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Baroness Gould of Potternewton: I, too, have a few questions to ask. The first is directed to the noble Lord, Lord Norton, regarding Amendment No. 135A and the inclusion of the words, "wheresoever resident". I have a problem here because I do not know how one would define "residence". Perhaps the noble Lord could interpret that for the Committee. One may have an address, but it could be an accommodation address. Because someone has an address, it does not necessarily mean that he or she is living there. The noble Lord talked about getting the parties off the hook, but I think that it would be very difficult for parties to police themselves here in the way that he suggested. Although I accept the noble Lord's first premise without any doubt--namely, that transparency is the key to all--I do not accept his solution.

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I also have a little problem in connection with Amendment No. 136, tabled in the name of the noble Lord, Lord Mackay. Again, it is a question of definition; for example, in the phrase,

"or eligible to be registered in an electoral register",

how can one define who is eligible? I take on board all the arguments about the people who do not register for safety reasons. That is why we had such a long discussion over the question of two registers when we debated the Representation of the People Act, as mentioned by the noble Lord. That may well have solved that particular problem. However, if there are other criteria for people who do not register but are eligible, does that have be laid down? Does the electoral commission have to determine who it is? Indeed, how would the political parties know? In itself, that raises an important question.

As regards the noble Lord's point about the rolling register, the idea is that it will take a maximum of six weeks to get on the register. I cannot see that as a major problem for anyone who has not already put himself on the register. The simple way to ensure absolute transparency is to accept what the Bill says.

The noble Lord, Lord Mackay, may be a little surprised to learn that I very much support his Amendment No. 142. This relates to quite a serious problem. A person may not, through no fault of his own, be on the electoral register but may have made a will in which he donates money to a political party. That person may be seriously ill in a hospice and have missed the registration time. It would be very remiss of this Bill not to allow political parties to accept such a donation. I do not believe that the clause should be deleted, as suggested by the noble Lord, Lord Norton. The proposal put forward by the noble Lord, Lord Mackay, is a better solution.

Lord Bassam of Brighton: This has been a very wide-ranging debate. I agree with the noble Lord, Lord Mackay, that today's proceedings encapsulate a very broad range of amendments, which makes my task of trying to pull these threads together rather more difficult. Primarily, this group of amendments is concerned with the definition of a "permissible donor", as set out in Clause 49. The Neill committee conceived the concept of a "permissible source" in order to effect a workable ban on foreign donations. The Government have sought to adhere, as far as they possibly can, to the recommendation of the Neill committee as to what should constitute a permissible source.

The consideration of this particular issue makes our debate much more difficult. However, perhaps I may turn to some of the contents of the Bill. Clause 50(2) provides that any payment to a party from public funds is to be regarded as a donation from a permissible source. The term "public funds" is not presently defined in the Bill, but government Amendment No. 319A makes good that omission. The Committee will see from the definition to be inserted into Clause 150 that the term is intended to cover UK

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public funds; that is, payments out of the Consolidated Fund or payments by a UK government department. By putting the meaning of "public funds" in Clause 50(2) beyond doubt, there is no longer an avenue by which a party could accept payments from an institution of the European Union, other than payments covered by Clause 47(1)(c).

I turn now to the amendments to Clause 49(2)(a). In the case of individual donors, the Neill committee proposed that only those who are registered voters, or those who are eligible to register, should qualify as a permissible source. I believe that that goes to the heart of the interesting comparison of the noble Lord, Lord Mackay, between American and Canadian business people working in this country. Surely the principle is that the right to donate follows the right to vote. In those circumstances, does the noble Lord advocate giving the vote to foreign nationals resident in the UK? I suspect that he does not.

This issue was examined by the Home Affairs Select Committee in its October 1998 report on the conduct of elections. The committee unanimously came out against any such change in the franchise along those lines. It must surely be right in principle that only those who have the right to participate in the electoral process by means of voting should have the right to influence that process by financially supporting a political party--

Lord Mackay of Ardbrecknish: I accept where the noble Lord is in his argument. He is saying that someone with a right to vote in this country should be allowed to donate. I return to my Canadian friend who is working in London. He has not registered, but undoubtedly has a right to vote. Does that mean that he can in fact donate?

Lord Bassam of Brighton: The noble Lord asks a neat question, to which I shall have to find an equally neat answer. The link between the right to vote and eligibility to be a donor has the merit of providing the recipients of donations, and the electoral commission, with a practicable test for establishing whether or not a donation can be accepted.

However, it is on the latter point that the Government have considered it necessary to depart to a limited extent from the committee's recommendation and to restrict the definition of a permissible donor only to those individuals who are registered voters. Amendment No. 136 would bring the definition into line with the committee's recommendation. But it would be no easy matter for a registered party to establish whether a donor whose name did not appear on an electoral register was nevertheless entitled to register. The difficulty would be all the greater where the donor lived overseas. Under the current rules for overseas registration, a party would need to establish that the person was registered to vote on the "domestic" register anything up to 20 years previously.

Moreover, I am not convinced that any benefit would accrue as a result to offset the added complication. It seems reasonable to suppose that a

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person with sufficient interest in the politics of this country so as to donate more than £200 to a political party will also have taken the trouble to register to vote. This, of course, will be considerably easier with the introduction of the rolling register. In these circumstances, we do not believe that much is lost by the small departure from the Neill committee's recommendation, but there is a considerable net gain in terms of the integrity and ease of operation of the regime for the control of donations.

There would also be practical difficulties for the parties themselves in working to these amendments. It is not specified what is meant by the term,

"resident in the United Kingdom".

There is a concept at law of being "ordinarily resident". If we assume that that is what is meant, the recipient party would have to establish in each and every case whether the donor was ordinarily resident. That would not be an easy or enviable task.

I turn to Amendment No. 135A in the name of the noble Lord, Lord Norton of Louth. He described his approach here as radical. I certainly agree with that description. I consider that it takes a battering ram to the ramparts of the Bill. Amendment No. 135A, and consequential Amendment No. 146, would take matters a step further by allowing a party to accept a donation from any individual, wheresoever resident. The noble Lord appears to want a free market, as it were, whereby one might name and shame people out of making donations because of where they are resident rather than having a system of regulation. The noble Lord clearly believes that there is a distinction to be had between donations made by individuals and those made by companies or other organisations. I can only say that this was not a distinction recognised by the Neill committee; nor is it one that the Government can accept.

Amendments Nos. 142 and 140A are concerned with bequests. I cannot commend Amendment No. 140A to the Committee as deleting Clause 49(3) would cast doubt on whether a party could accept a donation which takes the form of a bequest. However, I have rather more sympathy with Amendment No. 142. I can see that as someone gets older and frailer he or she may drop off the electoral register in their twilight years. In such circumstances the person would not be a permissible donor at the time of their death and the party named as a beneficiary of the estate in the person's will could not then accept the intended bequest.

I accept that it would be wrong to frustrate the deceased's wishes--perhaps the wishes of a whole lifetime--in such circumstances. Accordingly, I am ready to accept the spirit of that part of Amendment No. 142 which provides for a five-year period of grace. For reasons I have already explained, I am not attracted to, nor do I see the need for, the ordinary residence test in the amendment. It ought to be enough that the deceased had been registered to vote at any time in the five years before his or her death. If the noble Lord, Lord Mackay of Ardbrecknish, agrees to withdraw Amendment No. 142, we shall bring forward an acceptable provision on Report.

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The noble Lord, Lord Mackay, has argued that Amendment No. 137, as with Amendment No. 136, is intended to bring Clause 49(2)(b) in line with the Neill committee's recommendation. I might first concede that the Government have departed from the committee's recommendation on that point. The Neill committee recommended that the definition of a permissible source should include companies which are incorporated in the United Kingdom. I make no bones of the fact that we might have preferred to adhere to that principle, but the Government are firmly persuaded that such a restriction would be contrary to Community law, as at least two Members of the Chamber acknowledged. People might not like that, but that is the case. We have to work within that framework.

The argument is, briefly, that companies incorporated elsewhere in the European Union must be allowed to carry on business here on the same terms as companies incorporated within the United Kingdom. If the latter are permitted to make donations, on the basis that they are entitled to seek to influence the political process in this country, so must the former be. I cannot, obviously, recommend the Committee to accept an amendment which would result in the Bill being contrary to European Union law.

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