HL Deb 21 November 2000 vol 619 cc753-99 (" . After section 379 of the Income and Corporation Taxes Act 1988 (interpretation of sections 369 to 378) there shall be inserted—

"Tax relief on political donations.

379AA.—(1) Tax relief shall be available to an individual ("the donor") in accordance with this section on qualifying political donations made by him of up to £500 in any year of assessment.

(2) A donation is a qualifying political donation for the purposes of this section if it is made to a registered political party (other than a minor party) and—

  1. (a) it takes the form of the payment of a sum of money,
  2. (b) it is not subject to a condition as to repayment,
  3. (c) it is not conditional on or associated with, or part of an arrangement involving, the acquisition of property by the political party, its members or accounting units, otherwise than by way of gift, from the donor or a person connected with him, and
  4. (d) the donor is a registered elector.

(3) For the purposes of this section a political party is an eligible political party if—

  1. (a) it is a registered party within the meaning of section 22 of this Act other than a minor party, and
  2. (b) at the last general election preceding the donation in question—
    1. (i) two members of that party were elected to the House of Commons, or
    2. (ii) one member of that party was elected to the House of Commons and not less than 150,000 votes were given to candidates who were members of that party.

(4) If an individual makes a qualifying donation he shall be entitled, on making the payment, to deduct and retain out of it a sum equal to basic rate tax thereon.

(5) Where a sum is deducted under subsection (4) above, the sum deducted shall be treated as income tax paid by the person to whom the payment is made.

(6) Any person by whom a qualifying donation is received shall be entitled to recover from the Board, in accordance with regulations, an amount which by virtue of subsection (5) above is treated as income tax paid by him; and any amount so recovered shall be treated for the purposes of the Tax Acts in like manner as the qualifying political donation to which it relates.

(7) The following provisions of the Taxes Management Act 1970, namely—

  1. (a) section 29(1)(c) (excessive relief) as it has effect apart from section 29(2) to (10) of that Act,
  2. (b) section 30 (tax repaid in error, etc) apart from subsection (1B),
  3. (c) section 86 (interest), and
  4. (d) section 95 (incorrect return or accounts),
shall apply in relation to an amount which is paid to any person by the Board as an amount recoverable in accordance with regulations made by virtue of subsection (6) above but to which that person is not entitled as if it were income tax which ought not to have been repaid and, where that amount was claimed by that person, as if it had been repaid as respects a chargeable period as a relief which was not due.

(8) In the application of section 86 of the Taxes Management Act 1970 by virtue of subsection (7) above in relation to sums due and payable by virtue of an assessment made for the whole or part of a year of assessment ("the relevant year of assessment") under section 29(1)(c) or 30 of that Act, as applied by that subsection, the relevant date—

  1. (a) is 1st January in the relevant year of assessment in a case where the person falling within subsection (5) above has made a relevant interim claim; and
  2. (b) in any other case is the later of the following dates, that is to say—
    1. (i) 1st January in the relevant year of assessment; or
    2. (ii) the date of the making of the payment by the Board which gives rise to the assessment.

(9) The Board may by regulations make provision—

  1. (a) for the purposes of any provision of this section which relates to any matter or thing to be specified by or done in accordance with regulations;
  2. (b) with respect to the furnishing of information by donors or recipients, including, in the case of recipients, the inspection of books, documents and other records on behalf of the Board; and
  3. (c) generally for giving effect to this section.

(10) In this section—

(11) Section 839 of this Act shall apply for the purposes of this section to determine whether one person is connected with another."").

The noble Lord said: My Lords, I shall not resist the temptation of saying that this is another amendment that the spin doctors should have been told about before they did the spinning. Once again, the Government are asking us to insert a provision that is contrary to the Neill report. Last weekend the spinner said, more or less, that it was a disgrace for the House of Lords to try to vary what the Neill committee said, so one must suppose that he also thinks that it is a disgrace for the Government to try to do so.

The Government have rejected the Neill committee's proposal that tax relief should be provided on small donations—those under £500 in any year. That is part and parcel of the problem of trying to encourage donors to political parties, which we considered on the previous amendment. The Neill committee's proposals are supported by the Liberal Democrats and even by some Labour Back Benchers. The Government should think carefully before rejecting them. I remind the Minister of the powerful speeches of the noble Lord, Lord Shore—he is probably glad that I have not brought the noble Lord in again to argue this point—and the noble Lord, Lord Goodhart. In the other place, my right honourable friend John MacGregor also spoke powerfully on the issue. Three members of the Neill committee have backed the recommendations in Parliament. The Government cannot dismiss those speeches out of hand.

Further, the noble Lord, Lord Neill of Bladen, wrote to the Home Secretary in October in response to the White Paper, saying: During the committee's investigation into the funding of political parties we found widespread support for the view that political parties should be funded by a large number of small donations rather than by a small number of large donations. My colleagues and I remain of this view. We are disappointed that you have decided against our proposals in relation to a tax relief system".

The Government have criticised the amendment on the ground that it provides for the state funding of political parties. No doubt the Minister will repeat that criticism in a minute. But that would not be its effect. The Neill committee did not regard it as state funding. No one argues that charities that benefit from tax relief on donations are funded by the state. The provisions envisaged by the Neill committee would prevent the need for state aid of the kind proposed by the Liberal Democrats yesterday. The report argued not only that tax relief on small donations was not state funding, but, in paragraph 8.7, that it would be necessary, given the envisaged reduction in large donations, to prevent parties coming cap in hand to the Government to ask for state funding. The Neill committee clearly recognised that the new restrictions on donations would be likely to reduce the income of political parties, perhaps significantly. It proposed this measure in part to redress the imbalance that would be created. It is short-sighted and wrong of the Government to reject that approach.

My right honourable friend John MacGregor encapsulated the committee's views in the other place when he made the point that, because of the new restriction on donations and the reporting and disclosure requirements, large donations to political parties would be less forthcoming. He said that, because of this, the Neill committee saw tax relief on small donations as a means of ensuring that sufficient funds to serve our democratic purposes were attracted to political parties. The independent Member in another place—it is very unusual for there to be an independent Member in the other place—Mr Martin Bell, said that this new clause would encourage the "little people" to get involved in politics, which would help our democracy and make it much healthier. I do not know whether I would quite use the words that Mr Martin Bell used. However, I believe that we all know what he means, and I think he is right.

I hope that the Government will reconsider their decision to reject the Neill committee in this regard and will accept my amendment. I fully accept that an amendment of this length may well contain some technical defects. If that is so, they can be resolved at Third Reading. In a spirit of consensus, I strongly commend this amendment to the House. I beg to move.

Lord Goodhart

My Lords, I rise to support with some enthusiasm the amendment moved by the noble Lord, Lord MacKay of Ardbrecknish. The Neill committee regarded this as a matter of some importance. It does not involve a large amount of money. The Government estimate that it will cost about £4 million. As I said at Committee stage, even if one treats it as government spending, that will amount to £1 out of every £100,000 of government spending. It is, therefore, a negligible amount. In view of the enormous increases in public spending recently announced by the Government, it is absurd to use what I might call the schools and hospitals argument.

I turn briefly to the merits of the amendment. The Neill committee saw it as a considerable evil and very undesirable for parties to depend, to the extent that I believe both the Conservative and Labour parties now do, on donations of six or seven figures from very wealthy individuals—an opinion that is widely shared by the public. However, parties do need political funds. If they cannot get them from rich, individual donors—and, of course, one gets them much less nowadays from corporations than in the past—they will have to look to a large extent at numbers. We believe that it is important, by a carrot of this kind, to encourage more contributions from ordinary members and to make up whatever shortfall there may be from the falling off of large donations, which is one of the probable results of the new transparency regime. This sort of carrot provides a real incentive to parties to take what we believe is the right route in the shift from large individual funders to a much greater number of smaller donors.

We also believe that there is a wider advantage: namely, that it sends a message to the public that giving to political parties is not a duty, but something to be praised as a genuine contribution to the democratic system of this country. We note that in Canada there is a system to encourage small donors which is rather more generous than the proposal tabled by this amendment. The details are set out in one of the appendices at the back of this book. It is a system that works very well.

We believe that, in the same way as tax relief on charitable donations recognises that giving to charities is part of good citizenship, the tax system should also recognise that giving to political parties is good citizenship. It is not exactly the same as for charities. One could say that in a sense it is a duty for people to make charitable giving. It is obviously not a duty, and never would be, to give to a political party. For those who feel inclined to do so, it should be signalled that that is something which helps the democratic process. That, together with the practical reasons in this case, is why I believe that the amendment should be strongly supported. I have great pleasure in following the speech of the noble Lord, Lord Mackay.

10 p.m.

Baroness Gould of Potternewton

My Lords, I rise to oppose the amendment, as I did in committee. Perhaps I may pray in aid the point made earlier, that Neill is not a compelling reason for accepting any clause or amendment within the Bill.

As the noble Lord, Lord Goodhart, said, the Neill committee discussed this proposal at great length and came to the conclusion that the arguments against it were not strong. A problem I found within the report is that the committee does not identify why the arguments are not strong; it just states that they are not. That is the conclusion, which I do not find satisfactory.

I oppose the amendment for a number of reasons. That does not mean that I am opposed to the idea of small donations as opposed to the large ones we have now. However, I do not think that that is genuinely the answer. There are serious defects in the proposal, not in the wording but in principle.

The amendment provides two specific areas of discrimination. The unfairness of the system is that it will cost a non-taxpayer more to provide the same benefit to the party than it would a taxpayer. That is not terribly fair to the "little people" to whom the noble Lord, Lord Mackay referred. That position was highlighted to the Neill committee by Professor Vernon Bogdanor when he said: It would be thought in this country to be inequitable that people who do not pay tax should not get the benefit that taxpayers would". I do not think that can be accepted. It is a form of social exclusion.

The noble Lord, Lord Goodhart, also said in committee—perhaps he will correct me if I am wrong—that few donors, except perhaps students, would be people who are not themselves taxpayers, at least at the basic rate. I cannot quite accept that. My understanding is that of the 47 million adults in Britain, only 26 million pay tax. It might therefore be interpreted that this clause and these proposals encourage parties to court taxpayers at the expense of other members of the community, such as perhaps the poorer pensioners, students and non-working partners. Many women are involved in the nonworking partner element, and I certainly hope political parties will be courting them.

A further factor of importance in respect of taxpayers is that only some 8 million—that is, 30 per cent—file their own tax returns. That means that tax returns are filed for employees by their employers. In some cases, they would not want to disclose that they are giving a donation to a political party and would therefore not choose that route.

Lord Goodhart

My Lords, I am grateful to the noble Baroness for giving way. Perhaps I may say that the system which is proposed by the Neill committee would not involve any disclosure to an employer of the fact that an employee was making a payment. The employee is not getting the money back. A taxpayer simply signs a piece of paper which goes to the political party along with the donation and the party which receives the money. It would never go through the PAYE system and it would never need to be mentioned to the employer.

Baroness Gould of Potternewton

My Lords, I am very grateful to the noble Lord for that explanation because that is certainly not the interpretation that the Labour Party puts on the clause. I shall make sure that it is aware of that particular interpretation and then we can perhaps discuss the matter further.

The second area of discrimination is the restriction on small parties. I raised that matter in Committee, but since then I have given more thought to the question. While I believe that the provision discriminates against small parties, there is a particular problem in the sense that if we included small parties that might give support to extremist parties. Therefore, we have a dilemma and the only way out of it is not to follow this route at all. I would like to see parties such as the Green Party benefit from this measure, but I would not like to see the National Front benefit. We have quite serious problems there.

The other point concerns state funding. I accept that the Neill committee may not have identified tax relief for state funding, but the House of Commons Select Committee report of 1994 identified tax incentives as a form of public subsidy, that is to say, state funding. That view was fully supported by the Conservative Party in its evidence to the Select Committee. I would like to know what has changed its mind. If the party thought it was state funding then, why does the Conservative Party not believe that that is the case now? I am sure that we shall be told, as we have been in the past, that we have Short money, Cranborne money, free postage and so forth, at elections. But all those fundings are specific; we are now suggesting something that is general state funding with no specific strings attached. I accept that sometimes the strings are difficult to identify. General state funding has been consistently opposed by the party opposite.

The aim of the Neill committee has been to clean up politics and to provide absolute transparency and clarity. I believe that the additional subsidy to political parties from the state would not assist that process. If there is no case for direct grants through state aid, I do not believe that there is a case for tax relief.

Perhaps I may make a couple of small points. It has been suggested that if we follow this particular road it will help increase the membership of political parties. It is a mistaken motivation to gain membership through an essentially economic activity rather than through political motivation.

I would like advice on the next point because I may be misinterpreting it. The qualifying donation at the moment is £500. What safeguards are there in this clause, or in Neill, that at some future point it may not be increased to £5,000 or £50,000 so that big donations receive tax relief? I cannot see any assurance anywhere that that does not happen. There are too many flaws in the amendment. I do not believe that the clause as it stands is transparent enough in the way in which the procedure would work.

Lord Hodgson of Astley Abbotts

My Lords, before the noble Baroness sits down, perhaps she can enlighten me on one matter. For example, if a charity such as the Royal National Lifeboat Institution recovers tax, does she regard that as being state subsidy or funding for the RNLI?

Baroness Gould of Potternewton

My Lords, it is and I have no objection to it.

Lord Wedderburn of Charlton

My Lords, I agree entirely with what my noble friend has just said. Perhaps I may put a question to the noble Lord, Lord Mackay of Ardbrecknish, or to anyone else who would like to take it on. If this clause were passed, whatever the actual machinery and the recipient of the advantage, there would be tax advantages for gifts to charities and gifts to registered political parties. Would not that be bound to open up the position of think tanks?

Some think tanks are charities and some are not. It is a sensitive area, as I know well from being indirectly involved in an application for charitable status by a body that thought it was like a think tank. Does the noble Lord, Lord Mackay, agree that if charities and registered parties receive tax advantages, the position of think tanks and tax relief on donations to those that are not yet charities—of which there are many—would also logically be opened up?

Lord Bassam of Brighton

My Lords, I shall not say a great deal. My speech has already been made by my noble friend Lady Gould, much more effectively than I could have made it.

The Government and the Official Opposition are agreed, have agreed and were certainly agreed at the time of the Neill committee, that any general system of state aid to political parties is undesirable. The noble Lord, Lord Mackay, actually repeated that yesterday when he said, I am opposed to the direct funding of political parties".—[Official Report, 20/11/00; col. 602.] No doubt when the noble Lord responds to this point he will say that we are talking about "direct" funding of political parties. But I see no difference in tax relief on donations and direct funding of political parties. Of course it is direct. That is the intention of the tax relief. If I think back to the Budgets under the last Chancellor, Kenneth Clarke, and perhaps even his predecessor, it was often the case that when Conservative Chancellors wanted to make the point that they believed in charitable giving, they loudly trumpeted the fact that it was a form of state aid to charities.

If somebody can advise me that that was not the case when they are arguing the point, I should like to hear from them. My view is that tax relief amounts to a direct subsidy to political parties in this instance if this amendment is carried.

It was argued that the sums of money are small. They may well seem so. But, as my noble friend Lady Gould said, once set upon this rocky road, what is to stop governments in the future from increasing the sum of money exponentially, as it were, so that it becomes increasingly large and the benefit therefore increasingly large in terms of direct government subsidy in the form of tax relief?

We have heard the arguments about Short money, Cranborne money, free mail shots, policy development grants, start-up funding and so forth being direct state aid. The point in that regard, which was well made, is that that money relates to specific purposes; this money does not. It is a direct form of tax relief into a political party and it needs to be understood as such.

At the weekend it was revealed with some concern in some quarters of the press that when it came to matters such as Short money, the Conservative Party itself was not entirely sure whether it was using that money properly. David Prior, the chief executive of the Conservative Party, acknowledged that the money had been used for the war room at Central Office. If we cannot trust the Conservatives—if the report is right—to understand the proper use of Short money, how can we expect them to make proper use of such a direct subsidy as set out in the amendment? The Conservative Party's friends on this issue, the Liberal Democrats, need to think carefully before tying themselves so closely to this amendment which they gleefully welcomed.

Lord Hodgson of Astley Abbotts

My Lords, the Minister mentioned Conservative Party funding. He quoted from the comments of David Prior. What he did not say was that the party took advice from PricewaterhouseCoopers, who said that the purpose for which the money was being used was not in conflict with the Short money provisions. That was the basis on which the expenditure was undertaken.

Lord Bassam of Brighton

My Lords, as a matter of record that is undoubtedly the case. But what appears to have happened is that a change of definition in the Fees Office was not communicated to other political parties. The chairman of the Public Administration Committee said that the Fees Office appeared to have "unilaterally redefined the rules". I know that there is considerable anxiety over that matter. No doubt it will be a matter for disputation.

Whatever the merits of the proposal, few members of the public will identify the needs of political parties as a priority in terms of public expenditure. The sum may be small but the principle is most important. I hesitate to make the point that the political party comprising noble Lords opposite is concerned about taxation and is offering us tax cuts but here it is after a slice of public expenditure for its own political purposes. That is a strange order of priorities and no doubt the public will view it similarly. I suggest to noble Lords opposite that they ought to withdraw their amendment.

10.15 p.m.

Lord Norton of Louth

My Lords, before the Minister sits down, perhaps I may point to a matter which he did not address regarding state funding. It is not a case of the state giving out money willy-nilly; it is related to electors. Short money is related to a formula based on the number of votes a party gained at the previous election and, in the context of tax relief, it is triggered by individuals. It does not come from the state as such and there is a crucial distinction to be drawn in any discussion. The Minister's comments did not address that point.

Lord Bassam of Brighton

My Lords, my comments may not have addressed that point but the principle is the important point. Public perception is important—indeed, much of our debate on the issue has been about public perceptions. On several occasions I have been reminded that public perceptions of what happens in the process of politics are the most important. The noble Lord probably understands that better than most.

Lord Mackay of Ardbrecknish

My Lords, the fact that the Minister was on weak ground was clearly illustrated by the fact that for the first time today he indulged in some political bashing of the Conservative Party. That told me that he did not want to address the argument. He had better consult his right honourable friend the Chancellor on when a tax credit is expenditure and when it is not. The family tax credit has been shifted from the expenditure column to the negative income column in order to be able to say that it is not a state subsidy or an expenditure of state money. Perhaps he should examine that before advancing his argument further. However, I suggest that when the Minister travels home tonight in his car he looks at pages 94 to 99 of the Neill report. There he will find many powerful arguments which torpedo many of his arguments.

I presume that in logic the Government will deal with the fact that United Kingdom donations to political parties are already exempt from inheritance tax. If the Government believe that it is so terrible, where is the amendment to stop it? It is nowhere.

As the noble Baroness, Lady Gould, is seldom confused, those briefing her must have been confused about charitable giving via a payroll, about which the employer would know, and charitable giving—in which I am sure many noble Lords participate—when one fills in a form which goes to the charity together with one's cheque, which then go to the Inland Revenue and about which the employer would know nothing. I am not an expert but I believe that the Chancellor is making changes which will make the process a good deal simpler.

It has been argued that it is unfair on non-taxpayers because if a charity receives £100 from a non-taxpayer it will receive only £100 but if the money comes from a taxpayer it will receive, say, £125 after adding the tax relief. If that argument is good for political parties it must be good also for charities. Is it not unfair that non-taxpayers must give more from their own pockets than taxpayers in order to give the charity of their choice the same amount of money? The noble Baroness attacked the whole system of charitable donations and the tax regime, and I do not believe that there are many who agree with her. The noble Baroness is the first person I have ever heard advance the argument that it is a little unfair to non-taxpayers that charities can get some tax back.

Baroness Gould of Potternewton

My Lords, with great respect I quoted from the evidence given to the Neill committee by Vernon Bogdanor, who made exactly that point. If the noble Lord has read the Neill report it is not the first time that he will have heard the argument.

Lord Mackay of Ardbrecknish

My Lords, Vernon Bogdanor may be a very great man but he is not the last authority on every single issue on earth, and I beg to disagree with him on this matter. The one or two charities in which I am involved are extremely grateful to the people who give donations via deeds of covenant—they are no longer required—or forms which allow them to claim back tax. I suspect that we shall not see a proposal to abolish those tax advantages for charities in the Labour Party manifesto. I shall not pursue the point.

I also point out to the noble Baroness that subsection (3) of the new clause provides:

  1. "(i) two members of that party were elected to the House of Commons, or
  2. (ii) one member of that party was elected to the House of Commons and not less than 150,000 votes were given to candidates who were members of that party".
Given the way our system works, that is a fairly high hurdle. Not very many Members who represent tiny parties reach the other place. Mr Martin Bell is the only example who comes to mind. By and large, that hurdle would catch almost every party that could not get two Members elected to the House of Commons. As far as concerns tax relief for think tanks, I shall pass. We have some later amendments which deal with think tanks. I have every sympathy for think tanks which serve a useful purpose. Certainly, it is not my intention to cause them any damage by this amendment. I simply ask the Government why they abandon, with such venom, an important part of Neill. After all, Neill is a package which recognises that political parties will probably experience a drop in larger donations and this is a way to try to fill that gap. I would have thought that that was a perfectly reasonable proposal. However, I know that I shall not succeed in persuading the Government. For the moment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 68 [Special provision for Northern Ireland parties]:

[Amendments Nos. 127 and 128 not moved.]

Lord Bach moved Amendment No. 129: Page 51, line 1, at end insert— ("() Any period specified in an order under subsection (1)(a) or (b) must end not later than four years after the date on which the order comes into force, but this is without prejudice to the making (on one or more occasions) of a further such order which—

  1. (a) extends that period for a period ending not later than four years after the date on which the further order comes into force, or
  2. (b) specifies a fresh such period.").

On Question, amendment agreed to.

[Amendments Nos. 130 and 131 not moved.]

Lord Mackay of Ardbrecknish moved Amendment No. 132: Page 51, line 8, at end insert— ("() An order under this section shall not be made so as to enable any Northern Ireland party to receive donations during a referendum period (as defined in section 100) from any source other than a permissible donor as specified in section 52(2).").

The noble Lord said: My Lords, in moving Amendment No. 132 I should like to speak also to Amendment No. 187. I apologise in advance for the complexity of the issue which I tried to resolve in correspondence with the Minister rather than bring it before your Lordships. I have failed utterly in my attempt to get the issue addressed. The Government's proposed exemption order to be made next year under Clause 68 will allow the foreign funding of referendums in Northern Ireland. I believe that eventually that was admitted by the Minister in Committee. He told my noble friend Lord Astor: I like to be straight with your Lordships' House. The information I have from officials is that Northern Ireland parties can use the fruits of money raised abroad in a UK referendum. That may well present difficulties. Obviously we need to keep the matter closely under review and I shall give it further consideration".—[Official Report, 18/10/00; col. 1038.] It is strange that the Minister talked about this presenting difficulties on 18th October, and yet on 24th October he said that he was, not persuaded of the case for preventing a Northern Ireland party using the proceeds of a foreign donation to meet its own referendum expenses".—[Official Report, 24/10/00; col. 191] So in the course of a week's reflection the Minister decided by 24th October that the difficulties of 18th October no longer existed.

I raised two distinct issues in Committee. I have not had answers. Therefore, I have to raise them again. The first is that any Northern Ireland political party could benefit from the exemption on foreign funding, take foreign funding from United States of America or Australia or wherever and could then use that money to participate and campaign in Great Britain as a permitted participant in a UK-wide referendum. I argued that front parties could be set up to exploit this provision and channel foreign funding into Great Britain. That is a major loophole in the supposed ban on foreign funding. It is not the same as the loophole we discussed earlier, which is a loophole in the funding of political parties for their campaigning for elections in Northern Ireland.

Secondly, the exemption order would allow foreign funding to flow into Northern Ireland to affect the result of a referendum campaign on the constitutional status of Northern Ireland itself. That is far more significant politically in the current climate.

The Minister entirely refuted my first point in Committee. He argued that the safeguards in Schedule 15, as it is now, would prevent the situation occurring. I have since written to the noble Lord twice on the matter, pointing out the defects in what he has said. He has replied to my first letter. I should be happy to provide any noble Lord with a copy of the correspondence. But his arguments on this point in Committee were factually incorrect. I want to explain why.

In Committee the noble Lord said: Schedule 14 imposes restrictions on the acceptance by a permitted participant of donations from abroad … Amendment No. 239 prevents a permitted participant, other than a designated organisation, from accepting a donation from any registered party. Therefore, a Northern Ireland party cannot transfer a foreign donation it receives to a referendum organisation in Great Britain".—[Official Report, 24/10/00; col. 190.] Later he said that there were, safeguards in Part II and Schedule 14 which would prevent a Northern Ireland party simply acting as an agent in passing on a donation from a foreign source intended for a referendum campaign group".—[Official Report, 24/10/00; col. 191.] The schedule cited by the noble Lord provides that no donation may be accepted by a permitted participant from an impermissible donor. However, paragraph 1(1) makes clear that that schedule applies only to, permitted participants that either are not registered parties or are minor parties". Where the permitted participant is a registered party, as any front party would be, then the donation regime in Part IV would still apply, and, in the case of Northern Ireland parties registered as permitted participants, so would any exemption order under Clause 68.

The noble Lord also prayed in aid the Government's Amendment No. 239 in Committee, now paragraph 1(6) of the Schedule, which prevents the transfer of money to permitted participants from registered parties. This argument also fails to address my specific points.

A front Northern Ireland party would not need to transfer money to another party in Great Britain in order to campaign as a permitted participant on Great Britain in a UK-wide referendum. In relation to UK-wide referendums, the Bill makes no distinction between permitted participants in Northern Ireland and those in the rest of the UK. No transfer of funds would be necessary, as the front party, once registered as a permitted participant, could use any foreign donations to campaign both in Northern Ireland and in Great Britain. The Minister's argument was therefore totally irrelevant.

In my letter I gave an example scenario to the Minister: if there were ever to be a UK-wide referendum at some time, say on the abolition of the monarchy, there would be nothing to stop English, Scottish or Welsh anti-monarchists from registering a Scrap the Monarchy Party in Northern Ireland. That party would then benefit from any Clause 68 exemption order and be allowed to take funds from a foreign donor, perhaps from the anti-monarchy movement in Australia. Having registered with the electoral commission as a permitted participant in the UK-wide referendum, it could use that foreign funding to campaign anywhere in the UK using that foreign cash. There is nothing in the Bill to stop that.

I sent my first letter on 25th October. The Minister replied on the 14th November. I think I had to prompt him. By this time he had changed his tune. With characteristic understatement he said: I welcome the opportunity to provide a more complete answer to the points which you put to me". He then wrote: As you suggest, the Bill would not prevent a Northern Ireland party campaigning in its own right in a United Kingdom-wide referendum … It is quite possible that funds received from overseas while an order under Clause 68 was in force might be used to meet referendum expenses incurred by a Northern Ireland party … I accept that this means that for as long as an order is in force under Clause 68 a ban on foreign funding in relation to referendum campaigns would not be wholly complete. There does exist the possibility that an organisation wishing to campaign in a United Kingdom referendum might seek to circumvent the restrictions on the acceptance of foreign donations by registering as a Northern Ireland party. The requirements of Part II do not erect a definite barrier against this happening". I shall be most interested to hear what the Minister says today. On 24th October he said that he saw, the need to ensure that other referendum organisations do not use a Northern Ireland party purely as a front to receive foreign funding".—[Official Report, 24/10/00; co1.191.] That is precisely what the Bill does not ensure at the moment. There is no "definite barrier", to use the noble Lord's own words in his letter. We can be certain that this loophole will be taken advantage of if it is not plugged. The Minister recognised this but no amendments have been tabled. Therefore, I hope that he will accept my amendments that plug the loophole.

I have outlined—as the noble Lord has admitted in writing—that the Minister's arguments in Committee were plainly wrong. What worries me is that the Minister and officials seemed unaware of the true position on 23rd October. Surely they understood the implications of the way the Bill was worded.

On the second issue—the foreign funding of a referendum in Northern Ireland itself—the Minister admitted in Committee that the Bill allowed Northern Ireland parties to use foreign money in referendums. It took repeated questioning from my noble friend, Lord Astor, to prise this out of him on 18th October. He then said that this presented difficulties. This state of affairs would clearly benefit the republican movement and especially Sinn Fein/IRA. They will be able to use the foreign money they get from North America—and continue to get—to influence the results of any referendum on the future of Northern Ireland. The Minister admits that that is what is in the Bill. Do the Government consciously intend that to be in the Bill or is it just a by-product of poor thinking?

I asked that question in my letter of 25th October, but the Minister failed to answer in his reply of 14th November. I will be most interested to hear his answer tonight. In his letter the Minister implied that foreign funding could not skew any such referendum result because of the low spending limits in Northern Ireland. I should point out that this entirely depends on the ability of the republican movement to raise funds inside the Province. If it cannot raise up to the limit, then foreign funding will come into play. It will make a difference. Surely, there is a point of principle here about the funding of referendums. It is difficult not to avoid seeing this as yet another concession to a republican movement heaped on the other concessions at which we have been looking in the past few days.

My amendments try to address some of these issues. They reflect the points made repeatedly by the Minister that we cannot regulate the uses to which a particular donation is put. But they do attempt to stop Northern Ireland parties accepting foreign money during the actual period of a referendum campaign. They are not fully watertight but they do meet the Minister's concerns and certainly make for a better Bill. I hope that he can accept at least one of them.

I hope the Minister will comment on what is a truly bizarre anomaly which I have raised with him twice in correspondence but on which he has not commented. Is it not the case that any non-partisan political organisation set up specifically to campaign in a referendum in Northern Ireland would be banned from accepting foreign donations whereas registered Northern Ireland political parties wishing to campaign in the same referendum would still benefit from any exemption order under Clause 68 and be able to accept and use foreign donations? Is that not totally inconsistent? Is it fair? What are the Government going to do about it?

I am sorry that I have gone on for while, but these are complicated issues where one has to relate one part of the Bill to another and also to correspondence which I have had with the Minister which, I appreciate, other noble Lords have not had the chance to see.

The issues go to the heart of the political process in Northern Ireland. As your Lordships know, I am not happy about the current position whereby it will still be possible to fund political parties in Northern Ireland by foreign donations. I am much less happy, if that is possible, at the thought that the foreign money might help to fund referendums in Northern Ireland. My unhappiness increases even more when I realise that the same foreign money could be used to fund referendum campaigns across the whole of the United Kingdom. If that is not a coach and horses, I am sorry to say that the Minister would not recognise a coach and horses if it ran over him on the road to Brighton this evening. I beg to move.

10.30 p.m.

Lord Bassam of Brighton

My Lords, I pay tribute to the noble Lord for his diligence and wit in pursuing these matters. The noble Lord may not like what I am about to say but I shall certainly study again the paper flow for inconsistencies on my part. If they occurred, they were certainly not intended. Perhaps it is not always the case that Ministers are entirely seamless at the Dispatch Box in the quality of their arguments and ripostes.

We return to the vexed question of the exemptions proposed for Northern Ireland parties. The amendments are concerned with the impact of a Clause 68 order on a referendum campaign. I should like to make one point clear from the start. Any exemption from the controls on donations in Part IV in respect of Northern Ireland parties has to apply across the board. We are not saying—indeed, the Neill committee did not say it—that Northern Ireland parties should be able to accept foreign donations only to help meet the costs of running their headquarters or to meet election campaign expenditure. An exemption from the ban on foreign funding is an exemption for all purposes, including for the purpose of meeting referendum expenses.

To, I suppose, characterise his annoyance and exasperation, the noble Lord is rather making the case that he has latterly discovered this and that it has become something of a revelation. But I think it was always there. I apologise to the noble Lord if it was not made clear on our part or if it was not plain at the outset many months ago of the debates on the Bill. There was no conscious move by the Government to obscure matters or to hide anything. We thought that the situation was plainly understood. Much as the noble Lord likes to construct conspiracy around all of these matters, I can say to the suggestion that the Government are in some way or other seeking to secure aid for the republican cause that that is not the case. That is not the object of our policy in this regard.

I fully accept that the situation as it stands will mean that a Northern Ireland party would be able to use foreign donations in any future referendum on the constitutional status of Northern Ireland or, for that matter, in any UK-wide referendum; for example, perhaps even on the euro. Another consequence of a Clause 68 order which I do not seek to hide is that a Northern Ireland party could use foreign funds in a referendum but any other permitted participant could not. I do not pretend that the position is ideal. I have never argued that that is the case—far from it. Exactly the same set of circumstances will arise in relation to an election campaign. Consequently, the fact that the ban on foreign funding in relation to referendum campaigns would not be complete is no more or no less a cause for regret. But these are consequences with which we shall have to learn to live. We do not see any other way of making the system work, particularly for as long as the special provisions are necessary.

The noble Lord is perfectly entitled to his view that there should be no special provisions for Northern Ireland. He has made that case very ably. But I put it to him that if the opposite view prevails there is no basis for these two amendments. I suppose that, so far as concerns Northern Ireland political parties, we are left very much with the status quo; namely, a system of self regulation and regulation by exposure. That is the kind of regulation which on occasion the noble Lord, Lord Norton of Louth, has proposed would be best used across the United Kingdom. I fully recognise that the situation is less than perfect and that the noble Lord is entitled to make his case. But we do not believe that there is another way of dealing with this, nor do we believe that it would work in the way that the noble Lord has suggested—either on the issue of referendums or with certain controls on political parties.

As regards the future for Northern Ireland, it is essential that we keep under careful review all these matters, but I do not believe that we can realistically do more in the current set of circumstances.

Lord Mackay of Ardbrecknish

My Lords, I am disappointed that the noble Lord thinks that there is nothing he can do. However, at least I have managed to extract from him a clear statement that he accepts that Northern Ireland parties could use foreign donations even in the United Kingdom on a referendum on the euro. I did not mention the euro earlier, but the noble Lord has done so. That seems to be the most amazing breach of the general principle that there should be no foreign donations when it comes to referendums.

This is as ridiculous as the previous situation on political parties, where the SNP will not be able to receive money from America, but Sinn Fein/IRA will be able to do so. Representatives of Northern Ireland parties holding referendums in Northern Ireland will be able to receive donations from abroad in order to influence a referendum. However, should a referendum be held in Scotland, I presume that the two sides in Scotland will not be able to accept funding from abroad to assist in such a referendum. As my noble friend Lord Cranborne pointed out earlier in our deliberations, the reason is simple: in this case, terrorism has paid. Because Scotland is a peaceful country and those trying to secure Scottish independence are doing so peacefully, they cannot receive money from abroad for a referendum—even if they do manage to force a referendum at some stage in the future. I know how I would vote in such a referendum—I would not be on their side—but that does not mean that I am not aware of the unfairness of the situation.

The notion that money can be received from foreign sources through Northern Ireland to support a referendum held in this country is going to cause serious concern, should we ever reach such a referendum. I am not entirely certain whether I should test the opinion of the House at this time of night. I suspect that the noble Lord may have a great many troops in the House who have not listened to the argument. I cannot believe that anyone who had listened to the debate would be in any way happy with the situation that the Government declare will be in place once the Bill has been passed. I do not believe that anyone in your Lordships' House would be happy with the notion that foreign funding can come in via Northern Ireland in order to influence UK-wide referendums; in other words, through the back door. Such funding cannot come in through the front door. I think that this is an unsatisfactory position.

However, after a great deal of effort, I have at least secured a straightforward and simple confession from the Minister as regards what the Bill will do. I shall study what he has said about my amendments. I cannot promise not to return to this issue at Third Reading once I have had an opportunity to read through the correspondence and the latest contribution from the Minister. For the moment, however, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 133 and 134 not moved.]

Schedule 7 [Control of donations to individuals and members associations]:

Lord Bach moved Amendments Nos. 135 and 136: Page 149, line 32, leave out ("(2)(d)") and insert ("(1)(d)"). Page 149, line 34, leave out ("(2)(e)") and insert ("(1)(e)").

On Question, amendments agreed to.

Lord Mackay of Ardbrecknish moved Amendments Nos. 137 and 138: Page 152, line 3, leave out ("not less") and insert ("more"). Page 152, line 19, leave out ("not less") and insert ("more").

On Question, amendments agreed to.

Lord Bach moved Amendment No. 139: Page 153, line 1, leave out sub-paragraph (5) and insert— ("(5) Any controlled donation received by a regulated donee which is an exempt trust donation shall be regarded as a controlled donation received by the donee from a permissible donor. (6) But any controlled donation received by a regulated donee from a trustee of any property (in his capacity as such) which is not

  1. (a) an exempt trust donation, or
  2. (b) a controlled donation transmitted by the trustee to the donee on behalf of beneficiaries under the trust who are—
    3. 770
    1. (i) persons who at the time of its receipt by the donee are permissible donors falling within section 52(2), or
    2. (ii) the members of an unincorporated association which at that time is a permissible donor,
shall be regarded as a controlled donation received by the donee from a person who is not a permissible donor.").

On Question, amendment agreed to.

Lord Mackay of Ardbrecknish moved Amendments Nos. 140 and 141: Page 153, line 38, leave out ("not less") and insert ("more"). Page 153, line 46, leave out ("not less") and insert ("more").

On Question, amendments agreed to.

Lord Bach moved Amendment No. 142: Page 156, line 25, leave out ("(4) to (10)").

On Question, amendment agreed to.

Clause 70 [Campaign Expenditure]:

10.45 p.m.

Viscount Astor moved Amendment No. 143: Page 52, line 24, leave out subsection (9).

The noble Viscount said: My Lords, on page 52 of the Bill, Clause 70(9) states: In this section 'candidates' includes future candidates, whether identifiable or not". I asked in Committee how a party can promote the electoral success of future, unidentifiable candidates. I did not get a satisfactory answer. The Minister said he would reflect on the matter. I should like to know the result of his reflections. I beg to move.

Lord Bach

My Lords, subsection (9) of Clause 70, which the amendment seeks to delete, was added to the Bill in Committee. At that stage it did not appear to cause concern. We are a little surprised that exception should now be taken to it, although I understand that this is almost certainly a probing amendment to ascertain the Government's thinking on this issue.

Subsection (9) was one of a number of changes made to the Bill in Committee to strengthen the definition of "campaign expenditure". If the £20 million limitation on election spending in the 365 days before an election is to be effective, it is important to ensure that the definition of "campaign expenditure" is a robust definition. The previous definition referred to expenses incurred by and on behalf of a party with a view to promoting or procuring the election "of existing or future candidates" standing in the name of the party.

Of particular concern to the Government with that approach was that the reference to a party's candidates might attract the narrow meaning of a candidate under the Representation of the People Act 1983. In broad terms, a person becomes a candidate under that Act only when he or she is nominated as a candidate, or is declared by himself or by herself or by others to be a candidate. Under the 1983 Act, nominations are normally only submitted some two to three weeks before the date of the poll. If such a narrow construction were to be put on the reference to candidates in Clause 70, it could be open for a party to argue that a particular campaign conducted 10 months before the date of the election was not directed to promoting the return of the party's candidates at that election. Such an argument would rely on the fact that the party's candidate had either not been selected or, where they had been selected, had not been formally adopted.

Subsection (9) is there to counteract any such construction. It is clear from this subsection that the term "candidates" includes any candidates who stand in the name of the party at the next election, whether or not they have been selected or formally adopted at the relevant point in time.

I hope that, on reflection, the noble Viscount will accept that that subsection provides necessary reassurance and thus becomes an important element of the clause.

Viscount Astor

My Lords, I am grateful to the Minister for that response. I am sure that he is aware that I raised this issue in Committee on 18th October, when the Government moved their earlier amendment. I think I have understood what the Minister said; however, it is late in the evening. I listened as carefully as I could, but I shall have to read his answer tomorrow to be entirely clear on the matter. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 72 [Officers of registered party with responsibility for campaign expenditure]:

Lord Bach moved Amendment No. 144: Page 54, line 37, leave out ("(1)") and insert ("(2)").

On Question, amendment agreed to.

Clause 74 [Restriction on payments in respect of campaign expenditure]:

Lord Mackay of Ardbrecknish moved Amendment No. 145: Page 55, line 36, leave out ("and") and insert ("or").

The noble Lord said: My Lords, in moving Amendment No. 145, I shall speak also to Amendments Nos. 152, 153, 168, 175 and 198. I shall not have to make a speech of any great length because your Lordships will have noticed that, in addition to my noble friend Lord Astor and myself, the noble Lords, Lord McNally, Lord Rennard, and Lord Bassam of Brighton himself, have added their names to the amendment. I am therefore assuming that the Government will accept the amendment.

The amendment relates to the requirement to produce both an invoice and a receipt for the auditing of a party's expenditure. Replacing the word "and" with the word "or" would mean that one or the other would do. In the anticipation that the noble Lord, Lord Bassam of Brighton, really meant to add his name and that his noble friend Lord Bach will not do something contrary, I beg to move.

Lord Bach

My Lords, perhaps I may speak to this group of amendments generally. I shall be brief.

In Committee, the noble Lord, Lord Lucas, questioned whether it was necessary for political parties to produce both an invoice and a receipt as evidence of the payment of campaign expenditure. He described such a requirement as something "out of the dark ages". We hope that our electoral law has moved on somewhat since those times. Nonetheless, we are happy to concede, on reflection, that it would be sufficient to require the production of either an invoice or a receipt. The amendments make the appropriate changes to the relevant provisions of the Bill and to the Representation of the People Act 1983.

We have gone for the formula of "an invoice or a receipt" rather than simply an invoice because, for some relatively small transactions—for example, goods purchased over the counter—no invoice may be generated; all that will be available is a standard till receipt. We are grateful to noble Lords for raising the matter and for the tabling of these amendments. The amendments will ease the administrative burden on political parties. We support them and commend them to the House.

Lord Mackay of Ardbrecknish

My Lords, I am hugely grateful and commend this amendment to the House.

On Question, amendment agreed to.

Viscount Astor moved Amendment No. 146: Page 55, line 36, leave out ("£100") and insert ("£200").

The noble Viscount said: My Lords, this is one of a simple group of amendments that seeks to raise from £100 to £200 the sum above which the production of bills from suppliers of goods would be required. In Committee, we debated what the figure should be. I believe the Minister said that the £100 requirement was based on the Representation of the People Act 1983. On reflection, we think it sensible to raise the figure to that above which a donation must be declared; namely, £200.

A figure of £100 will place a large burden not only on parties but on the electoral commission. Such a requirement will be very time-consuming because there will be a large number of small invoices. The noble Lord, Lord Rennard, supported this amendment at an earlier stage and I hope that he will do so this evening, given his experience of running political parties. I beg to move.

Lord McNally

My Lords, it is not my experienced noble friend Lord Rennard who will give support to the amendment, but the inexperienced me! I merely want to add a point which applies not only to this amendment but to the previous one also. It is one that Ministers could well bear in mind before we reach Third Reading.

The Bill could still do with a good comb-through to make sure that, wherever possible, the responsibilities written into it reflect some of the reality of running a political party at the sharp end. During the passage of the Bill we have already heard the worrying idea that it has been written by skilled parliamentary draftsmen, helped by equally skilled bureaucrats, who may never have been inside a party committee room at election time and who have no idea how much parties have to operate on a wing and a prayer and a great deal of amateur goodwill. Therefore, any amendments that lift the burden, as it were, will help in that respect. We believe that this is one such small amendment which will make this less of a burden for those amateur—in the real sense of the word—unpaid party officers who have to try to make this Bill work at the sharp end.

Lord Bach

My Lords, I am grateful for the remarks just made by the noble Lord, Lord McNally. He is quite right in what he says. This Bill has been the work of skilled draftsmen and bureaucrats. It has also been subject to the work of skilled politicians, both in this House and in the other place, whether of the experienced kind represented by the noble Lord, Lord Rennard, or of the comparatively inexperienced kind such as the noble Lord who has just spoken. It is that mixture of the three skilled professions that will make this Bill a better one than it was originally. This is one of those examples where we believe that we have improved the Bill by accepting these amendments.

We went round this course in Committee, both in this House and in another place. We have argued that, for sound accounting practice, £100 would be an appropriate figure in respect of which an invoice or a receipt may be required. We believe that that may be right. However, within reasonable bounds, there is no right or wrong figure. There appears to be a consensus on the Benches opposite that a higher threshold is appropriate. We are content and happy to accept the amendments on that basis. Of course, if the figure proves to be too high, it will be open to the electoral commission to endorse our original proposals. As I said, we are happy and content to accept Amendment No. 146.

Viscount Astor

My Lords, I knew that the noble Lord, Lord McNally, was eloquent, but this proves that he is eloquent beyond even the heights that I had imagined. With his support we have managed to persuade the Government. I am duly grateful.

On Question, amendment agreed to.

Lord Bach moved Amendments Nos. 147 and 148: Page 55, line 41, at end insert ("or receipt"). Page 55, line 42, leave out from ("payment") to end of line 2 on page 56.

On Question, amendments agreed to.

Clause 75 [Restriction on making claims in respect of campaign expenditure]:

Lord Bach moved Amendment No. 149: Page 56, line 9, leave out (", together with the relevant invoice,").

On Question, amendment agreed to.

Schedule 9 [Limits on campaign expenditure]:

Lord Mackay of Ardbrecknish

My Lords, before my noble friend moves his amendment, perhaps I may intervene. I wonder whether it would be convenient for the House if we were to shift certain amendments a little. I have given the Government Front Bench notice of this request. When we deal with Amendment No. 149A, perhaps we could speak also to Amendment No. 150. We could then take Amendments Nos. 151 and 160 with Amendment No. 159, because they hang together somewhat better than suggested by the current grouping. I am sorry to make this request so late in the evening.

Lord Bach

My Lords, the noble Lord gave us advance notice of this request. We are content to follow that course.

Lord Hodgson of Astley Abbotts moved Amendment No. 149A: Page 161, line 13, leave out ("£30,000") and insert ("£20,000").

The noble Lord said: My Lords, my amendment relates to the maximum expenditure at a parliamentary general election, as covered by Schedule 9. It seeks to reduce the maximum amount expendable by a party in a general election to £20,000 per parliamentary seat contested, thereby reducing the maximum from approximately £19 million to about £13 million.

This Bill is about creating a balance. We referred earlier to the balance between the need for disclosure and the need for local democracy. However, there is at least one other balance to be struck; namely, that between the needs and wishes of a political party at the centre and the needs and wishes of local associations. I believe it is commonly agreed that politics is becoming more presidential and centralised. That tendency is, perhaps, emphasised by press reports and by radio and television programmes. Therefore there is a danger that parties nationally could become divorced from their roots.

I do not wish to divert too much, but that is why I, and I think some other noble Lords, were disappointed that the noble Lord, Lord Bach, could not accept the proposal with regard to independents and the five additional words that we discussed last night. The presence of some local independents constitutes a means of keeping national political parties politically honest, so to speak.

Large election spending reinforces the emphasis placed on the centre and the importance accorded to that. Large spending means poster campaigns, mass mailings and the "big picture" approach. It certainly lessens, perhaps removes, the need for parties centrally to galvanise local support and build up their local activist base. If you do not have the money, you have to use ingenuity. That ingenuity will consist primarily of persuading volunteers to work for the party at a local level to fill the gap which is otherwise made good by major spending. It is a critical part of our democracy to encourage that process as a general development. If restrictions were imposed on the amount of money they could spend centrally, parties would encourage volunteers locally to undertake the hard and often unglamorous work of persuading their fellow citizens of the rightness of their cause, as they say in the trade, "on the knocker".

If that is accepted, where do we set the right balance between the centre and local parties? Before the noble Baroness, Lady Gould, asks me how we arrived at the figure, I set out the following rough calculation. The allowable election expenses in a constituency at a parliamentary election consist of a lump sum. I think that that is just under £5,000. I am sure that the noble Baroness, Lady Gould, will put me right if I am wrong, but I think that it is £4,965, plus a sum per elector varying between 4.2p per elector in a borough constituency and 5.6p per elector in a county constituency. Based on an electorate of, say, 70,000, that would result in an additional £3,000 to £4,000 which could be spent locally. Under current regulations that would allow a party to spend between £8,000 and £9,000 locally. We have fought parliamentary elections at constituency level perfectly satisfactorily.

Of course there are legitimate funding needs for a party to fight an election effectively at the centre. I believe that it would be appropriate for the party nationally to be able to spend as much centrally as it is permitted to spend at constituency level, perhaps with a little more added on. Therefore, the £8,000 or £9,000 which is what a party would spend at local constituency level would, with a small addition, arrive at a nice round £20,000 per constituency contested, with some £ 10,000 or £11,000 available to the party to spend centrally.

This measure represents an attempt to strike a balance between these two important needs and to get away from the massive spending of both my party and, indeed, the Government at the previous two elections, much of which I consider did nothing to improve the quality of our democratic process. I beg to move.

11 p.m.

Lord Rennard

My Lords, I support Amendment No. 149A. However, Amendment No. 150 is remarkably similar. In Committee I and my noble friend Lord McNally proposed that the limit per constituency be around £22,500. That would mean a total election expense limit for the parties nationally of around £15 million. We should try to agree within that ballpark area.

In Committee, the Minister said that if there were a consensus between the parties, the Government would have to fix the limit according to the party consensus. The Bill provides at present for a limit of approximately £20 million. The figure of £19.76 million for a party fighting every seat in Great Britain was put forward initially by the Neill committee. However, it was a compromise figure. There was no specific argument for £20 million; it was the best stab at a figure.

In Committee, the Minister said that if the parties were to come to some consensus the Government would have to act accordingly. Amendment No. 149A suggests a limit of nearly £15 million—perhaps £14 million. Amendment No. 150 provides a limit of £15 million. The Conservative Party now says that £14 million or £15 million is the appropriate limit for national expenditure.

I remind noble Lords on the Government Benches that in evidence to the Neill committee in a document entitled, Transparency, Participation, Equality, the Labour Party argued powerfully for a limit of precisely £15 million. In another place Mr Martin Linton argued strongly that £15 million was the correct limit. The figure of Liberal Democrats and Labour Party members in another place who supported the £15 million limit was 70 per cent.

Amendments from the Conservative Benches in this House provide for a limit nationally of £14 million or £15 million. Over 90 per cent of the Members of another place now support a limit of £14 million or £15 million. Therefore there is a new consensus between the parties: on the Conservative Benches, in the Labour Party's evidence, and among the Liberal Democrats. It is a compelling argument: the Government should act upon that new consensus.

Lord Mackay of Ardbrecknish

My Lords, I speak to Amendment No. 150. I have no problem with the amendment of my noble friend Lord Hodgson of Astley Abbotts. It arrives at largely the same total figure.

If I explain why I have arrived at the figure of £15 million, noble Lords may understand that the Government are in some difficulty over their own internal logic. When the Bill arrived at your Lordships' House the total limit was £20 million. In Schedule 8, the list of qualifying expenses making up the £20 million was quite long; the exclusions list was somewhat shorter. In Committee, the Government took out a number of qualifying items and put them in the exclusions. I hope that I am right; I speak from memory. I think that they were largely expenses falling on the property, services and facilities of the headquarters of the national parties and on the party's ordinary remuneration allowances, payments to staff, and some other points. That must be worth some money. If it were £20 million when all those items were included, logic tells me that it should be a tinge—

Lord Bassam of Brighton

My Lords, I cannot resist asking how the noble Lord comes up with this figure. How has he managed to reduce his original figure from £20 million to £15 million? I have heard the explanation. How has he managed to cost it so precisely?

Lord Mackay of Ardbrecknish

My Lords, it is not precise. That is the point. It was not my £20 million to begin with. I remind the noble Lord that it was the Government's £20 million. When that £20 million was supposed to cover a large number of items, I was content to leave it at that. However, the Government have taken out a number of expensive items, but have left the figure at £20 million. I fully accept that my figure is a rough estimate. The accurate figure might be £14 million, £16 million or perhaps even more. However, the Government know why they have made the changes, so they must have some idea of how much those other items are worth. They are certainly not worthless—they are worth a considerable amount. My guesstimate is that they might be worth around £5 million to the major parties. That is why I have suggested that the limit should be £15 million rather than the £20 million that we started with.

That is my logic. If it is faulty, no doubt the Government will tell me. They are usually quick to do so. However, if it is just the numbers that are wrong, we still have Third Reading to come. If the Government do not like my approach, perhaps they prefer that of my noble friend Lord Hodgson. Even at this late hour, we should turn our minds to the consequences of the amendments that the Government tabled in Committee and how they impinge on the £20 million that we began with. Like the noble Lord, Lord Rennard, and my noble friend Lord Hodgson, I look forward to hearing the Government's explanation.

Lord McNally

My Lords, I am attracted to the American saying that when you are up to your armpits in alligators, it is sometimes difficult to remember that the idea was to drain the swamp. That certainly applies here.

I urge Ministers not to leap up with a glib rejection. This is one of those moments—they sometimes happen late at night—when the Government should grab hold of an opportunity that would have a massive impact on the Bill. As the noble Lord, Lord Hodgson, said, a large part of the motivation behind the Bill has been to drive the big money and the big donations out of our politics. As my noble friend Lord Rennard said, we now have a remarkable consensus, based on the earlier recommendations of the Labour Party and the new declared policy of the Conservative Party. We should not let that slip.

I know that the Labour Party is a lot more flush than it was in my day, but the big upper limit of £20 million, combined with a Bill that will make it very difficult to get anybody to donate large sums to political parties, could leave us in trouble. The lower we can get the cap, the healthier our politics will be and the better it will be for all political parties. I urge Ministers to grab this opportunity to strengthen the Bill immeasurably.

Lord Bassam of Brighton

My Lords, the amendments relate to limits on campaign and controlled expenditure. I shall run through the arguments and pose a few questions at the end.

The Neill committee recommended a £20 million limit on the campaign expenditure that may be incurred by a party in connection with a general election. The committee further recommended that the limit for particular parties should be based on a formula calculated on the basis of the number of seats contested by that party. That is simple and straightforward. Schedule 9, paragraph 3, contains such a formula. It provides for an allowance of £30,000 for each constituency that the party contests. That is a realistic sum in modern electioneering. A party that fights all 659 constituencies in the United Kingdom will have an overall limit of £19,770,000.

The noble Lords, Lords Hodgson and Mackay, now wish to reduce the £20 million limit, in round terms, by a third and a quarter respectively. I am absolutely gobsmacked. I am really taken aback by this sudden conversion to the limit lower than that proposed by the Neil committee. In Committee, the noble Lord, Lord Cope, in response to an amendment tabled very honourably by the Liberal Democrats, who throughout this debate have been entirely consistent, said: It will come as no surprise to the noble Lord, Lord Rennard, that we do not support these amendments … The Government are sensible"— this is a Conservative spokesman saying that the Government are sensible— to stick to the Neil committee's recommendations in this respect".—[Official Report, 18/10/00; col. 1098.] I believe that the House ought to be told why there has been a sudden change of heart. I suggest to your Lordships that it is rather late in the day to change course on such an important feature of this Bill. I do not suggest that the figure of £20 million is set in stone. Far from it. But it is, after all, the product of very careful deliberation by—

11.15 p.m.

Lord Mackay of Ardbrecknish

My Lords, I am interested in listening to the noble Lord, but will he address the point that certain quite large items have been taken out of one column and put into the other since my noble friend Lord Cope made his point? I would happily have stuck with £20 million if it had not been for that. That is my point. Perhaps the noble Lord will address that.

Lord Bassam of Brighton

My Lords, I shall address that point. However, let us not forget that this was an independent advisory committee. In my view, we should not try to change its recommendations without seeking further independent advice. That is an important point, particularly in view of the last remark of the noble Lord. I suggest that it would be most appropriate to take independent advice from the electoral commission, without wide consultation with the main political parties. I suggest to the House that the proper course is for us to run with the figure of £20 million for the next election and then perhaps look at the matter in the light of that experience. If there is then a new consensus in favour a lower limit, the Home Secretary can, of course, exercise his powers in Clause 152 to reduce the sum of £30,000 per constituency in order to achieve the desired result.

In view of what the noble Lord said, it is perhaps worth reminding ourselves that the amendments to Schedule 8, to which he referred, were made before the noble Lord, Lord Cope, spoke to the amendment to Schedule 9, tabled by the noble Lord, Lord Rennard. I think the noble Lord has rather gathered the point that I am about to make.

I am not by nature a deeply suspicious person. I am not a cynic in politics. However, I am very puzzled by this late conversion to the lower figure. If the best that the noble Lords opposite can do is make the point that £15 million is the sum that we put to Neill, I am afraid that that is not terribly good. I cannot help thinking that perhaps this amendment has something to do with the fact that the Conservative Party is experiencing extreme difficulty raising funds towards the cost of the next general election. If that is not so, perhaps it has something to do with the fact that it fears handing back money, otherwise described as Short money, because it has been misused. I am very puzzled. These arguments have never been put in the past. We are running up to a general election, some months, maybe a little more than a year, away, and it is most strange that this argument to bring down the level of expenditure for the next general election should be now advanced. Is it the case that the Conservative Party fears losing the next general election and, therefore, perhaps wants to tuck away a little more for later general elections, without wasting it on William's great campaign next year or the year after? It is a very strange conversion indeed.

My earlier question to the noble Lord, Lord MacKay, about how he managed to cost so precisely the amendments to Schedule 8 is a very real question. How has he arrived at a figure of approximately £5 million? It is a very interesting figure, particularly as it appears to come so close to reducing the level to that which he obviously wants to argue in terms of our original submission to the Neil committee. I am deeply suspicious. I am not a little amused by this. However, I intend to stick to the argument of consistency. The position we have come to, properly reached, advised by Neill, is the position which we in Government wish to stick to because that is the consistent position.

The noble Lord has been arguing consistently all evening. He has made that a virtue of many of his arguments. If that is the case, I am sure that he, and the noble Lord, Lord Hodgson, will feel more than comfortable in withdrawing these very strange amendments.

Lord Rennard

My Lords, before the Minister sits down, he has just referred to consistency in arguments. I would have thought that he should have welcomed the conversion and change of heart, based in part upon new information, on the Conservative Benches. He should perhaps have taken the attitude of more joy in Heaven for one sinner that repenteth, as perhaps the Conservative Party's position has now moved to the Labour Party position.

The Minister did not address my question. Indeed, when I moved the amendment in Committee suggesting that £22,500 was the appropriate constituency limit aggregated nationally, he said that if there was consensus between the parties the Government would have to shift to recognise that consensus. I ask the Minister to be consistent, as he has just urged all Members of your Lordships' House to be consistent. We have on record the Labour Party's position. We now have the Conservative Party's position and the Liberal Democrats' position. I ask the Minister what more consensus there could be on this issue to produce the shift for which we ask in official government policy.

Lord Bassam of Brighton

My Lords, arguments about consistency cut several ways. I argue for consistency in terms of the position which was adopted and recommended to your Lordships' House by virtue of the Neill committee. That is where we intend to be consistent. I consistently intend to stick to that point.

Lord Hodgson of Astley Abbots

My Lords, I am grateful to the noble Lords, Lord Rennard and McNally, for their support for the amendment. I was extremely disappointed by the Minister's comments, which consisted of two parts: first, a series of political slurs, trying to say that this concerned funding difficulties in the Conservative Party and difficulties over the Short money. When the Minister kindly gave way earlier, I pointed out that he quoted only part of the information and evidence given by David Prior. The remarks I made in moving the amendment were not concerned with funding but with the balance between the centre and local parties. I made clear consistently in a number of interventions during Report that I am concerned about the balance we are seeking to strike in many ways in the Bill. That is what it is all about. The Minister has been kind and thoughtful. He may be irritated because it is now 11.25 pm, but I thought that his irritation showed in a way which was not worthy of him.

Secondly, his substantive political point was to say, "Let's run with the £20 million and then consider". That is like the advice of St Augustine, to the effect, "Lord give me chastity but don't give it yet". The Minister knows very well that if we reach the next general election on this basis the chances of the matter being readdressed and reconsidered after the general election are next to negligible.

We are seeking to strike an important balance. Given the support from the Liberal Democrat Benches and the evidence that his own party has given in the past, I ask the Minister to go away and think carefully about this. I give notice that I may wish to raise this matter again at Third Reading. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 150 not moved.]

Lord Mackay of Ardbrecknish moved Amendment No. 151: Page 161, line 33, leave out from ("(b))") to end of line 34 and insert ("any period of one year").

The noble Lord said: My Lords, this amendment is now grouped with Amendment No. 159 in the name of my noble friend Lord Willoughby de Broke and also Amendment No. 160. I shall be fairly brief about this. The amendment is concerned with the interesting question of the expenditure of £20 million, which we have discussed, being accounted for over a 365-day period before a general election. I could understand that in relation to a Scottish election because, although I cannot quite remember it, everyone who is interested and involved knows the date of the next Scottish general election because those elections occur at fixed periods. I believe I am right in saying that we know the date of the next European election, give a day or two. The Europeans sometimes manage to change the date, but not significantly.

Unless the noble Lord is going to tell us this evening—I am sure that he will not because I have tried to trap him on a number of occasions—one thing that we do not know is the date of the next general election. I do not know whether we are in one of the 12 months for which the noble Lord, Lord Rennard, has to keep careful accounts. I do not know whether we have been in it for two or three months now. It is an unknown period.

What we are concerned about here is a double unknown; namely, the question of whether we have more than one election in a year. Instead of the period of 365 days ending with the date of the poll for the election, my amendment specifies "any period of one year". While I am not certain that that is the happiest of solutions, it certainly seems to provide a good deal more certainty than is provided by the Government in the Bill. At the moment we do not know whether we are in the important year or not. My amendment would suggest that we would be in that important year all the time.

My noble friend Lord Willoughby de Broke will deal with his amendment. I have some sympathy with it as regards third parties, although I predict that the Minister will expose some technical difficulties which could mean that, if third parties were so minded, they would be able to use the leniency of my noble friend's amendment in a way that I am sure he does not intend. A third party would use it in order to abuse the special position which his amendment would provide. I believe that uncertainty about the 365-day period is unfortunate for our political parties. The Government should have addressed this issue long ago. I put forward my amendment as my modest contribution to try to firm up these matters and to make the issue a good deal more certain than it is. I beg to move.

11.30 p.m.

Lord Willoughby de Broke

My Lords, my Amendment No. 159 deals with paragraph 3 of Schedule 10, which imposes restrictions and controls on third parties campaigning in a general election for a year before polling day. My amendment deals specifically with paragraph 3(3). Its purpose is to redefine the controls so that they apply only from the date when the election is called.

I assume that it is generally accepted that, as the Bill limits spending by political parties, it is also reasonable to limit spending by third party organisations if they affect elections, otherwise controls on political parties could easily be circumvented by front organisations. My amendment seeks to deal with the form which these controls take. I am suggesting that they should refer to Clause 61(6) on page 46 of the Bill, which states that the, 'general election period' means the period—

  1. (a) beginning with the date on which Her Majesty's intention to dissolve Parliament is announced in connection with a forthcoming parliamentary general election, and
  2. (b) ending with the date of the poll".
The provisions in Schedule 10 are not aimed at political parties, which, by definition, work to parliamentary and political timetables. Here we are dealing with campaign groups, private organisations and even charities which until now have been largely free to campaign at any time provided that at an election they did not spend money in support of political candidates. As Schedule 10 stands at the moment, the spending limits will apply for a year before the election. Since Parliament is not for a fixed term, as my noble friend Lord Mackay pointed out, campaign groups will not be certain when these controls will apply.

The Government's response so far—the only one I have managed to find—comes in a letter dated 2nd February from the Home Office Minister, Mike O'Brien, to the right honourable Frank Field, which says that, recognised third parties can avoid the offence of exceeding the limits on controlled expenditure imposed by Schedule 10 by, in effect, operating to the expenditure limits for any 365 days period". That seems somewhat draconian. The effect is to impose the most sweeping controls on third parties, including restrictions on spending and requirements relating to the disclosure and permissible source of donations, at all times. Such an arbitrary restraint risks being struck down by the courts, I should have thought, as a breach of the guarantee of free speech under Article 10 of the European Convention on Human Rights. At the very least it will result in protracted legal disputes over whether or not specific materials were intended to influence the election.

This provision should be of concern to any organisation, including charities, whose activities touch the political arena, particularly where politicians take exception to that group's views. Even if its aim is not to influence the election of parties or candidates, its leaflets or advertisements could be held to fall foul of the law if it is judged that the material, can reasonably be regarded as intended", to enhance the standing or election of parties or candidates.

Anyone who doubts that should look at a letter from the noble Lord, Lord Bach, dated 1st November, to my noble friend Lord Cope. I understand that a copy was placed in the Library. Paragraph 2 reads, Your particular concern was, I think, that an organisation might conduct a campaign on an issue which is outside, or at the margins of, the main lines of party political debate … It is likely therefore that, to take your example, an animal welfare organisation running a campaign in the run up to an election which advocated a ban on fur farming would be caught by provisions of Part IV". I wonder whether the Minister, when he replies to the amendment, can confirm that it is the Government's intention that any charitable organisation such as the RSPCA, to take one example, should be caught by these provisions and indeed whether it is their intention that any cross-party organisation—for example, one campaigning against the euro—would also be caught by the provisions, even though the Government have said that no decision on the euro will be taken until after the election.

While a few campaign groups might try to influence the election of candidates, most simply want to influence policy, not elections. That is a fundamental distinction. All such groups know that they should take care at election time. Now, under the provisions of Schedule 10 as they stand, they run the risk of prosecution at any time.

Concern was expressed in another place during debates on this Bill about these provisions and an attempt was made in an amendment tabled by the right honourable Frank Field MP to restrict the control period so that it began only when a general election was called. The Government rejected the amendment but were not very convincing in their response. The Home Office Minister, Mr Tipping, said at col. 226 of Hansard of 14th March this year that the Government would, look at [the] debate and take account of the comments made down the road"— that is us. The fact that there is no certainty about the date of the election until the end of the Parliament is no reason to subject campaign organisations to controls all year round. Nor is it good enough to say that such organisations need only register and then there will be nothing to worry about. They will still be subject to the Bill's stringent controls on the source of funds and to spending limits.

That adds up to a gross infringement of their freedom. The controls should relate to when the election is actually called. That is the effect of my amendment. If the Minister thinks that the period is too short, perhaps he will come up with an alternative suggestion. But government controls on campaign groups that apply every day of every year simply because those groups take a contentious position on a specific issue, are controls that have gone a bridge too far.

Lord Bassam of Brighton

My Lords, I shall deal with all the amendments which have been regrouped. Amendments Nos. 151 and 160 are familiar to your Lordships' House, the noble Lord having spoken to them previously. They relate to the period during which the spending limits are to apply.

The noble Lord, Lord Mackay, expressed concern that in the absence of a fixed-term Parliament registered parties will not know when the 365-day period when spending limits are to apply will commence. I should not give him the date of the next general election, even if I knew it. It is a matter of considerable speculation, so let us leave it there. As I indicated previously, parties can comply with the law by working to the spending limit in each 365-day period. The noble Lord has taken me at my word in putting forward amendments which give effect to that.

It is one thing for parties to work to a rolling 365-day period on a voluntary basis but quite another to require that of parties. If the £20 million limit is to apply to any period of one year, it would have to be enforced for any such period. That would mean that a registered party would have to submit a return to the electoral commission on a daily basis, covering the most recent rolling 365-day period. We have heard a great deal about intolerable burdens and I submit that that would place a most intolerable burden on parties to no good purpose.

We are concerned with the 365-day period ending with the date of an election. Only in respect of that period do we need to require a return from each party. I therefore commend to the noble Lord the existing formula in the Bill and invite him to withdraw his amendment.

I turn to Amendment No. 159 tabled by the noble Lord, Lord Willoughby de Broke. As he said, it would reduce the period during which the controls on controlled expenditure would apply in relation to a parliamentary general election. As paragraph 3 of Schedule 10 stands, the relevant period is 365 days prior to the date of the poll. That mirrors the position for registered parties under Schedule 9. The amendment cuts the relevant period to one or just under 30 days beginning on the day an election is called. However, the noble Lord thought that we might want to bring forward some other number of days.

If adopted, the amendment would allow third parties to incur controlled expenditure in the weeks and months leading up to an election. Instead of being limited to a budget of £1 million in the year before an election, a third party would be free to spend up to that amount in the final six weeks of the campaign and on top of that spend a further £5 million, £10 million or more in the weeks and months which preceded a formal announcement of the date of poll.

The noble Lord suggested that because we do not have fixed-term Parliaments, a third party cannot know when the 365-day period will start, thus a third party may unwittingly be caught out by the provisions of Part VI. However, the fact that the precise date of a general election is not known well enough in advance is no hindrance to the operation of the scheme set out in the Bill. I believe that there is common agreement to that.

A third party can avoid committing any offence as a consequence of incurring expenditure above the lower limit on controlled expenditure by making the required notification to the electoral commission and by renewing it on an annual basis. In practice, a third party can ensure that its campaign expenditure remains within the prescribed upper limits on third-party expenditure by adhering to those limits during any 365-day period. In most cases, we are dealing with sophisticated organisations which can take an educated guess at the timing of an election and consequently tailor their expenditure accordingly.

Most expenditure aimed at an election will in any event take place in the immediate run-up to the poll. While I recognise that there may be a theoretical concern about the possibility of incurring controlled expenditure in breach of the requirements of Part VI, I am not convinced that there is a real danger in practice. Applying restrictions over a 365-day period is, however, essential to the aim of bearing down on election expenditure. The noble Lord, Lord Willoughby de Broke, referred to campaign groups. Whether or not Business for Sterling or any other group falls within Clause 83(3) in Part VI of the Bill depends very much on the facts of the case.

As the debates have proceeded noble Lords opposite now appear to argue for a lower cap for general election campaigns. They also argue strenuously that that should apply for a shorter period. Do noble Lords opposite want a larger sum of money in a shorter period of time, with the ability to spend much more outside the period of control, or do they believe that there should be a proper system of regulation as set out in the Bill? Some of the important issues have been drawn out as the debate has proceeded. I shall be interested to hear from noble Lords opposite why they have decided to try to dismantle a system of control which I understood commanded a degree of consensus.

Lord Willoughby de Broke

My Lords, while I thank the Minister for that reply I do not believe that he has answered my concerns. The Minister simply repeated what he said at Second Reading and what was said in the other place. He left it to third parties to operate their expenditure limits for any 365-day period and invited them to take what he called an educated guess. The Minister has given noble Lords one or two hints but no more. If the Minister will not tell us when the election will take place, how can third parties possibly guess and operate accordingly? It is grossly unfair that they should have to operate on a rolling 365-day basis; otherwise, they will fall foul of the Bill as it stands. Having made that point, I should like to revisit the matter at Third Reading.

Lord Mackay of Ardbrecknish

My Lords, I have listened to the Minister, who does not convince me. The Minister is supposed to convince noble Lords of the merits of the Government's cause, not the other way round. I remind the Minister that when we debated the problem of the 365 days both his noble friend Lady Gould and I doubted its good sense and believed that it would be difficult to operate. That is especially so in parliaments with narrower majorities than the present where one can assume that it will run four years, if not longer. It can be very difficult to predict the position in parliaments with tighter majorities and each month must be assumed to be month one of the 12-month period, which adds to the problem. I would control the two or three months running up to the election, because that is the key period. Political parties which wanted to spend outside that period would be off their heads. The political climate can change. I remind noble Lords that that happened in September in connection with the price of petrol. I do not believe that the Minister would want an election within a week or two of that event. The world changes quite quickly. However, I shall not make any progress. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 78 [Returns as to campaign expenditure]:

Lord Mackay of Ardbrecknish moved Amendment No. 152: Page 59, line 21, leave out ("and") and insert ("or").

On Question, amendment agreed to.

Clause 89 [Restriction on payments in respect of controlled expenditure]:

Lord Mackay of Ardbrecknish moved Amendments Nos. 153 and 154: Page 67, line 14, leave out ("and") and insert ("or"). Page 67, line 14, leave out ("£100") and insert ("£200").

On Question, amendments agreed to.

11.45 p.m.

Lord Bach moved Amendments Nos. 155 and 156: Page 67, line 19, at end insert ("or receipt"). Page 67, line 20, leave out from ("payment") to end of line 22.

On Question, amendments agreed to.

Clause 90 [Restriction on making claims in respect of controlled expenditure]:

Lord Bach moved Amendment No. 157: Page 67, line 29, leave out (", together with the relevant invoice,").

On Question, amendment agreed to.

Clause 92 [Limits on controlled expenditure by third parties]:

Lord Bach moved Amendment No. 158: Page 69, line 37, at end insert— ("(5A) Where—

  1. (a) during a regulated period any controlled expenditure is incurred in a particular part of the United Kingdom by or on behalf of a third party, and
  2. (b) the expenditure is so incurred in pursuance of a plan or other arrangement whereby controlled expenditure is to be incurred by or on behalf of—
    1. (i) that third party, and
    2. (ii) one or more other third parties,
    respectively in connection with the production or publication of election material which can reasonably be regarded as intended to achieve a common purpose falling within section 83(3),
the expenditure mentioned in paragraph (a) shall be treated for the purposes of this section and Schedule 10 as having also been incurred, during the period and in the part of the United Kingdom concerned, by or on behalf of the other third party (or, as the case may be, each of the other third parties) mentioned in paragraph (b)(ii). (5B) Subsection (5A) applies whether or not any of the third parties in question is a recognised third party.").

The noble Lord said: The amendment responds to the concern expressed in Committee by the noble Lord, Lord Rennard, about third parties ganging up in order—as he put it—to hijack the agenda during an election campaign.

The noble Lord will be aware that under Section 75 of the Representation of the People Act 1983 it is an offence for a third party in a constituency contest to incur expenditure in concert with others. We do not want to add to the list of offences created by the Bill. But I hope the noble Lord will agree that this amendment should have the same deterrent effect. The amendment provides that where a third party incurs control of expenditure in pursuance of a plan or other arrangement with one or more other third parties, the expenditure is deemed to have been incurred by each of the third parties concerned.

As a result, where, for example, four third parties were acting in concert in mounting a campaign throughout the United Kingdom, the buying power of their aggregate spending limit would be in round terms £1 million and not four times that amount. In short, third parties could not pool their resources in order to secure a bigger impact for their campaign. I beg to move.

Lord Rennard

My Lords, I thank the Minister for closing what I think is a serious loophole in the legislation.

On Question, amendment agreed to.

Schedule 10 [Limits on controlled expenditure]:

[Amendments Nos. 159 and 160 not moved.]

Schedule 11 [Control of donations to recognised third parties]:

Lord Bach moved Amendments Nos. 161 to 163: Page 175, line 48, leave out ("(2)(d)") and insert ("(1)(d)"). Page 176, line 1, leave out ("(2)(e)") and insert ("(1)(e)"). Page 178, line 12, leave out sub-paragraph (2) and insert—

("(2) For the purposes of this Schedule, any relevant donation received by a recognised third party which is an exempt trust donation shall be regarded as a relevant donation received by the recognised third party from a permissible donor. (2A) But, for the purposes of this Schedule, any relevant donation received by a recognised third party from a trustee of any property (in his capacity as such) which is not—
  1. (a) an exempt trust donation, or
  2. (b) a relevant donation transmitted by the trustee to the recognised third party on behalf of beneficiaries under the trust who are—
    1. (i) persons who at the time of its receipt by the recognised third party are permissible donors falling within section 52(2), or
    2. (ii) the members of an unincorporated association which at that time is such a permissible donor,
shall be regarded as a relevant donation received by the recognised third party from a person who is not such a permissible donor.").

On Question., amendments agreed to.

Lord Mackay of Ardbrecknish moved Amendments Nos. 164 to 165: Page 178,1ine 27, leave out ("not less") and insert ("more"). Page 178, line 42, leave out ("not less") and insert ("more").

On Question, amendments agreed to.

Lord Bach moved Amendment No. 166: Page 179, line 41, leave out ("(2) to (10)").

On Question, amendment agreed to.

Lord Mackay of Ardbrecknish moved Amendment No. 167: Page 179, line 43, leave out ("not less") and insert ("more").

On Question, amendment agreed to.

Clause 94 [Returns as to controlled expenditure]:

Lord Mackay of Ardbrecknish moved Amendment No. 168: Page 71, line 4, leave out ("and") and insert ("or").

On Question, amendment agreed to.

Clause 99 [Referendums to which this Part applies]:

Lord Campbell of Alloway

My Lords, I beg to move that the House do now adjourn. We now reach the referendum part of the Bill, which is Part VII. This is the first amendment. I have been to see the Leader of the House to discuss the amendment. The noble Baroness agreed that it is a matter which is not of party political importance. It is concerned with constitutional matters. It is concerned with the body politic. She agreed with me that this should not in any circumstances be taken at this sort of hour in the House.

I happen to know—I shall not mention the noble Lord's name—that a distinguished Member of the Benches opposite would have been speaking on this issue. I happen to know that the issue had the support—I can say this—of my noble friend Lord Cranborne. I informed the Leader of the House that this was the position. It is no use the noble Lord, Lord Carter, shaking his head. I appeal to the noble Lord not to shake his head. I have never said anything in this House which was not true.

This was a perfectly clear discussion in amity across the political divide. Here we are now, at ten minutes to midnight, seeking to deal with a constitutional matter of great importance. We all know we are in the hands of our Front Benches, but the Back Benches are the backbone of this House. Some consideration should be given to us. Some consideration should be given to an understanding made between a very insignificant Back Bencher such as myself and the Leader of the House. I do not mind what my own Front Bench thinks. What I mind is that there should be some sort of orderly and civilised conduct of debate on a constitutional issue such as this. I do not know if anyone wishes to speak; I will not pre-empt them if they wish to do so.

Moved, That the House do now adjourn.—(Lord Campbell of Alloway.)

Lord Chalfont

My Lords, perhaps I may—

The Chairman of Committees

My Lords, I apologise to the noble Lord, Lord Chalfont, for intervening and I do not do so in any way to usurp the authority of the House to maintain order in your Lordships' House. I should point out that if an amendment is not to be moved and an amendment is not to be considered, the Motion that can come before the House is not that the House do now adjourn but that further consideration on Report be now adjourned.

Lord Carter

My Lords, I was shaking my head because it was news to me that the noble Lord had discussed this matter with the Leader of the House. That is why I was showing my surprise.

We are at something of a disadvantage. There was an agreement between the two Front Benches that we should reach a certain point tonight which, I think, is Amendment No. 174. That is a normal agreement. I see that the Opposition Chief Whip is agreeing with me. This is an agreement that we reach every night. If the noble Lord wished to press his Motion that the House be now adjourned, that would be unusual. It is almost unique for anyone other than the Government to move that the House be now adjourned. I can understand the noble Lord's feelings. This situation is news to all of us. I should like to suggest, because I know that the noble Lord always thinks of the House, that we have the debate on his amendment—it is an important one, but I am not sure of its terms—and hear the views of the Front Benches. If he wishes to return to it at Third Reading he is perfectly entitled to do so.

Lord Campbell of Alloway

My Lords, if it is in order, I say to the noble Lord that he is quite right. I did not tell him. I had a discussion with the Leader of the House. Perhaps I was in error. It seems to me that the arrangement that was made was an arrangement made in honour and one which I would wish to be observed. Talking about honour, my own Front Bench did not tell me. I have been trying to find out all day what the agreement was and how far it was intended to go. Perhaps the noble Lord, Lord Carter, will accept that I have discovered that information from him only now, having sought it from my own Front Bench all day. This is not a very satisfactory position.

Lord Carter

My Lords, I know that the noble Lord will be aware that it is normally as the evening wears on that we reach an agreement about how far we may go. We can never tell how long a debate will last as the House is self-regulating. Certain groups of amendments may, surprisingly, take an hour instead of 15 minutes. We can never tell until late on in the evening how far we might go. There was a genuine agreement between us that we would go to Amendment No. 174. We are taking the time of the House. I am in the hands of the noble Lord, for whom I have respect. We have always discussed these matters with great amity. I think that the best thing to do is to discuss his amendment and hear the Front Bench views. Then, in the usual way, if the noble Lord wishes to come back at Third Reading, he is perfectly entitled to do so.

Lord Henley

My Lords, I rise with some diffidence to support the noble Lord the Government Chief Whip and to persuade my noble friend that what he is suggesting is not necessary on this occasion. As the noble Lord the Government Chief Whip suggested, we come to certain agreements over the course of an evening as to how we should get on in terms of the business in front of the House. It is always very difficult to do so. We always proceed in this House by means of agreement between the usual channels. If we do not proceed by agreement, the procedures of the House break down completely. On this occasion we have agreed to finish the Bill in three days. Tomorrow we have other business—we have the Freedom of Information Bill—and we will then return to this Bill. We therefore have to do a certain amount tonight. The noble Lord the Government Chief Whip and I agree that we had to get so far on this occasion. For that reason, I think it is right that we should go on. I therefore hope that my noble friend will feel that he can withdraw the suggestion that he put before the House.

Lord Campbell of Alloway

My Lords, I am not at all sure that I will. It would have been very much appreciated if the courtesy of what had been agreed could have been passed on to me. No one let me know. It is a most unsatisfactory situation. But there comes a point of time when one has to stop protesting. I suppose that the only sensible thing to do, under great protest, is to move my amendment.

Lord Carter

My Lords, I am extremely grateful to the noble Lord.

Lord Campbell of Alloway

But I protest that I have to do it.

Lord Carter

My Lords, I understand the noble Lord's feelings. He has behaved with his usual respect for the courtesies of the House. There has been a misunderstanding. It happens from time to time in the best conducted organisations. There was a genuine misunderstanding between us all. I suggest that we have the discussion now on this important amendment. I suspect that the noble Lord may wish to withdraw it and then return to the matter at a later stage.

Lord Campbell of Alloway

Very well, my Lords. I apologise for being so cross but it was true anger. I beg leave to withdraw my Motion to adjourn the House.

Motion, by leave, withdrawn.

Clause 99 [Referendums to which this Part applies]:

Lord Campbell of Alloway moved Amendment No. 169: Page 73, line 43, after ("Parliament") insert ("or pursuant to resolutions of both Houses of Parliament on the advice of the constitutional committee of the House of Lords that certain provisions of the Bill substantially effect the constitution").

The noble Lord said: My Lords, I shall get on with this as quickly as I can. The amendment eases the restraint of Clause 99(2)(a) to assert the freedom of both Houses, if so advised under extant rules of procedure, to resolve that a pre-legislative referendum be conducted as proposed in Amendment No. 170 on provisions of a Bill which on the advice of the constitutional committee substantially affect the constitution.

The purpose, without derogation from the exercise of your Lordships' guardianship function under the Parliament Acts, is to delay enactment of a Bill until the result of a referendum is known and so, in the interests of the body politic and not of any particular party, to seek to safeguard the unwritten constitution from unwelcome erosion by statute. Irrespective of the result of the referendum, the legislative powers of government are preserved. Albeit that the remit of the constitutional committee, which is about to be setup, is indeed wide, as affirmed by the noble Baroness the Leader of the House on 14th November—at cols. 124 and 125 of the Official Report—the scope of the amendment is concerned with Bills in which no provision is made for a referendum, and not with the interpretation or implementation of the Parliament Acts or with any other enactment upon which it would be within the remit of the constitutional committee to advise this House.

This is an enabling provision, a measure of safeguard at the disposal of both Houses, but not at the disposal of one House. It is to be implemented only if so advised under the freedom of each House, a freedom which cannot be exercised under this Bill unless this measure were to be amended before enactment, as proposed. Part VII of the Bill on referendums is of generic application to all referendums and provides that all referendums shall be conducted by the electoral commission, as all referendums have to be held by or under an Act of Parliament.

The concept of a pre-legislative referendum on the provisions of a Bill which substantially affect the constitution derives from Clause 3 of the Parliamentary Government Bill of my noble friend Lord Cranborne, read a second time on 25th June 1999. As I have said already, my noble friend would have wished to address the House tonight on this matter. This concept, as proposed to be implemented by the amendment tabled by the noble Lord, Lord Owen, in Committee, could not have been supported for reasons given by my noble friend Lord Cranborne and other noble Lords. Implementation of the concept as proposed by these amendments is dependent on a factor which may well not have been taken into account when instructions to draft this Bill were prepared; that is, the advice of a constitutional committee to be set up on the recommendations of the Royal Commission to be tendered to this House on the provisions of a Bill which substantially affect the constitution. Such advice will be reasoned, objective and wholly devoid of party political consideration. The crucial consideration is whether both Houses resolve to accept such advice and that a referendum should be held in which event the referendum would be held by an independent body appointed by the Secretary of State rather than by the electoral commission.

These amendments acknowledge the sovereignty of another place, asserting the procedural freedom of both Houses to resolve that a referendum should be held and, if so advised, to impose conditions such as the form of the question to be put, as well as the threshold. In neither House could argument for or against a pre-legislative referendum he foreclosed upon. I mention that in deference to my noble friend Lord Norton of Louth, who is present in the House. He takes one view and I take another. Voting entitlement would be provided under Clause 102 of the Bill. Indeed, the provisions of the Bill would stand save as requisite to accommodate these amendments which, if acceptable in principle, would require expert attention to the Bill by a draftsman before enactment of Part VII.

Much has been said about modernising Parliament, but little has been said about safeguarding our largely unwritten constitution. The cumbersome and complex machinery of the Bill may well be appropriate to govern elections, albeit that serious reservations have been expressed. But it is not appropriate that the electoral commission should have the conduct of a referendum such as that proposed by these amendments on matters concerning the constitution.

It is assumed that the constitutional committee will report on Bills, either on its own initiative or at the instigation of the leader of any party or the Convenor of the Cross Benches, and will have access to academia. It is envisaged that a new dimension of amity as between the two Houses could evolve.

Having to talk at this hour of night about a new dimension of amity which could conceivably take us a little further forward towards safeguarding the constitution shows the ridicule of the position in which I have been put, against which I firmly protest and shall continue to do so. Neither my party nor the party opposite is the slightest bit interested or concerned about anything that I am saying tonight. I hope that when the House is assembled on Third Reading, it will be interested. I accept that the Front Benches are not.

This new dimension is to be achieved on a case by case basis without derogation from the delaying power under the Parliament Acts. The advice of the constitutional committee—of which no account has been taken—would enter the public domain after it had been tendered to your Lordships' House. Is there any reason to suppose that the quality and objectivity of its advice should not receive in another place the general acclaim and respect accorded to the advice of all other Select Committees of your Lordships' House? It is to be hoped that the Committee of Selection will favour the inclusion of Law Lords—or retired Law Lords if they are willing to serve—as the efficacy of the amendments is dependent upon the authority, advice and status of the committee, which would be greatly enhanced by their inclusion.

We cannot know when or on what instructions Part VII of the Bill, which deals with referendums, was drafted. Was it by accident or design that provisions to accommodate the freedom of both Houses were omitted? If by accident, perhaps the Government will take on board the principle of these amendments at Third Reading. If by design, then why so? As I said, under protest, I beg to move.

The Chairman of Committees

My Lords, it may be for the convenience of your Lordships, in order to place the matter beyond doubt, if I say that any attempt to move the adjournment of the House may be taken as having been, by leave, withdrawn.

Lord Chalfont

My Lords, I support the amendment of the noble Lord, Lord Campbell of Alloway. I have put my name to the second amendment in this group.

As a simple Back Bencher, perhaps I may express the view that this is the most bizarre way of conducting the affairs of a serious legislative body. We are sitting after midnight, with fewer than a dozen noble Lords present, and with the two major parties of the House trading genial insults with each other when dealing with an amendment which has serious constitutional implications. I find it most odd that those who put their names to the amendment should have had no idea whatever of any arrangement between the usual channels as to which clause should have been reached by the time the proceedings of the House were to be concluded. Whatever those arrangements may be and whatever may be the views of the House on this or any other amendment, I find this a most extraordinary and bizarre way of conducting the affairs of a serious upper House.

I support the amendment. It is of great constitutional significance. We have had much discussion recently about constitutional change and the weakening of the powers of Parliament. There has been much concern about constitutional changes such as those that have taken place in the House of Lords, in terms of devolution, and in attitudes towards Europe and the European Community.

"Constitutionalism" is, I suppose, the expression for the beliefs of those of us who believe in the importance of the constitution, albeit unwritten. I have always believed that the constitution assumes that all state and civic institutions derive from a Constitution—in capital letters—and that that constitution is to be obeyed and not departed from at the whim of the government of the day, of whatever complexion it may be.

Although the constitution should mean a government of law and not of men—of either political persuasion—we must accept that constitutional law, like any other law, can be changed. Parliament is fully sovereign. There is no field in which Parliament is forbidden to legislate. However, it seems to me that the amendment is a microcosm of a much broader concern. I apologise to noble Lords for developing this argument at this time of night. I should have liked to develop it at a more civilised time in front of a House with some people listening. It is arguable that, if it is agreed that the proceedings of this House are an integral part of the constitution—which I believe them to be—Clause 99 represents a change in the constitution.

Are we in this House fully aware of the fundamental and important changes that are being imposed on our constitution, against the whole ethic of a constitution—namely, that it is there to be obeyed and not to be changed at the whim of a single political party in a single parliament? Are we fully aware of what is happening? That is my main reason for supporting the amendment. I shall be interested to hear the Minister's response. Quite apart from the importance of the amendment, which I strongly support, we are paddling in waters the depth of which I do not think anyone has fully appreciated. Do we really know what we are doing to the powers of this House and the other place, and to what is after all, however unwritten it may be, the constitution of this country?

12.15 a.m.

Lord Dean of Harptree

My Lords, the hour is late and the Benches in the Chamber are not exactly crowded, but Hansard will record this important debate tomorrow. I am grateful to my noble friend Lord Campbell of Alloway for his skilful drafting. I am also grateful to my noble friend Lord Cranborne because the amendment is in fact modelled on Clause 3 of his Parliamentary Government Bill.

I am not necessarily wedded to the details, but I wish to concentrate on the principle; namely, that we need better parliamentary and outside safeguards for Bills of major constitutional importance. I am not enthusiastic about referendums. It seems to me that they fit ill with our concept of parliamentary sovereignty and the representative character of Members of Parliament and your Lordships. We are sent to Parliament to exercise our judgment, having due regard to public opinion. But the reality is that we are making increasing use in recent years of referendums, and it looks to me as if they have come to stay. If that is so, I can think of no better subject for an appeal to the people than proposals to change the constitution of our country.

I am delighted that your Lordships' House has agreed to set up a constitutional committee and that the terms of reference, as my noble friend Lord Campbell of Alloway said, have been agreed: To examine the constitutional implications of all public Bills coming before the House; and to keep under review the operation of the constitution". This should provide for your Lordships' House a valuable safeguard—an early warning system to alert this House to major constitutional matters and allow it to recommend how they should be dealt with.

It may well be argued that we should see how the constitutional committee works in practice before proceeding further. Indeed, I shall not be at all surprised to hear the Minister using that argument. There is force in that argument; but, none the less, I believe that the matter is too urgent to be left there. One of the reasons why I say that is to look at the procedure of another place, not in any way in criticism but to consider what the position is there.

There was a long-standing convention in another place that constitutional Bills should not be timetabled or guillotined and that the Committee stage of these Bills should be taken on the Floor of the House, so that all Members of Parliament could take part. That convention has been over-ridden in this Parliament. There are now no more safeguards for major constitutional Bills than for minor technical Bills. I understand that the other place has now decided to go further next Session. It is intended that all Bills should be tabled or guillotined from the start. It is not for me to comment on the procedures of another place; they are masters of their procedure, just as we are masters of our procedure. However, the two Houses are complementary: we both have a duty to sustain the government of the day and to call them to account. I suggest, therefore, that we need to take note of the procedures of another place in determining our own procedures.

All governments—I stress "all governments"—no matter what their political colour, are authoritarian by nature if they can get away with it. They need discipline from two Houses of a strong Parliament. Very regrettably, we now have the tendency of government, all governments, to make statements first to the media, thus bypassing and devaluing Parliament.

The power of government has increased and is increasing. The power of Parliament has diminished and is still diminishing. The time has come to redress the balance, especially with Bills of major constitutional importance. I believe that this amendment would go some way to achieve that objective.

Lord Norton of Louth

My Lords, I shall speak briefly, not because of the lateness of the hour but simply because I shall return to some of the issues shortly when we discuss one of my amendments. As my noble friend Lord Campbell of Alloway has already mentioned, I come at this matter from a somewhat different position. As I have made clear before, I have a fundamental and principled objection to referendums and therefore I do not wish to encourage them in any way.

The noble Lord, Lord Chalfont, asked whether we were aware of all the significant constitutional changes that are taking place. One of those significant constitutional changes is the use of referendums. We certainly have a constitution. Contrary to the popular perception, it is not unwritten. What we have is a constitution that is part written but uncodified. I do not think that we protect the constitution by installing a procedure that I argue serves to undermine it. For reasons that I shall mention later in connection with my amendment, I think that this device runs contrary to, rather than reinforces, parliamentary government.

I come to the specifics of the amendment. I wish to make just two points at this stage. For reasons that will be clear from what we heard earlier, I suspect that we shall return to it. Therefore I shall keep my comments short. Given that my objection is to referendums on principle, I have an objection to the amendment because it makes the triggering of referendums rather too easy. Under the amendment, both Houses would be able to ignore the advice of the constitutional committee. Therefore the constitutional committee of this House could not trigger automatically the holding of a referendum. Both Houses could still reject the advice. But I argue that the advice should precede a Bill rather than simple resolutions of the two Houses. I think that there needs to be a far lengthier reflective process before Parliament approves the use of the mechanism.

The other problem I mention at this stage and draw to the attention of my noble friend is that the House of Commons is likely to find the provision unacceptable, as it provides that resolutions have to follow advice from a committee of this House. For the reasons that have been advanced I do not doubt that the committee will be highly qualified to comment on the matter. But that is not at issue. It is a committee of one House that would trigger resolutions of both Houses. I think that there are problems with the amendment as drafted but because of my stance on referendums I reject the amendment.

As my noble friend Lord Dean indicated, if the amendment springs from a belief that Parliament is weak, how on earth—if that is the case—will one achieve passage of this provision? If Parliament is weak, you strengthen Parliament; you do not look for devices outside the institution to achieve that result.

Lord Mackay of Ardbrecknish

My Lords, I consider that virtually all of the Bill constitutes important constitutional provisions. Perhaps with the exception of the noble Lord, Lord McIntosh of Haringey, who has just entered the Chamber, I think I can safely say that among those present in the Chamber this evening am the only holder of the campaign medal for all the constitutional Bills we have had since 1997, starting with the Referendums (Scotland and Wales) Bill. I believe that that was its title.

One of the difficulties we experience in this House is that often we have to address important legislative issues late at night. However, in my view that is one of the virtues of our not having a guillotine system and having to do things by agreement. I am content to deal with these matters late at night, even though I should have liked to discuss some of the matters I have dealt with this evening before a larger audience at prime time. But that is the way of the world. We treat these matters as seriously at this time of the night as at any other time.

Like my noble friend Lord Norton of Louth, I have a principled dislike of referendums. In an ideal world I should not have started having them. I realise that they are a de facto part of the constitution, if not written into it. On a number of occasions we have discussed trigger mechanisms other than Her Majesty's Government triggering a referendum. So I have some sympathy with the search for a different trigger mechanism.

I am not entirely convinced that my noble friend Lord Campbell of Alloway has alighted on the right one, any more than I was convinced that the noble Lord, Lord Owen, and others had done so. Nor was I convinced when I proposed my earlier amendments that I had alighted on the right mechanism. But, undoubtedly, if we are to have many referendums we shall have to address how they are triggered other than by government. Theoretically they can be triggered by Parliament despite the government. But I have been long enough in politics to know that that may be theoretical; the chances of it happening are slight. It occurred on the Scotland legislation in the 1970s but it was an unusual occurrence due to the government's lack of a majority in the House of Commons and a rebellion on their own side.

These are important issues. I look forward to hearing from the noble Lord, Lord Bassam.

Lord Bassam of Brighton

My Lords, late though the hour is I join with the noble Lord, Lord Mackay, in recognising that this is an important debate. It continues the discussion that began in Committee. I am grateful to the noble Lord, Lord Campbell, and others who have enlivened the debate.

As no doubt Members of your Lordships' House will recall, the noble Lord, Lord Owen, moved an amendment which would have had the effect of binding Parliament not to proceed with a certain class of legislation unless it had been approved in a referendum. Many who spoke in the debate were profoundly concerned at the constitutional implications of the proposal. Of particular concern was the fact that the decision whether or not to hold a referendum on a given constitutional issue would be placed in the hands of the Speaker rather than left to Parliament as a whole. With the amendments now before us, the proposal once again is that in specific cases a Bill may not pass into law unless and until a referendum is held.

However, it is less obvious that this proposal comes squarely up against the principle of parliamentary supremacy since such a referendum would be held pursuant to a resolution of both Houses of Parliament. To that extent it might be argued that the procedure envisaged is no more than an alternative to Parliament choosing to legislate to the same effect. If that is so, it might also be argued that it would be better that Parliament provided for a referendum to be held through the normal legislative process rather than by means of a resolution.

If I understand it correctly, the proposal is that Parliament would consider making such a resolution if the constitutional committee of the House of Lords were to advise that provisions of a particular Bill would substantially affect the constitution. The Royal Commission on the reform of the House of Lords recommended that a sessional constitutional committee be established. The Wakeham Commission further proposed that this committee should have the function of scrutinising all public Bills and preparing a report on their constitutional implications.

The picture would be radically different if the consequence of the committee's advice might be to prompt Parliament to consider the holding of a referendum. Such an arrangement would draw the work of such a committee into the thick of political controversy. It would beg more questions about whether the work of such a committee should be the preserve of a committee of this House alone.

I do not intend to dwell any further on the constitutional implications of these proposals. However, I am bemused by the proposal of Amendment No. 170: that in the case of a referendum held as a result of these provisions the chief counting officer should not be chairman of the electoral commission or a person appointed by him, as provided by Clause 125(2). It is instead suggested that the appointment of the chief counting officer should be farmed out to some unspecified independent body. We have gone to some lengths to ensure that the electoral commission is such an independent body. I do not understand the concerns that lie behind that aspect of the amendment. If there is a genuine concern, why should the alternative arrangements apply only to constitutional referendums?

I can only repeat that the purpose of the provision is to enable the application of the relevant provisions of the Representation of the People Acts, with any necessary modifications, to the holding of a referendum without the need to enact such provisions in primary legislation.

To conclude, the Neill committee did not address these issues and the Government do not believe that it is appropriate to legislate on them in this Bill. We have sought to give effect to the Neill committee's recommendations on the fair conduct of referendums. The circumstances in which referendums are held are an issue of an altogether different order. As a student of the British constitution, I fully respect and understand the points that have been made about the constitution, its organic development, the way in which we should treat it, how it changes over time and how it should properly be considered. However, for the reasons that I have given, I urge the noble Lord to withdraw the amendment.

12.30 a.m.

Lord Campbell of Alloway

My Lords, I thank all those who have spoken. I shall not enter into a riposte argument on the way in which they have commended or criticised the amendment. I did not expect any amendment of mine to have the support of my Front Bench, so I am not the slightest bit disappointed. I had hoped to be able to canvass a wider discussion among Back-Benchers throughout the House. On the undertaking to read with care everything that has been said, I beg leave to withdraw the amendment so that I may return to it at Third Reading.

Amendment, by leave, withdrawn.

The Chairman of Committees

Does the noble Lord, Lord Campbell of Alloway, intend not to move Amendment No. 170?

Lord Campbell of Alloway

I have to move it, do I not?

Noble Lords

No.

Lord Campbell of Alloway

All right, my Lords. If I do not have to move it, I am obliged. Can I move it at Third Reading?

The Chairman of Committees

My Lords, strictly speaking it is not for me to say, because it is within the scope and function of your Lordships' House to determine these matters, but informally—and, I take it, with the approval of your Lordships—the answer is that the noble Lord may return to it at Third Reading if he chooses.

[Amendment No. 170 not moved.]

Lord Bach moved Amendment No. 171: After Clause 101, insert the following new clause—