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Lord McNally: My Lords, before the noble Lord sits down, there is something that has crept into this debate that worries me. Hitherto, we have had the noble Lord, Lord Neill's committee claimed in aid when a proposer agrees with it. We now seem to have another doctrine, which is that if the noble Lord's committee had thought of it we must agree with it. I hope that the Minister does not go along with that.

Lord Bach: My Lords, I entirely agree with the noble Lord.

Lord Mackay of Ardbrecknish: My Lords, I thought for one horrible moment that the Minister was going to say that he would accept the amendment "conditional on me finding the remaining 16" instances. I am grateful to him. I fully accept that there will be other occasions. It is perhaps me being rather a particular mathematician. I do not think that all the pennies that the political parties will get will make--as we Scots would say--a muckle that will make much difference. But it will make the issue easier. I am grateful to the noble Lord for taking on board what is a small but useful simplification.

On Question, amendment agreed to.

Lord Mackay of Ardbrecknish moved Amendment No. 98:

On Question, amendment agreed to.

[Amendments Nos. 99 to 100 not moved.]

Clause 53 [Payments etc. which are (or are not) to be treated as donations by permissible donors]:

Lord Bach moved Amendment No. 101:

    Page 40, line 9, leave out subsection (5) and insert--

("(5) Any exempt trust donation received by a registered party shall be regarded as a donation received by the party from a permissible donor.
(6) But any donation received by a registered party from a trustee of any property (in his capacity as such) which is not--
(a) an exempt trust donation, or
(b) a donation transmitted by the trustee to the party on behalf of beneficiaries under the trust who are--
(i) persons who at the time of its receipt by the party are permissible donors, or
(ii) the members of an unincorporated association which at that time is a permissible donor,
shall be regarded as a donation received by the party from a person who is not a permissible donor.").

On Question, amendment agreed to.

[Amendment No. 102 not moved.]

Clause 60 [Quarterly donation reports]:

Lord Mackay of Ardbrecknish moved Amendments Nos. 103 to 107:

    Page 44, line 6, leave out ("not less") and insert ("more").

    Page 44, line 8, leave out ("not less") and insert ("more").

    Page 44, line 15, leave out ("not less) and ("more").

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    Page 44, line 25, leave out ("not less") and insert ("more").

    Page 44, line 33, leave out ("not less") and insert ("more").

On Question, amendments agreed to.

Clause 61 [Weekly donation reports during general election periods]:

Lord Mackay of Ardbrecknish moved Amendment No. 108:

    Page 45, line 44, leave out ("not less") and insert ("more").

On Question, amendment agreed to.

Lord Norton of Louth moved Amendment No. 108A:

    Page 45, line 44, leave out ("£5,000") and insert ("£50,000").

The noble Lord said: In moving Amendment No. 108A, I shall speak to Amendment No. 110A standing in my name with this group of amendments. We debated Clause 61 in some detail in Committee. Various noble Lords raised problems with the clause as it was drafted. The noble Lord, Lord Bassam, indicated that he would reflect on the points that were made. But he said that the Government had been content up to that point and he thought they would remain content with what had been set out in the Neill report on the issue. Given the absence of government amendments to the clause, they are obviously content with the provisions.

I am not content with the provisions. My amendment seeks to make a bad clause less bad. If the Government are not prepared to accept the amendment or to bring forward some amendment of their own, then we should take the clause out of the Bill.

As I said in Committee, the clause has to be read in conjunction with the other provisions of the Bill. The Bill imposes a tremendous burden on political parties. Political parties are losing members as citizens increasingly channel their energies through interest groups. The parties have difficulty--a matter that has already been touched upon--in maintaining an effective infrastructure. In some constituencies parties exist in name only.

If we accept that vibrant political parties are essential to a healthy parliamentary democracy, then we must be wary of taking action that undermines them. The Bill places a great burden on them. I am not sure that it is a justifiable burden. I argued in Committee for a simpler system of regulation with transparency ensuring effective regulation. I would still like to see that, but I realise that I shall not make much headway in advancing that case.

Therefore, I focus on the specific provisions of the Bill. Given what I have said about the burdens on political parties, I believe that a clear case needs to be made for any provision that imposes an additional burden. In Committee, I suggested that we apply a "compelling case" test, not a balancing test of the kind that the noble and learned Lord, Lord Falconer, was so keen to demonstrate in our discussions on the Freedom of Information Bill. In other words, is there a compelling case for imposing the burden? If not, it

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should not be in the Bill. At the Committee stage the amendments attracted the support of the noble Lord, Lord McNally.

Is there a compelling case for this clause? The arguments advanced for it are twofold. One is in terms of its genesis; it was recommended by the Neill committee. However, that is not a compelling argument, as the noble Lord, Lord Bassam, conceded in Committee. The Minister said on 10th October when discussing Clause 12 that,

    "we do not ... have to buy into everything that is said in the report".--[Official Report, 10/10/00; col.207.]

Therefore, inclusion in the report is not in itself sufficient.

The other argument is that of transparency. As the Minister noted in our discussions in Committee, I have stressed the need for transparency. I have certainly done that. But I do not think that this clause is essential for the purposes of transparency.

My reason for saying that is that transparency is achieved by the other provisions of the Bill. Under Clause 60 political parties will have to reveal each donation of £5,000 or more. I have no problem with that. I would have no problem with the amount being a much lower one. These donations will be revealed not in annual reports but in quarterly returns. I should have thought that that, in itself, imposes a considerable burden on the parties. As I read the Bill, the donations will be known.

The clause is principally concerned with the point at which the information is placed in the public domain. As the Minister emphasised at Committee stage, the argument for it is that electors have a right to know who is giving large sums of money to parties during the course of an election.

I understand the argument. However, I am not certain that it meets the compelling justification test. The information will come out in the quarterly returns. Under the Bill, money may only be accepted from permissible donors. Money accepted during an election campaign will come only from those listed under Clause 52. Do we really need to impose an additional and substantial burden on political parties during an election campaign just so we know which permissible donors have given money in each week during the campaign?

Therefore, I am not certain that there is a compelling case for retaining this clause. If it is thought that there is a case for electors knowing who the big donors are during an election, then my amendment to the clause is offered as a compromise. It requires the parties only to return, during each seven-day period, details of donations of £50,000 or more.

I would suggest that this has a dual benefit. First, and most importantly, it reduces the burden on parties. The number of donations of £50,000 or more presumably will be considerably fewer than those giving £5,000 or more. In terms of public interest, I argue that this captures those making the big donations. I doubt that the press or public has any great interest in who gives £5,000 or so to a party.

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The second advantage is that it may go some way to addressing the potential mischief that I identified at Committee stage as being possible. During election campaigns parties have to record donations received in the accounting period even if they have not been accepted. It is always possible that someone who is out to cause trouble may arrange for money to be sent from some impermissible source--though not an obviously impermissible source-- during a campaign, knowing that that donation will have to be included in the return and then for the person to tell the press that it was from a dubious source. As it was from an impermissible source the money would eventually have to be returned. The damage to the party will have been done and at no financial costs to the mischief-maker.

Raising the limit would not solve this problem but it would make it more difficult for mischief-makers. They would have to raise a considerable sum of money. I appreciate that this is hypothetical. Such mischief may be unlikely and, in any event, is not the principal reason for my amendment. Reducing the chance of mischief-making is an incidental benefit. My main argument relates to the burden that the clause imposes on political parties. I do not believe that a compelling case has been made for the provisions of this clause. I can see the argument for it. I do not think it is compelling in relation to the burden placed on parties. It imposes a considerable and, I believe, unnecessary burden on political parties.

The burden should either be reduced, hence the amendment, or, failing that, removed altogether. If the Government are not minded to accept the amendment, then I suggest that the clause be left out. I beg to move.

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