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Lord Marsh moved Amendment No. 22:

("(3A) Subject to subsection (3B), no material to which this section applies shall be distributed or displayed to the public free of charge during the referendum period by or on behalf of--
(a) any Minister of the Crown, government department or local authority;
(b) any other person or body whose expenses are defrayed wholly or mainly out of public funds or by any local authority; or
(c) the Post Office;
unless such material--
(d) is factual and impartial; and
(e) has been circulated to permitted participants at least seven days before it is published.
(3B) Subsection (3A) does not apply to--
(a) material made available to persons in response to specific requests for information or to persons seeking access to it; or
(b) material published on web-sites.").

The noble Lord said: My Lords, the amendment is connected with the general issue raised by the previous amendment. I should make it clear that I have been involved with Business for Sterling since its inception and am president of its council. Having said that, one day I should be interested to hear privately why the noble Lord, Lord Bassam, left the council of Britain in Europe. I can think of many reasons why I would have done so, but that is his personal grief.

This amendment clearly has a relationship with the euro and the single currency because they will almost certainly be the subject of the next referendum. I believe, however, that it raises fundamental issues which go much wider than that. We have to recognise that over the years there will be other referendums. I cannot believe that there will not now that we have embarked upon that course. I believe that basically this amendment goes to the guts of the extent to which taxpayers' money and the full machinery of government may properly be used to influence the outcome of a referendum. It does not matter what the subject is; it so happens that the next one is likely to concern the single currency.

The argument is clearly set out in the report of the Committee on Standards in Public Life:

    "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 they do during 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

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    argument. In other words, referendum campaigns should be treated for these purposes in every way as though they were general election campaigns".

That is the issue. It is not a case of whether one does or does not join the single currency, or whether one likes or does not like the European Union. It is a question of the use of public moneys on such occasions.

The Government's view, which, as we would expect, the noble Lord spelt out clearly last time this matter was debated, was that that was simply not possible. They believe that the issues are so complicated that no one can tell the difference between party political propaganda and a civil service document. The noble Lord gave as an example the passage through Parliament of a Bill which would make possible provision for the referendum. He suggested that even the Explanatory Notes could be controversial.

With the greatest respect, I suspect that over the years most senior Ministers and senior civil servants have had long discussions and arguments about the dividing line between legitimate public expenditure and political activity which is clearly at the taxpayers' expense. They are two different things and, as the proverbial elephant (which seems to be making its presence felt in this debate) shows, you can always tell it when you see it. The position is similar to that of managers who deal with senior executives' expense claims. It is difficult to describe the exact point at which a claim becomes unacceptable, but the manager always knows when it is and the executive always knows when it is. I believe that the same analogy can apply in this case.

If one says that it cannot be done, that assumes that our Parliament is not sophisticated enough to accept the fact that, whichever party is in power, the Government have a right and a duty to govern whether or not a referendum or a general election is in process. I do not believe that any of the parties would have any sympathy if, having complained about the political activities of the Government, they were then to turn this into a political argy-bargy.

Many of us considered that, if a difficulty arose which appeared to be insuperable, the way round it would be to favour no limits on expenditure. Perhaps I may take as an example the euro. I suspect that the campaigns for both sides of that argument will not be short of money. However, the Government have rejected that and chosen a course which in my view is indefensible.

Briefly, in the six-month run-up to the poll, the political parties will be limited to expenditure of between £0.5 million and £5 million. But the Government will have no limit on the amount of public money that they can spend in support of their party's policy. That is the problem. The Government should not pretend that there is a dividing line between the Government and the Government's political party. They are one and the same, and in my view it is wrong when they use public moneys for a party aim.

Between £0.5 million and £5 million will be available for the parties involved. However, there will be no limit on the amount of public money that the Government

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can spend in support of their party's policy up to 28 days before the poll. But the parties outside the Government are to be limited to a period of six months. That involves two totally different sets of rules and is based on the argument that we could not conceivably draw a distinction between public expenditure used for party ends and the proper activity of a political party.

Of course, there are strong arguments in favour of what other people will see as the blatant misuse of taxpayers' money for party benefits. President Mugabe would have no problem with that. He would wonder what the debate was about. After all, that is one of the perks of being in office. However, that is not how we have traditionally done things in this country. Senior Minister Lee Kuan Yew, for whom I have great respect, would probably argue that Singapore would never have achieved the success that it has if it had adopted our Westminster traditions. When it comes to public expenditure, there is a rigid distinction between party and government.

As I said at the beginning, I believe that this is an issue of fundamental principle and importance. I do not believe that it is confined to a single party. It has ramifications which go much wider than that. As referendums develop, what is now seen as a disputed process will become accepted and improved upon. In that connection, I am told that Article 10 of the convention on human rights includes,

    "the right ... to receive and impart information and ideas without interference by public authority".

It is public knowledge that Business for Sterling has taken legal advice on this issue. The advice that I have seen is that, although the Act permits even-handed regulation of referendums, controls which give an advantage to one side are open to challenge. If a solution exists through the courts, we shall pursue it because I do not believe that the issue should simply be allowed to die.

I can understand why any Opposition may well believe that, when it takes up the reins of government, this may turn out to be a useful piece of legislation. I believe that that would be false and this is a very dangerous precedent which should be resisted. The provisions in the Bill introduce a new and highly undesirable development in the use of public money for political purposes. The Bill as drafted legitimises a gross abuse of the freedom of future governments to access public funds for party political uses. We may be able to test the matter in the courts or discuss it further. I do not believe that it is enough simply to say that this is an argument about the Eurosceptics. It is an argument about the British constitution and how we run public affairs. I beg to move.

Lord Avebury: My Lords, will the noble Lord explain why he believes that it is legitimate for governments to publish material on websites that is not factual or impartial? The noble Lord did not deal with the proposed subsection (3)(b) in the amendment and I am rather mystified by it.

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6.30 p.m.

Lord Marsh: My Lords, I felt some sympathy for the noble Lord, Lord Bassam, who has undergone very long hours on this subject, as have other Members of the House. Therefore, I tried to keep my speech as simple as possible.

The reason for those exemptions is precisely because we believe that you cannot stop a government carrying out their activities. If they have a website, that gives government information. I give an example. It is not legitimate to send out 800,000 letters to British businessmen, 75 per cent of whom do not trade outside the country in any event, trying to persuade them that they should be supporters of a single currency.

So, yes, Ministers will make speeches which will receive publicity. Ministers will no doubt issue White Papers which will happen to appear in the course of the events. Those things will happen. The idea that Ministers cannot express their governmental views and carry out their governmental jobs is nonsense.

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