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Mr. John Bercow (Buckingham): I am sure that the House has listened to the right hon. Gentleman's historical exegesis with great interest. If he is against the purchase of votes, how does he justify promoting a Bill that will allow the issue by Ministers of official press releases in support, for example, of the abolition of our national currency, while regulating the activities of campaigning organisations in any such referendum for up to six months, thereby preventing the supporters of national self-government from effectively arguing their case?

Mr. Straw: I do not accept what the hon. Gentleman says. 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. If, as I think, the hon. Gentleman is referring to the fact that controls on campaign spending in a referendum can go back six months, but that the purdah period for Government is 28 days, that is no different from the situation on general elections that obtained under the previous Government as well as this one. I think that there is general agreement that, once the provisions are fully in force, the spending rules should cover the year before a general election. However, we have sought to replicate the purdah period that exists before a general election--when officials cannot get involved in the policy of the Government of

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the day except in narrowly controlled circumstances--to apply to referendum campaigns, but obviously taking account of the differences. I shall shortly speak in more detail about the changes to referendums.

Given every other change that has taken place in our national life over the past 120 years, it is astonishing that we still conduct our elections according to rules laid down at the end of the 19th century. They tightly regulate spending by candidates and third parties at a constituency level, but do not recognise even the existence of political parties and third parties at the national level. That is plainly absurd, and the Bill puts the situation right.

Similarly, as the Neill committee recognised, the way in which we conduct referendums has also failed to keep up with the changing political landscape. Neill proposed having standing ground rules in operation, well in advance of any future referendum, so that the debate can concentrate on the issue at stake and not on the conduct of the poll.

Each side in a referendum campaign must have the opportunity fairly to put its case to the electorate. The Bill achieves that by providing for the designation by the Electoral Commission of an umbrella organisation on each side of a campaign. Once designated, the two umbrella bodies will each be entitled to a grant of up to £600,000, a free mailshot to each household and free air time for referendum broadcasts.

In addition, in the 28-day period before the date of the poll, the Government of the day will stand back from the debate and leave it to the umbrella groups and other participants to campaign. This purdah period is a fair and practical response to the Neill committee recommendation, and the committee has welcomed it.

Mr. Denis MacShane (Rotherham): What does my right hon. Friend have to say about the huge sums of money already being spent on a pre-referendum campaign? Mr. Paul Sykes has said in the Yorkshire Post that he is prepared to spend £235 million campaigning against Members of Parliament who believe that our country should be a full player in Europe. He is putting up posters all over the country. Mine has a rather flattering picture of me when younger. Constituents are phoning up asking who is publishing this picture with my name on it.

This is taking place now--millions and million of pounds are being spent to try to get Britain to leave Europe. That must be considered by the Government and the Neill committee.

Mr. Straw: As I shall explain in a moment, it is not possible to achieve perfect equality in spending by both sides in a referendum campaign. I am pleased to learn that my hon. Friend has been portrayed by a picture that suggests that he is even younger than he is.

Mr. Peter Bradley (The Wrekin): But no more lovely.

Mr. Straw: As far as I am aware, I do not even merit a poster from Mr. Sykes in my constituency, still less a photograph. However, that is one of the burdens that I must bear.

I can tell my hon. Friend the Member for Rotherham (Mr. MacShane) that the arrangements for the fair conduct of referendums, in part VII, include one departure from

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the Neill committee recommendations. That departure has to do with expenditure limits on campaign organisations--a subject of much debate, both in the Neill committee and outside it. The committee said that it was not opposed to expenditure limits as a matter of principle, but it questioned how such limits could be applied effectively in practice. It therefore proposed that there should be no limits on either side.

For a reason that I shall expand on in a moment, the Government agree that it is not practicable to impose an overall limit on the amount that each side in a referendum may spend. In our judgment, such an approach would indeed be unenforceable. It would compel otherwise implacable opponents, who happened to share the same view on a given referendum question, to work together and agree a share-out of the expenditure limit. To expect that to happen is simply not to live in the real world.

It not possible either to construct a regime that automatically produces a level playing field between the two designated umbrella bodies, but that leaves everyone else out in the cold. We know that from the experience in Quebec, where considerable use is made of referendums. There, a 1978 Act introduced an almost total ban on independent spending by individuals or groups operating outside a formal umbrella group or what was called the national committee.

Several sections of that Quebec law were struck down by the Supreme Court of Canada in October 1997, on the grounds that they violated freedom of expression under both the Canadian and the Quebec charters of human rights and freedoms. Any equivalent provisions here would be equally vulnerable to legal challenge under article 10 of the European convention on human rights.

However, I have taken some trouble to talk to colleagues in Canada, and I should also tell the House that the operation of the Quebec law was intolerably complicated. Squabbles took place between participant groups both before and after referendum campaigns about how a fair share-out might be implemented, and about whether it should. In the end, it was accepted in Canada--as I hope that it will be accepted in this House--that such a fair share-out was impossible.

However, it is possible to place limits on the spending of each individual or organisation participating in a referendum. I will be the first to admit that that will not produce absolute equality in terms of what is actually spent in a campaign, any more than the prescription of maximum limits on what parties may spend will secure an equality of what is actually spent in elections by those political parties.

For example, the Liberal Democrats are offered generous spending limits in the Bill, but it is a racing certainty that the party will not be able to raise money to the level of the spending limit. So to argue that spending by the Labour and Liberal Democrats parties will be nearly equal because both parties will be able to spend up to a maximum amount fails to take into account the capacity of parties to raise money up to the maximum.

We have listened to the criticisms levelled against the expenditure limits set out in the draft Bill. I accept that they were too crude and failed to take account of the relative support for political parties as represented in the House. We have refashioned the limits in the Bill, and made them more sensitive to what we perceive to be the level of support for those parties.

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I also say, particularly to Conservative Members, that the revised expenditure limits set out in the Bill are not necessarily our last word on the matter. We remain open to argument if better, more workable proposals can be introduced. I have to say--I do not say this with any arrogance--that, so far, I have not seen any better and more workable alternatives than those in the Bill. I have asked the Opposition to come forward with their further and better particulars for some months. If they present them to us, we shall certainly consider them on their merits.

Mr. Simon Hughes (Southwark, North and Bermondsey): I have a linked referendum question. In the Home Secretary's examination of part VII on referendums, has he considered two issues that do not appear in the Bill? The first is that referendums could be triggered by people other than the Government and the second is that the formulation of a referendum question should be arbitrated by someone other than the Government and the Government majority in Parliament. For example, the question could be arbitrated by the Electoral Commission.

The Government are committed to two referendums--one on the European currency and another on the electoral system--and the way to ensure that debate on each does not get clouded by the debate on how to take the decision would be to have a process that would decide the referendum question independently of Government and of Ministers of the day.

Mr. Straw: The hon. Gentleman puts two points to me. The first is whether we have considered the circumstances in which a referendum might be introduced by people other than the Government. The Bill deals with referendums that are determined by Parliament. It is possible to conceive of circumstances in which an Opposition Back-Bench Member introduces a private Member's Bill that will secure a referendum. In such a case, and notwithstanding the fact that the Bill had been introduced by an Opposition Member, Parliament would have decided on a referendum and the rules in the Bill would come into play. In practice, all previous referendums have been held on the basis of Government Bills. However, it is not Government but Parliament that decides to have a referendum. That is an important and profound distinction.

The hon. Gentleman's second point is the important one of whether there should be invigilation of the question set in a referendum. I am open to argument on that point, but my judgment is that, in the end, the question must be a matter for Parliament. The question should be clear when Parliament is coming to a decision on whether to approve a Bill proposing a referendum. However, there are good grounds for considering whether the Electoral Commission could have a role in advising Parliament and the Government on the wording of the question. It is plainly in nobody's interest to have a question that is either so confusing to the electorate or so patently biased as to lead to a decision by the electorate that remains open to question. However, it is a matter of record that the

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questions asked in referendums in the past have, on the whole, been fair. If a referendum is to have legitimacy, it is crucial that fairness is apparent in the question.

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