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Mr. Winnick: What was the result?

Mr. Walter: Unfortunately, he won--but only just.

The most recent devolution referendums--particularly the one in Wales--saw prominent members of the governing party campaigning against the proposition. Both the major parties at the last election were committed to a referendum on the single currency, which has been mentioned by right hon. and hon. Members on both sides. Why? Why, in a representative democracy, did they not have a clear mandate on the issue? Why are the Government proposing a referendum on proportional representation? With 75 per cent. of the Labour party against the proposition, there is no clear mandate for it.

What is the logic of controlling the expenditure in a referendum campaign by linking it to political parties and then defining a formula based on popular support at a general election at which the Government gained no clear mandate on the issue that is the subject of the referendum? Who will decide whether the Labour party's £5 million in the PR referendum is given to the no or to the yes campaign? Will it be the Prime Minister or the national executive committee?

The Minister of State, Home Office (Mr. Paul Boateng): Same thing.

Mr. Walter: Oh, it is the same thing, is it? The truth is revealed.

Mr. Straw: It was a joke.

Mr. Walter: He who laughs last.

If there is no coherent link between support in a general election and party commitment to a referendum outcome, how should we control the spending--or should we control it at all? Neill rejected any cap because of the complexity of enforcement. As the right hon. Member for Birkenhead (Mr. Field) pointed out, whatever the cap, the proprietors of The Sun or The Mirror can campaign for one side or the other day after day and not be subject to any limit.

There is a certain attraction in the simplicity of an equal cap on both sides, but Neill could find no formula that would fit the Bill. The Government's formula is unfair and unsustainable. The Home Secretary is clearly unhappy and has invited an alternative proposal. The proposal on the table is the Neill proposal, which we support.

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The Bill contains important constitutional changes. I emphasise our desire that, by agreement through the usual channels, the provisions on referendums, on the control of political parties, on the establishment of the Electoral Commission and on restricting the franchise should be taken on the Floor of the House.

We welcome the Neill report and support the measures to enact it, so we will not divide the House tonight.

9.42 pm

The Parliamentary Under-Secretary of State for the Home Department (Mr. Mike O'Brien): Some commentators are naturally suspicious whenever the House agrees on legislation, but I take considerable comfort in the large measure of cross-party support for many of the Bill's provisions. Despite the tone of the end of the speech by the hon. Member for North Dorset (Mr. Walter), the House has been broadly supportive of the terms of the Bill.

We have heard some excellent speeches, including those from my right hon. Friend the Member for Birkenhead (Mr. Field) and my hon. Friends the Members for Walsall, North (Mr. Winnick) and for Southampton, Test (Dr. Whitehead). My hon. Friend the Member for Battersea (Mr. Linton) made a well-informed and thoughtful speech, and my hon. Friend the Member for Rotherham (Mr. MacShane) made a powerful contribution.

There were also important and worthwhile contributions from the right hon. Members for North-West Hampshire (Sir G. Young), for Caithness, Sutherland and Easter Ross (Mr. Maclennan) and for Cities of London and Westminster (Mr. Brooke). I listened with especial care to the contribution of the right hon. Member for South Norfolk (Mr. MacGregor), who is a member of the Neill committee. The endorsement of a leading Tory on the committee for most of the Bill's provisions was telling. I hope to deal with his specific questions as we proceed.

When we are embarking on major constitutional changes and changing some of our party political machinery, it is right that the House should proceed on a consensual basis as far as is possible. Nothing would be more destabilising than if, with each new Administration, how we conduct our elections were subject to change and counter-change.

There is still no agreement on a number of issues--thankfully, a small number. I hope that we can discuss those issues as the Bill progresses through the House. On referendum spending limits, my right hon. Friend the Home Secretary has on more than one occasion said that he is willing to consider alternative proposals; but any alternative must be workable. We see fundamental practical and legal difficulties with any scheme that applies a single overall spending limit to each side of the argument in a referendum. The right hon. Member for South Norfolk made a telling point when he said that he thought that it was probably impossible to have complete equality. Those who seek to achieve it must have the onus placed on them to show that it would be practical and legal to achieve that aim. We do not have a closed mind on the issue, but we have considered it with care and the other solutions that have been proposed would produce even greater difficulties.

The hon. Member for North Dorset made the point that the Neill committee recommended that fair opportunity should be provided for both sides to put their arguments

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to the public during a referendum, and we endorse that view. However, fairness does not necessarily mean equality. Equality may produce unfairness in certain types of campaign, especially if those on the same side have different reasons for seeking a particular outcome. Some people might not be able to advance their views under an umbrella organisation which would, I suspect, be the only way in which we could achieve perfect equality in expenditure.

The hon. Member for North Dorset also said that the Opposition had said that they would support the Neill proposals. However, I note that, in the Conservatives' internal briefing on the Neill committee's inquiry, they said:

The proposed 28-day purdah period provided for in clause 118 is entirely consistent with the Neill committee's recommendations and with the long-standing position in respect of general election campaigns with which the committee drew a parallel. The Neill committee has welcomed the Government's proposals in relation to the role played by the Government during a referendum campaign. Separate legislation would be needed, for example, to determine the procedure for setting the question that would be put in a referendum. The question will need to be considered in the context of such legislation, and it is right that its wording should be a matter for Parliament to decide. The Neill committee did not propose any role for the Electoral Commission in setting a referendum question, but the right hon. Member for Caithness, Sutherland and Easter Ross suggested that it should. We are sympathetic to that idea, and will consider it.

We listened carefully to the comments about the expenditure limits proposed in the Bill. In particular, the Neill committee has said that it does not oppose expenditure limits as a matter of principle, but it has questioned whether parties represented in the House of Commons should be subject to the same £5 million limit, irrespective of the number of Members of Parliament they had. In view of the Neill committee's concern, we have adjusted the expenditure limits for political parties so that they are now geared according to the parties' share of the vote at the last election. The hon. Member for Blaby (Mr. Robathan), among others, questioned whether that was fair, but achieving complete fairness would be difficult. It is a legitimate area for debate and perhaps in Committee we may consider it in more detail. I repeat that we do not have a closed mind on the issue.

We will propose Government amendments in relation to the administration of referendums. As the Bill stands, part VIII provides the framework for the fair conduct of referendums, but the nuts and bolts of organising the poll and the count are missing. We intend to table amendments that will plug that gap and make the legislation a truly generic referendums Bill. I do not expect those amendments to be controversial, so the House need not worry, but we will welcome any representations the Opposition may have to make.

Another point raised by the right hon. Member for North-West Hampshire and by the hon. Members for North Dorset and for Blaby was which stages of the Bill might be taken on the Floor of the House. As my right hon. Friend the Home Secretary said earlier, we recognise

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that parts of the Bill give rise to constitutional issues. However, that cannot be said of the Bill as a whole. We will wish to discuss through the usual channels which provisions should properly be taken on the Floor of the House. I hope that that explanation provides some reassurance.

The right hon. Members for North-West Hampshire, for South Norfolk and for Caithness, Sutherland and Easter Ross all mentioned tax relief. The right hon. Member for South Norfolk also asked about administration costs. The Government are not persuaded of the case for tax relief on donations. It would amount to general state aid by another route, and the Government have to balance the loss of revenue that such relief would entail against other spending priorities.

The Bill sets out proposals for targeted assistance to political parties, including provision for a total of up to £2 million to be made available each year for a policy development grant. A generous increase, 270 per cent., in the Short money funding for Opposition parties has been agreed.

The right hon. Gentleman asked about the administration costs of tax relief. Such costs are only one factor--by no means the paramount one--that the Government took into account when coming to their view. We are still prepared to discuss the issue during the Bill's passage. Any precise assessment of the administrative costs of a tax relief scheme will depend on the ultimate shape of the relief and the way in which it is paid. No decision on these matters has been taken. Subject to that proviso, I suppose that a very rough estimate--I can do no better than that--of the sort of costs to the Inland Revenue of setting up and administering such a scheme would be between £700,000 and £1.1 million in the first year, and between £500,000 and £700,000 in subsequent years. Such costs are high, and must be set against the likely benefit to the main political parties--which will themselves incur costs in connection with the administration of the scheme--of perhaps £4 million or £5 million. There has to be a balance. We can discuss these issues further, but I hope that that explanation is helpful to the right hon. Gentleman.

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