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Mr. Walter: I do not want to delay the House for long, but an issue arises when one reads clause 81 and the amendments in this group. I am still somewhat disturbed about that issue, as I was in Committee when we were considering it. Although I acknowledge the points that the Minister has made, I am still concerned that the amendments in this group fail to address some of the issues that were raised in Committee.

6.45 pm

In clause 81, there is a fascinating turn of phrase about an "unincorporated association", and the need to state

if it is a recognised third party, and

    the address of an office of the association in the United Kingdom--

as if the association might have offices outside the United Kingdom.

Although we have gone to great lengths in the rest of the Bill to ensure that we prevent foreign influence over our electoral process, the Bill still provides that one could be a recognised third party without necessarily being a United Kingdom citizen or an association in the United Kingdom. In fact, one could be a foreign body.

When clause 81 was drafted, I was told that it could not be amended because it had to comply with the European convention on human rights. We have to be clear, therefore, that the clause will allow a group of foreign individuals to come to the United Kingdom, perhaps to take a suite of rooms at the Savoy hotel, and to register with the Electoral Commission. Subsequently, those individuals may each spend £500,000 across the United

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Kingdom--on newspaper advertisements, posters and leaflets through the door--all in support of a particular political cause, and all paid for by foreigners.

The clause, as amended by the Government today, is still a glaring leak in the Bill's provisions seeking to ban foreign donations and foreign influence on our political process. The leak is still there, and the Government have done nothing to remove it.

Amendment agreed to.

Amendments made: No. 135, in page 52, line 25, at end insert--

'(1A) A third party may only give a notification under subsection (1) if--
(a) an individual,
(b) a company falling within section 48(2)(b), or
(c) an unincorporated association of such a description as is mentioned in section 48(2)(f).'.

No. 37, in page 53, line 4, after "shall" insert--

', subject to subsection (3A),'.

No. 38, in page 53, line 7, at end insert--

'(3A) Where--
(a) the original notification would apart from this subsection lapse under subsection (3)(b) at the end of any such period of three months as is mentioned in that provision, but
(b) the end of that period falls within any regulated period at the end of which a return will fall to be prepared under section 89 in respect of controlled expenditure incurred by or on behalf of the third party during the regulated period,
the original notification shall be treated, for all purposes connected with controlled expenditure so incurred during the regulated period, as lapsing at the end of that period instead.'.

No. 39, in page 53, line 13, leave out from "statement" to "subsection" in line 16 and insert "conforming with".

No. 40, in page 53, line 26, leave out--

'subsection (1)(a) or (b) or (as the case may be)'.--[Mr. Mike Hall.]

Clause 83

Restriction on incurring controlled expenditure

Amendment made: No. 41, in page 54, line 9, after "if", insert ", without reasonable excuse,".--[Mr. Mike Hall.]

Clause 84

Restriction on payments in respect of controlled expenditure

Amendments made: No. 42, in page 54, line 27, after "if", insert ", without reasonable excuse,".
No. 43, in page 54, line 29, leave out ", without reasonable excuse,".--[Mr. Mike Hall.]

Clause 85

Restriction on making claims in respect of controlled expenditure

Amendment made: No. 44, in page 54, line 40, after "if", insert ", without reasonable excuse,".--[Mr. Mike Hall.]

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Clause 87

Limits on controlled expenditure by third parties

Mr. Tipping: I beg to move amendment No. 45, in page 56, line 2, leave out--

', in connection with relevant elections falling within section 72(1),'.

Mr. Deputy Speaker: With this it will be convenient to discuss the following: Government amendments Nos. 45A to 48.

Amendment No. 138, in schedule 9, page 132, leave out lines 14 to 21 and insert--

'the period between the date on which Parliament is dissolved and the date of the poll for the election.'.

Government amendments Nos. 49 to 52, 54 and 55.

Mr. Tipping: Amendments Nos. 45 to 55 essentially make technical or drafting changes to chapter II of part VI. Amendment No. 45 removes an inconsistency between clause 87(1) and the general approach to controlling election expenditure taken in both parts V and VI--which proceed on the basis that it would be artificial and difficult in practice to attribute campaign expenditure between different elections occurring in close proximity to each other.

Last year's elections in Scotland are a case in point. Within a five-week period, there were local elections and elections to the Scottish and European Parliaments. Advertising by the political parties would have been devoted to achieving success at all three elections. Therefore, the approach taken in the Bill is to link expenditure controls not to specific elections, but to regulated periods ending with the date of an election.

As a consequence of that approach, a recognised third party will have to account for all controlled expenditure incurred during a regulated period, including any expenditure linked to local government elections. As drafted, clause 87(1) gives the contrary impression. The provision refers back to clause 72(1), which contains a list of elections that does not include local government elections. Amendment No. 54, therefore, tidies up the drafting in clause 87(1), so that the general approach that I have described is clearly reflected in that provision.

Mr. Grieve: The Minister gave the example of elections in close proximity. However, will he confirm that the impact of the approach is that third parties will be subject to the regulations at all times? Unless third parties happen to fall into one of the "hole" periods in which there are no such elections, with all those elections applying to them at no time could they assume that the rules would not bite upon them.

Mr. Tipping: That would depend entirely on the third parties' purposes and aims--third parties come and go. Some third parties will exist in perpetuity, and amendment No. 54 will affect them as I have just described, whereas I suspect that other third parties will be solely campaigning organisations that are established for a specific purpose or election, but subsequently dissolve.

Amendment No. 47 ensures that the expenditure limits for recognised third parties cannot be circumvented by incurring controlled expenditure during a regulated period

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both as a third party and as a recognised third party. As a result of the amendment, any expenditure incurred by a third party before it became a recognised third party would count towards the relevant expenditure limit stated in schedule 9.

Amendment No. 49 flows naturally from amendment No. 47. The general restrictions relating to controlled expenditure in clauses 83 to 86 apply only to recognised third parties. It follows that a recognised third party could not comply with subsections (2) to (4) of clause 89 in respect of any controlled expenditure incurred before they became a recognised third party. The amendment disapplies those subsections in respect of any expenditure incurred during a regulated period as a third party.

Amendment No. 50 ensures that the requirement to submit a return under clause 89 in respect of controlled expenditure incurred during a regulated period continues to apply in circumstances in which a third party ceases to be a recognised third party at any time on or after the end of the regulated period. The other Government amendments in the group make minor or drafting changes.

My right hon. Friend the Member for Birkenhead (Mr. Field) has tabled amendment No. 138, returning to an issue that he raised on Second Reading. His concern appears to be that pressure groups and other third parties may unwittingly be caught out by the provisions of part VI, as they cannot be expected to know when the 365-day relevant period before a general election will begin. The aim of the amendment is to introduce greater certainty by confining the period during which expenditure controls will apply to the three or four weeks following the dissolution of Parliament.

Since Second Reading, my hon. Friend the Under- Secretary of State for the Home Department has corresponded with my right hon. Friend the Member for Birkenhead on the issue. In a letter of 8 February, my hon. Friend explained why he believed my right hon. Friend's concerns to be unfounded. For the convenience of the House, I shall try to set out briefly the positions of third parties that will follow the commencement of part VI.

Pressure groups, trade unions or other third parties that incur expenditure designed to enhance or prejudice the electoral prospects of a political party or its candidates at an election could be caught by one of two offences. First, a non-registered third party commits an offence under clause 87(3) if controlled expenditure is incurred in a regulated period in excess of one of the de minimis limits in clause 87(5), which are £10,000 in England and £5,000 in any other part of the UK. Many third parties that spend relatively small amounts will not need to become recognised, so there will be no restrictions on them. I suspect that a variety of small third party campaigns will emerge around single issues that affect neighbourhoods, groups of people or interest groups. They will want to pursue those matters vigorously. Provided that they stay below the de minimis provisions, their actions will be largely unaffected.

However, if such a group wants to spend more than those limits, they will need to become a recognised third party. To do so, they will need to submit notification to the Electoral Commission, in accordance with the provisions of clause 81. It is a simple procedure that involves no more than depositing with the commission the name and address of the organisation and the address of a person who will be responsible for complying with the

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financial controls set out in part VI. Many Members expressed concern about that in Committee. They were keen to ensure that the rigorous and onerous provisions of the Bill did not impact too heavily and discourage small third parties. We all want an explosion of political involvement and activity.

Any third party that expects to incur controlled expenditure could avoid the offence in clause 87(3) by making the required notification and renewing it annually. That would make it a recognised third party, able to benefit from the higher limits on controlled expenditure set out in schedule 9.

A recognised third party could avoid the second offence of exceeding the limits on controlled expenditure imposed in schedule 9 by operating to the expenditure limit for any 365-day period. I think that that is my right hon. Friend's principal concern. A recognised third party that intends to incur significant controlled expenditure is likely to incur a sizeable proportion of it only once an election has been called and can therefore limit its expenditure accordingly. We all know from our campaigning experience that the bulk of any campaign expenditure is best spent on the final lap.

Many third parties are sophisticated political organisations that can make as educated a guess as my right hon. Friend or I about when a general election is likely to be held. We all suspect that the next general election is only 12 to 18 months away. I am not giving away any great secrets. I have no insider knowledge; it is a matter of judgment. I suspect that third parties can make the same judgments. If I can make such a guess, so can the chief executives of third parties.

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