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Lord Lucas: This is an arcane bit of accounting that is required of political parties. I cannot think of a commercial firm that requires invoices to be receipted. An invoice is quite sufficient for all auditing purposes. If one requires to check something, a letter is sent to the person who provided the invoice asking, "Is this true?" I find it astonishing that receipts are required at all, let alone for amounts as small as £100. It is something that has come out of the Dark Ages.

6.30 p.m.

Viscount Astor: Perhaps I might at this stage add my support for this amendment to that of my noble friend. It is sensible to look at this point. My honourable friend Dominic Grieve moved an amendment in Committee in another place to raise the limit to £250. The noble Lord, Lord Rennard, wants to raise it to £500. But whatever the arguments on the amount, an issue of principle clearly arises.

What happens if the invoice is lost? We heard from the noble Lord, Lord Rennard, that trying to obtain the right invoice from the right place, such as the Post Office, is sometimes an impossible task. Also it is important to remember--I do not believe the noble

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Lord, Lord Rennard, mentioned this--that criminal sanctions are attached to this clause. We do not want to put local volunteers in the position of being liable to prosecution simply because they forgot about or lost a receipt for a small amount of money. That does not make sense. So this amendment is extremely valid.

Perhaps I can come back to Amendments Nos. 201E and 201F after the Minister has responded.

Lord Bach: The noble Lord, Lord Rennard, with his great experience, put the case for increasing the threshold in Clause 71(2) from £100 to £500. As he explained, the significance of the threshold is that it determines the point at which any campaign expenditure must be supported by an invoice and a receipt. The provision is modelled on Section 73 of the Representation of the People Act 1983, although in that case the threshold is set at £20. So we have already shown some appreciation for the administrative burdens on political parties by setting the threshold at £100.

There is no right or wrong level at which to set the threshold. But simply as a matter of good accounting practice it would be desirable for a party to insist on an invoice and receipt where the cost of any goods or services exceeds £100. As well as providing an audit trail for the electoral commission, such good practice would help protect a party against fraud. In those circumstances, it is our judgment that £100 is about right. I invite the noble Lord to let the figure in the Bill stand so that it can be put to the test at the next election. If it proves to be too onerous a requirement, it would be open to the electoral commission to recommend an increase, perhaps to a level closer to the one the noble Lord proposed and for him to remind us of our refusal to go along with him on this occasion.

Perhaps I may say a word on receipts because the noble Lord, Lord Lucas, made a small but important contribution to this debate. Receipts for gas, electricity, rates and even paper clips will not be required as they do not constitute campaign expenditure. Invoices and receipts will be required only for the items of qualifying expenses in the revised, and I am happy to be able to tell the Committee, much reduced Schedule 7.

I turn from Amendment No. 201C to the government amendments in this group, which are principally concerned with the controls in Clauses 72 and 73, on making claims in respect of campaign expenditure and the settlement of such claims. Equivalent controls are to be found in Parts VI (the third party aspect) and VII (the referendum aspect) and the group therefore includes parallel amendments to the relevant clauses in those parts.

The restrictions on making claims in respect of campaign expenditure are part of the machinery for ensuring the proper observance of the limits on such expenditure. Subsection (1) of Clause 72 currently requires that any claim for payment in respect of campaign expenditure must be sent to the treasurer or a deputy treasurer or other authorised person within 21 days of the date on which the expenditure was

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incurred. Where a claim is received, in accordance with subsection (1) it must be paid within 42 days of the date on which the expenditure was incurred.

On reflection, those requirements could place an unduly onerous requirement on registered parties. Campaign expenditure may be said to have been incurred when the contractual terms for the supply of the relevant goods or services are agreed. On such a construction the goods or services would have to be paid for within 42 days from the date of the contract, irrespective of the date the goods or services are supplied, which may be some weeks or months later. To insist on such payment terms could lead to cash flow problems for registered parties.

Where possible we should leave the arrangements for making and settling claims in respect of campaign expenditure to political parties and their contractors. But we need a fail-safe mechanism to ensure that all such claims are properly settled in time for the relevant information to be included in the return made by a registered party after an election.

The amendments to Clause 72 and the equivalent clauses in Parts VI and VII achieve that proper balance. Amendment No. 201D provides that the restrictions in Clause 72 apply only in the case of claims for payment in respect of campaign expenditure incurred during a relevant election period, as defined in Schedule 8. Amendments Nos. 201E and 201F provide that the 21 and 42-day deadlines for making and paying claims run, not from the date on which the campaign expenditure was incurred, but from the end of the relevant campaign period. Lastly, Amendment No. 201G protects the rights of creditors to require payment from a registered party before the end of the 42-day period allowed in the revised Clause 72(2).

Amendments Nos. 201H and 201J to Clause 73, which is concerned with disputed claims, are consequential to those to Clause 72. Again, parallel amendments are made in Parts VI and VII. Amendment No. 201K, also to Clause 73, would omit subsection (3). That subsection relates to proceedings in Scotland in cases where a registered party admits liability but is challenging the amount of a claim. The procedure for settling such disputes is already laid down in rules of court; consequently subsection (3) is simply unnecessary.

Amendment No. 208W also removes an unnecessary provision, in this case that in Clause 78(2)(c). Clause 78 sets out the form of the declaration which must be made by a registered treasurer when submitting his party's return as to campaign expenditure. It is clear from Clauses 72 and 73 that any late or disputed claims which have not been included in the return may only be paid in pursuance of a court order. As such, it is unnecessary for a treasurer to make a declaration to that effect. Other amendments in this group are of a minor technical character. Among other things, they ensure that in applying

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certain provisions in Part V to recognise third parties and to permitted participants the appropriate adaptations are made.

Lord Lucas: Perhaps I might briefly come back on the question of receipts. I trained as an accountant over 30 years ago and we had already abandoned receipts as a necessary document for an audit trail then. They had no value. If an invoice has been forged, forging a receipt is no problem. To check an invoice one must go back to the person who issued the invoice and ask, "Is this really yours? Were you paid for it?".

The problem being pointed out by the noble Lord, Lord Rennard, is that there is no difficulty obtaining an invoice from British Telecom; it gives out invoices and we are made to pay them. But obtaining a receipt is God's own business. And it is something which is of no value to an audit trail. It adds nothing to its quality. It merely adds a great deal to the time taken to obtain it. It was abandoned a long time ago for public company auditing and should be abandoned now for the control of political expenditure.

Lord Bach: Before the noble Lord, Lord Cope, who I believe is a distinguished accountant, speaks to the amendment--no, I am wrong. I thought that he was.

Lord Cope of Berkeley: I am an accountant by training but not very distinguished!

Lord Bach: I do not accept that distinction. Before the noble Lord becomes involved in the argument, perhaps I may say that we are grateful to the noble Lord, Lord Lucas. There appears to be much in what he says and we want to consider that aspect of the matter. We are trying to bring many electoral practices out of the Dark Ages but the noble Lord is encouraging us to move faster than we had intended. Perhaps we may go away and think about what he has said.

Lord Rennard: I thank the Minister for that helpful reply and the noble Lord, Lord Lucas, for his comments. The utility companies were a bad example but there is a problem with many suppliers obtaining a receipt. The amount is not the only issue at stake but as regards election expenses the term used in current legislation is "voucher"; one has to produce a voucher to the value of £20 or more. An invoice may be sufficient on these occasions, but a signed receipt is too burdensome. One cannot expect parties to collect signed receipts for small amounts of money from every supplier across the UK in order to conform with the legislation. On that note, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 71 agreed to.

Clause 72 [Restriction on making claims in respect of campaign expenditure]:

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