HC Deb 16 February 2000 vol 344 cc972-91
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.

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 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. 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 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 (South Holland and The Deepings)

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 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 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 (New Forest, East)

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— 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 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 (New Forest, West)

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.

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 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. 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 (Ellesmere Port and Neston)

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 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, 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.

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 £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)
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
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.
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
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.

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