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Lord Shore of Stepney: I did not.

Lord Barnett: My Lords, my noble friend may not have supported them, but his government did, as did the government of the noble Viscount, Lord Cranborne, and the noble Lord, Lord Tebbit--who did not resign on those grounds either. I give way to the noble Lord.

Lord Tebbit: My Lords, I am grateful to the noble Lord. He will remember that, after I had resigned from government, I strongly opposed the Maastricht Treaty. More to the point, when we signed the Treaty of Rome, did the noble Lord anticipate that one of its effects would be to prohibit us from preventing foreign money flowing into this country in support of particular political parties or causes?

Lord Barnett: My Lords, the noble Lord is at it again: he is using the word "foreign" in that context. We are all citizens of the European Union. The noble Lord may not like it, but it is a fact. I knew that I should provoke a number of noble Lords in the brief speech that I wanted to make. I have guests arriving shortly, so I had better make it quickly.

Lord Tebbit: My Lords, perhaps I may impose again on the noble Lord's good nature. If he is right, why are personal donations from his fellow citizens of Europe in foreign countries prohibited under the Bill? Will he seek to introduce an amendment to put the matter right? Or is he being slightly illogical or even incoherent?

Lord Barnett: My Lords, it is possible that I am incoherent, and all kinds of other things, when I disagree with the noble Lord. I do not doubt that that is possible at times. I have often been guilty of all kinds of things. But we are talking about citizens of the European Union. That is the central point. That is what we all are. In that context, therefore, we cannot refuse members of the European Union who want to give funds, perhaps also from a Euro-sceptic point of view. That is presumably why the junior Minister in another place did not do so.

Lord Shore of Stepney: My Lords, perhaps I may interrupt my noble friend once more. If we are citizens of the European Union, surely we are also citizens of the Commonwealth.

Noble Lords: Order!

Lord Bach: My Lords, before my noble friend answers, this is an interesting and distinguished debate; however, this is Report stage, and we ought to get a move on now.

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Lord Barnett: My Lords, I apologise for being too polite, but I have always given way, especially to my noble friend, as I have to the noble Lord, Lord Tebbit, and the noble Viscount, Lord Cranborne, and I am happy to do so. Nevertheless, I gather that I am being forbidden to do so now.

In response to my noble friend's question, the Commonwealth countries are not members of the European Union. That is a straight fact. I see him nodding in agreement. It is the European Union that we are talking about--of which we are all citizens. I do not want to waste any more of the House's time. The amendment is a pleasant one, but it is wrong. I hope that the House will reject it.

Lord Peston: My Lords, is my impression that there is not considerable disagreement with the amendment. Therefore, I think that I should add another voice to the debate. I was under the impression that we were dealing with the Political Parties, Elections and Referendums Bill, not the "United Kingdom (Exit from the European Union) Bill". Unfortunately, as we do not have a Speaker in this House, we do not have anyone who can rule speeches out of order. However, I fail to see how most of what was said connects with the amendment or the Bill.

I want to expostulate with your Lordships on two matters. There was a suggestion in one or two speeches that the bona fides of the Government were being called into question. It was also suggested that the Government had a hidden agenda. To doubt the veracity of the Government or their desire to do the right thing is not a satisfactory approach to these matters.

I do not have the credentials that some noble Lords have for taking part in this debate. I have never sat in the other place, or even remotely thought it a worthwhile thing to do. I have never been a Minister. However, it is my understanding that Ministers have a serious role to play in public life, and that that role includes precisely what my noble friend Lord Barnett says; namely, that they act according to the law as it is explained to them. The suggestion is that, having taken the best possible advice on this matter from those who are legally qualified to give it, Ministers will say, "We do not like the consequences of the treaties that we have signed; therefore, we shall not proceed legally as Ministers of the Crown and, in many cases, Privy Counsellors. We are going to defy this and ask, 'What can you do to us, and what are your sanctions'?". That is not even a remotely satisfactory way for Ministers or ex-Ministers to address your Lordships on this or any other matter.

The matter before the House is simple and straightforward. We do not like foreign funding. I am much more extreme than many noble Lords. I detest all funding from businesses. I should very much like us not to go down the line that we see particularly in the United States, of vast business funding and an inability to take part in the democratic system if one does not have a lot of money. But we have not got quite that far.

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The Government have spoken honestly about what they would genuinely like to do, and they have been told by their advisers that there are legal limits to what can be done. There is no doubt that while we are citizens of the European Union there are restraints on what we can do. There was never any doubt about that from the moment the Treaty of Rome was signed by a British government.

I regard outrage, even if it is genuine, as no substitute for rational discourse. These amendments are ridiculous. I hope that my noble friend will press them to a Division because I cannot wait--assuming that it happens early enough--to vote against them.

Baroness O'Neill of Bengarve: My Lords, there is good sense in the amendment. However, I have been sorry to watch its supporters make it less and less supportable by linking it to taking a certain view on the position of the United Kingdom in the European Union. The serious reasons for doubting whether this clause should stand unamended have to do with the variety of accountancy standards in different jurisdictions within the European Union and the prospective European Union. When looking at the substance of the matter, we should ask ourselves whether we cannot set some barrier on contributions from companies in those jurisdictions whose accountancy standards do not achieve the openness and the transparency to which we aspire and which we may not always reach. The problem will only get worse if, as is likely, the European Union is enlarged but legislation in various parts of it does not keep pace with these standards.

Therefore, if the Government are absolutely convinced that it is not possible to draw a distinction between companies registered in various members states of the European Union, I hope that they will explain why they do not consider it possible to set other standards that must be met by companies that seek to donate funds to political parties in the United Kingdom.

Lord McNally: My Lords, the noble Lord, Lord Lamont, invited some comments from these Benches. I know an elephant trap when I see one; indeed, if I did not, the contribution of the noble Lord, Lord Barnett, proved it beyond peradventure. If you begin by stating the facts and putting them into context, all that you provoke is a re-run of the debates that some of us have been engaging in for nearly 40 years. Perhaps I may assure the noble Lord, Lord Lamont, that we on these Benches are very happy to have that debate at the appropriate time--but not tonight; not on this Bill; and not on these amendments.

The contributions of the noble Lords, Lord Barnett and Lord Peston, and that of the noble Baroness, Lady O'Neill, put the matter in its proper context for a decision. Within that proper context, let there be no doubt that we shall support the Government in the Division Lobby tonight. In the meantime, I recommend a reading of the speech made by the noble Lord, Lord Bruce of Donington. Among all the

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verbiage that we have heard tonight, there was that very striking clarion call to release our media from foreign shackles, foreign influence and foreign distortion of our debates and political decisions. To me, that is a much more important issue in our democracy. I should be much more impressed with some of the speakers tonight if they espoused that as a cause. As I said, I assure Ministers of the support of these Benches.

6.45 p.m.

Viscount Astor: My Lords, I now understand why the noble Lord, Lord McNally, does not have his noble friend Lord Goodhart sitting beside him in his usual place. I make that observation because, of course, the Neill committee was unanimous against foreign donations. Indeed, if the noble Lord, Lord Goodhart, had been sitting in his place, he would, presumably, have had to take the opposite line to the noble Lord, Lord McNally.

The Government's case might have some merit if they were able to say that this Bill had been introduced because of some EU treaty, or some negotiation or agreement, and that, therefore, we were bringing ourselves into line with best practice in Europe, or even with European law. Indeed, that might give this the figleaf of respectability. But they have not done so because they cannot make that claim.

While I was listening to the debate, I looked through Appendix 1 on foreign countries in the report of the Neill committee, which is extremely interesting. If we take Germany, for example, the report points out that,

    "a business enterprise whose shares are more than 50 per cent owned by Germans ... may contribute".

However, if that is not so, it cannot contribute. In Belgium, the report found that only private individuals are allowed to give to political parties, and that "institutional donations are banned". The position in France is quite clearly and helpfully set out in the report:

    "Companies cannot donate funds to political parties".

Finally, as for Spain, the report says:

    "Companies wishing to donate to parties must have the approval of their shareholders".

That is the only rule that seems to apply in that country.

So we have a bizarre situation. If a German company is 51 per cent owned by a non-German, it cannot make a donation in that country but it can do so in Britain under the Government's proposals. However, if it is 49 per cent owned by a foreigner it can, of course, do both. In Belgium, a company can donate in this country under these proposals but cannot do so in its own country. The same applies in France: a French company can give money to a political party here, but cannot do so in its own country. In Spain, donations must have the approval of shareholders, but in other EU countries no such approval of shareholders is required under their laws. One has to ask the Government--the Labour Party--this question. If they receive a donation from a company in Europe that does not have the approval of its

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shareholders, will they accept it or send it back to that country, which requires shareholders' approval for political donations?

My noble friend Lord Tebbit pointed out that a company in either Hungary or Poland will not be able to give to a party in this country. I can reassure my noble friend. He need not worry, because such a company can give that same donation in many European Union states. Therefore, one way or another, they can probably get it here. The noble Lord, Lord Monson, asked a question about what British companies can do as regards reciprocity. The answer is yes, they can do so in some countries, but not in others. There are no clear, uniform rules that apply throughout the European Union.

I am afraid that the noble Lord, Lord Barnett, somewhat confused matters in his interesting intervention. He spoke as if this Bill were part of some important treaty obligation. But it is not, and noble Lords are aware of that fact. The noble Lord also made one mistake and perhaps I may respectfully correct him. I believe he said that EU citizens would be able to give money to political parties. But, of course, they cannot do so; they have to be on the electoral register in this country if they wish to do so. Indeed, that provision is to be found in Clause 52 of the Bill. However, that does not apply in the case of Northern Ireland, where, because of the special reasons regarding Sinn Fein, such donations can be accepted. There is a real distinction in the Bill about so-called "foreigners" and so-called "English citizens" on the electoral register. I do not regard the term "foreigner" as being in any way derogatory; indeed, I am sure that they regard us in exactly the same way. We are all part of Europe. We are in Europe, but they are not on our electoral register and we are not on theirs.

The noble Lord, Lord Peston, in his interesting intervention said that we should not doubt the veracity of government. I have always doubted the veracity of government; indeed, even when I was in government. It is extremely important for us always to doubt the veracity of government, whatever it may be.

We have to ask why this extraordinary loophole has been left unamended. The Government have put forward no clear argument as to why this is necessary. Clearly, there are no such rules in other countries in Europe that are similar to this provision. We shall not be bringing ourselves into line with any European country; indeed, if that were so, it might be an argument in support of the clause. We shall be distorting the system and making ourselves more different from almost every other country in the EU.

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