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Mr. Walter: I am grateful to the Government for responding to some of the points that we made in Committee on this issue, and for tightening up the provisions that relate to companies and unincorporated associations. Of course, as the Minister pointed out, it is still possible for a company registered in this country but incorporated elsewhere in the European Union to be a permitted participant in a referendum campaign.

The amendments do nothing to remove the provision for a permitted participant to be a foreign national, to visit this country--as I mentioned when we were discussing third parties--and to spend £500,000 on furthering his political views in a referendum campaign. If a group of individuals did that, they could have a significant impact on the referendum campaign. We are still very unhappy with the way in which the clause is drafted, as we are with the way in which the clause on third parties is drafted.

Amendment agreed to.

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Clause 99

Declarations and Notifications for Purposes of Section 98

Amendment made: No. 59, in page 63, line 5, at end insert--
'(4A) If at any time before the end of the compliance period any of the statements which, in accordance with any provision of subsection (4), are contained in a notification under this section (as it has effect for the time being) ceases to be accurate, the permitted participant by whom the notification was given shall give the Commission a notification ("a notification of alteration") indicating that that statement is replaced by some other statement--
(a) contained in the notification of alteration, and
(b) conforming with that provision of subsection (4).
(4B) For the purposes of subsection (4A) "the compliance period" is the period during which any provisions of Chapter II remain to be complied with on the part of the permitted participant.'.--[Mr. Mike Hall.]

Clause 100

Register of Declarations and Notifications for Purposes of Section 98

Amendments made: No. 60, in page 63, line 16, leave out subsection (3).
No. 61, in page 63, line 19, after "cause", insert--
No. 62, in page 63, line 20, after "register", insert ", or
(b) in the case of a notification under section 99(4A), any change required as a consequence of the notification to be made in the register,'.
No. 63, in page 63, line 21, at end insert--
'(5) The information to be entered in the register in respect of a permitted participant who is an individual shall, however, not include his home address.'.--[Mr. Mike Hall.]

Schedule 11

Assistance Available to Designated Organisations

Amendment made: No. 109, in page 144, line 19, leave out from "organisations," to end of line 21.--[Mr. Mike Hall.]

Clause 104

Referendum Expenses

Amendment made: No. 64, in page 65, line 13, after "referendum", insert--
'to which this Part applies'.--[Mr. Mike Hall.]

Schedule 12

Referendum Expenses: Qualifying Expenses

Mr. Mike O'Brien: I beg to move amendment No. 110, in page 146, leave out lines 5 to 11.

Mr. Deputy Speaker: With this it will be convenient to discuss the following: Amendment No. 182, in page 69, line 11, leave out Clause 111.

Amendment No. 151, in page 148, line 25, leave out Schedule 13.

Amendment No. 146, in page 75, line 17, leave out Clause 122.

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Government amendment No. 82.

Mr. O'Brien: I shall deal first with the Government amendments and then turn to those tabled by the Opposition.

When we considered schedule 12 as a Committee of the whole House, the hon. Member for North Dorset (Mr. Walter) suggested that sub-paragraphs (a) and (b) in paragraph 2 looked out of place. We considered that matter and we agree: schedule 12 is almost the mirror image of schedule 7. Although the exclusions to which the sub-paragraphs relate are appropriate in the context of election campaign expenditure--for example in a general election--they do not fit the circumstances of referendum campaigns. He pointed that out, and we were happy to table amendment No. 110, which would remove those two sub-paragraphs. I hope that it will command the broad support of the House.

I will take the remaining amendments in the group in reverse order. Government amendment No. 82 amends clause 144 so as to add to the list of delegated powers that are subject to the affirmative resolution procedure the order-making power in clause 122. Amendment No. 182, tabled by the right hon. Member for North-West Hampshire (Sir G. Young) and his colleagues, takes a more drastic approach: it would delete the whole clause and with it the order-making power.

The House will recall that clause 122 was added to the Bill in Committee. It is fair to say that the new clause generated some heat at the end of proceedings on 16 February. It may be as well, therefore, for me to take this opportunity to say a little more about the order-making power set out in the clause.

The purpose of the clause is to enable the Secretary of State to make provision for the conduct of a referendum to which part VII applies. Although, in accordance with precedent, the clause uses the word "conduct", it is in fact concerned with the administration of a referendum--the nuts and bolts of the polling arrangements. An order made under clause 122 may be expected to do no more than apply to a referendum the relevant provisions of the Representation of the People Acts and regulations. An order would thus be concerned with such matters as postal voting, the provision of polling stations, the issue of polling cards and the hours of polling. Those are important but none the less administrative matters, which can sensibly be left to subordinate legislation.

As was pointed out in Committee, there are several precedents for this order-making power, including legislation passed by previous Conservative Administrations--namely the Northern Ireland (Border Poll) Act 1972. Other precedents include the Referendum Act 1975, the Scotland Act 1978, the Wales Act 1978 and, more recently, the Greater London Authority (Referendum) Act 1998. The arrangements for the conduct of the elections to the Scottish Parliament and the National Assembly for Wales also derive from subordinate legislation made under the Scotland Act 1998 and the Government of Wales Act 1998.

I hope that the House will be reassured that we are creating nothing sinister--nothing that may give the Secretary of State power mendaciously to influence the outcome of a referendum campaign. The provision is simply concerned with the mere mechanics of a referendum poll. I point out to the right hon. Member for

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North-West Hampshire that, if any legal dispute should arise, Pepper v. Hart will apply. No doubt he has had a chance to look it up overnight.

It is appropriate that such an order should be subject to the affirmative resolution procedure. I therefore commend amendment No. 82 to the House.

7.45 pm

I turn now to amendments Nos. 182 and 151. It is true that, in its original report, the Neill committee recommended against spending limits in referendum campaigns. Both in the report and in their comments on the draft Bill, members of the committee made it clear that its difficulty with spending limits was based not so much on principle, but on practical grounds. We have rehearsed that argument, so I shall not go into it at great length. The committee had particularly in mind the transient nature of some referendum campaign organisations.

The Government are not persuaded that the practical difficulties are too great. The Neill committee had already recommended that referendum campaign organisations--not merely those in receipt of public funds, but any that intended to spend more than the de minimis limit--should register with the Electoral Commission. That requirement provides in itself much of the control machinery needed for the imposition of expenditure limits. There is no reason why it should be more difficult, practically and technically, to impose spending limits in referendum campaigns than it is to impose them in constituency election contests or--perhaps I dare say it--campaigns to be mayor of London.

As to the principle, the Government take the view that it is every bit as desirable to prevent a referendum campaign from being skewed by the amount of money at the disposal of particular participants as it would be in a general election campaign.

The official Opposition have not really answered that point. There has been much huffing and puffing, but no clear statement as to why they oppose expenditure controls. One of their arguments is that Neill did not recommend them; another is that they would be difficult to organise. However, that does not go to the nub of the issue: why--if it were possible to do so--do the Opposition believe that we should get involved in some form of arms race over who can spend the most in a referendum campaign? That is undesirable. The point is to allow people to choose; it is not about who can spend the most on putting out propaganda. As the hon. Member for Hazel Grove (Mr. Stunell) remarked in Committee, the Conservatives seem to confuse expenditure controls with the amounts available to parties and other organisations.

The serious point, which cannot be gainsaid, is that expenditure controls on parties and organisations cannot be relied on to ensure that the same amount is spent by both sides in a referendum campaign. We have been over that ground on previous occasions. As no scheme has been suggested to achieve that result, it is common ground in the House that it would not be practicable. However, that does not dispose of the case for expenditure controls with more limited objectives and, possibly, more modest results.

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We have consistently kept an open mind on the detail of the scheme--especially the figures in schedule 13. We adjusted the limits for political parties, and the basis for such limits, in response to the comments of the Neill committee on the draft Bill. We have continued to invite Opposition Members to tell us if they think that the figures should be further varied.

The official Opposition have consistently declined to make any suggestions; they simply say that they want no limits at all. They are not prepared to enter serious discussions on how we can ensure that people have a choice that is not skewed by an arms race for who can spend the most. Their only reply to our request to enter that debate is that it is all too difficult. Obviously, we shall vote on whether there should be expenditure controls. However, if there is to be a scheme--as we say there should be--the detail is as right as we could fairly and reasonably make it.

We continue to think that it is only realistic to regard the larger political parties as likely to want to participate in a referendum campaign, and that the spending limits should reflect the electoral support they enjoy. However, the Bill does not require a party to participate in a campaign; for example, a party may not do so because it is split or for other reasons.

We have tried to take a principled view; it is right to have expenditure controls, but we do not want an arms race during a referendum campaign. We invited the Conservatives to join us in supporting that view and to discuss how it might be applied. However, they seem to reject the principle altogether. I regret that. If we really care about democracy and the way in which a referendum campaign is conducted, we should try to ensure that there is a reasonably fair playing field. We want to ensure a rough balance--it could never be perfect--so that the people who decide the outcome of the referendum can make up their minds, exercise their judgment and come to a conclusion based on a fair and reasonably balanced presentation of the evidence.

That is how we intend to progress. I hope that, even at this late stage, the Conservatives will join us.

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