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Lord McNally: We broadly welcome this batch of amendments. But we must be careful to ensure that we give parties sufficient freedom to raise funds. As a Labour Party official, I remember a first application from a body to put up a stall at the Labour Party conference. It was supported by Mr Wedgwood Benn at the time and rejected by the rest of the executive as being far too radical a thought. That was around 30 years ago.

Now of course all the political parties make a substantial profit from their party conference trade exhibitions. I would not want to see the regulations so pernickety as to destroy that source of finance. Two benefits arise from it. First, it is a legitimate source of finance; and, secondly, one of the healthier things that has happened at all our party conferences has been the arrival of interest groups, both commercial and campaigning groups. They pass on their ideas, make contact with political parties, and so influence them.

Obviously, there is always a danger that those who want to get round the regulations can try to pay inflated fees. That is why the commission and the

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powers exist. But the amendments have the balance right and offer parties the prospect of legitimately earning much-needed cash. It is better to do it in this transparent way than in some other ways which give rise to concern. Basically, therefore, we welcome the amendments.

Baroness Gould of Potternewton: I, too, welcome these amendments. At Second Reading, concern was voiced throughout the Chamber. At the same time we heard from the CBI of its concern about the Bill as it stood then. So there was a need to look at the whole question of sponsorship versus donation and what we could do about companies' bona fide commercial and advertising activities being seen purely as donations, and at the consequences of that. I am delighted that we now have a much clearer definition of what constitute normal commercial relationships.

In relation to party conferences and stalls, the noble Lord, Lord McNally, referred to the days when stalls were not acceptable. In fact, if you were lucky you would have got not so much a "stall" as a six-foot trestle table! But life has changed considerably and the exhibitions at party conferences are now very big events.

I have a query in relation to the electoral commission defining what is a reasonable rate for hiring a stand. Every conference is different. Each has a different audience and therefore different numbers of people will see the publicity, which is what the stands are. Also, there may be big stands and little stands. I wonder how that definition will be arrived at to ensure that a level is not set which may be too high for small organisations which would also like to participate in conference exhibitions.

5.15 p.m.

Lord Mackay of Ardbrecknish: This is an important and, to a large extent, a welcome group of amendments. As the Minister said, they define what the Bill means when it talks about "sponsorship" in the context of political "donations". As the noble Lord, Lord McNally, indicated, exhibitions involving sponsorship now form a considerable part of the side-show at major party conferences and provide the parties with income which helps with the expensive cost of conferences. I am glad to see that many of the concerns raised by my honourable friends in the other place have been addressed in the amendment. I particularly welcome the fact that the cost of hiring stands at party conferences will not be included in the definition of political donations.

The amendments will enable companies--or at least I hope that they will--to continue to interact with political parties on a genuinely commercial basis while retaining the requirement for shareholder consent in respect of gifts of money and sponsorship, among other things. I hope that their effect will be that intended by the Minister in the other place, Mr Tipping, who said on 25th January at col. 86 in Standing Committee G:

    "it is important to devise a system that allows for commercial contracts and distinguishes them from sponsorship".

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But once again I am puzzled. We have been asking for these amendments for months. In fact, my right honourable friend Sir George Young said as long ago as 10th January in the other place at col. 49:

    "We shall need a better definition of a donation and of sponsorship".

On 13th March we initiated a debate in the other place on this very issue when my honourable friend Nigel Evans said, "We need clarification".

So it has taken a long time. I understand that the Home Secretary wrote to the Neill committee in early January raising these issues. The committee responded positively and in good time. Yet we had to wait until the end of October for the amendments to be tabled. That is all part and parcel of the way the Government have handled this Bill.

Amendment No. 133 seeks to exclude payments made to political parties in respect of educational activities for the benefit of members. I apologise if the wording is a little imprecise. A similar amendment was tabled in Committee in another place when my honourable friend Robert Walter raised points about overseas visits to sister parties by party officials and MPs. The Government took those points on board in their own amendments, which are now part of the Bill. But my intention in tabling Amendment No. 133, which is a probing amendment, was to look at another aspect of educational activity: educating the party membership at large.

What if a party were to receive money from a source which is not permissible under the Bill, but that money were to be used to fund activity of a purely educational nature within the party itself and not political campaigning? Perhaps it could be education about a sister party abroad, or about political developments in another country. It could be money given by an individual benefactor, a charity or a company in order for the party better to inform its membership about an issue with no relation to political debate. Should such a payment be classed as a political donation, with all that that entails?

I have no particular example in mind. But I want to probe this issue, especially with regard to whether or not the restrictions on what is and what is not classed as a donation might be a little too narrow. I shall be interested to hear the Minister's comments.

I have a number of other questions which I hope are more straightforward. First, what are the implications of the amendments defining sponsorship for recognised third parties, members' associations and individuals? Will any meetings they organise or research they undertake, even if the issue is not a politically relevant one, be able to be sponsored only by permissible donors? What research has the Home Office done into the implications of that for organisations and people that are likely to fall within the categories I mentioned, especially for candidates at elections, under Amendment No. 248H?

I should also like to know why the Secretary of State and the commission are being given power to amend the definition of what is and what is not sponsorship by order. I recognise that such an order will be subject

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to affirmative resolution--I welcome that--if Amendment No. 315A is agreed to. But perhaps the Minister could shed a little light on the circumstances behind the inclusion of the power and the circumstances in which the definition might be so amended. Why is subsection (2)(b) of Amendment No. 319B so worded? Who will be making the reasonable assumption, having regard to all the circumstances that it mentions?

Moving away from sponsorship, what is the intention behind Amendment No. 131B, which relates to trustees? In what circumstances could a political party or a members' association receive assistance under Section 9 of the Local Government and Housing Act 1989, which will henceforth not count as a donation if Amendment No. 132B is agreed to? Finally, I should add that I look forward to moving Amendments Nos. 131 and 134, to which the Minister has added his name. Such consensus really pleases me because, as the noble Lord, Lord Bassam of Brighton, knows, that is what I am looking for in this Bill.

Lord Bassam of Brighton: I am astonished and delighted by the noble Lord's positive reaction. I am afraid that I must answer to some of his questions in writing, but they are good questions. In fact, I am interested in hearing the answer to some of them so they must be good questions!

I am grateful for the welcome the amendments received. The noble Lord, Lord McNally, was obviously an innovator in his time. He appears to have stormed ahead when the forces of reaction were battling hard against him. I am sure that that is true, but I shall check later with my noble friend Lady Gould.

The question which my noble friend raised about the reasonable rate is helpful. The commission will be expected to set an upper limit on what it might be. No doubt it must discuss the matter with the parties before doing so and take account of the existing range of charges. I hope that they are assisted in that regard so that the not-for-profit organisations are not squeezed out and are afforded the opportunity of discounted rates. I have tried to afford that opportunity to parties and organisations in small conferences which I have organised. It seems to me a sensible way forward.

I take the point raised by the noble Lord, Lord Mackay, about educational activity within the party. However, the problem is that it will be difficult, if not impossible, to differentiate how moneys are used and it could be open to a form of manipulation. I can accept that someone might make a donation purely for educational purposes but because of the way in which parties account for the cash which comes in and the way in which they use it, the proposal will be difficult to achieve.

The noble Lord, Lord Mackay, asked a number of questions about sponsorship and so forth and I shall have to write to him about them. However, I may be able to answer his question about the Local Government and Housing Act 1989. That legislation established and enabled special advisers to be in place

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to advise political groups within local government. That might not be the answer, but it is the one point which occurs to me.

I am pleased with the genuine welcome that has been given to the amendments. I apologise for their complexity but that is due to their knock-on effect throughout the Bill. I commend them to the Committee.

On Question, amendment agreed to.

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