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8.45 pm
In paragraph 12.21, Neill clearly made the point that
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:
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:
My right hon. Friend the Member for South Norfolk (Mr. MacGregor), who was a member of the Neill committee, reaffirmed its recommendations. He said:
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:
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.
Sir Michael Spicer:
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:
"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.
"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.
"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.
"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".
"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.
"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.
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