman is taking the Committee back to a point that I made a few moments ago—that the minimum time for a referendum could be 10 weeks. The 10 weeks comprise two 28-day periods and a 14-day period. There is a 28-day period for the formation of the umbrella group; 14 days for the commission to deal with designation; and a campaign period, beyond that, of not less than 28 days. I think that covers the hon. Gentleman's point.
    The hon. Member for Beaconsfield (Mr. Grieve) asked why there was provision for a shorter period and why flexibility was needed. He asked for clear examples. The most obvious example is in Northern Ireland, where it is sometimes necessary quickly to seek the consent of the people on a particular settlement. In the referendum on the Good Friday agreement, only 32 days elapsed between the laying of the Northern Ireland Negotiations (Referendum) Order 1998 and the holding of the referendum. That is the reason for the inclusion of a reference to a shorter period.
    The Government believe that, occasionally, there might be situations where it is necessary to act quickly, but that will not be the norm. Ministers and officials feel that we should reserve that flexibility; in extreme circumstances, there should be the chance to move to a shorter period. The object of the Bill is to conform to the time periods that it establishes—the 28 days and the 14 days, which, as the hon. Gentleman points out, will be most demanding. However, there could be occasions—especially in Northern Ireland—when some flexibility might be used.
    Given that reassurance, I hope that the hon. Gentleman will reconsider the amendment.
    Mr. Grieve: I am grateful to the Minister for his candour, although I do not find the Northern Ireland example entirely reassuring. Indeed, it is a good example, because one might say that what was being sought was to take a snapshot of public opinion in the Province and to do it so quickly that people did not have time to change their minds on the issue. Dare I say it to the Minister, but I thought that the whole idea behind the Bill was to create a fair framework that would prevent sudden advantage being taken of public moods? I make that point even though, if I had been living in Northern Ireland, I might have voted yes in the referendum there.
    I am not wholly persuaded by the Minister's argument. He is honestly telling us that there may be circumstances in which the Government think that it is to their advantage to ask a question and get a quick answer. However, those who disagree with the answer that a Government are seeking look to the rules and regulations, as set out by Lord Neill, to do the opposite. They look to them to offer a sufficient time frame in which debate and reasoned argument can take place, so that everyone can go to the polling station on the day of the referendum having had a real opportunity to consider the issues.

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    We cannot get away from the fact that, historically, referendums have often been used by tyrannical regimes to seek endorsement for matters to their advantage from waves of public opinion. Sometimes, they come unstuck. For example, in the past 48 hours, a Government, who seem to have pretty dubious democratic credentials have received a slap in the face from the electorate when they thought that they had it all stitched up.
    We are trying to do something different. I am not persuaded by the Minister's argument, but I shall not press the amendment to a vote. However, I hope that he will reconsider the issue, because the limits set out in the clause are the absolute minimum on which a fair campaign could possibly be based. If that is so, the only possible ground for having a shorter period would be to introduce a measure of unfairness. In those circumstances, the Committee should have nothing to do with the provision. However, subject to those comments—and I hope that the Minister will bear them in mind—I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Question proposed, That the clause stand part of the Bill.
    Sir Michael Spicer: I wish to make two brief points. First, I believe that it is unhealthy for the state to fund political campaigns. Down that path are all sorts of threats to democracy. However, I shall put that point to one side. Secondly, if the state is going to make such payments, it is right that there should be an independent commission as outlined in the clause. It should be responsible for allocating state payments. If it is right for the commission to have designation and authoritative powers under the clause, why is it not given similar powers in other clauses? I have returned to that point time and again, because it is illogical. If the commission is correctly given such authoritative powers by this clause, could not the Government reconsider, as I sense they might, the whole philosophy, so that they strengthen the authority and independence of the commission?
    I hope that the clause will act as a precedent for the Government and that they will continue the process of giving as much independence to the commission—as opposed to the Secretary of State—as is possible.
    Mr. Tipping: I will not comment on the hon. Gentleman's view that we should not go down the road of state funding, except to point out that he, his party and all of us receive such facilities during a general election campaign. The proposal in the clause is not as new as he suggests.
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    I agree entirely with the hon. Gentleman that the commission must be seen as independent and authoritative, and it must have the support of all the political parties and players. I have never said that the Bill is in the best shape possible; we have already improved it in our discussions and there will be further opportunities to do that. I also draw his attention to clauses 4 and 5, which will give the commission the task of preparing reports after each election and reviewing its work
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    regularly so that it can take stock of what it has done. Referendums are a new area for legislation, and the commission will want to revisit the issues, revise them and bring forward further proposals.
    Sir Michael Spicer: The Minister's point about independence was correct, and I am grateful to him for saying that he will consider ways of improving the Bill.
    This clause is about the commission's functions and powers. I hope that the precedent established by the powers for designation in the clause will be borne in mind by the Minister when he considers the commission's powers and functions in other clauses.
    Question put and agreed to.
    Clause 102 ordered to stand part of the Bill.

  Clause 103

    ASSISTANCE AVAILABLE TO DESIGNATED ORGANISATIONS
    Question proposed, That the clause stand part of the Bill.
    Sir George Young: I wish to raise a few points, in particular about subsection (2) which mentions £600,000 as the sum available. I have traced the genealogy of the sum through the Neill report and the White Paper and I am not arguing for a higher figure—once a Treasury Minister, always a Treasury Minister. However, I was slightly surprised to see that the figure of £600,000 is set in stone. I have looked through the clause and I cannot see any provision for varying it. On several occasions, we have heard that the Bill is a template and that it is designed to last for a long time, so I assume that we shall need primary legislation to change the figure of £600,000. I appreciate that sums are mentioned elsewhere in the Bill, but they tend to be larger sums—£20 million and others. The figure in this clause is relatively small, so I am puzzled why there is no power to vary it.
    Mr. Tipping: I draw the right hon. Gentleman's attention to clause 141.
    Sir George Young: It is kind of the Minister to suggest that there may be that provision for variation. I take it that that applies to this clause.
    Mr. Tippingindicated assent.
    Sir George Young: That is helpful. However, I seek further explanation. Other clauses in the Bill, such as clause 11 on grants, give the commission pretty wide discretion. It can make grants to other persons or bodies to enable them to carry out certain programmes. Under clause 11, it seems to have enormous flexibility to spend quite large sums of money on grants that are not wholly its prime purpose. However, this clause gives it £600,000 to help designated organisations, and clause 141, which the Minister mentioned, gives powers to the Secretary of State to vary the figure. In effect, that is my point.
    Other parts of the Bill, such as schedule 13, allow for flexibility, although I concede that, in the case of the schedule, it is flexibility on the part of the Secretary of State. When the commission produces its post mortem on a referendum, will it have the freedom to state its view of the figure of £600,000? That is not clear from this clause.

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    However, if, for the sake of argument, it felt that the figure in subsection (2) was wrong, will it be able to make recommendations to the Secretary of State suggesting that the figure was either too high or too low and will he take its views on board and consider varying it?
    It would be helpful if the Minister could explain why the figure of £600,000 is so tightly constrained by the Secretary of State, when one of the commission's prime functions is to make sure that a side of the argument that is in danger of being under-represented gets sufficient money. There are no such constraints on the commission in making the grants in clause 11, yet that function is arguably less important. In fact, we argued that it was so unimportant that the provision should be deleted. There seems to be an imbalance between clauses 11 and 103. Can the Minister shed any light on that?
    Mr. Tipping: I shall try to shed light on the matter. I take the right hon. Gentleman back to clause 141. I admit that I sprung that on him earlier, but if he reads it he will realise that although the Secretary of State makes the order, subsection (2)(b) adds,
    "where the order gives effect to a recommendation of the Commission."
    The Secretary of State cannot therefore make an order without a recommendation from the commission.
    I turn the right hon. Gentleman's attention to clause 4, which spells out the reports that the commission must produce regularly after elections, and clause 5, which contains a much more permissive power to keep matters under review and submit reports to the Secretary of State from time to time.
    The right hon. Gentleman asked why clause 11 gives the commission a great deal of flexibility. Speaking from memory, I believe that the sum concerned is £3 million, but a lot of that is existing money within the Home Office and local government, which is used, perhaps not very successfully, to remind and exhort people to vote. Although I should not stray from the subject at hand, I accept that there is a great deal of good work for the commission to do on electoral education under clause 11.
    Another part of the Bill dealing with policy development grants represents a step forward. It gives the commission the power to make £2 million of grants to political parties so that they can develop their policies, but the commission has to bring forward a scheme after consultation.
    There is, therefore, a great deal of flexibility throughout the Bill for promoting awareness and policy development. As I pointed out to the right hon. Gentleman, there is also flexibility in the power to vary the sum of £600,000. I look forward to the commission's reports because they will be a trigger that will help all our thinking.
    Question put and agreed to.
    Clause 103 ordered to stand part of the Bill.

  Schedule 11

    ASSISTANCE AVAILABLE TO DESIGNATED ORGANISATIONS
    Question proposed, That this schedule be the Eleventh schedule to the Bill.
    Sir George Young: Schedule 11 deals with the right to send a referendum address post free, which is of topical interest.
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    Paragraph 280 on page 64 of the explanatory notes, which the Department kindly circulated with the Bill, says:
    "A mailing by the two sides in a United Kingdom-wide referendum to every elector would cost some £13.2 million. One to every household would cost some £7.2 million."
    I am entirely in favour of free mailshots during a referendum campaign.
    In the previous debate, the Minister pulled something out of a hat, and I wonder whether he can do the same on this occasion. I was following last night's debate, and at 11.16 pm, the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Streatham (Mr. Hill), said:
    "The GLA is a small streamlined authority with a budget of £35 million, and expenditure of £15 million to £20 million on mailshots would be quite disproportionate."—[Official Report, 15 February 2000; Vol. 344, c. 893.]
    I am sure that the Parliamentary Secretary is asking himself the same question as I am asking myself, which is why the Greater London Authority would spend £15 million to £20 million if it paid for mailshots, but a mailshot to every elector by the two sides in a UK-wide referendum would cost £13.2 million. I appreciate that there can be more than two candidates in a mayoral election, although presumably if there were more than two, the mailshots could be delivered at the same time. Last night, however, the Government used a rather high figure when they were trying to discourage the House from pushing for a free mailshot, and that figure was much higher than that on page 64 of the explanatory notes. Can the Minister shed any light on the apparent incompatibility of the two figures?
    Mr. Tipping: Having pulled something out of the hat earlier, I am afraid that it is empty on this occasion. All I can do is consider the figures and the extracts that the right hon. Gentleman has just quoted, and write to him. I would add that the GLA provisions are seen as local government provisions, whereas we are discussing national campaigns in this Bill. Referendum mailshots would typically be for two sides, but I understand that there may be up to 20 candidates for the mayor of London, which will clearly increase costs. I will write to the right hon. Gentleman, without the sense of magic and flourish that goes with pulling something out of a hat.
    Sir Michael Spicer: Schedule 11 also deals with the commission's role in ensuring fairness in broadcasting. Do the Government envisage the commission having not only the powers to set policies on fairness but the resources to monitor and ensure that those policies are implemented? We all know that broadcasters can set out with good intentions, but they do not always fulfil them. The BBC is ruled by statute but does not always comply with it in practice. Will the commission be responsible for ensuring that its policies on fairness are implemented day to day?
    Mr. Tipping: The Committee has had an opportunity to discuss this matter. I draw hon. Members' attention to clause 9, which says that broadcasters shall have regard to the commission's views. The commission is in a position to express views about broadcasting. I have already given the Committee an undertaking to consider

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    introducing a new form of words. It is clearly important that the commission should be involved, but that does not remove responsibility from broadcasters.
    Question put and agreed to.
    Schedule 11 agreed to.
    Clause 104 ordered to stand part of the Bill.

  Schedule 12

    REFERENDUM EXPENSES: QUALIFYING EXPENSES
    Question proposed, That this schedule be the Twelfth schedule to the Bill.
    Mr. Walter: The schedule, which deals with qualifying expenses in a referendum, seems reasonable, but as I read through it I become a little confused. We are given a list of expenses, including those incurred in referendum campaign broadcasts, advertising of any nature, and
    "unsolicited material addressed to electors (whether addressed to them by name or intended for delivery to households within any particular area or areas)."
    The list of exclusions in paragraph 2, however, says:
    "Nothing in paragraph 1 shall be taken as extending to…
    (b) any expenses in respects of unsolicited material sent to supporters of the referendum campaign".
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    I am not sure of the distinction between the two types of unsolicited material. Those fighting a referendum campaign usually start from the presumption that everybody is a supporter of their cause. So perhaps they do not have to count against their expenditure limits the expense of sending material to those whom they perceive to be their supporters.
    Also among the exclusions are
    "any expenses in respect of newsletters or similar publications issued by or on behalf of the campaign organiser with a view to giving electors in a particular electoral area information about the opinions or activities of, or other personal information relating to, their elected representatives or existing or prospective candidates".
    At first I thought that the sub-paragraph had strayed from another part of the Bill. In fact, it means that as long as newsletters tell one something about the views of one's local elected representative, expense incurred in sending them does not count as the campaign expenditure of an organisation campaigning in a referendum. One can therefore imagine an awful lot of newsletters going out in a referendum. Will the Minister give me some guidance, particularly on the exclusions?
    Another exclusion is:
    "any expenses incurred in respect of the remuneration or allowances payable to any member of the permanent staff of the campaign organiser".
    That means that such staff are no longer an expense in the referendum. I can understand the exclusions covering
    "any reasonable expenses incurred in respect of an individual by way of travelling expenses…or in providing for his accommodation or other personal needs",
    but fail to see why expenditure on publications and newsletters, on unsolicited material and in respect of remuneration of staff should be excluded.
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    Paragraph 2 is another example of dilution of what we thought were ground rules on campaign expenditure. Indeed, two sub-paragraphs—on unsolicited material addressed to electors and on unsolicited material sent to supporters—appear to be contradictory. Electors and supporters can be one and the same thing.
    Mr. Tipping: The hon. Gentleman will recognise that schedule 12 almost exactly mirrors schedule 7, which we have had the opportunity to discuss. I am grateful to him for drawing our attention to paragraph 2 and, incidentally, to similar provisions in schedule 7. During our debate upstairs, I said on a number of occasions that I would like to reflect on the matter. The hon. Gentleman has made important points. There may have been some drafting errors. I am grateful for his points; I will write to him and, if necessary, correct matters later.
    Question put and agreed to.
    Schedule 12 agreed to.

  Clause 105

    NOTIONAL REFERENDUM EXPENSES
    Mr. Grieve: I beg to move amendment No. 50, in page 66, line 2, leave out "£100" and insert "£200".
    The Second Deputy Chairman of Ways and Means (Mr. Michael Lord): With this, it will be convenient to discuss amendment No. 51, in clause 107, page 67, line 10, leave out "£100" and insert "£200".
    Mr. Grieve: These amendments follow a pattern reflected elsewhere concerning de minimis amounts. In the light of some earlier comments, considerations in the context of referendum expenditure may be slightly different from those that apply to elections.
    Under clause 105, any individual or body that is provided with certain services must declare them, and they are treated as incurred if they exceed £100. Similarly, clause 107 states:
    "No payment (of whatever nature) may be made in respect of any referendum expenses incurred or to be incurred by or on behalf of a permitted participant unless it is…less than £100."
    If payment is over £100, it must be properly recorded and submitted to the commission.
    There seems to be a difference between the two clauses. Clause 105 refers to any "individual or body", whereas clause 107 refers to "a permitted participant". Will the Minister clarify whether it is intended that clause 105 should cover a wider group of people? One way of interpreting matters is that, unlike clause 105, clause 107 does not apply to others who might wish to get involved in a campaign—individuals whom I described earlier as the loose cannon of the procedure. If that is so, why the distinction between the two clauses?
    Have we got the limits right? We have had some debate about whether the £100 limit—or the £200 limit, as we propose in our probing amendment—is appropriate. I shall not take up the Committee's time on that; the arguments were rehearsed almost ad infinitum when debating election expenses. However, the Minister will have to ponder the following issue.

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    We have discussed—we shall return to it—what those who are not permitted participants but foreign nationals, individuals or organisations can do in referendum campaigns. The Minister has conceded that they can spend up to £10,000. I find it difficult to identify mechanisms of scrutiny by which one may ascertain how much such individuals spend. It might be a criminal offence for them to spend more than £10,000, but there is nothing to indicate how they are supposed to make a return to the commission, how the commission might investigate them, or how such individuals might be kept under control. In addition, we must accept that because such individuals can spend up to £10,000, all they need do is club together as a group of, say, 10 and they can spend £100,000.
    Are we being reasonable in specifying that if permitted participants spend a penny over £100 they must have an invoice and every conceivable detail, but all other people milling around on the sidelines, dabbling in a referendum campaign, can spend up to £10,000 without having to do so? I am prepared to accept the Minister's guidance. Clause 105 might just cover people who spend money as if there were no tomorrow.
    It seems to me that the issue may be different from that which we discussed when we considered election expenses upstairs. We are imposing all these burdens on the poor old permitted participants, whereas there is a huge loophole allowing others to campaign without turning into third parties, as in the case of elections. They will be able to campaign, put forward their view and argue that a vote should go a particular way, yet they will not be subject to the same controls.
    I should be grateful to hear from the Minister about the precise scope of clauses 105 and 107, and whether the limits that are being imposed are reasonable, in view of the fact that many other people will be able to participate without being subject to such stringent conditions.
    Mr. Tipping: Clause 105 is concerned with goods or services provided to a permitted participant by a third party. Clause 107 is concerned with direct expenditure by a permitted participant. That is the difference between the two clauses.
    The hon. Gentleman spoke about the loose cannons that may get involved, and there may be some. He is always interested in hypothetical situations, in which such loose cannons appear larger than in reality.
    Mr. Jim Dowd (Lord Commissioner to the Treasury): Loose cannon.
    Mr. Tipping: Loose cannon. I am corrected by a voice that rarely speaks, but when it does, it does so with force.
    The hypothetical situations described by the hon. Gentleman may not develop in reality to the extent that he is tempted to think.
    Let me remind the hon. Gentleman about the de minimis provision. People can spend up to £10,000 without being a permitted party and without having to keep accounts. He asks what monitoring there will be. The commission will examine the matter. The offence is set out in clause 106(2). It is a criminal offence. That will put the brake on overspending, avoidance and evasion.
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    I remember that only a day or two ago, the hon. Gentleman told me that the criminal sanctions in the Bill were far too draconian.
    Mr. Grieve: I counted 68 criminal offences created by the Bill. Some of them are draconian, and some appear absolute—I shall shortly deal with one—and may need amendment. I know that the Minister will do that.
    However, an offence is draconian only if someone can be convicted of it. If I spend £100,000 and am investigated for it, I produce 10 friends and say that we spent £10,000 each.
    Mr. Tipping: Of course that is a possibility. We discussed the matter on Second Reading and on various occasions since. It takes us back to the argument about hypothesis versus reality. I expect that the reality will not be as exciting as the hon. Gentleman tempts me to believe.
    Let me be more helpful to the hon. Gentleman and say that he makes a fair point in amendment No. 50. We discussed the figure in the context of part V. I am happy to accept amendment No. 50—another example of the Bill being improved.
    Mr. Patrick McLoughlin: Can the Minister tell us how often the Bill has had to be improved so far? On how many amendments has he said that he will come back to the Committee? Does not that show how ill prepared the Bill was, rather than how much it has been improved?
    Mr. Tipping: The hon. Gentleman makes a point, and I shall make another. Under previous Governments, there was a regime where it was seen as inappropriate to make concessions. I remember that he was a Minister in that regime.
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    Mr. McLoughlin: It was a Government, not a regime.
    Mr. Tipping: It may have been a Government, but the regime introduced by the Government led to their losing office. One of the things that I have been keen to do during the course of the Bill—perhaps the hon. Gentleman will speak to some of his hon. Friends about this—is to listen to the arguments and make concessions where that will improve—
    Mr. McLoughlin: How many?
    Mr. Tipping: I do not have a score chart. I will write to the hon. Gentleman. There have been a good number of occasions when appropriate suggestion were made. We are coming to one from the hon. Member for Hazel Grove (Mr. Stunell) in a moment.
    It has been appropriate to make changes because the Bill will affect us all fundamentally. What marks the Bill is the fact that we all know something about the political system, and we all have a contribution to make. I do not accept that the Bill was ill prepared. I remind the hon. Member for West Derbyshire (Mr. McLoughlin) that it was published in draft form in July. His party had an opportunity to comment on it. If there are failings in it, it

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    reflects badly on those who work for his party that they were not picked up. I shall not be tempted further down that route. He hits a nerve, and I shall return to the matter.
    I am not persuaded to accept amendment No. 51, which deals with receipts and suggests that the value of the receipts should be increased from £100 to £200. There is a case, which the hon. Member for Hazel Grove may make, in relation to smaller organisations. The de minimis provision is £100, which applies in this case, so only organisations that spend more than that will be affected.
    The figure in the Bill is drawn from the Representation of the People Act 1983, where it was set at £20. It has been increased to £100, so that affords referendum campaigns more leeway. However, it is not unreasonable to ask well run, well resourced campaigns to present receipts and invoices.
    These are ultimately matters of judgment. There is not a great deal between £100 and £200. What is important is that a milestone is set down. In my judgment, £100, rather than £200, is the right figure.
    Mr. Grieve: I have reason to be grateful to the Minister, who has given me 50 per cent. more than I expected. I am happy that he has accepted amendment No. 50.
    Amendment agreed to.
    Clause 105, as amended, ordered to stand part of the Bill.
    Clause 106 ordered to stand part of the Bill.

  Clause 107

    RESTRICTION ON PAYMENTS IN RESPECT OF REFERENDUM EXPENSES
    Question proposed, That the clause stand part of the Bill.
    Mr. Grieve: I mentioned to the Minister earlier that I would return to a topic that has excited me during the passage of the Bill—the creation of absolute offences. Under clause 107(4), an absolute offence is committed if a person makes a payment in contravention of subsection (1), even if he did so by mistake or with an excuse that he believed to be reasonable. Is that what the Minister intends?
    With regard to the contravention of subsection (3), the reasonable excuse defence exists. Perhaps the Minister will look into that, in the spirit in which he has undertaken to look at other points in the Bill.
    Mr. Tipping: I have already given the hon. Gentleman and the Committee an undertaking that all the defence arguments will be brought in line during the period when we reflect on the Bill. I have heard what he said, and I will of course consider it.
    Question put and agreed to.
    Clause 107 ordered to stand part of the Bill.

  Clause 108

    RESTRICTION ON MAKING CLAIMS IN RESPECT OF REFERENDUM EXPENSES
    Mr. Tipping: I beg to move amendment No. 8, in page 67, line 30, leave out '30' and insert '42'.
    The amendment constitutes plagiarism. Similar amendments, originally tabled by the hon. Member for Hazel Grove (Mr. Stunell), were made to parallel clauses 70 and 85. We accepted his amendments then, and I am happy to move amendment No. 8 now.
    Mr. Stunell: I wish to put on record that the Minister has been helpful and constructive throughout our proceedings. He has not always given us what we wanted—perhaps not even most of what we wanted—but he has always listened carefully. I appreciate his adoption of our amendment, which we tabled early in our proceedings. It provides an opportunity for organisations that make returns to get their paperwork done. Those organisations are often small and inevitably involve human frailty. I am pleased that the Minister has accepted the amendment.
    Amendment agreed to.
    Clause 108, as amended, ordered to stand part of the Bill.
    Clause 109 ordered to stand part of the Bill.

  Clause 110

    GENERAL RESTRICTION ON REFERENDUM EXPENSES
    Question proposed, That the clause stand part of the Bill.
    Mr. Walter: I want to consider again, perhaps in a slightly different way, financial limits and circumstances in which someone who is not a permitted participant can spend up to £10,000. If that person spends more than £10,000,
    "he is guilty of an offence if he knew, or ought reasonably to have known that the expenses were being incurred in excess of that limit."
    When we consider clause 111, we shall discuss the matter in more detail. There is a complex set of formulae for deciding how much various categories of participants—permitted participants, political parties or designated organisations—can spend in a referendum campaign.
    However, there is a loophole, if I dare call it that, which suggests that those who are not permitted participants can spend up to £10,000. Let us consider a specific scenario in which an organisation that, for whatever reason, is not a permitted participant in a referendum campaign and operates in London has several supporters dotted around the country. On a word processor or a laptop in London, the organisation draws up a sample newspaper advertisement to persuade people to vote in a particular way in a referendum campaign. The only missing item from the advertisement is an imprint. The organisation distributes the advertisement to its supporters throughout the country and suggests to them, "Why don't you insert this advertisement in your local newspapers and pay for it out of your own pocket? You won't be a permitted participant, but the advertisement will have a massive impact on the campaign because we'll have newspaper

    1011
    advertisements all over the country. You won't have made any donations to us directly. We're not registered; you're not registered. There's nothing anyone can do about it."
    If we are to exercise rigorous control, more time and consideration should have been given to that obvious loophole. I do not want to trespass on the ground of my right hon. Friend the Member for North-West Hampshire (Sir G. Young), who will speak shortly, but the alternative is to set no financial limits in referendum campaigns.
    Mr. Hayes: That point is directly related to a matter that the Minister raised earlier. He claimed that the electorate would see through any attempt to disguise support for a specific side in a referendum campaign, and to fund such support. He said that such an attempt would backfire. As my hon. Friend suggests, the attempt could be heavily disguised and thus not transparent. I invite my hon. Friend to challenge the Minister to explain how the electorate can arbitrate when support or funding is heavily veiled.
    Mr. Walter: I thank my hon. Friend for his intervention. The tenor of the Bill and the Neill report suggests that we are seeking transparency. Exceptions of as much as £10,000 to limits—that figure can be multiplied by people who are not permitted participants acting in concert—can make a significant impact on a referendum campaign.
    I ask the Minister to ponder on whether the financial limits for which the clause provides are appropriate. If they are inappropriate, why should it be an offence to spend more than £10,000?
    Mr. Tipping: The hon. Gentleman asks me to ponder, and I shall do that. I have listened consistently to the Committee's views. The hon. Member for West Derbyshire (Mr. McLoughlin) chastised me earlier for accepting amendments and thus making changes to the Bill. I believe that that is a sign of strength, not weakness.
    In a previous intervention, the hon. Member for South Holland and The Deepings (Mr. Hayes) was vexed by the European Union. He suggested a scenario in which the European Union secretly funded clandestine organisations throughout the United Kingdom in a referendum campaign, I dare say about the euro. That stretches a hypothesis beyond the pale.
    Mr. Graham Brady rose—
    Mr. Hayes rose—
    Mr. Tipping: I shall not revert to the subject of the European Union. I appreciate that it excites Opposition Members. We had a good opportunity to discuss the European Union earlier.
    The hon. Member for North Dorset (Mr. Walker) asked why the figure was set at £10,000 and invited me to reflect on it. I have been reminded that the Neill committee suggested £25,000. I am delighted that the right hon. Member for South Norfolk (Mr. MacGregor), who was a distinguished member of the Neill committee, will be able to participate in the debate. The Government have reduced the figure that the committee suggested. As I said, I shall ponder the matter.
    1012
    The hon. Member for North Dorset gave me an example to consider. He presented the notion of an advertisement that was circulated by friends and supporters of an organisation. It is difficult to comment on hypothetical circumstances, but the organisation in his example seemed to be an unincorporated body by another name. If that was the case, the commission would want to examine the matter and perhaps involve the police and bring a prosecution. However, I do not claim that there is no scope for avoidance and evasion.
    8 pm
    Mr. Swayne: The clause is interesting in that it creates an offence in respect of persons or bodies that are not permitted participants and spend more than £10,000 to influence a campaign. I hope that the Minister will say whether such persons or bodies might indeed include the European Union, of which we have spoken. If not, why not? Will he therefore consider tabling an amendment on Report to make it so?
    Mr. Tipping: Conservative Members tabled amendments on that point, but did not bother to turn up to move them.
    Mr. Swayne: All the more reason for the Minister to consider such a move, given the expression of concern he has heard this evening—although he said that he regards our concerns as pure fantasy. I wonder what world he lives in. He spoke of the EU secretly funding a campaign. There is no question of secrecy; it is doing so openly.
    I draw to the Minister's attention the fact that we held such a referendum in 1975, so our concerns are not fantasy and such referendums occur in the real world. At the beginning of the campaign, there was a 2:1 lead in the opinion polls for withdrawing from what was then the Common Market. By its end, albeit on a low turnout, the vote was 2:1 in favour of staying in. The strength of the argument or the wisdom of the British people might have achieved that result, but I cannot help but think that it had something to do with the fact that the no campaign was outspent by the yes campaign by 20:1.
    Even if our concerns are fantasy and there is no prospect whatever of such a body as the EU spending money secretly or openly, what possible problem can there be with making such provision in the Bill? If that is unlikely to happen, the Minister will lose nothing, but he will gain everything by assuaging the concern, which is not restricted to Conservative Members, but is rife in the country. That is what his spin doctors would call a win-win situation. I invite him to take his opportunity.
    Mr. Hayes: The Minister and I go back a long way and he well knows that I am neither paranoid nor extreme about anything. I am a terribly mild, moderate and reasonable chap, so the last thing in the world that he would want to do is give the false impression that my position is anything less than calm, cool and collected. To correct him, I did not mention the European Union in my intervention; I talked about commercial organisations and multinational companies that might take an interest in funding referendum campaigns. To be absolutely precise,

    1013
    my paranoia—if there is any paranoia at all, and I do not think there is—is more about international capitalism than the European Commission.
    Mr. Tipping: That is a reflection of the change in the political agendas across the parties.
    Mr. Hayes: It is more a reflection of the moderate broad church that is the Conservative party.
    The Minister criticised Conservative Members for not moving amendments dealing specifically with the point made by my hon. Friend the Member for New Forest, West (Mr. Swayne) and said that if we felt so strongly we should, at this stage, have moved amendments that would have tightened up the Bill in respect of our particular concerns and fears, but he said also that the Bill is enabling legislation and freely acknowledged that, in the event of a specific referendum campaign at a particular time—many euphemisms have been used, but we all know the spectre that many of us fear—additional legislation specific to those circumstances would be needed. Surely, he cannot have it both ways.
    My contention is that, at this stage, we need to set the tone, broadcast the signals and lay the foundations, which the Minister rightly said would be built on when we faced a particular referendum at an indeterminate time in the future. However, if those foundations are of an entirely different making from the building that is required later, there is little sense in arguing that we can construct a good building on shaky, insecure or inappropriate foundations, because that building will not be appropriate for an occasion that may or may not arise either later in this Parliament or in the next.
    We must lay foundations that clearly and starkly signal—in the House and more widely—our intentions, assumptions and presuppositions about the conduct of future campaigns and how they are to be supported and funded. I am profoundly concerned that we are changing the nature of campaigning and the funding of campaigns. The Minister and I share a love of robust, honest and frank exchanges of views and a civilised concern that those matters should be dealt with in the right way. I emphasise that I know that from the previous life that we shared. [HON. MEMBERS: "Oh!"] Is not it a pity that Hansard does not record irony?
    I am sure that the Minister also shares my desire that referendums and general election campaigns should be conducted, as far as possible, in a spirit of fairness, openness and honesty. The funding of those campaigns is fundamentally important to that fairness and that spirit. I believe, therefore, that these measures will concern decent democrats on both sides of the House—Labour Members as much as Conservative Members—not because they share the same views on what side they might take in a future and so far unspecified referendum, but because they would want that referendum to have a degree of legitimacy. Legitimacy is based on fairness, openness and honesty in terms of funding and the nature of campaigning. I am most concerned that we are missing an opportunity to lay the appropriate foundations on which we could construct a building of which we could all be justly proud.
    Mr. John MacGregor: I had not intended to speak, but the Minister referred to the Neill committee and I was its only member from the House of Commons. I may not have heard everything he said, but I realised that he was not addressing the point made by my hon. Friend the Member for North Dorset (Mr. Walter) about penalties. As he knows, the Neill committee recommended a limit of £25,000, not in relation to expenditure—we recommended against that and we shall come to it in a moment—but in relation to becoming a registered party and therefore having to observe all the requirements on donations and so on. We now find that there is a limit on expenditure as well, so someone who spends more than £10,000 will be caught on that, too.
    I am worried about lowering the limit, which takes me beyond the clause to schedule 19. I said on Second Reading that I was anxious about the enormous number of offences that would apply to breaches of the clause. All of us on the Neill committee knew that it would be difficult to persuade some people of calibre to be treasurers in such circumstances. That applies to political parties more generally, not just to referendums. To be faced with this horrendous list of offences is a further disincentive to people to take on that role.
    This problem applies acutely to the clause, because £10,000 is not a high expenditure figure when one is trying to put across a point of view. If someone inadvertently exceeded the £10,000 limit, they would, on indictment, be subject to a fine or one year's imprisonment. That is excessive for someone who may inadvertently breach that low limit. I do not think I heard the Minister refer to that point in his response to my hon. Friend the Member for North Dorset, and I should be grateful if he would address it because it is relevant if we are to lower the limit from £25,000 to £10,000.
    Mr. Stephen O'Brien: I, too, had not intended to speak in this debate, but when I heard my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes) refer to paranoia, it struck me that we should focus on the reality of the problem that the clause is trying to address. It is a fair analysis to argue that this provision looks like an attempt to limit the conduct of the arguments in a referendum to political parties, and to extend the control of party Whips.
    As we know, arguments in referendums tend to extend across parties. By insisting that a body can only spend up to £10,000 if it is not a permitted participant, this provision not only creates a mismatch but, one has to conclude, intends to favour political parties, as the participants, in putting forward the arguments in a referendum.
    As my hon. Friend the Member for South Holland and The Deepings said, there are plenty of other bodies with legitimate interests in the arguments presented in any referendum campaign. The provision would choke the campaigning abilities of legitimate interested parties. When he spoke of paranoia, it seemed to me that we should try to understand what problem the clause seeks to address and relate that to the findings of the Neill committee. As my right hon. Friend the Member for South Norfolk (Mr. MacGregor) said, £10,000 in today's communications world, particularly the broadcast world, is a small sum if one wants to get a message across.

    1015
    I must ask whether the paranoia is on the Government side, given that they have included this provision in the Bill. I have a straightforward question to put to the Minister, and I look forward to receiving an answer. What are the Government afraid of which makes them advance this clause?
    Mr. Brady: I had hoped to make a brief intervention when the Minister was speaking, but he would not allow me to, so I am forced to make a short speech. I took particular exception to the Minister's suggestion that Conservative Members who have raised concerns about the funding of such a referendum may be paranoid or living in a fantasy world. Just because some of my hon. Friends have suggested that the European Union may seek to become engaged in the funding or running of a referendum campaign, it is not appropriate for the Minister merely to brush their concerns aside.
    8.15 pm
    Whether it happens to involve the European Union or some other body, country, interest group, major multinational company or group of companies, we must remember that the major referendum on the horizon will be on whether the United Kingdom should give up its currency and join the euro zone. Such a change would have enormous geopolitical ramifications. It would be a massive step on the road to political integration of the European Union. People in other countries of the European Union may have an interest in discussing and influencing that process, and people across the world will also take an interest in it. It is entirely reasonable to assert that that issue may attract the funding, whether secret or open, that hon. Members have suggested. It is a realistic point to raise.
    I wish that I had kept the reference, but I heard an interesting programme on Radio 4 a couple of weeks ago. One of the key protagonists of the European movement—he has recently written a book—was talking about the circumstances of the 1975 referendum. He made the point that in that campaign there were strong suspicions that funding was provided by agents of other Governments. He was happy with the outcome of the referendum, and had been part of the campaign.
    There were strong suggestions that funding had come from the CIA, which, on behalf of the United States Government, was keen to promote the United Kingdom's membership of the European Economic Community. I do not know whether that is true. That person had no axe to grind and no interest in falsely suggesting that overseas Government funding was involved in that campaign. If that could happen then on a related issue, it could certainly happen now. It is not satisfactory for Ministers to brush aside these issues and suggest that only some Conservative Members with long-standing concerns about the European Union have expressed anxiety about the clause.
    Mr. Swayne: There is every prospect that, in any referendum on this issue, the present governing party will be on the losing side. It should protect itself against the real possibility that international organisations, such as the North American Free Trade Agreement, may fund the side that it opposes.
    Mr. Brady: I am grateful to my hon. Friend for making that important point. We are debating the issue of fairness
    1016
    in the conduct of a referendum. Whichever side of the argument one is on, it is in the interests of both sides to have a proper, fair campaign.
    Mr. Miller: The hon. Gentleman should reflect on the fact that the hon. Member for Eddisbury (Mr. O'Brien) has just argued the case for having no upper limit. Conservative Members are talking at cross-purposes.
    Mr. Brady: It is perfectly appropriate to examine the clause from all angles. I have no difficulty with that, and I am delighted that the hon. Gentleman has entered the debate. Whether the limit should be removed altogether or whether it should be £10,000, £25,000 or any other appropriate figure can be argued all ways, but that does not do away with the fundamental point about fairness to which my hon. Friend the Member for New Forest, West (Mr. Swayne) referred. This is about having a level playing field and maximum transparency.
    I have some reservations about the £10,000 limit because it interferes with people's freedom to engage in political activity and to expend their own resources on a matter that may be of great significance to them. If the Government are intent on including a £10,000 limit in the legislation, they should carefully consider all the circumstances and how it could be enforced.
    I ask the Minister to reflect on the situation provided for by clause 110, as it stands. The clause makes a distinction between, for instance, a body and an individual. At what stage of co-operation, or coalescence, between individuals do those individuals become a body in the terms of the clause? That is difficult to define.
    A common theme has been seen to develop in the present age of the internet. Direct action supported by some Labour Members—I do not think that they are present this evening—has taken place in Seattle and in the City of London. Some of those activities are obviously co-ordinated in some way, frequently through the internet. The internet is clearly a way of bringing together disparate people and groups who may have slightly different interests, and different reasons for engaging in the activities in which they are participating. However, it is an increasing fact of modern life that it is far easier today to post, on the internet, a statement urging people to take some action, and others may independently, as individuals, choose to take that action.
    Such people need not be members of an organisation such as a political party, a lobby group or a campaigning body, but, at that point, they would clearly be acting in concert to some extent. Under the Bill as it stands, how would Ministers define the point at which those individuals became a body?
    If individual expenditure is involved, other questions need to be answered. If an individual is spending his own money in the way envisaged in the Bill, that may be one thing; but what if a person or body seeks to assist a number of different individuals who—as is perfectly possible—may support people on both sides of an argument? I do not know whether this still happens, but not so long ago some major British companies made a point of funding both major political parties, because they thought it a good idea to support the democratic process. It is possible that someone will see a good reason to support both sides of an argument in the future, perhaps to ensure that the process receives adequate funds.

    1017
    In terms of subsection (3)(a), what is the definition of expense incurred "on behalf of a body? Must it be according to the direction of the body providing the funds? What if there is total autonomy on the part of the recipient of the funds in terms of how they are spent, how the argument is presented and what media are used to convey the argument? As it stands, the clause contains many holes and poses many questions.
    What arrangements does the Minister envisage for the checking and verification of expenditure? The clause does not appear to involve professional organisations or political parties. The aspect that concerns the individual is clearly aimed at those who may have strong beliefs, but are not part of a formal, organised political entity or process. If that is the case, we are clearly not dealing with professional political party agents who know the procedures for returning expenses incurred during elections or, in this instance, referendums.
    How will expenditure be checked, verified and catalogued? How can that be done in the case of people who are not even registered entities? They may simply be ordinary members of the public who feel so strongly about the subject of a referendum that they want to become involved, and to make some impact on their own. As a result, they may distribute posters or leaflets. How, in such instances, can the £10,000 limit be policed in any meaningful way? If the Minister has decided that £10,000 is appropriate, rather than £25,000 or any other figure, we must have a mechanism enabling us to verify the expenditure and establish the items that will count towards that sum.
    Although we may be dealing with enthusiastic amateurs, I think that the Government should make all that clear in detail so that the individuals concerned can have some certainty. If they are to be subject to the stringent criminal penalties referred to by my right hon. Friend the Member for South Norfolk (Mr. MacGregor), they must be able to know when they would be breaking the law.
    As we have heard, fines or imprisonment can be imposed on individuals. Let me return to what at least purports to be the fundamental purpose of this part of the Bill. In the spirit of the Neill report, its purpose is to achieve fairness in the process of a referendum, and, through that, in the outcome; but the punishment that might be visited on an individual who exceeded the expenditure limits—imprisonment or a fine—would clearly have no bearing on the outcome of the referendum.
    If Members of Parliament mistakenly overspend in their election campaigns, a penalty can be imposed involving the rerunning of the election. If someone engages in practices contrary to the spirit of the democratic process, the matter can be returned to the electors, who can be given another opportunity to engage in a contest that achieves the fairness that Ministers, in the spirit of the Neill report, want to achieve in the Bill. Clause 110, however, contains provisions that can be invoked to punish individuals who transgress—perhaps inadvertently—but no provision to bring the matter back. If there has been a widespread abuse, we may conclude that the referendum process was unfair, and that the result of the referendum is therefore tainted; yet we may find that people go to prison or pay a fine, while the result stands.
    1018
    As I said, I did not intend to speak on this, but I feel that there are serious flaws in clause 110. The Committee needs some answers.
    Mr. Walter: I had not intended to intervene again on the clause, but my right hon. and hon. Friends have raised some interesting points. They brought me back to our discussion on whether the clause in its entirety complies with the European convention on human rights.
    I was intrigued to find on the Table a copy of the Bill that is not the same as the copy that we had on Second Reading, or were using in Committee. It has a statement about the convention, which was not there before. It states that the Home Secretary believes that the Bill is compatible with the convention.
    8.30 pm
    My hon. Friends who have been here for the whole of the debate will have heard the Minister use the convention as a reason for not permitting certain of our amendments to go forward, but article 10 states:
    "This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers."
    The Minister has cited clause 110 as the reason it is not possible to exclude foreigners from being third parties, or permitted participants. Surely, article 10 brings into question whether the clause complies with the convention. I would be interested to hear his view because it seems that, if the convention says that one can impart information without interference, a £10,000 limit with criminal penalties of up to a year's imprisonment may contravene the convention.
    Mr. Tipping: I am conscious that I have spoken before and that the Committee wants to make progress. I hesitate to say it in view of the contributions that we have had over the past half hour or so, but there are one or two points to which I want to respond.
    The hon. Member for North Dorset (Mr. Walter) asked whether the Bill complies with the Human Rights Act 1998. That is why the Secretary of State's name is on the front of it. It is straightforward. We put the Bill on the Table in front of the hon. Gentleman so that he knows. It may be challengeable, but that is the fact as we see it.
    The hon. Member for Eddisbury (Mr. O'Brien) was saying, I think, that anyone should be able to spend what they want.
    Mr. Stephen O'Brien: What are you afraid of?
    Mr. Tipping: I am not afraid of anything. People can spend what they want. There is no prescription of what an individual can spend, up to £500,000. If someone wants to spend more than £10,000, they will have to become a permitted party in the terms of the Bill. People can spend far more. I am not afraid of these issues.
    There will be consequences if people spend large sums. One of the themes that has run in Committee is whether both sides of the argument will be balanced. Clearly, that can never be the case—a point that Neill recognised and the Government recognise. To try to contain spending, caps at various levels have been imposed.

    1019
    The hon. Member for Altrincham and Sale, West (Mr. Brady) tried to tempt me down the European Union road yet again. We had a prolonged discussion on clause 98 around those issues. I say for the record—it is merely for the record; I do not criticise it—that amendments on restricting EU contributions, amendments Nos. 14, 15 and 16, were not moved by Conservative Members. Having seen the reaction and excitement of Members during the debate, I have no doubt that there will be many other occasions when we will have the opportunity to discuss referendums, the euro and the EU's involvement. Many of us will welcome that.
    The right hon. Member for South Norfolk (Mr. MacGregor) made one significant point, and throughout its discussions, the Committee has been aware of it. The Bill places some fairly onerous responsibilities on treasurers and responsible persons. There is anxiety—I put it no higher—that it may be difficult to persuade people to become involved as fully as they might in the political process. At various points in the Bill, de minimis provisions are worked in. During our discussions, it was acknowledged across the Committee that the de minimis provisions as they affect constituencies and branches are acceptable and should not cause the problems that they might appear to on first sight of the Bill.
    The right hon. Gentleman asked me about the £10,000 limit and the criminal sanctions. I do not think that he heard my earlier remarks to the hon. Member for North Dorset, who was pressing hard—I am sure that he will continue to press—on what provisions are made to stop avoidance and evasion, and asking what in reality would stop a person from spending more than £10,000. Currently, the only provision in the Bill to achieve that objective is the hefty criminal sanctions.
    The right hon. Member for South Norfolk rightly mentioned—the Committee has discussed the issue at length—the number of criminal offences listed in schedule 19. I agree with his major point that we must be careful not to make the Bill's provisions so strong, firm and frightening that it will put people off engaging in political activity. We should realise that, although political activity may have earned itself a bad name, the Bill will help to rectify the situation.
    Despite what has been said, I believe that most people who work in political parties are the type of people who are involved in charitable work, who want to make a difference and who want to change their communities for the better.
    Mr. MacGregor: I was making that point, but I was also making a point on clause 110 that was rather different from the first one. By lowering the limit from £25,000 to £10,000, one increases the risk of people inadvertently spending modest sums in making their case and yet incurring those heavy criminal sanctions. The two points are slightly different from each other. If the limit were £25,000 as the Neill committee recommended, the provision would not be quite so serious.
    Mr. Tipping: The right hon. Gentleman has hit on a theme that has occupied members of this Committee, and particularly Conservative Members—the Bill's provision of defence clauses. Surely, the type of person whom I described—those who act in good faith and who want to make change and to be part of the process—provided that they act in good faith and properly, should not be penalised for mistakes.
    1020
    In our debates, I have given the Committee an assurance that the Government have written in more comprehensive defence arguments. I have also, more than once, given the Committee an undertaking that, before Report, we shall work our way through the Bill, to ensure that the defence arguments and reasons are comprehensive and in good shape.
    With that, I hope that the Committee will agree that clause 110 should stand part.
    Question put and agreed to.
    Clause 110 ordered to stand part of the Bill.

  Clause 111

    SPECIAL RESTRICTIONS ON REFERENDUM EXPENSES BY PERMITTED PARTICIPANTS
    Question proposed, That the clause stand part of the Bill.
    The Second Deputy Chairman: With this it will be convenient to discuss schedule 13 stand part and new clause 4—Spending limits in referendums—
    '.—(1) The Commission shall review from time to time the question of spending limits in referendums.
    (2) The Commission shall present a report on any review under subsection (1) above to each House of Parliament.'.
    Sir George Young: This debate complements the debate that we have just had, which was introduced by my hon. Friend the Member for North Dorset (Mr. Walter) and focused on the lower expenditure limit of £10,000. This debate will examine the much higher expenditure limits that are provided for, particularly in schedule 13, and address one of the major contentious issues in the Bill.
    In the earlier debate, the Parliamentary Secretary, Privy Council Office said that it was a sign of strength each time he made a concession to the Opposition. We seek a display of yet more strength in this debate, although it may test his virility to the extreme as we consider clause 111 stand part.
    In a nutshell, we believe that the Government have got the matter wrong. We believe that they have it wrong in principle and in practice. We therefore propose to delete the spending limits provided for in the Bill and revert to the position adopted by the Neill committee. If I can use a computer analogy, the Government have turned the parliamentary screen blue. We now need to press a number of buttons, including delete, to try to get back to a workable position.
    There were no spending limits in the 1975 referendum, when the Labour Government of the day concluded that such measures would be impractical. The Welsh and Scottish devolution referendums in 1979 had no limits. The Referendums (Scotland and Wales) Act 1997, the Greater London Authority (Referendum) Act 1998, the Northern Ireland Negotiations (Referendum) Order 1998 and the Education (Grammar School Ballots) Regulations 1998 contained no limits. The Local Government Bill, which provides for local referendums on mayoral appointments and other issues, also contains no spending limits.

    1021
    The Neill committee looked at the issue in depth and reported in October 1998. In paragraph 12.45, it conceded:
    "The case, in principle, for imposing spending limits in referendum campaigns is a strong one."
    However, the next paragraph concludes:
    "We believe, however, that it would be futile and possibly also wrong to attempt to impose such limits in connection with referendums."
    The report goes on to describe the circumstances of a referendum, which include strange bedfellows, participants not confined to the political parties and unknown timing. Explaining its conclusion, the committee says:
    "It appears to us that under these circumstances it would be impracticable to try to control campaign spending. The number of individuals and organisations involved would often be too large. The time-scale would often be too short. Adequate accounting procedures would often be impossible to put in place. The administrative apparatus required would resemble one of Heath Robinson's most outlandish contraptions—and would almost certainly not work."
    The commission on the conduct of referendums reached the same conclusion in 1996, saying:
    "On balance, it is not considered practical to exercise Government control over the total expenditure by those campaigning on either side in a referendum."
    Notwithstanding those conclusions, the Government rejected the Neill committee's advice, although anyone reading the White Paper might be forgiven for not realising that. Chapter 8, on referendums, says:
    "The Committee's report contains a set of recommendations on these matters which the Government accepts."
    That is Government speak for "The committee's report contains one major recommendation, which the Government reject." That semblance of acceptance of Neill, with the Government in denial mode, was repeated by the Home Secretary on Second Reading. He said:
    "I have sought to ensure that the spirit, as well as the letter, of the Neill committee's recommendations on referendums is introduced into the Bill."—[Official Report, 10 January 2000; Vol. 342, c. 36.]
    That was a surprising assertion, as Neill considered and specifically rejected the Home Secretary's solution. The Government not only rejected the committee's principal conclusions, but went on to adopt a solution that the committee had explicitly rejected—an expenditure limit based on votes at the most recent general election. That formula is set out in schedule 13.
    There are three options. The first is that each side in a referendum campaign spends the same amount. Option two is that what each participant can spend is limited. Option three is that there are no limits. The intuitive solution is option one—that in a referendum campaign, the yes and the no side should have equal funding. Sadly, that is ruled out by nearly everyone. However attractive it may be to try to corral all those with an interest in the outcome into two large camps, each with an identical spending cap in the interests of equity, it does not work. When it was tried in Quebec, it was struck down on legal grounds as a violation of the right of freedom of expression of those who did not want to be in one of those two camps. As the Home Secretary said on Second Reading, if we tried to do that here, it would be vulnerable to legal challenge under article 10 of the European
    1022
    convention on human rights. In the clause 98 stand part debate, the Minister said that option one, with each side spending the same, was a cloud cuckoo land solution.
    If that option is not available, those who favour spending restrictions on participants are driven to option 2, which is set out in clause 111 and schedule 13. However, spending restrictions on participants do not work either, particularly when the participants are defined as they are in the Bill.
    8.45 pm
    In paragraph 12.21, Neill clearly made the point that
    "in referendums the political parties may be pitted one against another, or most of the parties may find themselves on the same side … or one or more of them may be seriously split … Whatever happens in any particular case, it is clear that general rules governing the conduct of referendums cannot be based on predictions about the parties' behaviour or assumptions about their role."
    Neill dismissed the assertion by the Labour party in its evidence that
    "the focus of any regulation should be on the political parties."
    It is worth repeating Neill's conclusions:
    "To represent referendum campaigns as merely another manifestation of the usual party political battle seems to us both misconceived in principle and false to the history".
    But that is exactly what is manifested in the Bill.
    In fairness to the Government, they recognised the vulnerability of their proposals during our debate on Second Reading. The speeches of Ministers were peppered with recognition of the difficulties, and with almost desperate invitations to the House to come up with something different. The Home Secretary said:
    "We remain open to argument if better, more workable proposals can be introduced."—[Official Report, 10 January 2000; Vol. 342, c. 39.]
    The Under-Secretary of State for the Home Department said in winding-up:
    "I repeat that we do not have a closed mind on the issue."—[Official Report, 10 January 2000; Vol. 342, c. 113.]
    This debate will test that assertion.
    On Second Reading, this aspect of the Bill engaged the attention of many of those who spoke; and the Government's proposals took on board a fair amount of water. That is significant because it was in the context of broad support for the Bill, which had an unopposed Second Reading.
    The right hon. Member for Birkenhead (Mr. Field) said:
    "For the proposals on the financing of third parties that want to campaign in a referendum to be workable, we shall have to lock some people up."—[Official Report, 10 January 2000; Vol. 342, c. 54.]
    I recognise that, with the present Home Secretary, that may well be an argument in its favour, but the more squeamish among us will want to see if there is a third way.
    My right hon. Friend the Member for South Norfolk (Mr. MacGregor), who was a member of the Neill committee, reaffirmed its recommendations. He said:
    "That is why the Neill committee found that it would be difficult to have a fair, workable system of capping in referendums. I still hold to that view",—[Official Report, 10 January 2000; Vol. 342, c. 67.]
    The hon. Member for Rotherham (Mr. MacShane) made the point that one referendum campaign—on Europe—is under way already, so the limits in the Bill

    1023
    are to some extent redundant. My hon. Friend the Member for Blaby (Mr. Robathan) said that these sections of the Bill "remain flawed".
    My hon. Friend the Member for New Forest, East (Dr. Lewis) used his legendary knowledge of the component parts of the pro-nuclear disarmament movement in the 1970s and 1980s to show how the limits in the Bill could easily be evaded. He concluded:
    "That is why the whole concept of putting caps on what may be spent by parties or groups in a referendum is fundamentally flawed."—[Official Report, 10 January 2000; Vol. 342, c. 107.]
    I stand to be corrected, but I could not find in Hansard during the Second Reading debate one explicit endorsement of the Government's proposals. There was criticism from all sides, and even the Ministers were uncharacteristically hesitant in their advocacy.
    The reality is that they have come up with something that is neither defensible intellectually, nor deliverable in practice. It is fatally flawed in relating spending power to votes at the general election. There is no intellectual argument whatsoever for that limit. As Neill pointed out, general rules governing the conduct of referendums cannot be based on predictions about parties' behaviour or assumptions about their role. If we are resolving in a referendum an issue that it has not been possible to resolve through a general election, and on which major parties may be split, why should we base spending limits on the basis of votes cast at the last election? If, for the sake of argument, the amount Labour could spend on a yes vote in a euro referendum was based on how many votes it got at the next general election, that would be assuming that everyone who votes Labour would like to join, but we all know that that is not the case.
    If we had a referendum on proportional representation, how would Labour's entitlement to spend be determined? It has no policy on PR—we all know that it is split. Why should all Labour's spending power be allocated to one side of the argument according to the whim of the national executive? That is an absurd proposition, rejected by Neill and supported by no one.
    It is also incongruous to place spending limits on the protagonists in a referendum, when the media remain free to sponsor or promote any campaign they see fit. Indeed, one of the protagonists could simply buy a newspaper or magazine and circumvent the restrictions, and the message might not be seen as an advertisement, but as unbiased editorial comment.
    Not only are there some arguments of principle, but there are some practical problems, many of which were rehearsed earlier in Committee, including the so-called amoeba factor where a group simply divides itself into two. Individuals can form an unlimited number of partnerships or establish an unlimited number of companies. If they registered as permitted participants, they could then each spend up to an amount prescribed in the Bill. Of course, any spending controls can be got round by spending prior to the official commencement of the campaign.
    One interesting point that we raised earlier in Committee was that political parties can donate to other political parties under clause 48(2)(c). On Second Reading, the Home Secretary defended his limits as being unbiased because, he said, it was a "racing certainty" that the Liberal Democrats could never raise £3.5 million. However, they would not need to raise the money
    1024
    themselves because Labour could simply give it to them under clause 48(2). We heard earlier about the potential role of international organisations. I do not wish to spend too much time on Europe, but in effect the Minister pleaded with European institutions not to get involved in domestic referendums and another hon. Member remarked that that might be counterproductive. That may be right, but the Minister's pleading may fall on deaf ears. On top of what might be spent in this country, foreign donations—about which we have heard so much—could influence the outcome of a domestic referendum.
    We are left with option three of no spending limits, which is the preferred option of Neill and others. I think that that is the best solution, certainly in the short term. Of course, we want to avoid a re-run of the situation in Wales, where one side had lots of money and the other very little, and the possibility—I put it no higher than that—that that influenced the outcome. However, let us look at the likely referendums in the near future, which include first past the post against alternative vote plus, and entry into the euro. In neither case is it likely that any side will want for financial support. On the euro, there are some big battalions on both sides, as there are on the voting system. Once those two referendums are out of the way, new clause 4 can kick in, and the Electoral Commission can reflect on that and come up with its views.
    The Government have been flexible on the Bill, and they have said that they will consider and reflect in the light of our debates. It really is important they do the same on this issue, otherwise the verdict of the referendum will not have the validity that we all want. A few hours ago, the voting closed in the Labour party's selection of a candidate for the mayor of London. I do not mind the Labour party having strange rules for its internal elections, but the Committee should think twice before it imports unchallenged into the Bill the propositions before us tonight.
    Sir Michael Spicer: As my right hon. Friend the Member for North-West Hampshire (Sir G. Young) has just said, the problem with clause 111 as it stands is that it is unfair in two ways. First, at the moment all the official parties in the House—with the exception of the Conservatives—are in favour of a yes vote in a referendum on the euro. The formula in clause 111 and schedule 13 would mean that much more money would be collected by the yes campaign. On grounds of general equity, that would be inappropriate.
    The second unfairness is much more serious and it was alluded to by Neill, as well as by my right hon. Friend. In chapter 12.30, Neill states:
    "To represent referendum campaigns as merely another manifestation of the usual party political battle seems to us both misconceived in principle and false to the history of referendums since 1975."
    The reason that Neill gives, as my right hon. Friend mentioned, is that political parties are alliances. All parties are split on the question of Europe, for example. The hon. Member for North Devon (Mr. Harvey) has his own faction in the Liberal Democrat party. That party's official position on Europe has been clear for many years, and it is that it wants a federal European state. However, the party's membership and electors hold a view that is very different from that of the party establishment.

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    The same is true of the Labour party.
    Mr. Miller: Is the hon. Gentleman arguing that, in a campaign on the euro, for example, part of Conservative party resources should be allocated to promoting the views of the hon. Member for Esher and Walton (Mr. Taylor), which contrast with the hon. Gentleman's own views?
    Sir Michael Spicer: I am saying that the Bill is nonsense. I am dealing with unfairness at the moment, but I shall come to questions of logic and principle in a moment.
    The leadership of the Labour party suppresses the faction led by the hon. Member for Great Grimsby (Mr. Mitchell). Many Labour Members support views that are diametrically opposite to those held by the party leadership. The fact that parties are alliances is therefore manifest throughout the House.
    The same is true of other permitted participants in the referendum campaign, such as the trade unions. Some of the biggest unions—the Transport and General Workers Union, for example, and Unison—have come out against entry to the single currency. However, the established leadership of many of the unions that took part in last year's Trades Union Congress special conference on the matter clearly demonstrated its support for the project. The unions' leadership—and, therefore, the people whom one presumes would apply for the money available under the clause—is committed in one direction, but members are much less convinced. That difference was fudged at the special conference.
    It is not surprising that trade union members should be so unhappy about the European question, as 69 per cent. of the entire population share their views. The same fault line runs through most of our institutions, but the Bill provides that overwhelming amounts of money will be collected by organisations whose established leaderships have settled on a particular point of view—in many cases, without the full-blooded support of their members.
    The Bill is therefore manifestly unfair to the memberships of the political parties and the other organisations involved in the referendum campaign. The Conservative position is the correct one. Neill looked at the matter very carefully and his arguments are very balanced. He concluded that it would be completely wrong to use political parties as the basis for the allocation of limits on referendum expenses.
    Secondly, Neill came to the conclusion—this was implicit in what he said—that if that process was engaged upon, given the present position of most of the establishments of the political parties and trade unions, campaign funding would be unbalanced. That seems a poor way of establishing fairness.
    9 pm
    The clause throws up something even more fundamental about the Bill. It demonstrates how obsessed the Government are with trying to control spending amounts, and in a way that is unfair. The Bill is sloppy when it comes to other important aspects that it should be addressing, such as the powers of the commission to set
    1026
    the question. The Government have said that they will look at such matters again, but they have displayed a sloppiness of thinking in that respect. However, that is not the case when it comes to money. The Government are absolutely obsessed about controlling expenditure in a way that could do great harm to the cause of democracy, in so far as it is represented by a referendum.
    I support my right hon. and hon. Friends in that it must be right to go down the Neill path. There should be no limits on referendum campaign spending, because they are both appropriate and impossible to apply.
    Mr. MacGregor: I congratulate my right hon. Friend the Member for North-West Hampshire (Sir G. Young) on his speech in opening the debate. He expressed admirably a series of arguments that totally demolished the Government's case. I will not go into some of them in detail because, happily, he has already done so.
    I agree with my right hon. Friend that, on Second Reading, the Home Secretary and the Under-Secretary of State for the Home Department, the hon. Member for North Warwickshire (Mr. O'Brien), displayed an openness of mind on the issue. They seemed to be looking to the House to come up with an alternative solution that would meet our objections. We have racked our brains; so has the Neill committee, and so, no doubt, have the Government. No one has an alternative solution except to remove limits on spending. That is the position that we have reached, and I think that it is correct, which means voting against clause 111.
    As is well known to those who follow these matters, on the Neill committee I held a minority position on spending on general elections. I took the view that the Neill committee's recommendation to have a spending limit was wrong, and I briefly set out my reasons in the report. Two of those reasons are relevant to this debate. First, I believe that to have spending limits in these crucial areas of national importance is an unwarranted restriction on freedom of speech. Secondly, I believe that the practical difficulties of evasion and enforcement that apply to the general election will apply even more to referendums.
    A retired party official, in giving evidence to the Neill committee, said, "Show me a limit and I'll show you how to get round it." Illustrations were given on Second Reading and again tonight on how it is possible to get round a limit. If that is true of general elections—as I think it is—it is true in spades when it comes to putting limits on referendum campaign spending. The Neill committee was unanimously against the idea.
    I found it fascinating to go through all the arguments to reach a conclusion. Wryly, I sometimes thought that the arguments justified my desire not to have spending limits on the general election campaign. Leaving aside the point of principle, we all believed that the practical difficulties were such that there was no case for recommending spending limits.
    Let me list some of my objections. The first is an objection of principle. Without taking sides in the euro debate, I refer to the issue of the referendum on the single currency. Clearly, that is a crucial national decision, which is, in theory, irreversible. Because of the key importance of that national debate, is it right to set a limit that is less than a company's yearly spending on

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    marketing detergents? It is astonishing that we cannot even spend as much as is spent on the marketing of one domestic product on that critical national decision.
    The nation, not Parliament, is making the decision. In theory, it will be a permanent commitment—unlike a general election, when the nation can change its mind after four or five years. The measure is an unwarranted restriction on, and interference with, freedom of speech and debate on that crucial issue. That is the point of principle.
    The practical issues point in the same direction. By and large, a general election is fought by political parties with well-established machines and structures, and expertise in matters such as electoral law. Parties have professional management and staff, who are skilled in dealing with issues such as the control of expenditure, the management of limits and related accounting problems.
    That will not happen in a referendum campaign. It may happen for the political parties, but other organisations—whether official ones to which Government funding will be attached or those others listed in the Bill—will be rapidly put together. They will be united by only one thing—the side for which they are fighting in the campaign.
    Those units, parties or organisations will hold different points of view. At best, they will have only six months to sort out all the complications of controlling expenditure, and managing the limits. In practice, it will not be possible for them to do that. There could be many unintended, innocent breaches—especially in the early stages of the campaign.
    The Neill committee dealt with that matter in paragraph 12.46 of our report, which was quoted by my right hon. Friend the Member for North-West Hampshire. The committee's case was based on a long argument, but it is succinctly put in the report. We pointed out that a referendum campaign is not like a general election; it is
    "more like a free-for-all. Anyone can participate. Many do. The political parties may, or may not, be the principal contestants"
    or may be only in part.
    The report continued:
    "It is often not known long in advance whether a referendum will take place."
    The six-month period that will apply will come upon one suddenly. As I pointed out, those on both sides of the campaign may never have worked together before and would not have the structures to control the machine. Sometimes they might be unwilling to co-operate on expenditure. It would be impractical to undertake such a commitment. The committee summed up the point by stating:
    "Adequate accounting procedures would often be impossible to put in place. The administrative apparatus required would resemble one of Heath Robinson's most outlandish contraptions—and would almost certainly not work."
    It is not right to introduce an unworkable proposition, which has criminal penalties attached.
    When we discussed clause 110, I raised the issue of criminal penalties. I do not refer to the difficulty of recruiting treasurers for political parties. My point is that it will be difficult to recruit someone to take on that key role in an organisation that has been hastily brought together for one particular purpose, for only a short time. If that person does not have the machinery to control the organisation, he will be liable for criminal penalties.
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    Third-party groups are difficult enough to control in a general election, although that is crucial when there are expenditure limits. It will be much more difficult to control them in a referendum. There will be many little ad hoc groups. The amoeba principle has been referred to in other debates—there will be many ways to breach the limits by setting up different organisations with different names. In effect, the limit will not be properly adhered to in any case.
    My colleagues have already referred to unfairness, which is another crucial element. Of course, it is true that there is no way that we can achieve total fairness on expenditure either in a general election or in a referendum. We all agree on that, and my right hon. Friend the Member for North-West Hampshire made that point clearly in his speech. It is important that there is fairness in terms of Government expenditure, and that point has been agreed. It was clear to us on the Neill committee that that point was so important that it should have been applied in earlier referendums. For example, if there had been Government funding for both sides in the Welsh referendum, I suspect that the Government would have been spared a great deal of their current embarrassment because we would not have a Welsh Assembly.
    Another aspect of unfairness is the undue emphasis given to political parties in a referendum, which is the point that my hon. Friend the Member for West Worcestershire (Sir M. Spicer) has just made. I do not understand why the funding should be based on political parties.
    Mr. Brady: Did my right hon. Friend and his colleagues on the Neill committee consider the situation that appertained at the last general election? A political party attracted quite a large number of votes, but it had no position on the European issue. I refer to the Referendum party, which wished to have a referendum but did not take a stance as to whether one should vote yes or no in it. The people who voted for the Referendum party would properly accrue a share of the expenditure limit in the same way as others, but that party did not adopt a position on the issue.
    Mr. MacGregor: We did not consider that issue, but my hon. Friend makes a point. I am sure that there are many other issues that we did not consider which point in the same direction.
    I acknowledge that the formula has been improved since the original proposal to which Lord Neill objected and about which he wrote to the Home Secretary. However, it is still far from satisfactory. It could lead to a manifestly unfair outcome with four of the political parties perhaps being on one side in the referendum, with only one on the other. I do not see why we should set up a formula that is weighted in that way, but that will happen because the formula is weighted towards the political parties.
    There are many reasons why we should reject the clause. It will clearly give the Government an advantage in whatever position they wish to take. Let us assume that there is a six-month period for the referendum campaign. The Government will still be allowed to campaign with substantial funding for five of those six months, whereas all the others will be constrained during the six months by the limits that apply to them. That is another element of complete unfairness.

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    I return to the position that my right hon. Friend the Member for North-West Hampshire and the Neill committee have held about expenditure limits generally. The proposal is wrong in principle and unworkable and there is not another solution available. The right thing to do is to reject the clause.
    Mr. Stunell: The Conservatives' arguments on the clause and schedule 13 are misconceived. I shall illustrate why I think that is so and I invite them to consider what would happen if they were successful in rejecting the clause.
    What the clause proposes and the schedule puts in place is not an absolute limit on the spending that will be available to any particular side in any particular referendum campaign. They limit the amount that individual participants can contribute to that campaign. A campaign that attracts funds from many participants—political parties, manufacturing industry and trade unions—can receive as many contributions from those bodies as it can accumulate. The Bill places a ceiling on the contributions of each of those bodies, but as far as I can see, there is no provision for a global ceiling for any campaign seeking a particular outcome in a referendum.
    Mr. MacGregor: Does that not make a nonsense of having a ceiling at all?
    9.15 pm
    Mr. Stunell: I shall perhaps illustrate that it does not, although I do not know whether that will be to the right hon. Gentleman's satisfaction, but I shall first develop my argument a little further.
    The debate so far suggests that the Bill provides not so much for a limit as for a grant, so that money will be given which can be spent to the set limits. That is not the case.
    If we adopt the scheme in the Bill and Conservative Members' assumptions are correct, the Conservative side—let us call it that for the sake of argument—in a euro debate would be able to attract a ceiling of £10 million. That would consist of £5 million for the umbrella body and £5 million for the Conservative party, being one that scored more than 30 per cent. of the vote in the previous general election.
    Conversely, the other side of the debate would attract a ceiling of £5 million for its umbrella organisation. It would also attract £5 million for the Labour party, as one that got over 30 per cent. of the vote at the previous election, and £3 million for the Liberal Democrats. If Conservative Members' assumptions about other parties in the House are right, seven other parties would be able to attract ceilings of £500,000 each. The total ceiling for that side of the debate would be £16.5 million, compared with the total ceiling of £10 million for the Conservative side.
    It has been said that that is where the unfairness lies, but that is not the case. What other options are there for a no campaign that wants to spend over £10 million? It can recruit any individual, company and unincorporated association prepared to contribute up to £500,000.
    Mr. Swayne: It is of course possible for a handicapped horse to win a race, but it nevertheless begins with a
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    handicap. That is the position that the hon. Gentleman seems to be espousing. It might be possible for a political party to overcome a handicap, but it is still unfair that it should start with one.
    Mr. Stunell: That is where the Conservatives have got the whole argument fundamentally upside down. It is not a question of whether a political party is handicapped, because as the hon. Gentleman rightly pointed out earlier, the various parties have different views within them, and it might well be that a party was committing to the argument a sum that fell a long way short of the amount allowed by the expenditure ceiling. If there were serious internal divisions, the party's fund-raising attempts and the determination of its executive to apply the funds to a particular cause might be inhibited.
    Sir Michael Spicer: The point is not that political parties would be handicapped—we have been arguing that the emphasis should not be on political parties—but that a particular side of the argument would be handicapped, as the hon. Gentleman has rather brilliantly explained.
    Mr. Stunell: Let me develop my point a little further. There is such a fundamental disconnection between the arguments being put by the Conservatives and real life that it will take a while to explain it. We have not yet considered the situation of the Democracy movement, which is not part of the calculation at present, the UK Independence party, or any other extraparliamentary party which is now represented in the European Parliament and possibly elsewhere. There will be other participants in the campaign and each will have a limit on its spending. That is what the Bill proposes.
    I ask Conservative Members to address themselves to the unfairness that would be generated if we accepted their scheme instead. The view that the Conservatives have presented to the Committee is that there should be no limit on the spending of any political party in any referendum. There would therefore be no limit on the expenditure of every one of the nine non-Conservative parties represented in this House. Let us suppose that every one chose to spend as much on a referendum campaign as the Conservatives spent on the general election campaign—£28 million. Under the Bill, the anti-Conservative forces would be restricted to spending £16.5 million, but under Conservative proposals, £250 million would be the barrier.
    The Conservatives will say that the Liberal Democrats would never spend £28 million. That is precisely my point. The legal limits in the Bill cap the expenditure of any participant in a referendum campaign but would not limit expenditure of one side of the argument as a whole. That seems fairer and less unequal than Conservative proposals.
    The right hon. Member for South Norfolk (Mr. McGregor) said clearly that he was opposed to any financial limits for general elections or referendums. We really must decide whether we prefer to use the word "referendums" or "referenda". [Interruption.] Typically, the Government have one view and the Opposition another.
    Sir Patrick Cormack: Stick to the Latin.
    Mr. Stunell: If I recall Standing Orders correctly, I believe that I am required to speak English in the Chamber.

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    I take a different view from the right hon. Member for South Norfolk. We must create a more level playing field; we need more balanced legislative requirements. That is why the Liberal Democrats have throughout supported the principle of a limit on national expenditure in general election campaigns, and why we certainly support introducing limits on expenditure in referendum campaigns.
    Let us be clear: the Bill—I am not sure whether it is the Government's intention—prevents one participant on one side of the argument distorting the value and impact of a campaign by jacking in £28 million, or whatever the sum might be. A large amount of money can be spent, but only if a wide range of bodies and organisations are committed to one cause. That is an appropriate way forward.
    It has been argued that one poor, impoverished, unsupported political party, isolated and marooned, carrying the flag for a point of view in a referendum, could be overwhelmed by Scottish and Welsh nationalists and Liberal Democrats, all of whom will have pumped large sums of money into the campaign. What world do people who present such arguments inhabit, for goodness sake? It is not like that at all.
    Mr. David Rendel: I wish it were.
    Mr. Stunell: We certainly do. I would love to regale Members with some of the stories that have come out of our proceedings upstairs. My local party does not have a budget of £250,000 a year, although I know one or two local Conservative parties that do—and good luck to them.
    Let us please keep in touch with the real world and understand what the Bill does and does not allow. It does not put the Conservatives at a disadvantage. It introduces sensible limits, which the public are expecting this House to set. Indeed, they would be disgusted with us if we failed to do so. The limits will protect democracy in future and, in due course, benefit the Conservative party just as much as they will any other political force inside or outside this House.
    Mr. Swayne: I shall try to reconnect the hon. Member for Hazel Grove (Mr. Stunell) with reality. I noticed that during his powerful speech, he did not address himself to any of the arguments made by the Neill committee, which set out the reasons for not having such limits.
    It is nonsense that the amount spent by a political party in a referendum campaign should be linked, as it is in schedule 13, to the proportion of votes cast in a preceding general election. A general election is a referendum, so to speak, on any number of issues. People do not have the single-issue focus that determines their vote in a subsequent referendum. Indeed, they may well support a political party in a general election for a particular reason, while being wholly opposed to that political party's stance on the issue that is the subject of a subsequent referendum.
    Political parties recognise that and play it for all it is worth, as we see from the spin being put out for the next general election. The governing party is determined that the next general election should not be a sterling election, because it recognises that at present 69 per cent. in the opinion polls are deeply anxious about the prospect of
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    sterling being abolished. The Government therefore want to make it clear that the next general election is not about that. It is about any number of other issues, and that topic can be addressed subsequently in a single-issue referendum.
    Of course, that is entirely disingenuous to the voter, whose vote at the general election will determine the expenditure of a political party at the subsequent referendum. The logic of that is monstrous—that someone who is wholly opposed to a political party's stance on the referendum issue should, by casting his vote for that political party quite properly on other issues at a general election, nevertheless play a part in determining the expenditure permitted to that party at the subsequent referendum.
    Mr. Stunell: I am not sure whether the hon. Gentleman is following his own logic. Is he saying that he would be happier for that party to have no limit on how much it pumped into a campaign with which that voter disagreed, or that he would prefer to have a limit? He seems to be arguing in favour of a worse evil than the one about which he is complaining.
    Mr. Swayne: No. I believe that the logic of the clause is monstrous, and I do not want the clause or the schedule in the Bill at all. I shall vote against them.
    Mr. Mike O'Brien: Argue that.
    Mr. Swayne: I am arguing it now.
    The Minister is aware that there is an issue with respect to parties being split. It has been drawn to our attention by the Neill committee. I suggest that one of the reasons for calling referendums is the fact that parties are split on the issue.
    Mr. Stunell rose
    Mr. Swayne: Let me answer the hon. Gentleman's last point, before he makes his next one.
    It may be more logical than the position set out in the clause to argue that political parties have no right to spend any money on a referendum campaign, because the purpose of a representative democracy is that political parties, on the strength of their votes, should determine the issues on the basis of arguments presented in the Chamber.
    It seems to me more logical that the political parties, having handed that decision to the people in direct democracy rather than representative democracy, should stand back and spend nothing as political parties, but allow everything to be carried forward under the umbrella campaign. That is not what the clause states, which is a powerful reason for voting against it.
    Mr. Stunell: I thank the hon. Gentleman for giving way. He seems to be moving round to my position that there should be a limit; he just thinks that it should be set at zero, not £5 million. How can he be happy for the Labour party, for instance, under the strict control of the Prime Minister, to be committed to spending, say, £26 million, as it did in the general election, in order to support a yes vote? Would

    1033
    he not prefer the Labour party to be limited to spending only £5 million in support of a yes vote, or zero, as he now seems to be offering the House?
    9.30 pm
    Mr. Swayne: The hon. Member for Hazel Grove illustrates effectively the problem of setting any spending limit in a referendum campaign. The Neill report makes that point. As the hon. Gentleman showed in his critique of my arguments, there are many different ways of reaching a position. The clause should not remain in the Bill. One could use any number of different logical arguments to support that view.
    Mr. Brady: If the Labour party were prepared to be honest, and to campaign vigorously in a general election for a yes vote on the euro, there would be some merit in the clause because its vote in the general election would be so greatly reduced that its expenditure in the referendum campaign would be much less.
    Mr. Swayne: On fairness, I shall develop the point that I mentioned earlier about the necessity of political parties standing back from the fray. A useful example would be the referendum that we never had and should not have been denied on Maastricht. All the political parties were in favour of the treaty and they would all have spent up to their limit on promoting a yes vote. That is outrageous.
    Mr. Mike O'Brien: I am following the hon. Gentleman's arguments with care, in so far as I am able; sometimes they turn in on themselves. It is interesting that one of the reasons for the hon. Gentleman's objection to the clause is that it does not prevent political parties from engaging in the debate. He suggests that it would perhaps be better to allow only umbrella organisations to fight a campaign, and that both sides should be equally funded.
    We considered the hon. Gentleman's view, but the difficulty is that political parties may take a stand for or against a proposition for reasons different from other organisations'. They might not therefore agree with the arguments of an umbrella organisation. For example, the British National party might have different arguments from the Conservative party's about sterling.
    Mr. Swayne: I accept that, but it applies to anyone in an umbrella organisation, not only political parties. I can accept the logic of different limits for different political parties, but it is monstrous for them to be determined by the number of votes that a political party receives in a general election, which is held on a range of issues.
    There has been much talk about a European referendum. That is quite proper because it focuses the mind. However, let us consider other possible referendums. It is conceivable that we may have a referendum on independence for Scotland or Wales. After all, the governing party recently came fourth in a by-election in the Principality. At the election for the National Assembly for Wales, the governing party lost Islwyn, the former parliamentary seat of Commissioner Neil Kinnock.
    The governing party may want to lance the boil of nationalism at some stage and reveal it for what it is by holding a single-issue referendum on independence.
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    Under the proportions set out in schedule 13, £30 million would be spent on the side of keeping Wales in the Union, while the Welsh National party would spend only £500,000 against the proposition. That is monstrous. The same would apply in a Scottish referendum. The clause is manifest nonsense and should not stand part of the Bill.
    Mr. Brady: I am grateful for the opportunity to contribute to this interesting debate and I am pleased to follow my hon. Friend the Member for New Forest, West (Mr. Swayne), who made some important points. At one point, I was tempted to change my stance because linking the sums of money that can be spent in a referendum campaign to a general election result might affect the way in which people vote in a general election. That might have some benefits. I wavered for a moment and the hon. Member for Hazel Grove (Mr. Stunell) nearly swayed me—I think unintentionally—but it is important to note that although the clause is ostensibly about fairness and striking a balance on expenditure and the conduct of a referendum, the detail does precisely the opposite in so many ways. As my right hon. Friend the Member for South Norfolk (Mr. MacGregor) pointed out, there would be no restriction on the Government's expenditure for five months of a six-month campaign.
    One can take that even further by thinking back to the admission made in the House yesterday by the Minister of State, Foreign and Commonwealth Office, the hon. Member for Leicester, East (Mr. Vaz), that considerable Government expenditure is already going into the beginnings of a campaign for British membership of the euro. The "Your Britain, Your Europe" campaign has already started, a campaign bus is going about the country and Ministers are addressing public meetings. That is all part of the softening-up exercise for a euro referendum. The Government are taking advantage of their freedom to spend public money on matters that may, over the medium term, influence the outcome of a referendum on the euro in the next few years. The failure to control Government expenditure makes the clause laughable as, apart from very close to the date of the referendum, it ultimately would not control what could be the most outrageous abuse in the whole referendum process.
    Mr. Mike O'Brien: I hear what the hon. Gentleman says, but I would not want him to mislead the Committee. Is he sure that the Bill does not also deal with Government expenditure and the use of the civil service during the course of a referendum campaign?
    Mr. Brady: During the immediate course of the campaign. We do not know whether the referendum will take place in two or three years or when the Government will press the British people to give up the pound, but at this distance we can already see public expenditure on a softening-up exercise on the wider issues related to the euro. The clause does not prevent that.
    The detail of the clause is even more remarkable because the total lack of logic in the formulae that have been employed beggars belief, and I cannot see why the share of the vote at a general election should be the relevant measure for these purposes. My hon. Friend the Member for New Forest, West (Mr. Swayne) pointed out that there are good reasons why that may be anything but an adequate indicator of people's views or sympathies on a referendum on a particular issue such as the euro or,

    1035
    as he said, independence for Scotland or Wales. All those issues can divide all parties in the House and the people of this country, but not in ways that are easily categorised according to voting behaviour at a general election.
    There are other ways of arriving at a suitable split of the expenditure and we might refer to opinion poll ratings on a particular issue. On the euro, 70 per cent. of the British public would favour keeping the pound. I do not say that opinion polls would be the perfect measure for such an exercise, but they would at least be immediately germane to the specific issue in the referendum, whereas the previous general election may have no relevance whatever. Hon. Members have frequently chosen the euro as a good example, and a better measure for deciding the expenditure permissible in a referendum on the euro might be the share of the vote at the previous European election. That would give a different outcome.
    In the north-west, where Labour has the large majority of parliamentary seats, it had only a minority of the vote in the European election. I strongly contend that that was a far better indication of the views of people in my region on whether we should give up the pound than was the vote at the last general election when, inevitably, many other issues were at stake.
    I referred to the Referendum party in an intervention, so I shall not deal with it at length now. It shows that there is a fundamental flaw in the Government's approach of taking a share of the general election vote as the relevant measure for these purposes. How can that possibly be the appropriate measure, if a political party expressly does not take a view on an issue that may be tested in a referendum? How can it be right that the votes of those people who voted for such a party do not count in the distribution of funds for these purposes?
    Mr. Stephen O'Brien: In addition to sharing a surname with the Minister, we are on opposite sides on the Committee considering the Freedom of Information Bill. Although that is a great pleasure, it is about as far as we go, as we do not share the same views on this clause.
    Clause 111 goes to the heart of fairness in referendums. The provisions cover referendums for the United Kingdom as a whole and for parts of it. When considering the clause, it is useful to have in mind the forthcoming—sooner or later, we do not know—referendum on whether the United Kingdom should join the European single currency. That helps to highlight some of the issues. I hope that the Minister will be able to give the clarification and assurances that are required.
    Under clause 98, permitted participants are either registered parties, individuals or entities duly declared and notified under clause 99. As my right hon. Friend the Member for South Norfolk (Mr. MacGregor) said when we debated clause 110, the nominated person is the treasurer or deputy treasurer under clause 111(2)(a)(i), who can be guilty of an offence if spending is in excess of the authorised limit.
    At the time a general election is called, the party association—or however else it is organised—is suspended, and the agent and candidate become legally responsible during the campaign. Under electoral law they have the authority to control expenditure, and they can insist that no further expenditure is incurred by the party for fear of it being counted as an electoral expense. It is not clear whether, under the Bill, that would apply to a referendum.
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    I understand why there has to be a difference. By definition, a referendum is a process apart from the broad general election, when a party and candidates are seeking a mandate. A referendum is necessarily a hived-off process. I realise that the thinking behind the Bill is an attempt to find an alternative to the well-established practice, which has much precedent, of the agent and the candidate becoming legally responsible for expenditure during a general election. If a referendum is called when the House of Commons is sitting, there must be a different process.
    9.45 pm
    As has been said, there is a lack of clarity. Many of the arguments and the expenditures—although not all—will be made by political parties in any referendum campaign. What controls are provided? This is the clause in which they need to be identified. What authority is given to treasurers to establish that a political party's expenditure to support its fund raising does not constitute part of its expenditure in support of the referendum campaign, and should not therefore count in terms of the limit?
    The hiring of halls and catering facilities for fund-raising purposes might be considered to be de minimis, but we should bear in mind that most parties would seek—in general, and if they could do it—to spend to the limit in any referendum campaign. They would have the opportunity and, no doubt, the sense of duty to use all the resources at their disposal to put their case to the electorate. The Bill does not make it clear whether those expenditures would count.
    This goes to the heart of what was said by my right hon. Friend the Member for South Norfolk. It is a worrying aspect of the attempt to attract and, in this instance, retain treasurers or deputy treasurers; and, given the criminal sanctions involved, it is particularly serious. The Bill does not seem to address the problem.
    There seems to be a confusion between the duties of the Executive at the time of a referendum campaign, or when it is known that one is to take place, and the case being made in respect of the issue involved. The most graphic way of illustrating that is to imagine that a referendum is to take place on the same day as a general election. Indeed, we were given some indication that the Government had had that in mind. I hope that the Minister will explain how the clause in particular, and the Bill in general, would operate in such circumstances. I tried to read the Bill with that scenario in mind, and the result was very confusing. I hope that that does not merely reflect my own shortcomings; I genuinely believe that there are serious problems.
    Paragraph 3 of schedule 13, which is linked to clause 111, provides for circumstances in which a referendum does not apply to the whole United Kingdom. My hon. Friend the Member for New Forest, West (Mr. Swayne) alluded to such circumstances. In the case of a referendum on electoral reform, there might well be dispute over whether Northern Ireland should be embraced. Under the Bill, however, the Secretary of State has total power to make provisions by order. That carries a grave danger, given that the Government would no doubt have an interest.
    We need reassurance about the Secretary of State's powers to make an order in relation to that type of referendum procedure, given that it would relate to only

    1037
    part of the United Kingdom, according to paragraph 3, which empowers the Secretary of State to make an order when that is the case. We need to know whether the Secretary of State's powers might carry some favourable prejudice on the part of the Government, who, no doubt, would have a view in regard to the referendum.
    Listening to my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady), I was reminded that the time limits prompt certain questions in relation to, for instance, a referendum on our entry into the single currency. At what point would the Government's national changeover plan expenditure qualify to be counted within the limits, or would the might of the Government's machine and of the parties that might support entry be in aggregate a built-in prejudice in favour of the argument versus those who take a different view?
    I am trying to keep my comments brief in the interests of all Members who might want to add to the debate, but those issues go to the heart of democratic legitimacy. A referendum is intended, above all other things, to confer democratic legitimacy on an issue, particularly one in relation to constitutional arrangements. My concern is that with spending limits, particularly as highlighted by Neill, and with the Government's policy as stated both in the debate on Neill and today—they will try to insist on Government neutrality—we will not end up with a fair fight.
    The clause does nothing to ensure a fair fight. It does not dispel the anxiety—irrespective of which side of the argument people are on—that the Government machine, coupled with parties in support of the Government's stated position, will invariably be able financially to outgun the opposing view. Therefore, I support the position of my party's Front-Bench team.
    Mr. Mike O'Brien: It is the first time that I have had to follow the hon. Member for Eddisbury (Mr. O'Brien) in a debate on the Floor of the House, although we are in Committee. It is a pleasure to welcome another member of the O'Brien family to the Chamber. The O'Briens are still voting 2:1 for Labour, so the other side of the family—the black sheep of the family—will perhaps have to work a bit harder. He made a very good speech and raised some forensic points, which deserve much consideration. I should like to consider at greater length some of the finer aspects of the issues that he raised and perhaps write to him on some of them.
    The hon. Gentleman asked about the responsibilities of treasurers. He pointed out that, in a general election, the agent in the constituency and the treasurer nationally would have responsibility, so what happens when we have umbrella organisations and what happens to the parties? The treasurer would still have responsibility for the expenditure of the parties, but the umbrella organisation would have to construct its own financial set-up, including a treasurer. Then we would have to ensure that some responsibilities attach to that treasurer.
    I should like to consider further some of the hon. Gentleman's points, which may deserve some closer thought. He asked what would happen if a general election and a referendum happened on the same day. In that unlikely event, parts V and VII would operate. A registered party would need to submit separate returns
    1038
    for the campaign expenditure in part V and the campaign expenditure in part VII; but, again, the hon. Gentleman raised a number of issues. They suggest that he is right: if that happens, perhaps we will need further legislation to clarify some of the issues. I congratulate him on what was a very good, pertinent and, in many ways, most difficult speech; that is why I thought that I would get rid of his points at the start and then turn to the others.
    Interestingly, one of the most complex issues was whether we should refer to these things as referendums or referenda. I am interested that it is the Labour party that has decided to use the English version and that the Conservatives seem to be using referenda, the European version—perhaps that says something about the debate.
    For the benefit of those who may be watching us, it is likely that we may be in for a longer night than we had anticipated. Whether we will be able to vote at 10 o'clock is probably doubtful, but that will be a matter for you, Mr. Martin, and for the Committee.
    Subsection (1) of clause 111 introduces schedule 13, which provides the expenditure limits on referendum campaigns. Therefore, that short subsection constitutes the outcome that the preceding provisions of part VI are designed to support.
    The issue in this debate is whether such controls should be in place at all. I argue that the Government's position is based on principle and is not aimed at gaining any particular result from any particular referendum. We believe that if, as we have agreed, it is right and practical to control spending at major general elections, it is right and practical to control spending in referendum campaigns. As we have seen in previous clauses, it is no greater matter to establish a regime to fit a relatively brief referendum campaign than it is to activate the Representation of the People Act 1983 regime in relation to, for example, a Westminster by-election.
    Although the need to avoid an arms race perhaps does not arise so acutely in referendum campaigns as in general election campaigns, nevertheless we believe that it is desirable to ensure that the outcome of a referendum is not unduly influenced by the often substantial sums that individuals or organisations may have at their disposal. Schedule 13, which we have attached to clause 111 and are considering in the context of this debate, provides the various limits that each organisation would be expected to observe in a referendum.
    We believe that the Opposition's new clause 4 would send the wrong message to those who are considering the issues that we are debating. We think that the new clause is unnecessary and, in many ways, designed simply to give the Opposition a chance to have the Electoral Commission publish a report seeking to change the way in which referendum financing is organised.
    The new clause, in addition to the Bill's provisions, would send to the Electoral Commission the message that Parliament was so uncertain about the controls that it had established that it wanted the Electoral Commission to re-examine those controls, perhaps even before they were put into operation. The Government, of course, believe that that would be a false signal.
    The Bill gives the commission ample opportunity to comment on anything that it feels is not going well. It does not need the new clause to do that, and we do not want to send it the wrong signal. The Opposition may also feel that, as they do not like the provision in the Bill, they

    1039
    could get a better deal from the Electoral Commission. We do not want them to abuse the Electoral Commission in that way.
    We believe that it is simply undesirable to have referendums bought by those who are able to pay the largest sums. We have to seek to have some constraints. A referendum should, after all, be a decision by the people of Britain. They should decide what to do on the specific issue. However, if one side is able liberally to put its case, whereas the other side is restrained by the finances at its disposal—or if, as Conservative Members propose, there are no spending limits—we could end up with one side being able to drown out the views of the other side, deluging the public with their views and vast amounts of literature, to the exclusion of the other side of the argument.
    If we are putting a question to the British people, we have to give them a choice, a balanced debate and a demonstration of fair play in which both sides are able to put their case.
    The Opposition spokesman, the right hon. Member for North-West Hampshire (Sir G. Young), made three propositions. He said that we could have equal limits, no limits or some limits. I have already dealt with the proposition of equal expenditure in reply to the hon. Member for New Forest, West (Mr. Swayne).
    We could have specified that there shall be equal expenditure by both umbrella organisations. The problem with doing so is that the umbrella organisations may seek to express their arguments in a specific way that is not supported by some of the major political parties supporting a no or a yes campaign. The parties may wish to express their own point of view, and we think that it would be wrong to seek to prevent them from doing so. As the Neill committee argued, it would be impractical to set an equal limit on both sides, but that does not mean that we should have no limits, because that would merely enable those who can spend the most to outshout—
    It being Ten o'clock, THE CHAIRMAN left the Chair to report progress and ask leave to sit again.
    Committee report progress.
    Motion made, and Question put forthwith, pursuant to Standing Order No. 15 (Exempted business),
    That, at this day's sitting, the Political Parties, Elections and Referendums Bill may be proceeded with, though opposed, until any hour.—[Mr. Kevin Hughes.]
    Question agreed to.
    Question again proposed, That the clause stand part of the Bill.
    Mr. Mike O'Brien: I was saying that it would be wrong to enable one side to outshout, outspend or out-propagandise the other, because the people of this country, who might be being asked to make a judgment on an important issue, would not have a balanced argument put to them.
    Having some limits would enable the debate to be balanced. Both sides would have an opportunity to put their case. The parties need not have identical limits imposed on both sides. We do not have a closed mind about the exact make-up of the limits, but our proposal would provide balance in the basic funding for the
    1040
    umbrella organisations and put limits on the other participants in the debate to ensure that everyone could participate.
    Mr. Brady rose—
    Mr. O'Brien: The hon. Gentleman has made his points and I shall try to deal with them. We are pressed for time and there are others who want to contribute on other clauses and amendments, so I shall make progress if he will allow me.
    People want to be informed but they do not want to be deluged with propaganda by the richer side, or by both sides getting involved in an arms race to see who can put the most junk mail into people's letter boxes. They want a sensible debate in which both sides have sufficient funding to ensure that they can put their arguments forward.
    We heard an important speech from the right hon. Member for South Norfolk (Mr. MacGregor), a member of the Neill committee. I shall deal with some of the points that he raised. In response to the White Paper, the Neill committee said:
    "As a matter of principle we do not oppose the imposition of a cap on such expenditure. Our conclusion to the contrary was largely founded on practical considerations."
    If it is practical, as the Opposition accept, to impose limits at a general election, it is practical to impose them on a referendum campaign. There are no new issues of principle.
    The intention behind part VII is to ensure fair play in a referendum. There cannot be fair play if the campaign is skewed by wealthy individuals spending millions of pounds on one side. Provided that they do not attempt too much expenditure, the best way of creating as level a playing field as we can is by imposing limits on the umbrella organisations and the various other participants.
    Conservative Members have pointed out that in the 1975 referendum campaign, Britain in Europe outspent the national referendum campaign by 20:1. The limits in the Bill restrict each umbrella group to £5 million. That is a significant improvement on the situation 25 years ago.
    The right hon. Member for South Norfolk complained about foreign intervention in a UK referendum. If all spending controls are removed, foreign nations will have free rein to spend as much as they want. The scheme set out in the Bill imposes some constraints on that. The Conservatives should bear that in mind. They want to restrict the EU and the various umbrella organisations; they want to restrict everyone except the Conservative party. Labour and the Liberal Democrats are willing to accept limits. The only people who are arguing for unlimited funding are the Conservatives.
    The right hon. Gentleman opposes limits in principle, but that was not the view taken by the Neill committee. He referred to the practical difficulties for campaigning bodies that may not be familiar with the rules, but the Neill committee recommended expenditure controls on third parties and elections. Neill acknowledged that there

    1041
    needed to be appropriate restrictions. If such restrictions are workable for third parties at elections, they are workable for referendum campaigns.
    Mr. MacGregor: I am sure that the Minister would acknowledge that that was not the position of the Neill committee in relation to referendums.
    Mr. O'Brien: I said that it was the position of the Neill committee in relation to elections. The Neill committee opposed controls in respect of referendums because it did not believe that they would be practical. I repeat Neill's conclusion:
    "As a matter of principle we do not oppose the imposition of a cap on such expenditure. Our conclusion to the contrary was largely founded on practical considerations."
    If the practical difficulties can be addressed—we believe that they can—that argument falls.
    The Conservatives are opposed to limits which ensure a balanced debate in any referendum campaign. They want to be free to buy their way to influencing the outcome of a referendum; they do not believe that there should be fair play, or that it is necessary. Our position is that limits are practical and enforceable; they enable free speech, the British tradition of fair play and both sides to have their say in a reasonably balanced way. The Tories may well defend the prerogative of the monied interest to buy the result that they favour. We want the British people to hear fully the arguments on both sides, and we trust them to make a judgment.
    Sir George Young: We have had a good debate. If I may say so, that was not the most assured and confident performance that we have seen from the Minister.
    The Committee has made good progress this afternoon. We had the emollient presence of the Parliamentary Secretary, Privy Council Office. Had he been replying to this debate, I am sure we would have made even more progress. It is like being questioned by two detectives: one shines a very strong light into one's eyes and the other offers a cigarette. Sadly, the one with the cigarette disappeared during this debate, and we were left with the hard man with the bright torch.
    It is not the case, as the Minister asserted, that we want a debate in which one side can outgun the other. The Bill is likely to provide exactly the scenario that he said he did not want, for the reasons explained by my hon. Friend the Member for West Worcestershire (Sir M. Spicer), with the spending power outlined in the schedule.
    Let me pick up on one or two points made by my right hon. Friend the Member for South Norfolk (Mr. MacGregor)—the voice of Neill. They are not Conservative proposals, as the hon. Member for Hazel Grove (Mr. Stunell) and the Minister keep saying. They are proposals from the unanimous report of the Neill committee. Ten people reached the conclusion that the Government's proposals are wrong and ours are right. It is misleading of the Minister to try to put them in a party political context when we are seeking to implement the recommendations of an impartial, neutral committee.
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    As my right hon. Friend the Member for South Norfolk said, some of the limits in the Bill will restrict spending on a decision of enormous importance to less than a company's marketing budget. That raises the issue of liberty. As my right hon. Friend said, we shall impose criminal penalties on a system that the Neill committee believes to be unworkable. A number of my hon. Friends pointed out that the formula in schedule 13 is unfair.
    The hon. Member for Hazel Grove, who is against the proposals, described them as Conservative proposals. They are not just Conservative proposals; some Labour Members supported them on Second Reading. The hon. Gentleman sawed off the branch on which he was sitting. He was in favour of limits because it is possible to get round them. That was the nub of his argument. He wanted an overall limit on all expenditure, but that is not what the Bill delivers.
    Mr. Stunell: I appreciate the right hon. Gentleman's critique, but he misquotes me. I did not say that I was against the proposals because they were Conservative proposals: I am against them because they are wrong.
    Sir George Young: The hon. Gentleman described them as Conservative proposals, but they are not. They are the recommendations of the Neill committee and of the Nairne committee before that. The proposals as they now stand will cause the Government enormous difficulties. We believe that they are indefensible in theory and undeliverable in practice, and we urge the Committee to vote against them.
    Question put, That the clause stand part of the Bill:—
    The Committee divided: Ayes 334, Noes 137.

    Division No. 80]

    [10.10 pm

    AYES

    Ainger, Nick

    Bruce, Malcolm (Gordon)

    Ainsworth, Robert (Cov'try NE)

    Burden, Richard

    Alexander, Douglas

    Burgon, Colin

    Allen, Graham

    Bumett, John

    Anderson, Donald (Swansea E)

    Campbell, Alan (Tynemouth)

    Armstrong, Rt Hon Ms Hilary

    Campbell, Rt Hon Menzies (NE Fife)

    Ashton, Joe

    Atherton, Ms Candy

    Campbell, Ronnie (Blyth V)

    Atkins, Charlotte

    Campbell-Savours, Dale

    Austin, John

    Caplin, Ivor

    Banks, Tony

    Casale, Roger

    Barnes, Harry

    Caton, Martin

    Barron, Kevin

    Cawsey, Ian

    Bayley, Hugh

    Chapman, Ben (Wirral S)

    Beard, Nigel

    Clapham, Michael

    Beckett, Rt Hon Mrs Margaret

    Clark, Rt Hon Dr David (S Shields)

    Beith, Rt Hon A J

    Clark, Paul (Gillingham)

    Bell, Martin (Tatton)

    Clarke, Charles (Norwich S)

    Benn, Hilary (Leeds C)

    Clarke, Rt Hon Tom (Coatbridge)

    Benn, Rt Hon Tony (Chesterfield)

    Clarke, Tony (Northampton S)

    Bennett, Andrew F

    Clelland, David

    Benton, Joe

    Coaker, Vemnon

    Bermingham, Gerald

    Coffey, Ms Ann

    Berry, Roger

    Cohen, Harry

    Best, Harold

    Coleman, Iain

    Blackman, Liz

    Colman, Tony

    Blears, Ms Hazel

    Connarty, Michael

    Blizzard, Bob

    Cooper, Yvette

    Borrow, David

    Corbyn, Jeremy

    Bradshaw, Ben

    Corston, Jean

    Brinton, Mrs Helen

    Cotter, Brian

    Brown, Russell (Dumfries)

    Cousins, Jim

    Browne, Desmond

    Cox, Tom

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    Cranston, Ross

    Hope, Phil

    Crausby, David

    Hopkins, Kelvin

    Cryer, Mrs Ann (Keighley)

    Howells, Dr Kim

    Cryer, John (Hornchurch)

    Hughes, Ms Beverley (Stretford)

    Cummings, John

    Hughes, Kevin (Doncaster N)

    Cunningham, Rt Hon Dr Jack (Copeland)

    Hughes, Simon (Southwark N)

    Humble, Mrs Joan

    Cunningham, Jim (Cov'try S)

    Iddon, Dr Brian

    Dalyell, Tam

    Illsley, Eric

    Darling, Rt Hon Alistair

    Jackson, Helen (Hillsborough)

    Darvill, Keith

    Jamieson, David

    Davey, Valerie (Bristol W)

    Jenkins, Brian

    Davidson, Ian

    Johnson, Alan (Hull W & Hessle)

    Davis, Rt Hon Terry (B'ham Hodge H)

    Jones, Rt Hon Barry (Alyn)

    Jones, Mrs Fiona (Newark)

    Dawson, Hilton

    Jones, Helen (Warrington N)

    Dismore, Andrew

    Jones, Ms Jenny (Wolverh'ton SW)

    Dobbin, Jim

    Donohoe, Brian H

    Jones, Jon Owen (Cardiff C)

    Doran, Frank

    Jones, Dr Lynne (Selly Oak)

    Dowd, Jim

    Jones, Martyn (Clwyd S)

    Drew, David

    Kaufman, Rt Hon Gerald

    Eagle, Angela (Wallasey)

    Keeble, Ms Sally

    Eagle, Maria (L'pool Garston)

    Keen, Alan (Feltham & Heston)

    Edwards, Huw

    Kemp, Fraser

    Efford, Clive

    Kennedy, Jane (Wavertree)

    Ellman, Mrs Louise

    Kidney, David

    Ennis, Jeff

    Kilfoyle, Peter

    Etherington, Bill

    King, Andy (Rugby & Kenilworth)

    Feam, Ronnie

    Kumar, Dr Ashok

    Field, Rt Hon Frank

    Ladyman, Dr Stephen

    Fisher, Mark

    Laxton, Bob

    Fitzpatrick, Jim

    Lepper, David

    Fitzsimons, Loma

    Leslie, Christopher

    Flint, Caroline

    Levitt, Tom

    Flynn, Paul

    Lewis, Ivan (Bury S)

    Follett, Barbara

    Lewis, Terry (Worsley)

    Foster, Michael Jabez (Hastings)

    Liddell, Rt Hon Mrs Helen

    Foster, Michael J (Worcester)

    Linton, Martin

    Foulkes, George

    Livsey, Richard

    Fyfe, Maria

    Llwyd, Elfyn

    Gapes, Mike

    Lock, David

    Gardiner, Barry

    Love, Andrew

    George, Andrew (St Ives)

    McAvoy, Thomas

    George, Bruce (Walsall S)

    McCafferty, Ms Chris

    Gerrard, Neil

    McCartney, Rt Hon Ian (Makerfield)

    Gibson, Dr Ian

    Gilroy, Mrs Linda

    McDonagh, Siobhain

    Godman, Dr Norman A

    Macdonald, Calum

    Godsiff, Roger

    McDonnell, John

    Goggins, Paul

    McGuire, Mrs Anne

    Golding, Mrs Llin

    McIsaac, Shona

    Griffiths, Jane (Reading E)

    McKenna, Mrs Rosemary

    Griffiths, Nigel (Edinburgh S)

    Mackinlay, Andrew

    Griffiths, Win (Bridgend)

    McNamara, Kevin

    Grocott, Bruce

    McNulty, Tony

    Grogan, John

    MacShane, Denis

    Gunnell, John

    Mactaggart, Fiona

    Hain, Peter

    McWalter, Tony

    Hall, Patrick (Bedford)

    McWilliam, John

    Hamilton, Fabian (Leeds NE)

    Mahon, Mrs Alice

    Hanson, David

    Mallaber, Judy

    Harman, Rt Hon Ms Harriet

    Marsden, Gordon (Blackpool S)

    Heal, Mrs Sylvia

    Marsden, Paul (Shrewsbury)

    Healey, John

    Marshall, David (Shettleston)

    Heath, David (Somerton & Frome)

    Marshall, Jim (Leicester S)

    Henderson, Doug (Newcastle N)

    Marshall-Andrews, Robert

    Henderson, Ivan (Harwich)

    Martlew, Eric

    Hepburn, Stephen

    Meacher, Rt Hon Michael

    Heppell, John

    Meale, Alan

    Hesford, Stephen

    Merron, Gillian

    Hewitt, Ms Patricia

    Michie, Bill (Shef'ld Heeley)

    Hill, Keith

    Milburn, Rt Hon Alan

    Hodge, Ms Margaret

    Miller, Andrew

    Hoey, Kate

    Moffatt, Laura

    Hood, Jimmy

    Moonie, Dr Lewis

    1044

    Moore, Michael

    Smith, Angela (Basildon)

    Moran, Ms Margaret

    Smith, Miss Geraldine (Morecambe & Lunesdale)

    Morley, Elliot

    Morris, Rt Hon Ms Estelle (B'ham Yardley)

    Smith, Jacqui (Redditch)

    Smith, John (Glamorgan)

    Mountford, Kali

    Snape, Peter

    Mudie, George

    Southworth, Ms Helen

    Mullin, Chris

    Spellar, John

    Murphy, Denis (Wansbeck)

    Squire, Ms Rachel

    Murphy, Jim (Eastwood)

    Starkey, Dr Phyllis

    Murphy, Rt Hon Paul (Torfaen)

    Steinberg, Gerry

    Naysmith, Dr Doug

    Stevenson, George

    Norris, Dan

    Stewart, David (Inverness E)

    O'Brien, Bill (Normanton)

    Stewart, Ian (Eccles)

    O'Brien, Mike (N Warks)

    Stinchcombe, Paul

    O'Hara, Eddie

    Stoate, Dr Howard

    O'Neill, Martin

    Straw, Rt Hon Jack

    Organ, Mrs Diana

    Stuart, Ms Gisela

    Pearson, Ian

    Stunell, Andrew

    Pendry, Tom

    Taylor, Rt Hon Mrs Ann (Dewsbury)

    Pickthall, Colin

    Pike, Peter L

    Taylor, Ms Dari (Stockton S)

    Plaskitt, James

    Taylor, David (NW Leics)

    Pollard, Kerry

    Taylor, Matthew (Truro)

    Pond, Chris

    Temple-Morris, Peter

    Pope, Greg

    Thomas, Gareth (Clwyd W)

    Pound, Stephen

    Thomas, Simon (Ceredigion)

    Powell, Sir Raymond

    Timms, Stephen

    Prentice, Ms Bridget (Lewisham E)

    Tipping, Paddy

    Prentice, Gordon (Pendle)

    Todd, Mark

    Prescott, Rt Hon John

    Tonge, Dr Jenny

    Primarolo, Dawn

    Touhig, Don

    Prosser, Gwyn

    Trickett, Jon

    Purchase, Ken

    Truswell, Paul

    Quin, Rt Hon Ms Joyce

    Turner, Dennis (Wolverh'ton SE)

    Rammell, Bill

    Turner, Dr Desmond (Kemptown)

    Rapson, Syd

    Turner, Dr George (NW Norfolk)

    Reed, Andrew (Loughborough)

    Turner, Neil (Wigan)

    Twigg, Derek (Halton)

    Reid, Rt Hon Dr John (Hamilton N)

    Twigg, Stephen (Enfield)

    Rendel, David

    Tyler, Paul

    Roche, Mrs Barbara

    Tynan, Bill

    Rogers, Allan

    Vis, Dr Rudi

    Rooker, Rt Hon Jeff

    Walley, Ms Joan

    Rooney, Terry

    Ward, Ms Claire

    Ross, Emie (Dundee W)

    Wareing, Robert N

    Rowlands, Ted

    Webb, Steven

    Roy, Frank

    Welsh, Andrew

    Ruddock, Joan

    White, Brian

    Russell, Bob (Colchester)

    Whitehead, Dr Alan

    Russell, Ms Christine (Chester)

    Wicks, Malcolm

    Ryan, Ms Joan

    Williams, Rt Hon Alan (Swansea W)

    Salter, Martin

    Sanders, Adrian

    Williams, Alan W (E Carmarthen)

    Sarwar, Mohammad

    Willis, Phil

    Savidge, Malcolm

    Winterton, Ms Rosie (Doncaster C)

    Sawford, Phil

    Wise, Audrey

    Shaw, Jonathan

    Woolas, Phil

    Sheerman, Barry

    Wright, Anthony D (Gt Yarmouth)

    Sheldon, Rt Hon Robert

    Wright, Dr Tony (Cannock)

    Shipley, Ms Debra

    Wyatt, Derek

    Simpson, Alan (Nottingham S)

    Singh, Marsha

    Tellers for the Ayes:

    Skinner, Dennis

    Mr. Mike Hall and

    Smith, Rt Hon Andrew (Oxford E)

    Mr. Gerry Sutcliffe.

    NOES

    Ainsworth, Peter (E Surrey)

    Blunt, Crispin

    Amess, David

    Body, Sir Richard

    Ancram, Rt Hon Michael

    Boswell, Tim

    Arbuthnot, Rt Hon James

    Bottomley, Peter (Worthing W)

    Atkinson, Peter (Hexham)

    Bottomley, Rt Hon Mrs Virginia

    Baldry, Tony

    Brady, Graham

    Beggs, Roy

    Brazier, Julian

    Bercow, John

    Brooke, Rt Hon Peter

    Beresford, Sir Paul

    Browning, Mrs Angela

    1045

    Bruce, Ian (S Dorset)

    Lilley, Rt Hon Peter

    Burns, Simon

    Lloyd, Rt Hon Sir Peter (Fareham)

    Butterfill, John

    Loughton, Tim

    Cash, William

    Lyell, Rt Hon Sir Nicholas

    Chapman, Sir Sydney (Chipping Barnet)

    MacGregor, Rt Hon John

    McIntosh, Miss Anne

    Chope, Christopher

    MacKay, Rt Hon Andrew

    Clappison, James

    Maclean, Rt Hon David

    Clark, Dr Michael (Rayleigh)

    McLoughlin, Patrick

    Clifton-Brown, Geoffrey

    Madel, Sir David

    Collins, Tim

    Malins, Humfrey

    Colvin, Michael

    Mawhinney, Rt Hon Sir Brian

    Cormack, Sir Patrick

    May, Mrs Theresa

    Cran, James

    Moss, Malcolm

    Curry, Rt Hon David

    Nicholls, Patrick

    Davies, Quentin (Grantham)

    Norman, Archie

    Davis, Rt Hon David (Haltemprice)

    O'Brien, Stephen (Eddisbury)

    Day, Stephen

    Ottaway, Richard

    Donaldson, Jeffrey

    Page, Richard

    Duncan, Alan

    Paice, James

    Duncan Smith, Iain

    Paterson, Owen

    Evans, Nigel

    Pickles, Eric

    Faber, David

    Randall, John

    Fabricant, Michael

    Redwood, Rt Hon John

    Fallon, Michael

    Robertson, Laurence

    Flight, Howard

    Roe, Mrs Marion (Broxboume)

    Forth, Rt Hon Eric

    Ross, William (E Lond'y)

    Fox, Dr Liam

    Ruffley, David

    Fraser, Christopher

    St Aubyn, Nick

    Gale, Roger

    Sayeed, Jonathan

    Garnier, Edward

    Simpson, Keith (Mid-Norfolk)

    Gibb, Nick

    Soames, Nicholas

    Gill, Christopher

    Spelman, Mrs Caroline

    Gillan, Mrs Cheryl

    Spicer, Sir Michael

    Gorman, Mrs Teresa

    Spring, Richard

    Gray, James

    Steen, Anthony

    Green, Damian

    Streeter, Gary

    Greenway, John

    Swayne, Desmond

    Grieve, Dominic

    Syms, Robert

    Tapsell, Sir Peter

    Hamilton, Rt Hon Sir Archie

    Taylor, Ian (Esher & Walton)

    Hammond, Philip

    Taylor, John M (Solihull)

    Hawkins, Nick

    Taylor, Sir Teddy

    Hayes, John

    Townend, John

    Heald, Oliver

    Tredinnk, David

    Heathcoat-Amory, Rt Hon David

    Trend, Michael

    Hogg, Rt Hon Douglas

    Tyrie, Andrew

    Horam, John

    Walter, Robert

    Howarth, Gerald (Aldershot)

    Wardle, Charles

    Hunter, Andrew

    Whitney, Sir Raymond

    Jack, Rt Hon Michael

    Whittingdale, John

    Jackson, Robert (Wantage)

    Widdecombe, Rt Hon Miss Ann

    Jenkin, Bemard

    Wilkinson, John

    Johnson Smith, Rt Hon Sir Geoffrey

    Willetts, David

    Wilshire, David

    Key, Robert

    Winterton, Mrs Ann (Congleton)

    Kirkbride, Miss Julie

    Winterton, Nicholas (Macclesfield)

    Lait, Mrs Jacqui

    Yeo, Tim

    Lansley, Andrew

    Young, Rt Hon Sir George

    Leigh, Edward

    Letwin, Oliver

    Tellers for the Noes:

    Lewis, Dr Julian (New Forest E)

    Mrs. Eleanor Laing and

    Lidington, David

    Mr. Peter Luff.

    Question accordingly agreed to.
    Clause 111 ordered to stand part of the Bill.
    Schedule 13 agreed to.

  Clause 112

    CONTROL OF DONATIONS TO PERMITTED PARTICIPANTS
    Question proposed, That the clause stand part of the Bill.
    Mr. Walter: Clause 112 is incredibly short; it immediately refers to schedule 14, which is the next item
    1046
    on the selection list. It is impossible to consider clause 112 without a fairly detailed reference to schedule 14, so I apologise in advance if I stray into what might be a debate on the next schedule.
    Schedule 14 states that it
    "has effect for controlling donations to permitted participants other than registered parties."
    When we read further into the schedule, it feels as though we are going around in a circle. Clause 112, taken with schedule 14, makes nonsense of this part of the Bill.
    Part II of the schedule is headed "Controls on Donations". It states:
    "A relevant donation received by a permitted participant must not be accepted by the permitted participant if … the person by whom the donation would be made is not, at the time of its receipt by the permitted participant, a permissible donor falling within section 48(2)."
    We have referred to clause 48(2) at length in our deliberations. It states that a permissible donor is
    "an individual registered in an electoral register; a company … registered under the Companies Act 1985 or the Companies (Northern Ireland) Order 1986, and … incorporated within the European Union; a registered party; a trade union … a friendly society … any other unincorporated association of two or more persons which carries on … activities wholly or mainly in the United Kingdom and whose main office is there".
    Earlier provisions in the measure create a procedure whereby a permitted participant would not be eligible to be a permissible donor. It is okay for a foreigner, a foreign company or a foreign association to be a permitted participant in a referendum campaign, but heaven forbid that any of them should make a contribution to any other permitted participant because that would be an impermissible donation.
    The Government need to reconsider clause 112 and schedule 14, because they make nonsense of this part of the Bill. They would create the ridiculous situation whereby foreigners could participate in referendum campaigns for whatever reason—earlier the Parliamentary Secretary, Privy Council Office told us that it is because of the European convention on human rights—but could not write out a cheque to other permitted participants, even if those permitted participants were themselves foreigners. We are in a tangle. I suggest to the Ministers that clause 112, and schedule 14 which hangs on it, should be reconsidered and even withdrawn.
    Mr. Mike O'Brien: I have considered the points made by the hon. Member for North Dorset (Mr. Walter). The purpose of clause 112—like that of clause 111, but more so—is simply to introduce the schedule. The schedule controls donations to referendum campaign groups in much the same way that part IV of the Bill controls donations to registered parties. Those controls are important for the way in which campaigns are to be undertaken. They operate reasonably in general election campaigns and it is possible to apply them in referendum campaigns.
    There is a difference between a foreign national spending money in his name and making a donation to a political party or to another player in a referendum. As my hon. Friend the Parliamentary Secretary, Privy Council Office explained, article 10 of the European convention on human rights would preclude undue restrictions on the amount that a person may spend to put forward his views. Such considerations do not apply to donations.

    1047
    We want to apply regulation and a fair degree of control where we can. Where that is not possible because of article 10, we have chosen not to do so. That seems straightforward and reasonable. We do not need to withdraw the clause or the schedule.
    10.30 pm
    The hon. Gentleman makes essentially a technical point about the drafting. I shall consider it further, but I do not see any other way that we could have drafted the clause. He makes a not unreasonable point, and I shall reflect on it.
    Question put and agreed to.
    Clause 112 ordered to stand part of the Bill.
    Schedule 14 agreed to.
    Clauses 113 to 117 ordered to stand part of the Bill.

  Clause 118

    RESTRICTION ON PUBLICATION ETC. OF PROMOTIONAL MATERIAL BY CENTRAL AND LOCAL GOVERNMENT ETC.
    Mr. Grieve: I beg to move amendment No. 54, in page 72, line 41, leave out "relevant" and insert "referendum".
    The First Deputy Chairman of Ways and Means (Mr. Michael J. Martin): With this it will be convenient to discuss the following amendments: No. 56, in page 73, line 10, leave out from "poll" to end of line 11.
    No. 55, in page 73, leave out lines 19 and 20.
    No. 57, in page 73, line 20, at end add—
    '(5)(a) no civil servant or agency appointed by Government acting in an official capacity shall advocate any argument for or against any particular answer to any question in a referendum.
    (b) in this subsection the term "civil servant" includes any person employed as a special adviser.'.
    Mr. Grieve: We now come to an important clause that concerns the control of publications during a referendum. As it is drafted, it does not appear to reflect what Lord Neill said on the subject in his report.
    Our amendments seek to rectify an omission and the Government's failure properly to reflect Lord Neill's recommendations. The starting point must be what the Neill committee said. As the Minister will be aware, it was concerned about the role of Government in the course of a referendum campaign. To put it bluntly, its view of the role that the Government played in the Welsh referendum was not complimentary. Given the comments about the referendum in Northern Ireland, I remind the Minister that it had equal anxieties about how the Good Friday agreement referendum was conducted.
    I draw attention to the salient points on this subject in the Neill report. It says:
    "Another important question concerns the role of the government of the day during a referendum campaign, especially when it will itself have called the referendum and will almost certainly have publicly declared a preference regarding the outcome. Our view is straightforward. We believe it is perfectly appropriate for the government of the day to state its view and for members of the Government to campaign vigorously during referendum campaigns, just as they do during general election campaigns. But we also believe that, just as in general election campaigns, neither taxpayers' money nor the permanent government machine—civil servants,
    1048
    official cars, the Government Information Service, and so forth—should be used to promote the interests of the Government side of the argument. In other words, referendum campaigns should be treated for these purposes in every way as though they were general election campaigns."
    Mr. Tipping: It would help if the hon. Gentleman gave the reference.
    Mr. Grieve: I apologise to the Minister. I should have thought that by now he would be very familiar with Lord Neill's report, but I accept that other members of the Committee may not be. I refer the Minister to paragraph 12.41.
    As I pointed out, the report then discourses on past referendums with a critique that is not complimentary to Government roles. In particular, paragraph 12.43 criticises the conduct of the referendum on the Good Friday agreement in Northern Ireland, and contains quotations from those who felt that they were being emotionally blackmailed by the way in which the Government involved themselves and the government machine in it.
    Lord Neill concludes in paragraph 12.44:
    "We believe that it is extraordinarily difficult, if not impossible, for the government of the day to offer purely objective and factual information in the course of a referendum campaign, especially when, as will usually be the case, itself it is a party to the campaign. We believe governments should not participate in referendum campaigns in this manner, just as it would be thought to be wholly inappropriate during a general election campaign for the government to print and distribute, at the taxpayer's expense, literature setting out government policy."
    Recommendation 89 says:
    "The government of the day in future referendums should, as a government, remain neutral and should not distribute at public expense literature, even purportedly 'factual' literature, setting out or otherwise promoting its case."
    With that in mind we turn to clause 118. It certainly makes a few concessions towards Lord Neill's recommendations, but the single most important and glaring omission is the identification of the relevant period of a referendum as merely the last 28 days of the campaign. That is not in the spirit of what Lord Neill intended.
    As the Minister himself pointed out, there will be a minimum of 10 weeks—the period may be longer in certain circumstances—between the beginning of the referendum period and the date when the referendum takes place. It seems to us that that is the entire referendum period. It is wrong to say that the last 28 days of that period can somehow be separated from the rest.
    The Government may have a role in initiating the referendum and putting into statute the necessary order or Bill for it to take place. Once that has been done, there should be an end to Government propaganda seeking a particular outcome. As I said earlier, one of the difficulties, which I do not necessarily attribute to this Government, is that there is ample evidence that referendums have in the past been used as instruments of tyranny, often by semi-tyrannical Governments of a populist bent.
    Sir Patrick Cormack: Or really tyrannical Governments.
    Mr. Grieve: I agree with my hon. Friend. I remember studying Napoleon III at university. I sometimes think that

    1049
    the Government, above all the Prime Minister, resemble Napoleon III more every day. His reign ended in disaster, but he maintained a populist Government by a series of referendum fixes that covered what was, in effect, his poor government. There have to be rules to make sure that there is proper, adequate debate when referendums occur.
    Amendment No. 54 would change the "relevant" period to the "referendum" period, being the entire period within which the referendum will be taking place. I will be interested to hear from the Minister why the Government feel that only the last 28 days should be counted.
    Mr. Bercow: That is when the browbeating will be done.
    Mr. Grieve: Indeed it will, and I find it extraordinary that it will take place during the period in which the commission will be examining whether an organisation is favoured.
    The party that is opposing the Government will always be at a disadvantage because only in the last 28 days can it be up and running as a separate umbrella organisation of equal status to those that are arguing the Government's case. In those circumstances, it is particularly important that the entire referendum period should be covered.
    Mr. Hayes: My hon. Friend will be as familiar as I am with the debate on 10 April 1975, in which my hon. Friend the Member for South Staffordshire (Sir P. Cormack) raised precisely the same point in debating the timetable of the 1975 referendum and the opportunities that hon. Members who were active in that campaign would have to participate in that debate. We are witnessing a repetition of the concerns expressed so sagely on that occasion.
    Mr. Grieve: I agree entirely with my hon. Friend. The situation is a little bizarre. We are setting up a framework that is designed to iron out problems that have caused public disquiet, yet on this critical issue we are failing to implement Lord Neill's recommendations fully. It is difficult to escape the conclusion—the Minister knows that in Committee we sought to take a non-partisan view of the matter—that the Government are introducing the provision only because they see some advantage from it. It is difficult to envisage why Lord Neill's proposals would not be implemented in full if the Government were neutral in their approach.
    I shall not comment on amendment No. 16. Suffice it to say that it again addresses the funding problem concerning European Union institutions and foreign Governments. I shall be interested in the Minister's comments because my understanding is—[HON. MEMBERS: "It has not been selected for debate."] I apologise. The amendment is relevant, although I accept that the subject was dealt with. I shall move on.
    Amendment No. 56 relates to a most curious state of affairs. Certain activities are prohibited during the relevant period, whether it be the relevant period as the Minister identifies it or the referendum period, as I would prefer it. One activity that is not prohibited is the issue of press notices by Government. How long is a piece of string? What is intended? Once one accepts that press
    1050
    notices that are relevant to the referendum may be issued, it is difficult to see how one is not preventing the possibility of Governments issuing propaganda on the question of the referendum result.
    Before I am prepared to accept this provision, I shall need much reassurance from the Minister that the Government do not intend to create a loophole to enable them to put their view across. In those circumstances, 1 hope that he will give a positive response to its proposed deletion. I do not understand why the provision is included, unless there is some ulterior motive.
    10.45 pm
    Mr. Bercow: Can my hon. Friend confirm that line 11 on page 73 directly contradicts line 39 on page 72? Is it not extraordinary that in the space of only 16 lines, the Government have contradicted themselves? Does he agree that the purpose of the press releases that the Government will be entitled to issue is to influence the result? Clearly, they are not supposed to be about the merits of basket weaving or about the weather forecast.
    Mr. Grieve: I try to be fair to the Government—
    Sir Patrick Cormack: Do not try too hard.
    Mr. Grieve: I shall not try too hard, but I have always tried to be fair to the Government in Committee, and I intend to continue.
    I accept that a press notice covering, for instance, the formalities of the referendum may be perfectly in order. The times at which the polls will open and close are suitable, neutral matters for the Government to deal with. After all, they must implement and run the referendum, subject to the input of the Electoral Commission. However, as my hon. Friend the Member for Buckingham (Mr. Bercow) said, I do not see why press notices would be specified at all, except to provide a loophole. A press notice designed to encourage voting at a referendum would clearly be prohibited. I want to identify, with the Minister, what is intended in the clause.
    Mr. Stunell: The hon. Gentleman is a lawyer of sound repute. Can he offer the Committee a legal definition of a press notice? Does he agree that interpretation of the provision is open-ended?
    Mr. Grieve: I agree. That is precisely why I want to press the Minister. If he can satisfy me, I shall be reassured, but, having read the Bill, I am not happy with it, or I should not have tabled the amendment.
    Mr. Nicholas Winterton: May I try to help my hon. Friend? Is he not, like all Opposition Members, deeply suspicious of press notices? We seem to have a Government who govern by press briefings, formal or informal, and press notices. Is not that the real loophole?
    Mr. Grieve: I agree. As matters stand, we might describe it as the Alastair Campbell loophole. I do not want such a loophole in the Bill, and I want it plugged now, rather than having serious disagreements with the Government later. As the Minister rightly says, this is a framework Bill designed to command widespread public acceptance.

    1051
    Amendment No. 55 would delete "the relevant period", which is defined as 28 days. As I explained, we want Government propaganda to be prohibited during the entire referendum period.
    Amendment No. 57 deals with the role of the civil service in the course of a referendum campaign and prohibits civil servants providing arguments for or against any answer to a referendum question. I accept that subsection (2) provides that
    "any Minister of the Crown, government department or local authority"
    shall not publish, display or distribute information, but that does not go far enough.
    We are particularly concerned about the role of special advisers, who have always been a hybrid entity and whose activities in government are bringing them into increasing disrepute for receiving the taxpayers' money, but doing their political masters' bidding.
    Mr. Mike Hall: What about your lot?
    Mr. Grieve: The hon. Gentleman makes a reference to political advisers under previous Governments. He cannot escape the fact that the number of political advisers has increased exponentially under this Government. They are present in all Departments and their role, activities and failure to follow civil service rules have been questioned time and again by the press. I therefore recommend him not to pursue that argument from a sedentary or any other position.
    Mr. Bercow: I endorse the thrust of my hon. Friend's comments. Does he agree that it is important that our amendment is not only intellectually robust—it is—but capable of being monitored and enforced? Does he accept that to enforce the restriction on special advisers, it will be necessary to put them all on a slow boat to China during any referendum campaign under a Labour Government?
    Mr. Grieve: I am not sure whether exile to China is necessary; the amendments would do the job adequately.
    I hope that the Bill will be a monument to the Government and that it will endure well beyond the time when the electorate throw out the Labour Government. After that, when I confidently believe that a Conservative Government will be in office, the rules that the amendment proposes would fetter that Government as effectively as today's Labour Government. That is the principal justification for ensuring that the Bill is neutral and fair, and protects the liberty of the people.
    Mr. Owen Paterson: My hon. Friend the Member for Buckingham (Mr. Bercow) referred to special advisers' travel plans. Does my hon. Friend the Member for Beaconsfield (Mr. Grieve) know that the travel bill for special advisers has increased by £500,000 in the past year?
    The First Deputy Chairman: Order. We are straying from the amendment.
    Mr. Grieve: I want to ensure that the referendum will be regarded as having taken place in a fair environment. The controls on publications under clause 118 are
    1052
    inadequate and do not reflect Lord Neill's report. I hope that, in the spirit of co-operation that has prevailed in our proceedings, the Minister will give the amendments special consideration. If he believes that I have made valid points, I hope that he will provide some reassurance, as he has done so often in the past, that they will be properly considered.
    Sir Michael Spicer: The amendments and short debate are significant because the Government are not neutral in any referendum. That is crucial. A referendum on the single currency would never take place if the Government did not decide that they wanted to join it and therefore wished to put their view to the test. The Government are perhaps the major participant in such circumstances. It is therefore of paramount importance that they are on one side in a campaign.
    Many of us have constantly stressed that the Bill is inadequate because it gives the Secretary of State too many powers and the commission too few. We have therefore been especially pleased to hear Ministers' constant assurances, especially those of the Parliamentary Secretary, Privy Council Office, who was described as the man who gives away the cigarettes. He has been especially good at saying that he will consider several of our suggestions to place the Government at one remove from managing the campaigns or the events that lead up to them.
    The amendment is crucial, because if the Secretary of State is to be responsible for ensuring neutrality, setting the questions and all matters that significantly affect the campaign—even some funding matters—it is appalling that the Government should simultaneously be allowed to campaign until 28 days before the referendum. The amendment is a bit generous and 10 weeks is an extremely brief period in which to limit the Government's campaigning abilities, although it is certainly better than 28 days.
    I am concerned even about a 10-week period, because, as my hon. Friend the Member for Macclesfield (Mr. Winterton) said, this Government above all have been shameless in the way that they use propaganda to further their particular cause. A recent example is the changeover plan, which they are already using as an instrument for anticipating the referendum on the single currency. They are pumping money into blatant propaganda that often appears in schools and places where they hope to influence people who will vote in a referendum in a few years' time.
    We have only to read the pure party political propaganda that appears throughout the intergovernmental conference White Paper, which was published this week, to emphasise our concern that this Government above all cannot be allowed to manage the conduct of the referendum campaign in a so-called neutral way through the Secretary of State when they are also allowed to campaign right up to the last minute.
    Mr. Nicholas Winterton: Does my hon. Friend agree that the propaganda in our schools to which he referred comes not only from Government circles, but direct from the European Union, albeit that it is paid for in part by our contribution to the EU? It comes from two different sources.
    Sir Michael Spicer: I agree with my hon. Friend, which is why it would be nice to prevent the European

    1053
    Union from campaigning or influencing the campaign directly. We tried to introduce an amendment to that effect, but the nice guy who gives out the cigarettes assured us that that would be counterproductive. I think he meant that no one believes or trusts the EU so its intervention would be counter-productive, but I do not take that view. The money would be pumped in surreptitiously through third parties—we know that that is already being done. The Government should accept an amendment if they want to be fair and clear cut. Even at this late stage, I hope that they will see the force of our argument.
    The amendment is related to the Government's involvement and I fully support my Front Benchers, although I would prefer an even wider restriction, as 10 weeks is a bit close to the event. However, it is better than 28 days, which is scandalously close given that the Government will manage large chunks of the referendum.
    Mr. Stunell: It is a pity that a comparatively good case has been spoiled by some of the arguments. There are good reasons for challenging part of the clause and I want to do that, but we should not get too precious about the European referendum. I understand how important it is to Conservative Members, but whatever limits we introduce, those who want to promote a particular view will still do so in government or in opposition. If there are complaints that the European Union is sending literature to schools, there might equally be complaints that the Democracy Movement is sending literature to schools as well.
    Dr. Julian Lewis: It is not.
    Mr. Stunell: If the Democracy Movement is not sending literature to schools, it should start doing so and stop sending post cards to me. We cannot make Britain a politics-free zone in which one is not allowed to debate issues or attempt to influence views.
    Dr. Lewis: The only snag is that a provision in the Education Acts prohibits the indoctrination of children in schools with partisan politics on politically controversial issues. If such literature is being sent to schools, it is breaking the existing law.
    11 pm
    Mr. Stunell: I rest my case. There is scope for educational material for and against a particular point of view being sent to schools. What use they make of it is another matter.
    Given some of the comments that have been made, some hon. Members would obviously not like the subject of Europe to be discussed in any pub, school or workplace in the land, and believe that anyone who tries to do so should be stopped. They may want that, but this is not the Bill to achieve it.
    I want to focus more precisely on what the clause does and does not do. I can make common cause with the hon. Member for Beaconsfield (Mr. Grieve) in some respects. When considering the impact of amendment No. 56 and its deletion of press notices from exempt materials that public bodies can distribute, what does the Minister believe a court would consider to be a press notice? Is it
    1054
    any piece of literature with the words "press notice" at the top? Is it a self-defining document? If so, is he happy with that? If there is some other definition of a press notice, will he put it on the record so that we know what it is? It is unsatisfactory to leave that loophole, especially in its present form. I am not a lawyer, but I do not think that there is a legal definition of a press notice. If there is one that does not arise from case law, it should be clearly stated on the record.
    The general issue of when the moratorium on public bodies' advocacy of a particular course of action should start is complex. I would not be averse to an extension of the 28 days. The amendment does not do that with enough accuracy and certainty. There needs to be a date beyond which it is not proper for public bodies to disseminate such material. Four weeks is a short time, but it may not be too short. It could be from the date at which the umbrella organisations were approved by the Electoral Commission or some other prior date that was clear and gave certainty. I would be interested to hear from the Minister what could be achieved.
    I come part way with the hon. Member for Beaconsfield on bringing forward the 28-day deadline. I am sympathetic to that view, but I do not think that his amendment quite achieves it. However, I am not with him on the political restrictions on civil servants. It is wrong for us to impose political restrictions on civil servants during referendums additional to those that are already in force. For better or for worse, Parliament has provided for the role of political advisers and their ability to operate under substantially more relaxed guidelines than those for civil servants in general in relation to political activity.
    Mr. Grieve: I accept that the guidelines are more relaxed, but how are they to be exercised? Does the hon. Gentleman contemplate that special advisers should be allowed to make use of the civil service machinery for the dissemination of their views—which is what they are currently able to do during a referendum?
    Mr. Stunell: I am not entirely sure that the case has been made that that is different from civil servants exercising their views prior to a vote in the House on, say, a reduction in disability benefits, when quite clearly they are operating on behalf of the Government to develop public opinion and opinion in the House. I am not clear that there is a sufficient distinction that would necessitate those guidelines being varied, in particular for referendum campaigns.
    Mr. Nicholas Winterton: Does the hon. Gentleman not differentiate between a vote in the House by Members of Parliament who have been elected to decide issues, and an election—a referendum—outside? Surely it is wrong for taxpayers' money to be used to influence people in the country. I understand its being used for that purpose in the House, but surely it should not be used for that purpose in the country, in a referendum.
    Mr. Stunell: Some interesting points are emerging. Perhaps they should feature in a slightly different debate about what range of relaxations should be available to political advisers. There is nothing to stop a political adviser in any Department making comments in the four, or eight, weeks leading up to a local election campaign,

    1055
    or a Scottish Parliament campaign, or a Welsh Assembly campaign—or, even more to the point, a London mayoral campaign.
    At present, there is no such restriction, although it might be argued that there should be. I am not convinced that this is such a special case that we should treat it as such at this stage. There may be something to be said for the argument that is being advanced, but I do not think that we should load the issue simply because we do not want a particular view to be advanced about Europe.
    Mr. Bercow: I am trying intently to follow the logic of the hon. Gentleman's argument. Is he saying that Ministers should be restricted in terms of their use of Government facilities and resources during the 28-day period of a referendum campaign, but that their political advisers should not be so restricted? That is an extraordinary proposition.
    Mr. Stunell: It would be extraordinary if it were advanced, but I am not advancing it. Nothing in the Bill, or in precedent, prevents Ministers, in their party political role, from advocating a particular outcome during a referendum campaign. I do not see what point the hon. Gentleman is making, but if he concentrates even more intently on my argument, I am sure that he will be with me in the end.
    The Government have a case to answer on the issue of constraining the output of public bodies. Press notices are certainly a weak link. I also think that we should consider whether the 28-day moratorium should be extended, and I would like to hear the Minister's view.
    Dr. Julian Lewis: I was fortunate enough to be on the Standing Committee that dealt with other parts of the Bill. I congratulate the Government on having reserved the most controversial parts for the Floor of the House.
    Mr. Tipping: The hon. Gentleman should be praising his hon. Friends on the Opposition Front Bench.
    Dr. Lewis: I am delighted. That accords far better with my thesis, which is that the Government's proposals are incredibly unfair—which is why I thought it strange that they were willing to give this part of the Bill a wider and more public airing. Now that I have been informed that my hon. Friends on the Opposition Front Bench are responsible, I am even happier to congratulate them on taking the opportunity to bring these abuses more clearly to the attention of the public.
    I am astonished at the difference in the atmosphere—the difference between the relative consensus on uncontroversial matters in the Standing Committee, and what is being proposed here. I well remember when the Home Secretary himself, on July 1997 in the House, compared Neill's recommendations with the Government's proposed responses to them. The one issue on which I felt it incumbent on me to intervene at the time was this very question of the 28-day limit on Government propaganda in favour of one side of the argument on a future referendum issue.
    Clearly, the Neill committee was recommending that the Government should keep their nose out of referendum campaigns. Equally clearly, the Government want to observe only the tiniest part of the letter of that
    1056
    recommendation, while wholly ignoring the spirit of it. In any future referendum, whatever the topic, while Labour are in government, they intend to be able to spend as much public money as they like for weeks and months leading up to the crucial vote and to stop doing so a mere 28 days before the votes are cast. If it is wrong that Governments should be able to spend a great deal of public money during the last 28 days, it is equally wrong that they should be able to spend great quantities of public money for significantly longer periods, up to that tiny window of abstention just before the vote is cast.
    Equally, as my hon. Friend the Member for Beaconsfield (Mr. Grieve) points out, why should it be the case that, throughout even that 28-day period, when even the Government are prepared to be a little abstemious in the amount of propaganda that they pump out to try to skew the referendum result, they are still entitled to put the words "press notice" on any further propaganda that they wish to issue, exploiting the loophole in the clause to persist pumping out their message right up to polling day, as far as I can see?
    The point has been made: just as the use of public money to pump out literature is wrong, so the use of public money to pay civil servants to do the Government's partisan campaigning is wrong. I am concerned about the way in which the Government are trying to turn what was meant to be the cleaning-up of partisan distortions of referendum campaigns into something that is of advantage to the Government of the day.
    Mr. Hayes: Contrary to the suggestion from the hon. Member for Hazel Grove (Mr. Stunell), is not the debate a fine opportunity to tighten up and straighten out the business of special advisers, about whom there is growing concern in terms of their political involvement? That would apply to a Government of any political persuasion. Is not the debate an ideal opportunity to assuage those concerns and fears by defining more clearly their role and limiting their involvement in such a political process?
    Dr. Lewis: It is not only that. The point has been well made by the Conservative Front-Bench team that the matter will affect any future Government. It is like the introduction of a new weapon into warfare, even if it is only political warfare: people should realise what it will be like when that weapon is turned on them and the roles are reversed.
    One day, roles will be reversed. I hope still to be in this place when that happens. I will remember the current debate and how the Government have conducted themselves when we hear the squeals of outrage from Labour Members on the Opposition Benches as we seek in government to exploit the very loopholes that they are wrongly building into the Bill. Rather than have such tit-for-tat abuse of the system, such mutual rejection of the spirit of the Neill proposals, I appeal to the Minister to observe on the Floor of the House the same spirit of compromise, consensus and fairness that he has observed elsewhere and at least to promise that, if we do not divide the Committee tonight, he will revisit the matter on Report and introduce more satisfactory proposals.
    Mr. Paterson: I am grateful to you, Mr. Martin, for calling me in what is an important debate.

    1057
    If the clause stands, we will have an intolerable situation, given the extraordinary increase in the number of special advisers, whose main role is to pump out Government propaganda.
    Mr. Nicholas Winterton: Party propaganda.
    Mr. Paterson: Exactly. They are pumping out party propaganda and Government propaganda—which, in a referendum, as my hon. Friend the Member for West Worcestershire (Sir M. Spicer) said, will be the same thing. The Government will not initiate a referendum campaign if they do not want to win it.
    11.15 pm
    Before Christmas, I tabled a parliamentary question on the number of special advisers, and was told that, since the Government came to power, an extra 68 have been hired. However, in a previous debate, my hon. Friend the Member for Chichester (Mr. Tyrie) corrected me on that figure, and said that the number of additional advisers had risen to 77, who are costing the taxpayer an extra £1.8 million annually. In total, Government special advisers are costing the taxpayer about £3.9 million. As I said in an earlier intervention, their travel alone costs £500,000.
    Special advisers are there not for nothing, but to put across the Government point of view. How much are the Government spending on publicity? Perhaps we should examine the three Departments that would be affected in a referendum campaign. Since May 1997, total publicity spending by the Foreign and Commonwealth Office has been £5,933,637, of which £44,067.39 has been specifically dedicated to spending on press releases. What about websites? The Department spent £554,097 on them. The Department spent £4,818,211 on something called "extra publicity". What is that? Did it have something to do with press releases? A cool £464,628 was spent on media advertising.
    The Minister will have to tell us how that money for publicity is being spent. He will also have to tell us how the clause will operate. It would be intolerable if the sums that I have described were spent legally in a referendum by the Government, whereas—as clause 118 currently provides—those who oppose the Government in that contest would not have access to such funds.
    Last year, the Scotland Office conducted a referendum. Since May 1999, its total spending on publicity has been £3.4 million—of which £119,000 was spent on press releases—whereas it has spent £808,000 on websites and £2.5 million on media advertising. Those are enormous sums, and they are at the disposal of politically dedicated outsiders who were brought in by the Government with only one purpose: to propagate the Government's point of view. That is what they will be doing in a referendum if clause 118 is not amended.
    Mr. Bercow: Does my hon. Friend agree that any Government reckless enough to want permanently to abandon the national currency of an independent nation is inevitably prepared to resort to virtually any and every
    1058
    technique to get the result that they want? Is not the important point that legislation should protect the rest of us from those certifiable tendencies?
    Mr. Paterson: As usual, my hon. Friend makes the most pertinent observation. The Government already, before a referendum, have the material means in their hands—they have taken on the personnel and have extraordinarily large sums—to propagate their own point of view. When the campaign comes, they will have not only the motive, but the means to put forward their view. Those who are opposed to the Government's position in the referendum will not only be short of means, but will be prevented, by an unamended clause 118, from competing with the Government.
    Mr. Hayes: The evidence is clear. Neill examined the matter quite carefully, particularly the conduct of the referendum on the Good Friday agreement in Northern Ireland. Regardless of what one thinks of the Good Friday agreement—I think that most hon. Members support it wholeheartedly—Neill specifically criticises the Government for sending out copies of the agreement to every household, but not providing
    "comparable provision—by way of core funding or anything else—for the opposition side."
    The evidence is such that Governments, when they are completely committed to a case—to which hon. Members on both sides of the House may be committed—will push that case to its limits and not play an entirely straight bat.
    Mr. Paterson: That was my next point. Since May 1997, the Northern Ireland Office has spent £4.8 million on publicity. Of that, £966,000 was on direct mail publicity. Every house in Northern Ireland was mailed with the Government's point of view during the Good Friday agreement referendum campaign. Whatever the merits of that campaign—most of us endorsed the agreement—we are making no provision for the opposite point of view to be put. Direct mail publicity would be Government propaganda, but it would come under the heading of press releases. It must be possible for the opposite point of view to be put.
    I strongly endorse the amendment and I should like a clear definition from the Minister of what counts as a press release.
    Mr. Tipping: I shall do my best to be emollient and reassuring, but, having heard the comments of the hon. Members for North Shropshire (Mr. Paterson), for West Worcestershire (Sir M. Spicer), for New Forest, East (Dr. Lewis) and for South Holland and The Deepings (Mr. Hayes), I fear that it will be an uphill task.
    As the hon. Member for Beaconsfield (Mr. Grieve) pointed out in his well-balanced and well-judged contribution, the clause implements the Neill committee's recommendation that, at a certain point before a referendum is held, the Government of the day should stand back and leave campaigning to political parties and other campaign organisations. So far there is no argument. The Neill committee was particularly sceptical about material that has been circulated to the electorate very close to the date of previous referendums, and questioned the distinction between factual and persuasive material.
    The clause implements the committee's recommendations by providing for a 28-day embargo on the issuing to the public of Government publications. The

    1059
    hon. Member for Beaconsfield will not mind my saying that he built the foundation of his speech on the Neill report and quoted extensively from it. In its comments on the draft Bill, the Neill committee welcomed these provisions. For the sake of completeness, let me tell the Committee what Neill said. Rather than criticising our proposals, he supported them:
    "We welcome your proposals on the part which should be played by the Government in referendum campaigns and your recognition of the importance of ensuring that there is a period immediately prior to a referendum in which, as you say, the Government of the day stands aside and the campaigning is left to the political parties and other organisations."
    We have had an opportunity this evening to hear the remarks of the right hon. Member for South Norfolk (Mr. MacGregor), who is a touchstone for fairness in the House. On Second Reading he said:
    "I am glad that the Bill includes the 28-day moratorium, which meets our point".—[Official Report, 10 January 2000; Vol. 342, c. 67.]
    Far from being critical of the Government, the right hon. Gentleman, who is the Opposition representative on the committee, has endorsed our proposals. The hon. Member for Beaconsfield based his argument on Neill, saying that what was right for a general election should be right for a referendum campaign. I have had some research done on the subject and the purdah period for a general election campaign is almost identical to the 28-day period that we are advocating.
    Amendments Nos. 54 and 55 would affect the period during which the restrictions apply. They are based on the proposition that if it is right for political parties and other campaign organisations to be subject to controls on expenditure from a date earlier than 28 days before the date of the poll, any controls on the Government should also apply from that earlier date.
    My advice to the Committee is to reject the amendments. I fear that not all right hon. and hon. Members will take that advice, so I have the task of trying to explain my case. First, as well as relying on the support of Neill and the right hon. Member for South Norfolk, I should point out that the prohibition in clause 118 is absolute. No material of the kind mentioned in the clause is allowed to be published. Controls on political parties and other organisations, on the other hand, are not of that kind. For 28 days, the Government can issue nothing, but political parties can continue to put out material, so long as their expenditure remains within certain limits during the referendum period. The accounting responsibility runs from the start of the referendum period, but there is nothing to prevent parties and other organisations from beginning to spend their money from the start of that period if they so wish.
    Secondly, it is unrealistic to expect the Government to be unable to put out material for the entire referendum period. As has been acknowledged during our discussions this evening, the referendum period could start while the Bill for the referendum was going through the House. It would be a remarkable situation if the Government could not put out material and information while the Bill was passing through the House.
    Mr. Grieve: In moving the amendment, I pointed out to the Minister that, although it applied to the entire referendum period, there were alternative options, one of which was the 14-day period that preceded the 28-day
    1060
    period—the time when the Electoral Commission is selecting the umbrella organisations. Is the Minister willing to consider whether that period should be similarly covered, as well as the 28 days?
    Mr. Tipping: Of course I am willing to consider the points that the hon. Gentleman makes, but I have a firmer and stronger argument. It could often be the case that the referendum period started while the Bill was before the House. Even extending the limits as he proposes would create real difficulties.
    In respect of amendments Nos. 54 and 55, first, reliance on Neill is unfair and unfounded. Indeed, the Neill committee supports the Government. Secondly, the 28-day period is similar to the purdah period during a general election campaign—another point acknowledged by Neill. Thirdly, during the 28-day period the Government can put out no material at all, unlike the other campaign groups. Fourthly, and perhaps most important, it would be a strange state of affairs if the Government were passing legislation around the referendum, but were not in a position to put out information or promote their views.
    Dr. Julian Lewis: I thank the Minister for his courtesy in giving way yet again. Will he refer to the point about press notices? When he says that the Government can put out no material during the 28-day period, what is there to stop them putting out material that would normally be caught by the prohibition, but getting round it by putting the words "press notice" at the top of it?
    Mr. Tipping: I shall come to that point when I address amendments Nos. 56 and 57. I have tried to reassure the Committee, to be emollient and to say that amendments Nos. 54 and 55 are unnecessary.
    The Neill committee was concerned that the Government of the day might—at public expense—distribute material, even purportedly factual documents that put forward the Government's case, that had the effect of influencing the vote. Clause 118 is intended to prohibit the distribution of such unsolicited material addressed directly to the public as a whole. To address the point raised by the hon. Member for New Forest, East (Dr. Lewis) clause 118(3) provides for certain exemptions to the overall prohibition. Those exceptions are entirely consistent with the basic proposition that the Government of the day should not be able unfairly to influence the conduct of a referendum campaign.
    11.30 pm
    Amendment No. 56 deals with press notices. The hon. Member for Hazel Grove (Mr. Stunell) asked me to define a press notice—and the hon. Member for New Forest, East repeated that request. A press notice is a notice issued to the press. I know that the hon. Member for Hazel Grove is keen to pin those issues down and, since he spoke, we have been trying to identify a statutory definition of a press notice, but I am afraid that none exists. Under clause 118(3)(d), the Government of the day would continue to be able to issue press notices, but that does not represent an attempt to circumvent the basic principle behind the clause.
    The point of the restrictions is to prevent the Government distributing directly to the public, but the press should continue to be able to demand information

    1061
    from the Government. Information contained in a press notice will be subject to the scrutiny and comment of the press before it reaches the public. During the purdah period, the press will approach the Government and it is appropriate that they should be able to respond. The press, as always, will make what they can of the press notice, and one of the issues the press will consider is whether the Government are attempting to engineer the situation during the purdah period.
    Mr. Nicholas Winterton: The Minister is being emollient and is seeking to answer the genuine concerns felt by Opposition Members, but can he say whether the press notices—which, as he has stressed, are for the press—will be put on the website? If so, they will be available to everyone, and that could create much unfairness.
    Mr. Tipping: The hon. Gentleman leads me into a difficult area, because one of the issues that the Committee has considered—to which there is no easy solution—is that, prior to the referendum, the Government and other parties will have put material on websites. When the referendum starts, everyone involved will have a backlog of material on their websites that cannot be withdrawn. That is a real problem which the Committee has discussed and the Government are considering.
    Amendment No. 57 concerns the role of civil servants.
    Dr. Julian Lewis: Let us suppose the Government were to issue a substantial publication and call it a press notice. As it had been issued as a press notice, what would stop the Government supplying a copy to anybody who wanted one or supplying many copies to organisations that wished to distribute them to others?
    Mr. Tipping: The hon. Gentleman has the habit of shining a light into dark corners and discovering what is not really there. It would be faintly ludicrous deliberately to do what is outside the rules of a campaign that is being scrutinised by the press. Moreover, publishing the press notice in the way he described would be against the rules for civil servants.
    Mr. Paterson: The Minister is trying to be emollient and has been generous in giving way, but he is being naive. The figures that I quoted show that press releases represent only a small portion of the budget. For example, the Foreign Office spent £44,000 on press releases, but £4.8 million is provided for what is called extra publicity. If the press were to pick up that extra publicity, that would be an enormous weapon in the Government's hands.
    Mr. Tipping: The hon. Gentleman made a similar point earlier about special advisers. It is a bit rich for Conservative Members to criticise such advisers, when the Government—at Opposition Members' request—has increased by 270 per cent. the help available to Opposition parties. I have been called emollient, so I can tell the Committee that the Government will respond to another Neill report on special advisers in due course.
    Amendment No. 57 has to do with the role of civil servants. The position is clear: if people ring the Government during a referendum campaign and ask
    1062
    questions, it would be appropriate for civil servants to send them material. That is the purpose of this part of the Bill. A strong code of practice exists for the civil service, and it has been sharpened over time.
    The Government have done their best to balance this issue. They studied the Neill report for a long time and responded to it. Neill has praised the Government and has acted to ensure that the Government do not put out material. He has also acted to ensure that civil servants are not involved in the debate
    Mr. Nicholas Winterton: The Minister is trying hard to answer the concerns raised by Conservative Members. He mentioned the historical impartiality of the civil service, which is much appreciated. However, if a person asked questions about the single currency, would the civil service send both sides of the argument in answer to those questions? Or if the Government supported a single currency, would they send out only the Government's side of the argument?
    Mr. Tipping: The civil servants would send the factual material produced by the Government. They would not take a partisan view, as that is proscribed by the sharpened code of practice. The Government are trying to do their best in what is a very difficult area, and I consider that the Bill already meets the questions raised by the amendments. I therefore hope that the amendments will be withdrawn.
    Mr. Grieve: The Minister will appreciate the strong views among Opposition Members on this issue. If they want to continue in the spirit of consensus that obtained in Standing Committee, the Government would be well advised to examine the clause very carefully once more.
    The Minister indicated that he was prepared to consider whether another period might be included within the period of purdah. I draw some slight comfort from that. He made the valid point that the extension from when debate starts in this House, for instance, might be excessive. However, we are worried that the 28-day period on its own will be insufficient. The particular mischief is that there will be a preliminary period, in which the campaign that will be set up in opposition to the view that the Government want to put forward, but which they will subsume into their own campaign organisation, is not up and running because it has not received validation from the commission. That is a particularly sensitive period and the Minister should consider it carefully. I hope that he will; if he does not, I think that the issue will be revisited, because we feel extremely strongly about it.
    The Minister has provided some reassurance on civil service impartiality and the role of special advisers, but I have anxieties about the press notices. The hon. Gentleman admitted that they would be to the press, giving what can only be described as the Government view. I simply do not see how, once that has been done, the purdah period applies. The press will be reporting that the Government have said this, that or the other on the subject of the referendum, and will give their views on it. That is a dangerous area, and I urge the Minister to reconsider it as well, if only to qualify what the press notice should consist of.
    The Minister quoted Lord Neill as saying approvingly, when he had seen the Bill, that he believed that it implemented what he had been hoping for. I appreciate

    1063
    that these things are always difficult, but comparing the report with the clause, I see many deficiencies in the clause as drafted. However, Lord Neill may have been pleasantly surprised that the Government were prepared to implement even one iota of his recommendations, because he proposed some revolutionary changes in the way in which Governments approach referendums. The Bill will certainly do away with some of the worst excesses of what happened in the Wales referendum and, I regret, the referendum in Northern Ireland, even if I supported the Government on their aim in that matter.
    Mr. Hayes: My hon. Friend is right that the Neill report seems to be at variance with what the Minister said, particularly on the issue of civil servants, although the hon. Gentleman was the personification of emollience. The report says that civil servants, official cars, the Government information service and so forth should not be used to promote the interests of the Government's side of the argument. The Minister talks about civil servants answering telephone calls and reacting to inquiries. Surely that is at variance with what the Neill report expressly recommended.
    Mr. Grieve: I agree with my hon. Friend that it would undoubtedly be at variance if civil servants put over anything other than objective factual material on the progress of the referendum. I think that the Minister can cure the problem if he defines press notices properly. On its own, the provision is extremely ambiguous; it is open to misinterpretation and misunderstanding. I ask the Minister to look at that issue particularly carefully. He could provide considerable reassurance, while still allowing the Government to perform a neutral information role which it is certainly not our intention to prevent.
    We are very concerned about the provision. We will not press the matter to a Division this evening—I do not wish to take up the time of the Committee unnecessarily. However, I assure the Minister that the issue will not go away. He has had an opportunity to hear something about the strength of view on this side of the Committee. Although we will continue to listen to his submissions in a spirit of co-operation and will try to understand the thrust of what he is saying, we are not yet satisfied nor, I think, are we likely to be satisfied as the matter stands. Subject to that, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Clause 118 ordered to stand part of the Bill.

  Clause 119

    OTHER PUBLICATIONS TO CONTAIN DETAILS OF PRINTER AND PUBLISHER.
    11.45 pm
    Question proposed, That the clause stand part of the Bill.
    Mr. Stunell: I shall say only three sentences—perhaps two if hon. Members are lucky. I remind the Minister that subsection (4) includes a phrase relating to the last page of the document and its imprint that is similar to one that
    1064
    we discussed earlier. I would be grateful if the Minister gave the same consideration to that point as he did in our earlier debate.
    Mr. Tipping: I gave an undertaking to consider a similar provision; we shall do so. If we make amendments to an earlier clause, there will be consequential changes to clause 119.
    Question put and agreed to.
    Clause 119 ordered to stand part of the Bill.

  Clause 120

    REFERENDUM CAMPAIGN BROADCASTS.
    Question proposed, That the clause stand part of the Bill.
    Mr. Douglas Hogg: I am sorry to rise on what is, in essence, a technical point, but such matters should be addressed in Committee.
    I have no objection to the prohibition on the broadcasting in broadcasting services of contemporaneous referendum material. That is right and one cannot object to it.
    What troubles me is that clause 120 seems to prohibit a broadcaster, who wanted to take an historical view of the way that referendum campaigns had been carried out over some time, from broadcasting long after the original broadcasting material had been published. That seems to be a serious restriction on free speech. It would prevent broadcasters from analysing the material several years after the original broadcast. It is possible that I have misread the clause, but I do not think so.
    Mr. Mike O'Brien: I hope that the right hon. and learned Gentleman has misread the clause; it is not intended to do what he describes. I will consider the point that he raises and write to him about it. If it is necessary to amend the clause because it would have the effect that he claims, we shall consider doing so.
    Question put and agreed to.
    Clause 120 ordered to stand part of the Bill.

  New Clause 1
    CHIEF COUNTING OFFICERS, AND COUNTING OFFICERS, FOR REFERENDUMS
      'CHAPTER IV

        CONDUCT OF REFERENDUMS
        .—(1) This section has effect in relation to any referendum to which this Part applies.
        (2) There shall be a Chief Counting Officer for the referendum, who (subject to subsection (8)) shall be—

        (a) the chairman of the Commission, or

        (b) if the chairman of the Commission appoints some other person to act as Chief Counting Officer for the referendum, the person so appointed.

        (3) The Chief Counting Officer for the referendum shall appoint a counting officer for each relevant area in Great Britain.
        (4) The local authority in the case of each such area shall place the services of their officers at the disposal of the counting officer for the area for the purpose of assisting him in the discharge of his functions.
        (5) Each counting officer shall, as respects the votes cast in the area for which he is appointed, certify—

        (a) the number of ballot papers counted by him, and

        (b) the number of votes cast in favour of each answer to a question asked in the referendum.

        (6) The Chief Counting Officer shall certify—

        (a) the total number of ballot papers counted, and

        (b) the total number of votes cast in favour of each answer to a question asked in the referendum,

        in the whole of the referendum area.
        (7) Where two or more forms of ballot paper are used in the referendum, a separate number shall be certified under subsection (5)(a) or (6)(a) in relation to each form of ballot paper so used.
        (8) Where the referendum is held in Northern Ireland, the Chief Electoral Officer for Northern Ireland—

        (a) shall be the Chief Counting Officer for the referendum if it is held only in Northern Ireland, and

        (b) in any other case shall be treated, for the purposes of subsection (5), as if he were a counting officer appointed under this section for the whole of Northern Ireland.

        (9) In this section—

        (a) "relevant area in Great Britain" means any of the following—

        (i) a district in England or a London borough,

        (ii) the City of London (including the Inner and Middle Temples), the Isle of Wight or the Isles of Scilly,

        (iii) a local government area in Scotland, or

        (iv) a county or county borough in Wales,

        where it is comprised in the referendum area;

        (b) "the local authority"—

        (i) in the case of an area falling within paragraph (a)(i), (iii) or (iv), means the council for that area, and

        (ii) in the case of an area falling within paragraph (a)(ii), means the Common Council of the City of London, the Council of the Isle of Wight or the Council of the Isles of Scilly, as the case may be;

        (c) "the referendum area" means the parts or part of the United Kingdom, or (as the case may be) the region in England, throughout which the referendum is held as mentioned in section 95(1).'.—[Mike O'Brien.]

        Brought up, and read the First time.
        Mr. Mike O'Brien: I beg to move, That the clause be read a Second time.
        The Second Deputy Chairman of Ways and Means (Mr. Michael Lord): With this it will be convenient to discuss the following: Government new clause 2—Orders regulating conduct of referendums.
        Government amendment No. 9.
        Mr. O'Brien: I understand that the hon. Member for South Staffordshire (Sir P. Cormack) wants to make some points on the new clauses and the amendment, so I shall introduce them briefly.
        The two new clauses contain procedural provisions for the administration of a referendum. Provision for major referendums, such as those in Scotland and Wales in 1997, has customarily been made in separate Bills, but those Bills contained several administrative provisions that have, by now, become standard.
        It is not the intention that the Bill should replace the need for specific legislation to authorise the holding of a referendum on a particular issue; we made that clear earlier in our proceedings. However, the consideration of
        1066
        such legislation should focus on the key issues: whether it is right to hold a referendum on the particular issue and, if so, when it should be held and what the question should be. By covering the nuts and bolts of a referendum in the Bill, we can ensure that future Parliaments can concentrate on the big picture.
        New clause 1 designates the chairman of the Electoral Commission as the chief counting officer in any referendum to which part VII of the Bill applies. There is one exception to that rule: when a referendum is held only in Northern Ireland, the chief electoral officer is designated as the chief counting officer.
        The clause also empowers the chief counting officer to appoint counting officers in each local government area where the referendum is being held. As a result, votes will be counted and declared at the level of a district council or a London borough in England, and by local authority area in Scotland and Wales. That follows the practice in referendums that have been held to date. There would be one count and one declaration in Northern Ireland.
        I understand that the main concern of the hon. Member for South Staffordshire is new clause 2. The purpose of that clause is to enable the provisions of the Representation of the People Acts and regulations to be applied to any referendum. The clause mirrors similar order-making powers in section 4 of the Greater London Authority (Referendum) Act 1998—I have a copy of the Act before me.
        Mr. Hogg rose—
        Mr. O'Brien: I will give way to the right hon. and learned Gentleman in a moment.
        Section 1 of the Referendum Act 1975, schedule 12 to the Wales Act 1978 and schedule 17 to the Scotland Act 1978 contain similar provisions. The clause is entirely benign, with no hidden agenda. I hope that the hon. Member for South Staffordshire will accept that that is our intention. The Secretary of State will have to consult the Electoral Commission before making any order under the provision, and the order will have to come before the House.
        Mr. Hogg: The Minister will know that new clause 2 contains a power to create offences and to apply and disapply other enactments to the provision. Is the order-making power covered entirely by clause 142? As I understand it in this context, clause 142 uses the negative, not the affirmative, procedure. Will he, therefore, confirm that the affirmative procedure is not being applied to the creation of offences?
        Mr. O'Brien: The creation of some offences will already be covered in the representation of the people legislation. In effect, all that we are doing is importing into a referendum campaign provisions that we all accept for general election campaigns. I do not think that there is any particular problem here. If we were seeking to go further, the Committee would become aware of that and I expect that it would be a matter of considerable controversy.
        Although in practice the right hon. and learned Gentleman may have a point—I certainly undertake to consider it—in reality the provision will not cause any great difficulty. The matters about which he has expressed

        1067
        concern are the sorts of provisions that we would deal with on a day-to-day basis in any local government election, never mind a national election or a referendum.
        Sir Michael Spicer: Will the Minister give way?
        Mr. O'Brien: I shall give way once more, and that will be it.
        Sir Michael Spicer: Whether new clause 2 is benign in the way that the Minister described depends on how one interprets words such as
        "regulating the conduct of referendums".
        That phrase is all embracing, so will it cover how the question is set? What assurances can the Minister provide given that the words are in the new clause and are all-embracing?
        Mr. O'Brien: The hon. Gentleman knows perfectly well—we dealt with this point earlier in the debate—that there will be specific legislation on any national referendum campaign. We deal with such issues on a daily basis in relation to any general election. New clause 2 is entirely benign.
        Sir Patrick Cormack: The Minister is in his less emollient mood. A few moments ago, the Parliamentary Secretary, Privy Council Office, used his technique of gentle persuasion and sweet reason; now we have the staccato utterances of the Minister as he seeks to persuade us—without taking much trouble over doing so—that new clause 2 is benign. I direct my remarks to that new clause, because we have no quarrel with new clause 1.
        New clause 2 has been called—and with some justification—a Henry VIII clause. Through it, unfettered powers can be taken by the Secretary of State. He can, by order, make certain provisions. As my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) said, the Secretary of State can dictate what offences have been created. The new clause gives him enormous power. There is not even much of a fig-leaf in subsection (4). It refers to the necessity to consult the commission, but the commission has no power of veto or real authority in this matter.
        The Minister prayed in aid the Representation of the People Bill, but clause 11(4) of that Bill states:
        "An order under subsection (1) shall be made by statutory instrument; and no such order shall be made unless a draft of the statutory instrument containing the order has been laid before, and approved by a resolution of, each House of Parliament."
        It would be nice for the Minister to listen to what I am saying. [Interruption.] The Government Whip should contain himself; he is getting terribly agitated and will only prolong the agony by so doing.
        Where is the reference in new clause 2 to the power of the House? There is very real concern on this side of the Committee that, at the end of the Committee proceedings, the Secretary of State is taking to himself unfettered, unrestricted powers. Although I do not for a moment seek to impugn the Minister's good intention, his explanation did not go anywhere near far enough to convince us that the new clause is benign. Indeed, we consider it malign and we are very worried about it. Unless he can give us some powerful promises and assurances, we will certainly want to divide the Committee on it.
        Mr. Swayne: I find new clause 2 absolutely outrageous. We are at the end of the Committee stage, having discussed the ins and outs of the Bill, and we discover that notwithstanding all that we have said, the Secretary of State can do as he pleases and make up the rules as he goes along. The Minister says that the new clause is benign. Has it occurred to him that the Secretaries of State who follow may not be benign?
        We are dealing here with the conduct of referendums. Has the Minister studied the conduct of the referendums as used by dictators in the 1930s? Referendums are tools of tyranny in the wrong hands. What self-respecting Parliament hands such wide-ranging order-making powers to Ministers, however benign they might be—like a benign tumour perhaps?
        Subsection (2)(a) says that the Secretary of State may make an order to
        "make provision for the creation of offences".
        Perhaps one of the most awe-inspiring things that we do in this place is to create offences that may result in the imprisonment of some of our constituents. A Parliament should think long and carefully about that, but we are not prepared to think about it at all; we are prepared to hand the powers to a Minister.
        What sort of Parliament would pass this new clause? My hon. Friend the Member for South Staffordshire (Sir P. Cormack) said that it is a Henry VIII clause; it is in fact an Attila the Hun clause.
        Mr. Hogg: I support the remarks of my hon. Friend the Member for New Forest, West (Mr. Swayne). New clause 2 is indeed far reaching. It does not matter much to me whether it is an Attila the Hun clause or a Henry VIII clause, but it is certainly not a clause that the House should support.
        We need to analyse the new clause, bearing in mind the fact that it must be read in the context of clause 142. The new clause enables the Secretary of State to do at least three things. First, in the context of referendums, it enables him to create offences that, by definition, have a penalty attached, which will be either a fine, a term of imprisonment or a period of disqualification and may incur more than one of those penalties. The new clause enables the Secretary of State to create offences without seeking the consent of the House.
        Dr. Julian Lewis: Is my right hon. and learned Friend suggesting that the Government are pretending not only to be tough on crime and tough on the causes of crime, but tough in the creation of new crimes?
        Mr. Hogg: Indeed; the Government do not intend to consult the House.
        Secondly, the new clause enables the Secretary of State not only to create new offences, but to apply to the referendum law any other enactment that he chooses. He can fish a provision from another statute and apply it to the law on referendums without coming to the House. That is a bizarre proposition.
        Thirdly—this is even more bizarre, especially in a time of devolution—the new clause enables the Secretary of State by order to apply or disapply the law as it is contained in the Bill differentially as between the various parts of the United Kingdom. We can therefore have

        1069
        different systems of law applying to different parts of the UK that are promulgated by law at the behest of the Secretary of State. All that is done by order—and by the negative procedure, as clause 142 states. In other words, none of the things that I have described has to come before the House.
        I used Henry VIII clauses as a Minister—of course I did—and the Government of whom I was a member used them over many years, but that does not mean that it is right to do so. We should be very chary about using such clauses. This one is so far reaching that it is best moved by the cardinal himself. I rather expect in another place the Lord Chancellor to move it. It is so far reaching that I hope that it is unacceptable to any democrat.
        12 midnight
        Mr. Stephen O'Brien: My hon. Friend the Member for South Staffordshire (Sir P. Cormack) mentioned Henry VIII, who famously said to his wives, "I shan't be keeping you long." I shall not be keeping you long, Mr. Lord.
        The Minister was generous enough about my speech on clause 111 and schedule 13 to accept that, in certain respects, my arguments had validity and to say that he would be looking into them and would write to me. I hope that he will be equally open minded on this matter. He will recall that the basis of those arguments was ensuring the democratic legitimacy of provisions, particularly those on referendums. If referendums are for anything, they are to confer the democratic legitimacy of the populace on measures that affect the whole country. Therefore, new clause 2 must go to the very heart of democratic legitimacy, especially in relation to referendums.
        Under new clause 2, the Secretary of State is allowed to reserve for himself the powers to set rules. As a Minister of the Crown, he is bound to have an interest in the outcome of a referendum. Therefore, he would be setting the rules for a game in which he had an interest whether he won or lost, and whatever side of the argument he took. That is why it was fair of my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) to say that, although most Governments have habitually used Henry VIII clauses, there is a very real reason why it is not appropriate to do so in this case. The new clause should not be agreed.
        Mr. Nicholas Winterton: The Minister described new clause 2 as benign. I rise to speak briefly because I want to know how he can describe it so. It has been said from the Opposition Benches that the new clause is a Henry VIII provision, and the one thing that one cannot say about Henry VIII is that he was benign.
        Bearing in mind what my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) and other hon. Friends have said, I am sure that, in seeking to give me his definition of "benign" in his winding-up speech, the Minister will accept that the new clause is draconian. It gives the Secretary of State very wide powers.
        Mr. Hayes: Perhaps the Minister confuses benign with vague. It is probably true that the more specific the clauses, the more benign they are; the more vague they
        1070
        are, the less benign they are. Because the new clause is so wide ranging, it is anything but benign. Vagueness is no excuse for accuracy in defining what Ministers can and cannot do under this Bill or any other legislation.
        Mr. Winterton: I am not sure that I can answer that point. I am hoping that the Minister will deal with my hon. Friend's intervention in his winding-up speech. I agree with the views expressed by my hon. Friend, as I do with those expressed by my fellow Cheshire Member of Parliament, my hon. Friend the Member for Eddisbury (Mr. O'Brien), who in a brief speech made some important points.
        New clause 2 is surely a draconian, all-enveloping provision, which gives substantial powers to the Secretary of State. Can the Minister justify his remarks that the clause is not that important and is benign? This matter is important, and the House deserves a proper and full explanation.
        The Second Deputy Chairman: The Question is, That the clause be read a Second time—
        Sir Patrick Cormack: Are we to take it, Mr. Lord, that the Minister, having heard the strong objections from the Opposition—
        The Second Deputy Chairman: Order. The Minister gave no indication that he wished to address the House.
        Sir Patrick Cormack: In that case, Mr. Lord, I shall say a few words. That is contemptuous treatment of the House of Commons. Several extremely powerful points were made by the Opposition.
        The new clause is utterly unacceptable. The Secretary of State would take to himself wide-ranging powers when, as we have heard, in a referendum all the dice are loaded in favour of the Government of the day.
        In a genuine fit of repentance, my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) explained how wrong such Henry VIII clauses are. There is nothing worse than for the Government to take the powers of a Henry VIII clause when dealing with a referendum. We are utterly opposed to the new clause, and we are, frankly, disgusted that the Minister is not prepared to answer the debate. We want to press the motion to a Division.
        Mr. Hogg: I support my hon. Friend. On any view of the matter, the new clause gives the Secretary of State the power to create new offences and to apply the law differentially throughout the United Kingdom. Whether that should be done by affirmative resolution or negative resolution or be written into the Bill is a matter for legitimate debate. The Opposition have urged a certain point of view. It is a disgrace that those on the Government Front Bench have not sought to respond to those points. It is a contempt of Parliament.
        Mr. Mike O'Brien: It is inappropriate that I have failed to address the important point raised by the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg). I understand that the usual channels have had their discussions about the length of

        1071
        the debate. Hon. Members in all parts of the House will understand that some hon. Members want to go home. One can understand that. [Interruption.]
        However, let me address the point rightly raised by the right hon. and learned Gentleman, which is relevant. He suggested that the measure could be introduced under the negative resolution. The precedent is that it should be done by affirmative resolution. We need to consider the right hon. and learned Gentleman's point. It is my view that the affirmative resolution procedure should properly be used, but I will examine the matter.
        The Second Deputy Chairman: We are dealing with new clause 1. The Question is—
        Sir Michael Spicer rose
        The Second Deputy Chairman: I call Sir Michael Spicer.
        Sir Michael Spicer: There is one point that I want to raise with the Minister. I pointed out in an intervention that the new clause gives overriding powers to the Secretary of State. The Minister said that the Bill contained safeguards against that. The issue has arisen late in the day, and overrides everything else in the Bill. It is all-inclusive and all-embracing. The Minister must answer the point. He cannot simply say that there are safeguards in the Bill. The new clause is crucial, which is probably why it was introduced so late.
        Mr. O'Brien: The hon. Gentleman is wrong. That is nonsense.
        Mr. Paterson: This must be one of the lowest points in this Parliament. [Interruption.] It is 12.10 am—
        Mr. Joe Ashton: On a point of order, Mr. Lord. On at least two occasions, you have risen to your feet to put the Question, and then withdrawn because an Opposition Member stood up. The will of the House is to put the Question now.
        The Second Deputy Chairman: Let me be clear: I have not completely put the Question. We are in Committee, and hon. Members can speak as often as they choose. It is important that we hear hon. Members who want to contribute.
        Mr. Paterson: My hon. Friend the Member for South Staffordshire (Sir P. Cormack) and my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) posed some pertinent questions. Notwithstanding clause 142, which gives the Home Secretary extraordinarily wide powers, we have not received a proper explanation of why, without consulting Parliament, the Home Secretary, who will not be impartial in a referendum campaign, should be given such wide powers in new clause 2.
        Secondly, under new clause 2, the Home Secretary will be able to choose different provisions for different parts of the United Kingdom. That is extraordinary and unique. I have never seen such a provision before. It is a charter for gerrymandering the referendum and a power of which Mr. Mugabe could only dream.
        1072
        I know that hon. Members want to go to beddy-byes, but we want straight answers to our pertinent questions. The provision is a constitutional outrage and the Minister should answer the questions before we vote.
        Question put and agreed to.
        Clause read a Second time, and added to the Bill.

      New Clause 2

        ORDERS REGULATING CONDUCT OF REFERENDUMS
        '.—(1) The Secretary of State may by order make such provision as he considers expedient for or in connection with regulating the conduct of referendums to which this Part applies.
        (2) An order under this section may, in particular—

        (a) make provision for the creation of offences;

        (b) apply (with or without modification) any provision of any enactment;

        and different provision may be made under this section in relation to different parts of the United Kingdom.
        (3) An order under this section shall not apply in relation to any referendum in relation to which specific provision is made by any other enactment for or in connection with regulating any matters relating to the conduct of the referendum, except to such extent (if any) as may be provided by that enactment.
        (4) Before making an order under this section the Secretary of State shall consult the Commission.'.—[Mr. Mike O'Brien.]
        Brought up, and read the First time.
        Motion made, and Question put, That the clause be read a Second time:— The Committee divided: Ayes 266, Noes 135.

        Division No. 81]

        [12.14 am

        AYES

        Ainger, Nick

        Chapman, Ben (Wirral S)

        Ainsworth, Robert (Cov'try NE)

        Clapham, Michael

        Alexander, Douglas

        Clark, Rt Hon Dr David (S Shields)

        Allen, Graham

        Clark, Paul (Gillingham)

        Anderson, Donald (Swansea E)

        Clarke, Charles (Norwich S)

        Ashton, Joe

        Clarke, Tony (Northampton S)

        Atherton, Ms Candy

        Clelland, David

        Atkins, Charlotte

        Coaker, Vemon

        Austin, John

        Coffey, Ms Ann

        Banks, Tony

        Cohen, Harry

        Barnes, Harry

        Coleman, Iain

        Barron, Kevin

        Colman, Tony

        Bayley, Hugh

        Connarty, Michael

        Beard, Nigel

        Corbyn, Jeremy

        Beckett, Rt Hon Mrs Margaret

        Corston, Jean

        Benn, Hilary (Leeds C)

        Cousins, Jim

        Benn, Rt Hon Tony (Chesterfield)

        Cox, Tom

        Bennett, Andrew F

        Cranston, Ross

        Benton, Joe

        Crausby, David

        Berry, Roger

        Cryer, Mrs Ann (Keighley)

        Best, Harold

        Cryer, John (Hornchurch)

        Betts, Clive

        Cummings, John

        Blackman, Liz

        Cunningham, Jim (Cov'try S)

        Blears, Ms Hazel

        Dalyell, Tam

        Blizzard, Bob

        Darvill, Keith

        Borrow, David

        Davey, Valerie (Bristol W)

        Bradshaw, Ben

        Davidson, Ian

        Brown, Russell (Dumfries)

        Davies, Rt Hon Denzil (Llanelli)

        Browne, Desmond

        Davis, Rt Hon Terry (B'ham Hodge H)

        Burden, Richard

        Burgon, Colin

        Dawson, Hilton

        Campbell, Alan (Tynemouth)

        Dismore, Andrew

        Campbell-Savours, Dale

        Dobbin, Jim

        Caplin, Ivor

        Donohoe, Brian H

        Casale, Roger

        Doran, Frank

        Caton, Martin

        Dowd, Jim

        Cawsey, Ian

        Drew, David

        1073

        Eagle, Maria (L'pool Garston)

        Love, Andrew

        Efford, Clive

        McAvoy, Thomas

        Ellman, Mrs Louise

        McCafferty, Ms Chris

        Ennis, Jeff

        McCartney, Rt Hon Ian (Makerfield)

        Etherington, Bill

        Field, Rt Hon Frank

        McDonagh, Siobhain

        Fisher, Mark

        Macdonald, Calum

        Fitzpatrick, Jim

        McDonnell, John

        Flint, Caroline

        McGuire, Mrs Anne

        Flynn, Paul

        McIsaac, Shona

        Follett, Barbara

        McKenna, Mrs Rosemary

        Foster, Rt Hon Derek

        Mackinlay, Andrew

        Foster, Michael Jabez (Hastings)

        McNamara, Kevin

        Foster, Michael J (Worcester)

        MacShane, Denis

        Foulkes, George

        Mactaggart, Fiona

        Fyfe, Maria

        McWalter, Tony

        Gapes, Mike

        McWilliam, John

        Gardiner, Barry

        Mahon, Mrs Alice

        George, Bruce (Walsall S)

        Mallaber, Judy

        Gerrard, Neil

        Marsden, Paul (Shrewsbury)

        Gibson, Dr Ian

        Marshall, David (Shettleston)

        Gilroy, Mrs Linda

        Marshall-Andrews, Robert

        Godman, Dr Norman A

        Martlew, Eric

        Godsiff, Roger

        Meacher, Rt Hon Michael

        Goggins, Paul

        Meale, Alan

        Golding, Mrs Llin

        Merron, Gillian

        Griffiths, Jane (Reading E)

        Michie, Bill (Shef'ld Heeley)

        Griffiths, Nigel (Edinburgh S)

        Miller, Andrew

        Griffiths, Win (Bridgend)

        Mitchell, Austin

        Grocott, Bruce

        Moffatt, Laura

        Grogan, John

        Moran, Ms Margaret

        Hain, Peter

        Morley, Elliot

        Hall, Mike (Weaver Vale)

        Morris, Rt Hon Ms Estelle (B'ham Yardley)

        Hall, Patrick (Bedford)

        Hamilton, Fabian (Leeds NE)

        Mountford, Kali

        Hanson, David

        Mudie, George

        Heal, Mrs Sylvia

        Mullin, Chris

        Healey, John

        Murphy, Denis (Wansbeck)

        Henderson, Doug (Newcastle N)

        Murphy, Jim (Eastwood)

        Hepburn, Stephen

        Murphy, Rt Hon Paul (Torfaen)

        Heppell, John

        Naysmith, Dr Doug

        Hesford, Stephen

        Norris, Dan

        Hoey, Kate

        O'Brien, Bill (Normanton)

        Hood, Jimmy

        O'Brien, Mike (N Warks)

        Hopkins, Kelvin

        O'Hara, Eddie

        Hughes, Ms Beverley (Stretford)

        O'Neill, Martin

        Hughes, Kevin (Doncaster N)

        Organ, Mrs Diana

        Humble, Mrs Joan

        Pearson, Ian

        Iddon, Dr Brian

        Pickthall, Colin

        Illsley, Eric

        Pike, Peter L

        Jackson, Helen (Hillsborough)

        Plaskitt, James

        Jamieson, David

        Pollard, Kerry

        Jenkins, Brian

        Pond, Chris

        Johnson, Alan (Hull W & Hessle)

        Pope, Greg

        Jones, Rt Hon Barry (Alyn)

        Pound, Stephen

        Jones, Mrs Fiona (Newark)

        Prentice, Ms Bridget (Lewisham E)

        Jones, Helen (Warrington N)

        Prosser, Gwyn

        Jones, Ms Jenny (Wolverh'ton SW)

        Purchase, Ken

        Rammell, Bill

        Jones, Jon Owen (Cardiff C)

        Rapson, Syd

        Jones, Martyn (Clwyd S)

        Roche, Mrs Barbara

        Kaufman, Rt Hon Gerald

        Rooney, Terry

        Keeble, Ms Sally

        Ross, Emie (Dundee W)

        Kemp, Fraser

        Rowlands, Ted

        Kidney, David

        Roy, Frank

        Kilfoyle, Peter

        Ruddock, Joan

        King, Andy (Rugby & Kenilworth)

        Russell, Ms Christine (Chester)

        Kumar, Dr Ashok

        Ryan, Ms Joan

        Ladyman, Dr Stephen

        Sarwar, Mohammad

        Laxton, Bob

        Savidge, Malcolm

        Lepper, David

        Sawford, Phil

        Levitt, Tom

        Sheerman, Barry

        Lewis, Ivan (Bury S)

        Simpson, Alan (Nottingham S)

        Lewis, Terry (Worsley)

        Singh, Marsha

        Linton, Martin

        Skinner, Dennis

        Lock, David

        Smith, Rt Hon Andrew (Oxford E)

        1074

        Smith, Angela (Basildon)

        Trickett, Jon

        Smith, Miss Geraldine (Morecambe & Lunesdale)

        Truswell, Paul

        Turner, Dennis (Wolverh'ton SE)

        Smith, Jacqui (Redditch)

        Turner, Dr Desmond (Kemptown)

        Snape, Peter

        Turner, Dr George (NW Norfolk)

        Southworth, Ms Helen

        Turner, Neil (Wigan)

        Spellar, John

        Twigg, Derek (Halton)

        Squire, Ms Rachel

        Twigg, Stephen (Enfield)

        Starkey, Dr Phyllis

        Tynan, Bill

        Steinberg, Gerry

        Vis, Dr Rudi

        Stevenson, George

        Walley, Ms Joan

        Stewart, David (Inverness E)

        Wareing, Robert N

        Stewat, Ian (Eccles)

        Welsh, Andrew

        White, Brian

        Stinchcombe, Paul

        Whitehead, Dr Alan

        Stoate, Dr Howard

        Williams, Rt Hon Alan (Swansea W)

        Taylor, Rt Hon Mrs Ann (Dewsbury)

        Williams, Alan W (E Carmarthen)

        Taylor, Ms Dari (Stockton S)

        Winnick, David

        Taylor, David (NW Leics)

        Wise, Audrey

        Temple-Morris, Peter

        Wright, Anthony D (Gt Yarmouth)

        Thomas, Gareth (Clwyd W)

        Wright, Dr Tony (Cannock)

        Timms, Stephen

        Tipping, Paddy

        Tellers for the Ayes:

        Todd, Mark

        Mr. Tony McNulty and

        Touhig, Don

        Mr. Gerry Sutcliffe.

        NOES

        Ainsworth, Peter (E Surrey)

        Gorman, Mrs Teresa

        Amess, David

        Gray, James

        Arbuthnot, Rt Hon James

        Green, Damian

        Atkinson, Peter (Hexham)

        Greenway, John

        Baldry, Tony

        Grieve, Dominic

        Bercow, John

        Hamilton, Rt Hon Sir Archie

        Beresford, Sir Paul

        Hammond, Philip

        Blunt, Crispin

        Hawkins, Nick

        Boswell, Tim

        Hayes, John

        Bottomley, Peter (Worthing W)

        Heald, Oliver

        Bottomley, Rt Hon Mrs Virginia

        Heath, David (Somerton & Frome)

        Brady, Graham

        Heathcoat-Amory, Rt Hon David

        Brazier, Julian

        Hogg, Rt Hon Douglas

        Brooke, Rt Hon Peter

        Horam, John

        Browning, Mrs Angela

        Howarth, Gerald (Aldershot)

        Bruce, Ian (S Dorset)

        Jack, Rt Hon Michael

        Bumett, John

        Jackson, Robert (Wantage)

        Burns, Simon

        Jenkin, Bemard

        Butterfill, John

        Key, Robert

        Cash, William

        Lait, Mrs Jacqui

        Chapman, Sir Sydney (Chipping Barnet)

        Lansley, Andrew

        Leigh, Edward

        Chope, Christopher

        Letwin, Oliver

        Clappison, James

        Lewis, Dr Julian (New Forest E)

        Clifton-Brown, Geoffrey

        Lidington, David

        Collins, Tim

        Lloyd, Rt Hon Sir Peter (Fareham)

        Colvin, Michael

        Loughton, Tim

        Cormack, Sir Patrick

        McIntosh, Miss Anne

        Cran, James

        Maclean, Rt Hon David

        Curry, Rt Hon David

        McLoughlin, Patrick

        Davies, Quentin (Grantham)

        Madel, Sir David

        Davis, Rt Hon David (Haltemprice)

        Malins, Humfrey

        Day, Stephen

        Maude, Rt Hon Francis

        Donaldson, Jeffrey

        Mawhinney, Rt Hon Sir Brian

        Duncan, Alan

        May, Mrs Theresa

        Duncan Smith, Iain

        Moore, Michael

        Evans, Nigel

        Moss, Malcolm

        Faber, David

        Nicholls, Patrick

        Fabricant, Michael

        Norman, Archie

        Fallon, Michael

        O'Brien, Stephen (Eddisbury)

        Flight, Howard

        Ottaway, Richard

        Fox, Dr Liam

        Page, Richard

        Fraser, Christopher

        Paice, James

        Gale, Roger

        Paterson, Owen

        Garnier, Edward

        Pickles, Eric

        Gibb, Nick

        Portillo, Rt Hon Michael

        Gill, Christopher

        Randall, John

        Gillan, Mrs Cheryl

        Redwood, Rt Hon John

        1075

        Rendel, David

        Townend, John

        Robertson, Laurence

        Tredinnick, David

        Roe, Mrs Marion (Broxboume)

        Trend, Michael

        Ross, William (E Lond'y)

        Tyrie, Andrew

        Ruffley, David

        Walter, Robert

        Russell, Bob (Colchester)

        Wardle, Charles

        St Aubyn, Nick

        Waterson, Nigel

        Sanders, Adrian

        Webb, Steve

        Sayeed, Jonathan

        Whitney, Sir Raymond

        Simpson, Keith (Mid-Norfolk)

        Whittingdale, John

        Soames, Nicholas

        Widdecombe, Rt Hon Miss Ann

        Spelman, Mrs Caroline

        Wilkinson, John

        Spicer, Sir Michael

        Willetts, David

        Spring, Richard

        Wilshire, David

        Steen, Anthony

        Winterton, Mrs Ann (Congleton)

        Streeter, Gary

        Winterton, Nicholas (Macclesfield)

        Stunell, Andrew

        Yeo, Tim

        Swayne, Desmond

        Young, Rt Hon Sir George

        Syms, Robert

        Tapsell, Sir Peter

        Tellers for the Noes:

        Taylor, Ian (Esher & Walton)

        Mrs. Eleanor Laing and

        Taylor, John M (Solihull)

        Mr. Peter Luff.

        Question accordingly agreed to.
        Clause read a Second time, and added to the Bill.
        Amendment made: No. 9, in title, line 4, after "campaigns", insert—
        'and the conduct of referendums'.—[Mr. Mike O'Brien.]
        Bill (Clauses 1 to 18 and 95 to 120, schedules 1, 2 and 11 to 14, and new clauses and new schedules relating to parts I and VII) reported, with amendments; to lie upon the Table. Bill, as amended in the Committee and in the Standing Committee, to be considered tomorrow, and to be printed. [Bill 34.]

  Police Funding (Avon and Somerset)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Mike Hall.]
  12.27 am
  Mr. Steve Webb: I am grateful for the opportunity at this late hour to raise the funding of Avon and Somerset police.
  The funding of our police service is a matter of considerable concern to my constituents, but I want to set my speech in the context of my respect and admiration for the work done by the force. Its officers serve our community faithfully and with great dedication. One of my aims is to ensure that advantage is not taken of that work, and that the force receives the backing that it deserves. I am pleased to be joined by my hon. Friend the Member for Somerton and Frome (Mr. Heath), who was chairman of Avon and Somerset police authority for three years and brings great experience to the debate.
  The dedication and professionalism of our force deserve from Members on both sides of the House not just warm words, but hard cash. That means cash for salaries and pensions, cash for officers on the ground, and cash for support services. My central contention is that the Avon and Somerset police force is stretched to the limit. I do not wish to be unnecessarily alarmist, but the force is clearly under pressure—pressure that is not entirely consistent with the language that the Government have used, and the way in which they have financed the force.
  My normal custom in debate is to rely heavily on statistical evidence, and I shall shortly draw to some extent on facts and figures. First, however, I want to give some impressions of the current position from those involved in the police service. Let me start at the top, as I generally do.
  The Bristol Evening Post recently ran a story quoting Avon and Somerset' s chief constable, Steve Pilkington. He is not someone who rushes to the press lightly, or is regularly quoted as saying things that stir matters up. However, speaking of this year's budget settlement, he said:
  "We have a very, very tight budget. We will have to reduce our support staff at HQ.
  You take a risk when you do that. It does mean that when there is a major incident we won't be able to mobilise the support that we have done in the past."
  That is the perspective of the chief constable. He was not being alarmist, but saying that a gamble was inherent in the settlement for the coming year.
  I have done some research, and have spoken to officers at my local police station in Chipping Sodbury. They spoke of increasing pressure to take time away from front-line police duties. They talked about increasing pressure for training. I am sure that hon. Members on both sides of the House would welcome a well-trained police service, but if that means that a given number of officers have less time for front-line policing, the bare statistics about the number of officers will not reflect their ability to deliver on the ground. We want them to be trained in human rights, new legislation, and the use of equipment and technology. Those are all good things, but if they detract from front-line policing and, at the same time, there is pressure on police numbers, something somewhere will have to give.

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  To give perhaps the most extreme example that I have come across in just the few days that I have been making inquiries, to coin a phrase, one constable, who for understandable reasons asked not to be named in the debate, told me that, on 25 days in the past year, he had been told not to use his police car because the budget would not wear it. The cost of the petrol would mean going over budget. On 25 occasions, he was told to stay at the station, do some paperwork and not get in the car. That was spontaneous. I did not ring up and say, "Tell me it is terrible." He simply said, "Those are the day-to-day pressures that budgets are under. That is the effect on the service on the ground." That is a sign of a force that is under stress and being pushed perhaps a little too far.
  What are the hard facts about the settlement and the position for Avon and Somerset? The police authority has estimated that there was a shortfall of roughly £7 million between the funding that it was given by central Government, the assumed rise in council tax, or in the precept on the council tax, and what it needed to meet the demands. In a budget of roughly £180 million, £7 million is a substantial figure.
  Why are there such pressures? Two substantial ones are well known to the Minister. The effect of pay awards and inflation eats up all the additional grant and additional assumed council tax rise. Over and above that, £2 million is needed for police pensions.
  I was shocked to learn that, in the budget overall, £1 in every £6 of net police spending goes not on the police, but on pensions. That is an arbitrary way in which to fund those liabilities. That is the position not just in the police service, but in the fire service and other sectors of public service.
  I recognise what the Minister said in the debate the other day—I think on 3 February. The Government recognise that it is a problem. The previous Government, the Conservatives, said that they recognised that there was a problem. We all recognise that there is a problem. We do not appear to be any nearer a solution. I hope that the Minister can reassure me that, year on year, the Government will not keep loading pension costs on to forces at the expense of police officers.
  How is the authority having to respond to that pressure on the budget? Most obviously, it is having to cut police officers. Reluctantly, the police will cut 30 officers from the force in the coming year—not front-line officers, but police officers based mainly at Avon and Somerset headquarters.
  The Government have talked about 5,000 extra officers-5,000 over three years, of course—through the crime fighting fund. Yes, Avon and Somerset will get some officers. It bid for more than 160. It has been awarded 101, spread over three years. Next year it will get 20 additional officers—so 30 down, 20 up: a net loss of 10.
  I was in the House this afternoon when the Prime Minister boasted about the investment in extra police, but Avon and Somerset will not have extra police. Despite the figures that he quoted, it will have 10 fewer officers next year. Last year, between March and September, Avon and Somerset numbers fell by 11. It was 11 down in that period and another 10 down this year, yet the Government talk about being tough on crime. They do not back that up with money to make it a reality.
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  As well as cutting the number of officers, what else has the force been forced to do? It has had to cut not only back-room staff—back-room police officers—but support staff. Funding of support staff decreased by a further 1.5 per cent. to 95 per cent.
  The force sat down and decided what a good police service should do. It thought that it would investigate financial crime more. That has been scrapped. No additional investment is planned because it cannot afford it. It planned to make some long-needed capital investment to make the force more efficient and to replace worn-out equipment. A £2 million contribution from revenue was going to go into capital. That was scrapped.
  There is an allowance in the budget for 3.5 per cent. pay awards, but there is no general provision for price changes, so, as prices rise, the budget has to bear those costs. Petrol is the classic case. Petrol prices have been rising very rapidly and hitting police budgets, so that police officers cannot use their cars, which are costing too much money to operate. It is an absurd situation.
  What has been the impact on service provision? The police authority report states:
  "the loss of 30 officers from central staffs could impact on the level of support given to police districts"—
  particularly if there were a major incident—
  "and a further reduction in support staff will be felt in terms of internal service delivery".
  That means the people who help police to do their job. The report continues:
  "it is only with an eye to the impact on precept that the Chief Constable has reluctantly proposed a reduction in authorised police strength."
  In other words—even with a "measured" cut of 30 police officers—the precept is rising by 11 per cent. The chief constable, who is worried about the precept, after cutting 30 officers, was willing to allow it to rise to 11 per cent. That is the type of pressure that police are under. However, not only officers will be cut.
  As the report states,
  "a backlog of forensic samples may build up"
  because planned additional investment in forensics has had to be cut. Moreover, equipment programmes have been pared, and other programmes have been deferred. The situation has the aura of make do and mend, not of a modern efficient police service.
  I believe that the Avon and Somerset police force is efficient and that it has made efficiency savings and achieved a great deal. However, constantly asking year on year for greater efficiencies without granting capital and making investment to achieve them eventually runs only into a dead end.
  There have, therefore, been cuts in officers and in back-room services, but an 11 per cent. council tax rise. What can be done? I reassure the Minister that I have read in full the transcript of the debate of 3 February, when he announced the new grant settlement, which was debated in the House. Some of the points that I shall make today were made also in that debate. I shall therefore not make the points at great length, but they are particularly germane to Avon and Somerset.
  Avon and Somerset has in previous years particularly, and to a limited extent this year, had to dip into its balances, taking them dangerously low. The force's

  1079
  balances are now below the level recommended by auditors. One can almost picture the police authority with its collective fingers crossed, hoping that nothing happens or goes wrong, because resources and reserves are low and the officers are stretched. We just hope that there will not be a major call on the force. But is that any way to have to run a police service?
  The funding formula needs to be addressed. The arguments on that are well known to the Minister. He is aware of the impact of sparsity on areas such as Avon and Somerset, and the Home Office has accepted its impact on policing costs. The area cost adjustment—which may seem irrelevant in this context—and the damping effect of using six-year-old establishment factors contribute to making the funding formula unjust. I think that it is widely accepted that the formula is unjust. However, the Government's bizarre response is to do nothing about it for at least a year, to ensure stability.
  Stability is a virtue, but it is not a virtue that counteracts injustice. This is perhaps an extreme analogy, but if someone were wrongfully arrested, we would not say that stability demands that we should leave them in jail—justice demands that we should get them out. Stability does not counteract injustice, which should be tackled at the earliest opportunity.
  I have already addressed the pensions issues. It is agreed that it is a problem. However, there is no sign of a solution, and the problem will only get worse with every passing year.
  As for the council tax benefit limitation scheme, the fact is that, when the precept rises by 11 per cent., councils will—according to the police authority—be penalised by half a million pounds, which is the equivalent of 20 officers. Therefore, although so-called crude and universal capping may have gone, back-door capping is alive and well and affecting the decisions of police authorities on policing.
  I just wonder how the people of Avon and Somerset would feel if they appreciated that decisions on police numbers—decisions to cut police officers from the force—were being affected by the modem equivalent of council tax capping. If they knew, I think that they would be very concerned. When they receive their council tax bills and see the precept rise of 11 per cent., they will perhaps assume that a major improvement in the force has been made, such as the purchase of a second helicopter. They will be shocked when they learn that it is accompanied by cuts in officers, planned investment and services.
  We cannot talk only about inputs; we have to talk about outputs. No one can deny that, in the past six years, the Avon and Somerset force has made important progress in cutting crime. I welcome that unreservedly and pay tribute to the force. I have two concerns. First, we should not allow ourselves to become complacent by focusing on a high base period of the early 1990s, when crime was at record levels. With the aid of the Library, I have looked at the record for the past 20 years. In the early 1980s, recorded crime in Avon and Somerset was at barely half its present level. Although things are moving in the right direction, crime levels are still unacceptably high. There is a feeling that some people do not bother to report minor crimes, because they think that the police are too stretched.
  1080
  The trends on recorded crime are moving in the right direction, but I fear that that will not continue in the medium term if the force continues to be put under pressure. In its survey this year, the force asked a new question:
  "Were you satisfied with the perceived level of foot patrol?"
  Just 11 per cent. of the public were satisfied and the figure was only 27 per cent. for the mobile patrol. The headline figures may be coming down, but the public are not receiving the reassurance that they want from their police.
  The Government are out of touch with the wishes of the people of Avon and Somerset. They talk a good game on police numbers, but they are not delivering. I know that the Minister accepts many of my points. I hope that this debate will emphasise to him that the people whom I represent want not just good words on policing, but action. I hope that tonight he can promise me some action.
  12.42 am
  The Minister of State, Home Office (Mr. Charles Clarke): I congratulate the hon. Member for Northavon (Mr. Webb) on securing this debate on the funding of the Avon and Somerset constabulary. I join in his opening tribute to the dedication and commitment of his force, particularly the chief constable, Mr. Pilkington. Early in my time as a Minister I had an opportunity to go to Bristol, where I met Mr. Pilkington and many of his colleagues in the crime reduction partnership. I was very impressed by the approach of the force and the partner authorities with whom they are seeking to fight to reduce crime levels.
  In the polarity that the hon. Gentleman suggested, it would be more accurate to describe Avon and Somerset as a modern and efficient force than to call it a make do and mend force. It is well led and is seeking to address difficult issues creatively and effectively. I want to place on record my appreciation of that.
  As the hon. Gentleman acknowledged, only a week ago I responded to an Adjournment debate from the hon. Member for Gainsborough (Mr. Leigh) about the funding of Lincolnshire police. Police funding and rural crime concerns have been raised in earlier debates. They are important and genuine issues. As the hon. Gentleman generously acknowledged, my response is bound to be similar to those that I have given in previous debates.
  The House debated and approved the Government's proposals for police funding for 2000–01 on Thursday 3 February. The Liberal Democrats voted against the plans. Ironically, that would have cut the funding for all police authorities. We did not make much of that. I understand that the hon. Gentleman was not able to be in the Chamber for that debate, no doubt for a valid reason. His hon. Friend the Member for Somerton and Frome (Mr. Heath) raised important issues from his experience as chairman of a police authority.
  It is important to set out the facts for Avon and Somerset constabulary. For 2000–01, its funding from the Government is £173.7 million—an increase of 3.2 per cent. on the previous year, compared with the national average of 2.8 per cent. It is important to put on record the fact that Avon and Somerset did better than the national average. I understand that the police authority unanimously set its budget on 10 February at a total of £181.2 million. The increase in its net revenue spending over 1999–2000 is 3.9 per cent., which is significant.

  1081
  As the hon. Gentleman said, the authority was conscious of the need to set a precept that was reasonable and prudent. The increase in the police precept on the council tax is 11.5 per cent. for a band D property and I understand that the increase is expected to be below the average precept increase for the south-west. I know neither why that decision was taken nor what the position of the Liberal Democrats was on those issues—given their famous tax-raising commitment—when the matter was debated in the police authority. However, I understand the constraints on every police authority in deciding what judgment to make in respect of resources and I note that the police precept increase was expected to be below the average for the south-west.
  The chief constable deserves great credit, as the hon. Gentleman said. When the police authority looked at its spending plans, it did so in a positive way that minimised the effect on delivery of front-line policing. The plans mean a reduction in police numbers by 30, but they protect the operational front line by ensuring that the cuts are made in central departments in the way suggested by the hon. Gentleman.
  It may be of interest to the House to know that the total number of police officers in the Avon and Somerset constabulary was the same in September 1999 as it was in March 1997. There has been no decline during that period. The police authority deserves tribute for maintaining stability in the force.
  Avon and Somerset's expenditure per head of population in 1999–2000 was estimated at £115.50, which is marginally better than the average for the shire counties of £114 per head of population. Avon and Somerset has done well in that significant respect. It has addressed the situation by taking hard decisions and directing them well.
  In responding to the debate, I must refer to the hon. Gentleman's point about crime levels in the county. As he acknowledged, in the 12 months to September 1999, crime in Avon and Somerset fell by 5.2 per cent. or 8,162 crimes. That contrasted with an increase in crime in England and Wales, so Avon and Somerset did extremely well in that regard.
  The hon. Gentleman said that citing that figure might suggest complacency. Let me reassure him that there is absolutely none. As the Government made plain this week, we have a clear drive towards reducing crime levels throughout the country, particularly in respect of vehicle crime, burglary and robbery. We have set a clear agenda and we are not complacent. However, it is right to congratulate the force on their success, in partnership with local authorities and others, in substantially reducing crime levels.
  I understand the hon. Gentleman's concerns about resources and money. He makes a fair point and any hon. Member worth his salt would do so. However, I am sure that he would acknowledge that those concerns need to be set in the context of the genuine achievements of the force in addressing the issues and making progress.
  Mr. Webb: May I return to the Minister's earlier comment about make do and mend as opposed to modern and efficient? As the record will show, I accepted that the service is efficient. My concern is that it must not become
  1082
  make do and mend, with police officers worried about getting in the car and spending money on petrol. I hope that the Minister realises that that is unacceptable.
  Mr. Clarke: One of the joys of responding to an Adjournment debate is that one has a text to help one through these difficult discussions. The phrases "make do and mend" and "modern and efficient" were not in my text; they were in the hon. Gentleman's speech. He used that language. The record will sustain what I said—that it is important to pay tribute to the modern and efficient Avon and Somerset constabulary, rather than suggesting that it was moving towards make do and mend. I certainly did not make such a suggestion, although the hon. Gentleman may have done. Confidence in the force is both required and deserved, which is why I thought it important to respond to his suggestion that it was becoming a make do and mend force. I do not believe that the police authority, the chief constable or the senior officers believe that to be true, although they will all continue—rightly and fairly—to make the case for more resources as time passes. I am disappointed that the hon. Gentleman should try to spread gossip that the force was approaching a make do and mend situation, because that is not true. I know that he would not want to be accused of spreading gloom about the future of policing in the area that he represents, and I thought that it was important to get it on the record that the Government do not believe that that is an appropriate description of the situation.
  The police authority stated in its policing plan for 1999–2000:
  "Crime reduction and community safety must be at the forefront of all that we do. We aim to reduce the overall levels of crime and disorder through working in partnership with local authorities and local communities."
  The Government can take credit for the work that they have done through the Crime and Disorder Act 1998 on building local partnerships, but the example of what has been done in the Avon and Somerset force, including the clear commitment by the whole force to working in partnership with local authorities—and, by the same token, the commitment by the local authorities to working with the police force—is exemplary and is the main reason why the force has succeeded in working with others to reduce crime. It is important to acknowledge that.
  The hon. Gentleman raised several issues, as an aside to his discussion, that were addressed in the debate on 3 February, such as sparsity, the damping factor and security issues. I shall not repeat what I said in that debate and, indeed, the hon. Gentleman generously did not ask me to do so. He highlighted two issues—pensions and pay and conditions—on which I wish to confirm what I said in that debate.
  We acknowledge that there is a serious problem with pensions. The hon. Member for Somerton and Frome raised it powerfully in his speech in the debate on 3 February, and it is a genuine issue across the country. This Government and previous Governments have not grasped the issues as it needs to be grasped. It raises fundamental issues about funding as a whole, the proportion of police spending that goes on pensions, and distribution—because different forces deal with the situation in different ways.
  As I said in the earlier debate, we are addressing the issues as a matter of high priority, because the current situation is not fair. We are carefully considering what

  1083
  should be done, but I do not have a white rabbit to pull out of the hat to solve the problem. The issues have not previously been addressed because they are difficult to address and even harder to get right. What is important is that a police authority such as Avon and Somerset should not have its flexibility to decide the allocation of its resources constrained unacceptably by the proportion of its funding that must be devoted to pensions. That is a legitimate issue for the hon. Member for Northavon to raise, and I take it very seriously. Any genuinely constructive suggestions that he has about how we should address that issue would be welcome—I do not say that in a sly spirit, because I mean it seriously. Many people have odd ideas, but actually cracking the problem will be difficult.
  The hon. Gentleman was right to raise the issues he did on pay and conditions. We have a nationally agreed system of pay that offers constraint and is a significant factor, but those problems do not begin to approach the pensions problems in terms of the balance of issues that we must address.
  In conclusion, I want to emphasise that the Avon and Somerset police constabulary will receive an extra 101 posts over the next three years under the crime fighting fund. That will be of significant help in addressing some of the issues that the hon. Gentleman has raised, but it is a step in the right direction, and not the complete process. The chairman of the Avon and Somerset police authority welcomed the decision. He was very positive about it, and I welcome that acknowledgement.
  Being a Liberal Democrat, the hon. Member for Northavon is not a utopian. He will not expect me to pluck from the sky a solution that will solve every problem under the sun, and the realism of his party on tax and other matters is well known. However, I assure him in all seriousness that the Government are trying to move in the direction that he prefers.
  1084
  We want more resources to reach areas such as Avon and Somerset, but we want to ensure that the economy remains stable. Police authorities and other public-sector organisations are finding that the steady year-on-year increases under our three-year spending programme—which may not be as large as people would like—provide better help than the regime that we inherited. Under the previous Government's arrangements, resources went up and down every year, and cuts were always a possibility.
  The early years of this Government are being spent filling in some of the deep holes that developed under the previous Administration. However, the steady increases that we are achieving in resource allocation represent the way forward. In my experience, police authorities across the country welcome the balanced and steady way in which we approach such matters, as year-on-year fluctuations in resources make planning and budgeting extremely difficult.
  I appreciate that the Avon and Somerset force has a backlog of capital maintenance works. The hon. Member for Somerton and Frome suggested that that backlog amounted to about £7 million and that it could be tackled if the force were allowed to unlock capital receipts. The House will understand that my Department is governed by Treasury rules, but my right hon. Friend the Deputy Prime Minister is considering the matter in his review of local authority funding.
  I have tried to deal directly with the various points legitimately raised by the hon. Member for Northavon. However, his suggestion of a potential crisis is not correct, and the police force in Avon and Somerset deserves a clear statement of the Government's confidence in the way that it is dealing with matters. I am confident that it will continue its success of recent years in bringing down crime.
  Question put and agreed to.
  Adjourned accordingly at three minutes to One o'clock.