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Lord Bassam of Brighton: I am grateful to the noble Viscount for his explanation that his amendments are probing amendments. I am not sure what he probed, but it was an interesting observation in itself.

I confess to being slightly puzzled by Amendment No. 191, which would remove subsection (2) of Clause 67. The subsection defines "campaign expenditure" by reference to items of qualifying expenses set out in Schedule 7. The noble Viscount has not tabled an amendment to delete Schedule 7. If he is broadly content with Schedule 7, as he would appear to be, I hope he will accept that we must retain Clause 67(2) in order to give effect to that schedule.

The large group of government amendments to Clause 67(2) are consequential on the proposed changes to Schedule 7 and it is to these that I now turn. Schedule 7 is the product of recommendation 53 of the Neill committee report. That recommendation stated:

That is very sound advice.

As throughout the rest of this Bill, we have sought to be faithful to the Neill proposals. The committee recommended a comprehensive list of election expenses and we have produced one. In retrospect, however, the Neill committee's recommendation was rather on the ambitious side. It is worth reminding ourselves constantly that political parties are, by and large, voluntary organisations--a point made by several noble Lords during our debates and deliberations on this Bill. At best, they employ only a

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small number of directly employed core staff. To expect political parties to itemise and account for every telephone call, stamp or paper clip devoted to an election campaign is simply expecting too much.

The main political parties would have to engage a small army of staff just to keep on top of the requirements of the Bill, thereby diverting their limited resources away from fighting an election campaign. We need to strike a proper balance between the public interest in exerting a downward pressure on campaign expenditure and the ability of the political parties to comply with the administrative consequences involved. As it stands, Schedule 7 imposes unreasonable demands on political parties. The aim of these government amendments is to scale back the list of qualifying expenses to something more manageable.

The amendments would strike out the items relating to office accommodation, staffing, legal or other professional services and the use of telephones and other office equipment. Staff expenses, postage, stationery and printing costs would also be omitted to the extent that such costs did not fall within any of the remaining items; thus, for example, the printing costs of campaign leaflets would still be covered. We have also removed the whole of Part II of Schedule 7, which relates to overheads.

The qualifying expenses that will remain in Schedule 7 would still constitute a formidable list. The list will include the cost of producing party political and election broadcasts, all advertising costs, direct mail, opinion polling, media facilities, campaign rallies and transport costs such as a party leader's "battle bus". The information supplied to the Neill committee by the three main parties suggests that these items together accounted for a very significant share of their overall expenditure at the last general election. Pruning the list of qualifying expenses will go a considerable way towards easing the bureaucracy on the parties but without compromising the tight rein to be imposed on campaign expenditure.

I should remind the Committee that it will remain a responsibility of the electoral commission to keep the list of qualifying expenses under review. It will be open to the commission, in the light of changing patterns of election spending, to recommend change to the list in order to keep it up to date. Paragraph 7 of Schedule 7 enables such changes to be made by order so that the commission's recommendations can be acted upon speedily.

By removing the item relating to legal services from Schedule 7, I hope that the noble Viscount, Lord Astor, can be persuaded that his Amendments Nos. 194 and 195 are no longer needed. These two amendments relate to legal or other professional expenses incurred either in respect of any requirements of the Bill or in connection with any legal proceedings. It seems to me to be most sensible to remove them. Expenses incurred in respect of such matters would not constitute expenses incurred for election purposes, as defined in Clause 67(4) and would not, therefore, count as qualifying expenses. I see no purpose in adding these items to the list of exclusions in paragraph 2 of Schedule 7.

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Amendments Nos. 192B, 193F and 193G aim to clarify the relationship between paragraph 1(11) and 2(e) of Schedule 7. These provisions are concerned with travel costs. Paragraph 1(11) is particularly aimed at transportation costs associated with the hire of a "battle bus" or of a helicopter to take leading party figures around the country during the course of a whistlestop campaign tour. The paragraph would also encompass the cost of bussing in party supporters to an election rally. In sharpening up the drafting of this provision we have removed the reference to,

    "travelling from place to place",

which I believe will address the concerns raised in Amendment No. 193. The revised provision also leaves out the words "national or other" which, as presently drafted, qualify the reference to an "election campaign" in paragraph 1(11), perhaps confusingly. I hope that this addresses the noble Viscount's point as set out in Amendment No. 192C. Where party workers meet their own travel costs, these would not fall to be treated as a campaign expense. Amendments Nos. 193A to 193C bring the drafting of paragraph 1(12) into line with the revised paragraph 1(11). Government Amendments Nos. 234M to 234YC simply make parallel changes to the list of referendum qualifying expenses.

I hope that the Committee will agree that these government amendments are an equitable and proportionate response to legitimate concerns by all political parties about the practicality of operating to Schedule 7 in its current, perhaps overly prescriptive, form. The revised schedule will continue to cover the main items of campaign expenditure and, as such, will ensure that the limits on such expenditure are effective in achieving the Neill committee's objective of ending the "arms race" in election spending.

During the course of my commentary I hope that I have covered the main questions raised. However, I believe that the noble Viscount, Lord Astor, asked a few questions about expenses, especially in relation to a candidate's election campaign. Such expenses would be included in the candidate's return under the Representation of the People Act. The noble Viscount's further question about existing paragraph 1(11) is probably answered simply by the replacement of that paragraph under Amendment No. 192B.

The noble Viscount also raised the question of office and staff costs. As I said earlier, we have deleted these so that we can reduce the administrative burdens on parties. In our view, these provisions are also unfair to small parties that will not have any significant infrastructure and only take on staff or officers at election times. I trust that those explanations will satisfy the noble Viscount.

Viscount Astor: I am grateful to the Minister for his explanation, which I believe has answered most of the points that I raised, but I shall certainly have to study Hansard to consider it further. I believe the government amendments relating to office and staff costs are particularly helpful. I am somewhat confused on government Amendments Nos. 193A to 193C as regards how they change the definition of rallies and

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public meetings. I am still under the impression that a new national limit was supposed to relate to national campaigning only. But, as far as I can see, the changes that are to be made will not necessarily have that effect.

However, I shall have to study Schedule 7 in its revised form and, if necessary, return to the matter at a later stage if I have any further queries. As I am sure the noble Lord knows, it is difficult to put all the amendments into Schedule 7 and imagine how the revised schedule will work. Nevertheless, I am grateful to the Minister for his reply. It has been most helpful in improving our understanding of how Schedule 7 works. I take note of the point made by the noble Baroness, Lady Gould, that this schedule must be made simpler, more understandable and must be workable. Indeed, if the provisions are too complicated, the schedule will not work. The purpose of all political parties here is to produce something that is workable. In the light of that and the Minister's comments, which were generally helpful, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Lord Bassam of Brighton moved Amendments Nos. 191A and 191B:

    Page 42, line 21, leave out ("either").

    Page 42, line 23, leave out from ("purposes") to end of line 26.

On Question, amendments agreed to.

5.30 p.m.

Lord Bassam of Brighton moved Amendment No. 191C:

    Page 42, line 29, leave out subsections (4) and (5) and insert--

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