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Baroness Gould of Potternewton: My Lords, I did not actually say that. I am sorry if I was not clear. I said that I hoped that when we discussed the detail we did not forget the principle.

Viscount Astor: My Lords, I accept entirely what the noble Baroness has said. We shall try always to remember the principles as we wade through the detail of the Bill.

I turn now to some of the issues which derive from the Bill. The first issue is political party donations. We agree that blind trusts should not be used. They have been abused in the past; it is extraordinary how many prospective Cabinet Ministers suddenly turned out to have one. The two main points about donations amplified by the noble Lord, Lord Shore, are that there should be a disclosure of names and a limit on expenditure in elections. We agree with all of that.

Turning now to something more difficult--that is, the electoral commission. The noble Lord, Lord Cocks of Hartcliffe, was concerned about membership. We agree. My noble friend Lord Norton is concerned about membership. It seems to us that membership should be open to include, for example, members of the judiciary. The idea that former politicians should be disbarred seems totally illogical. It is rather like asking Members of another place to come to this House, to forget that they are politicians and to sit on the Cross-Benches and have individual views. That does not make any sense. Many distinguished politicians and former politicians have been chosen by this Government and the previous Government to sit on commissions; they have carried out their roles with great impartiality and have done extremely good jobs. To disbar a whole number of people who have a wealth of experience is utterly illogical.

My second point about the commission concerns the extraordinary power it will have under Clause 12. Clause 12 is extraordinarily wide-ranging. Under Clause 12 the commission can promote EU institutions. How can that be justified? After all, these institutions have their own vastly expensive PR machines and are quite happy to promote themselves. They certainly do not need our help.

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The commission is to have an educational role. The noble Lord, Lord Neill of Bladen, was concerned about overloading the commission with an educational role. Clause 12 does that. Indeed, subsection (4)(b) even gives it the power to make,

    "grants to other persons or bodies for the purpose of enabling them to carry out such programmes".

What kind of "other bodies" could these be that the commission will substitute for its own role in education?

That brings me to another point regarding the commission and the proposal in the Bill that we should suddenly be within or without 365 days of a general election. That proposal puts the Government in a totally privileged position. The noble Lord, Lord Shore, said that this was obvious nonsense. We agree. We shall certainly wish to return to this point at the Committee stage.

Perhaps I may leave general elections and turn to referendums. My noble friend Lord Lamont, the noble Lord, Lord Harris of High Cross, and my noble friend Lord Willoughby de Broke were concerned about the clauses in the Bill on referendums. The central issue about a referendum is who decides the question and whether the question is fair. My noble friend Lord Norton said that the commission should have a central function. The Bill as currently drafted will allow the Government to gerrymander any referendum in favour of, for example, the euro. At the very least the commission should have to be consulted and perhaps should even have to approve or frame the question. It must be for Parliament to decide what the final question is, but surely the commission should have a role in that. The same applies to determining thresholds, turn-out and period issues. Surely the commission should play a part in determining that policy.

The whole point of a referendum is that a party does not necessarily have a view and questions cross party lines. With regard to the previous referendum on Europe, parties were split in ways that were perhaps surprising when we look back to those days. The idea that there should be arbitrary limits, as set out in Schedule 15, is unfair. It should come under umbrella organisations. We shall have to look closely at whether EU organisations should be able to play a part and become permitted participants, as the Bill currently allows.

Perhaps I may say a few words about broadcasters. It is surprising that the commission should not play a greater role in party political broadcasts and determining how many there should be. I understand that that has been resisted by both the ITC and the BBC. We know that in the past there have always been arguments about how long they should be and how many there should be. Indeed, the Liberal Democrat Party felt on one occasion that it had been left out of that process and complained bitterly. It would seem sensible to look at whether the commission should have a greater role in deciding what is fair. Very often the ITC and the BBC do not necessarily agree. We shall therefore want to look closely at Clause 10. We shall also want to look at advertising and poster

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advertising in general elections. Control of advertising has concerned many of those who have spoken in the debate.

We shall want to look at other issues--for example, bequests, the definition of campaign expenditure, compliance costs, and Clause 94 and the order allowing the Secretary of State to make changes regarding referendums. My noble friend Lord Lamont is concerned about referendums and defining caps by political parties. We agree that it should be for umbrella organisations with regard to referendums. The Bill needs to be amended in that area.

Perhaps I may now turn to trade unions. Trade unions are generally affiliated to the Labour Party--the Bill should recognise that fact but it does not--as are often co-operative societies, which, like trade unions, are major funders of the Labour Party. The Bill gives the Labour Party a way round the limits on campaign expenditure. Unions pay political levies. Unions are part of the Labour Party's nomination process. They have a vote in who is to be chosen as, for example, a mayoral candidate. Indeed, they have a vote in who is to be chosen to be the leader of the Labour Party. How can they be separate bodies as defined under the Bill? That cannot be right.

My noble friend Lord Onslow is concerned about Northern Ireland. So are we. We believe that if Sinn Fein wants to be a credible political party it, too, should not rely on overseas donations when other parties cannot receive them. We know that in reality the Bill could be a cover for the funding of terrorist acts against our own people. We know that that could happen and we must guard against it. We shall want to look closely at this issue. The way that the Bill is presently drafted cannot be right.

Perhaps I may come back to political funding and local treasurers. It seems to us that weekly donation reports are unnecessary and are far too burdensome. With the chaos of party machines, as it often is, during general elections, how can local treasurers manage to take control of this issue? Under Clause 62 the Secretary of State--I am reading from page 13 of the Delegated Powers and Deregulation Committee's report--may,

    "after consulting the Commission, by order, extend the provisions on weekly donation reports in relation to the specified election period in relation to one or more relevant elections".

That means that the Secretary of State, by order, will be able to expand the provision. The point I am making is not a particularly Conservative Party one. It is the same for any local party. If we are going to encourage democracy, if we are to encourage people to come forward and play a part in local elections and if we are to encourage donations, we must have sensible rules. They must be enforceable, so they must be simple and straightforward. The rules in the Bill are not.

That brings me to tax relief. All noble Lords were in favour of it, except possibly the noble Lord, Lord Cocks. Tax relief was recommended in the report. It would cost between £4 million and £5 million a year. That is what the Government spend on spin doctors.

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As we have heard, they spend £92 million on their advertising budget. There would be no great administrative burden. Tax relief would prevent state aid and not encourage it or be a substitute for state aid. The costs are so small in comparison with what has been raised by the Government's stealth taxes that the Government's reason has to be political and not fiscal. There can be no argument that it is a fiscal reason. It cannot be argued on budgetary grounds. In his report, the noble Lord, Lord Neill, encouraged the giving of small amounts. All noble Lords on this side of the House agreed with that. The Government are going to have to reconsider the matter.

I turn now to company donations. There seems to be a loophole here, left by the Government for some reason, I know not why. European companies will be able to give money without restrictions. I hate to sound harsh to the Minister, but we all know how the socialist parties in Germany and elsewhere in Europe have benefited from company funding. I am sure that that is not the Government's intention, but they will have to tighten up that clause of the Bill. The noble Lord, Lord Shore, described the provision as driving a coach and horses through British politics. We agree.

We have always wished to see the Neill recommendations implemented in full, not with parts missing. The noble Lord, Lord McNally, described the Government's thinking behind the Bill as, "It's now our turn to draw up the rules". I am afraid that that is only too true. The Bill has in part been written by a responsible Government; but in part, I am afraid, it shows too much influence of the party chairman and the Labour Party machine.

I warn the Minister that if a clause is too complicated, if it is not understandable, and if the Minister cannot explain it, we shall have to look closely at amending it in Committee.

8.11 p.m.

Lord Bassam of Brighton: My Lords, I spent Saturday evening--I cannot resist saying this because the noble Lord, Lord McNally, is present--in the company of a body of citizens who come under the heading, the National Society of Allied and Independent Funeral Directors. I held out great hopes for the society's annual banquet. I was given a very entertaining time. I wagered that this evening would not be so interesting or entertaining, but I have to tell noble Lords that they have matched the National Society of Allied and Independent Funeral Directors in every respect.

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