Political Parties, Elections and Referendums Bill

HL Deb 18 October 2000 vol 617 cc1125-86

8.31 p.m.

House again in Committee.

Clause 80 [Controlled expenditure by third parties]:

Lord Bassam of Brighton moved Amendment No. 208X: Page 51, line 8, leave out subsections (2) and (3) and insert— ("(2) "Controlled expenditure", in relation to a third party, means (subject to section 82) expenses incurred by or on behalf of the third party in connection with the production or publication of election material which is made available to the public at large or any section of the public (in whatever form and by whatever means). (2A) "Election material" is material which can reasonably be regarded as intended to—

1. (a) promote or procure electoral success at any relevant election for—
1. (i) one or more particular registered parties,
2. (ii) one or more registered parties who advocate (or do not advocate) particular policies or who otherwise fall within a particular category of such parties, or
3. (iii) candidates who hold (or do not hold) particular opinions or who advocate (or do not advocate) particular policies or who otherwise fall within a particular category of candidates, or
2. (b) otherwise enhance the standing—
   1. (i) of any such party or parties, or
   2. (ii) of any such candidates,
   with the electorate in connection with future relevant elections (whether imminent or otherwise);

and any such material is election material even though it can reasonably be regarded as intended to achieve any other purpose as well. (2B) For the purposes of subsection (2A)—

1. (a) the reference to electoral success at any relevant election is a reference—
1. (i) in relation to a registered party, to the return at any such election of candidates standing in the name of the party or included in a list of candidates submitted by the party in connection with the election, and
2. (ii) in relation to candidates, to their return at any such election; and
2. (b) the reference to doing any of the things mentioned in paragraph (a) or (as the case may be) paragraph (b) of that subsection includes doing so by prejudicing the 1126 electoral prospects at the election of other parties or candidates or (as the case may be) by prejudicing the standing with the electorate of other parties or candidates;

and, for the purpose of determining whether any material is election material, it is immaterial that it does not expressly mention the name of any party or candidate.").

The noble Lord said: I beg to move Amendment No. 208X, which is grouped with Amendments Nos. 208YA, 208YB and 208YG. I have already spoken to this group of amendments.

Viscount Astor

The noble Lord said that he has spoken to these amendments. He did not; he alluded to them in an earlier debate. We very purposely de-coupled them and, if the noble Lord bothers to look at the Marshalled List, he will see that they are de-coupled and are entirely separate. Frankly, it is not good enough for the Minister to skate over the issues that are raised on Clause 80. It is an important clause and some extremely important issues are part of it. We also referred to it to some extent during debate on an amendment to which the noble Lord, Lord Bach, replied on the subject of third parties. I have a number of questions relating to these amendments and the Minister will have to give a proper answer to the Committee this evening.

The government amendment which, as I said, was referred to in passing at an earlier stage effectively will rewrite in Clause 80 the definition of a "third party" for the purposes of elections. Amendment No. 208X is possibly the most important in the group. The definition of a third party in Clause 80 will affect dozens, and probably hundreds, of organisations. The definition of "controlled expenditure" in Clause 80 is crucial because it is by the very fact that organisations incur controlled expenditure that they are defined as third parties. The definition of a "registered political party" depends on whether or not it stands candidates at elections. That is quite straightforward.

However, the attempt to define third parties by reference to the type of item on which they spend money means that the situation is more complicated. Indeed, perhaps I should suggest to the Committee that this is something of a grey area.

Under Clause 83 an organisation is obliged to register with the electoral commission as a recognised third party if it spends more than £10,000 a year on controlled expenditure; otherwise, criminal sanctions kick in. The effect of registration as a recognised third party is to limit the amount of controlled expenditure that the organisation or individual can incur in a single year to £988,500 in the whole of the United Kingdom.

The definition of controlled expenditure is, as I said, crucial. The amendment broadens the definition considerably. Controlled expenditure is the money spent on what is termed as "election material". The amendment makes clear that election material is that which can "reasonably be regarded" as promoting or, indeed, prejudicing the electoral fortunes of a particular party or candidate. That includes the publication of material that may be related to issues on which candidates or parties have particular policies or opinions, even if the material does not mention the candidate or party by name.

The net is cast even wider by the words at the end of new subsection (2A) in Amendment No. 208X, which states, any such material is election material even though it can reasonably be regarded as intended to achieve any other purpose as well". That definition is very wide. The definition, reasonably be regarded as intended to achieve", is one that I feel is bound to end up in the courts. I do not understand how anyone can reasonably be expected to define that under the Government's thinking. I believe that as soon as the Bill becomes an Act, as night follows day we shall end up in the courts for definition. That is unsatisfactory.

As I said, both Amendment No. 208X and the Bill as drafted will cast the net very wide. I am thinking not only of organisations such as Britain in Europe and Business for Sterling which campaign for or against United Kingdom entry into the single currency. That was referred to by the Minister earlier during the Committee stage. Given that the euro is a hot political topic—certainly, one might say, a hot potato—for the Government and, indeed, probably for all political parties, the material issued by such organisations will mean that they must register as recognised third parties.

Earlier my noble friend Lord Cope talked about the example of the Royal Society for the Prevention of Cruelty to Animals. He raised various issues and the noble Lord, Lord Bach, kindly said that he would write to my noble friend. However, he raised issues on a rather narrow point and I believe that it is important that we expand on them because it is not only that one organisation which will be caught.

However, the RSPCA provides a good example. It runs campaigns on many issues. Earlier I looked at its website, which stated: The RSPCA is strongly opposed to the hunting of foxes, deer, mink and hares with dogs, believing that these activities are both cruel and unnecessary as control measures". It gives a range of information in relation to hunting and urges visitors to the site to write to their MP in support of a complete ban on hunting. The noble Lord, Lord Bach, said earlier that that issue would come under, I believe, Part VI of the Bill but he was not sure to what extent it was covered.

Wider issues arise here. The RSPCA deals not only with single issues such as hunting; it lists campaigns on topics such as live animal transport, the welfare of pigs, cosmetic testing and, indeed, fur farming. That is the subject of a Bill which is before your Lordships' House at present; it is going through its Committee stage.

We need to know the Government's thinking on this matter, but the only view that we have heard so far is that the Government are not sure. However, when they tabled the amendment they must have had a view on whether the material produced by this type of organisation would fall within the scope of the definition of election material, whether on a website or not. All politicians who stand for election have opinions, and that is the term used in the government amendment on such controversial issues as, for example, fur farming. Therefore, as I understand it, campaigns on those issues by groups such as the RSPCA clearly would fall within the definition in new subsection (2A) in Amendment No. 208X, even if their primary purpose was not electoral, although we know, of course, that they may influence the result of an election.

If my analysis is correct, the result would be that the RSPCA would be forced to register as a recognised third party with the electoral commission and restrict its spending on such material to just under £1 million per year. I do not know how much that organisation spends and it probably spends a great deal more than that. Personally, I am entirely on the other side of the argument, so for my part the less it is allowed to spend the better. However, I have no idea whether it spends £1 million or more than £1 million. I do not have a clue. But that is not the point. I have just used the RSPCA as an illustration of what I am talking about.

Certainly, if such an organisation spent more than £10,000 in the year before an election, Schedule 19 tells us that its financial officers would be liable to a criminal conviction and, on indictment, to an unlimited fine.

I used that example because it was an example used earlier. But, indeed, there are many other groups dealing with a whole range of issues which are affected; for example, the Countryside Alliance, Friends of the Earth, the Road Haulage Association, the Refugee Council, the British Medical Association, the Confederation of British Industry and even the Electoral Reform Society might be caught by the Bill's provisions. All those bodies issue material on political issues which could fall within the definition provided by Amendment No. 208X.

Therefore, the Government are seeking to limit the spending of those organisations. That might be the purpose of the amendment. If so, the Government must come clean and say whether it is; whether or not it is meant to include those organisations. We do not know and the Government have not made it clear. The Minister did not make it clear when he alluded earlier to those amendments. Therefore, I shall press him to do so now.

One of the important effects of making those organisations part of that is that they then fall into the limits which relate to 365 days before an election. Those organisations may have less of an idea as to when an election is to be called than some of the political parties. Therefore, we need to have clearly on the record the Government's view on this matter as to what they believe will be caught by the provisions of this amendment.

There is one other issue which I should mention. It seems to me that there are clear implications here relating to the Human Rights Act and freedom of speech. I should like to know whether the Government and the Minister have taken that into consideration and whether they are sure that the amendments do not fall foul of any of that legislation. I am sure that they have considered that matter but it would be useful to know from the Government that they have indeed considered it and they do not perceive that it is a problem.

8.45 p.m.

Lord Bassam of Brighton

Perhaps I may deal with the last matter first. I would not have signed the front of the Bill if I thought that the legislation which we were putting forward to your Lordships' House in any way contravened the Human Rights Act.

The noble Viscount has sought to see complexity and perhaps something more sinister about these amendments than pertains in reality. Amendments Nos. 208X and 208YB to Clause 80 merely seek to bring the definition of "controlled expenditure" into line with the revised definition of "campaign expenditure".

If an organisation runs a campaign urging people to vote for a party which favours retaining the pound or banning fox hunting, it is right that such an organisation should be subject to the controls contained in Part VI. If that means that, for example, the RSPCA has to register, then so be it. That seems to me to be entirely right. It should do so and should be regulated accordingly. If expenditure went unregulated, it would undermine the system of controls that we have put in place.

Material aimed at achieving, for example, a ban on hunting by inviting the electorate to vote for candidates of a party which supports a ban would fall within the closing words of the proposed Clause 80(2A). Although aimed at achieving a ban, it would also influence the election itself. Therefore, it must be right that that material would be caught by the provisions of the amendment.

The noble Viscount took exception to the final lines of the proposed subsection (2A). He seemed to be upset by the words, any such material is election material even though it can reasonably be regarded as intended to achieve any other purpose as well". My guess is that that is designed to cover something which during an election period might promote the party, even though it did not promote an individual candidate. For example, it might promote a surgery that a candidate is running in the constituency. Although that in itself is not necessarily in the business of securing extra votes for the particular candidate, it would obviously be designed in part to offer a full range of services and enhance the attractiveness of that particular political party.

But in overall terms it is right that that should fall within the terms of incurring expenditure which should be attributed towards election expenditure. I hope that that answers the points which the noble Viscount raised. I ran through the issues perhaps not in the depth which the noble Viscount would have liked. But I believe that I have dealt with the issues which he raised and I trust that with those explanations he will feel contented with our amendments.

Viscount Astor

I am grateful to the Minister for his explanation. As he knows, I was not arguing for either the inclusion or exclusion of a particular organisation. I merely used the RSPCA as an example. But he has confirmed quite clearly that a large number of organisations which, whether they be charities, lobbying groups or whatever, will now fall within the provisions of Clause 80 as amended by these amendments.

It is important that we should all recognise that. I suspect that many of the organisations do not realise at the moment that they may be caught by the provisions of the Bill and some of them may be quite surprised to find that they must register. I do not know what consultation the Government have undertaken in regard to those organisations. We shall want to consider this matter between now and Report stage. I am sure that representatives of many of the organisations involved will want to come along and talk to the Government about it.

As amended, this clause has broadened the ambit of those organisations which might be included. The Government have made an important statement that they wish those organisations to be included. We shall all wish to read carefully what the Minister has said.

Lord Bassam of Brighton

We made it quite clear both in the White Paper and also when the draft Bill was published that those organisations would fall to be caught within the terms of the legislation if they campaigned in that particular way. They are on notice, understand and appreciate that.

The noble Viscount may well have a point on this matter but we have not received any particularly strong reaction or backlash against this. Charities and voluntary organisations understand the implications of the legislation and realise that it is quite right that they should be regulated.

Viscount Astor

I am sure that the Minister is right but he will not receive representations until the organisations concerned have seen the amendments which define and explain the Government's thinking. Amendment No. 208X crosses the "i"s and dots the "t"s. I believe that this will come as surprise for some of those organisations. I do not comment as to whether it will be a good or bad surprise. That is an issue which we shall want to consider. However, the reason for this debate is to clarify the government thinking behind Clause 80 and the issues raised. I am grateful for the Minister's explanation. I am sure that we shall look at this area again when we come to Report stage.

On Question, amendment agreed to.

Lord Bach moved Amendments Nos. 208Y to 208YB: Page 51, leave out lines 40 to 43 and insert—

1. ("(a) if the third party is an individual, that individual;
2. (b) if the third party is a registered party—
1. (i) the treasurer of the party, or
2. (ii) in the case of a minor party, the person for the time being notified to the Commission by the party in accordance with section 83(3)(b)(iii); and
3. (c) otherwise, the person or officer for the time being notified to the Commission by the third party in accordance with section 83(3)(c)(ii).").

Page 52, leave out lines 1 and 2 and insert— ("(b) subject to subsection (7A), any registered party. (7A) In connection with the application of subsection (2) in relation to expenses incurred by or on behalf of a third party which is a registered party, any reference in subsection (2A) to a registered party or registered parties or to any candidates does not include—

1. (a) the party itself, or
2. (b) any candidates standing in the name of the party at any relevant election or included in any list submitted by the party in connection with any such election,

as the case may be."). Page 52, line 2, at end insert— ("( ) In this section "candidates" includes future candidates, whether identifiable or not.").

On Question, amendments agreed to.

Clause 80, as amended, agreed to.

Clause 81 [Notional controlled expenditure]:

Lord Bach moved Amendments Nos. 208YC to 208YF: Page 52, line 3, leave out subsections (1) and (2) and insert— ("(1) This section applies where, in the case of a third party—

1. (a) either—
1. (i) property is transferred to the third party free of charge or at a discount of more than 10 per cent. of its market value, or
2. (ii) property, services or facilities is or are provided for the use or benefit of the third party free of charge or at a discount of more than 10 per cent. of the commercial rate for the use of the property or for the provision of the services or facilities, and
2. (b) the property, services or facilities is or are made use of by or on behalf of the third party in circumstances such that, if any expenses were to he (or are) actually incurred by or on behalf of the third party in respect of that use, they would be (or are) controlled expenditure incurred by or on behalf of the third party.

(1A) Where this section applies, an amount of controlled expenditure determined in accordance with this section ("the appropriate amount") shall be treated, for the purposes of this Part, as incurred by the third party during the period for which the property, services or facilities is or are made use of as mentioned in subsection (1)(b). This subsection has effect subject to section 82. (1B) Where subsection (1)(a)(i) applies, the appropriate amount is such proportion of either—

1. (a) the market value of the property (where the property is transferred free of charge), or
2. (b) the difference between the market value of the property and the amount of expenses actually incurred by or on behalf of the third party in respect of the property (where the property is transferred at a discount),

as is reasonably attributable to the use made of the property as mentioned in subsection (1)(b). (1C) Where subsection (1)(a)(ii) applies, the appropriate amount is such proportion of either—

1. (a) the commercial rate for the use of the property or the provision of the services or facilities (where the property, services or facilities is or are provided free of charge), or
2. (b) the difference between that commercial rate and the amount of expenses actually incurred by or on behalf of the third party in respect of the use of the property or the provision of the services or facilities (where the property, services or facilities is or are provided at a discount),

as is reasonably attributable to the use made of the property, services or facilities as mentioned in subsection (1)(b)."). Page 52, line 30, leave out ("and") and insert ("or"). Page 52, line 37, leave out subsection (4) and insert— ("(4) Where an amount of controlled expenditure is treated, by virtue of subsection (1A), as incurred by or on behalf of a third party during any period the whole or part of which falls within any period which is a regulated period (as defined by section 89(6)(a)), then—

1. (a) the amount mentioned in subsection (4A) shall be treated as incurred by or on behalf of the third party during the regulated period, and
2. (b) if a return falls to be prepared under section 91 in respect of controlled expenditure incurred by or on behalf of the third party during that period, the responsible person shall make a declaration of that amount,

unless that amount is less than £200. (4A) The amount mentioned in subsection (4) is such proportion of the appropriate amount (determined in accordance with subsection (1B) or (1C)) as reasonably represents the use made of the property, services or facilities as mentioned in subsection (1)(b) during the regulated period."). Page 52, line 45, at end insert— ("( ) Paragraph 2(3) and (4)(a) of Schedule 10 shall apply with any necessary modifications for the purpose of determining, for the purposes of subsection (1), whether property is transferred to a third party.").

On Question, amendments agreed to.

Clause 81, as amended, agreed to.

Clause 82 [Expenditure by third parties which is not controlled expenditure]:

Lord Bach moved Amendment No. 208YG: Page 53, line 5, leave out ("(otherwise than by the third party)").

On Question, amendment agreed to.

[Amendment No. 209 not moved.]

Lord Bach moved Amendment No. 209A: Page 53, line 10, leave out from ("of") to end of line 12 and insert ("expenses falls (in accordance with any enactment) to be included in a return as to election expenses in respect of a candidate or candidates at a particular election,").

On Question, amendment agreed to.

Viscount Astor moved Amendment No. 210: Page 53, line 15, leave out paragraph (a).

The noble Viscount said: I understand the purpose of the Government's intentions in this Bill. The Bill reads: publication of any matter relating to an election, other than in an advertisement".

It then mentions "newspaper or periodical". This is a probing amendment. Supposing, like the noble Lord's friend, Mr Robinson, a Member in another place, one buys a magazine such as the New Statesman, what would happen if one wanted to publish an advertisement that is covered by the Bill? Buying a magazine may be cheaper than buying a newspaper, but plenty of newspapers appear to be up for sale at the moment so it may be cheaper to buy a newspaper or a magazine than to place an advertisement. Would that count? I beg to move.

Lord Bassam of Brighton

Perhaps I should explain what this clause achieves before I answer the point raised by the noble Viscount. The clause exempts from the controls on third party expenditure the print and broadcast media and it reflects the current situation under the Representation of the People Act 1983. The answer to the question posed by the noble Viscount is that it would depend who bought the newspaper. If a party bought the newspaper and the party used it as a campaigning tool, my guess is that it probably would not be exempted. We shall have to look at that. I believe that is the situation.

Viscount Astor

What would happen if I bought the newspaper or the noble Lord, Lord Alli, who I see is in his place, bought the newspaper? Would that count?

Lord Bassam of Brighton

Would that we were all as rich as the noble Viscount and could afford to buy a newspaper. That was a facetious observation. Apparently, there is case law on the equivalent provision in the 1983 Act to the effect that a "newspaper" is not something issued purely for political purposes. That would not be the case in respect of the publications to which the noble Viscount has referred, including the Daily Telegraph.

Viscount Astor

I thank the Minister for that reply. Of course, at one point my family owned newspapers in this country, but we gave that up quite a long time ago. I have no intention of buying a newspaper unless I find a generous benefactor. Someone may come along and back the Minister to buy a newspaper. One never knows. I beg leave to withdraw the amendment.

Lord Bassam of Brighton

While I do not own the Evening Argos, it gives me ample support from time to time!

Lord Alli

Perhaps I may say that I can give no such undertaking!

Amendment, by leave, withdrawn.

Clause 82, as amended, agreed to.

Clause 83 [Third parties recognised for the purposes of this Part]:

Lord Bach moved Amendments Nos. 210A to 210E: Page 53, line 34, leave out paragraphs (a) to (c) and insert ("the third party is—

1. (a) an individual resident in the United Kingdom or registered in electoral register (as defined by section 49(8)),
1134
2. (b) a registered party, or
3. (c) a body falling within any of paragraphs (b) and (d) to (f) of section 49(2).").

Page 53, line 41, at end insert ("or (if he has no such address in the United Kingdom) his home address elsewhere"). Page 53, line 43, leave out from beginning to end of line 15 on page 54 and insert— ("(b) if given by a registered party, state—

1. (i) the party's registered name,
2. (ii) the address of its registered headquarters, and
3. (iii) (in the case of a minor party) the name of the person who will be responsible for compliance on the part of the party with the provisions of Chapter II,

and be signed by the responsible officers of the party (within the meaning of section 59); and (c) if given by a body falling within any of paragraphs (b) and (d) to (f) of section 49(2), state—

1. (i) all such details in respect of the body as are required by virtue of any of sub-paragraphs (4) and (6) to (8) of paragraph 2 of Schedule 5 to be given in respect of such a body as the donor of a recordable donation, and
2. (ii) the name of the person or officer who will be responsible for compliance on the part of the body with the provisions of Chapter II,

and be signed by the body's secretary or a person who acts in a similar capacity in relation to the body."). Page 54, line 18, leave out ("relevant notification date") and insert ("date on which it is received by the Commission"). Page 55, line 4, leave out subsection (9).

On Question, amendments agreed to.

Clause 83, as amended, agreed to.

Clause 84 agreed to.

Clause 85 [Restriction on incurring controlled expenditure]:

Lord Bach moved Amendment No. 210F: Page 55, line 28, at end insert— ("( ) Where, in the case of a recognised third party that is a registered party, any expenses are incurred in contravention of subsection (1), the expenses shall not count for the purposes of sections 89 to 94 or Schedule 9 as controlled expenditure incurred by or on behalf of the recognised third party.").

On Question, amendment agreed to.

Clause 85, as amended, agreed to.

Clause 86 agreed to.

Clause 87 [Restriction on making claims in respect of controlled expenditure]:

Lord Bach moved Amendments Nos. 210G to 210L: Page 56, line 9, after ("party") insert ("during any period which is a regulated period (as defined by section 89(6)(a))"). Page 56, leave out lines 14 and 15 and insert ("not later than 21 days after the end of the regulated period"). Page 56, line 16, leave out from ("paid") to end of line 17 and insert ("not later than 42 days after the end of the regulated period"). Page 56, line 32, at end insert— ("( ) Subsection (2) is without prejudice to any rights of a creditor of a recognised third party to obtain payment before the end of the period allowed under that subsection."). Page 56, line 38, at end insert ("; and ( ) any reference to the treasurer or deputy treasurer of the registered party were a reference to the responsible person in relation to the recognised third party.").

On Question, amendments agreed to.

Clause 87, as amended, agreed to.

Clause 88 [Disputed claims]:

Lord Bach moved Amendments Nos. 210M to 210S: Page 56, line 41, after ("party") insert ("as mentioned in section 87(1)"). Page 57, line 3, leave out ("section 87(1)") and insert ("that provision"). Page 57, line 12, leave out subsection (3). Page 57, line 16, leave out ("Subsections (4) to (7) of section 72") and insert ("For the purposes of this section— (a) subsections (4) and (5) of section 87"). Page 57, line 19, after ("claim") insert ("(whether it is disputed or otherwise) which is"). Page 57, line 19, leave out (" 72(1)") and insert (" 87(1); and (b) subsections (6) and (7) of section 72 shall apply as if any reference to subsection (4) of that section were a reference to section 87(4) as applied by paragraph (a) above.").

On Question, amendments agreed to.

Clause 88, as amended, agreed to.

Clause 89 [Limits on controlled expenditure by third parties]:

Lord Rennard moved Amendment No. 210T: Page 58, line 8, leave out ("£10,000") and insert ("£2,000").

The noble Lord said: Amendments Nos. 210T and 210U restrict undeclared third parties to spending a maximum of £2,000 in England or £1,000 in each of Scotland, Wales and Northern Ireland. I believe that the purpose is to reduce potential abuse by third parties. It seems to me that it is too easy for someone to spend £10,000 asking people to vote for or against a particular proposition, affecting a particular candidate or group of candidates. However, it is not too difficult to register for third party expenditure so that it can be controlled properly.

My main concern is in relation to the size of expenditure for third parties when they are registered. That is dealt with in Amendments Nos. 211 to 214. I ask the Committee to think back to the Scottish parliamentary by-election earlier this year. Effectively, it was hijacked by large, expensive campaigns focusing on the Scottish Section 2A issue.

This highlights the problem of a third party being allowed to spend up to £1 million. Several different like-minded organisations may also be allowed to spend £1 million each during an election campaign. Let us say, for the sake of argument, that 10 or even 20 Eurosceptic organisations grouped together and each was able to spend £1 million during an election campaign; between them they would be able to spend as much as the Labour Party or Conservative Party or the Liberal Democrats, if we had the money. I feel that the agenda of a general election could effectively be hijacked.

Instead of standing as candidates for a party, or influencing policy within parties, are we to see anti-abortion, anti-European or anti-gay organisations able to derail the democratic process because they have sufficient money and are allowed to spend it? The overarching principle of this Bill is that money should not buy influence over policy. Of course there should be freedom of speech, and of course we should be mindful of the human rights legislation guaranteeing freedom of speech. But limiting each third party to around £300,000 of expenditure will breach that principle.

The danger is, if we allow a £1 million limit for each third party, then just six organisations, possibly campaigning on a common platform, will be able to spend more money in a general election campaign than all of the candidates for a specific party put together will be able to spend even if they stand in every constituency in the country. The £1 million limit puts disproportionate power in the hands of third party organisations. We accept that they have a right to have their say, but not to use their money to buy control of the political agenda and the outcome of elections.

Third parties can have their say in many ways, and most of those ways do not require money. Let us try to limit the influence of money in elections, whether spent by political parties or by so-called third parties. I beg to move.

9 p.m.

Viscount Astor

The Liberal Democrats never cease to surprise me. Earlier this evening they were arguing about raising limits to get away from a cumbersome and bureaucratic process. They were talking of changing £100 to £500.

Lord Rennard

The noble Viscount may have missed my point. I was arguing for a reduction in national expenditure limits. When it comes to the accountancy principles for the vouchers we have to provide, perhaps fewer vouchers need to be provided. My overarching principle is consistent; that is, that less money should be used to influence elections.

Viscount Astor

The noble Lord may think it is consistent, but I fail to see it. In effect his amendments seek to reduce the threshold at which third party organisations have to register with the electoral commission. That means more organisations will fall in and I do not see the logic behind that argument.

I wish to make only one small further point. The Neill committee recommended that a third party should be able to spend up to 5 per cent of the maximum limit for any political party. These amendments would change that and we feel that the proposals in the Neill committee are the ones that should be followed.

Lord Bach

The purpose of this group of amendments is to reduce the various monetary limits that apply to third parties under Part VI of the Bill. Amendments Nos. 210T and 210U are concerned with the threshold at which a third party is required to register with the electoral commission. Clause 89 currently sets the threshold at £10,000 in the case of a third party incurring controlled expenditure in England and £5,000 in the case of Scotland, Wales and Northern Ireland. The noble Lord's amendments would reduce those thresholds to £2,000 and £1,000 respectively.

I remind the noble Lord that the thresholds set out in Clause 89 are already significantly below the £25,000 proposed in the Neill committee report. To reduce the threshold further to the figures he mentioned would be difficult to justify. These are relatively modest sums. Anyone spending up to such limits would have very little impact on an election campaign. I cannot therefore see the case for bringing these minor players within the electoral commission's regulatory remit.

The purpose of Amendments Nos. 211 to 214 is to reduce the overall expenditure limits to which recognised third parties are subject. Amendments Nos. 203 and 204 proposed that the limits on political parties' expenditure be reduced by a quarter. In this context it is proposed that the limits be reduced by two-thirds. The figures set out in the Bill derive from a clear and unambiguous recommendation in the Neill committee report. I am conscious when I say that, that all sides in this Chamber use Neill when it suits them and do not use it when it does not. I am about to use it.

As ever, when considering amendments to the Bill, it is often instructive to go back to the committee's report to remind ourselves of how the committee came to its various conclusions. At paragraphs 10.83 and 10.84 the committee said: we are conscious that the Bowman judgment in the European Court of Human Rights accepts that such [third party] limits may he imposed, but also makes it clear that the limit must not be so low that, in effect, it deprives the third party of its right to free expression. Against this background, we propose that registered third parties should be able to spend up to 5 per cent of the permitted maximum for parties contesting more than 600 parliamentary constituencies". We fully acknowledge that setting the third party limits, or indeed any of the limits in the Bill, is not an exact science. But the point the Neill committee was making was that the limit must be sufficient to afford an individual or organisation the opportunity to put their views across throughout the whole country. It is questionable whether the lower limits proposed in the amendments would enable a person to mount an effective national campaign.

Some might seek to draw a comparison with the £500 limit we intend to introduce on third party expenditure at the constituency level. It would be a false comparison. In proposing an overall spending limit of £20 million for political parties, the Neill committee did not take the limit on what a candidate may spend as its starting point. The £20 million limit for political parties is considerably more than the aggregate of a candidate's limit in each of 659 constituencies. The national third party limit must be determined against that background. The £500 constituency limit is quite simply a red herring in this context.

We entirely accept that general elections are, first and foremost, contests between the political parties and it is right that the focus of the campaign should be upon them. But elections are not exclusively a matter for the parties. In a democratic society all individuals and bodies have a right to have their views heard. It would clearly distort the democratic process if any one individual or body were able to bring unlimited resources to bear on a campaign. To that extent the noble Lord is correct. But we should avoid going to the other extreme and so constrain third parties as to leave them without a fair opportunity to put their views across. We believe that the Neill committee got the balance right and that we should adhere to the figures in the Bill.

Lord Rennard

I thank the Minister for that reply, in particular for his honesty and candour in admitting that all sides in the Committee have a tendency to use the Neill committee in their defence when the arguments suit them and to disagree with it when they do not.

His brief obviously suggested that I might refer to the fine and constituency limits. I did not do so because I did not think it appropriate. However, I urge the Minister to think again about the issue because he did not quite address my concern about "ganging up". It was referred to by the noble Lord, Lord Mackay, at Second Reading when he feared that there may be a capacity for some third party organisations to co-operate in such a way as to ensure that they can drive a coach and horses through the principle of the legislation.

We saw how in previous elections third party expenditure may cause serious problems; for example, inelections to the Scottish Parliament. I fear that it may be a real issue in the general election unless the Government address it hut, in the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 210U not moved.]

Lord Bach moved Amendments Nos. 210V and 210W: Page 58, line 9, at end insert— ("(5A) Where—

1. (a) at any time before the beginning of any regulated period any expenses within section 80(2) are incurred by or on behalf of a third party in respect of any property, services or facilities, but
2. (b) the property, services or facilities is or are made use of by or on behalf of the third party during the regulated period in circumstances such that, had any expenses been incurred in respect of that use during that period, they would by virtue of section 80(2) have constituted controlled expenditure incurred by or on behalf of the third party during that period,

the appropriate proportion of the expenses mentioned in paragraph (a) shall be treated for the purposes of this section, sections 91 to 94 and Schedule 9 as controlledexpenditure incurred by or on behalf of the third party during that period. (5B) For the purposes of subsection (5A) the appropriate proportion of the expenses mentioned in paragraph (a) of that subsection is such proportion of those expenses as is reasonably attributable to the use made of the property, services or facilities as mentioned in paragraph (b)."). Page 58, line 10, leave out ("Chapter") and insert ("this section, sections 91 to 94 and Schedule 9").

On Question, amendments agreed to.

Clause 89, as amended, agreed to.

Schedule 9 [Limits on controlled expenditure]:

[Amendments Nos. 211 to 214 not moved.]

Lord Bach moved Amendments Nos. 214A to 214D: Page 138, line 28, after ("period") insert ("for the purposes of this paragraph"). Page 138, line 36, leave out ("(except in the context of a period mentioned in sub-paragraph (2))"). Page 139, line 16, after ("period") insert ("for the purposes of this sub-paragraph"). Page 142, leave out lines 4 to 10.

On Question, amendments agreed to.

Schedule 9, as amended, agreed to.

Clause 90 [Control of donations to recognised third parties]:

Lord Bach moved Amendment No. 215: Page 58, line 25, leave out ("other than registered parties") and insert ("which either are not registered parties or are minor parties").

On Question, amendment agreed to.

Clause 90, as amended, agreed to.

Schedule 10 [Control of donations to recognised third parties]:

Lord Bach moved Amendments Nos. 216 to 218P: Page 142, line 16, leave out ("other than registered parties")and insert ("which either are not registered parties or are minor parties"). Page 142, line 19, at end insert ("other than a minor party"). Page 142, line 21, leave out from ("donation") to end of line 22 and insert ("to the recognised third party for the purpose of meeting controlled expenditure incurred by or on behalf of that third party"). Page 142, line 23, after ("2") insert (", 2A"). Page 142, line 23, at end insert— ("( ) References to a permissible donor falling within section 49(2) do not include a registered party."). Page 142, line 27, at end insert— ("(aa) any sponsorship provided in relation to the recognised third party (as defined by paragraph 2A);"). Page 142, line 28, leave out ("a recognised third party or a person authorised to act on its behalf)") and insert ("or on behalf of the recognised third party)"). Page 142, line 30, after ("by") insert ("or on behalf of"). Page 142, leave out line 36. Page 142, line 40, leave out sub-paragraph (2) and insert— ("(2) Where—

1. (a) any money or other property is transferred to a recognised third party pursuant to any transaction or arrangement involving the provision by or on behalf of the recognised third party of any property, services or facilities or other consideration of monetary value, and
2. (b) the total value in monetary terms of the consideration so provided by or on behalf of the recognised third party is less than the value of the money or (as the case may be) the market value of the property transferred,

the transfer of the money or property shall (subject to sub-paragraph (2B)) constitute a gift to the recognised third party for the purposes of sub-paragraph (1)(a). (2A) In determining—

1. (a) for the purposes of sub-paragraph (2)(c), whether any money lent to a recognised third party is so lent otherwise than on commercial terms, or
2. (b) for the purposes of sub-paragraph (2)(d), whether any property, services or facilities provided for theuse or benefit of a recognised third party is or are so provided otherwise than on such terms,

regard shall be had to the total value in monetary terms of the consideration provided by or on behalf of the recognised third party in respect of the loan or the provision of the property, services or facilities. (2B) Where (apart from this sub-paragraph) anything would be a donation both by virtue of sub-paragraph (1)(aa) and by virtue of any other provision of this paragraph, sub-paragraph (1)(aa) (together with paragraph 2A) shall apply in relation to it to the exclusion of the other provision of this paragraph."). Page 142, line 44, after ("member") insert (", trustee"). Page 142, line 45, leave out second ("and") and insert ("or"). Page 143, line 8, at end insert—

cc1140-72
1. Sponsorship 16,591 words
cc1172-86
2. VALIDITY OF REFERENDUM: THRESHOLD OF VOTES CAST 6,964 words