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("(7) In subsections (1), (1B), (1C) and (3) any reference to anything done by or in relation to a registered party includes a reference to anything done by or in relation to any accounting unit of the party; and section 46(4) and (6)(a) shall apply with any necessary modifications for the purpose of determining, for the purposes of subsection (1), whether property is transferred to a registered party or to any such unit.").

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On Question, amendments agreed to.

Clause 68, as amended, agreed to.

Clause 69 [Officers of registered party with responsibility for campaign expenditure]:

[Amendments Nos. 197D to 197G not moved.]

Lord Bassam of Brighton moved Amendment No. 198:

    Page 44, line 46, at end insert--

("( ) Where a deputy treasurer of a registered party is convicted of an offence falling within subsection (3), his appointment as deputy treasurer shall terminate on the date of the conviction.").

On Question, amendment agreed to.

The Deputy Chairman of Committees: I should inform the Committee that if Amendment No. 199 is agreed to, I cannot call Amendments Nos. 199A to 199D.

Lord Bach moved Amendment No. 199.

    Page 45, line 1, leave out subsection (5) and insert--

("(5) If, where the appointment of any deputy treasurer of a registered party has been notified to the Commission under subsection (1)--
(a) the deputy treasurer dies or his appointment terminates for any other reason, or
(b) any change occurs in the address of his office,
the treasurer of the party must notify the Commission of that fact within the appropriate period.
(5A) In subsection (5) "the appropriate period" means--
(a) the period of 14 days beginning with the date of the deputy treasurer's death or the termination of his appointment, or
(b) the period of 28 days beginning with the date when the change of address occurs,
as the case may be.").

On Question, amendment agreed to.

[Amendments Nos. 199A to 199D not moved.]

Lord Bach moved Amendments Nos. 200 and 201:

    Page 45, line 10, leave out ("register of political parties") and insert ("Great Britain or Northern Ireland register").

    Page 45, line 10, at end insert--

("( ) Where the Commission receive a notification under subsection (5), they shall cause any change required as a consequence of the notification to be made in any such entry as soon as is reasonably practicable.").

On Question, amendments agreed to.

[Amendment No. 201A not moved.]

Clause 69, as amended, agreed to.

Clause 70 [Restriction on incurring campaign expenditure]:

Lord Bach moved Amendment No. 201B:

    Page 45, line 24, at end insert--

("( ) Where any expenses are incurred in contravention of subsection (1), the expenses shall not count for the purposes of sections 74 to 78 or Schedule 8 as campaign expenditure incurred by or on behalf of the party.").

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The noble Lord said: In speaking to the amendment I shall also speak to Amendments Nos. 210F and 234YH. These amendments respond to concerns that the system of authorising expenditure in Parts V to VII of the Bill is based on an unrealistic assumption about the ability of the central organisation of any of the major political parties to control the actions of every officer and member of the party.

Those legitimate concerns stem from the effect of Clause 67. Under subsections (2) and (9) of that clause the definition of "campaign expenditure" includes expenditure incurred by or on behalf of an accounting unit of a party. Clause 70(1) requires that all campaign expenditure incurred by or on behalf of a party must be authorised by either the treasurer, or a deputy treasurer, or a person authorised in writing by either the treasurer or a deputy treasurer. A person who incurs campaign expenditure without the required authorisation commits an offence under subsection (2) of Clause 70.

The fact that campaign expenditure was incurred without authorisation, say by an officer of a constituency association, does not absolve the party from bringing that expenditure to account in the return prepared under Clause 75. Moreover, any unauthorised expenditure would count towards the expenditure limits in Schedule 8. For a party spending close to its expenditure limit, any unauthorised expenditure could have the effect of pushing the party over the limit, thereby exposing the party to criminal sanctions. The party is therefore vulnerable to the maverick or irresponsible actions of any of its members or officers right down to branch level.

We believe that it is unreasonable to expose any party to such a situation. We would expect all the major parties to instruct all their constituency associations, branches and other sub-units as to the requirements of the legislation. But ensuring that party officers and members are attuned to the requirements of the Bill is one thing, guarding against the actions of mavericks is quite another. A party may be able to take disciplinary action after the event, but by then it could be too late in terms of the party's own liability to prosecution.

To address these concerns, raised by all the major political parties, Amendment No. 201B provides that any campaign expenditure incurred in breach of Clause 70(1) would not count towards a party's expenditure for the purpose of the limits in Schedule 8. Furthermore, a party's treasurer would not be required to include unauthorised expenditure in a return under Clause 75. In short, no liability would fall on the party or the registered treasurer in respect of unauthorised expenditure. Liability would instead fall solely on the person who incurred the expenditure.

Amendments Nos. 210F and 234YH make parallel amendments to Clauses 85 and 108, where a registered party is acting as a recognised third party or permitted participant. In other words, the incurring of unauthorised controlled expenditure or referendum expenses would constitute offences, but unauthorised

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expenditure would not count towards the limits in Schedules 9 and 13 respectively as respects a registered party.

We understand that the Official Opposition, while being broadly supportive of this change, had some concerns about possible abuse. It has been suggested that an unscrupulous political party could seek to evade the expenditure controls by giving a nod and a wink to supposedly "unauthorised" expenditure. We do not dismiss such concerns, but nor do we believe that such a scenario is likely to arise. As I have said, it would continue to be an offence--punishable by a fine of up to £5,000--to incur unauthorised expenditure. This is not a step that any person seeking to secure political office either for himself or herself or his or her party will take lightly. Similarly, it is difficult to imagine that the treasurer of a registered party would conspire with others to commit such an offence.

Furthermore, we are sure that party workers will be on the look out for any sign of transgression of the rules by other parties and will quickly draw them to the attention of the electoral commission and the police. Indeed, if they did not, there would be a remarkable change in how one party views another during an election. In the circumstances, we believe that we can rely on the criminal offence in Clause 70(2) to ensure that this sensible easement in the controls is not open to abuse. I beg to move.

Lord Cope of Berkeley: We welcome these amendments. As the Minister said, we are concerned about possible unscrupulous use, but his words have reassured us. We hope that provisions provided elsewhere in the Bill for punishments will prove effective in that respect.

Baroness Gould of Potternewton: I welcome Amendment No. 201B. Having been a party official for many years, I can envisage concerns being expressed by all political parties in relation to the problems that could be caused by a maverick or irresponsible person creating expenditure that would take the party over the maximum, thus setting in train the legal consequences of such an action. The amendment is welcomed, as the noble Lord, Lord Cope, said, by all political parties and it will help to overcome that particular problem. I have had discussions about possible abuse in relation to this matter but, as my noble friend said, it is covered by Clause 72.

On Question, amendment agreed to.

Clause 70, as amended, agreed to.

Clause 71 [Restriction on payments in respect of campaign expenditure]:

Lord Rennard moved Amendment No. 201C:

    Page 45, line 33, leave out ("£100") and insert ("£500").

The noble Lord said: Amendment No. 201C concerns reducing the bureaucracy imposed on political parties through this legislation. On Tuesday last week I argued that as my party's nominating officer, I would be willing to take on some additional

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duties by sharing some of the responsibilities which it is proposed that the party treasurer should undertake. Today I am seeking to reduce that administrative burden and the associated paperwork.

The Bill will require that receipts must be provided for expenditure over £100. That will mean copying a huge number of bills. My view is that although all payments should be listed, a receipt should be required only for payments in excess of £500. That would considerably reduce the administrative burden, and I do not believe that it would open up greater prospects for fraud.

As an election agent in the past, I remember the cumbersome process after polling day of collecting receipts, initially for anything over the value of £2 and then for anything over the value of £20. For a few weeks after an election a great deal of time was spent chasing receipts from people to whom one had paid money for goods or services. In the old days, the Post Office used to be particularly bad at supplying receipts for phone bills on time. Acquiring invoices and receipts can sometimes be difficult, even though the bills have been paid. Collecting such things as bills for gas, electricity, rent, rates, printing and so on, was a difficult process. Last year I relived the nightmare in connection with the European election. Collecting receipts for small sums of money from all over the UK involved a myriad of paperwork and a great deal of time.

Unless we can reach agreement in relation to ongoing financial support for the parties to assist with that operation, I believe that that will cost the parties a great deal of time and money to administer. In any event, let us try to reduce the bureaucracy involved by saying that sums of money under £500 must be accounted for but that they do not require an invoice and a receipt. I beg to move.

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