Orders of the Day — Political Parties, Elections and Referendums Bill

House of Commons, 16 February 2000.

REFERENDUMS TO WHICH THIS PART APPLIES.

Robert Walter (Conservative, North Dorset)

I beg to move amendment No. 36, in page 60, line 37, leave out from "Ireland" to end of line 39.

Robert Walter (Conservative, North Dorset)

I do not intend to dwell long on the amendments, which are relatively simple. Conservative Members are conscious of the fact that the measure provides for referendums to be held not only nationally, but in England, Wales, Scotland or Northern Ireland, and in any of the regions, as defined by the regional development agencies. It may come as no surprise to the Committee that Conservative Members see nothing magical in the areas of the RDAs. Elsewhere and on other occasions, we have pointed out that we are not entirely happy with the concept of RDAs—not least because we are not entirely happy that government should be organised on such a basis, although regional boundaries must be drawn somewhere. That does not mean, however, that there is always a community of interest in a particular region. For example, my constituency is in Dorset, which is linked to the south-west region, but my constituents have little in common with the electors of Tewkesbury or Truro—save the fact that we all catch the train from either Waterloo or Paddington to reach the area. Through the amendments, we want to provide the Electoral Commission with the power to regulate referendums held in smaller areas in multiples of local government areas—not in individual local government areas, because those are covered elsewhere. It would thus be possible to hold a regional referendum in, for example, Devon and Cornwall on an issue that was pertinent to both counties, but not to only one of them, and certainly not to the whole south-west region. One could envisage a referendum being held on an issue that affected both sides of the Severn estuary; that might include the local government units in the former county of Gwent, in Gloucestershire and in Somerset. To give the Electoral Commission the flexibility to consider local referendums in areas that do not necessarily coincide with those covered by the RDAs or the home nations would be a worthwhile addition to the Bill.

Andrew Stunell (Liberal Democrat, Hazel Grove)

The amendments are rather mismatched. The first would delete one category of referendum. That is a mistake, because we need the widest possible range of options to ensure that the area in which opinions are sought, whatever its boundaries, comes within the purview of the Electoral Commission. As we want to bring all such matters under the control of the commission, it seems perverse to remove one category of referendum. The second amendment is sensible. As the hon. Member for North Dorset (Mr. Walter) pointed out, it will sometimes be appropriate or expedient to hold referendums in more limited areas. He hinted at a Severn estuary referendum or at others that might cross current regional boundaries. I represent a constituency with the east midlands region on its southern boundary, but it is firmly placed in the north-west. It is less than 10 miles to the Yorkshire and Humberside region. The hon. Member for High Peak (Mr. Levitt) is in the Chamber, and we share a constituency boundary even though our constituencies are in different regions. One can imagine that a referendum on the Peak district national park or related issues would necessarily cross regional boundaries. [Interruption.] The hon. Gentleman is holding up several fingers, but I cannot interpret what they mean. Amendment No. 44 would allow for something that is not constrained by the nations and states of the United Kingdom, or by the economic regions. It would thus be a useful addition to the Bill. Unfortunately, any vote would be on amendment No. 36. I hope that the Government will reject that, but that they will give serious consideration to amendment No. 44, which would build in a level of flexibility that would allow the Electoral Commission in reasonably foreseeable circumstances to exercise control and be the effective monitoring body, without the need to resort again to primary legislation.

Norman Godman (Labour, Greenock and Inverclyde)

I shall be brief. I agree with much of what the hon. Member for Hazel Grove (Mr. Stunell) said about the two amendments. Regional referendums can be important. The Committee may recall a referendum on the merits of the public ownership of water authorities that was held some years ago in the Strathclyde region. It attracted about 1 million respondents, 98 per cent. of whom said that they wanted water services to remain under local authority control. The potency of that response deterred the then Tory Government from privatising the water boards in Scotland. I wish to ask my hon. Friend the Minister a question. It might be a little precipitate, but it was prompted by something that the hon. Member for North Dorset (Mr. Walter) said. Have there been any discussions with the Scottish Executive, the Northern Ireland Executive—we all know about the problems there—and the Welsh Executive about the conduct and commissioning of referendums? For example, if referendums are held in Northern Ireland once the Executive is reinstituted— I hope that that will take place soon—or in Scotland and Wales, am I right in thinking that it will be the respective Executives rather than the Westminster Government who will have the authority to call the referendums?

Mike O'Brien (Labour, North Warwickshire)

The distance between us is very small, even though I will not accept the amendments. I do not agree with amendment No. 36, but I shall give some consideration to amendment No. 44, albeit not on this Bill. As I shall explain, there is a way of dealing with the issue other than trying to amend the Bill. Clause 95(1) specifies the referendums to which the provisions of part VII apply. It is not ultimately an exhaustive list, in the sense that future legislation providing for referendums to be held throughout areas or combinations of administrative units not specified in the clause could provide for the controls set in this part to be applied fully or in part to those referendums. That is not the only way in which we can manage the division of areas for referendums. We could decide in later legislation to do it differently. All that we are providing here, for the sake of convenience, is a template that we may or may not choose to use. A case in point would be referendums on directly elected mayors under the Local Government Bill, which will make provision for the Secretary of State to make regulations as to the conduct of such referendums. It is intended that those regulations should apply, with necessary modifications, to a number of the provisions in part VII, having regard to the particular circumstances of those local referendums. Clause 95(1)(c), which amendment No. 36 would delete, allows the provisions of part VII to be applied to a referendum held throughout an English region. Such referendums are not by any means an immediate prospect, but the Government intend to introduce, possibly in the next Parliament, legislation to allow people, region by region, to decide in a referendum whether they want directly elected regional government. The Government's judgment is that the part VII provisions would apply fully to such referendums. We might as well put them in place, because this is convenient legislation in which to do so, and it will provide for simplicity later. Those referendums would be held on matters of significance, and each would involve a substantial electorate. Given that regional referendums are a genuine prospect, it makes sense to take this opportunity to make it clear that these controls would apply to those referendums. Amendment No. 44 would apply the part VII provisions to referendums held in two or more local government administrative units in England and Wales. I am not persuaded that we need to put that into the Bill. We have made no presumptions that the boundaries for any future regional government in England need necessarily follow those of the existing administrative regions; that is, the Government office boundaries. We have said that in time we shall introduce legislation to allow people to choose whether they want regional government. How we would deal with referendums cutting across regional boundaries should be a matter for that legislation. It is no use trying to prejudge the boundaries that we would use, when it may be some time before we will want to call those referendums. The Bill is convenient and simple and gives us a legitimate basis for proceeding with those referendums. We are not closing the door on the ideas put forward by the hon. Members for North Dorset (Mr. Walter) and for Hazel Grove (Mr. Stunell), and I hope that, with the reassurances that I have given, the hon. Member for North Dorset will feel able to withdraw the amendment. I say to my hon. Friend the Member for Greenock and Inverclyde (Dr. Godman) that there have been discussions with the Scots and Welsh about how to proceed with the legislation. As we get used to devolution, it is becoming natural for us to consult and discuss with our colleagues in the Scottish Parliament and Executive and the Welsh Assembly and Executive the changes that are taking place. I hope that he is satisfied with that reassurance.

Robert Walter (Conservative, North Dorset)

I thank the Minister for his response. I am slightly—I would not say entirely—reassured that he has taken on board our points, particularly on amendment No. 44. On the basis that he seems to accept their spirit and suggests that they should be incorporated in other, later legislation, I beg to ask leave to withdraw the amendment.

Patrick Cormack (Conservative, South Staffordshire)

I beg to move amendment No. 45, in page 61, line 13, at end add— '(6) The exact number, nature and wording of (a) the question or questions, and (b) the possible answers to each question in a referendum or other poll to which this Part applies shall be determined after consultation with the Commission; and any views expressed by the Commission shall be published.'.

Patrick Cormack (Conservative, South Staffordshire)

In responding to the previous group of amendments moved by my hon. Friend the Member for North Dorset (Mr. Walter), the Minister used some interesting turns of phrase, of which I made a note. He talked of, "We might as well put in place", "It will be convenient" and "It makes sense." I hope that he will respond to amendment No. 45 in a similar spirit, because it would make sense and be convenient to implement the provisions suggested in it and the consequential amendments that we have tabled. There was much talk on Monday, when we debated previous clauses, of the role of the commission and of the Speaker's Committee that will oversee its work. However, there seems to be no place for the commission in the crucial, central part of the Bill on drafting questions on referendum forms. The amendments would ensure a specified, proper and official place for the commission. It should be consulted on the drafting, so that it may be satisfied, beyond doubt, that the wording is not loaded. Members of Parliament are called on more than others to fill in questionnaires day after day. Frankly, I make a practice of refusing to do so.

Mike O'Brien (Labour, North Warwickshire)

So do I.

Patrick Cormack (Conservative, South Staffordshire)

I am glad that the Minister takes the same line. His apt sedentary intervention underlines the need for the amendments. It is easy to load a question, thereby almost directing the answer. The commission should be consulted and any views expressed by it published, so that people may take due note of what it has said.

John Bercow (Conservative, Buckingham)

The Committee knows that my hon. Friend's eloquence is legendary. Do I interpret him correctly if I say that, without the amendments that he is eloquently advocating, the danger is that the commission would be nothing but the Prime Minister's hapless glove puppet?

Patrick Cormack (Conservative, South Staffordshire)

I am always reluctant to allow any colleague to put words into my mouth, particularly when they come from my hon. Friend's silver tongue. If we do not incorporate the amendment, the danger is that we shall have an emasculated commission, which, at the very point of delivery, cannot exert influence or even express an opinion. In a sense, therefore, my hon. Friend is right. We are concerned about the commission. We want it to have due and proper influence on the way in which questions are worded. We want its views to be known to all so that, if there is conflict or doubt, those who are called on to vote on any issue will know what the commission has said. I hope that there is common ground between parties that the commission should be a respected body, whose general impartiality and approach is never questioned. If the commission is to have such a reputation and to maintain it through the years, it must have influence at such a crucial point. The Minister has acknowledged, not only in his sedentary intervention, but in the context of the Bill, that there is some force to my argument, so I hope that he will accept the amendment. Even in the new clause, which we shall debate later and which I therefore cannot debate now, and which is so draconian, there is a specific reference to the commission and a role assigned to it. How much more important it is, then, to assign a role to the commission in clause 95.

Martin Bell (Independent, Tatton)

I shall be brief. The independents have not been widely consulted on this measure. Indeed, regrettably, they have not been consulted at all. The Parliamentary Secretary said that it was his belief that independents were usually Conservatives in disguise. That is not always and invariably the case. I support the amendment, because I believe that the Bill contains some anti-democratic elements, of which this provision is one. The commission's independence is paramount, as it is in the nature of political parties—all political parties—to take power or to hold on to power. It will be extraordinarily difficult to safeguard the independence of the commission and its right to speak for and protect the interests of all the people in the country, who may not necessarily belong to a political party but who have profound political interests. Therefore, I support the amendment.

Andrew Stunell (Liberal Democrat, Hazel Grove)

The Liberal Democrats support the thrust of the amendment. The three national referendums most likely to be held over the next few years are all on issues on which I would want the answer to be yes—Lords reform, the European Union and proportional representation. However, my strong desire for a positive result when those referendums are held does not blind me to the fact that those who set the questions have tremendous power to determine the outcome. Every politician, I suppose, wants to win by fair means or foul, but I want to win primarily by fair means.

Patrick Cormack (Conservative, South Staffordshire)

Having enunciated that novel—or perhaps traditional—Liberal Democrat policy, will the hon. Gentleman explain the ratio?

Andrew Stunell (Liberal Democrat, Hazel Grove)

I am glad to have livened up the debate somewhat. The difficulty in discussing the Bill, as I said in a previous debate on the Floor of the House, is not that Members of Parliament are too poorly informed to discuss it—a fault that sometimes arises, if I may say so—but that we are too well informed to discuss it properly. Regardless of the passion with which we want a particular outcome in politics, we have a duty to ensure that the processes used to reach decisions are fair, proper and balanced, not just to produce the desired outcome, but to ensure a fair opportunity for alternative views to be expressed and heard. The point made by the hon. Member for Tatton (Mr. Bell) is one that we may not want to state on the Floor of the Chamber, but which we would certainly admit elsewhere—that is, that politicians never want to give up power. They will take power and hold on to it. I do not exclude the Liberal Democrats or any other political party from that. Perhaps the hon. Member for Tatton would allow me to say that even independents, once elected to the House, are sometimes tempted to stay. They may resist that temptation, and the Bill is about resisting temptation. The intention of the amendments, if not their precise wording, is right. They reserve to the commission some of the fundamental decisions about how referendum questions will be phrased and put to the public. That is a proper reservation of power and duty to the Electoral Commission. I understand the Government's thinking. I understand that there is a certain amount of expedience in this Parliament and, in their mind, in the next Parliament and possibly for the next thousand years. They will set the questions. However, a day will come when they will not set the questions. They might then wish that the Electoral Commission had a bigger role than that for which the Bill provides. As a Liberal Democrat, I seldom get to set the questions. Although I support a specific outcome, I am well versed in the need for safeguards against power. I urge the Government to look favourably on the amendment's intention, if not the precise wording.

Norman Godman (Labour, Greenock and Inverclyde)

I have been a Member of Parliament for 16 years, but I never thought the day would come when I found myself in some agreement with a Conservative, the hon. Member for South Staffordshire (Sir P. Cormack); a Liberal Democrat spokesman, the hon. Member for Hazel Grove (Mr. Stunell); and an Independent Member, the hon. Member for Tatton (Mr. Bell). I may get into trouble, but they have raised important points of principle about setting a fair question or series of questions in a referendum. I was sorry to hear the hon. Member for South Staffordshire say that he never fills in questionnaires. Much empirical social science research uses questionnaires as a methodological tool. Not all questionnaires should be dismissed out of hand, because they can elicit useful information for public bodies and others. I was therefore sorry to hear him adopt such a dogmatic position. I throw the occasional questionnaire away, but such documents should be examined on their merit. I hope that the Minister will take cognisance of some of the mistakes made by Governments in the Irish Republic, which has much more experience of referendums than we have. In recent years, as the Minister knows, there has been huge controversy about setting questions in referendums in the Irish Republic. For example, there was a recent referendum on the controversial issue of abortion, and controversy surrounded setting the question for the referendum on divorce.

John Bercow (Conservative, Buckingham)

I agree with the thrust of the hon. Gentleman's comments. Does he agree that one useful test of the fairness of a referendum question is whether the wording is acceptable to a professionally commissioned opinion pollster?

Norman Godman (Labour, Greenock and Inverclyde)

I am being too agreeable this afternoon. I agree that setting the question—whether in a social science research questionnaire, of which I have some experience, or, more importantly, in a referendum—is very important. It is essential therefore that, whichever party is in power, the electorate perceive referendum questions to be fair and above board. In 10 or 15 years' time, we may have a referendum in Scotland on whether to be independent or to maintain the United Kingdom, if I can call it that. As the hon. Member for South Staffordshire said, there is nothing worse than a loaded question. We are dealing with a smart electorate, who are much more intelligent than some hon. Members—none of whom are present today, of course—believe. Irrespective of political differences, we all owe it to the electorate to ensure that, when we conduct referendums at regional level, or in Northern Ireland, Scotland or Wales, we can say, "Yes, a fair set of questions is being asked." I agree with the Opposition that the commission could vet the questions that are to be asked in a referendum by a party in power.

Mike O'Brien (Labour, North Warwickshire)

The debate, including the Freudian speech of the hon. Member for Hazel Grove (Mr. Stunell), has been useful. However, I do not necessarily share his cynical view that politicians hold on to power. It could be argued that, given our unwritten constitution and the power of the Executive, abstinence from the abuse of power might sum up the whole of British constitutional history, at least in recent centuries. Perhaps we could argue that academically on another occasion. 4.15 pm I am sorry that the hon. Member for Tatton (Mr. Bell) feels under-consulted on the Bill. If he wants to meet to discuss its terms and how it might be better framed, I should be more than happy to do so. The hon. Member for South Staffordshire (Sir P. Cormack) made a well-argued case for the question in any referendum to which part VII applies to be set after consultation with the Electoral Commission. Let me say up front that the Government want to reflect on that proposition. I agree that the commission must be seen as impartial and above the fray, and that it is possible to frame questions to achieve a certain result. I welcome the fact that amendment No. 45 requires that a referendum question should be determined after consultation with, rather than on the recommendation of, the commission. It must be right that it is ultimately for Parliament to decide the wording of a referendum question. Part VII does not replace the need for separate legislation to authorise the holding of a particular referendum. That legislation will need to determine in particular the wording of the question and the date of the poll. Those are important issues for Parliament to consider.

John Bercow (Conservative, Buckingham)

I note that the Minister said that, ultimately, it should be for Parliament to decide the question. Does he accept that if the commission recommended a particular question and the Government of the day sought to persuade Parliament to accept an alternative form of words, the least that the Government would owe Parliament and the British public would be an explanation of their reasons for rejecting the recommendation?

Mike O'Brien (Labour, North Warwickshire)

The Government listen carefully to Parliament and the Home Office has shown repeatedly that it listens to debates in the House with care and notes the strength of the arguments. We reflect on those arguments and are prepared to change our view if they are good, but sometimes they are not so good and we tell people where to get off. If the wording of the question were left entirely to the Electoral Commission to determine, the House would be denied its proper role, which it should retain. The Government, therefore, would not agree to the question in a referendum being set or approved by the commission. However, consultation is an entirely different matter. Given the commission' s wider role in ensuring fair play in the conduct of a referendum, I can see merit in the argument made by the hon. Member for South Staffordshire. However, it is worth noting that the Neill committee made no proposals on the commission's involvement in setting a referendum question. That matter was considered in the November 1996 report of the Commission on Conduct of Referendums, chaired by Sir Patrick Nairne, but even it recognised that the wording of the question had to be for Parliament to decide. I have listened carefully to the points made in the debate and we want to reflect on the matter. The hon. Gentleman made some sound arguments in favour of the proposition and we shall consider them. In the meantime, I ask him not to press amendment No. 45. The proposal in amendment No. 46 would not fit properly into our constitutional arrangements or the scheme set up by the Bill. Other countries have systems in which the Government or a certain number of citizens can require a referendum to be held. Alternatively, the constitution of the country concerned may require a referendum to be held to approve any constitutional change. In such a system it would be natural, and probably inescapable, for all the arrangements for holding the referendum to be put in the hands of a body equivalent to the Electoral Commission, which we are establishing in the Bill. However, our system is not of that variety. It has almost invariably been the practice in the past, and seems likely to remain so in the future, that Parliament legislates for a particular referendum on a case-by-case basis. The proposed date on which the referendum would be held is an integral part of the proposition that is presented to Parliament, which Parliament adopts, alters or rejects. There is no denying that the date on which a referendum is to be held is itself a political matter. Having it on one date may have consequences that having it on another date would not. Passing that matter over to the Electoral Commission would not transform it from a political to an apolitical question; it would simply mean that a decision of a political character, or at least with heavy political overtones, was being taken by the Electoral Commission rather than by Parliament. That would open it to criticism from political parties, which may feel themselves advantaged or disadvantaged in some way. We do not think that that would be a sensible arrangement or would benefit anyone. This issue would be all the more difficult for the Electoral Commission because the amendment provides no criteria to guide it. The only guideline is the one already in the Bill, which provides for a minimum 28-day interval following the determination of applications for designation. The amendment does not, for example, say that the poll is to be held as soon as is practicable thereafter. What are the Opposition after? Are they seeking a device to delay a referendum taking place? Well, we shall see. They say that the amendment is to prevent the Government of the day from putting into a Bill a date for a referendum that will best suit their own purposes. However, with no criteria to guide the commission, the obvious implication is that it is expected to ensure that the date of the poll does not unduly favour the Government side, which means that, relatively speaking, it favours the other side. That is asking too much of the commission, and is wrong in principle under our system. Trying to take what is, in many ways, a political decision out of the realm of political debate is not a sensible approach.

John Bercow (Conservative, Buckingham)

So the Government are motivated by charity.

Mike O'Brien (Labour, North Warwickshire)

The Government are motivated by the highest standards of national interest and concern. Clause 101(3), to which amendment No. 48 relates, is concerned with the possibility that a referendum question may admit more than two possible outcomes. In such circumstances, it may be open to question whether a permitted participant should be designated in respect of each of the possible outcomes. It is conceivable, for example, that one or more of the possible outcomes would be nonsensical. An example of that was the 1997 poll on Scottish devolution, in which voters were presented with a two-part ballot paper and asked, first, to indicate whether they agreed or disagreed that there should be a Scottish Parliament, and, secondly, whether they agreed or disagreed that such a Parliament should have tax-varying powers. There were four possible outcomes, at least one of which—no to a Parliament but yes to giving it tax-varying powers—was meaningless in terms of the referendum campaign. Subsection (3) sets out a mechanism whereby it could be directed that no permitted participant be designated in respect of such an outcome. The question is how such a decision is arrived at. Subsection (3) requires that the commission be consulted. As amended by amendment 48, such an order could be made only on the recommendation of the commission. In practice, it seems very unlikely that there would be much difference either way. It is difficult to envisage the circumstances in which there could be any real dispute as to whether a particular outcome merited the designation of a permitted participant. In principle, I believe that this subsection should remain as it stands. The provisions of part VII start from the premise that the key decisions on whether and when a referendum is held, and the question of policy that the referendum is intended to resolve, are matters for the Government of the day and for Parliament. It is for the commission then to oversee the conduct of the referendum to ensure that, above all, it is fair. Although it is entirely right to consult the commission on the matter, it does not seem right to take that decision entirely out of the hands of the political arena, of the Chamber and of Parliament. I stress the role of Parliament in deciding these matters, as any order made under clause 101(3) is subject to the affirmative resolution procedure. In view of what I think the hon. Member for South Staffordshire would agree was a sympathetic response to the amendments—at least on amendment No. 45—I hope that he will feel able to withdraw them.

Patrick Cormack (Conservative, South Staffordshire)

Ah! The Minister says he hopes that I will feel able to withdraw "them". Well, I am perfectly content to withdraw amendment No. 45. The Minister has given a sympathetic and understanding answer; I believe him to be a man of his word, and I expect an amendment along the lines of amendment No. 45, giving the commission the role that he and I both want it to have, to be tabled on Report. If my inference is correct, we shall not press the amendment to a Division at this point, but, if the Minister does not table a similar amendment on Report, we shall do so then.

Mike O'Brien (Labour, North Warwickshire)

I want to reflect and consider. Obviously, consultations will be necessary. We spoke earlier of the need to consult devolved Executives, for instance. I am not giving the hon. Gentleman an undertaking; I am saying that I am very sympathetic, but wish to consider the matter further and undertake the proper consultations that I am sure he would want me to undertake before proposing such a measure.

Patrick Cormack (Conservative, South Staffordshire)

It is early in the afternoon, and I am a man of infinite charity. I am therefore prepared to accept what the Minister has said in regard to amendment No. 45, but I must make plain our belief that my point—echoed, briefly but eloquently, by the hon. Members for Tatton (Mr. Bell), for Hazel Grove (Mr. Stunell) and for Greenock and Inverclyde (Dr. Godman), and by my hon. and silver-tongued Friend the Member for Buckingham (Mr. Bercow) in his interventions—is important, and that the amendment is important. We want to return to the issue on Report if the Minister does not, and it is only right to give the Committee notice of that. The Minister gave an elegantly forensic response to amendment No. 46, but a response that was wholly unsatisfactory to us. There are worries about the timing of referendums, and the Minister was honest enough to admit that timing can influence outcome. Let us look back to the two constitutional referendums that took place in the autumn of 1997. I cannot prove and do not know, but strongly suspect, that, had Wales voted on the same day as Scotland, the result might well have been different. A week later, the result was too close to call: it was so marginal as to be equivalent to a result demanding a recount in a marginal seat. We had the tiniest possible majority for the Welsh Assembly. Nothing that I say should be taken to mean that I want to rerun that referendum. Constitutionally speaking, we of course accept that a majority is a majority, and we are doing all in our power to make the Welsh Assembly work; but the concept was not embraced with universal enthusiasm in the Principality. Half the people voted, and of those, nearly half said that they did not want it. I think that, if people had not been to some degree influenced by what I accept was a much more decisive result in Scotland in the previous week, we might well have seen a different result in Wales. That experience underlies our amendment. The Minister sought to argue, in a pleasant and plausible manner, that the commission should have no say in the fixing of the date, but we nevertheless believe that it should have a real part to play, for all the reasons that I sought to advance in support of amendment No. 45—reasons with which hon. Members on both sides of the Committee agreed. We want the commission to be widely respected throughout the country. We want it to have a real role, which we think can be complete only if it can influence both the wording of the question and the date. 4.30 pm Therefore, although I am prepared, for the reasons that I have advanced, to withdraw amendment No. 45 and will not press amendment No. 48 to a vote because the argument is finely balanced. We do not agree with the Minister, but we do not seek to divide the Committee on every amendment. We believe that there is a point of real substance in amendment No. 46. The Committee should be given the opportunity to vote on it. At the appropriate time, therefore, I would wish to call a Division on amendment No. 46. I beg to ask leave to withdraw the amendment.

REFERENDUM PERIOD

Dominic Grieve (Conservative, Beaconsfield)

I do not want to take up the Committee's time, but we should widen the discussion a little to look at what clauses 96 and 97 contain, in the absence of amendment No. 46 which we discussed earlier. Clause 97 is of particular concern. As the Committee will be aware, the whole purpose of the legislation is to establish a set of ground rules. It provides for fairness between the respective parties participating in a referendum campaign. As some of the clauses concern the provision of funding to one side or another, fairness is essential—above all, fairness for a campaign to get off the ground to put its case. Clause 97 is linked to clause 96. There are two provisions. Clause 96 provides for a period not exceeding six months from when the draft of an order comes in to the date of a poll, but, crucially, clause 97 provides that the date so fixed shall not be earlier than 28 days after the end of the period in which the various parties participating in the campaign have been identified. If it were taken to its absolute conclusion, the 28-day period would be very short. After designation, I would find it hard to imagine getting a national campaign off the ground with funds in only 28 days. I think that the Minister would agree that that is the absolute minimum period in which a referendum campaign could properly take place and be described as fair, yet clause 97 will not apply to a referendum where the date of the poll is specified in the Act. The explanatory notes put it in a way that the Minister might say is a little disingenuous: Nonetheless, the expectation in such cases will similarly be that there will be at least 28 days for campaigning following the designation of campaign organisations. That fills me with some concern. We are enacting complex legislation, some issues in which have taken up much time upstairs in Committee and which we have tried as best we can to speed through, yet we are left with a clause—clause 97—that the Minister would have to agree could be circumvented at will by a Government who wished to do so. All they would have to do would be to designate in the Act that the period concerned was reduced to 10 days, five days or four days. What is the purpose of the Bill if it is not to set a fair framework? Yet, as things stand, what I have outlined could easily happen: it will not matter how much funding is provided to the campaign that the Government do not like because, in reality, the campaign will never have an opportunity to get off the ground. I should therefore be grateful if the Minister could comment on that issue as we debate the two clauses, but particularly clause 97. It might also give him pause for thought in relation to amendment No. 46, to which my hon. Friend the Member for South Staffordshire (Sir P. Cormack) spoke earlier and which was dismissed rather out of hand by the Minister as being "unnecessary". The Minister said that those are political decisions—of course they are political decisions—but the whole purpose of the legislation is to remove party politics from, and introduce a note of fairness into, proceedings.

Michael Spicer (Conservative, West Worcestershire)

I am listening very carefully to my hon. Friend's comments. I wonder whether his interpretation of the Bill is such that he believes that the 28-day period specified in clause 97 is relevant also to the powers that the Government would have to intervene and to make their case? Is it part of the quarantine period that the Government would have applied in communicating their own point of view? If so, such a period is not only very short, but highly relevant.

Dominic Grieve (Conservative, Beaconsfield)

My hon. Friend has a good point. The clauses are complex, but the Minister may care to enlighten us. Certainly there is a whole series of mechanisms of interlinked timings. Part of that is the quarantine for the Government, which would run up to the time of the referendum. I would assume, therefore, that that is the time in which the umbrella organisations are up and running and the Government have no part in the proceedings. If I am wrong about that, the Minister will enlighten me. The point I was making—my hon. Friend has rightly just added another element to it—is that, if in fact we are leaving open the opportunity for the House or a Government using their majority to specify in an Act a shorter period, one might well ask why on earth we are being bothered with passing this complicated legislation with all these rules. Without so much as altering this Bill or having a debate on whether its provisions should be changed, it would be possible for a Government who wished to do so completely to circumvent the purpose that the legislation is designed to achieve. That is a matter of concern. Why bother to have the Electoral Commission's input into referendums if the Government could, with a short wave of the hand, simply introduce a referendum Bill stating that these clauses will not in reality have effect?

Mike O'Brien (Labour, North Warwickshire)

We are considering clauses 96 and 97. In clause 96, we are ensuring that we establish a basis for subsequent clauses, in part VII, such as those providing for the designation of umbrella groups and for expenditure restrictions. Those later clauses lean heavily on the concept of there being a defined referendum period in which the provisions will apply. The purpose of clause 96 is to establish how the referendum period is to be calculated. The main provision is in subsection (4) and applies to the great majority of cases in which the date of a referendum poll is specified in a Bill. It is an important point. Parliament will decide the date of the great majority of referendums. Therefore, the length of time for a campaign will be a matter for political discussion in this place. If a Government were to seek to introduce a Bill attempting unfairly to constrain the period for the public to consider a debate, the public would make a judgment on the integrity and proper behaviour of that Government. Anyone who sought to manipulate the electorate in quite that way would undoubtedly be judged by the electorate.

Dominic Grieve (Conservative, Beaconsfield)

Is it not the purpose of this legislation to impose a little fetter on the Government's ability to do that, or have I completely misunderstood why I have spent the past four weeks upstairs in Committee?

Mike O'Brien (Labour, North Warwickshire)

The hon. Gentleman knows well—he is a lawyer; he knows perfectly well—that the Bill cannot bind a future Parliament or prevent another Bill from being introduced that makes entirely different provision. He also knows that any Government who introduce legislation on a referendum will in all probability be raising a highly politically charged issue, and that the electorate will be very well briefed on the way in which the Government are handling the matter. If it is clear that a Government are seeking to fix the referendum—in other words to fix the voters—the electorate will not be terribly pleased. Any Government would be well aware of that. Any future Bill providing for a referendum could override this Bill. However, we believe that a minimum campaigning period should be 28 days. General election campaigns can be of a similar length. In the past—although not in 1997—Prime Ministers have often concluded that 28 days is highly adequate for the electorate to decide which way they want to vote in a general election. I suspect that that view has not escaped the minds of Conservative Prime Ministers in the past couple of decades.

Patrick Cormack (Conservative, South Staffordshire)

The hon. Gentleman puts his case with disarming charm, but he knows that when a Government have a huge majority, as his Government currently enjoy, they can get away with whatever they want. We do not have a written constitution providing for qualified majority voting and a two-thirds vote in Parliament before a constitutional issue can be decided. If the Government decide that they are going to do something and they have a majority such as the present Government's, they can do it. That is why we are anxious for amendment No. 46, which we shall shortly press to a Division, to be inserted in the Bill and why we take the line that we do on these clauses.

Mike O'Brien (Labour, North Warwickshire)

That brings me back to the first point that I made in reply to the hon. Member for Hazel Grove (Mr. Stunell). I disagreed with his cynical view about politicians and suggested that it was arguable that the history of our unwritten constitution was one of abstinence from the abuse of power by various Governments, taking cognisance of the fact that they are answerable to the electorate who will form a view about how they behave. They have to behave reasonably and deal with the electorate in a way that commands broad support. Every Member of Parliament is aware that a Government's majority—and their seat—can be taken away by the electorate. The majority in the Commons may be big or small, but even with a majority of one, a Government have power if they can carry the House. The size of a majority is not the issue. The issue is whether a Government can command support. Every Member of Parliament has to deal with their constituents and will be aware of the how the public will view the Government if the Government seek to abuse their power. One can hold all sorts of paranoid views about any Government, but Governments have to manage the political debate in a way that commands support in the country, as we seek to do. No doubt, in their own way, previous Governments sought to do the same, however well they have managed it. No Parliament can bind another. Some of the concerns expressed by Opposition Members are not of the real world.

Andrew Stunell (Liberal Democrat, Hazel Grove)

The Minister has missed the central point of the argument. Politics in this country is comparatively free of the abuses seen in some other democracies—and certainly in non-democracies—not because we have a better class of politician, but because we have a strong framework of regulation. The point of the Bill is to ensure that we have a strong framework for referendums, which are a new constitutional development. We are good because we are made good, not because we are good by intention. I hope that the Minister understands that that is how the system works. It is important to get these rules and regulations right, so that in 10 or 15 years we can still say the same thing.

Mike O'Brien (Labour, North Warwickshire)

I am afraid that the hon. Gentleman has not quite understood the nature of the debate between the two Front-Bench spokesmen about whether everything has to be in the Bill so that it can become the basis of all future referendums. The reality is that Parliament makes laws. We do not simply have a system of regulations; we have a Parliament that is answerable to the electorate and a Government who have to respond to the electorate and are ultimately dependent on the electorate for their future.

Richard Shepherd (Conservative, Aldridge-Brownhills)

Will the Minister give way?

Mike O'Brien (Labour, North Warwickshire)

I shall give way when I have finished this point. Conservative Members have suggested that the Bill must somehow cover everything. That is not necessary. We have to ensure that the Bill provides a basis, a template or a foundation for future referendum campaigns so that, broadly speaking, we know how they should be conducted. The detail will be decided by the House in the normal way—by the passing of a Bill. The broad-based political debate will take place then. That is why the concerns that have been raised about clauses 96 and 97 are unfounded. Most of the arguments were based on the idea that a referendum campaign will last for 28 days. As I have said, 28 days is not a short time for a general election campaign. The Bill envisages that, at least in normal circumstances, there should be at least a further 14 days for preparing the various umbrella groups that might be needed. As there will probably be a fixed date, there will be months of lead-in time to any referendum. Referendums do not appear from nowhere. Many of them have gestations of many years. Indeed, it is arguable that we are now into a long gestation period in respect of deciding whether to join the single currency. Almost invariably, there is a long time to consider such issues. The hon. Member for Aldridge-Brownhills (Mr. Shepherd) asked me to give way.

Richard Shepherd (Conservative, Aldridge-Brownhills)

I would rather make my own speech.

Michael Spicer (Conservative, West Worcestershire)

rose—

Mike O'Brien (Labour, North Warwickshire)

Then I shall give way to the hon. Member for West Worcestershire (Sir M. Spicer).

Michael Spicer (Conservative, West Worcestershire)

Will the Minister explain the Government quarantine period? Are the 28 days the period during which the Government may not interfere, get involved financially or proselytise? Does he envisage a further period, or will he say that that is a matter for a future Bill, in which case what is the point of this one?

Mike O'Brien (Labour, North Warwickshire)

The quarantine period is covered later in the Bill, when we shall debate whether the Government could use their influence over civil servants. I must be careful what I say as I am conscious that you will rule us out of order, Mr. Martin, if we discuss a clause that we have not reached. We shall have the opportunity to debate the quarantine period, but our view is that it should be the same as it is during a general election campaign. It has never been a matter of great controversy in the past and I suspect that it need not be in future. We believe that clauses 96 and 97 provide a framework. They do no more than that, and issues relating to the conduct of future referendums will be dealt with at the time by legislation that will determine the detail of those referendums.

Richard Shepherd (Conservative, Aldridge-Brownhills)

The Minister is quite right to say that Governments come and go and that the British public can take a view on whether they wish to continue with an Administration. The 28 days may be appropriate for that. However, the Minister will also be perfectly well aware that referendums are an attempt at a permanent settlement, and are therefore different in character from general elections. I cite that fact that because my party—that is why I support it so vigorously—is concerned about the position of the pound. In the treaty that will be put to the British people—if the Government fulfil their pledge and the conditions are met—it is intended that the judgment taken by the British electorate should be irrevocable and for all time. "Irrevocable" and "irreversible" are the actual words of the treaty. In a general election, the British people can say whether they wish to continue to be governed by new Labour, but after a referendum the terms are set in concrete. The point that my Front-Bench colleagues have made is valid, and the Minister should reflect on his counter-argument that a referendum campaign is equivalent to a general election campaign, because of the nature of the referendum decision. That is why I support my right hon. and hon. Friends on the issue.

DATE OF POLL

PERMITTED PARTICIPANTS

Robert Walter (Conservative, North Dorset)

I beg to move amendment No. 47, in page 62 line 1, after "individual", insert— `registered in an electoral register'. The purpose of the Bill is to introduce into our political life a sense of financial propriety and of transparency, and to raise the standards of political life. One of the purposes underlying the Bill is to remove foreign donations from our political life. The clause as drafted allows an individual—without qualification—a company, or an unincorporated association to be a permitted participant in a referendum. Such an individual, as a permitted participant, could spend £500,000, out of his own pocket, in a referendum campaign, pursuing the case of one side or the other. There are a few leaks in the Bill and that is one of them. The Government plugged it in their original draft of clause 48, which covers permissible donations to political parties. The definition of permissible donors includes an individual registered in an electoral register". Neill's original recommendation for that provision was that it should also include those who are eligible to be put on an electoral register in the United Kingdom". In Committee, my hon. Friend the Member for Beaconsfield (Mr. Grieve) and I tabled an amendment to try to reincorporate the original Neill recommendation, but it was not accepted because the Government wanted to keep the original wording. Clause 81 deals with those who could be registered third parties in an election campaign. In Committee, we found that a third party could simply be an individual. Again, my hon. Friend and I tabled an amendment to expand the provision to include the words an individual registered in an electoral register". That is the crux of amendment No. 47. I imagine that the Parliamentary Secretary, Privy Council Office will respond to the debate. I do not want to make his speech for him, but I shall refer to his answer, which he gave me outside the Committee, as to why our amendment to clause 81 in Committee was—and possibly why this amendment will be—unacceptable, even though it would have plugged a worrying leak. The Minister's letter to me stated: Turning to clause 81 you correctly inferred that it was possible for a foreign national to be a recognised third party in an election. As I indicated in Committee we have not sought to prohibit foreign nationals resident in the United Kingdom from spending their own money in their own name in order to express their opinion and by extension influence the outcome of an election. He then came to the crux of the matter. The letter continued: To do so would be a contravention of Article 10 of the European Convention on Human Rights (which provides for the right to freedom of expression including the freedom to impart information). It is one thing to prevent a foreign national donating money to a political party or other organisation to help it to further its political objectives, but it is quite another thing to place absolute restrictions on the ability of a person to publicise his or her own views. The problem with that interpretation of the European convention is that the people mentioned in the clause are not those who spread their thoughts around the country in the furtherance of a political idea without supporting a specific candidate for election. The clause refers to registered permitted participants who may be on one side or other of the question on the referendum paper. They are much more closely involved in the process and in securing the outcome of the referendum. If we draw an election analogy, it is almost as though they support a specific candidate in a general, Assembly or parliamentary election. I will be interested to find whether the Minister will again pray in aid the European convention on human rights. I am not sure whether a permitted participant even has to be resident in the United Kingdom. He could simply stay at Claridge's or the Savoy for the duration of the campaign and use the hotel as his registered office with the Electoral Commission. He could spend £500,000 taking out advertisements in national newspapers in favour of the yes or the no vote in a referendum. If he got a few chums to do the same thing, we could be talking about a significant amount of money from foreign sources being committed to one side or the other of a referendum campaign. The Bill clearly seeks to exclude foreign financing of our electoral and political processes. Therefore, I suggest that the Government should consider the amendment seriously if the Bill is not to develop an enormous leak, with parcels of up to £500,000 coming into our electoral process from foreign sources. In other circumstances, such as the financing of political parties or of individual candidates at general elections, that would be considered impermissible. To stick with the spirit of the Bill and the Neill report, which is to exclude foreign money from our electoral process, I commend the amendment to the Committee. It would add after the word "individual" the phrase registered in an electoral register". That would ensure that permitted participants in our referendum campaigns are citizens of the United Kingdom, the Commonwealth or the Irish Republic and are part of the United Kingdom electoral process to the extent that they are registered in an electoral register and prevent foreigners from distorting the result of a referendum in this country.

Michael Spicer (Conservative, West Worcestershire)

I wish briefly to support my hon. Friend's argument. If the Bill is left untouched, it will contain the leak that he described and foreign people might become involved in our referendums. Under a wicked Secretary of State, that might mean the foreigners whom he likes best for the purposes of a campaign. Clause 98(1)(b)(i) refers to an individual by whom a notification has been given under section 99". Sub-paragraph (i) is the only one referred to in the explanatory notes, but sub-paragraph (ii) adds in the case of whom any other prescribed requirements are satisfied". The Bill then states: for this purpose 'prescribed' means prescribed by regulations made by the Secretary of State after consulting the Commission. 5.15 pm We have here the old problem of the Secretary of State having far too many powers and the commission far too few. That is by the by, but unless the amendment is made or assurances are given by the Government, not only will foreigners be able to take part in referendums, but the Secretary of State will be able to choose which foreigners he will allow to take part and which he will ban from taking part. The amendment seems innocent and unimportant but it could be very important. I hope that the Government can reassure us.

Paddy Tipping (Labour, Sherwood)

As the hon. Member for North Dorset (Mr. Walter) said, the amendment covers ground that the Standing Committee has already covered a couple of times, particularly on clause 81, when a similar amendment was discussed. He and the hon. Member for West Worcestershire (Sir M. Spicer) said that they are worried because there is a leak in the Bill. I shall try to reassure them on the point about the Secretary of State. In a referendum campaign, participants who want to spend more than £10,000 will have to have a dialogue with, and be recognised by, the Electoral Commission. That recognition will then be prescribed by the Secretary of State, so whether he is wicked or benign, he will act on the commission's advice, and it is not a question of him prescribing his friends or enemies.

Michael Spicer (Conservative, West Worcestershire)

Advice will be given, but it may not be accepted, and ultimately the Bill leaves it to the Secretary of State to decide whether to take the advice.

Paddy Tipping (Labour, Sherwood)

The prescription is recommended by the commission and there is no intention that the Secretary of State should not take the prescription. I can see that the hon. Gentleman is unhappy with that answer, and while we are still in Committee, I shall have another look at the wording of the Bill. He makes a fair point that the Secretary of State should not be able to prescribe his friends and enemies. I am confident on the point, but I shall consider the wording. The hon. Member for North Dorset said that he was not going to make my speech for me, but in effect he did when he took the Committee through my letter to him of 12 February. For the record and for members of the Committee, I shall repeat what I said. I stated: we have not sought to prohibit foreign nationals resident in the United Kingdom from spending their own money in their own name in order to express their opinion and by extension influence the outcome of an election"— or referendum. I went on to say: To do so would be a contravention of Article 10 of the European Convention on Human Rights (which provides for the right to freedom of expression including the freedom to impart information). The hon. Gentleman said that there is a difference in the Bill between clause 48, which we have discussed and which deals with money being given to a political party by a foreign source, and this part, on which I am advised that article 10 would prohibit the Government stopping foreign donations or involvement in a referendum campaign.

Robert Walter (Conservative, North Dorset)

Will the Minister give a little more clarification on that point? If article 10 of the European convention prohibits such action under the right to freedom of expression, would it not prohibit the Government limiting the expenditure to £500,000?

Paddy Tipping (Labour, Sherwood)

I am not exactly sure what point the hon. Gentleman is making. Under the Bill, a foreign national—or, to use his phrase, a foreigner—could participate in a referendum by incurring expenses up to any sum that he desires. The hon. Gentleman presses me on article 10 of the convention. We have looked at the issue again since he raised it in Committee upstairs, and I shall take him through some more of the legal advice. The very same issues were examined by the European Court of Human Rights in the Bowman judgment, which, as he knows, informs part of the Bill. The implications of the judgment are considered in paragraphs 10.51 to 10.71 of the Neill report. The court held that the existing £5 limit on third-party expenditure in section 75 of the Representation of the People Act 1983 was so low that it amounted to an unjustified restriction on freedom of expression. I am advised that the court would undoubtedly take the same view of any prohibition or undue restriction on foreign nationals resident in the UK incurring controlled expenditure under part VI or referendum expenses under part VII. The hon. Gentleman described—I shall not argue with him—a foreign national who is resident in the UK spending large sums of money in the referendum campaign. That clearly is a possibility. How far it will translate into reality and whether, if I may use the phrase, the person would bring his mates to participate, is moot. Legal advice is very clear. The Government have sought to—and through clause 48 will—stop political parties receiving money from foreign sources. I think that the phrase that we used upstairs was firetight or watertight; there was some doubt about the correct phraseology. The possibility has been plugged and secured. I sense the hon. Gentleman's unhappiness on the matter. I feel some uncomfortableness across the Chamber, but I have presented the reality. Article 10 prohibits us accepting the amendment as drafted. I have tried to reassure him, but I suspect that I have not. Having discussed the matter under clause 41 and clause 81 and in this debate, I shall not be able to reassure him further. He may wish to return to the issue.

Robert Walter (Conservative, North Dorset)

The Minister has not reassured me. In fact, as the debate went on, I became more worried by the provision. It appears—he has not said anything to reassure me otherwise—that although we can limit the amount of money that an individual permitted participant who is a UK citizen spends to £500,000, a permitted participant who is not a UK citizen and not on the electoral register could spend what he liked. So, foreigners—I use the term advisedly, because we are talking about foreigners participating in our democratic process—may register as permitted participants and spend whatever they like on ensuring the outcome of a referendum that they, rather than United Kingdom citizens, want. Indeed, under the European convention, they may not even have to register as permitted participants. I suspect that I should be taking this debate elsewhere; this Bill will not overrule European Court judgments or supersede the treaty that established the European convention on human rights. What we have discovered is a leak. Although we can control the amount of money given to political parties, we cannot control the amount spent by third parties in the political process, or the amount spent by permitted or even non-permitted participants in a referendum campaign.

John Hayes (Conservative, South Holland and The Deepings)

Is not that ironic, given the fact that there is likely to be heightened interest from abroad in elections in this country, and certainly in referendums? Surely we should be exerting more control and having more sensible and enlightened regulation, rather than freeing up the process. That is nonsense. Are we not travelling in entirely the wrong direction?

Robert Walter (Conservative, North Dorset)

I am grateful to my hon. Friend, who put the case more succinctly than I had. The Bill is supposed to enable us to clean up our act with regard to foreign donations, yet outside the registered political parties and the candidates nominated in elections, foreigners can come into the country and spend whatever they like to achieve the outcome of an election or referendum that best suits them. We may have a referendum in the not too distant future, although I suspect not during this Parliament, when foreigners may well have a vested interest in the outcome, and may want to make a contribution to the debate in the form of large cheques, while watching the outcome from their suite at the Savoy. The situation is worrying, but the objections that I have raised are outside the scope of the Bill, so I reluctantly beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Question proposed, That the clause stand part of the Bill.

Dominic Grieve (Conservative, Beaconsfield)

The Committee has noted that a series of amendments dealing with the participation of European Union institutions was not moved. In view of the Minister's comments in reply to my hon. Friend the Member for North Dorset (Mr. Walter), one can understand why. The Minister would reply that such a fetter on the activities of any organisation was redundant, because although such an organisation could not become a permitted participant under our rules, it could continue as an independent operator to spend any amount of money to further a particular cause. I am sure that the Minister will confirm that. Some interesting questions arise, which it may be worth flagging up in the debate on clause 98 stand part, as they will feature later in our deliberations. Clause 111 places a ceiling limit on expenditure by the permitted participants in referendum campaigns. The aim is to prevent a free spending competition to determine the outcome of a referendum. We did the same upstairs in Committee in relation to elections. It is an important issue. If I understand correctly the answers that the Minister gave my hon. Friend the Member for North Dorset on amendment No. 47, it is clear that there is no mechanism whereby a ceiling can be imposed on spending money to influence a referendum result. All people need to do if they fail to become a permitted participant is to become a loose cannon participant. A foreign organisation cannot be prevented from doing that; it can spend any amount of money it likes. Mr. Martin, the House must face the inequalities that such a system is likely to introduce.

Graham Allen (Labour, Nottingham North)

Mr. Martin has gone.

Dominic Grieve (Conservative, Beaconsfield)

I apologise, Sir Alan. You appeared in the Chair so magically that I was not as conscious of your arrival as I should have been. Let us take an example that the Minister might consider fair. Let us consider a referendum that involves a national interest and an international dimension. One side has no international support, and its members would say that they stood for the national interest; the other side is backed by an international interest. The national participants will be fettered; they will have to be permitted participants. Those who are not will be unable to contribute. The national participants will also be fettered in the amount of money that they can spend because clause 111, which is intimately linked to clause 98, places a ceiling on their expenditure. There will be no such problem for the international participants. Spending will be capped for the national campaign and the permitted participants who are based in this country, while the sky will be the limit on the expenditure incurred by international participants, whose impact on a referendum campaign could be as great as that of national participants, in terms of taking out advertisements and distributing literature. Will the Minister tell the Committee how the clause will work in practice? His reply to my hon. Friend the Member for North Dorset calls into question the clause and the provisions that deal with referendums. We are about to create an extraordinarily unequal system. Far from putting a ceiling on expenditure and properly regulating participants, we will create a system that regulates some participants, who have the misfortune to be British nationals, and allows international participants to do as they please. I wonder whether the Government have taken that on board. I appreciate that we are considering a difficult subject and that the creation of an unequal system was not the intention when the Neill committee reported or when the Government first considered the measure. However, a coach and horses have been driven through the Bill's provisions on referendums. The problem is different from those we faced over elections. I would therefore be grateful for the Minister's view on whether clause 98 should remain in the Bill and on whether the Government will go back to the drawing board and return with fresh suggestions.

Julian Lewis (Conservative, New Forest East)

I want to reinforce the comments of my hon. Friend the Member for Beaconsfield (Mr. Grieve). When we considered other provisions in Standing Committee, we were worried about the framing of clauses that might be deemed to be motivated by the circumstances of a specific, wealthy individual donor. Today, we are considering a clause which could be regarded as tailor-made to allow the European Union, as an international body, to overwhelm completely, through the money that it spends on propaganda, the strict limits on such expenditure that the Bill imposes on individual parties that may campaign on the referendum question at issue. What would be the point of having such strict limits on the sums that the national parties on either side of the argument would be allowed to raise and spend—for example, in a referendum on the single currency—if the European Union, as an international institution and in support of those who wanted Britain to join, could outspend the whole lot of them put together, and multiplied by an untold factor? That would not only drive a coach and horses through the restrictions, but show up the entire system as skewed. At Prime Minister's Question Time a couple of weeks ago, I raised the issue of public money being spent by each side in a referendum campaign—for and against— and he went to considerable lengths to try to reassure me and the House that the system is fair. This country faces the possibility of a referendum on the single currency—which will determine what happens to our political and economic independence, perhaps irrevocably—and the parties are being told that they can spend only up to certain limits. However, the EU and its institutions could outspend the lot of them. I do not know why my hon. Friend the Member for Blaby (Mr. Robathan) and my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) were unable to move amendment No. 14, but I am sure that it has nothing to do with the merits of the case. If the Bill is to include meaningful provisions on referendums, the Minister must show the same consideration, fairness and concern on the Floor of the House as he manifestly showed in Committee—time and again, I am delighted to say.

Michael Spicer (Conservative, West Worcestershire)

My hon. Friends and I are not displaying paranoia and we feel strongly that the European Union would clearly have a strong vested interest in the outcome of a referendum on the single currency. There is no question about that, so the issue is whether it is right and proper for it to be able to become directly or indirectly involved—financially, in particular—in that referendum. If the clause is not amended or if the Government do not give us the assurance that they will think again, the EU could become involved in two ways. If it was a permitted participant, it would be allowed to spend up to the limit of £500,000 or whatever, which is unacceptable in itself, or it could stay out and, as it would not be a permitted participant, the restrictions in the Bill would not apply. That is particularly worrying because under these arrangements "prescribed" means prescribed by regulations made by the Secretary of State after consulting"; and the Minister has said that consulting means no more than that. The Secretary of State would not have to take the advice he was given and ultimately would determine who was and was not a permitted participant. He could decide not to allow the EU to be a permitted participant and, as my hon. Friend the Member for Beaconsfield (Mr. Grieve) said, it would be allowed an unlimited run of expenditure and involvement in the campaign from the sidelines. I am grateful to the Minister for saying that he will consider prescription and how it works—he was extremely helpful—and I hope that in this context, as in others, he will give the commission greater independence vis-a-vis the Secretary of State. However, that is a separate issue. I hope that the Minister will consider this point. Whatever side of the argument one is on, it clearly would be wrong for a body outside this country with a direct interest in the result to be allowed for one reason or another—there are at least two opposite reasons—to be a participant and deeply involved in a referendum under the terms of the clause. I hope that the Minister, in the spirit in which he responded earlier on this matter, will agree to consider this issue carefully; specifically, the question of not allowing the European Union to become involved directly or indirectly through companies or unincorporated associations, or by giving money on the side to permitted participants. That could completely distort a future referendum campaign—or referendum struggle—and it would be in the interests of democracy to consider this matter carefully.

John Hayes (Conservative, South Holland and The Deepings)

I want to refer particularly to the comment of my hon. Friend the Member for West Worcestershire (Sir M. Spicer) about the possible involvement of commercial organisations. Some multinational companies will have a vested commercial interest in the outcome of such a referendum campaign, and would have a great deal of money to commit to a campaign in their self-interest. I am particularly concerned that we are loosening the regulation in that respect, whereas we should be tightening it. This provision is expressly against the will of the Neill committee. All hon. Members who value democratic fairness and political decency will be intimately familiar with pages 160 to 170 of the Neill report. When Neill studied this issue, he referred to the 1975 referendum campaign, when we voted to stay in the European Union. The report explicitly states that the Britain in Europe campaign vastly outspent the National Referendum Campaign, by a factor of one to 20 … There is also the danger, if there is lavish spending on one or more sides, that the impression will be given that the Yes and No campaigns are trying to 'buy' people's votes. Buying people's votes is one thing, but the buying of people's votes by organisations which are outside this country, which do not necessarily have this country's national interests at heart and which may, in addition, have a commercial, financial or pecuniary interest in the outcome of any such campaign is entirely undesirable. It is certainly not in the spirit of the Neill report or in the best interests of good democratic practice in this country. I am surprised that the clause does not address the matters considered by Neill. I am also surprised that the Government want to be associated with a measure that will be perceived outside the House as a diminution of good, fair, democratic politics.

Desmond Swayne (Conservative, New Forest West)

It would be perverse for a Bill that is specifically aimed at excluding the possibility of foreign donations to our political process and which seeks properly to limit the permitted participants' ability to spend, at the same time to leave international participants entirely unrestrained in the amounts that they can spend. Those concerns are not academic: they are very real, given the prospect of a referendum early in the next Parliament. It certainly has not escaped my notice that the European Union is taking a more elaborate interest than hitherto—

Paddy Tipping (Labour, Sherwood)

I just want to clarify the point that the hon. Gentleman made. He said that individuals could give unlimited amounts of money. His hon. Friend the Member for Beaconsfield (Mr. Grieve) referred to that as well. I remind him that clause 110(2) makes it a criminal offence for anyone to give more than £10,000.

Desmond Swayne (Conservative, New Forest West)

I am aware of that provision in clause 110. I was more concerned about institutions, such as the European Union, than about individuals. As we have now raised the prospect of a referendum, it is clear that the European Union is taking more than a close interest in the politics of participant member states. 5.45 pm Let me say in passing that I support the British Government's view of recent events in Austria, and therefore, by implication, the view taken by most other European member states. I am, however, deeply alarmed by the view of those events taken by the European Commission. Members of the Commission are, of course, civil servants. My fear is that a similar interest will be taken in any referendum that we might hold in regard to our own national interests, especially a referendum on whether we should join the single European currency. The issue will undoubtedly be of great interest to the European Union, and I very much fear that it will be able to spend without limit in attempting to influence us.

Julian Lewis (Conservative, New Forest East)

Spend our money, that is.

Desmond Swayne (Conservative, New Forest West)

Indeed; but there will be those who spend their own money as well. My hon. Friend the Member for South Holland and The Deepings (Mr. Hayes) mentioned companies, and we already know that companies—foreign companies—have been lining up on both sides of the argument, threatening us with the withdrawal of investment should we decide not to go into the currency, or with the prospect of uncompetitiveness should we decide to do so. Companies on either side of the argument might seek to put their money where their mouth is, and I do not believe that that would be healthy for the British democratic process—although I think that the totality of expenditure would be swamped by the European Union's potential to spend in this respect. Let me take the Committee a step further, to the prospect of another referendum. It would be entirely legitimate for us to hold a referendum on the question of continued membership of the European Union; it is, after all, some 25 years since we held such a referendum. I am sure that you, Sir Alan, like me, would not espouse some form of African democracy: "one man, one vote … once", which would not allow future generations to decide the matter. Clearly, such a referendum would be hugely significant to the European Union itself. What assurance can the Minister give that the Government have thought the issue through? What limit can be placed on the European Union's ability to spend what is, as my hon. Friend the Member for New Forest, East (Dr. Lewis) pointed out, our money, to influence our decisions on our national interest? These are hugely important issues, and I hope that the Minister will be able to reassure me.

Martin Bell (Independent, Tatton)

I shall be brief. I am aware that the Parliamentary Secretary, Privy Council Office, thinks that most Independents are Conservatives in disguise. This is rather embarrassing for me, because there has been a great deal of merit in what Conservatives have said today.

Paddy Tipping (Labour, Sherwood)

I said that, in my experience, most Independents were Conservatives in disguise. There are, of course, exceptions.

Martin Bell (Independent, Tatton)

We hope to enlarge the Minister's experience shortly. The Bill and the Neill report are about purging the British political system of the corruption of money, and we should not need too much persuasion of the need for that. I envisage a difficult situation if a referendum is held binding the British people more or less in perpetuity. There appears to be an imbalance, in that money is flooding in from one side rather than the other.

Desmond Swayne (Conservative, New Forest West)

Is the hon. Gentleman aware of the bitter taste left in many mouths by the hugely disproportionate spending on the occasion of the 1975 referendum, when the "yes" campaign was able to outspend the "no" campaign by a factor of 20 to one?

Martin Bell (Independent, Tatton)

I am well aware of it. That is precisely the kind of imbalance that the Bill tries to address. No referendum will work, or will be seen to be democratic, unless the losing side accepts its validity: that is the test of a referendum, and we must ensure that the Bill meets it.

Paddy Tipping (Labour, Sherwood)

These points are extremely important. The first substantive point to make is that, in any referendum campaign, it will not be possible to ensure that both sides are equally balanced. There are discussions about that. Many hon. Members on both sides of the Chamber feel that, in fairness—

Julian Lewis (Conservative, New Forest East)

rose

Paddy Tipping (Labour, Sherwood)

Let me make just a bit of progress. Both sides should be evenly balanced, but we all live in the political world and we know that that will not be possible. Different organisations, individuals and participants will want to contribute, and one side of the argument will try to develop resources. One of the Bill's provisions is to ensure that there is a second side—that the commission has resources to enable an opposition campaign to go forward—but we must recognise that individuals, parties and companies can collectively work together, spend and campaign. Given that, one of the Bill's important provisions is to place a cap on what parties, companies or individuals can spend. As the Neill committee put it in relation to the general election, it is a way to reduce the arms race.

Julian Lewis (Conservative, New Forest East)

I am glad that the Minister has given way at this point. What is the point of placing a cap on what the parties on either side of a referendum campaign can spend if the institutions of an international organisation such as the European Union do not face such a limitation?

Paddy Tipping (Labour, Sherwood)

I know that the hon. Gentleman gets excited by Europe—he tried to intervene after three or four sentences. I shall come to the point about the European Union, which is extremely important and excites the hon. Gentleman and some of his colleagues. We need to be aware of it, to look at it, to act rationally on it and to engage in some grown-up politics; we should not engage in yah-boo politics about the EU and the euro. The more mature consideration and debate on such matters are, the better. He and the hon. Member for West Worcestershire (Sir M. Spicer), who takes important, long-standing and strong views on European matters, are rightly making those points.

Dominic Grieve (Conservative, Beaconsfield)

rose

Paddy Tipping (Labour, Sherwood)

I give way before I get to the EU.

Dominic Grieve (Conservative, Beaconsfield)

Perhaps I can spare the Minister from necessarily focusing on the EU, which is but one example. There is a need for clarification and I should be grateful if the Minister could provide it as soon as possible. Clause 110 says that those who are not permitted participants will commit a criminal offence if they spend more than £10,000 to influence the campaign. Does that apply to foreign nationals or institutions, or would that breach the European convention on human rights?

Paddy Tipping (Labour, Sherwood)

It applies. I made the point—I will do so more substantively in a moment—to the hon. Member for New Forest, West (Mr. Swayne). I reminded him that there is a criminal offence. Anyone who spends more than £10,000 and is not a permitted participant is committing a criminal offence.

Robert Walter (Conservative, North Dorset)

The Minister will forgive me for intervening. He has used article 10 of the European convention on human rights. I have managed to get a copy from the Vote Office, and it says: Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers. Does that not mean that the Bill contravenes the convention?

Paddy Tipping (Labour, Sherwood)

No. It reinforces my points to the hon. Gentleman during an earlier debate. He has quoted article 10, which reinforces all my points. I know that he did not like those points, but it reinforces them. Article 10 guarantees rights and freedoms, but, as I have said, the £10,000 restriction applies to individuals. I shall not address amendments Nos. 14, 15 and 16, which were not discussed, but come to the issue of the EU. Hon. Members ask fairly: how we can ensure that the EU does not become involved? I say at the outset that this is an enabling Bill. It is not designed to set up a referendum on the EU. We are not at that stage yet, and we may not reach that stage for some time—if some hon. Members have their way, we shall never reach that stage. It is an enabling Bill that sets out the context—my hon. Friend the Under-Secretary of State for the Home Department called it a template. The Bill is not about a campaign for the euro. Hon. Members say to me, "How can we ensure that the EU does not become involved in these matters?" The EU can, of course, run information campaigns. Indeed, it does run such campaigns. Some of us may not like some of what it says in those campaigns, but it has the right to say it. When, or if, we get to a referendum campaign on the EU, the best way to be sure that the EU will not become involved is to look at the Bill and to be aware that it is a matter for the British people, the British Parliament and British parties. It is inconceivable that the European Commission, the European Parliament or others will become involved in a campaign because they know that it would be counterproductive.

Andrew Miller (Labour, Ellesmere Port and Neston)

My hon. Friend is coming to the point that I want to raise. If one followed the logic of Opposition Members' claims that the Commission is an unpopular institution and their figures on the popularity of the euro, it would play right into their hands if the Commission were to spend a penny piece on supporting such a change, so it is a complete and utter red herring.

Julian Lewis (Conservative, New Forest East)

rose—

Paddy Tipping (Labour, Sherwood)

The hon. Gentleman will have to intervene on me, rather than on my hon. Friend. I can see that he is getting excited again. We are a long way from the referendum campaign, although I am looking forward to it. I can see that he is looking forward to it, too; he can hardly contain himself. My hon. Friend, however, is right.

Julian Lewis (Conservative, New Forest East)

I assure the Minister that he has not seen me even begin to get excited. Does he expect us to think that he is naive enough to believe that the European Commission would directly stand up and dish out the currency, whichever particular brand it was using, and intervene in the campaign openly? Of course it would not. It would operate by channelling funds through all sorts of intermediate institutions and pressure groups. Bodies would spring up like mushrooms, apparently independent but covertly funded by our money to defeat the interest of our people.

Paddy Tipping (Labour, Sherwood)

I should hate to see the hon. Gentleman consumed by passion. We see him getting excited tonight, but, when he becomes passionate, that will be a sight for someone—perhaps behind closed doors. I shall develop my hon. Friend's point. Rather than being naive, we are fully aware of the political reality, which is that if the EU itself, or through its agents, companies or some shadowy organisation, became involved, that would work against it. It is absolutely clear that referendums, whatever the questions concerned, are about the British people deciding. That is the purpose of a referendum, and that is why we are going down this route. I know that that reassures neither the hon. Gentleman nor some of his hon. Friends.

John Hayes (Conservative, South Holland and The Deepings)

I have no desire to see either the Minister or my hon. Friend the Member for New Forest, East (Dr. Lewis) excited. The Minister underestimates the Committee's intelligence when he says that the Bill is only enabling legislation and not specific provision for a specific referendum. Surely he will acknowledge that the framework and tone that are established in the Bill, and the messages and signals that are broadcast by it, are vital. The Bill is an opportunity to get the matter right, even if there will be subsequent legislation on a specific situation.

Paddy Tipping (Labour, Sherwood)

The hon. Gentleman has not followed the debate as closely as some other Opposition Members have. I repeat that the Bill is enabling legislation. It is a new and important step forward and a building block. Before any future referendum, a new Bill will have to be considered by the House. Later in our proceedings on this Bill, we shall discuss the design of some of those Bills. Nevertheless, it is absolutely clear that the wording of any question and, in many cases, the election date, will have to be decided by the House.

Michael Spicer (Conservative, West Worcestershire)

The Government keep hiding behind the idea that this is only an enabling Bill and that we must wait for the great Bill, whenever it arrives. However, this Bill is very specific on many matters, such as the number of days to polling day and the permitted sums. As the Bill is littered with such detail, it is not good enough to pursue the point that it is only enabling legislation. If the Minister thinks that it would be wrong for European institutions to become involved in a British referendum, and given the amount of detail that the Bill already contains, what does he have against incorporating in the Bill safeguards that would seem to deal with his own concerns about the involvement of institutions from abroad?

Paddy Tipping (Labour, Sherwood)

As I said—and as my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) said—I just cannot see that happening. If there were a referendum on, say, the euro, I do not believe that the European Union would become involved. It would be counterproductive for it to do so. As I keep telling the Committee, such a matter is for the British people to decide, and they would not take kindly to other organisations becoming involved in it. The hon. Member for West Worcestershire says that we should make provision in the Bill to address that issue—there is an issue, and I do not dismiss it lightly—but the correct time to address it is when, if ever, we have to debate the design of a European single currency Bill, not now. I appreciate that hon. Members want to demonstrate their European credentials and Euro-scepticism and to express their dissatisfaction with Europe, but that future debate is the time for them to do that. This Bill is quite simply enabling legislation. The hon. Member for South Holland and Deeping—

John Hayes (Conservative, South Holland and The Deepings)

The Deepings. My constituency is right next door to the Minister's.

Paddy Tipping (Labour, Sherwood)

I know where the constituency is located—I often campaign down that way—and it is not quite next door to my constituency. Nevertheless, the hon. Gentleman asked about the position on companies. There will be a cap—£500,000 on the sums that companies can contribute. As I said at the beginning of a this debate, partly in reply to the hon. Member for Tatton (Mr. Bell), those of us who are in politics realise the excitement and passions that certain issues can arouse. We also certainly know that, in any referendum campaign, the two opposing sides will not be equally armed. The sides will look to different sources for money, and anyone who thinks that, in any issue, both sides could raise equal sums is living in cloud cuckoo land. The Bill tackles that situation by placing caps on the sums that individuals, companies and parties can spend. The Bill will not create a level playing field, but it will at least keep spending under control.

Richard Shepherd (Conservative, Aldridge-Brownhills)

The Irish Republic examined that problem, and I should imagine that the Home Office has spent much time examining that experience. The Irish Republic seeks equality of funding in national referendum campaigns, and its policy has had an impact on the outturn of a series of referendums on the European Union. In the most recent referendum, the policy achieved a much more equal balance in the vote turned out. The point of my intervention is to support my hon. Friend the Member for West Worcestershire (Sir M. Spicer). This is a framework Bill which is trying to create the ground rules to ensure fairness. It seems not unreasonable, therefore, to expect that some of the contentions that my hon. Friend mentioned should be dealt with in the framework. Specific matters could be identified and dealt with in subsequent legislation introduced by the Government—who, after all, are the initiating force in a referendum. They initiate a referendum only because they themselves have a view on the matter. The rules—in the framework Bill—should work to ensure fairness.

Paddy Tipping (Labour, Sherwood)

The hon. Gentleman makes a fair point. I thought that he was going to try to persuade me that different parties should have the same sums to spend on referendums.

Richard Shepherd (Conservative, Aldridge-Brownhills)

They should have an equal sum.

Paddy Tipping (Labour, Sherwood)

I have extracted the hon. Gentleman's view. However, I do not think that that objective is practically achievable. He asked whether European and international comparisons have been made: they have been made. He also pursued me on whether the Bill is template and framework legislation: it is. One important aspect of the Bill—we shall have an opportunity to discuss it in a later debate—is the provision, in clauses 4 and 5, for the Electoral Commission to review both the legislation's operation and how referendums are working. It has been acknowledged on both sides of the Committee that we are addressing new and difficult issues. Nevertheless—to reply to the point made by the hon. Member for West Worcestershire—the way to tackle those issues is to acknowledge that this is a template and framework Bill and to consider it in the light of experience. The Electoral Commission, for example, will have to respond after each election by producing a report. That issue is being addressed. The time for discussion of Europe and funding from Europe, a subject that is clearly taxing hon. Members, is when—at some point in the future, or never, if some people have their way—the House considers a referendum Bill on that matter. I hope that the Committee will agree to clause 98 standing part of the Bill.

Dominic Grieve (Conservative, Beaconsfield)

I hope that the Minister will accept, from the long time that we have had discussing the Bill upstairs in Committee, that the Opposition have tried to take a non-partisan and constructive approach to the legislation. However, in his last remarks, the Minister sounded like Mr. Micawber, waiting for something to turn up in the future, rather than looking for something to solve his problem. As my hon. Friends the Members for West Worcestershire (Sir M. Spicer) and for Aldridge-Brownhills (Mr. Shepherd) said, this is supposed to be a framework Bill. Yet, everything that I have heard in the debate suggests that the framework is flawed. To clear up some anomalies—the Minister will correct me if I have it wrong—foreign organisations will be able to register under clause 98, and there is nothing to stop them from doing so. If they do so as individual organisations and companies, they will be able to spend £500,000 in participating in a referendum campaign. That is notwithstanding the fact that Lord Neill, at paragraph 12.51 of his report, says that he considers that the arguments on the funding of political parties apply equally to the funding of referendum campaigns, especially since these are likely to be concerned with major constitutional questions. We believe, therefore, that the same rules about 'permissible sources' that we recommend should apply to political parties and others in connection with foreign donations should also apply to individuals and organisations, including political parties, taking part in referendum campaigns. The Minister has had to accept that that cannot happen. The Bill goes further, because even foreign individuals and organisations who do not register as permitted organisations can spend £10,000 each. If an external organisation were divided into its constituent members, it could spend hundreds of thousands, if not millions of pounds in a referendum campaign. I am not concerned specifically about a referendum on the single currency. That could apply to any referendum. The Minister knows that we have approved of other parts of the Bill, but the whole of this part on referendums is badly flawed.

Richard Shepherd (Conservative, Aldridge-Brownhills)

The Minister said that the commission could review the arrangements, but that would be a post mortem. The critical events would already have happened. The commission would have no status in what could be an enormously important referendum.

Dominic Grieve (Conservative, Beaconsfield)

I entirely agree with my hon. Friend. We cannot support the clause and we intend to divide the House on it. It is the benchmark of a series of clauses that set up an edifice that is supposed to reflect Lord Neill's recommendations. Due to circumstances outside the Government's control—European law and the European convention on human rights—it is proving impossible to do that. This whole part of the Bill needs to be taken back to the drawing board. We should seriously consider dispensing with it until we have got it right.

DECLARATIONS AND NOTIFICATIONS FOR PURPOSES OF SECTION 98

Robert Walter (Conservative, North Dorset)

I do not wish to prolong the debate on organisations that are designated as permitted participants in a referendum campaign. Clause 99 deals with declarations and notifications for the purposes of clause 98. I wish to alert the Committee to what I see as more evidence of the problems in the Bill with regard to those who might well decide that they are or want to be permitted participants, but are not normally regarded as citizens of the United Kingdom or are not normally resident here. Clause 99(4)(a) states: A notification under this section must— (a) if given by an individual, state— (i) his full name, and (ii) his home address in the United Kingdom". I imagine that, for the purposes of his home address in the United Kingdom, a hotel or a friend's address would be perfectly acceptable so long as he signed the notification. In respect of a company, the name and the address of its registered office is required. To some extent, that brings companies within the scope of the Bill. None the less, there are no specific provisions, despite those in respect of permitted donors to political parties, that relate to a company registered under the Companies Act 1985 or the Companies (Northern Ireland) Order 1986, and … incorporated within the European Union, which carries on business in the United Kingdom. There are no such provisions in clause 99 in respect of the declarations and notifications that have to be made. If a notification is given by an unincorporated association", it must state "(i) the name of the association, (ii) the address of an office of the association in the United Kingdom". So one might well receive a notification from the good burghers of Calais who wished to participate in a referendum campaign and had a branch office in Dover. That would be sufficient for them to be permitted participants. If the limits in the Bill applied to them, as foreigners, they would be entitled to spend £500,000. In the previous couple of debates on amendments to clause 98 and clause stand part, we have emphasised the fact that the Bill allows for an enormous leak which will permit foreign individuals, companies, unincorporated associations and other bodies to participate in our democratic procedures without necessarily being United Kingdom nationals. It is a worrying provision and it is highlighted yet again in clause 99.

APPLICATIONS FOR DESIGNATION UNDER SECTION 101

Andrew Stunell (Liberal Democrat, Hazel Grove)

I beg to move amendment No. 13, in page 64, line 28, at end insert— '(5A) In making any designation of a permitted participant under section 101(2) or (4) the Commission shall have regard to (i) the separate levels of support for each of the permitted participants which have given notice under section 99(1)(b) or section 99(3)(b) that they propose to campaign for the same outcome, and (ii) evidence submitted to it by any permitted participants relating to their principal reasons for campaigning for that outcome. (5B) Where the Commission is satisfied that more than one permitted participant has demonstrated (a) substantial support, and (b) a distinct "principal reason" for campaigning for the same outcome, and (c) that it would be unreasonable to refuse designation under section 101(1), it may designate 2 or more permitted participants for assistance under section 103. (5C) Where the Commission makes any designation under subsection (5C) above, they shall make such an apportionment of eligibility for assistance between the designated permitted participants as they think fit.'.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

With this, it will be convenient to discuss amendment No. 12, in clause 103, page 64, line 40, at end insert— '(2A) Where more than one designation has been made under section 102(5B), that amount shall be apportioned in accordance with section 102(5C).'.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I refer hon. Members to clause 101(1), which states: The Commission may … designate permitted participants as organisations to whom assistance is available". We have a small language problem here in that there are designated organisations and permitted organisations. I do not claim that the Bill is ambiguous, but it is easy to become ambiguous when one is speaking about them. Clause 101 establishes that the designated participants that meet certain criteria may receive financial assistance, and the decision on that will be made by the Electoral Commission. Clause 102, to which amendment No. 13 relates, deals with how permitted participants will be designated. Clause 102(5) provides for a situation in which designated participants make competing applications to become the organisation that will receive assistance. The special use of language in the Bill means that it is possible to lose sight of the fine distinctions between the two types of body, but a person, political party or organisation that fulfils certain criteria can become a designated participant, which allows them to take part in the process. Beyond that, one or more of those designated participants can then apply to become an organisation that will receive assistance. The amendment would extend the options available to the Electoral Commission when deciding between competing designated participants who wished to become the organisation eligible to receive assistance. The Bill, as drafted, provides the commission with two options—it can establish which of the permitted participants has the greatest popular support, or, if it is not satisfied that any of the applicants adequately represents those campaigning for a particular outcome, it can make no award. In other words, the commission has to make an all or nothing choice if there are competing demands for support. The amendment would give the Electoral Commission more flexibility so that it could consider a third option. For example, in the feasible prospect of a referendum on the United Kingdom's joining the euro, it is likely that several bodies that are opposed to joining will compete to become the designated organisation. At one end of the spectrum of those opposed to joining will be the Socialist Workers party. Its reasons for opposing it might be complex and various, but they boil down to the argument that the euro is a capitalist plot that should be resisted at all costs. At the other end of the spectrum will be the so-called Democracy movement, which is equally ferociously opposed to the euro, essentially because it is a communist plot. Perhaps somewhere in the middle will be a large body of Conservatives, some of whom are what I call quitters and some of whom are stayers but all of whom are committed at the moment to opposing joining the euro. As the Bill is drafted, all three of those umbrella bodies would be able properly to participate in the campaign, but it would be for the Electoral Commission to decide which body would receive financial support for making its case in the campaign. If people are confident that their factional view is likely to be seen as the majority view among those seeking a particular outcome, they would not have to worry because the commission would designate them and they would receive the money. However, there is a problem if—perhaps in some future referendum—the forces that want one particular outcome are all strongly motivated and strongly supported, and it is not so evident which should receive the financial support of the commission. At the limit, the commission could toss a coin and say that the money would go to, for example, the SWP; or the commission could be unable to make up its mind, because there was too much controversy or uncertainty, and allocate no money to one side of the argument. While it may not be too helpful to pursue the specific case of the euro referendum to its logical conclusion, because people will argue that it is unlikely that the SWP would receive the money, I use it as an illustration of the fact that people can have fundamentally different reasons for supporting a particular outcome in a referendum. In some cases, it may be appropriate and proper for them to form an umbrella body that can qualify for support, but on other occasions that will not be possible. Let us suppose that the line of thought represented by Lord Shore, the right hon. Member for Chesterfield (Mr. Benn), the hon. Member for Bolsover (Mr. Skinner) and the SWP was the ascendant view in popular opinion as we approached a referendum on the euro. I put it to Conservative Members that they would not be happy if all the money to support the no campaign went to that faction and none went to the Conservative faction. Another likely future referendum is on stage 2 of the reform of the House of Lords. It is possible that some might want to vote against the reform package, their opposition being based on the fact that they wanted a wholly elected House of Lords and that what was being offered was a miserable and unworthy compromise. Some others might also be strongly opposed to the reforms because they wished to return to the hereditary principle. As the Bill stands, those two factions would either knock each other out, with the Electoral Commission making no grant, or one of them—if it could establish some ascendancy in its views—would be supported and the other would not. We have said several times in previous debates that the Bill is fundamental. It is the first reworking, in detailed and substantial form, of legislation that goes back 117 years, and we do not know how frequently it will be updated in the future. We heard earlier that it is a framework Bill on which other legislation dealing with referendums will be based. Therefore, the issue that I have drawn to the Committee's attention requires careful consideration. It may be that the examples I have mentioned—of the referendums on the euro and the House of Lords—are not appropriate, but it seems likely that over the next few generations the situation I have outlined will arise. If so, the absence of a third option in the Bill will be a drawback that will have considerable consequences. Amendment No. 13 would require that before the commission could adopt any sort of third-way approach, it would have to be satisfied that each alternative choice had substantial support. The Bill uses the phrase "to the greatest extent" to describe the necessary level of support, but that might be only 36 or 37 per cent. Alternative factions, with other views, might achieve support levels of 30, 32 or 33 per cent. The amendment retains the need for support to be substantial: it would not mean that some crackpot from Hazel Grove could turn and claim a share of the money just because he said that he had a distinctly different way of looking at things. It also requires that there be a "distinct 'principal reason''' for seeking the same outcome. If those two conditions were met, the amendment would give the Electoral Commission the authority to split the amount of financial support given to those supporting a particular outcome—but only if it would be unreasonable not to do so. The amendment would also provide that the split of the financial support available should be decided by the Electoral Commission. Amendment No. 12, to clause 103, is the consequential amendment that would implement that requirement. Amendment No. 13 would prevent a difficulty that is certainly possible in theory, and which I submit is quite feasible in real life—namely, that it is possible for there to be more than one completely distinct and separate reason for wanting a particular outcome. I do not know how many such reasons for wanting a particular outcome it might be possible to have, but I suggest that three is a practical limit. The amendment would prevent money going to an organisation that enjoyed only 35 per cent. support, when a larger number of people—the collective total of those who support the same outcome—would not get anything. It would also prevent the outcome whereby no money would be given to anyone simply because the Electoral Commission had lost patience with them all. The amendment would remove unfairness and prevent the undesirable and undemocratic outcome that such unfairness might produce. It would provide a third-way alternative for the Electoral Commission when it was deciding how to allocate resources in a referendum campaign. It is designed to ensure that those resources are not fragmented and that coherent and separate arguments opposing or supporting a particular outcome are taken into account. The amendment would safeguard democracy. I hope that the Minister will bear in mind the fact that the Bill puts in place a framework that will last for a long time. Many different circumstances will arise, and the circumstances in which there will be distinct and separate principal reasons should be a factor that the Electoral Commission takes into account when allocating resources.

Robert Walter (Conservative, North Dorset)

I am rather concerned about amendment No. 13, which I call the chaos amendment. The hon. Member for Hazel Grove (Mr. Stunell) described the third way and where it leads. I suspect that I am beginning to find out where it leads. This delightful amendment sums up my understanding of the Liberal Democrats, especially when they campaign in elections. For them, the desired outcome is clear—that Liberal Democrats should get elected. However, they believe it reasonable to use different—even conflicting—arguments to get to the same point. That propensity reminds me of a story arising from some local council elections in Dorset. In one village, a lady who had recently moved in complained that there were no street lights. The candidate told her that his party was going to make sure that street lights were installed. However, when the lady in the next house told him that she had heard that his party was going to put in street lights, he told her that she was safe and that his party had no intention of going against the village's tradition of not having them.

Andrew Miller (Labour, Ellesmere Port and Neston)

The same thing happened in my constituency.

Robert Walter (Conservative, North Dorset)

I am pleased that it does not happen only in Dorset. The amendment is worrying because, instead of allowing for the designation of one umbrella organisation on each side of the argument, it would allow several such umbrellas to exist. People would then run around looking for cover under the umbrella that most suited them. Under clause 103 and schedule 3, designated organisations will get £600,000. The precedent for that was set in the 1975 referendum, and the amount has been uprated to allow for inflation. However, designated organisations are also allowed to send an address to every household or elector, so if there were more than one designated organisation, which organisation would send the address? Would those messages be sent to only a third of the available households or electors, or to every other one? Under the amendment, would the designated organisations get the use of public rooms free of charge? If there were several such umbrella organisations on each side of the argument, that would come to an awful lot of rooms. How would the broadcasting authorities cope with referendum campaign broadcasts? For instance, umbrella organisations that support a single currency from capitalist and socialist points of view, respectively, might both seek time for referendum broadcasts. However, one organisation may fear that the broadcast made by the other might kill off the case for the single currency for all time. The Bill's provision that only one umbrella organisation should receive the grant from Government is the correct approach. The Electoral Commission may wish to knock heads together to determine which body should receive the money, or it may leave it for the relevant groups to work out for themselves. However, such an approach would not preclude other points of view being expressed, as the Bill allows political parties and other bodies to participate in the referendum process. The Bill means that the commission will have to deal with only one body on each side of the argument, and we are content with that.

Paddy Tipping (Labour, Sherwood)

The hon. Member for Hazel Grove (Mr. Stunell) struggled with the language when he spoke to his amendment. The matter is difficult, but he made it clear that his intention was to find a third way when it comes to funding. The amendment departs from the Bill's provision that the Electoral Commission will designate money to one umbrella organisation on each side of the referendum campaign, and would instead provide that there might be more than one such organisation on each side. The Government would strongly oppose taking that line. The essence of the Neill committee's proposal is that there should be one organisation on each side of the campaign. The committee's work in Wales persuaded it that a grant of £600,000 and facilities should be available to enable a minimum campaign to be run. As the hon. Member for North Dorset (Mr. Walter) said, the real advantage of an umbrella organisation is the mailshot—I had better be careful what I say about mailshots in view of last night's debate on election expenses for the mayor of London and the assembly—the free use of rooms and the right to broadcast. It is difficult to see how those resources could be shared among competing claims. The hon. Member for Hazel Grove said that the Electoral Commission would face a difficult task in identifying the umbrella organisation when there were competing demands. The hon. Gentleman's amendment states: Where the Commission makes any designation under subsection (5C) above, they shall make such an apportionment of eligibility for assistance between the designated permitted participants as they think fit. It is unclear how the Electoral Commission could be unable to identify an umbrella organisation and then do a more sophisticated analysis, in what the hon. Member for North Dorset called a chaotic situation, to identify the share-out within the umbrella group. The Government have always recognised that it will not always be possible for everybody to work together under an umbrella group, and the hon. Member for Hazel Grove gave us some examples. However, the Bill does not prevent that from happening. It will be possible to have an umbrella organisation and groups working alongside it, which are not part of it, and have a slightly different view. That is the plurality of the situation. It must be right to have only one umbrella group on either side. It is also right that others who want to participate will still be able to do so. There are rules in the Bill governing that. However, they will not have a right, unless they are part of the umbrella campaign, to a share of the public resources—the £600,000, the right to broadcast and the free mailshot. The hon. Member for North Dorset said that the financial pot will lead people to bang their heads together. I am not sure whether the Electoral Commission will be banging heads together. The prospect of substantial sums of money will, after a lot of discussion and some heartache, force bodies to work together as part of an umbrella organisation. To have an umbrella organisation on each side of the argument must be the way forward. It is what the Neill committee recommended, and it is the approach that the Government would like to adopt to avoid a chaotic situation. With that, I ask the hon. Member for Hazel Grove to reflect on his amendments.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I shall not talk about the intricacies of street lights in Dorset. However, I once made an issue out of two Conservative leaflets in my constituency—one was strongly in favour of a road, and one was strongly against it. They seemed to be distributed in adjacent areas, depending on what it was thought people in each area would like to hear. No one has a monopoly on distributing leaflets or talking to electors with what is sometimes called a forked tongue. I apologise to the House and the Hansard reporters if I got my "permitted participants" and "designated organisations" mixed up at various points in my speech. I hope that my intention was clear; in any event, the Minister has clarified what I was trying to say, and I thank him for that. I freely concede that there are some difficulties. My amendment may not be comprehensive enough in its scope and precise enough in its detail to achieve its objective. I understand the point that is being made. I am less happy, however, with the view that the scenario that I have described is unlikely or that if it does occur, it is not greatly to be feared. We are setting in place framework designation that is designed to last for a long time. The intention of my amendment is to provide a seldom-used but available alternative in a particular set of circumstances. However, I understand the Minister's reluctance to proceed, and recognise that there is no support for the proposal elsewhere in the House. Having aired my case, I beg to ask leave to withdraw the amendment.

Dominic Grieve (Conservative, Beaconsfield)

I beg to move amendment No. 49, in page 64, line 32, leave out "shorter or". This is a small amendment that can be considered without having to consider some of the wider issues that were before us earlier. Nevertheless, it cannot be completely divorced from those issues, because it concerns the power that clause 102 gives the Secretary of State to vary the periods that are provided for in that clause. It may be worth setting out briefly what this part of the Bill aims to do. Certain organisations may become designated organisations and receive funding, so there will be competition among various organisations to become so designated. All permitted participants will be eligible for designation, and will doubtless be rooting to be the designated group and receive the funding. Clause 102 provides: A permitted participant seeking to be designated under section 101 must make an application for the purpose to the Commission. He must provide statements saying that he adequately represents those campaigning for the outcome of the referendum. He must make his application within 28 days, beginning with the first day of the referendum period. Thereafter, the commission will have to get to work and, with considerable rapidity—given that dozens of organisations may be vying for designation—decide within 14 days which of the applications should be determined favourably or otherwise. If there is one application in relation to a particular outcome of the referendum, the commission will designate that applicant unless it is not satisfied that the applicant adequately represents those campaigning for that outcome. If there is more than one application in relation to a particular outcome, which I venture to suggest may well be the case, the commission has to make almost a judgment of Solomon between the various organisations. It must pick the one which appears to represent, to the greatest extent, those campaigning for that outcome, unless it is not satisfied that any of the applicants adequately represents those campaigning for the outcome. It is a complex and bureaucratic process, which will undoubtedly attract much public comment. One can envisage circumstances in which members of organisations may become upset and angry if they do not achieve designation. That is the task given to the commission. 7 pm The clause sets out an extremely tight timetable, which is linked to the rest of the timetable for referendum periods. As the Home Office Minister pointed out earlier, in reality there may be a long preliminary period for most referendums, during which all the parties would vie for position. Everyone would know that the referendum was due to be held, so no one would be taken by surprise. However, the measure is framework legislation and it must take account of contingencies, some of which might include circumstances when a referendum is sprung on an unsuspecting electorate by a Government. One example—dare I offer it to the Parliamentary Secretary, Privy Council Office?—might be that of a Government who had been promising a referendum for a long time, who lulled the electorate into a false sense of security because the referendum never seemed to happen, and then suddenly announced that it would take place immediately. If that were to happen, it would create an immense logjam. Indeed, in those circumstances the 28-day period for designation might be too short. Similarly, the poor old commission might be hard put to find the time to choose between competing organisations. It strikes me—and the official Opposition—as astonishing that in subsection (6) we give the Secretary of State the power to make by order a variation in the 28 and 14-day periods to make the period not only longer, but, if he sees fit, shorter. That appears completely crazy. I can understand the need for a longer period, but I cannot fathom how a shorter period could be just. The mere fact that the measure includes that provision gives me some cause for anxiety. Technically, it would allow the Secretary of State to move, by order, that the period for the submission of designation could be limited, for example, to six or seven days—let alone the absurdity that it might be reduced to 24 hours. One consequence of that would be that individual organisations seeking to be the designated party in a referendum campaign would be hamstrung because they would have insufficient time to mount their case. I should be grateful if the Minister would explain the justification for providing a shorter as well as a longer period, although I can well understand why a longer period might be provided.

Paddy Tipping (Labour, Sherwood)

indicated assent.

Dominic Grieve (Conservative, Beaconsfield)

The Minister nods. However, if we consider the matter realistically, a period of 28 days to put in a designation request and 14 days for its consideration is the bare minimum. In that case, the Committee can safely tell the Government to adopt the amendment and delete the possibility of a shorter period because, in practice, that shorter period could never happen. At least, it could never happen if a Government were acting properly. Although I have confidence even in the Government of whom the Minister is a representative, one has to look ahead, in framework legislation, to possible occasions when that might not be so. In those circumstances, unless the Minister can offer me some clear examples of why he thinks that the existing provision is useful, I urge him to reconsider the matter. If he thinks that my remarks make some sense, will he adopt the amendment or, at least, assure me that he will consider it?

Paddy Tipping (Labour, Sherwood)

I was struck by the hon. Gentleman's comment that provisions were needed so that contingencies could be taken into account. He rightly pointed out that, in this case, the contingency is the power of the Secretary of State to provide for a longer or shorter period than the 28 or 14 days. I shall not go over the provisions in the measure because he explained them so well. As the hon. Gentleman pointed out, the argument for a longer period is that there will be much pressure on the commission. According to the provisions set out in the measure, the quickest time in which a referendum could take place is 10 weeks. Usually, there would be far more notice than that. There may be a case for some flexibility and for a longer period because of the difficulties that the commission might face. That is why provision for a longer period has been included.

Michael Spicer (Conservative, West Worcestershire)

Will the Minister clarify whether it is possible that the use of the 28-day period in clause 102 would cause the designated 28-day period in clause 97 to run out? Is it possible that the umbrella group might never be formed during the referendum period?

Paddy Tipping (Labour, Sherwood)

That is certainly not the intention of the measure. It provides money and resources to umbrella groups—for the first time, £600,000 will be available, as well as free mailshots and so on. The intention clearly is not to stop the formation of umbrella organisations.

Michael Spicer (Conservative, West Worcestershire)

I accept that that is not the intention, but is it a possible outcome that the 28-day period mentioned in clause 97 would be the same 28-day period mentioned in clause 102? If so, the commission would run out of time for designation.

Paddy Tipping (Labour, Sherwood)

I think that the hon. Gentleman is taking the Committee back to a point that I made a few moments ago—that the minimum time for a referendum could be 10 weeks. The 10 weeks comprise two 28-day periods and a 14-day period. There is a 28-day period for the formation of the umbrella group; 14 days for the commission to deal with designation; and a campaign period, beyond that, of not less than 28 days. I think that covers the hon. Gentleman's point. The hon. Member for Beaconsfield (Mr. Grieve) asked why there was provision for a shorter period and why flexibility was needed. He asked for clear examples. The most obvious example is in Northern Ireland, where it is sometimes necessary quickly to seek the consent of the people on a particular settlement. In the referendum on the Good Friday agreement, only 32 days elapsed between the laying of the Northern Ireland Negotiations (Referendum) Order 1998 and the holding of the referendum. That is the reason for the inclusion of a reference to a shorter period. The Government believe that, occasionally, there might be situations where it is necessary to act quickly, but that will not be the norm. Ministers and officials feel that we should reserve that flexibility; in extreme circumstances, there should be the chance to move to a shorter period. The object of the Bill is to conform to the time periods that it establishes—the 28 days and the 14 days, which, as the hon. Gentleman points out, will be most demanding. However, there could be occasions—especially in Northern Ireland—when some flexibility might be used. Given that reassurance, I hope that the hon. Gentleman will reconsider the amendment.

Dominic Grieve (Conservative, Beaconsfield)

I am grateful to the Minister for his candour, although I do not find the Northern Ireland example entirely reassuring. Indeed, it is a good example, because one might say that what was being sought was to take a snapshot of public opinion in the Province and to do it so quickly that people did not have time to change their minds on the issue. Dare I say it to the Minister, but I thought that the whole idea behind the Bill was to create a fair framework that would prevent sudden advantage being taken of public moods? I make that point even though, if I had been living in Northern Ireland, I might have voted yes in the referendum there. I am not wholly persuaded by the Minister's argument. He is honestly telling us that there may be circumstances in which the Government think that it is to their advantage to ask a question and get a quick answer. However, those who disagree with the answer that a Government are seeking look to the rules and regulations, as set out by Lord Neill, to do the opposite. They look to them to offer a sufficient time frame in which debate and reasoned argument can take place, so that everyone can go to the polling station on the day of the referendum having had a real opportunity to consider the issues. We cannot get away from the fact that, historically, referendums have often been used by tyrannical regimes to seek endorsement for matters to their advantage from waves of public opinion. Sometimes, they come unstuck. For example, in the past 48 hours, a Government, who seem to have pretty dubious democratic credentials have received a slap in the face from the electorate when they thought that they had it all stitched up. We are trying to do something different. I am not persuaded by the Minister's argument, but I shall not press the amendment to a vote. However, I hope that he will reconsider the issue, because the limits set out in the clause are the absolute minimum on which a fair campaign could possibly be based. If that is so, the only possible ground for having a shorter period would be to introduce a measure of unfairness. In those circumstances, the Committee should have nothing to do with the provision. However, subject to those comments—and I hope that the Minister will bear them in mind—I beg to ask leave to withdraw the amendment.

Michael Spicer (Conservative, West Worcestershire)

I wish to make two brief points. First, I believe that it is unhealthy for the state to fund political campaigns. Down that path are all sorts of threats to democracy. However, I shall put that point to one side. Secondly, if the state is going to make such payments, it is right that there should be an independent commission as outlined in the clause. It should be responsible for allocating state payments. If it is right for the commission to have designation and authoritative powers under the clause, why is it not given similar powers in other clauses? I have returned to that point time and again, because it is illogical. If the commission is correctly given such authoritative powers by this clause, could not the Government reconsider, as I sense they might, the whole philosophy, so that they strengthen the authority and independence of the commission? I hope that the clause will act as a precedent for the Government and that they will continue the process of giving as much independence to the commission—as opposed to the Secretary of State—as is possible.

Paddy Tipping (Labour, Sherwood)

I will not comment on the hon. Gentleman's view that we should not go down the road of state funding, except to point out that he, his party and all of us receive such facilities during a general election campaign. The proposal in the clause is not as new as he suggests. 7.15 pm I agree entirely with the hon. Gentleman that the commission must be seen as independent and authoritative, and it must have the support of all the political parties and players. I have never said that the Bill is in the best shape possible; we have already improved it in our discussions and there will be further opportunities to do that. I also draw his attention to clauses 4 and 5, which will give the commission the task of preparing reports after each election and reviewing its work regularly so that it can take stock of what it has done. Referendums are a new area for legislation, and the commission will want to revisit the issues, revise them and bring forward further proposals.

Michael Spicer (Conservative, West Worcestershire)

The Minister's point about independence was correct, and I am grateful to him for saying that he will consider ways of improving the Bill. This clause is about the commission's functions and powers. I hope that the precedent established by the powers for designation in the clause will be borne in mind by the Minister when he considers the commission's powers and functions in other clauses.

ASSISTANCE AVAILABLE TO DESIGNATED ORGANISATIONS

George Young (Conservative, North West Hampshire)

I wish to raise a few points, in particular about subsection (2) which mentions £600,000 as the sum available. I have traced the genealogy of the sum through the Neill report and the White Paper and I am not arguing for a higher figure—once a Treasury Minister, always a Treasury Minister. However, I was slightly surprised to see that the figure of £600,000 is set in stone. I have looked through the clause and I cannot see any provision for varying it. On several occasions, we have heard that the Bill is a template and that it is designed to last for a long time, so I assume that we shall need primary legislation to change the figure of £600,000. I appreciate that sums are mentioned elsewhere in the Bill, but they tend to be larger sums—£20 million and others. The figure in this clause is relatively small, so I am puzzled why there is no power to vary it.

Paddy Tipping (Labour, Sherwood)

I draw the right hon. Gentleman's attention to clause 141.

George Young (Conservative, North West Hampshire)

It is kind of the Minister to suggest that there may be that provision for variation. I take it that that applies to this clause.

Paddy Tipping (Labour, Sherwood)

indicated assent.

George Young (Conservative, North West Hampshire)

That is helpful. However, I seek further explanation. Other clauses in the Bill, such as clause 11 on grants, give the commission pretty wide discretion. It can make grants to other persons or bodies to enable them to carry out certain programmes. Under clause 11, it seems to have enormous flexibility to spend quite large sums of money on grants that are not wholly its prime purpose. However, this clause gives it £600,000 to help designated organisations, and clause 141, which the Minister mentioned, gives powers to the Secretary of State to vary the figure. In effect, that is my point. Other parts of the Bill, such as schedule 13, allow for flexibility, although I concede that, in the case of the schedule, it is flexibility on the part of the Secretary of State. When the commission produces its post mortem on a referendum, will it have the freedom to state its view of the figure of £600,000? That is not clear from this clause. However, if, for the sake of argument, it felt that the figure in subsection (2) was wrong, will it be able to make recommendations to the Secretary of State suggesting that the figure was either too high or too low and will he take its views on board and consider varying it? It would be helpful if the Minister could explain why the figure of £600,000 is so tightly constrained by the Secretary of State, when one of the commission's prime functions is to make sure that a side of the argument that is in danger of being under-represented gets sufficient money. There are no such constraints on the commission in making the grants in clause 11, yet that function is arguably less important. In fact, we argued that it was so unimportant that the provision should be deleted. There seems to be an imbalance between clauses 11 and 103. Can the Minister shed any light on that?

Paddy Tipping (Labour, Sherwood)

I shall try to shed light on the matter. I take the right hon. Gentleman back to clause 141. I admit that I sprung that on him earlier, but if he reads it he will realise that although the Secretary of State makes the order, subsection (2)(b) adds, where the order gives effect to a recommendation of the Commission. The Secretary of State cannot therefore make an order without a recommendation from the commission. I turn the right hon. Gentleman's attention to clause 4, which spells out the reports that the commission must produce regularly after elections, and clause 5, which contains a much more permissive power to keep matters under review and submit reports to the Secretary of State from time to time. The right hon. Gentleman asked why clause 11 gives the commission a great deal of flexibility. Speaking from memory, I believe that the sum concerned is £3 million, but a lot of that is existing money within the Home Office and local government, which is used, perhaps not very successfully, to remind and exhort people to vote. Although I should not stray from the subject at hand, I accept that there is a great deal of good work for the commission to do on electoral education under clause 11. Another part of the Bill dealing with policy development grants represents a step forward. It gives the commission the power to make £2 million of grants to political parties so that they can develop their policies, but the commission has to bring forward a scheme after consultation. There is, therefore, a great deal of flexibility throughout the Bill for promoting awareness and policy development. As I pointed out to the right hon. Gentleman, there is also flexibility in the power to vary the sum of £600,000. I look forward to the commission's reports because they will be a trigger that will help all our thinking.

George Young (Conservative, North West Hampshire)

Schedule 11 deals with the right to send a referendum address post free, which is of topical interest. Paragraph 280 on page 64 of the explanatory notes, which the Department kindly circulated with the Bill, says: A mailing by the two sides in a United Kingdom-wide referendum to every elector would cost some £13.2 million. One to every household would cost some £7.2 million. I am entirely in favour of free mailshots during a referendum campaign. In the previous debate, the Minister pulled something out of a hat, and I wonder whether he can do the same on this occasion. I was following last night's debate, and at 11.16 pm, the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Streatham (Mr. Hill), said: The GLA is a small streamlined authority with a budget of £35 million, and expenditure of £15 million to £20 million on mailshots would be quite disproportionate."—[Official Report, 15 February 2000; Vol. 344, c. 893.] I am sure that the Parliamentary Secretary is asking himself the same question as I am asking myself, which is why the Greater London Authority would spend £15 million to £20 million if it paid for mailshots, but a mailshot to every elector by the two sides in a UK-wide referendum would cost £13.2 million. I appreciate that there can be more than two candidates in a mayoral election, although presumably if there were more than two, the mailshots could be delivered at the same time. Last night, however, the Government used a rather high figure when they were trying to discourage the House from pushing for a free mailshot, and that figure was much higher than that on page 64 of the explanatory notes. Can the Minister shed any light on the apparent incompatibility of the two figures?

Paddy Tipping (Labour, Sherwood)

Having pulled something out of the hat earlier, I am afraid that it is empty on this occasion. All I can do is consider the figures and the extracts that the right hon. Gentleman has just quoted, and write to him. I would add that the GLA provisions are seen as local government provisions, whereas we are discussing national campaigns in this Bill. Referendum mailshots would typically be for two sides, but I understand that there may be up to 20 candidates for the mayor of London, which will clearly increase costs. I will write to the right hon. Gentleman, without the sense of magic and flourish that goes with pulling something out of a hat.

Michael Spicer (Conservative, West Worcestershire)

Schedule 11 also deals with the commission's role in ensuring fairness in broadcasting. Do the Government envisage the commission having not only the powers to set policies on fairness but the resources to monitor and ensure that those policies are implemented? We all know that broadcasters can set out with good intentions, but they do not always fulfil them. The BBC is ruled by statute but does not always comply with it in practice. Will the commission be responsible for ensuring that its policies on fairness are implemented day to day?

Paddy Tipping (Labour, Sherwood)

The Committee has had an opportunity to discuss this matter. I draw hon. Members' attention to clause 9, which says that broadcasters shall have regard to the commission's views. The commission is in a position to express views about broadcasting. I have already given the Committee an undertaking to consider introducing a new form of words. It is clearly important that the commission should be involved, but that does not remove responsibility from broadcasters.

REFERENDUM EXPENSES: QUALIFYING EXPENSES

Robert Walter (Conservative, North Dorset)

The schedule, which deals with qualifying expenses in a referendum, seems reasonable, but as I read through it I become a little confused. We are given a list of expenses, including those incurred in referendum campaign broadcasts, advertising of any nature, and unsolicited material addressed to electors (whether addressed to them by name or intended for delivery to households within any particular area or areas). The list of exclusions in paragraph 2, however, says: Nothing in paragraph 1 shall be taken as extending to… (b) any expenses in respects of unsolicited material sent to supporters of the referendum campaign". 7.30 pm I am not sure of the distinction between the two types of unsolicited material. Those fighting a referendum campaign usually start from the presumption that everybody is a supporter of their cause. So perhaps they do not have to count against their expenditure limits the expense of sending material to those whom they perceive to be their supporters. Also among the exclusions are any expenses in respect of newsletters or similar publications issued by or on behalf of the campaign organiser with a view to giving electors in a particular electoral area information about the opinions or activities of, or other personal information relating to, their elected representatives or existing or prospective candidates". At first I thought that the sub-paragraph had strayed from another part of the Bill. In fact, it means that as long as newsletters tell one something about the views of one's local elected representative, expense incurred in sending them does not count as the campaign expenditure of an organisation campaigning in a referendum. One can therefore imagine an awful lot of newsletters going out in a referendum. Will the Minister give me some guidance, particularly on the exclusions? Another exclusion is: any expenses incurred in respect of the remuneration or allowances payable to any member of the permanent staff of the campaign organiser". That means that such staff are no longer an expense in the referendum. I can understand the exclusions covering any reasonable expenses incurred in respect of an individual by way of travelling expenses…or in providing for his accommodation or other personal needs", but fail to see why expenditure on publications and newsletters, on unsolicited material and in respect of remuneration of staff should be excluded. Paragraph 2 is another example of dilution of what we thought were ground rules on campaign expenditure. Indeed, two sub-paragraphs—on unsolicited material addressed to electors and on unsolicited material sent to supporters—appear to be contradictory. Electors and supporters can be one and the same thing.

Paddy Tipping (Labour, Sherwood)

The hon. Gentleman will recognise that schedule 12 almost exactly mirrors schedule 7, which we have had the opportunity to discuss. I am grateful to him for drawing our attention to paragraph 2 and, incidentally, to similar provisions in schedule 7. During our debate upstairs, I said on a number of occasions that I would like to reflect on the matter. The hon. Gentleman has made important points. There may have been some drafting errors. I am grateful for his points; I will write to him and, if necessary, correct matters later.

NOTIONAL REFERENDUM EXPENSES

Dominic Grieve (Conservative, Beaconsfield)

I beg to move amendment No. 50, in page 66, line 2, leave out "£100" and insert "£200".

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

With this, it will be convenient to discuss amendment No. 51, in clause 107, page 67, line 10, leave out "£100" and insert "£200".

Dominic Grieve (Conservative, Beaconsfield)

These amendments follow a pattern reflected elsewhere concerning de minimis amounts. In the light of some earlier comments, considerations in the context of referendum expenditure may be slightly different from those that apply to elections. Under clause 105, any individual or body that is provided with certain services must declare them, and they are treated as incurred if they exceed £100. Similarly, clause 107 states: No payment (of whatever nature) may be made in respect of any referendum expenses incurred or to be incurred by or on behalf of a permitted participant unless it is…less than £100. If payment is over £100, it must be properly recorded and submitted to the commission. There seems to be a difference between the two clauses. Clause 105 refers to any "individual or body", whereas clause 107 refers to "a permitted participant". Will the Minister clarify whether it is intended that clause 105 should cover a wider group of people? One way of interpreting matters is that, unlike clause 105, clause 107 does not apply to others who might wish to get involved in a campaign—individuals whom I described earlier as the loose cannon of the procedure. If that is so, why the distinction between the two clauses? Have we got the limits right? We have had some debate about whether the £100 limit—or the £200 limit, as we propose in our probing amendment—is appropriate. I shall not take up the Committee's time on that; the arguments were rehearsed almost ad infinitum when debating election expenses. However, the Minister will have to ponder the following issue. We have discussed—we shall return to it—what those who are not permitted participants but foreign nationals, individuals or organisations can do in referendum campaigns. The Minister has conceded that they can spend up to £10,000. I find it difficult to identify mechanisms of scrutiny by which one may ascertain how much such individuals spend. It might be a criminal offence for them to spend more than £10,000, but there is nothing to indicate how they are supposed to make a return to the commission, how the commission might investigate them, or how such individuals might be kept under control. In addition, we must accept that because such individuals can spend up to £10,000, all they need do is club together as a group of, say, 10 and they can spend £100,000. Are we being reasonable in specifying that if permitted participants spend a penny over £100 they must have an invoice and every conceivable detail, but all other people milling around on the sidelines, dabbling in a referendum campaign, can spend up to £10,000 without having to do so? I am prepared to accept the Minister's guidance. Clause 105 might just cover people who spend money as if there were no tomorrow. It seems to me that the issue may be different from that which we discussed when we considered election expenses upstairs. We are imposing all these burdens on the poor old permitted participants, whereas there is a huge loophole allowing others to campaign without turning into third parties, as in the case of elections. They will be able to campaign, put forward their view and argue that a vote should go a particular way, yet they will not be subject to the same controls. I should be grateful to hear from the Minister about the precise scope of clauses 105 and 107, and whether the limits that are being imposed are reasonable, in view of the fact that many other people will be able to participate without being subject to such stringent conditions.

Paddy Tipping (Labour, Sherwood)

Clause 105 is concerned with goods or services provided to a permitted participant by a third party. Clause 107 is concerned with direct expenditure by a permitted participant. That is the difference between the two clauses. The hon. Gentleman spoke about the loose cannons that may get involved, and there may be some. He is always interested in hypothetical situations, in which such loose cannons appear larger than in reality.

Jim Dowd (Labour, Lewisham West)

Loose cannon.

Paddy Tipping (Labour, Sherwood)

Loose cannon. I am corrected by a voice that rarely speaks, but when it does, it does so with force. The hypothetical situations described by the hon. Gentleman may not develop in reality to the extent that he is tempted to think. Let me remind the hon. Gentleman about the de minimis provision. People can spend up to £10,000 without being a permitted party and without having to keep accounts. He asks what monitoring there will be. The commission will examine the matter. The offence is set out in clause 106(2). It is a criminal offence. That will put the brake on overspending, avoidance and evasion. I remember that only a day or two ago, the hon. Gentleman told me that the criminal sanctions in the Bill were far too draconian.

Dominic Grieve (Conservative, Beaconsfield)

I counted 68 criminal offences created by the Bill. Some of them are draconian, and some appear absolute—I shall shortly deal with one—and may need amendment. I know that the Minister will do that. However, an offence is draconian only if someone can be convicted of it. If I spend £100,000 and am investigated for it, I produce 10 friends and say that we spent £10,000 each.

Paddy Tipping (Labour, Sherwood)

Of course that is a possibility. We discussed the matter on Second Reading and on various occasions since. It takes us back to the argument about hypothesis versus reality. I expect that the reality will not be as exciting as the hon. Gentleman tempts me to believe. Let me be more helpful to the hon. Gentleman and say that he makes a fair point in amendment No. 50. We discussed the figure in the context of part V. I am happy to accept amendment No. 50—another example of the Bill being improved.

Patrick McLoughlin (Conservative, West Derbyshire)

Can the Minister tell us how often the Bill has had to be improved so far? On how many amendments has he said that he will come back to the Committee? Does not that show how ill prepared the Bill was, rather than how much it has been improved?

Paddy Tipping (Labour, Sherwood)

The hon. Gentleman makes a point, and I shall make another. Under previous Governments, there was a regime where it was seen as inappropriate to make concessions. I remember that he was a Minister in that regime.

Patrick McLoughlin (Conservative, West Derbyshire)

It was a Government, not a regime.

Paddy Tipping (Labour, Sherwood)

It may have been a Government, but the regime introduced by the Government led to their losing office. One of the things that I have been keen to do during the course of the Bill—perhaps the hon. Gentleman will speak to some of his hon. Friends about this—is to listen to the arguments and make concessions where that will improve—

Patrick McLoughlin (Conservative, West Derbyshire)

How many?

Paddy Tipping (Labour, Sherwood)

I do not have a score chart. I will write to the hon. Gentleman. There have been a good number of occasions when appropriate suggestion were made. We are coming to one from the hon. Member for Hazel Grove (Mr. Stunell) in a moment. It has been appropriate to make changes because the Bill will affect us all fundamentally. What marks the Bill is the fact that we all know something about the political system, and we all have a contribution to make. I do not accept that the Bill was ill prepared. I remind the hon. Member for West Derbyshire (Mr. McLoughlin) that it was published in draft form in July. His party had an opportunity to comment on it. If there are failings in it, it reflects badly on those who work for his party that they were not picked up. I shall not be tempted further down that route. He hits a nerve, and I shall return to the matter. I am not persuaded to accept amendment No. 51, which deals with receipts and suggests that the value of the receipts should be increased from £100 to £200. There is a case, which the hon. Member for Hazel Grove may make, in relation to smaller organisations. The de minimis provision is £100, which applies in this case, so only organisations that spend more than that will be affected. The figure in the Bill is drawn from the Representation of the People Act 1983, where it was set at £20. It has been increased to £100, so that affords referendum campaigns more leeway. However, it is not unreasonable to ask well run, well resourced campaigns to present receipts and invoices. These are ultimately matters of judgment. There is not a great deal between £100 and £200. What is important is that a milestone is set down. In my judgment, £100, rather than £200, is the right figure.

Dominic Grieve (Conservative, Beaconsfield)

I have reason to be grateful to the Minister, who has given me 50 per cent. more than I expected. I am happy that he has accepted amendment No. 50.

RESTRICTION ON PAYMENTS IN RESPECT OF REFERENDUM EXPENSES

Dominic Grieve (Conservative, Beaconsfield)

I mentioned to the Minister earlier that I would return to a topic that has excited me during the passage of the Bill—the creation of absolute offences. Under clause 107(4), an absolute offence is committed if a person makes a payment in contravention of subsection (1), even if he did so by mistake or with an excuse that he believed to be reasonable. Is that what the Minister intends? With regard to the contravention of subsection (3), the reasonable excuse defence exists. Perhaps the Minister will look into that, in the spirit in which he has undertaken to look at other points in the Bill.

Paddy Tipping (Labour, Sherwood)

I have already given the hon. Gentleman and the Committee an undertaking that all the defence arguments will be brought in line during the period when we reflect on the Bill. I have heard what he said, and I will of course consider it.

RESTRICTION ON MAKING CLAIMS IN RESPECT OF REFERENDUM EXPENSES

Paddy Tipping (Labour, Sherwood)

I beg to move amendment No. 8, in page 67, line 30, leave out '30' and insert '42'. The amendment constitutes plagiarism. Similar amendments, originally tabled by the hon. Member for Hazel Grove (Mr. Stunell), were made to parallel clauses 70 and 85. We accepted his amendments then, and I am happy to move amendment No. 8 now.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I wish to put on record that the Minister has been helpful and constructive throughout our proceedings. He has not always given us what we wanted—perhaps not even most of what we wanted—but he has always listened carefully. I appreciate his adoption of our amendment, which we tabled early in our proceedings. It provides an opportunity for organisations that make returns to get their paperwork done. Those organisations are often small and inevitably involve human frailty. I am pleased that the Minister has accepted the amendment.

GENERAL RESTRICTION ON REFERENDUM EXPENSES

Robert Walter (Conservative, North Dorset)

I want to consider again, perhaps in a slightly different way, financial limits and circumstances in which someone who is not a permitted participant can spend up to £10,000. If that person spends more than £10,000, he is guilty of an offence if he knew, or ought reasonably to have known that the expenses were being incurred in excess of that limit. When we consider clause 111, we shall discuss the matter in more detail. There is a complex set of formulae for deciding how much various categories of participants—permitted participants, political parties or designated organisations—can spend in a referendum campaign. However, there is a loophole, if I dare call it that, which suggests that those who are not permitted participants can spend up to £10,000. Let us consider a specific scenario in which an organisation that, for whatever reason, is not a permitted participant in a referendum campaign and operates in London has several supporters dotted around the country. On a word processor or a laptop in London, the organisation draws up a sample newspaper advertisement to persuade people to vote in a particular way in a referendum campaign. The only missing item from the advertisement is an imprint. The organisation distributes the advertisement to its supporters throughout the country and suggests to them, "Why don't you insert this advertisement in your local newspapers and pay for it out of your own pocket? You won't be a permitted participant, but the advertisement will have a massive impact on the campaign because we'll have newspaper advertisements all over the country. You won't have made any donations to us directly. We're not registered; you're not registered. There's nothing anyone can do about it." If we are to exercise rigorous control, more time and consideration should have been given to that obvious loophole. I do not want to trespass on the ground of my right hon. Friend the Member for North-West Hampshire (Sir G. Young), who will speak shortly, but the alternative is to set no financial limits in referendum campaigns.

John Hayes (Conservative, South Holland and The Deepings)

That point is directly related to a matter that the Minister raised earlier. He claimed that the electorate would see through any attempt to disguise support for a specific side in a referendum campaign, and to fund such support. He said that such an attempt would backfire. As my hon. Friend suggests, the attempt could be heavily disguised and thus not transparent. I invite my hon. Friend to challenge the Minister to explain how the electorate can arbitrate when support or funding is heavily veiled.

Robert Walter (Conservative, North Dorset)

I thank my hon. Friend for his intervention. The tenor of the Bill and the Neill report suggests that we are seeking transparency. Exceptions of as much as £10,000 to limits—that figure can be multiplied by people who are not permitted participants acting in concert—can make a significant impact on a referendum campaign. I ask the Minister to ponder on whether the financial limits for which the clause provides are appropriate. If they are inappropriate, why should it be an offence to spend more than £10,000?

Paddy Tipping (Labour, Sherwood)

The hon. Gentleman asks me to ponder, and I shall do that. I have listened consistently to the Committee's views. The hon. Member for West Derbyshire (Mr. McLoughlin) chastised me earlier for accepting amendments and thus making changes to the Bill. I believe that that is a sign of strength, not weakness. In a previous intervention, the hon. Member for South Holland and The Deepings (Mr. Hayes) was vexed by the European Union. He suggested a scenario in which the European Union secretly funded clandestine organisations throughout the United Kingdom in a referendum campaign, I dare say about the euro. That stretches a hypothesis beyond the pale.

Graham Brady (Conservative, Altrincham and Sale West)

rose—

John Hayes (Conservative, South Holland and The Deepings)

rose—

Paddy Tipping (Labour, Sherwood)

I shall not revert to the subject of the European Union. I appreciate that it excites Opposition Members. We had a good opportunity to discuss the European Union earlier. The hon. Member for North Dorset (Mr. Walker) asked why the figure was set at £10,000 and invited me to reflect on it. I have been reminded that the Neill committee suggested £25,000. I am delighted that the right hon. Member for South Norfolk (Mr. MacGregor), who was a distinguished member of the Neill committee, will be able to participate in the debate. The Government have reduced the figure that the committee suggested. As I said, I shall ponder the matter. The hon. Member for North Dorset gave me an example to consider. He presented the notion of an advertisement that was circulated by friends and supporters of an organisation. It is difficult to comment on hypothetical circumstances, but the organisation in his example seemed to be an unincorporated body by another name. If that was the case, the commission would want to examine the matter and perhaps involve the police and bring a prosecution. However, I do not claim that there is no scope for avoidance and evasion.

Desmond Swayne (Conservative, New Forest West)

The clause is interesting in that it creates an offence in respect of persons or bodies that are not permitted participants and spend more than £10,000 to influence a campaign. I hope that the Minister will say whether such persons or bodies might indeed include the European Union, of which we have spoken. If not, why not? Will he therefore consider tabling an amendment on Report to make it so?

Paddy Tipping (Labour, Sherwood)

Conservative Members tabled amendments on that point, but did not bother to turn up to move them.

Desmond Swayne (Conservative, New Forest West)

All the more reason for the Minister to consider such a move, given the expression of concern he has heard this evening—although he said that he regards our concerns as pure fantasy. I wonder what world he lives in. He spoke of the EU secretly funding a campaign. There is no question of secrecy; it is doing so openly. I draw to the Minister's attention the fact that we held such a referendum in 1975, so our concerns are not fantasy and such referendums occur in the real world. At the beginning of the campaign, there was a 2:1 lead in the opinion polls for withdrawing from what was then the Common Market. By its end, albeit on a low turnout, the vote was 2:1 in favour of staying in. The strength of the argument or the wisdom of the British people might have achieved that result, but I cannot help but think that it had something to do with the fact that the no campaign was outspent by the yes campaign by 20:1. Even if our concerns are fantasy and there is no prospect whatever of such a body as the EU spending money secretly or openly, what possible problem can there be with making such provision in the Bill? If that is unlikely to happen, the Minister will lose nothing, but he will gain everything by assuaging the concern, which is not restricted to Conservative Members, but is rife in the country. That is what his spin doctors would call a win-win situation. I invite him to take his opportunity.

John Hayes (Conservative, South Holland and The Deepings)

The Minister and I go back a long way and he well knows that I am neither paranoid nor extreme about anything. I am a terribly mild, moderate and reasonable chap, so the last thing in the world that he would want to do is give the false impression that my position is anything less than calm, cool and collected. To correct him, I did not mention the European Union in my intervention; I talked about commercial organisations and multinational companies that might take an interest in funding referendum campaigns. To be absolutely precise, my paranoia—if there is any paranoia at all, and I do not think there is—is more about international capitalism than the European Commission.

Paddy Tipping (Labour, Sherwood)

That is a reflection of the change in the political agendas across the parties.

John Hayes (Conservative, South Holland and The Deepings)

It is more a reflection of the moderate broad church that is the Conservative party. The Minister criticised Conservative Members for not moving amendments dealing specifically with the point made by my hon. Friend the Member for New Forest, West (Mr. Swayne) and said that if we felt so strongly we should, at this stage, have moved amendments that would have tightened up the Bill in respect of our particular concerns and fears, but he said also that the Bill is enabling legislation and freely acknowledged that, in the event of a specific referendum campaign at a particular time—many euphemisms have been used, but we all know the spectre that many of us fear—additional legislation specific to those circumstances would be needed. Surely, he cannot have it both ways. My contention is that, at this stage, we need to set the tone, broadcast the signals and lay the foundations, which the Minister rightly said would be built on when we faced a particular referendum at an indeterminate time in the future. However, if those foundations are of an entirely different making from the building that is required later, there is little sense in arguing that we can construct a good building on shaky, insecure or inappropriate foundations, because that building will not be appropriate for an occasion that may or may not arise either later in this Parliament or in the next. We must lay foundations that clearly and starkly signal—in the House and more widely—our intentions, assumptions and presuppositions about the conduct of future campaigns and how they are to be supported and funded. I am profoundly concerned that we are changing the nature of campaigning and the funding of campaigns. The Minister and I share a love of robust, honest and frank exchanges of views and a civilised concern that those matters should be dealt with in the right way. I emphasise that I know that from the previous life that we shared. [HON. MEMBERS: "Oh!"] Is not it a pity that Hansard does not record irony? I am sure that the Minister also shares my desire that referendums and general election campaigns should be conducted, as far as possible, in a spirit of fairness, openness and honesty. The funding of those campaigns is fundamentally important to that fairness and that spirit. I believe, therefore, that these measures will concern decent democrats on both sides of the House—Labour Members as much as Conservative Members—not because they share the same views on what side they might take in a future and so far unspecified referendum, but because they would want that referendum to have a degree of legitimacy. Legitimacy is based on fairness, openness and honesty in terms of funding and the nature of campaigning. I am most concerned that we are missing an opportunity to lay the appropriate foundations on which we could construct a building of which we could all be justly proud.

John MacGregor (Conservative, South Norfolk)

I had not intended to speak, but the Minister referred to the Neill committee and I was its only member from the House of Commons. I may not have heard everything he said, but I realised that he was not addressing the point made by my hon. Friend the Member for North Dorset (Mr. Walter) about penalties. As he knows, the Neill committee recommended a limit of £25,000, not in relation to expenditure—we recommended against that and we shall come to it in a moment—but in relation to becoming a registered party and therefore having to observe all the requirements on donations and so on. We now find that there is a limit on expenditure as well, so someone who spends more than £10,000 will be caught on that, too. I am worried about lowering the limit, which takes me beyond the clause to schedule 19. I said on Second Reading that I was anxious about the enormous number of offences that would apply to breaches of the clause. All of us on the Neill committee knew that it would be difficult to persuade some people of calibre to be treasurers in such circumstances. That applies to political parties more generally, not just to referendums. To be faced with this horrendous list of offences is a further disincentive to people to take on that role. This problem applies acutely to the clause, because £10,000 is not a high expenditure figure when one is trying to put across a point of view. If someone inadvertently exceeded the £10,000 limit, they would, on indictment, be subject to a fine or one year's imprisonment. That is excessive for someone who may inadvertently breach that low limit. I do not think I heard the Minister refer to that point in his response to my hon. Friend the Member for North Dorset, and I should be grateful if he would address it because it is relevant if we are to lower the limit from £25,000 to £10,000.

Stephen O'Brien (Conservative, Eddisbury)

I, too, had not intended to speak in this debate, but when I heard my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes) refer to paranoia, it struck me that we should focus on the reality of the problem that the clause is trying to address. It is a fair analysis to argue that this provision looks like an attempt to limit the conduct of the arguments in a referendum to political parties, and to extend the control of party Whips. As we know, arguments in referendums tend to extend across parties. By insisting that a body can only spend up to £10,000 if it is not a permitted participant, this provision not only creates a mismatch but, one has to conclude, intends to favour political parties, as the participants, in putting forward the arguments in a referendum. As my hon. Friend the Member for South Holland and The Deepings said, there are plenty of other bodies with legitimate interests in the arguments presented in any referendum campaign. The provision would choke the campaigning abilities of legitimate interested parties. When he spoke of paranoia, it seemed to me that we should try to understand what problem the clause seeks to address and relate that to the findings of the Neill committee. As my right hon. Friend the Member for South Norfolk (Mr. MacGregor) said, £10,000 in today's communications world, particularly the broadcast world, is a small sum if one wants to get a message across. I must ask whether the paranoia is on the Government side, given that they have included this provision in the Bill. I have a straightforward question to put to the Minister, and I look forward to receiving an answer. What are the Government afraid of which makes them advance this clause?

Graham Brady (Conservative, Altrincham and Sale West)

I had hoped to make a brief intervention when the Minister was speaking, but he would not allow me to, so I am forced to make a short speech. I took particular exception to the Minister's suggestion that Conservative Members who have raised concerns about the funding of such a referendum may be paranoid or living in a fantasy world. Just because some of my hon. Friends have suggested that the European Union may seek to become engaged in the funding or running of a referendum campaign, it is not appropriate for the Minister merely to brush their concerns aside. 8.15 pm Whether it happens to involve the European Union or some other body, country, interest group, major multinational company or group of companies, we must remember that the major referendum on the horizon will be on whether the United Kingdom should give up its currency and join the euro zone. Such a change would have enormous geopolitical ramifications. It would be a massive step on the road to political integration of the European Union. People in other countries of the European Union may have an interest in discussing and influencing that process, and people across the world will also take an interest in it. It is entirely reasonable to assert that that issue may attract the funding, whether secret or open, that hon. Members have suggested. It is a realistic point to raise. I wish that I had kept the reference, but I heard an interesting programme on Radio 4 a couple of weeks ago. One of the key protagonists of the European movement—he has recently written a book—was talking about the circumstances of the 1975 referendum. He made the point that in that campaign there were strong suspicions that funding was provided by agents of other Governments. He was happy with the outcome of the referendum, and had been part of the campaign. There were strong suggestions that funding had come from the CIA, which, on behalf of the United States Government, was keen to promote the United Kingdom's membership of the European Economic Community. I do not know whether that is true. That person had no axe to grind and no interest in falsely suggesting that overseas Government funding was involved in that campaign. If that could happen then on a related issue, it could certainly happen now. It is not satisfactory for Ministers to brush aside these issues and suggest that only some Conservative Members with long-standing concerns about the European Union have expressed anxiety about the clause.

Desmond Swayne (Conservative, New Forest West)

There is every prospect that, in any referendum on this issue, the present governing party will be on the losing side. It should protect itself against the real possibility that international organisations, such as the North American Free Trade Agreement, may fund the side that it opposes.

Graham Brady (Conservative, Altrincham and Sale West)

I am grateful to my hon. Friend for making that important point. We are debating the issue of fairness in the conduct of a referendum. Whichever side of the argument one is on, it is in the interests of both sides to have a proper, fair campaign.

Andrew Miller (Labour, Ellesmere Port and Neston)

The hon. Gentleman should reflect on the fact that the hon. Member for Eddisbury (Mr. O'Brien) has just argued the case for having no upper limit. Conservative Members are talking at cross-purposes.

Graham Brady (Conservative, Altrincham and Sale West)

It is perfectly appropriate to examine the clause from all angles. I have no difficulty with that, and I am delighted that the hon. Gentleman has entered the debate. Whether the limit should be removed altogether or whether it should be £10,000, £25,000 or any other appropriate figure can be argued all ways, but that does not do away with the fundamental point about fairness to which my hon. Friend the Member for New Forest, West (Mr. Swayne) referred. This is about having a level playing field and maximum transparency. I have some reservations about the £10,000 limit because it interferes with people's freedom to engage in political activity and to expend their own resources on a matter that may be of great significance to them. If the Government are intent on including a £10,000 limit in the legislation, they should carefully consider all the circumstances and how it could be enforced. I ask the Minister to reflect on the situation provided for by clause 110, as it stands. The clause makes a distinction between, for instance, a body and an individual. At what stage of co-operation, or coalescence, between individuals do those individuals become a body in the terms of the clause? That is difficult to define. A common theme has been seen to develop in the present age of the internet. Direct action supported by some Labour Members—I do not think that they are present this evening—has taken place in Seattle and in the City of London. Some of those activities are obviously co-ordinated in some way, frequently through the internet. The internet is clearly a way of bringing together disparate people and groups who may have slightly different interests, and different reasons for engaging in the activities in which they are participating. However, it is an increasing fact of modern life that it is far easier today to post, on the internet, a statement urging people to take some action, and others may independently, as individuals, choose to take that action. Such people need not be members of an organisation such as a political party, a lobby group or a campaigning body, but, at that point, they would clearly be acting in concert to some extent. Under the Bill as it stands, how would Ministers define the point at which those individuals became a body? If individual expenditure is involved, other questions need to be answered. If an individual is spending his own money in the way envisaged in the Bill, that may be one thing; but what if a person or body seeks to assist a number of different individuals who—as is perfectly possible—may support people on both sides of an argument? I do not know whether this still happens, but not so long ago some major British companies made a point of funding both major political parties, because they thought it a good idea to support the democratic process. It is possible that someone will see a good reason to support both sides of an argument in the future, perhaps to ensure that the process receives adequate funds. In terms of subsection (3)(a), what is the definition of expense incurred "on behalf of a body? Must it be according to the direction of the body providing the funds? What if there is total autonomy on the part of the recipient of the funds in terms of how they are spent, how the argument is presented and what media are used to convey the argument? As it stands, the clause contains many holes and poses many questions. What arrangements does the Minister envisage for the checking and verification of expenditure? The clause does not appear to involve professional organisations or political parties. The aspect that concerns the individual is clearly aimed at those who may have strong beliefs, but are not part of a formal, organised political entity or process. If that is the case, we are clearly not dealing with professional political party agents who know the procedures for returning expenses incurred during elections or, in this instance, referendums. How will expenditure be checked, verified and catalogued? How can that be done in the case of people who are not even registered entities? They may simply be ordinary members of the public who feel so strongly about the subject of a referendum that they want to become involved, and to make some impact on their own. As a result, they may distribute posters or leaflets. How, in such instances, can the £10,000 limit be policed in any meaningful way? If the Minister has decided that £10,000 is appropriate, rather than £25,000 or any other figure, we must have a mechanism enabling us to verify the expenditure and establish the items that will count towards that sum. Although we may be dealing with enthusiastic amateurs, I think that the Government should make all that clear in detail so that the individuals concerned can have some certainty. If they are to be subject to the stringent criminal penalties referred to by my right hon. Friend the Member for South Norfolk (Mr. MacGregor), they must be able to know when they would be breaking the law. As we have heard, fines or imprisonment can be imposed on individuals. Let me return to what at least purports to be the fundamental purpose of this part of the Bill. In the spirit of the Neill report, its purpose is to achieve fairness in the process of a referendum, and, through that, in the outcome; but the punishment that might be visited on an individual who exceeded the expenditure limits—imprisonment or a fine—would clearly have no bearing on the outcome of the referendum. If Members of Parliament mistakenly overspend in their election campaigns, a penalty can be imposed involving the rerunning of the election. If someone engages in practices contrary to the spirit of the democratic process, the matter can be returned to the electors, who can be given another opportunity to engage in a contest that achieves the fairness that Ministers, in the spirit of the Neill report, want to achieve in the Bill. Clause 110, however, contains provisions that can be invoked to punish individuals who transgress—perhaps inadvertently—but no provision to bring the matter back. If there has been a widespread abuse, we may conclude that the referendum process was unfair, and that the result of the referendum is therefore tainted; yet we may find that people go to prison or pay a fine, while the result stands. As I said, I did not intend to speak on this, but I feel that there are serious flaws in clause 110. The Committee needs some answers.

Robert Walter (Conservative, North Dorset)

I had not intended to intervene again on the clause, but my right hon. and hon. Friends have raised some interesting points. They brought me back to our discussion on whether the clause in its entirety complies with the European convention on human rights. I was intrigued to find on the Table a copy of the Bill that is not the same as the copy that we had on Second Reading, or were using in Committee. It has a statement about the convention, which was not there before. It states that the Home Secretary believes that the Bill is compatible with the convention. 8.30 pm My hon. Friends who have been here for the whole of the debate will have heard the Minister use the convention as a reason for not permitting certain of our amendments to go forward, but article 10 states: This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers. The Minister has cited clause 110 as the reason it is not possible to exclude foreigners from being third parties, or permitted participants. Surely, article 10 brings into question whether the clause complies with the convention. I would be interested to hear his view because it seems that, if the convention says that one can impart information without interference, a £10,000 limit with criminal penalties of up to a year's imprisonment may contravene the convention.

Paddy Tipping (Labour, Sherwood)

I am conscious that I have spoken before and that the Committee wants to make progress. I hesitate to say it in view of the contributions that we have had over the past half hour or so, but there are one or two points to which I want to respond. The hon. Member for North Dorset (Mr. Walter) asked whether the Bill complies with the Human Rights Act 1998. That is why the Secretary of State's name is on the front of it. It is straightforward. We put the Bill on the Table in front of the hon. Gentleman so that he knows. It may be challengeable, but that is the fact as we see it. The hon. Member for Eddisbury (Mr. O'Brien) was saying, I think, that anyone should be able to spend what they want.

Stephen O'Brien (Conservative, Eddisbury)

What are you afraid of?

Paddy Tipping (Labour, Sherwood)

I am not afraid of anything. People can spend what they want. There is no prescription of what an individual can spend, up to £500,000. If someone wants to spend more than £10,000, they will have to become a permitted party in the terms of the Bill. People can spend far more. I am not afraid of these issues. There will be consequences if people spend large sums. One of the themes that has run in Committee is whether both sides of the argument will be balanced. Clearly, that can never be the case—a point that Neill recognised and the Government recognise. To try to contain spending, caps at various levels have been imposed. The hon. Member for Altrincham and Sale, West (Mr. Brady) tried to tempt me down the European Union road yet again. We had a prolonged discussion on clause 98 around those issues. I say for the record—it is merely for the record; I do not criticise it—that amendments on restricting EU contributions, amendments Nos. 14, 15 and 16, were not moved by Conservative Members. Having seen the reaction and excitement of Members during the debate, I have no doubt that there will be many other occasions when we will have the opportunity to discuss referendums, the euro and the EU's involvement. Many of us will welcome that. The right hon. Member for South Norfolk (Mr. MacGregor) made one significant point, and throughout its discussions, the Committee has been aware of it. The Bill places some fairly onerous responsibilities on treasurers and responsible persons. There is anxiety—I put it no higher—that it may be difficult to persuade people to become involved as fully as they might in the political process. At various points in the Bill, de minimis provisions are worked in. During our discussions, it was acknowledged across the Committee that the de minimis provisions as they affect constituencies and branches are acceptable and should not cause the problems that they might appear to on first sight of the Bill. The right hon. Gentleman asked me about the £10,000 limit and the criminal sanctions. I do not think that he heard my earlier remarks to the hon. Member for North Dorset, who was pressing hard—I am sure that he will continue to press—on what provisions are made to stop avoidance and evasion, and asking what in reality would stop a person from spending more than £10,000. Currently, the only provision in the Bill to achieve that objective is the hefty criminal sanctions. The right hon. Member for South Norfolk rightly mentioned—the Committee has discussed the issue at length—the number of criminal offences listed in schedule 19. I agree with his major point that we must be careful not to make the Bill's provisions so strong, firm and frightening that it will put people off engaging in political activity. We should realise that, although political activity may have earned itself a bad name, the Bill will help to rectify the situation. Despite what has been said, I believe that most people who work in political parties are the type of people who are involved in charitable work, who want to make a difference and who want to change their communities for the better.

John MacGregor (Conservative, South Norfolk)

I was making that point, but I was also making a point on clause 110 that was rather different from the first one. By lowering the limit from £25,000 to £10,000, one increases the risk of people inadvertently spending modest sums in making their case and yet incurring those heavy criminal sanctions. The two points are slightly different from each other. If the limit were £25,000 as the Neill committee recommended, the provision would not be quite so serious.

Paddy Tipping (Labour, Sherwood)

The right hon. Gentleman has hit on a theme that has occupied members of this Committee, and particularly Conservative Members—the Bill's provision of defence clauses. Surely, the type of person whom I described—those who act in good faith and who want to make change and to be part of the process—provided that they act in good faith and properly, should not be penalised for mistakes. In our debates, I have given the Committee an assurance that the Government have written in more comprehensive defence arguments. I have also, more than once, given the Committee an undertaking that, before Report, we shall work our way through the Bill, to ensure that the defence arguments and reasons are comprehensive and in good shape. With that, I hope that the Committee will agree that clause 110 should stand part.

SPECIAL RESTRICTIONS ON REFERENDUM EXPENSES BY PERMITTED PARTICIPANTS

George Young (Conservative, North West Hampshire)

This debate complements the debate that we have just had, which was introduced by my hon. Friend the Member for North Dorset (Mr. Walter) and focused on the lower expenditure limit of £10,000. This debate will examine the much higher expenditure limits that are provided for, particularly in schedule 13, and address one of the major contentious issues in the Bill. In the earlier debate, the Parliamentary Secretary, Privy Council Office said that it was a sign of strength each time he made a concession to the Opposition. We seek a display of yet more strength in this debate, although it may test his virility to the extreme as we consider clause 111 stand part. In a nutshell, we believe that the Government have got the matter wrong. We believe that they have it wrong in principle and in practice. We therefore propose to delete the spending limits provided for in the Bill and revert to the position adopted by the Neill committee. If I can use a computer analogy, the Government have turned the parliamentary screen blue. We now need to press a number of buttons, including delete, to try to get back to a workable position. There were no spending limits in the 1975 referendum, when the Labour Government of the day concluded that such measures would be impractical. The Welsh and Scottish devolution referendums in 1979 had no limits. The Referendums (Scotland and Wales) Act 1997, the Greater London Authority (Referendum) Act 1998, the Northern Ireland Negotiations (Referendum) Order 1998 and the Education (Grammar School Ballots) Regulations 1998 contained no limits. The Local Government Bill, which provides for local referendums on mayoral appointments and other issues, also contains no spending limits. The Neill committee looked at the issue in depth and reported in October 1998. In paragraph 12.45, it conceded: The case, in principle, for imposing spending limits in referendum campaigns is a strong one. However, the next paragraph concludes: We believe, however, that it would be futile and possibly also wrong to attempt to impose such limits in connection with referendums. The report goes on to describe the circumstances of a referendum, which include strange bedfellows, participants not confined to the political parties and unknown timing. Explaining its conclusion, the committee says: It appears to us that under these circumstances it would be impracticable to try to control campaign spending. The number of individuals and organisations involved would often be too large. The time-scale would often be too short. Adequate accounting procedures would often be impossible to put in place. The administrative apparatus required would resemble one of Heath Robinson's most outlandish contraptions—and would almost certainly not work. The commission on the conduct of referendums reached the same conclusion in 1996, saying: On balance, it is not considered practical to exercise Government control over the total expenditure by those campaigning on either side in a referendum. Notwithstanding those conclusions, the Government rejected the Neill committee's advice, although anyone reading the White Paper might be forgiven for not realising that. Chapter 8, on referendums, says: The Committee's report contains a set of recommendations on these matters which the Government accepts. That is Government speak for "The committee's report contains one major recommendation, which the Government reject." That semblance of acceptance of Neill, with the Government in denial mode, was repeated by the Home Secretary on Second Reading. He said: I have sought to ensure that the spirit, as well as the letter, of the Neill committee's recommendations on referendums is introduced into the Bill."—[Official Report, 10 January 2000; Vol. 342, c. 36.] That was a surprising assertion, as Neill considered and specifically rejected the Home Secretary's solution. The Government not only rejected the committee's principal conclusions, but went on to adopt a solution that the committee had explicitly rejected—an expenditure limit based on votes at the most recent general election. That formula is set out in schedule 13. There are three options. The first is that each side in a referendum campaign spends the same amount. Option two is that what each participant can spend is limited. Option three is that there are no limits. The intuitive solution is option one—that in a referendum campaign, the yes and the no side should have equal funding. Sadly, that is ruled out by nearly everyone. However attractive it may be to try to corral all those with an interest in the outcome into two large camps, each with an identical spending cap in the interests of equity, it does not work. When it was tried in Quebec, it was struck down on legal grounds as a violation of the right of freedom of expression of those who did not want to be in one of those two camps. As the Home Secretary said on Second Reading, if we tried to do that here, it would be vulnerable to legal challenge under article 10 of the European convention on human rights. In the clause 98 stand part debate, the Minister said that option one, with each side spending the same, was a cloud cuckoo land solution. If that option is not available, those who favour spending restrictions on participants are driven to option 2, which is set out in clause 111 and schedule 13. However, spending restrictions on participants do not work either, particularly when the participants are defined as they are in the Bill. 8.45 pm In paragraph 12.21, Neill clearly made the point that in referendums the political parties may be pitted one against another, or most of the parties may find themselves on the same side … or one or more of them may be seriously split … Whatever happens in any particular case, it is clear that general rules governing the conduct of referendums cannot be based on predictions about the parties' behaviour or assumptions about their role. Neill dismissed the assertion by the Labour party in its evidence that the focus of any regulation should be on the political parties. It is worth repeating Neill's conclusions: To represent referendum campaigns as merely another manifestation of the usual party political battle seems to us both misconceived in principle and false to the history". But that is exactly what is manifested in the Bill. In fairness to the Government, they recognised the vulnerability of their proposals during our debate on Second Reading. The speeches of Ministers were peppered with recognition of the difficulties, and with almost desperate invitations to the House to come up with something different. The Home Secretary said: We remain open to argument if better, more workable proposals can be introduced."—[Official Report, 10 January 2000; Vol. 342, c. 39.] The Under-Secretary of State for the Home Department said in winding-up: I repeat that we do not have a closed mind on the issue."—[Official Report, 10 January 2000; Vol. 342, c. 113.] This debate will test that assertion. On Second Reading, this aspect of the Bill engaged the attention of many of those who spoke; and the Government's proposals took on board a fair amount of water. That is significant because it was in the context of broad support for the Bill, which had an unopposed Second Reading. The right hon. Member for Birkenhead (Mr. Field) said: For the proposals on the financing of third parties that want to campaign in a referendum to be workable, we shall have to lock some people up."—[Official Report, 10 January 2000; Vol. 342, c. 54.] I recognise that, with the present Home Secretary, that may well be an argument in its favour, but the more squeamish among us will want to see if there is a third way. My right hon. Friend the Member for South Norfolk (Mr. MacGregor), who was a member of the Neill committee, reaffirmed its recommendations. He said: That is why the Neill committee found that it would be difficult to have a fair, workable system of capping in referendums. I still hold to that view",—[Official Report, 10 January 2000; Vol. 342, c. 67.] The hon. Member for Rotherham (Mr. MacShane) made the point that one referendum campaign—on Europe—is under way already, so the limits in the Bill are to some extent redundant. My hon. Friend the Member for Blaby (Mr. Robathan) said that these sections of the Bill "remain flawed". My hon. Friend the Member for New Forest, East (Dr. Lewis) used his legendary knowledge of the component parts of the pro-nuclear disarmament movement in the 1970s and 1980s to show how the limits in the Bill could easily be evaded. He concluded: That is why the whole concept of putting caps on what may be spent by parties or groups in a referendum is fundamentally flawed."—[Official Report, 10 January 2000; Vol. 342, c. 107.] I stand to be corrected, but I could not find in Hansard during the Second Reading debate one explicit endorsement of the Government's proposals. There was criticism from all sides, and even the Ministers were uncharacteristically hesitant in their advocacy. The reality is that they have come up with something that is neither defensible intellectually, nor deliverable in practice. It is fatally flawed in relating spending power to votes at the general election. There is no intellectual argument whatsoever for that limit. As Neill pointed out, general rules governing the conduct of referendums cannot be based on predictions about parties' behaviour or assumptions about their role. If we are resolving in a referendum an issue that it has not been possible to resolve through a general election, and on which major parties may be split, why should we base spending limits on the basis of votes cast at the last election? If, for the sake of argument, the amount Labour could spend on a yes vote in a euro referendum was based on how many votes it got at the next general election, that would be assuming that everyone who votes Labour would like to join, but we all know that that is not the case. If we had a referendum on proportional representation, how would Labour's entitlement to spend be determined? It has no policy on PR—we all know that it is split. Why should all Labour's spending power be allocated to one side of the argument according to the whim of the national executive? That is an absurd proposition, rejected by Neill and supported by no one. It is also incongruous to place spending limits on the protagonists in a referendum, when the media remain free to sponsor or promote any campaign they see fit. Indeed, one of the protagonists could simply buy a newspaper or magazine and circumvent the restrictions, and the message might not be seen as an advertisement, but as unbiased editorial comment. Not only are there some arguments of principle, but there are some practical problems, many of which were rehearsed earlier in Committee, including the so-called amoeba factor where a group simply divides itself into two. Individuals can form an unlimited number of partnerships or establish an unlimited number of companies. If they registered as permitted participants, they could then each spend up to an amount prescribed in the Bill. Of course, any spending controls can be got round by spending prior to the official commencement of the campaign. One interesting point that we raised earlier in Committee was that political parties can donate to other political parties under clause 48(2)(c). On Second Reading, the Home Secretary defended his limits as being unbiased because, he said, it was a "racing certainty" that the Liberal Democrats could never raise £3.5 million. However, they would not need to raise the money themselves because Labour could simply give it to them under clause 48(2). We heard earlier about the potential role of international organisations. I do not wish to spend too much time on Europe, but in effect the Minister pleaded with European institutions not to get involved in domestic referendums and another hon. Member remarked that that might be counterproductive. That may be right, but the Minister's pleading may fall on deaf ears. On top of what might be spent in this country, foreign donations—about which we have heard so much—could influence the outcome of a domestic referendum. We are left with option three of no spending limits, which is the preferred option of Neill and others. I think that that is the best solution, certainly in the short term. Of course, we want to avoid a re-run of the situation in Wales, where one side had lots of money and the other very little, and the possibility—I put it no higher than that—that that influenced the outcome. However, let us look at the likely referendums in the near future, which include first past the post against alternative vote plus, and entry into the euro. In neither case is it likely that any side will want for financial support. On the euro, there are some big battalions on both sides, as there are on the voting system. Once those two referendums are out of the way, new clause 4 can kick in, and the Electoral Commission can reflect on that and come up with its views. The Government have been flexible on the Bill, and they have said that they will consider and reflect in the light of our debates. It really is important they do the same on this issue, otherwise the verdict of the referendum will not have the validity that we all want. A few hours ago, the voting closed in the Labour party's selection of a candidate for the mayor of London. I do not mind the Labour party having strange rules for its internal elections, but the Committee should think twice before it imports unchallenged into the Bill the propositions before us tonight.

Michael Spicer (Conservative, West Worcestershire)

As my right hon. Friend the Member for North-West Hampshire (Sir G. Young) has just said, the problem with clause 111 as it stands is that it is unfair in two ways. First, at the moment all the official parties in the House—with the exception of the Conservatives—are in favour of a yes vote in a referendum on the euro. The formula in clause 111 and schedule 13 would mean that much more money would be collected by the yes campaign. On grounds of general equity, that would be inappropriate. The second unfairness is much more serious and it was alluded to by Neill, as well as by my right hon. Friend. In chapter 12.30, Neill states: To represent referendum campaigns as merely another manifestation of the usual party political battle seems to us both misconceived in principle and false to the history of referendums since 1975. The reason that Neill gives, as my right hon. Friend mentioned, is that political parties are alliances. All parties are split on the question of Europe, for example. The hon. Member for North Devon (Mr. Harvey) has his own faction in the Liberal Democrat party. That party's official position on Europe has been clear for many years, and it is that it wants a federal European state. However, the party's membership and electors hold a view that is very different from that of the party establishment. The same is true of the Labour party.

Andrew Miller (Labour, Ellesmere Port and Neston)

Is the hon. Gentleman arguing that, in a campaign on the euro, for example, part of Conservative party resources should be allocated to promoting the views of the hon. Member for Esher and Walton (Mr. Taylor), which contrast with the hon. Gentleman's own views?

Michael Spicer (Conservative, West Worcestershire)

I am saying that the Bill is nonsense. I am dealing with unfairness at the moment, but I shall come to questions of logic and principle in a moment. The leadership of the Labour party suppresses the faction led by the hon. Member for Great Grimsby (Mr. Mitchell). Many Labour Members support views that are diametrically opposite to those held by the party leadership. The fact that parties are alliances is therefore manifest throughout the House. The same is true of other permitted participants in the referendum campaign, such as the trade unions. Some of the biggest unions—the Transport and General Workers Union, for example, and Unison—have come out against entry to the single currency. However, the established leadership of many of the unions that took part in last year's Trades Union Congress special conference on the matter clearly demonstrated its support for the project. The unions' leadership—and, therefore, the people whom one presumes would apply for the money available under the clause—is committed in one direction, but members are much less convinced. That difference was fudged at the special conference. It is not surprising that trade union members should be so unhappy about the European question, as 69 per cent. of the entire population share their views. The same fault line runs through most of our institutions, but the Bill provides that overwhelming amounts of money will be collected by organisations whose established leaderships have settled on a particular point of view—in many cases, without the full-blooded support of their members. The Bill is therefore manifestly unfair to the memberships of the political parties and the other organisations involved in the referendum campaign. The Conservative position is the correct one. Neill looked at the matter very carefully and his arguments are very balanced. He concluded that it would be completely wrong to use political parties as the basis for the allocation of limits on referendum expenses. Secondly, Neill came to the conclusion—this was implicit in what he said—that if that process was engaged upon, given the present position of most of the establishments of the political parties and trade unions, campaign funding would be unbalanced. That seems a poor way of establishing fairness. 9 pm The clause throws up something even more fundamental about the Bill. It demonstrates how obsessed the Government are with trying to control spending amounts, and in a way that is unfair. The Bill is sloppy when it comes to other important aspects that it should be addressing, such as the powers of the commission to set the question. The Government have said that they will look at such matters again, but they have displayed a sloppiness of thinking in that respect. However, that is not the case when it comes to money. The Government are absolutely obsessed about controlling expenditure in a way that could do great harm to the cause of democracy, in so far as it is represented by a referendum. I support my right hon. and hon. Friends in that it must be right to go down the Neill path. There should be no limits on referendum campaign spending, because they are both appropriate and impossible to apply.

John MacGregor (Conservative, South Norfolk)

I congratulate my right hon. Friend the Member for North-West Hampshire (Sir G. Young) on his speech in opening the debate. He expressed admirably a series of arguments that totally demolished the Government's case. I will not go into some of them in detail because, happily, he has already done so. I agree with my right hon. Friend that, on Second Reading, the Home Secretary and the Under-Secretary of State for the Home Department, the hon. Member for North Warwickshire (Mr. O'Brien), displayed an openness of mind on the issue. They seemed to be looking to the House to come up with an alternative solution that would meet our objections. We have racked our brains; so has the Neill committee, and so, no doubt, have the Government. No one has an alternative solution except to remove limits on spending. That is the position that we have reached, and I think that it is correct, which means voting against clause 111. As is well known to those who follow these matters, on the Neill committee I held a minority position on spending on general elections. I took the view that the Neill committee's recommendation to have a spending limit was wrong, and I briefly set out my reasons in the report. Two of those reasons are relevant to this debate. First, I believe that to have spending limits in these crucial areas of national importance is an unwarranted restriction on freedom of speech. Secondly, I believe that the practical difficulties of evasion and enforcement that apply to the general election will apply even more to referendums. A retired party official, in giving evidence to the Neill committee, said, "Show me a limit and I'll show you how to get round it." Illustrations were given on Second Reading and again tonight on how it is possible to get round a limit. If that is true of general elections—as I think it is—it is true in spades when it comes to putting limits on referendum campaign spending. The Neill committee was unanimously against the idea. I found it fascinating to go through all the arguments to reach a conclusion. Wryly, I sometimes thought that the arguments justified my desire not to have spending limits on the general election campaign. Leaving aside the point of principle, we all believed that the practical difficulties were such that there was no case for recommending spending limits. Let me list some of my objections. The first is an objection of principle. Without taking sides in the euro debate, I refer to the issue of the referendum on the single currency. Clearly, that is a crucial national decision, which is, in theory, irreversible. Because of the key importance of that national debate, is it right to set a limit that is less than a company's yearly spending on marketing detergents? It is astonishing that we cannot even spend as much as is spent on the marketing of one domestic product on that critical national decision. The nation, not Parliament, is making the decision. In theory, it will be a permanent commitment—unlike a general election, when the nation can change its mind after four or five years. The measure is an unwarranted restriction on, and interference with, freedom of speech and debate on that crucial issue. That is the point of principle. The practical issues point in the same direction. By and large, a general election is fought by political parties with well-established machines and structures, and expertise in matters such as electoral law. Parties have professional management and staff, who are skilled in dealing with issues such as the control of expenditure, the management of limits and related accounting problems. That will not happen in a referendum campaign. It may happen for the political parties, but other organisations—whether official ones to which Government funding will be attached or those others listed in the Bill—will be rapidly put together. They will be united by only one thing—the side for which they are fighting in the campaign. Those units, parties or organisations will hold different points of view. At best, they will have only six months to sort out all the complications of controlling expenditure, and managing the limits. In practice, it will not be possible for them to do that. There could be many unintended, innocent breaches—especially in the early stages of the campaign. The Neill committee dealt with that matter in paragraph 12.46 of our report, which was quoted by my right hon. Friend the Member for North-West Hampshire. The committee's case was based on a long argument, but it is succinctly put in the report. We pointed out that a referendum campaign is not like a general election; it is more like a free-for-all. Anyone can participate. Many do. The political parties may, or may not, be the principal contestants or may be only in part. The report continued: It is often not known long in advance whether a referendum will take place. The six-month period that will apply will come upon one suddenly. As I pointed out, those on both sides of the campaign may never have worked together before and would not have the structures to control the machine. Sometimes they might be unwilling to co-operate on expenditure. It would be impractical to undertake such a commitment. The committee summed up the point by stating: Adequate accounting procedures would often be impossible to put in place. The administrative apparatus required would resemble one of Heath Robinson's most outlandish contraptions—and would almost certainly not work. It is not right to introduce an unworkable proposition, which has criminal penalties attached. When we discussed clause 110, I raised the issue of criminal penalties. I do not refer to the difficulty of recruiting treasurers for political parties. My point is that it will be difficult to recruit someone to take on that key role in an organisation that has been hastily brought together for one particular purpose, for only a short time. If that person does not have the machinery to control the organisation, he will be liable for criminal penalties. Third-party groups are difficult enough to control in a general election, although that is crucial when there are expenditure limits. It will be much more difficult to control them in a referendum. There will be many little ad hoc groups. The amoeba principle has been referred to in other debates—there will be many ways to breach the limits by setting up different organisations with different names. In effect, the limit will not be properly adhered to in any case. My colleagues have already referred to unfairness, which is another crucial element. Of course, it is true that there is no way that we can achieve total fairness on expenditure either in a general election or in a referendum. We all agree on that, and my right hon. Friend the Member for North-West Hampshire made that point clearly in his speech. It is important that there is fairness in terms of Government expenditure, and that point has been agreed. It was clear to us on the Neill committee that that point was so important that it should have been applied in earlier referendums. For example, if there had been Government funding for both sides in the Welsh referendum, I suspect that the Government would have been spared a great deal of their current embarrassment because we would not have a Welsh Assembly. Another aspect of unfairness is the undue emphasis given to political parties in a referendum, which is the point that my hon. Friend the Member for West Worcestershire (Sir M. Spicer) has just made. I do not understand why the funding should be based on political parties.

Graham Brady (Conservative, Altrincham and Sale West)

Did my right hon. Friend and his colleagues on the Neill committee consider the situation that appertained at the last general election? A political party attracted quite a large number of votes, but it had no position on the European issue. I refer to the Referendum party, which wished to have a referendum but did not take a stance as to whether one should vote yes or no in it. The people who voted for the Referendum party would properly accrue a share of the expenditure limit in the same way as others, but that party did not adopt a position on the issue.

John MacGregor (Conservative, South Norfolk)

We did not consider that issue, but my hon. Friend makes a point. I am sure that there are many other issues that we did not consider which point in the same direction. I acknowledge that the formula has been improved since the original proposal to which Lord Neill objected and about which he wrote to the Home Secretary. However, it is still far from satisfactory. It could lead to a manifestly unfair outcome with four of the political parties perhaps being on one side in the referendum, with only one on the other. I do not see why we should set up a formula that is weighted in that way, but that will happen because the formula is weighted towards the political parties. There are many reasons why we should reject the clause. It will clearly give the Government an advantage in whatever position they wish to take. Let us assume that there is a six-month period for the referendum campaign. The Government will still be allowed to campaign with substantial funding for five of those six months, whereas all the others will be constrained during the six months by the limits that apply to them. That is another element of complete unfairness. I return to the position that my right hon. Friend the Member for North-West Hampshire and the Neill committee have held about expenditure limits generally. The proposal is wrong in principle and unworkable and there is not another solution available. The right thing to do is to reject the clause.

Andrew Stunell (Liberal Democrat, Hazel Grove)

The Conservatives' arguments on the clause and schedule 13 are misconceived. I shall illustrate why I think that is so and I invite them to consider what would happen if they were successful in rejecting the clause. What the clause proposes and the schedule puts in place is not an absolute limit on the spending that will be available to any particular side in any particular referendum campaign. They limit the amount that individual participants can contribute to that campaign. A campaign that attracts funds from many participants—political parties, manufacturing industry and trade unions—can receive as many contributions from those bodies as it can accumulate. The Bill places a ceiling on the contributions of each of those bodies, but as far as I can see, there is no provision for a global ceiling for any campaign seeking a particular outcome in a referendum.

John MacGregor (Conservative, South Norfolk)

Does that not make a nonsense of having a ceiling at all?

Andrew Stunell (Liberal Democrat, Hazel Grove)

I shall perhaps illustrate that it does not, although I do not know whether that will be to the right hon. Gentleman's satisfaction, but I shall first develop my argument a little further. The debate so far suggests that the Bill provides not so much for a limit as for a grant, so that money will be given which can be spent to the set limits. That is not the case. If we adopt the scheme in the Bill and Conservative Members' assumptions are correct, the Conservative side—let us call it that for the sake of argument—in a euro debate would be able to attract a ceiling of £10 million. That would consist of £5 million for the umbrella body and £5 million for the Conservative party, being one that scored more than 30 per cent. of the vote in the previous general election. Conversely, the other side of the debate would attract a ceiling of £5 million for its umbrella organisation. It would also attract £5 million for the Labour party, as one that got over 30 per cent. of the vote at the previous election, and £3 million for the Liberal Democrats. If Conservative Members' assumptions about other parties in the House are right, seven other parties would be able to attract ceilings of £500,000 each. The total ceiling for that side of the debate would be £16.5 million, compared with the total ceiling of £10 million for the Conservative side. It has been said that that is where the unfairness lies, but that is not the case. What other options are there for a no campaign that wants to spend over £10 million? It can recruit any individual, company and unincorporated association prepared to contribute up to £500,000.

Desmond Swayne (Conservative, New Forest West)

It is of course possible for a handicapped horse to win a race, but it nevertheless begins with a handicap. That is the position that the hon. Gentleman seems to be espousing. It might be possible for a political party to overcome a handicap, but it is still unfair that it should start with one.

Andrew Stunell (Liberal Democrat, Hazel Grove)

That is where the Conservatives have got the whole argument fundamentally upside down. It is not a question of whether a political party is handicapped, because as the hon. Gentleman rightly pointed out earlier, the various parties have different views within them, and it might well be that a party was committing to the argument a sum that fell a long way short of the amount allowed by the expenditure ceiling. If there were serious internal divisions, the party's fund-raising attempts and the determination of its executive to apply the funds to a particular cause might be inhibited.

Michael Spicer (Conservative, West Worcestershire)

The point is not that political parties would be handicapped—we have been arguing that the emphasis should not be on political parties—but that a particular side of the argument would be handicapped, as the hon. Gentleman has rather brilliantly explained.

Andrew Stunell (Liberal Democrat, Hazel Grove)

Let me develop my point a little further. There is such a fundamental disconnection between the arguments being put by the Conservatives and real life that it will take a while to explain it. We have not yet considered the situation of the Democracy movement, which is not part of the calculation at present, the UK Independence party, or any other extraparliamentary party which is now represented in the European Parliament and possibly elsewhere. There will be other participants in the campaign and each will have a limit on its spending. That is what the Bill proposes. I ask Conservative Members to address themselves to the unfairness that would be generated if we accepted their scheme instead. The view that the Conservatives have presented to the Committee is that there should be no limit on the spending of any political party in any referendum. There would therefore be no limit on the expenditure of every one of the nine non-Conservative parties represented in this House. Let us suppose that every one chose to spend as much on a referendum campaign as the Conservatives spent on the general election campaign—£28 million. Under the Bill, the anti-Conservative forces would be restricted to spending £16.5 million, but under Conservative proposals, £250 million would be the barrier. The Conservatives will say that the Liberal Democrats would never spend £28 million. That is precisely my point. The legal limits in the Bill cap the expenditure of any participant in a referendum campaign but would not limit expenditure of one side of the argument as a whole. That seems fairer and less unequal than Conservative proposals. The right hon. Member for South Norfolk (Mr. McGregor) said clearly that he was opposed to any financial limits for general elections or referendums. We really must decide whether we prefer to use the word "referendums" or "referenda". [Interruption.] Typically, the Government have one view and the Opposition another.

Patrick Cormack (Conservative, South Staffordshire)

Stick to the Latin.

Andrew Stunell (Liberal Democrat, Hazel Grove)

If I recall Standing Orders correctly, I believe that I am required to speak English in the Chamber. I take a different view from the right hon. Member for South Norfolk. We must create a more level playing field; we need more balanced legislative requirements. That is why the Liberal Democrats have throughout supported the principle of a limit on national expenditure in general election campaigns, and why we certainly support introducing limits on expenditure in referendum campaigns. Let us be clear: the Bill—I am not sure whether it is the Government's intention—prevents one participant on one side of the argument distorting the value and impact of a campaign by jacking in £28 million, or whatever the sum might be. A large amount of money can be spent, but only if a wide range of bodies and organisations are committed to one cause. That is an appropriate way forward. It has been argued that one poor, impoverished, unsupported political party, isolated and marooned, carrying the flag for a point of view in a referendum, could be overwhelmed by Scottish and Welsh nationalists and Liberal Democrats, all of whom will have pumped large sums of money into the campaign. What world do people who present such arguments inhabit, for goodness sake? It is not like that at all.

David Rendel (Liberal Democrat, Newbury)

I wish it were.

Andrew Stunell (Liberal Democrat, Hazel Grove)

We certainly do. I would love to regale Members with some of the stories that have come out of our proceedings upstairs. My local party does not have a budget of £250,000 a year, although I know one or two local Conservative parties that do—and good luck to them. Let us please keep in touch with the real world and understand what the Bill does and does not allow. It does not put the Conservatives at a disadvantage. It introduces sensible limits, which the public are expecting this House to set. Indeed, they would be disgusted with us if we failed to do so. The limits will protect democracy in future and, in due course, benefit the Conservative party just as much as they will any other political force inside or outside this House.

Desmond Swayne (Conservative, New Forest West)

I shall try to reconnect the hon. Member for Hazel Grove (Mr. Stunell) with reality. I noticed that during his powerful speech, he did not address himself to any of the arguments made by the Neill committee, which set out the reasons for not having such limits. It is nonsense that the amount spent by a political party in a referendum campaign should be linked, as it is in schedule 13, to the proportion of votes cast in a preceding general election. A general election is a referendum, so to speak, on any number of issues. People do not have the single-issue focus that determines their vote in a subsequent referendum. Indeed, they may well support a political party in a general election for a particular reason, while being wholly opposed to that political party's stance on the issue that is the subject of a subsequent referendum. Political parties recognise that and play it for all it is worth, as we see from the spin being put out for the next general election. The governing party is determined that the next general election should not be a sterling election, because it recognises that at present 69 per cent. in the opinion polls are deeply anxious about the prospect of sterling being abolished. The Government therefore want to make it clear that the next general election is not about that. It is about any number of other issues, and that topic can be addressed subsequently in a single-issue referendum. Of course, that is entirely disingenuous to the voter, whose vote at the general election will determine the expenditure of a political party at the subsequent referendum. The logic of that is monstrous—that someone who is wholly opposed to a political party's stance on the referendum issue should, by casting his vote for that political party quite properly on other issues at a general election, nevertheless play a part in determining the expenditure permitted to that party at the subsequent referendum.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I am not sure whether the hon. Gentleman is following his own logic. Is he saying that he would be happier for that party to have no limit on how much it pumped into a campaign with which that voter disagreed, or that he would prefer to have a limit? He seems to be arguing in favour of a worse evil than the one about which he is complaining.

Desmond Swayne (Conservative, New Forest West)

No. I believe that the logic of the clause is monstrous, and I do not want the clause or the schedule in the Bill at all. I shall vote against them.

Mike O'Brien (Labour, North Warwickshire)

Argue that.

The rest of the debate is in Hansard.