HC Deb 16 February 2000 vol 344 cc1010-20

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 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 (Altrincham and Sale, West)


Mr. Hayes


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.

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, 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 (South Norfolk)

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 (Eddisbury)

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.

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 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.

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.

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.

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.

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.

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