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Lord Bach moved Amendments Nos. 190 and 191:

    Page 187, line 27, leave out ("(2)(e)") and insert ("(1)(e)").

On Question, amendments agreed to.

[Amendment No. 192 not moved.]

Lord Bach moved Amendments Nos. 193 and 194:

    Page 189, leave out lines 38 to 47.

    Page 189, line 47, at end insert--

("(2A) For the purposes of this Schedule, any relevant donation received by a permitted participant which is an exempt trust donation shall be regarded as a relevant donation received by the permitted participant from a permissible donor.
(2B) But, for the purposes of this Schedule, any relevant donation received by a permitted participant from a trustee of any property (in his capacity as such) which is not--
(a) an exempt trust donation, or

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(b) a relevant donation transmitted by the trustee to the permitted participant on behalf of beneficiaries under the trust who are--
(i) persons who at the time of its receipt by the permitted participant are permissible donors falling within section 52(2), or
(ii) the members of an unincorporated association which at that time is such a permissible donor,
shall be regarded as a relevant donation received by the permitted participant from a person who is not such a permissible donor.").

On Question, amendments agreed to.

Lord Mackay of Ardbrecknish moved Amendment No. 195:

    Page 190, line 6, leave out ("not less") and insert ("more").

On Question, amendment agreed to.

Lord Bach moved Amendment No. 196:

    Page 191, line 16, leave out ("(2) to (10)").

On Question, amendment agreed to.

[Amendment No. 197 not moved.]

Clause 117 [Returns as to referendum expenses]:

Lord Mackay of Ardbrecknish moved Amendment No. 198:

    Page 85, line 16, leave out ("and") and insert ("or").

On Question, amendment agreed to.

Clause 122 [Restriction on publication etc. of promotional material by central and local government etc.]:

Lord Mackay of Ardbrecknish moved Amendment No. 199:

    Page 87, line 30, leave out ("relevant") and insert ("referendum").

The noble Lord said: My Lords, in moving Amendment No. 199, I wish to speak also to Amendments Nos. 204 and 205. I tabled this amendment in Committee. I and my noble friends want to return to it simply because we did not leave it in a happy position. Amendment No. 204 is consequential on Amendment No. 199, and Amendment No. 205 is an attempt at some form of compromise.

I keep trying to find a form of compromise with the Government but I keep getting knocked back by the noble Lord, Lord Bassam. I cannot really complain because two or three of my amendments have been accepted. However, I put forward a compromise in the Bill that we dealt with earlier today and the noble and learned Lord, Lord Falconer, accepted it. Perhaps the noble Lord might follow his noble and learned friend's example.

This group of amendments deals with the "purdah period" which will apply to most, but not all, campaigning activity by the government of the day during the last 28 days of a referendum campaign. We had an interesting debate about this in Committee and there were also some good and interesting debates in the other place.

Essentially, the question is this: is it right and fair for the government of the day to be allowed to use unlimited amounts of public money to campaign for

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one side of the argument in a referendum, especially in the context of the spending restrictions that we have just agreed which will apply to everyone else who campaigns in that referendum?

In its report, the Neill committee took a very dim view of government participation in referendum campaigns. It cited the Scottish, Welsh and Northern Irish referendums held by this Government as having been influenced by partisan propaganda issued at the taxpayers' expense. It rejected that approach completely and said at paragraph 12.41 of the report:

    "We believe it is perfectly appropriate for the government of the day to state its views and for members of the Government to campaign vigorously during referendum campaigns, just as in general election campaigns. But we also believe that, just as in general election campaigns, neither taxpayers' money nor the permanent government machine--civil servants, official cars, the Government Information Service, and so forth--should be used to promote the interests of the Government side of the argument".

At paragraph 12.44, the committee concluded:

    "We believe that it is extraordinarily difficult, if not impossible, for the government of the day to offer purely objective and factual information in the course of a referendum campaign. We believe governments should not participate in referendum campaigns in this manner ... The government of the day in future referendums should, as a government, remain neutral and should not distribute at public expense literature, even purportedly factual literature, setting out or otherwise promoting its case".

That is pretty clear. However, I believe that it probably set alarm bells ringing in Millbank, the Home Office and even Downing Street. Therefore, we have a Bill which does not reflect those sentiments at all. In fact, it allows for the situation that the Neill committee said should be prohibited; namely, government propaganda issued at public expense during referendum campaigns.

I admit that the Government have provided for the 28-day purdah period in the Bill, although to what extent it is a real purdah we shall examine in the next group of amendments. However, the referendum campaign can last for up to six months. The political parties and other campaign organisations will be subject to strict rules on expenditure for the whole of that period, whereas the government of the day can spend what it likes for up to five out of a possible six months.

I know that the Neill committee welcomed the 28-day period. I know that it was welcomed by my right honourable friend John MacGregor in another place. It is possible that the committee did not imagine that, given what they did in the devolution referendums, the Government would ever have agreed to any purdah period at all. Perhaps the committee was pleasantly surprised. I am not sure whether the noble Lord, Lord Goodhart, is intending to intervene in this debate and to give us his views.

However, what the Government have done clearly deviates from the spirit and the letter of the Neill recommendations. I also consider it to be grossly unfair and yet another attempt to rig future referendums. For five months, when other organisations, including the political parties, are subject to spending restrictions, the government of the day can issue unlimited amounts of partisan material

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at public expense, use the government press machine and take out adverts in newspapers, all with taxpayers' money and all designed to influence the outcome of the referendum.

I believe that purdah should apply during the whole referendum period. I consider that to be fair and equitable. That is what Amendments Nos. 199 and 204 seek to achieve. In Committee, the Minister argued that we could not apply the purdah during the whole referendum period because that could also cover the passage of the Bill through Parliament. I do not believe that it is beyond the wit of the Government's draftsmen and the Minister's officials to devise wording to meet that point. It was a fig leaf provided for the Minister to cover his embarrassment.

In a spirit of generosity, I have tried to meet the point with Amendment No. 205. It is not my preferred option but it would at least limit the scope for abuse. The purdah period would be either 28 days or half the referendum period, whichever was longer. That would at least mean that for half the referendum period the Government could not distribute propaganda, but it would not affect the passage of the Bill through Parliament. In any event, I believe that proposal to be better than what is in the Bill.

I remind the noble Lords, Lord McNally, Lord Rennard and Lord Goodhart, that in another place the Liberal Democrat Front Bench spokesman, Mr Stunell, whom I have quoted before, supported our call for the purdah period to be increased. He said:

    "I would not be averse to an extension of the 28 days ... I come part way with the hon. Member for Beaconsfield on bringing forward the 28-day deadline. I am sympathetic to that view".--[Official Report, Commons, 16/2/00; col. 1054].

However, I believe that Mr Stunell completely misunderstood the effect of the amendments, which are the same as those before your Lordships today because he thought, mistakenly, that they would remove the purdah period entirely rather than extend it to the whole referendum period which would be their actual effect. I know that noble Lords on the Liberal Benches, if they speak, will not make that mistake with regard to the amendments before us today.

This is an important issue. We are trying to ensure that future referendums are not rigged. The Government are going against the spirit and letter of the Neill report in that respect. The amendment in the name of my noble friend Lord Willoughby de Broke is thoroughly sensible. If it is not acceptable to the Government and to your Lordships, I commend my compromise Amendment No. 205 to the House. I beg to move.

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