Previous Section Back to Table of Contents Lords Hansard Home Page

(""universal service provider" has the same meaning as in the Postal Services Act 2000.").

("( ) If this paragraph comes into force at a time when the amendments made to section 91 of the Representation of the People Act 1983 by the Postal Services Act 2000 have not come into force, then until such time as those amendments come into

24 Oct 2000 : Column 159

force, this paragraph shall have effect subject to such modifications as may be specified in the order under section 151 of this Act which brings this paragraph into force.").

    Page 148, line 13, at end insert ("for the purposes of this sub-paragraph").

On Question, amendments agreed to.

Schedule 11, as amended, agreed to.

Clause 106 [Referendum expenses]:

Lord Bach moved Amendments Nos. 234M and 234N:

    Page 67, line 25, leave out ("either").

    Page 67, line 27, leave out from ("purposes") to end of line 30.

The noble Lord said: These amendments were spoken to with Amendment No. 191. I beg to move.

On Question, amendments agreed to.

On Question, Whether Clause 106, as amended, shall stand part of the Bill?

Lord Mackay of Ardbrecknish: With Clause 106 we enter into the arena of the expenditure which would be allowed in a referendum. Essentially, a number of amendments will be brought forward in the next few groups which look at this question from different angles. Perhaps the best way to start is with a clause stand part debate. I refer to the question that in referendums we do not attempt to impose limits on the expenditure of political parties or umbrella organisations.

There is a good basis for this. The first report on these issues was the Nairne commission report on the conduct of referendums to which reference has been made. The report considered all aspects of referendums. One of its main recommendations was the setting up of an electoral commission. I wish in particular to refer to guideline 14. It follows paragraphs in the report which discuss whether or not we should have limits on spending on referendums. The guideline states:

    "On balance, it is not considered practical to exercise Government control over the total expenditure by those campaigning on either side in a referendum. Umbrella campaigning organisations should be required to undertake to provide accounts of monies received or spent on the campaign if they are to qualify for public money or services in kind".

So Nairne quite clearly said that there should not be a limit on spending.

I turn now to the report of the Neill committee. In the debate on the first of today's amendments, the noble Lord, Lord Bach, heavily prayed in aid the Neill committee to counter what I was saying. He quoted from its report and said, "That is it. Neill said such and such and that is what we should do". I just want to remind the Committee of what the Neill committee said on the question of referendum expenditure. It explicitly followed Nairne and rejected the approach taken in the Bill.

The committee pointed out that in referendums political parties may well not be the principal contestants. Indeed, political parties may be split on which side to support-- just as the Labour Party, as I mentioned earlier, would be split in a referendum on

24 Oct 2000 : Column 160

proportional representation. Who should decide on which side of the argument the £5 million allowed to the Labour Party should be spent?

The Neill committee looked into this issue and recognised the problems. I do not want to read it all out, but quoting from it saves me making the argument. The Neill committee makes a powerful case against the Government's current position and in favour of removing these limits. The report refers to the imbalance which is possible if one does not have limits, and it goes on to state:

    "The case, in principle, for imposing spending limits in referendum campaigns is a strong one".

No doubt the Minister will quote that. However, it goes on:

    "We believe, however, that it would be futile and possibly also wrong to attempt to impose such limits in connection with referendums. Ordinary election campaigns bear some resemblance to sporting contests, in the sense that they are fought by competing 'teams' in the form of the political parties. It is known long in advance that such contests will take place (though, in the case of general elections, the precise date may be uncertain). The political parties themselves are, in the great majority of cases, permanent institutions with leaders, members, headquarters, and professional staffs. By contrast, a referendum campaign is more like a free-for-all. Anyone can participate. Many do. The political parties may, or may not, be the principal contestants. It is often not known long in advance whether a referendum will take place, let alone when it will take place. Those on the Yes and No sides of the argument may never have worked together before--and may, quite possibly, be unwilling to work together now"--

a point I made earlier. This is the important point:

    "It appears to us that under these circumstances it would be impracticable to try to control campaign spending. The number of individuals and organisations involved would often be too large. The time-scale would often be too short. Adequate accounting procedures would often be impossible to put in place. The administrative apparatus required would resemble one of Heath Robinson's most outlandish contraptions--and would almost certainly not work".

And yet the Government have gone ahead with spending limits which are indefensible in theory and unworkable in practice.

Amendment No. 237 seeks to ensure that at least an uncoupling is made between the results at the last election and the amount of money to be spent. Why should the amount that a political party can spend on a referendum be dependent on its votes in a previous general election? A referendum is an entirely different issue; it has nothing to do with a general election. In fact, if an issue had been decided at a general election, there would be no need for a referendum. Some might think that certain issues should be decided at general elections and not left to referendums, but that is not the road along which we are going.

As the Committee will hear, in a referendum on the euro, Labour, the Liberal Democrats, Plaid Cymru and the SNP could spend something like £9 million to scrap the pound, but the Conservative Party would be allowed to spend only £5 million to save it.

Earlier, I suggested to the noble Lord, Lord Bach, that there might be more than one umbrella organisation. The noble Lord's best argument--perhaps his only argument-- against my proposition was that if there were two umbrella organisations on

24 Oct 2000 : Column 161

one side and only one on the other, the two organisations on the one side might have two freeposts. I wrote his words down,

    "it would give one side ... an unfair advantage".

That is what he said at 3.23 p.m. today. When he rises to reply at 4.23 p.m., he will no doubt be oblivious to the fact that if one side is allowed to spend at least £9 million, because of the political party line-up, and the other side is allowed to spend only £5 million, that gives an unfair advantage to one side in exactly the same way as allowing two umbrella organisations on one side to put out free leaflets would give that side an unfair advantage.

Amendment No. 238 seeks to impose spending limits on each side of the referendum as a whole. That is the attractive alternative. But the reality is, as my right honourable friend Sir George Young acknowledged in another place on 16th February, while it is an attractive solution, it is highly impracticable, because there will be differing organisations which will want to campaign in a referendum and it will be impossible to bring them all under the same total umbrella.

If that is impractical, it seems to me that the only alternative, in order to allow a fair referendum to take place, is not to have any spending limits at all. No spending limits seem better than rigged spending limits. I do not want to be emotive about this matter, but they are rigged. These spending limits would have been rigged in the Scottish referendum where, even if no side had been able to raise the money, it would have been very limited in the amount that it could have spent in comparison with Labour, the Liberal Democrats and the Scottish Nationalists. So there would have been an imbalance. The noble Lord, Lord Bach, may come to regret his phrase,

    "give one side ... an unfair advantage",

just as his noble friend Lord Bassam has come to regret his phrase at an earlier stage of the Bill, "unworkable and bureaucratic".

Lord Bassam of Brighton: For the record, I used the phrase "cumbersome and bureaucratic". I might perhaps have added a word, and said "necessarily cumbersome and bureaucratic".

Lord Mackay of Ardbrecknish: There we are. If it is cumbersome and bureaucratic but "necessary", it is fine. I do not think that a great deal of the Bill is necessary. Therefore its cumbersome and bureaucratic nature will make it impossible for the political parties--which, as I have told the Minister time without number, are largely voluntary organisations--to remain within the law, do their work and run elections, which are the very basis of our democratic society.

The Neill committee concluded that there were severe problems in relation to spending limits in referendum campaigns and the committee rejected them. We agree with the Neill committee. The committee's conclusion is not "if", "may be", or "possibly"; it is a very definite rejection. The Government should either make an overwhelming case

24 Oct 2000 : Column 162

for going against the conclusions of the Neill committee, or they should withdraw those parts of the Bill which place caps on spending and allow referendums to be uncapped. I oppose the Question that the clause shall stand part.

4.15 p.m.

Lord Lamont of Lerwick: I rise to speak to Amendments Nos. 235L and 235M standing in my name. They deal with the same subject of caps on expenditure by reference to political parties during a referendum. I have also given formal notice of my intention to oppose Clauses 112 and 113 and Schedule 13 in order to be able to have a debate on the whole principle of the caps, and to put forward an alternative to the idea of having equal caps on both sides.

The Bill contains a whole series of caps. There is a cap of £5 million on a designated umbrella organisation; there are caps on individual political parties, defined according to their share of the vote at the previous election; there are caps on what are described as "other permitted participants" of £0.5 million--these include individuals, registered companies and unincorporated associations; in addition, there is a limit of £10,000 on spending by individuals who are not "permitted participants".

The question raised by my noble friend Lord Mackay is one that I raised at Second Reading and one to which the noble Lord, Lord Goodhart, speaking at that time from the Liberal Front Bench, was quite sympathetic. In addition, the Government said several times in another place that they had an open mind on the matter, they were open to argument and were prepared to consider the position. This is not a party point; it is not merely about the referendum on the euro. It is a fundamental point about equity in framing the rules for a referendum. The Government, in attempting to stop people, as they put it, "buying" the result of a referendum, have created an in-built inequity in what is proposed.

As my noble friend on the Front Bench said, the basic problem is that the Government's attempt to control the expenditure of political parties in a referendum does so based on their share of the vote at the previous election. Two questions arise. First: is it right to concentrate on political parties at all? Secondly, if the concentration is on political parties, is it right to do so by relating the spending limit to their percentage of the vote at the previous election? The Government's proposition is questionable in a number of respects, and in other respects positively wrong. It is certainly against the recommendations of the Neill committee.

It is not necessarily the case that political parties will always be the key players in every referendum. The whole reason that we have referendums is to deal with issues that cut across party lines. As Professor Pulzer said in evidence to the Neill committee,

    "the whole point about the referendum is to get opinions from people who are organised not along the lines of the established political parties, and very frequently people do not vote in accordance with the advice that is given to them by the parties that they normally support".

24 Oct 2000 : Column 163

In many of the issues put forward in referendums, parties are split. So the concentration on parties is arguable. Perhaps there is an argument for saying that political parties should stand back from referendums and leave them to the umbrella organisations. In 1998, the Neill committee touched on this point, and put the matter bluntly (at paragraph 12.30):

    "To represent referendum campaigns as merely another manifestation of the usual party political battle seems to us both misconceived in principle and false to the history of referendums since 1975".

In the same paragraph, the committee states:

    "We believe that experience shows that referendum campaigns may well feature people from all parties, and also people with no party allegiance at all, on both sides of the argument".

So I question the targeting of political parties in this way.

Even if it is right to apply caps to political parties, it surely cannot be right to do so in relation to their share of the vote at the previous election. That proposition is fatally flawed. The whole point of referendums is to deal with issues that cut across and do not conform with party divisions.

My noble friend referred to proportional representation. There are Conservatives in favour of proportional representational. It has been said that there are very few. There may be rather more among people who vote Conservative but who are not Conservative activists. But if the Conservative Party is opposing PR in a referendum, why should it be permitted to spend money that is based on its share of the vote, including Conservatives who are in favour of proportional representation?

Obviously, the point could be made more dramatically with the case of a referendum on the euro. There are many Labour Party voters, not party members, who are against the euro; indeed, for all I know, perhaps as many as half of Labour voters. If the Labour Party supports the euro in a referendum campaign, why should it be allowed to spend a permitted amount of money that is calculated by a percentage that includes millions of people who do not share its view?

It seems to me that the proposition put forward by the Government ignores the fact that, in a referendum, people are voting on one issue. However, in a general election, people are voting on many issues. People who vote for a party in a general election may have a different view from their party in a referendum. The main point is that the outcome is extremely inequitable. As I believe the noble Lord, Lord Goodhart, acknowledged on Second Reading, this is not a party point. The unfairness would certainly arise in the case of a euro referendum where, if the caps were applied on the basis of votes cast at the last general election--that is to say, in 1997--it would result in caps on funding that were massively in favour of the "yes" side in a euro campaign. My noble friend Lord Mackay illustrated that fact, although he left out of his calculation the £5 million for the umbrella body.

24 Oct 2000 : Column 164

However, on the "no" side, there would be £5 million for the umbrella body, £5 million for the Conservative Party, being a party that achieved more than 30 per cent of the vote at the previous election, making around £10 million in all. Conversely, on the other side, you would have £5 million for the umbrella organisation, £5 million for the Labour Party, which got over 30 per cent of the vote, and £3 million for the Liberal Democrats, which got between 10 and 20 per cent. I read in the Hansard report of the debate in another place that there were seven other parties, which could attract ceilings of £500,000. If that is correct, that would make a total of £16.5 million, compared with £10 million. However, if that is incorrect--I have not checked the figures myself--one merely adds to the Liberal Democrat and Labour Parties the Scottish and Welsh Nationalists, which would give £14 million against £10 million for the "no" campaign.

What is the argument that is put forward in favour of this rather extraordinary proposition? The Government say that they want,

    "to prevent people buying the referendum".

That is why they want the caps. However, they are going a long way towards allowing one side possibly to buy the result. It seems to me that there is no point in having these ceilings on the various participants in a referendum--political parties, individuals, associations, companies and umbrella groups--if there is no overall expenditure limit. What is the point of having sub-limits if there is no overall limit? I should be willing to give way to the Minister if he could answer that question. I do not see the point of having sub-limits in the absence of an overall limit. I do not know whether the Minister can explain that point to me. As I said, I should be most willing to give way to the noble Lord if he wishes to intervene in my speech at this point. I simply do not follow the logic of it. I see that the Minister does not seem to want to intervene.

It seems to me that the Government have thrown equity out of the window in their enthusiasm simply to have caps that have no purpose. The only purpose of having caps on political parties would be where the vote in a referendum corresponded to party lines. That is very unlikely to be the situation in most referendums. Incidentally, as I said earlier, the Government have also rejected the findings of the Neill committee. As my noble friend Lord Mackay said, it was not opposed in principle but in paragraph 12.46, the committee said that,

    "it would be futile and possibly also wrong ... to impose such limits in connection with referendums".

It seems to me that there are two ways to deal with the problem: either you have a cap for both sides--an umbrella cap--or, as my noble friend from our Front Bench said, you have no caps. The first option of equal spending on both sides for the two umbrella organisations is the subject of both my amendments, Amendments Nos. 235L and 235M. Amendment

24 Oct 2000 : Column 165

No. 235L would cap the spending on either side in a referendum at £12 million. But I understand that many people may object to that; indeed, that may not be appropriate for referenda on certain subjects. We must not let our thoughts be dominated by one particular subject. Amendment No. 235M states that the spending on both sides should be equal, but that the precise sum should be determined by the electoral commission.

As my noble friend Lord Mackay hinted, I know that there are objections to that suggested course of action. I am sure that it must have been considered by the Neill committee. We look forward to hearing what the noble Lord, Lord Goodhart, has to say on the matter. The objections to my two amendments would be as follows: first, not everyone would necessarily want to be corralled into one umbrella organisation. Indeed, there are often people on one side of an issue in a referendum who are hardly on speaking terms with each other. In the last referendum in Northern Ireland, the parties did not want to campaign together in favour of the Belfast agreement. I understand that objection to what I propose, but the fact that people do not want to campaign together in an umbrella organisation does not mean that it is wholly impossible for them to agree, in discussion with the commission, some way in which the cap could be shared out among them. So that is not entirely impossible.

A second objection to what I propose might be our increasingly familiar friend the Human Rights Act, and Section 10 of the ECHR. In Quebec, provisions similar to those that I propose were struck down in advance of a referendum on the legal grounds that they were a violation of the rights of those who did not want to be ushered in and forced into the umbrella organisation. I realise that there are arguments against caps. However, I put it to anyone who approaches this in an unbiased way that what is proposed by the Government is manifestly unfair and not in accord with the reality of referenda.

It is not just the caps on political parties; it seems to me that it will be very easy to get round all the proposed caps. Indeed, they may be very ineffective. With respect to the Neill report, I know that one witness was quoted as saying, "Show me a cap and I'll show you how to get round it". As regards the amoeba phenomenon--that is, the idea that you can limit an organisation to £500,000--it will be very difficult for an organisation that is not a political party to enforce such a limit. I say that because an organisation can divide itself into two, three or four separate organisations. The impracticality applies also to the £10,000 limit on individuals who are not registered participants. As I see it, there is nothing to stop different people getting together with their individual £10,000 limits and making very large contributions to the campaign.

I entirely understand why the Neill committee came to the conclusion that caps are impractical. There were, of course, no caps in the 1975 European referendum and none in the 1979 Scottish referendum. Faced with this real problem, one might wonder

24 Oct 2000 : Column 166

whether caps have any purpose. If a rich individual whom one is trying to control can buy a newspaper, he is already well round the caps. Indeed, there will be a great deal of expenditure which is not controlled.

In my amendments and in my remarks about Clauses 112 and 113 and Schedule 13, I have endeavoured to state the problem. I have also tried to state some of the arguments that I believe could be deployed by the Minister against the idea of having caps on the umbrella organisations. It seems to me that we have a choice: either we have a cap on the umbrella organisations, or we have no caps. I believe that what the Government propose is manifestly unfair and has very little merit, as was clearly demonstrated by the Neill report.

4.30 p.m.

Lord Shore of Stepney: We are dealing with basic questions about the referendums and how they should be controlled in future; whether there should be control of who can spend and how much. The problem that the Neill committee faced was quite fairly stated by the noble Lord, Lord Mackay, when he said that that committee liked the idea of controlling expenditure in terms of avoiding an arms race-- and achieving a certain fairness--but reluctantly came to the conclusion that it was impractical to do that with a referendum which brings into the arena so many different and disparate interests. Therefore, it recommended that there should be no attempt to cap the expenditure on a referendum.

The Government rejected that particular proposal. I do not believe that I am misrepresenting the views of the Neill committee, of which I am a member, in saying that we were not particularly upset because we hoped and expected that the Government would produce a workable scheme which would in fact limit the amount that was spent and do that fairly and effectively. The Bill and its provisions give us the answer but for a number of reasons, it does not provide adequate regulation of campaign expenditure in relation to referendums.

As regards how much, that is fairly easy for individuals, according to the Bill. One must not spend more than £10,000 advocating "yes" or "no" during a particular referendum campaign. I shrug my shoulders as to how that is to be policed and monitored. I assume that it is just possible.

The big question is in relation to the permitted participants and those who can spend large sums of money. The first in the list are the campaign organisations for the "yes" and the "no" campaigns. Clearly, they must have a substantial sum of money. They are awarded £5 million each in the Bill. Then there are the political parties. I believe the point has been fairly made that the strength of the political parties in the House of Commons has little to do with the strength of their support for a "yes" or "no" vote in a referendum campaign. Nevertheless, some allowance must be made for the political parties. Whether the actual sums of money they are allowed to

24 Oct 2000 : Column 167

spend and the relationship between them are fair are matters that can be debated and vigorously questioned, as, indeed, they should be.

I am even more concerned about the next category. The third category is neither the political parties nor the "yes" or "no" campaigns, but those referred to in the Bill as individual companies or an unincorporated association. They are permitted participants provided they have registered as such. They can spend £500,000 each. When one considers the vested interests that could be involved in a particular referendum campaign, that again is a coach and horses through the control of the money. I can well imagine a situation in which more than 10 companies take part on one side of a campaign and easily equal the £5 million allotted to a major political party or to the headquarters of the "no" or "yes" campaign.

Then we reach the point very properly made and brought out very clearly by the noble Lord, Lord Lamont, in his amendment: is there an overall cap? We have individuals caps and I have just been through them. Is there no limit on what can be spent? As regards the euro, let us imagine the vested interests on one side or the other: is there to be no cap? Are we really saying that money can be poured out without any constraint? The Minister must answer that. Is there to be a cap? We can argue about whether the cap proposed by the noble Lord, Lord Lamont, is the right one can but in principle, is there to be a cap on the aggregate total expenditure in a referendum campaign?

That brings me back to the other fundamental question of who may take part. Clearly, companies can spend a great deal of money. The Minister and his friends have driven an even bigger coach and horses through the control mechanism because they have allowed, as permitted participants, not only British companies, but any company registered in the European Union. Can one imagine a referendum on the euro in which companies in the European Union are allowed to spend up to £500,000 each in the British campaign? Even the thought of that is outrageous. Yet the Government have feebly accepted that, because of some arcane ruling by the European Court of Justice, it would somehow be discriminatory for us to regulate the practice of our own democracy. That is ruled out by a single judgment of the European Court of Justice in a case which has nothing to do with the issues before us.

I say to this House--and I hope that others are listening outside--that that this is one of the greatest outrages and the abnegation of sovereignty and self-respect in the history of our nation. We are allowing a foreign body to decide how we should practise democracy and the control and management of democratic procedures in our own country. This wicked provision must be ruled out.

Next Section Back to Table of Contents Lords Hansard Home Page