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Lord Goodhart: My Lords, this is an unlikely but possible scenario. I suggest that the best way of dealing with the point is to take the simple step that I suggested yesterday; namely, to remove from the Bill all references to "minor parties". I have made a little list of the amendments that would be needed; it is not extensive. That would get rid of this difficulty altogether. It is clear that, as a result of the change that was introduced yesterday to allow anyone to contest a parish or community council election without forming a registered party, there is no need whatever to provide for the registration of a minor party.

Lord Bach: My Lords, the provisions that the amendment would remove serve a simple purpose. A party which has previously declared that it intends to contest only parish or community council elections and has therefore been registered--I know that the noble Lord, Lord Goodhart, is unhappy about this--as a minor party may subsequently decide that it wishes to fight, for example, local government elections. In order to do so it would need to comply with the full registration regime and submit details of its registered treasurer and its financial scheme. The subsections that the noble Lord, Lord Mackay, seeks to omit from the Bill make provision in relation to the submission of this additional information and the replacement of the party's existing entry.

The noble Lord has argued that these arrangements offer scope for abuse. An unscrupulous political party--if such a thing should ever exist--might register as a minor party and avoid the requirements of Part IV but then, immediately prior to a general election, change its registration so as to enable it to

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contest that election. I should point out that such scope for abuse would exist even if the Bill did not make provision for registration as a minor party since it is equally possible that a party which is not registered at all might seek to register at the last moment in order to evade the controls on donations.

However, is this likely? Given the requirements of the registration process, is a party determined to field candidates in a general election going to take the chance that registration can be tied up within a few weeks of the election? We doubt that. It is also the case that where a minor party incurred controlled expenditure, within the meaning of Part VI, in the 365 days prior to a general election, it would be subject to the restrictions on donations set out in Schedule 11. So a party that wished to abuse minor party status in order to take delivery of foreign money would need to stay its hand in terms of campaign expenditure for as long as it continued to accept those foreign donations.

It will always be possible to spot ingenious ways in which controls such as those set out in the Bill can be side-stepped. The noble Lord and others, perhaps with some justification, have already complained about the length and complexity of the Bill. We could add considerably to the length, if that is what noble Lords really want, in order to plug every conceivable loophole. In the last analysis the Government, and this House, have to make a judgment about whether a particular abuse is really likely to occur. We do not believe that it is likely in this instance. We have sought to cover the more obvious and likely loopholes--indeed, we debated one such loophole last night. As for the rest, our suggestion would be to see whether there is a genuine problem and then look to the electoral commission to come up with the solution. On that basis, I hope that the noble Lord will consider withdrawing his amendment.

So far as concerns minor parties--and the second plea within a few hours from the noble Lord, Lord Goodhart--we believe that we should keep the provisions in respect of minor parties in the Bill to allow such a party to register in order to protect its name. That was the purpose of the 1998 Act and it is as relevant to minor parties as it is to other parties.

Lord Mackay of Ardbrecknish: My Lords, I am grateful to the noble Lord for his response. I wholly agree that my scenario is not entirely likely. It is possible, however, and nothing the noble Lord has said has persuaded me that it is not. I see his point about controlled expenditure within 365 days and I shall reflect on it. It does make the scenario less possible than I thought. The noble Lord's best argument was that the amendment would add to the length of the Bill. As he knows, the length of the Bill already scares me, and to add to it scares me even more.

However, I find the proposition of the noble Lord, Lord Goodhart, extremely attractive. I am absolutely certain that if the noble Lord says that he has a list of amendments in his pocket that would remove minor parties from the Bill, it will be a pretty good list, and will probably be acceptable to the parliamentary

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draftsmen. Perhaps I can tempt him by saying that if he includes it in an amendment at Third Reading, I should be quite keen on reducing the size of the Bill by lending my support to it. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 34 [Assistance by Commission for existing registered parties]:

Lord Beaumont of Whitley moved Amendment No. 83:

Page 26, line 15, leave out ("initially") and insert (", in the first five years after this Act comes into force,").

The noble Lord said: My Lords, in Committee I put forward a series of amendments to extend the amount of help that can be given to parties to conform with the Bill so that they have some ongoing support after the first year. We believe that that is particularly relevant to parties of the size of the Green Party, which I represent. Indeed, I had experience as treasurer of the Liberal Party in the days when this would have applied to it. Parties of this size have particular needs. I have tabled amendments to limit the amount of time during which such a provision would apply and to spell out more fully how it would work. I do not pretend that my drafting is perfect. If the Government are at all sympathetic, I am sure that they can do better in meeting the point.

The recent chairman of the executive of my party wrote to me to say that, on his reckoning, compliance with the Bill will cost £10,000 in year one, and probably near to £8,000 for one, two or three years thereafter. The Green Party is what might be described as a second-tier party: it is not one of the big three, it is not merely regional and not very local. It is at the top of the second tier and has the longest history. Other parties include the Referendum Party and the UK Independence Party.

It must be assumed that the financial structures of the big three are already fairly sound, but that work will be needed to adapt in terms of processes and staff to cope with the transition. Thereafter, they should be able to cope. They should not have to apply for funding in the second and subsequent year, although under these amendments they may do so if they think it appropriate.

Many smaller parties do not field anything like as many candidates as the Green Party, so the costs that they will accrue are likely to be negligible by comparison. The second-tier parties will be worst hit. That is because we are already working to absolute capacity in relation to income. We find it harder to acquire funding than the larger parties simply by virtue of being smaller. Also, we ethically screen all would-be donors, which narrows the potential still further. We have a turnover slightly in excess of the £250,000 threshold in election years, so we should have to employ a qualified auditor and we should have to implement the system through a large number of local parties.

It is reasonable for us to accept more help, along with the other second-tier parties, than the other two groups. We shall continue to have extra costs after the

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start-up year, but the larger parties will be able to subsume the costs in their other expenditure. Smaller parties will never need to spend as much on compliance. However, it is reasonable to expect the second-tier parties to organise their budgets over time in order to cope with this new financial burden. Therefore, extending the funding for another five years will mean that the Green Party, and other second-tier parties, will have time to organise budgets to cope with the very significant extra costs that compliance with the legislation will create. That is why I have tabled these amendments.

During the previous stage, the noble Viscount, Lord Cranborne, and the noble Lord, Lord Rennard, both spoke rather sympathetically to the amendment that I put forward. Now that I have brought it back in another form, I hope that they will continue to support me. Having had time to reconsider the matter since the Committee stage and having noted the support that I received from other opposition parties, I also hope that the Government will be able to assist my party and other second-tier parties, and thus ensure a rather better working of the democratic system. I beg to move.

4 p.m.

Lord Rennard: My Lords, I have more than sympathy for these amendments. As I said in Committee, this Bill will impose great burdens upon the political parties. We have talked about the damage to democracy in terms of parties not being able spend their resources on promoting their case, but having to act like accountancy firms in administering this bureaucracy. If the Government were to agree to this amendment, it would not be a big concession for them to make.

We should remember that the fundamental principle is to be found in Clause 32--namely, that the start-up costs of implementing this legislation will be covered by the £500,000 fund that all parties have agreed should be available to enable them to set up the mechanisms and administer the Neill proposals. Therefore, to accept the small sum, relatively speaking, of £200,000 over four years would not be a big concession for the Government to make. It would be a boost to our democracy. Parties may lose out in many ways because of what they will have to do under this legislation. This suggested provision would give them some small comfort in facilitating the operation of this legislation.

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