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Lord Mackay of Ardbrecknish: My Lords, I am disappointed that the noble Lord thinks that there is nothing he can do. However, at least I have managed to extract from him a clear statement that he accepts that Northern Ireland parties could use foreign donations even in the United Kingdom on a referendum on the euro. I did not mention the euro earlier, but the noble Lord has done so. That seems to be the most amazing breach of the general principle that there should be no foreign donations when it comes to referendums.

This is as ridiculous as the previous situation on political parties, where the SNP will not be able to receive money from America, but Sinn Fein/IRA will be able to do so. Representatives of Northern Ireland parties holding referendums in Northern Ireland will be able to receive donations from abroad in order to influence a referendum. However, should a referendum be held in Scotland, I presume that the two sides in Scotland will not be able to accept funding from abroad to assist in such a referendum. As my noble friend Lord Cranborne pointed out earlier in our deliberations, the reason is simple: in this case, terrorism has paid. Because Scotland is a peaceful

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country and those trying to secure Scottish independence are doing so peacefully, they cannot receive money from abroad for a referendum--even if they do manage to force a referendum at some stage in the future. I know how I would vote in such a referendum--I would not be on their side--but that does not mean that I am not aware of the unfairness of the situation.

The notion that money can be received from foreign sources through Northern Ireland to support a referendum held in this country is going to cause serious concern, should we ever reach such a referendum. I am not entirely certain whether I should test the opinion of the House at this time of night. I suspect that the noble Lord may have a great many troops in the House who have not listened to the argument. I cannot believe that anyone who had listened to the debate would be in any way happy with the situation that the Government declare will be in place once the Bill has been passed. I do not believe that anyone in your Lordships' House would be happy with the notion that foreign funding can come in via Northern Ireland in order to influence UK-wide referendums; in other words, through the back door. Such funding cannot come in through the front door. I think that this is an unsatisfactory position.

However, after a great deal of effort, I have at least secured a straightforward and simple confession from the Minister as regards what the Bill will do. I shall study what he has said about my amendments. I cannot promise not to return to this issue at Third Reading once I have had an opportunity to read through the correspondence and the latest contribution from the Minister. For the moment, however, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 133 and 134 not moved.]

Schedule 7 [Control of donations to individuals and members associations]:

Lord Bach moved Amendments Nos. 135 and 136:

Page 149, line 32, leave out ("(2)(d)") and insert ("(1)(d)").

Page 149, line 34, leave out ("(2)(e)") and insert ("(1)(e)").

On Question, amendments agreed to.

Lord Mackay of Ardbrecknish moved Amendments Nos. 137 and 138:

Page 152, line 3, leave out ("not less") and insert ("more").

Page 152, line 19, leave out ("not less") and insert ("more").

On Question, amendments agreed to.

Lord Bach moved Amendment No. 139:

Page 153, line 1, leave out sub-paragraph (5) and insert--

("(5) Any controlled donation received by a regulated donee which is an exempt trust donation shall be regarded as a controlled donation received by the donee from a permissible donor.
(6) But any controlled donation received by a regulated donee from a trustee of any property (in his capacity as such) which is not
(a) an exempt trust donation, or
(b) a controlled donation transmitted by the trustee to the donee on behalf of beneficiaries under the trust who are--

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(i) persons who at the time of its receipt by the donee are permissible donors falling within section 52(2), or
(ii) the members of an unincorporated association which at that time is a permissible donor,
shall be regarded as a controlled donation received by the donee from a person who is not a permissible donor.").

On Question, amendment agreed to.

Lord Mackay of Ardbrecknish moved Amendments Nos. 140 and 141:

Page 153, line 38, leave out ("not less") and insert ("more").

Page 153, line 46, leave out ("not less") and insert ("more").

On Question, amendments agreed to.

Lord Bach moved Amendment No. 142:

Page 156, line 25, leave out ("(4) to (10)").

On Question, amendment agreed to.

Clause 70 [Campaign Expenditure]:

10.45 p.m.

Viscount Astor moved Amendment No. 143:

Page 52, line 24, leave out subsection (9).

The noble Viscount said: My Lords, on page 52 of the Bill, Clause 70(9) states:

"In this section 'candidates' includes future candidates, whether identifiable or not".

I asked in Committee how a party can promote the electoral success of future, unidentifiable candidates. I did not get a satisfactory answer. The Minister said he would reflect on the matter. I should like to know the result of his reflections. I beg to move.

Lord Bach: My Lords, subsection (9) of Clause 70, which the amendment seeks to delete, was added to the Bill in Committee. At that stage it did not appear to cause concern. We are a little surprised that exception should now be taken to it, although I understand that this is almost certainly a probing amendment to ascertain the Government's thinking on this issue.

Subsection (9) was one of a number of changes made to the Bill in Committee to strengthen the definition of "campaign expenditure". If the £20 million limitation on election spending in the 365 days before an election is to be effective, it is important to ensure that the definition of "campaign expenditure" is a robust definition. The previous definition referred to expenses incurred by and on behalf of a party with a view to promoting or procuring the election "of existing or future candidates" standing in the name of the party.

Of particular concern to the Government with that approach was that the reference to a party's candidates might attract the narrow meaning of a candidate under the Representation of the People Act 1983. In broad terms, a person becomes a candidate under that Act only when he or she is nominated as a candidate, or is declared by himself or by herself or by others to be a candidate. Under the 1983 Act, nominations are normally only submitted some two to three weeks before the date of the poll. If such a narrow

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construction were to be put on the reference to candidates in Clause 70, it could be open for a party to argue that a particular campaign conducted 10 months before the date of the election was not directed to promoting the return of the party's candidates at that election. Such an argument would rely on the fact that the party's candidate had either not been selected or, where they had been selected, had not been formally adopted.

Subsection (9) is there to counteract any such construction. It is clear from this subsection that the term "candidates" includes any candidates who stand in the name of the party at the next election, whether or not they have been selected or formally adopted at the relevant point in time.

I hope that, on reflection, the noble Viscount will accept that that subsection provides necessary reassurance and thus becomes an important element of the clause.

Viscount Astor: My Lords, I am grateful to the Minister for that response. I am sure that he is aware that I raised this issue in Committee on 18th October, when the Government moved their earlier amendment. I think I have understood what the Minister said; however, it is late in the evening. I listened as carefully as I could, but I shall have to read his answer tomorrow to be entirely clear on the matter. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 72 [Officers of registered party with responsibility for campaign expenditure]:

Lord Bach moved Amendment No. 144:

Page 54, line 37, leave out ("(1)") and insert ("(2)").

On Question, amendment agreed to.

Clause 74 [Restriction on payments in respect of campaign expenditure]:

Lord Mackay of Ardbrecknish moved Amendment No. 145:

Page 55, line 36, leave out ("and") and insert ("or").

The noble Lord said: My Lords, in moving Amendment No. 145, I shall speak also to Amendments Nos. 152, 153, 168, 175 and 198. I shall not have to make a speech of any great length because your Lordships will have noticed that, in addition to my noble friend Lord Astor and myself, the noble Lords, Lord McNally, Lord Rennard, and Lord Bassam of Brighton himself, have added their names to the amendment. I am therefore assuming that the Government will accept the amendment.

The amendment relates to the requirement to produce both an invoice and a receipt for the auditing of a party's expenditure. Replacing the word "and" with the word "or" would mean that one or the other would do. In the anticipation that the noble Lord, Lord Bassam of Brighton, really meant to add his name and that his noble friend Lord Bach will not do something contrary, I beg to move.

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