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Lord Sanderson of Bowden: My Lords, I support the amendment. Having been chairman of the Conservative Party in Scotland, I know something about unwinnable seats, particularly in the Glasgow and Greater Glasgow area. Our biggest problem is that, if we do not do something about a cut-off point, the whole question of democracy in such areas can suffer. That will affect the Labour Party in Glasgow and the Conservative Party in the Cotswolds. It will do nothing for democracy if these constituency associations find it far too difficult and give up the ghost. Volunteers will not come forward and say, "I want to fight in an impossible situation".

Viscount Cranborne: My Lords, I support my noble friend Lord Hodgson, whose experience has already been alluded to during this brief debate. We are all conscious--the noble Lord, Lord Bach, made it clear during the course of our proceedings last night that he was conscious of it--of an inherent danger in the Bill. We are institutionalising and bureaucratising our political processes so much that we may easily kill them off.

The noble Lord was sympathetic in particular to an amendment put forward by one of my noble friends. The amendment suggested that an independent candidate should be able to describe his or her specific policies in up to five additional words on the ballot

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paper. I thought that the noble Lord's response was extremely sympathetic, although he confessed himself to be defeated by the problem. I hope that the noble Lord--if he is to reply, but perhaps his noble friend Lord Bassam will feel the same way--will acknowledge that there are inherent dangers in what we are doing, as has been made clear during our debates on the Bill. The opportunity--if only on the spur of the moment--to participate in politics as a minority is very important to our polity. We destroy that opportunity, whether by an imposition of bureaucracy or whatever, at our peril.

On those grounds alone, my noble friend has done a great service in tabling this amendment. I hope that the Government will be sympathetic to the arguments that he put forward so eloquently. I hope also that the Government may feel that, whereas it is extremely agreeable to be in permanent political dominance in, say, Newcastle, it is equally disagreeable for that party to find itself in the opposite position in, say, Bournemouth. We are all aware of the dangers in terms of complacency and perhaps--dare one say it?--occasionally worse if there is no challenge to a political party which is in a position of almost permanent dominance.

Therefore, anything which encourages small minority groups, whether or not they form part of one of the great parties, to be able to organise themselves in such areas is of enormous benefit not only to the overall body politic but also to local politics. I hope that the Minister will at least acknowledge that my noble friend has a point. Better still, I hope that he will pursue some of his more agreeable instincts and perhaps even agree to the amendment.

Lord Goodhart: My Lords, the Neill committee did not go into a level of detail over whether there should be some minimum amount of constituency income below which the reporting and accounting obligations would be modified or eliminated. However, it seems to me that the Bill imposes a serious burden on small parties. I have to say that the political party to which I belong has rather more such constituencies than either the government party or the Conservative Party.

We are somewhat concerned about the detail involved. For example, a £1,000 donation has to be disclosed to a constituency party and there must be some mechanism for disclosing it. We would therefore have some hesitation about supporting the amendment as it stands, but it would be helpful if the Government could look at the matter again. Steps may need to be taken to close loopholes; for example, to prevent transfers from small parties to large parties as a way of getting around some of the restrictions. Having said that, in principle I would be in favour of anything that reduced what is a serious imposition on small parties. For example, the Bill may make it extremely difficult to get anyone to take on board the office of treasurer. We hope that the Government will be able to look with favour on what may be brought forward to deal with this problem.

Lord Bassam of Brighton: My Lords, the noble Viscount, Lord Cranborne, invites my better instincts

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to come to the fore and other noble Lords have touched those parts of my political past which are perhaps strongly attracted to local democracy and ensuring that local democratic institutions are hail and hearty in all respects.

At first look I can see that the amendment might have its attractions. As I understand it, the noble Lord, Lord Hodgson, is advocating that, where the income of an accounting unit is £5,000 or less, the unit should be completely ignored for the purposes of the Bill. I am all for having a light touch where an accounting unit has a modest income, but I cannot advise your Lordships' House to go quite as far as the noble Lord suggests.

I see two particular difficulties with the noble Lord's approach. First, I think it inherently undesirable that a constituent or affiliated organisation of a party should be treated as part of the party for the purposes of the Bill in one year when its income exceeds £5,000 but not in the next when its income dips below that figure. We could have that strange and anomalous position. Secondly, the Neill committee recommended that donations above £1,000 made at a local level should be disclosable. It may be that an accounting unit has an income below £5,000 but attracts a donation of £1,000 or more from a wealthy local supporter. Under the amendment such a donation would not be disclosed. The noble Lord, Lord Goodhart, drew attention to that difficulty.

I put it to the noble Lord that the proper way to deal with accounting units with modest incomes is, as I have said, to apply a light regulatory touch. Clause 40 enables the commission to set different requirements for an accounting unit's annual statement of accounts according to three income bands, the lowest being incomes below £5,000. In addition, Schedule 5 exempts accounting units with an income below £25,000 from the requirement to submit their annual statement of accounts to the electoral commission. In practice, therefore, there will be few additional burdens on the treasurer of those accounting units with modest incomes.

If the Bill is applied in that sensible way and with that lighter regulatory approach, we will probably go some way to meeting the understandable concerns raised by the noble Lord, Lord Hodgson, during the course of the debate. I took careful note of what the noble Lord, Lord Goodhart, said. If a practical measure could be designed to assist that lighter touch but nevertheless capture, as Neill said, that £1,000 donation--that is an important and significant figure--I would be open to further representations. I do not believe that the noble Lord's amendment goes in that direction and I would therefore need considerable persuasion. For those reasons, I ask the noble Lord to withdraw the amendment.

Lord Hodgson of Astley Abbotts: My Lords, I am grateful to all noble Lords who have spoken in support of the amendment, even if some of them felt that the detail of it needed further brushing up. I found the Minister's response disappointing. He raised two

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objections to the amendment. First, he said that we have no way of disclosing individual donations. As I said in my remarks, the national party would still have responsibility for the local association. The national party would be responsible for ensuring that its individual constituent associations which were below the level would still have a reporting responsibility in respect of individuals who fell within the definitions given by the Minister.

Secondly, the noble Lord objected to the dipping in and out idea, whereby in one year an association had £5,500 and in the next year £4,500. I accept that that is a difficulty, but it is not beyond the wit of man to have a maximum and minimum limit or an average over a period of years which would enable a line to be drawn. That is too superficial, if I may say so with respect. The Minister espouses the cause of local democracy but then says that one of the main reasons for refusing the amendment is that we cannot find a way of defining £5,000. The price of local democracy is greater than that and with a little ingenuity we could find a way around the problem.

I do not propose to push my amendment any further today but I reserve the right to think about the issue and come back later on. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 25 [Financial structure of registered party: accounting units]:

Lord Bach moved Amendment No. 57:

Page 19, line 30, leave out from ("who") to ("so") in line 31 and insert ("shall be responsible for compliance on the part of the unit with the provisions of Parts III and IV").

On Question, amendment agreed to.

Lord Bach moved Amendment No. 58:

Page 19, line 32, at end insert ("; and

(b) another person who is an officer of the unit registered for the purposes of subsection (3).").

The noble Lord said: My Lords, in moving Amendment No. 58, I should like to speak also to Amendments Nos. 59 66, 67, 70, 72 and 280 and make some passing reference to Amendment No. 60 standing in the name of the noble Lord, Lord Mackay.

The government amendments respond to two telling points made by the noble Lord, Lord Mackay, in Committee on 10th October. The amendments do two things. First, they provide that, where a vacancy arises in the office of treasurer of an accounting unit, another officer of the unit, whose name has been registered with the electoral commission for this purpose, will step into the breach until a permanent replacement can be found. Amendment No. 60, tabled by the noble Lord, Lord Mackay, seeks to achieve the same end. I hope that he will be satisfied with our amendment and will not move his own in due course.

The second effect of these amendments is to provide that any notification under Clause 29 advising the commission of a change to the treasurer of an accounting unit can be signed off by the registered treasurer of the party. It will no longer be necessary for

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such notifications to be countersigned by the registered leader of the party. If no one else remembers it, I certainly remember how the noble Lord, whether or not with the help of his expert researchers, used devastating logic to establish that the door would lead to the office of the Prime Minister, the Leader of the Opposition or the leader of the Liberal Democrat Party every time a local treasurer resigned. We are of course a listening government and we took careful note of the logical point made by the noble Lord, which could not be answered. We have now responded and I hope that the noble Lord will agree that the response is appropriate.

I am grateful to the noble Lord for having raised this matter and I hope that the amendments satisfy the House. I beg to move.

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