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Lord Bach moved Amendments Nos. 189A to 190:

    Page 122, line 28, after ("9(3),") insert ("9(4),").

    Page 122, line 33, leave out from ("shall") to second ("to") in line 34 and insert ("include power to make provision for disapplying any specified provisions of this Part, for such period as is specified, in relation").

    Page 122, line 37, at end insert--

("( ) Each order under section 65(1)(b) (as applied by sub-paragraph (1)) shall be so made as to--
(a) apply to every person or members association falling within sub-paragraph (1)(a) or (b), and
(b) make the same provision with respect to every such person or members association.").

The noble Lord said: These amendments have all been spoken to. I beg to move.

On Question, amendments agreed to.

Schedule 6, as amended, agreed to.

Clause 67 [Campaign expenditure]:

Viscount Astor moved Amendment No. 191:

    Page 42, line 19, leave out subsection (2).

The noble Viscount said: We have now moved on from the issue of political donations in Part IV to that of political expenditure in Part V. This is a probing amendment which, when it was originally tabled, sought to provoke a debate on the issue of campaign expenditure. The Government have subsequently tabled a large number of amendments which relate to it and to issues in Schedule 7 with which subsection (2) of Clause 67 deals. Indeed, although Amendment No. 191 seeks to delete subsection (2) for probing purposes only, I notice that the Government are seeking to delete large chunks of it with Amendments Nos. 191A and 191B.

Perhaps the most significant amendments in this group are Amendments Nos. 191A and 191B, together with government Amendments Nos. 192A and 195A. These amendments will remove Part II of Schedule 7 from the Bill in its entirety and substantially alter the definitions in Part I of the schedule. This is highly significant.

As the Committee will be aware, political parties will in future only be able to spend up to a maximum of just under £20 million on what is called "campaign expenditure" in the year before a general election. This builds on one of the key recommendations of the Neill committee, recommendation 47.

Schedule 7 currently defines the term "campaign expenditure" in some detail. The Government are seeking to alter that definition. In another place, the vast majority of the provisions that the Government are seeking to delete were not queried by the

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Opposition. Indeed, there was a very short discussion over the detail of the definition relating to the preparation of the manifesto.

On Report, the Opposition tabled amendments similar to Amendments Nos. 194 and 195 in relation to legal and professional fees. The issue was whether legal fees related to industrial tribunals, for example, or the auditing of accounts under the Bill, should count as campaign expenditure when, in effect, they were in no way related to political campaigning. I am therefore to an extent grateful that one of the effects of government Amendment No. 192A is to take all legal and professional fees out of the definition. That reflects, although in a more pronounced way, the points that my right honourable friends made in another place. Therefore, I shall not go into more detail on Amendments Nos. 194 and 195.

Returning to the general definition in Part I, government Amendment No. 192A seeks to delete much more than the area that have mentioned. We expect the Minister to explain why.

In addition to the legal and professional fees that I have mentioned, the amendment seeks to remove from the definition of "campaign expenditure" three further categories. Two of them relate directly to elections. The first is mentioned on page 123 of the Bill in subparagraph (7); namely,

    "Office accommodation acquired specifically for the purpose of being used in connection with a relevant election".

That seems strange. Surely it is logical that campaign expenditure should include the cost of offices rented specifically for use in election campaigns.

The second category to be deleted is the employment of staff used in connection with a relevant election. Again, that seems strange and we look forward to the Minister's explanation.

Amendment No. 193D would also remove a large amount of expenditure from the definition of "campaign expenditure"--staff expenses, postage and stationery costs. Why are these being excluded even if they are incurred in relation to an election campaign? How does Amendment No. 193D, which seeks to delete staff expenses from the main definition entirely, fit with Amendment No. 193G, which appears to limit the exemption in paragraph 2 in respect of expenses to those which are paid by the individual concerned and not reimbursed by the party? What kinds of expenses will now be covered and what do the amendments taken together mean?

Amendment No. 192B seems to tighten up some of the Government's drafting in relation to transport costs, but I should be interested to hear from the Minister a clearer definition of exactly what kinds of transport would be covered. That is the thinking behind our Amendments Nos. 192C and 193, which seek to examine what the words "national or other basis" and "from place to place" mean in the current drafting. What if, for example, an MP is being transported by the party to a campaign event in his own constituency? Does that count under the national limit or under the MP's limit as a local candidate? What about candidates or prospective candidates

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visiting neighbouring constituencies? Would their transport expenditure count? What about that of party officials or local activists?

The government amendments would also tighten up the definitions in relation to rallies and public meetings. In order to count towards the limit, they would no longer have to attract "national publicity", nor would they have to be attended by "prominent persons", and the costs of hiring premises for the meetings would now be covered. However, we were under the impression that the new national limit was supposed to relate to national campaigning only. Perhaps the Minister will outline the kinds of meetings that will be covered under the new definition that would not have been covered under the Bill as presently drafted.

Government Amendments 195A to 195C relate to the second type of expenditure in Schedule 7; namely, overheads. They seek to delete the category entirely. These amendments would blow a pretty big hole in the definition of "campaign expenditure". Permanent staff and office costs, telephone and other office costs, to the extent that they are attributable to the election campaign, would be removed entirely. We are puzzled by this development. Why are the Government doing this? We do not understand their logic.

While the amendments would to some extent reduce the administrative burden on political parties, they would have the effect of also allowing political parties to spend a great deal of the £20 million limit on, for example, national advertising, transport, meetings or rallies than would otherwise be the case. This would be of direct and substantial benefit to any parties that had the full amount of money to spend. We are mindful of the conclusion of the Neill committee, at paragraph 10.49 of its report, which states:

    "Which items of election-related expenditure should be included within the new national limit? The short answer is 'all'".

I have raised some fairly detailed points on this group of amendments, many of which are government amendments and many of which are mine. I thought it might be helpful if I put these points to the Minister at this stage so that, in introducing the government amendments, he may be able to deal with them. I beg to move.

The Deputy Chairman of Committees (Baroness Serota): I should point out to the Committee that if this amendment is agreed to, I cannot call Amendments Nos. 191A and 191B.

5.15 p.m.

Baroness Gould of Potternewton: I rise to give general support to the whole cluster of government amendments. I do so because all the political parties have registered concern about the complexity of Schedule 7 as it stands. There was obviously a need to simplify the schedule wherever possible.

One of the problems brought about by the amount of detail in the schedule was that the electoral commission would have had laid down before it the

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precise implications of the provision; rather, it will be commissioned to come up with a list of matters that should be covered and will now have the ability to do. What is important is that the provision will now be simplified in such a way as to reduce an enormous amount of the administrative burden on political parties and make the whole process more manageable.

The noble Viscount, Lord Astor, raised a number of specific points, and as we go through the Bill we may indeed see the need for modifications. However, the general principle--the idea that Schedule 7 should be simplified and made more workable--must be supported. Practitioners within political parties will support this approach. In no way should any amendment take away the need for tough restrictions. We must not undermine the Bill's intentions. Nevertheless, the definition of "election expenditure" is now more comprehensive and more workable than it was previously. In the all-party discussions that have taken place, all sides have expressed the view that Schedule 7 as it stood was impossible to operate. As we are constantly reminded by Members in this place, political parties are made up of volunteers and activists, not accountants. The simplification of the schedule may help the work of those volunteers. The new definition will ensure that the next general election is fought on a more level playing field than the old Schedule 7 would have provided.

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