HC Deb 16 February 2000 vol 344 cc1020-45

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.

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 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 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 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.

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 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 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.

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. 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 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.

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 (Newbury)

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 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


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 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. 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, 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.

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 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 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 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 umbrella organisations and put limits on the other participants in the debate to ensure that everyone could participate.

Mr. Brady


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 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.

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
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
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
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.
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
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.

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