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Baroness Symons of Vernham Dean: My Lords, as to the noble Lord's final point, to my certain knowledge the House has discussed this issue following Statements in relation to NATO summits and EU summits, and I have, both as a Foreign Office Minister and Defence Minister, answered a number of questions raised in a number of debates. As this Statement makes clear, this has not come as a bolt from the blue. The Government have signalled it for a very long time--certainly from the St Malo discussions at the end of 1998, which began with the Prime Minister's visit to France on that occasion. I take issue with the noble Lord's implication that this matter has been sprung on Parliament when the groundwork has been very carefully laid.

The noble Lord asked where this is all leading. He said, "The noble Baroness said that this was a step on the way, so where is this path taking us?" It is leading to better equipped European armed forces. It is leading to forces which will be able to engage where NATO decides not to. That is where it is leading. It is very clear. It is doing so because of the lessons we learnt in Kosovo and because the United States, on a number of occasions, has made clear to its European allies that it believes we should be putting more effort into our defence capability. We believe that is right, as do the other nations in Europe. That is where it is leading.

This is a step forward because we are now agreeing to it. Implementation is, of course, a quite different issue. Having now made these agreements, we have to see how they are implemented. That is the sense in which I say this is a very important step.

Our colleagues in NATO believe that this is a sensible move. On 20th November, the noble Lord, Lord Robertson, stated:

I heard a commentator on the radio this morning say, "Well, Lord Robertson would say that, wouldn't he? He used to be a Labour Minister". That is to do less than justice to the integrity of the noble Lord, Lord Robertson, as the Secretary-General of NATO. Quite rightly, he puts NATO first. Noble Lords on the Benches opposite may find that amusing, but we on these Benches take those points very seriously. I shall certainly defend the integrity of the noble Lord, Lord Robertson, in what he said.

As I said to my noble friend Lord Gilbert, it is important to remember that the tasks to be undertaken are Petersberg tasks. The noble Lord is right to say that if we are to engage in these tasks--whether as a single

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country or in co-operation with others--our troops must be properly equipped. That is why we have taken such pains to learn the lessons from Kosovo. We are being painstaking over what we should be doing about communication systems and painstaking over what we should be doing about our missile systems. We have taken steps to ensure that we have better equipment for our Armed Forces in the short term as well as in the long term.

I can assure the noble Lord, Lord Chalfont, that the safety of our troops is at the forefront of our minds. These issues would be the same for any expeditionary force in which the United Kingdom's Armed Forces were engaged.

The Earl of Onslow: My Lords--

Lord Pearson of Rannoch: My Lords, the Minister--

Lord Shore of Stepney: My Lords--

The Attorney-General (Lord Williams of Mostyn): My Lords, I believe it is the turn of the Conservatives.

The Earl of Onslow: My Lords--

Lord Pearson of Rannoch: My Lords, perhaps I may ask the Minister--

Lord Williams of Mostyn: My Lords, I suggest that we first hear the noble Lord, Lord Pearson.

Lord Pearson of Rannoch: My Lords, no less than three times the Minister has said that this will not be a European army. Will she perhaps comment on the remarks of no less a person than the President of the European Commission, Mr Prodi, who said recently,

    "You need not call it an EU army if you do not want to. You can call it a Margaret, or you can call it a Mary-Anne. You can call it what you like, but it will be an EU army".

Does the Minister agree that there is also another view on this European initiative; that it is in truth inspired by France's jealousy of the United States--by France's unfortunate need to bite the hand that freed her in no less than two world wars? Is not that the real reason why the new force has to be capable of autonomous action from NATO, and why it will inevitably undermine NATO in due course?

Finally, what will happen if our troops are fully committed to an EU operation, lasting perhaps more than a year, and something happens in another sphere of our interest which requires those troops? Will we be able to withdraw them from the EU operation and send them to the other area, or will they remain under the command of the EU commander and subject to a qualified majority vote for the prosecution of that operation?

Baroness Symons of Vernham Dean: My Lords, the noble Lord has quoted something that he said that Mr Prodi said. There have been an awful lot of quotes put forward from an awful lot of European colleagues in the past few days. As the noble Lord will know if he

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is quoted in the press as often as some of us, these quotes are not always reliable. I prefer to look at the communique that was issued at the end of the Brussels meeting. After all, it is the authoritative voice of what was said. The communique states:

    "This is a process without unnecessary duplication and it does not involve the establishment of a European army".

It is unequivocal; it is in the communique--and it is there for everyone to read.

The noble Lord made tendentious comments about what he described as France's jealousy of the United States. I shall not get involved in speculation about why any country has decided to do what it has done. I know that France--like Germany, the United Kingdom and our other major colleagues in Europe--believes that the United States is right when it says that Europe must pull its weight better over defence. We agree. We agree with the United States and we agree with our European colleagues. We agree because it is the sensible, right and proper thing to do.

The noble Lord asked what would happen if we have committed our troops and we find that we need to commit them elsewhere. What would happen anyway if we had committed our troops and another conflict arose? We would take sensible decisions in the light of the prevailing circumstances. The United Kingdom Government will take those decisions. The noble Lord may shake his head, but that is the position. The decision will be taken by a British Prime Minister answerable to a British Parliament. It would not be done by qualified majority voting. It would be a decision for the Government of this country--and it would be a sensible one.

Lord Shore of Stepney: My Lords, my noble friend will accept--

Lord Burlison: My Lords, the Companion is quite clear. We have reached 20 minutes and we must end the debate.

Political Parties, Elections and Referendums Bill

6.8 p.m.

The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton): My Lords, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be further considered on Report.--(Lord Bassam of Brighton.)

On Question, Motion agreed to.

Clause 114 [General restriction on referendum expenses]:

[Amendments Nos. 180 and 181 not moved.]

Clause 115 [Special restrictions on referendum expenses by permitted participants]:

Lord Mackay of Ardbrecknish moved Amendment No. 182:

    Leave out Clause 115.

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The noble Lord said: My Lords, in moving Amendment No. 182, I shall speak also to Amendment No. 186. Amendment No. 182 seeks to leave out Clause 115 and Amendment No. 186 seeks to leave out Schedule 14.

We return to the question of referendum spending limits. It is no secret that, from the beginning, we have been very doubtful about--indeed we have opposed--the attempt to place spending limits on referendums. We feel that, whatever the referendum may be about, the attempt by the Government to impose these limits is an attempt to rig the expenditure on referendums. I suspect that their principal objective--they never look a year ahead when a month will do--is probably the referendum on the euro. But other referendums are likely. If the Liberal Democrats manage to persuade them, the Government may well hold a referendum on proportional representation.

The Government have chosen to attempt to impose spending limits by focusing on the political parties. That is not sensible. Some parties will be split on issues. Let us take, for example, a referendum on PR. I have no doubt that the Labour Party would be divided on PR, although I am not sure how even or uneven the division would be. I suspect that there are one or two members of the Conservative Party whose view might differ from that of the majority; however, I do not think the split would be anything like that in the Labour Party.

I have asked this question a number of times and I never receive an answer. Nevertheless, it is always worth asking again. On whose side of the argument would the Labour Party's £5 million fall--or would it be divided in some kind of proportion, perhaps based on the views of Members of another place or members of the National Executive Committee? I do not know. But what I do know is, whichever way the £5 million comes down in the Labour Party, many of its members will be very unhappy about their party spending £5 million on a campaign with which they do not agree.

Why should the level of the limit be decided in relation to the votes cast at the previous general election when, by definition, the referendum issue was not decided at the general election? Many of those who vote for a particular party at a general election--because they agree in general terms with its policies on health, home affairs or whatever--may not agree on the issue that the party takes up in a referendum. Yet their votes would count in determining spending on the opposite side to their opinions. That is not a very happy prospect. The point was raised by my noble friend Lord Lamont; and the noble Lord, Lord Goodhart, said that it was wholly wrong in principle to base the spending limits on votes cast at the previous general election.

My noble friend Lord Pearson, who is no longer in his place, raised the issue of why the spending limits in a referendum should not be determined by the votes in the most recent European parliamentary elections. Why not? There would seem to be some sense in that if the referendum was not on the euro. I can see that in relation to proportional representation the division of

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expenditure would be based on the proportion of votes in the previous British general election, but on the euro or any other issue relating to Europe that need not be the case. Let us assume that the Government decide to hold a referendum on matters that emerge from the Nice summit. In that case it is much more logical to base the expenditure on the European elections. The interesting point about the debates that we have had on this issue is that not a single Member of this House has spoken in favour of the Government's proposals--except the rather beleaguered noble Lord the Minister.

We could take as an example on a more limited scale the referendums that we have held. But let us take a referendum on the euro. The main pro-euro parties could spend £9 million to scrap the pound; the Conservative Party could spend only £5 million to save it. What would the Minister have said had he been at the wrong end of that stick all those years ago in the famous "village green" referendum which brought him into politics in the first place? What would his mother have said if she had been on the wrong end of the red rose? That is a jokey way to put it, but it is a serious point. Even the noble Lord admitted, on 24th October, that the Government freely conceded that their proposals would not ensure that each side in a referendum was subject to the same overall limit on expenditure, and that there was no pretence that their proposals were intended to create a level playing fiend in that sense.

If there is any argument about deciding expenditure on a referendum, it ought to be about creating a level playing field. In the Scottish referendum, a level playing field would certainly not have been created, because three of the parties were on one side and only one was on the other. I am sure that my noble and learned friend Lord Fraser, who was involved in that campaign, will agree with me when I say that, frankly, even if there had been a level financial playing field, I doubt whether the result would have been significantly different. However, no one can be in any doubt that if there had been a level playing field in expenditure in the referendum on Wales, the result would have been entirely different. The Government would have lost.

I should be happier if we were attempting to create an equality of arms when it comes to a referendum. However, I understand why the Government do not believe that that can be done. I have examined the issue carefully and I do not think it can be done either. Various groups who may agree on nothing else but the referendum will find it impossible to agree on how much of the cake they will individually spend. It would be almost impossible to keep the "Yes" side inside some global sum and the "No" side inside some global sum. The individual components would be very hard to discipline.

The Neill committee considered this whole question and decided that the task was impossible; it would be very difficult to agree. Any attempt to agree the two global expenditures would probably mean that the various organisations would be fighting like ferrets in a sack. My right honourable friend Sir George Young came to exactly the same conclusion in another place.

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So I do not think it is possible to look at a theoretically ideal solution: for example, £20 million for the "Yes" side and £20 million for the "No" side; that is the cap; and everyone taking part on one side or the other has to play inside that cap. That is not realistic. Therefore, at this stage I am not coming forward with an amendment to that effect. Our choice is either the option proposed by the Government, or that of the Neill committee--which is that if you cannot succeed in doing something you should not really try, because in the trying you will probably create more anomalies and difficulties.

Late last night, the Minister and I discussed a small amendment of mine. Out of it came the clear conclusion that, in any referendum campaign, if a rich person wants to go abroad, base himself in Brussels, Paris or wherever, and spend his money trying to influence one side or the other, there is absolutely nothing that can be done about it under the provisions of the Bill. At one time that may not have been a productive thing for people to do. But today they could buy advertising space in British newspapers--the noble Lord may tell me that I am wrong about this--and a run a campaign for the "Yes" side or the "No" side. They could most assuredly gain access to the e-world, set up websites and pour their messages in from outside Britain. They could certainly go to a Dutch post office and post papers to us all so that we received papers for one side or the other.

I do not think I am being unfair to the Minister when I say that he had no escape from the logic that I pursued last night, and I do not think that he has received any help from his officials today. On that assumption, I think that my proposition is right. We can forget about limits. I know that the Government are terrified about a Mr Sykes, whom I have never met. Frankly, Mr Sykes can simply move from Yorkshire to Brussels and get on with spending all the money that the Government fear he might spend in a campaign on the euro on what they see to be the wrong side. So all their efforts to put limits on campaigning will be totally set aside--they will be just nonsense.

The Neill committee unanimously considered that there should not be spending limits in referendum campaigns. The committee said that it would be futile, and possibly wrong. I think it would be futile. As I have explained, it would be fine if we could have globals on each side, but it would be wrong to do this in the way the Government intend, especially as we have exposed the fact that not just one coach and a set of horses could be driven through this provision, but coaches and horses. If spending limits cannot be imposed, why try?

I commend to the Government acceptance of my two amendments, which would at least mean that everything would be up front when we had a referendum and the different sides would be spending whatever they could spend and whatever they could find to spend. That is what will actually happen. Otherwise, we in Parliament will be made to look

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ridiculous because we will have passed a law which was incapable of being enforced. That is a very serious matter. I beg to move.

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