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18 Oct 2006 : Column 967

Margaret Hodge: The hon. Member for Hornchurch (James Brokenshire) referred to the use of political funds by trade unions and the ability to switch money around, and asked about the transfer of money between general and political funds. That is not possible. I did not understand his point about the difference between direct and indirect contributions to the political fund, given that there is no possibility to transfer money between the two. That was basically my answer to his first question, but I would be happy to listen further if the hon. Gentleman wants to expand.

James Brokenshire: My point was about new clause 83(1), which includes the words

It may be a legal expression, but I am seeking to clarify what happens according to whether the contribution is direct or indirect. The Minister may want to take further advice. I am raising a technical point, on which I would like some clarification. I accept that we may not obtain it this evening, but any further assistance would be helpful.

Margaret Hodge: The advice that I am getting is what I thought myself—that there cannot be an indirect donation.

The point about trade union ballots on political funds was inappropriate in this context. I was very careful earlier not to raise an issue that would have been far more relevant to this evening’s debate—Constituency Campaigning Services, of Coleshill Manor, an organisation that appears to act as a Tory party front in the west midlands. Some say that the company is separate from the Conservative party, but the current Conservative leader believes that it is directly linked. Anyone who delves into the organisation can see that it is very closely linked. In debating the provisions on political donations, it would have been more appropriate for the hon. Member for Hornchurch to have reflected on whether there was proper transparency in respect of Conservative party funding, rather than head-banging and having another go at the link between the Labour party and the trade unions, of which we are extremely proud.

We had a long debate in Committee on lobbying, and I think that the hon. Member for Cambridge (David Howarth) and I simply differ. I disagree with him on his definition of political lobbying, because lobbying in the interests of a company on an issue that may, in future, be decided by politicians is a very different matter from other types of lobbying. Such lobbying is utterly legitimate and utterly invaluable to any member of the Government and in no way should we attempt to intervene. I said in Committee and I say again that my decisions as a Minister are much better informed when I have listened to all the interest groups—as indeed we have in the process of devising the Bill’s clauses—than they would be if I took advice only from my civil servants, for whom I have huge regard for their endless work on the Bill, but who nevertheless come with the limited view of working within the civil service. I believe that we have to accept that situation.

The hon. Gentleman made a wholly proper point, which I accept, about it being much easier for richer individuals and richer companies to lobby, but I am not
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sure that there is an easy answer to it. No doubt the hon. Gentleman would deal with the problem by finding mechanisms for equalising the voice of people in what I referred to in Committee as the political marketplace of interests. I believe that trade associations and other such organisations are hugely important in giving voice to smaller, less endowed companies.

In the end, we have to have faith in our own judgment that we can make an objective appraisal after lobbying from all sides. Indeed, we spent quite a lot of time this afternoon debating issues surrounding narrative reporting, about which we have been massively lobbied by business interests with differing views on a range of matters concerned with the environment and corporate social responsibility. In the end, we have to reach a balanced view and make a judgment on it. I am sorry that the hon. Gentleman and I disagree. We have already had the debate twice and no doubt we will have it again, but I believe that lobbying has a very important part to play in a vibrant, good democratic structure. We should look into ways of increasing the voice of people less able to fund that themselves, and we should nurture and value lobbying generally.

We have considered amendment No. 687 carefully and whether the drafting change to clause 372 that the hon. Gentleman proposes would make the meaning of the clause clearer. That is an issue for the lawyers and they have concluded that it would not. Subsection (3) clearly states that a resolution of members of a wholly owned subsidiary is not required, but a resolution of the members of its holding company is. I am, however, grateful to the hon. Gentleman for making the suggestion and lawyers will no doubt continue arguing about it.

I forgot to move amendment No. 647 at the beginning of my remarks and it would remove—

Mr. Deputy Speaker: Order. The right hon. Lady does not have to move the amendment. We will come to it in the course of our proceedings. She moves only the lead item in the group.

Margaret Hodge: With that helpful advice, Mr. Deputy Speaker, I draw my remarks on this group of new clauses and amendments to an end.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

Question, That new clauses 82 and 83 be brought up, read the First and Second time, and added to the Bill, put and agreed to.

New clause 76

Expenditure on lobbying

‘(1) A company must not in any financial year incur expenditure on lobbying activity in excess of the limit then in force, unless the expenditure has been authorised by a resolution of the members of the company.

(2) The provisions of sections 372(2) to (5), 372(6)(b), 372(7), 373(1), 373(2), 373(4), 373(6), 373(7), 374 and 375 to 379 shall apply to a resolution under this section.

(3) The Secretary of State shall have power to make regulations, which shall be subject to the affirmative resolution procedure, to—

(a) set the limit, and

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(b) exempt, to any extent the Secretary of State sees fit, expenditure incurred by companies in responding to requests for information initiated by governmental or parliamentary bodies,

but if the Secretary of State fails to set the limit, the limit shall be £1,000.

(4) Companies must report expenditure on lobbying activity in excess of the limit in a form to be specified by the Secretary of State by regulations, which shall be subject to the affirmative resolution procedure.

(5) Failure to comply with reporting requirements established under subsection (4) shall count as a violation of the duty to keep accounting records under section 392 and shall be punishable in accordance with section 393.

(6) This section applies to overseas companies, as defined in section 1011, as well as to UK companies, and the powers of the Secretary of State in Part 34 shall be deemed to include a power to require overseas companies to report their expenditure on lobbying activity in excess of the limit.

(7) “Lobbying activity” means any activity intended directly or indirectly to influence legislation or policy at any level of government in the United Kingdom.’.— [David Howarth.]

Brought up, and read the First time.

Motion made, and Question put, That the clause be read a Second time:—

The House divided: Ayes 50, Noes 291.
Division No. 314]
[6.12 pm


Alexander, Danny
Barrett, John
Beith, rh Mr. Alan
Brake, Tom
Bruce, rh Malcolm
Burstow, Mr. Paul
Burt, Lorely
Campbell, rh Sir Menzies
Clegg, Mr. Nick
Davey, Mr. Edward
Farron, Tim
Featherstone, Lynne
Foster, Mr. Don
George, Andrew
Gidley, Sandra
Goldsworthy, Julia
Harris, Dr. Evan
Hemming, John
Holmes, Paul
Horwood, Martin
Howarth, David
Hughes, Simon
Huhne, Chris
Hunter, Mark
Keetch, Mr. Paul
Kramer, Susan
Lamb, Norman
Laws, Mr. David
Leech, Mr. John
Llwyd, Mr. Elfyn
Oaten, Mr. Mark
Price, Adam
Reid, Mr. Alan
Rennie, Willie
Rogerson, Mr. Dan
Rowen, Paul
Sanders, Mr. Adrian
Smith, Sir Robert
Stunell, Andrew
Swinson, Jo
Taylor, Matthew
Taylor, Dr. Richard
Teather, Sarah
Thurso, John
Webb, Steve
Williams, Hywel
Williams, Mark
Williams, Mr. Roger
Williams, Stephen
Younger-Ross, Richard
Tellers for the Ayes:

Bob Russell and
Jenny Willott

Ainger, Nick
Ainsworth, rh Mr. Bob
Alexander, rh Mr. Douglas
Allen, Mr. Graham
Anderson, Janet
Atkins, Charlotte
Austin, Mr. Ian
Bailey, Mr. Adrian
Baird, Vera
Balls, Ed
Banks, Gordon
Barlow, Ms Celia
Barron, rh Mr. Kevin
Battle, rh John
Bayley, Hugh
Begg, Miss Anne
Benn, rh Hilary
Benton, Mr. Joe
Berry, Roger
Blackman, Liz
Blackman-Woods, Dr. Roberta
Blears, rh Hazel

Blizzard, Mr. Bob
Blunkett, rh Mr. David
Borrow, Mr. David S.
Bradshaw, Mr. Ben
Brennan, Kevin
Brown, rh Mr. Nicholas
Brown, Mr. Russell
Browne, rh Des
Bryant, Chris
Buck, Ms Karen
Burden, Richard
Burgon, Colin
Butler, Ms Dawn
Byrne, Mr. Liam
Cairns, David
Campbell, Mr. Alan
Campbell, Mr. Ronnie
Caton, Mr. Martin
Cawsey, Mr. Ian
Chapman, Ben
Chaytor, Mr. David
Clapham, Mr. Michael
Clark, Ms Katy
Clark, Paul
Clarke, rh Mr. Charles
Clarke, rh Mr. Tom
Clelland, Mr. David
Coffey, Ann
Cohen, Harry
Connarty, Michael
Cooper, Yvette
Corbyn, Jeremy
Cousins, Jim
Crausby, Mr. David
Creagh, Mary
Cruddas, Jon
Cryer, Mrs. Ann
Cummings, John
Cunningham, Mr. Jim
Curtis-Thomas, Mrs. Claire
Darling, rh Mr. Alistair
David, Mr. Wayne
Davidson, Mr. Ian
Dean, Mrs. Janet
Devine, Mr. Jim
Dhanda, Mr. Parmjit
Dismore, Mr. Andrew
Dobbin, Jim
Donohoe, Mr. Brian H.
Doran, Mr. Frank
Dowd, Jim
Drew, Mr. David
Dunwoody, Mrs. Gwyneth
Eagle, Angela
Efford, Clive
Ellman, Mrs. Louise
Engel, Natascha
Ennis, Jeff
Farrelly, Paul
Field, rh Mr. Frank
Fisher, Mark
Fitzpatrick, Jim
Flello, Mr. Robert
Flynn, Paul
Follett, Barbara
Foster, Michael Jabez (Hastings and Rye)
Francis, Dr. Hywel
Gapes, Mike
George, rh Mr. Bruce
Gerrard, Mr. Neil
Gibson, Dr. Ian
Gilroy, Linda
Godsiff, Mr. Roger
Goodman, Helen
Griffith, Nia
Grogan, Mr. John
Gwynne, Andrew
Hall, Mr. Mike
Hall, Patrick
Hamilton, Mr. David
Hamilton, Mr. Fabian
Hanson, Mr. David
Harman, rh Ms Harriet
Harris, Mr. Tom
Henderson, Mr. Doug
Hendrick, Mr. Mark
Heppell, Mr. John
Hesford, Stephen
Heyes, David
Hill, rh Keith
Hillier, Meg
Hodge, rh Margaret
Hodgson, Mrs. Sharon
Hood, Mr. Jimmy
Hoon, rh Mr. Geoffrey
Hope, Phil
Hopkins, Kelvin
Hosie, Stewart
Howarth, rh Mr. George
Hoyle, Mr. Lindsay
Humble, Mrs. Joan
Iddon, Dr. Brian
Irranca-Davies, Huw
Jackson, Glenda
Jenkins, Mr. Brian
Johnson, Ms Diana R.
Jones, Helen
Jones, Mr. Kevan
Jones, Lynne
Jones, Mr. Martyn
Joyce, Mr. Eric
Kaufman, rh Sir Gerald
Keeley, Barbara
Keen, Alan
Keen, Ann
Kelly, rh Ruth
Kemp, Mr. Fraser
Kennedy, rh Jane
Khabra, Mr. Piara S.
Khan, Mr. Sadiq
Kidney, Mr. David
Kumar, Dr. Ashok
Ladyman, Dr. Stephen
Lammy, Mr. David
Laxton, Mr. Bob
Lazarowicz, Mark
Lepper, David
Levitt, Tom
Linton, Martin
Lloyd, Tony
Love, Mr. Andrew
Lucas, Ian
Mackinlay, Andrew
MacNeil, Mr. Angus
MacShane, rh Mr. Denis
Mactaggart, Fiona
Mahmood, Mr. Khalid
Malik, Mr. Shahid
Mallaber, Judy
Mann, John
Marris, Rob
Marsden, Mr. Gordon
Marshall, Mr. David

Marshall-Andrews, Mr. Robert
Martlew, Mr. Eric
McAvoy, rh Mr. Thomas
McCabe, Steve
McCafferty, Chris
McCarthy, Kerry
McCarthy-Fry, Sarah
McCartney, rh Mr. Ian
McDonagh, Siobhain
McDonnell, John
McFadden, Mr. Pat
McFall, rh John
McGovern, Mr. Jim
McGrady, Mr. Eddie
McGuire, Mrs. Anne
McIsaac, Shona
McKechin, Ann
McKenna, Rosemary
Meacher, rh Mr. Michael
Meale, Mr. Alan
Merron, Gillian
Michael, rh Alun
Miliband, rh David
Miliband, Edward
Miller, Andrew
Mitchell, Mr. Austin
Moffatt, Laura
Mole, Chris
Moon, Mrs. Madeleine
Moran, Margaret
Morden, Jessica
Morgan, Julie
Morley, Mr. Elliot
Mountford, Kali
Mullin, Mr. Chris
Munn, Meg
Murphy, Mr. Jim
Naysmith, Dr. Doug
O'Brien, Mr. Mike
O'Hara, Mr. Edward
Olner, Mr. Bill
Osborne, Sandra
Owen, Albert
Palmer, Dr. Nick
Plaskitt, Mr. James
Pope, Mr. Greg
Prentice, Bridget
Prentice, Mr. Gordon
Prescott, rh Mr. John
Primarolo, rh Dawn
Prosser, Gwyn
Purchase, Mr. Ken
Purnell, James
Rammell, Bill
Raynsford, rh Mr. Nick
Reed, Mr. Jamie
Reid, rh John
Riordan, Mrs. Linda
Robertson, Angus
Robertson, John
Robinson, Mr. Geoffrey
Rooney, Mr. Terry
Roy, Mr. Frank
Ruane, Chris
Ruddock, Joan
Russell, Christine
Ryan, Joan
Salter, Martin
Seabeck, Alison
Shaw, Jonathan
Sheerman, Mr. Barry
Sheridan, Jim
Simon, Mr. Siôn
Simpson, Alan
Singh, Mr. Marsha
Skinner, Mr. Dennis
Slaughter, Mr. Andrew
Smith, rh Mr. Andrew
Smith, John
Snelgrove, Anne
Soulsby, Sir Peter
Southworth, Helen
Spellar, rh Mr. John
Spink, Bob
Stewart, Ian
Stoate, Dr. Howard
Strang, rh Dr. Gavin
Stuart, Ms Gisela
Sutcliffe, Mr. Gerry
Tami, Mark
Taylor, Ms Dari
Taylor, David
Thomas, Mr. Gareth
Thornberry, Emily
Timms, rh Mr. Stephen
Tipping, Paddy
Todd, Mr. Mark
Touhig, rh Mr. Don
Trickett, Jon
Truswell, Mr. Paul
Turner, Dr. Desmond
Turner, Mr. Neil
Ussher, Kitty
Vis, Dr. Rudi
Walley, Joan
Waltho, Lynda
Wareing, Mr. Robert N.
Watson, Mr. Tom
Watts, Mr. Dave
Weir, Mr. Mike
Whitehead, Dr. Alan
Wicks, Malcolm
Williams, rh Mr. Alan
Williams, Mrs. Betty
Wills, Mr. Michael
Winnick, Mr. David
Winterton, rh Ms Rosie
Wishart, Pete
Wood, Mike
Woodward, Mr. Shaun
Woolas, Mr. Phil
Wright, Mr. Anthony
Wright, David
Wright, Mr. Iain
Wright, Dr. Tony
Wyatt, Derek
Tellers for the Noes:

Tony Cunningham and
Mr. Michael Foster
Question accordingly negatived.
18 Oct 2006 : Column 970

18 Oct 2006 : Column 971

Question, That amendments Nos. 495 to 497, 706, 499, 647, 500, 501, 707, 503, 708 to 711 be made and that new clause 9 be brought up, read the First and Second time, and added to the Bill, put and agreed to.

18 Oct 2006 : Column 972

New Clause 13

Saving for provisions of articles as to determination of entitlement to vote

‘Nothing in this Chapter affects—

(a) any provision of a company’s articles—

(i) requiring an objection to a person’s entitlement to vote on a resolution to be made in accordance with the articles, and

(ii) for the determination of any such objection to be final and conclusive, or

(b) the grounds on which such a determination may be questioned in legal proceedings.’.— [Margaret Hodge.]

Brought up, and read the First time.

Margaret Hodge: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this it will be convenient to discuss the following: Government new clause 14— Computation of periods of notice etc: clear day rule.

Government amendment No. 643

Amendment No. 682, in clause 291, page 137, line 1, at end insert—

‘(3A) Directors of the company shall be ineligible to cast any proxy votes.’.

Government amendment No. 301

Amendment No. 355, in clause 307, page 142, line 23 , at end insert—

‘( ) Nothing in this Chapter affects a provision of a company’s articles which provides for a resolution in writing executed by or on behalf of each member who would have been entitled to vote upon it if it had been proposed at a general meeting, or at a meeting of any class of members of the company, at which he was present (whether such resolution consists of one instrument executed by or on behalf of each such member or of several instruments in the like form each executed by or on behalf of one or more such members) to be as effectual as if it had been passed at a general meeting, or at a meeting of any class of members of the company, duly convened and held. A resolution in writing passed in accordance with such a provision of the company’s articles shall be treated as if it were a “written resolution” for the purposes of this Chapter.’.

Government amendments Nos. 443, 302, 348 and 349.

Amendment No. 418, in clause 316, page 146, line 2, at end insert ‘and

(d) be communicated directly to the member either in electronic form or in hard copy form’.

Government amendment No. 444

Amendment No. 419, in clause 327, page 149, line 30 , at end insert—

‘(1A) The chairman must demand a poll when he is aware that the outcome would be different from that reached on a show of hands.’.

Amendment No. 420, in page 149, line 30, at end insert—

‘(1A) The chairman must announce the number of proxy votes in favour and against each resolution, before such a resolution is put to a vote of members in general meeting.’.

Government amendment No. 445

Amendment No. 421, in page 158, line 13, leave out Clauses 349 to 352.

Government amendments Nos. 446 and 350.

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