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Mr. Walter: 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?
Mr. Tipping: 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.
Mr. Walter:
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.
Mr. John Hayes (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?
Mr. Walter:
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
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.
Mr. Grieve:
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.
Mr. Graham Allen (Vice-Chamberlain of Her Majesty's Household):
Mr. Martin has gone.
Mr. Grieve:
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.
Dr. Julian Lewis (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.
5.30 pm
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