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Lord Bach moved Amendments Nos. 201D to 201G:

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    Page 46, line 3, after ("party") insert ("during any period which is, in relation to the party, a relevant campaign period (within the meaning of section 75)").

    Page 46, leave out lines 8 and 9 and insert ("not later than 21 days after the end of the relevant campaign period.").

    Page 46, line 10, leave out from ("paid") to end of line 11 and insert ("not later than 42 days after the end of the relevant campaign period").

    Page 46, line 26, at end insert--

("( ) Subsection (2) is without prejudice to any rights of a creditor of a registered party to obtain payment before the end of the period allowed under that subsection.").

On Question, amendments agreed to.

Clause 72, as amended, agreed to.

Clause 73 [Disputed claims]:

Lord Bach moved Amendments Nos. 201H to 201L:

    Page 47, line 12, after ("party") insert ("as mentioned in section 72(1)").

    Page 47, line 16, leave out ("section 72(1)") and insert ("that provision").

    Page 47, line 25, leave out subsection (3).

    Page 47, line 32, after ("claim") insert ("(whether it is disputed or otherwise) which is").

On Question, amendments agreed to.

Clause 73, as amended, agreed to.

6.45 p.m.

Clause 74 [Limits on campaign expenditure]:

Lord Bassam of Brighton moved Amendment No. 201M

    Page 47, line 34, leave out subsection (1).

The noble Lord said: These amendments are largely designed to make Schedule 8 a little easier to follow. I know that that objective will be warmly welcomed by noble Lords across the Committee. It is certainly welcomed by me. No doubt noble Lords opposite will say that they do not go far enough. We can certainly debate that point, but I would put it to them that the appropriate point to have such a debate may come later when we examine Amendments Nos. 205 to 208, the last of which seeks to remove paragraphs 8 to 11 of the schedule. For the moment, therefore, I will concentrate on setting out the purpose of these essentially drafting amendments.

The bulk of the amendments in this group, by which I mean Amendments Nos. 202H to 202K, 203B, 205A, 205B, 206A, 207A, 208A, 208C, 208F, 208G and 208J to 208R, clarify the circumstances in which the limits in each of paragraphs 3 to 11 of Schedule 8 apply to a registered party. Perhaps I may illustrate the point by reference to paragraph 3 of Schedule 8, which relates to parliamentary general elections. As presently drafted, paragraph 3(1) states:

    "For the purposes of sections 74 and 75 this paragraph imposes limits in relation to a parliamentary general election".

As amended by Amendment No. 202K, it would read:

    "This paragraph imposes limits in relation to campaign expenditure incurred by or on behalf of a registered party which contests one or more constituencies at a parliamentary general election".

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I hope that the Committee will recognise the improvement. The purpose of each paragraph will be far more transparent to the reader and, in particular, to parties' registered treasurers.

The amendments to Clauses 74 and 75 largely flow from these changes. For example, as a result of the redrafting of paragraphs 3 to 11 of Schedule 8, subsection (3) of Clause 74 is no longer required. Subsection (1) of Clause 74, and the words

    "in connection with such elections"

in subsection (2) are not required because they incorrectly imply that Schedule 8 imposes limits on campaign expenditure in relation to particular elections. In fact, Schedule 8 imposes limits on campaign expenditure in relation to relevant periods connected with particular elections. This approach reflects the fact that, in our view, campaign expenditure cannot be neatly apportioned between two or more different elections taking place in close proximity to each other.

Amendments Nos. 202B to 202G and 203A are consequential to the introduction of a separate register for Northern Ireland parties. As a result, any campaign expenditure by a Northern Ireland party must be attributed solely to Northern Ireland, while campaign expenditure incurred by a party registered in the Great Britain register must be apportioned between England, Scotland and Wales. The task of apportionment is made easier by the removal of paragraph 2(2) of Schedule 8. That is the effect of Amendment No. 202F

Both sub-paragraphs (2) and (3) of paragraph 2 are concerned with the apportionment of campaign expenditure between the different parts of Great Britain. There is some overlap between the two provisions and, in practice, whichever formula is applied the outcome is likely to be much the same. In the interest of simplification, paragraph 2(2) can therefore be omitted. I beg to move.

On Question, amendment agreed to.

Lord Bach moved Amendments Nos. 201N to 201R:

    Page 47, line 40, leave out (", in connection with such elections,").

    Page 48, line 1, leave out subsection (3).

    Page 48, line 8, leave out ("any limit imposed by Schedule 8") and insert ("that limit").

    Page 48, line 11, leave out ("any campaign") and insert ("the").

On Question, amendments agreed to.

Lord Cope of Berkeley moved Amendments Nos. 202:

    Page 48, line 15, leave out paragraph (b).

The noble Lord said: Amendment No. 202 leaves out subsection 4(b) of Clause 74. It provides that the party is guilty of an offence if it spends more than it should in a general election or other elections covered by it. There is a difficulty about that because political parties do not exist as a legal entity. How can "the party" pay a fine? Who will pay the fine if the funds of

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a political party are not sufficient to meet it? If the limit were exceeded to a great extent the fine could be very large.

There appears to be nothing to stop a party vastly overspending and then going bust and I do not know what would then happen. Would the treasurer, the leader or the members of the party be personally liable? There could be a large number of members who would be very surprised suddenly to be presented with such a bill.

The issue was discussed at length in another place but that was back in February. The then Minister, Mr Tipping, said that he would give further consideration to it. I wonder what thought has been given not only to that matter during the eight months since that discussion but also to the type of fines which might be imposed and who will be responsible.

Amendment No. 235, which arises later in the Bill, has a similar purpose. There is a difficulty about the Government's amendment which applies also to this one. Effectively, some of the campaigns will be continuous. After all, one has elections to Parliament at Westminster, to the European Parliament, to the Scottish Parliament and to the Northern Ireland and Welsh Assemblies. The national parties are involved in all of those elections. If the one-year period applies to each election, there will be an overlap. Remembering that the period applies one year before the election, if the next general election is in May 2001 the period in question goes back to May of this year. If the general election is to be in October next year, the limits already begin to apply. Even if the next general election is delayed to the last possible moment--May 2002--the limits will apply almost as soon as this Bill becomes an Act. Therefore, there could be difficulties, particularly bearing in mind that the £20 million limit, which the Committee will debate later, is lower than the sum spent by the major parties in the previous general election. Therefore, the restriction is not inconsiderable. I beg to move.

Lord Renton: My noble friend raises an unusual and interesting matter. Vicarious liability, which is the liability of one person for the actions of another, arises generally where an employer of any kind--an organisation like a political party is one such--employs an individual, in particular anyone who holds a responsible office. Here the position is inverted, in that the employee in question, the treasurer or deputy treasurer, may be guilty of an offence but the liability appears to be that of the party overall. I am not sure what the Government have in mind. My noble friend is wise to raise this matter in order to see what lies behind the provision. This is the strangest example one can remember of vicarious liability.

Lord Bassam of Brighton: Listening to the noble Lord, Lord Renton, it seems that we have probably invented a new term. The concept of "inverted vicarious liability" may add to the legal lexicon.

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This is an important issue which comes down to the importance of having sanctions. If the limits on election and referendum expenditure are to be effective, it is axiomatic that they must be backed up by appropriate sanctions. Clause 74(4) provides that a party's treasurer or deputy treasurer is guilty of a criminal offence where he or she has authorised expenditure in excess of the prescribed limits. This offence is equivalent to the one in Section 76(1) of the Representation of the People Act 1983 which makes it an illegal practice for a candidate, or his election agent, to incur expenditure in excess of the constituency spending limit. Therefore, this territory is not entirely unfamiliar to political parties.

However, we believe that it is right that some broader liability should attach to the party as a whole. Most political parties are unincorporated associations. Clause 143 provides for proceedings against such associations. Subsection (2) of that clause provides for the payment of fines out of their funds. Where overspending occurs, it may not always be appropriate to bring the weight of the law to bear on a single individual. The treasurer is acting on behalf of the party and it is the party which should attract its share of responsibility in the event that it exceeds the expenditure limit.

In the case of overspending by individual candidates, they face the prospect of losing their seat if found guilty of an illegal practice. However, in the case of national party expenditure, it is not possible to envisage equivalent consequences. As the Neill committee conceded, it is inconceivable that the results of a general election could be set aside or all the seats gained by the errant party declared void. The Neill committee concluded at paragraph 10.124 that the only realistic sanction would be a heavy financial penalty.

Clause 74(4)(b), which Amendment No. 202 would remove, makes provision for a party to be prosecuted for overspending. Clause 112(4), which Amendment No. 235 would delete, makes similar provision in relation to referendums. Clause 143 makes provision for proceedings to be brought against an unincorporated association for an offence under this Bill and for a fine to be paid out of the funds of that association.

We believe that these provisions are proportionate to the need to deter overspending. Limits on campaign expenditure are a core element of this Bill, and it must be right that where the limits are exceeded not only the treasurer but the party itself faces criminal penalties. As the party opposite professes to support the recommendations of the Neill committee, I invite the noble Lord to withdraw the amendments.

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