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Mr. Julian Brazier (Canterbury): The Home Secretary has just paid an implicit tribute to those in all political parties who become involved in political life. Most of those people are, of course, unpaid. How does he reconcile what he has just said with the Government's attitude to political honours; for example, for those involved in local government?

Mr. Straw: I am certainly fully aware that people from all parties who give distinguished public service, often based on their political position, are honoured by the Government. The hon. Gentleman will know that it is a matter of order in the House that we do not question the award of honours, save on a substantive motion, so, if he will excuse me, I will not pursue that matter.

As I said, part II re-enacts, with modifications, the Registration of Political Parties Act 1998, except in one important respect. The registration scheme set out in the 1998 Act was essentially a voluntary one. In contrast, part II brings any organisation that supports candidates at an election within the ambit of the controls on donations and campaign expenditure.

Part III deals with accounting requirements. Over time, the commission can be expected to establish common accounting requirements, so that the accounts of all parties follow best practice and can fairly be compared, one with another.

Part IV delivers our manifesto commitments. Parties will be required to report on a quarterly basis all donations of £5,000 or more accepted by the central organisation, and £1,000 or more accepted by a constituency association or other sub-division of the party structure. In the immediate run-up to a general election, reports will have to be submitted weekly.

The prohibition on foreign funding and anonymous donations is achieved through the concept of a "permissible donor", which is to be found in clause 48. The categories include an individual registered to vote and a registered company or unincorporated association that conducts business in the United Kingdom. Trust funds, including blind trusts, are specifically excluded from the definition of a permissible donor.

Before leaving part IV, I draw the House's attention to clause 64 and schedule 6. The provisions place holders of elective office, including Members of Parliament, under a statutory duty to report donations of £1,000 or more to the Electoral Commission. Those arrangements will augment, not replace, the existing registers of interest maintained by the House and other elected bodies.

Parts V and Vl control election expenditure by political parties and by third parties respectively. The limits on campaign expenditure by parties follow the recommendations of the Neill committee. In parliamentary general elections, a party will have an "allowance" of £30,000 for each constituency that it contests. The familiar limits for expenditure at local level will continue to apply.

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The expenditure limits for third parties are equivalent to 5 per cent. of the maximum amount that could be spent by a political party at a relevant national election. Those controls will cover national spending by trade unions, companies and others that is intended by those organisations to influence the outcome of an election.

Part VIII builds on the Representation of the People Bill by further changing the Representation of the People Act 1983 with a view to hauling its provisions at least into the 20th century, if not quite into the 21st century. I particularly draw your attention to clause 125, Mr. Deputy Speaker. It is designed to introduce into the 1983 Act the measure of clarity that Madam Speaker found that it lacked, following the successful appeal by my hon. Friend the Member for Newark (Mrs. Jones) against her conviction for a corrupt practice.

The House will be aware that, in the 1997-98 Session, the Select Committee on Home Affairs unanimously concluded that the existing 20-year qualifying period for registration as an overseas voter was excessive. The Government concur with that view. However, it is arguable that the Committee's recommendation that the qualifying period be reduced to five years goes too far in the other direction. Therefore, clause 130 provides for a reduction to 10 years, and that is a balanced and equitable response to the Committee's recommendation.

I should add that I do not propose to commence that provision until after the next general election, and then only when the new system of rolling registration is in place. That will ensure that a British citizen returning to this country after spending a period abroad will normally be able to re-register on the domestic register within six weeks at most. It takes anything up to 15 months under the existing annual registration arrangements.

Mrs. Llin Golding (Newcastle-under-Lyme): The clause does nothing to prevent plumping. My right hon. Friend will recall that, in a by-election in the Vale of Glamorgan, Conservatives Abroad put all its overseas voters into that constituency, thereby denying my hon. Friend the current Member for Vale of Glamorgan (Mr. Smith) victory on that occasion. Cannot the Bill ensure that the place where people register is linked to the area in which they lived or were registered before they went abroad?

Mr. Straw: I am interested in my hon. Friend's comments, although I believe that there are already requirements relating to proof of previous residence. I shall follow up those points and write to my hon. Friend, and ensure that the matter is taken up in Committee.

Mr. Simon Hughes: Will the Home Secretary give way?

Mr. Straw: I have already given way to the hon. Gentleman, and I should like to bring my remarks to a close.

Part IX puts into effect the Neill committee's recommendation that companies should be required to obtain the prior consent of their shareholders before making donations to parties or other political organisations. Political donations by a company are of such a unique nature that the decision should not, as it is

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at present, be left to the general discretion of the directors. The requirement will ensure that donations are made only when the management of a company can clearly demonstrate to shareholders--not less than every four years, according to Neill committee recommendations--that they are in the interests of the company.

Our objective is to effect as much as possible of the Bill by the next general election, whenever that may be. To achieve that will be no small undertaking, given that the successful establishment of the Electoral Commission will underpin all that follows. There are several imponderables in the timetable, for example, the timing of Royal Assent and that of the general election, which will be on or before May 2002.

All being well, we aim to have the electoral commissioners appointed and the Electoral Commission functioning by November. As soon as possible thereafter, I want to bring part II into force so that the transitional arrangements set out in clause 30 can come into play. Existing registered parties will then have six weeks in which to notify the Electoral Commission of the name of their registered treasurer and to deposit a scheme setting out their financial structure. It is only then--February or March 2001--that the accounting requirements and the controls on donations and on campaign expenditure, which are set out in parts III to VI, can come into force. The timetable is demanding, but, having established long-overdue controls on donations and campaign expenditure and consulted extensively on them, it is incumbent on us to do all that we can to have them in place for the next election.

We want to work with all parties to prepare them for the implementation of the Bill. We will offer what guidance we can in the run-up to the establishment of the Electoral Commission. However, there is a limit to what the Home Office or the commission can do. In the end, it will be down to each party to prepare for those far-reaching changes. The preparations need to start now.

We should not underestimate the importance of the Bill. The conduct of elections will never be quite the same again. As with all changes to electoral law, we wish, as much as possible, to proceed on the basis of consensus. I have no doubt that the right hon. Member for North-West Hampshire (Sir G. Young) will have points of detail to make, but I take comfort from the broadly supportive comments of the right hon. Member for Richmond, Yorks (Mr. Hague) during the debate on the Loyal Address. The time has come to get down to the business of restoring public confidence in our political institutions. The Bill aims to achieve that, and I commend it to the House.

5.2 pm

Sir George Young (North-West Hampshire): The Second Reading of this Bill marks a further step in the progress towards the statute book of the Neill committee's recommendations. Since the report was published in October 1998, we have had a full day's debate in the House on 9 November that year and the publication of the White Paper and the draft Bill, launched by the Home Secretary's statement, followed by questions and answers on 27 July last year. Just before Christmas, the Bill and the explanatory notes were published, and they are now before the House.

At each stage, the Opposition have made it clear that we accept Lord Neill's recommendations, and we will not obstruct their passage on to the statute book. I join the

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Home Secretary in paying tribute to Lord Neill and his committee--they have managed to build consensus out of the bricks of political contention. We accept the establishment of the Electoral Commission, the accounting requirements for political parties, the principle of containing national campaign expenditure at a general election, and the reporting of major donations and the restrictions on third parties. I agree with almost everything that the Home Secretary has just said.

My party's criticism of the Bill is that it rejects the Neill committee's recommendations on two points. However, I was delighted to hear the more conciliatory passage about referendums in the Home Secretary's speech. I shall discuss that shortly. The key objective of putting the Neill recommendations on the statute book is to enhance the status, credibility and integrity of the profession of politics. For that reason alone, it is particularly important for Government to resist the temptation to tweak the Neill committee's recommendations to seek party advantage. If they gave in to that temptation, it would add to public cynicism about the political process instead of defusing it.

Paragraph 2.34 of the Neill committee's report states:

The Government should pay attention to that assertion.

I want to make one or two general points.

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