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("(4) "For election purposes", in relation to a registered party, means for the purpose of or in connection with--
(a) promoting or procuring electoral success for the party at any relevant election, that is to say, the return at any such election of candidates--
(i) standing in the name of the party, or
(ii) included in a list of candidates submitted by the party in connection with the election; or
(b) otherwise enhancing the standing--
(i) of the party, or
(ii) of any such candidates,
with the electorate in connection with future relevant elections (whether imminent or otherwise).
(5) For the purposes of subsection (4)--
(a) the reference to doing any of the things mentioned in paragraph (a) or (as the case may be) paragraph (b) of that subsection includes doing so by prejudicing the electoral prospects at the election of other parties or candidates or (as the case may be) by prejudicing the standing with the electorate of other parties or candidates;
(b) a course of conduct may constitute the doing of one of those things even though it does not involve any express mention being made of the name of any party or candidate; and
(c) it is immaterial that any candidates standing in the name of the party also stand in the name of one or more other registered parties.").

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The noble Lord said: The amendments in this group primarily relate to the definitions of campaign expenditure incurred for election purposes in Clause 67 and of controlled expenditure in Clause 80.

The whole object of Part V of the Bill is to plug the gap in the controls on election expenditure that was created by the fascinating Tronoh Mines case in 1952. Tronoh Mines Ltd had placed an advertisement in The Times shortly before the 1951 general election condemning the policies of the then Labour government. The readers of the advertisement were invited to save the country by electing

    "a new and strong government with ministers who may be relied upon to encourage business enterprise and initiative".

Until that point it had been generally assumed that such advertising would be illegal, first, because the expenses were not authorised by an individual candidate or his agent and, secondly, because it breached the limit on third party spending set out in the then Section 63 of the Representation of the People Act 1949. The judge in the case concluded otherwise. He ruled that the purpose of Section 63 of the 1949 Act was to prohibit the incurring of expenditure which has the effect of supporting a particular candidate or candidates in a particular constituency. Section 63 did not prohibit expenditure,

    "the real purpose or effect of which is general political propaganda, even although that general political propaganda does incidentally assist a particular candidate among others".

We do not want the controls on campaign expenditure set out in Part V to be similarly vulnerable to legal challenge in years to come. What we are seeking to control is any campaign expenditure which is directed at enhancing the standing of a party, and therefore its electoral prospects, in the 365 days before the date of a general election. The Conservative Party's current "Save the Pound" campaign is a good example of the type of activity which should be caught by the controls. The campaign clearly seeks to promote the Conservative Party by reference to its stance on a particular policy. But whether, in the words of Clause 67(4), the campaign can be said to be "promoting or procuring" the election of Conservative Party candidates at the next election or generally enhancing the electoral prospects of such candidates is arguably open to question. There is at least a possibility that Clause 67(4) in its current form might be relied upon as evidence that expenditure which was intended to boost a party's general support, at a time when no election was imminent, was not caught by the expenditure controls. Clearly, we need to avoid any such construction being placed on this subsection.

The revised subsections (4) and (5) of Clause 67, as substituted by Amendment No. 191C, shifts the focus away from promoting or procuring the election of a party's candidates. The emphasis is now on promoting or procuring the electoral success of the party or otherwise enhancing the party's standing. Some reference to candidates is still apt because ultimately the measure of a party's electoral success is the return of one or more of its candidates. However, Amendment No. 191G makes it clear that a reference to a party's candidates in this context is not confined to

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candidates who have already been selected or formally nominated, but includes candidates who have still to be identified.

The tighter definition of the term "for election purposes", with its specific reference to the return of list based candidates makes subsection (8) of Clause 67 unnecessary; it is therefore omitted by Amendment No. 191E.

Amendment No. 191F makes it clear that where a party is a party with accounting units, campaign expenses incurred by an accounting unit are to be regarded as expenses incurred by or on behalf of the party. Without such a provision it would be the easiest thing in the world for a party's central organisation to avoid the spending limits by channelling some of its expenditure through one or more of its constituency associations. Amendment No. 191D makes it clear that any election expenses incurred by a candidate or candidates and which are included in a return made under the 1983 Act or any other enactment do not constitute campaign expenditure under Part V. The reference to candidates in the plural is intended to catch candidates for election as London members of the Greater London Authority.

Amendments Nos. 208X and 208YB to Clause 80 simply seek to bring the definition of controlled expenditure into line with the revised definition of campaign expenditure.

Amendment No. 208YA, which inserts a new subsection (7A) in Clause 80, makes it clear that a registered party does not incur controlled expenditure when it publishes election material promoting itself or its candidates, including material denigrating other parties or their candidates. Expenditure on such material would fall to be accounted for as campaign expenditure under Part V. But there may be circumstances where a registered party contests only a limited number of seats at an election and in the seats it is not contesting supports the candidates of another party. In such circumstances the party will need to consider, on a case by case basis, whether any election material it issues falls to be accounted for under Part V or Part VI.

Finally, Amendment No. 208YG relates to Clause 82(1)(b). This provision is designed to stop expenditure being counted twice under both Parts V and VI. If a third party uses its photocopier to run off, free of charge, some leaflets for use by a registered political party, it would be appropriate for the political party concerned to record the cost of the leaflets as notional expenditure under Part V. There is little merit in the third party also having to record, under Part VI, the notional cost to itself of using the photocopier. Removing the words in brackets will avoid such double counting. I beg to move.

Viscount Astor: I thought that I heard the Minister refer to Amendment No. 208X. However, I thought that that amendment had been degrouped from the amendments we are discussing and that we shall discuss it later. I believe that it would be easier if we proceed on that basis. I hope that the Minister will

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consider that matter while I address Amendments Nos. 191C to 191G which I thought were grouped and would be spoken to as a group by the Minister. I think that it would be helpful to the Committee to deal with Amendments Nos. 208X, 208YA, 208YB and 208YG later, if that is satisfactory.

I have a number of questions on Amendments Nos. 191C to 191G which I am sure the Minister will answer. First, why are the words,

    "promoting or procuring electoral success"

used in the proposed new subsection (4)(a) of the Amendment No. 191C when the Bill as drafted uses the term

    "promoting or procuring the election"?

What is the difference both in theory and in effect between electoral success and the actual election of a candidate? The proposed new subsection (4)(a) of government Amendment No. 191C mentions "procuring electoral success". One is either elected or one is not elected. Does the noble Lord consider that one can be electorally successful without being elected? Perhaps one can, but I fail to see how that can happen unless, of course, one stands as some kind of blocking candidate where one might consider one has been successful in blocking someone else. Does that count as electoral success?

The proposed new subsection (5)(b) in Amendment No. 191C states that,

    "a course of conduct may constitute the doing of one of those things"--

that is, promoting or procuring electoral success--

    "even though it does not involve any express mention being made of the name of any party or candidate".

Why use the term "a course of conduct" which is a broad term? What kind of political activity do the Government consider that that rather wide term will cover? Who will decide whether a political course of conduct will promote, procure or, indeed, prejudice a party or a particular candidate's election? Will it be the electoral commission or the courts?

The proposed amendment allows for almost anything undertaken publicly by a political party to be construed as campaigning even it is not intended as campaigning and does not involve the mention of any name, party or candidate. Are political parties to be penalised because they have acted unwittingly in a way which falls within the wide definition in this amended subsection?

I am puzzled by subsection (5)(c). In what circumstances will candidates stand for different political parties? Are there examples? The amendment refers to,

    "candidates standing in the name of ... one or more other registered parties".

Is the Minister signalling a Lib/Lab pact for the next general election; or does he have in mind other parties which might be registered in future? I do not understand. A candidate normally stands for one party. How does one stand for more than one party? I am confused. I look forward to the Minister's explanation.

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I welcome Amendments Nos. 191D and 191E which state in two lines what the Bill currently states in 12. We want greater clarity. However, having cut some words out, Amendment No. 191F doubles the length of Clause 67(9) with no apparent change in meaning. Where the Minister has managed to cut some words, he has quickly added more.

The Minister explained Amendment No. 191G. However, I do not understand. That may be my fault. How can a party promote the electoral success of future unidentifiable candidates? I understand that a party can promote the interests of identifiable candidates. The Minister did not explain the matter clearly. What do the Government mean by that?

5.45 p.m.

Lord Bassam of Brighton: That point relates to the situation where the party has not yet selected a candidate but is actively campaigning to promote the party in advance of the candidate being selected, and expenses might be incurred as a product of that.

The noble Viscount asked whether it would be a matter for the party to determine whether expenditure is election expenditure. That will be open to challenge and refinement by the electoral commission. Ultimately the courts would determine that point.

The noble Viscount seems to make points rather than ask questions. I shall study his remarks carefully before I answer specific issues he raises. Clearly they have a bearing on the content of the amendments. In these amendments we seek to clarify the language and make it easier to understand. At this stage, we should not get into too much detail on these points. I am happy to listen further the points the noble Viscount raises. I shall reflect on what he said. If specific questions arise, I shall reflect further and write to him.

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