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Schedule 6

Control of Donations to Individuals and Members Associations

Amendments made: No. 97, in page 111, line 29, leave out "sub-paragraph (3)" and insert "this Schedule".

No. 98, in page 114, line 7, leave out "falling within section 48(2)".

No. 99, in page 114, line 11, leave out sub-paragraph (2).

No. 100, in page 114, line 45, at end insert--

'Payments etc. which are (or are not) to be treated as donations by permissible donors

5A.--(1) The following provisions have effect for the purposes of this Schedule.
(2) Any payment out of public funds received by a regulated donee which is a members association, for its use and benefit in connection with any of its political activities, shall be regarded as a controlled donation received by the association from a permissible donor.
(3) Any donation received by a regulated donee shall (if it would not otherwise fall to be so regarded) be regarded as a controlled donation received by the donee from a permissible donor if and to the extent that--
(a) the purpose of the donation is to meet qualifying costs incurred or to be incurred in connection with any visit--
(i) by the donee in connection with any of the donee's political activities, or

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(ii) in the case of a members association, by any member or officer of the association in connection with any of its political activities,
to a country or territory outside the United Kingdom, and
(b) the amount of the donation does not exceed a reasonable amount in respect of such costs.
(4) In sub-paragraph (3) "qualifying costs", in relation to the donee or (as the case may be) any member or officer of the donee, means costs relating to that person in respect of--
(a) travelling between the United Kingdom and the country or territory in question; or
(b) travelling, accommodation or subsistence while within that country or territory.
(5) Any controlled donation received by a regulated donee from a trustee of any property (in his capacity as such) which does not constitute a donation transmitted by the trustee to the donee--
(a) on behalf of a person who, at the time of its receipt by the donee, is a permissible donor, or
(b) in pursuance of a bequest made by such a person as is mentioned in section 48(3),
shall be regarded as a controlled donation received by the donee from a person who is not a permissible donor.'.

No. 101, in page 114, line 47, at end insert "regulated donee and any".

No. 102, in page 114, line 49, after first "a" insert "registered party and any".

No. 103, in page 115, line 46, after "paragraph;" insert--


'(aa) any reference to section (Payments etc. which are (or are not) to be treated as donations by permissible donors)(2) or to section (Payments etc. which are (or are not) to be treated as donations by permissible donors)(3) shall be construed as a reference to paragraph 5A(2) above or to paragraph 5A(3) above respectively;'.

No. 104, in page 115, line 48, at end insert--


'(6) In the case of a donation to which paragraph 5A(2) applies, sub-paragraph (2)(b) above shall have effect as if for "by the same permissible donor" there were substituted "in circumstances falling within paragraph 5A(2)".
(7) In the case of a donation to which paragraph 5A(3) applies--
(a) sub-paragraph (2)(b) above shall have effect as if for "by the same permissible donor" there were substituted "in circumstances falling within paragraph 5A(3) by the same donor"; and
(b) any report prepared by virtue of sub-paragraph (1) above in respect of the donation must give--
(i) the date or dates on or between which the visit to which the donation relates took place, and
(ii) the destination and purpose of the visit.'.

No. 137, in page 118, line 28, leave out "or 9(3)" and insert ", 9(3) or 9(4)".--[Mrs. McGuire.]

Schedule 7

Campaign Expenditure: Qualifying Expenses

Mr. Grieve: I beg to move amendment No. 147, in page 120, line 30, at end add--


'(f) any legal or other professional expenses incurred in respect of, or in connection with, any requirement in this Act.'.

Mr. Deputy Speaker: With this it will be convenient to discuss the following: Government amendments Nos. 25 and 35.

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Amendment No. 148, in schedule 12, page 146, line 18, at end add--


'(f) any legal or other professional expenses incurred in respect of, or in connection with, any requirement in this Act.'.

Government amendment No. 71.

Mr. Grieve: In Committee, we were interested in the lists of expenses that would constitute campaign expenditure, or referendum expenditure, for the purpose of "notching up" to the limits that would be allowable. Certain exclusions are provided, under which expenses do not count in respect of that ceiling. They include


--enabling the individual to travel around his constituency, or to conduct a referendum campaign. It is noticeable that we have not discussed the expenses that will be incurred by political parties to achieve compliance with the Bill. Amendments Nos. 147 and 148 would exempt


    any legal or other professional expenses incurred in respect of, or in connection with, any requirement in this Act.

As I am sure the Minister will accept, there is no doubt that compliance with the Bill will place financial burdens on political parties. If, in the past, parties have relied on auditors--who may not have been qualified--to do the work on a benevolent basis, it is likely that in future they will have to pay for proper auditors and accountants. Election and referendum campaigns will involve administrative burdens, and in the case of the larger parties, that burden is likely to require the recruitment of staff to ensure complete compliance with the legislation. I hope that the Minister considers it reasonable to assume that it would be wrong to ask parties to deduct the amount involved from their campaign expenditure ceiling.

Let me issue a slight caveat in regard to my own proposals. I can envisage the possibility of the running up of legal expenses by a political party or individual defending a prosecution under the Bill, and if conviction were to follow, it might be argued that the exemption should not apply. If the Minister wishes to consider that further, I shall not stand in his way. It must be right, however, for basic, day-to-day administrative expenses that will impose an additional burden on all political parties, especially smaller parties, to be excluded, as we propose in amendments Nos. 147 and 148--which are identical, apart from the fact that amendment No. 148 applies to referendum expenses.

I know that the Minister has tabled amendments, and I welcome them. They take on board what was said in Committee about the need to raise some of the de minimis levels of expenditure to reduce the burden on political parties, and Opposition Members will support them.

Mr. Tipping: Government amendments Nos. 25, 35 and 71 are indeed concerned with increasing de minimis provision in the case of notional services. As the hon. Member for Beaconsfield (Mr. Grieve) said, the issue was discussed in Committee; indeed, he and his hon. Friends pressed the Government to increase the provision, and I am delighted to have been able to respond. Given the consensus that appears to exist, perhaps I can let the matter rest there.

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Amendments Nos. 147 and 148 would add to the list of items in schedules 7 and 12 that are not to be regarded as constituting election or referendum expenses in respect of legal or other professional services incurred in connection with compliance with the Bill. When I first looked at the amendments, I thought they were drawn very widely, but I believed that I knew what their purpose was. I must be fair to the hon. Member for Beaconsfield: he gave some examples, and rightly pointed out that the Bill would place extra burdens on all political parties. I think that he--also being fair, as ever--will acknowledge that, throughout the Bill's passage so far, the Government have provided a series of stepping stones, providing for a light touch in respect of smaller parties and more rigorous enforcement in respect of those with larger incomes and expenditure.

The hon. Gentleman will recall that, earlier in the Bill, the Government allow the Electoral Commission to establish a scheme to distribute money to help political parties to prepare for the legislation. He will also recall that the amount is £500,000 for all political parties.

The hon. Gentleman rightly said that there would be teething troubles, and that the Bill would produce extra burdens; but I am not convinced that the burdens on the larger parties--dare I call them the mainstream parties?--will be as great as he suggested. All the major parties already have the benefit of legal advice, and their accounts are already professionally audited.


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