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House of Lords

Wednesday, 15 January 2014.

3 pm

Prayers—read by the Lord Bishop of Newcastle.

Shipping: Passenger Safety


3.06 pm

Asked by Lord Berkeley

To ask Her Majesty’s Government what assessment they have made of the impact on passenger safety of their application to the Committee on Safe Seas and the Prevention of Pollution from Ships for exemption for certain ships and areas of operation from European safety requirements in order to substitute life rings for life rafts.

The Minister of State, Department for Transport (Baroness Kramer) (LD): My Lords, Her Majesty’s Government require all vessels to carry enough life rafts to meet the risk to those on board in an emergency. The proposal submitted to the Committee on Safe Seas and the Prevention of Pollution from Ships is based on UK regulations for domestic passenger ships and is supported by the department’s formal safety assessment of domestic passenger ships carried out between 2002 and 2004 in response to Lord Justice Clarke’s formal inquiry into the “Marchioness”/“Bowbelle” collision.

Lord Berkeley (Lab): I am grateful to the noble Baroness for that response. My understanding is that this exemption application applies to passenger ships with up to 130 people on them, which, under directive 2009/45, article 4, allows them to go 15 miles from the place of refuge or five miles from the coast in the summer. The idea is to reduce the number of life rafts to the maximum number of passengers—not allowing, of course, for the fact that you cannot always launch life rafts if a ship is heeling—and to replace the rafts removed with life rings. Does the Minister really think that it is a good idea for people who might be wrecked in an accident in the North Sea or off the Hebrides to have to get into a life ring rather than a life raft?

Baroness Kramer: My Lords, my understanding is that this exemption is for up to five miles and therefore would not apply in most of the circumstances that the noble Lord has just described. It is for small craft of less than 24 metres which have to be travelling in daylight and in summer only. They are required to have sufficient life rafts for all passengers but additional safety can be provided by buoyancy apparatus.

Lord Higgins (Con): My Lords, are life rafts generally not preferable to life rings, particularly if the water is cold? Is the saving in this negotiation really significant? Presumably all existing vessels already have the current requirement rather than the reduced one.

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Baroness Kramer: My Lords, there is clearly some confusion. The EU directive was designed for the large, steel ferries that I think noble Lords are referring to. These are small craft. Existing small craft already have this exemption; it is simply as they are replaced that newer craft can have the same exemption. The rationale is simply that on a very small boat there is very little space for adding one additional life raft, which is what would be required by the directive. You would have to take off passengers. These are usually small, family operations operating on a tight financial margin and, as I say, it is within five miles of the coast so that if something untoward were to happen, modern life rafts are very reliable and air-sea rescue is very close at hand. Therefore, the marginal benefit is considered very marginal.

Lord Lea of Crondall (Lab): My Lords, I am rather exercised by the fact that Britain over the past 100 years has had the reputation of giving leadership in the International Maritime Organisation, which is across the road there, with the highest standards in world shipping. I am trying to think of the read-across of this to the Philippines archipelago, to Indonesia and so on. Two very brilliant new books on seafaring that have just come out show that many safety standards are now deteriorating. Will the Minister give an assurance that, within the IMO and elsewhere, the British Government will continue to listen to the problems of workers on seagoing ships and that the Government’s contacts with the employers will be equally matched by their contacts with the trade unions?

Baroness Kramer: My Lords, the UK has been an absolute leader in marine safety and I can guarantee that this Government will continue to be. I will ask about various discussions that are taking place with the IMO and other stakeholders, and make sure that we write back to the noble Lord.

Lord West of Spithead (Lab): Is the Department for Transport involved in any studies looking at lessons learnt from, for example, the “Costa Concordia”, and at the inability to launch lifeboats and life rafts at excessive degrees of heel?

Baroness Kramer: My Lords, I do not have the answer to the noble Lord’s question but I will obtain it. I want to make it very clear, however, that the exemption being sought is not for a boat like the “Costa Concordia”. We are talking about something much smaller in benign waters very close to shore.

Lord Greenway (CB): My Lords, is not this application one of a number which have arisen from the formal safety assessment by the Maritime and Coastguard Agency which I as a mariner regard as entirely practical?

Baroness Kramer: The noble Lord is exactly right. I think that this is regarded by almost everybody as a practical, reasonable and sensible measure. It has withstood over many years a reputation of providing sufficient safety in the relevant circumstances.

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Lord Swinfen (Con): My Lords, what would be the comparative rates of survival for the two methods, life rafts and life rings, in cold winter water around our northern coasts?

Baroness Kramer: I assure your Lordships that this standard could not apply in winter weather; it is for summer only. It is for boats that are very close to the coast and for small excursion vessels. It is part of an appropriate safety regime to look at how the vessels are being used and to make sure that safety is appropriate to that rather than circumstances in which they cannot be used.

Lord Wigley (PC): My Lords, may I invite the Minister to reconsider her reference to benign waters? Very often, waters that appear benign can rapidly become less benign, and lifeboats are not available at close proximity all along the coast. Can we make sure that if we are erring, we are erring on the side of safety?

Baroness Kramer: I can assure your Lordships that, from a UK perspective, this measure meets a very high standard of safety. Both the safety required of the boats themselves and the quality required of the life rafts have been very closely examined. I have learnt in this House that the word “benign” can be wrongly used, but I think that these are generally benign waters.

Lord Davies of Oldham (Lab): My Lords, the Minister is still trying to convince the House that there is virtue in pitching British safety standards below the minimum of European safety standards. Why on earth should that be done unless it is just some doctrinaire response to Europe?

Baroness Kramer: Perhaps I may explain, because I think that there is some confusion here. The EU directive which would require an additional life raft is not intended for this kind of vessel; it is for steel vessels and for large-scale ferries, so it does not apply to most of these craft because typically they are fibreglass, and so on. We want to be sure that we are getting an appropriate exemption for future replacement of existing craft. As I said, the EU directive is not intended to deal with this kind of craft; they are expected to be handled through an exemption process.



3.15 pm

Asked by Lord Holmes of Richmond

To ask Her Majesty’s Government what assessment they have made of the number of people in full-time employment in the United Kingdom.

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con): There are more people in work than ever before. The latest figures show that we have reached a record high employment level in the UK, with more than 30 million people now in work. Three in every four workers—about 22 million people—are in full-time employment. In the past year,

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the number of people in full-time work has risen by 460,000. This represents 95% of the increase in total employment in the UK.

Lord Holmes of Richmond (Con): I thank my noble friend for his response. These figures are very good news. Work represents the greatest way for people not only to escape poverty but for most of us to realise our potential. What are the Government doing to ensure that all groups benefit from this employment boom, not least young people and disabled people?

Lord Freud: My noble friend is right to concentrate on specifics, and I am happy to assure him that we have campaigns to get the disabled into work. We have just launched the two-year Disability Confident campaign for employers, and in December we issued the disability health employment strategy. As for youth, I am pleased to be able to say that JSA for youth has now fallen for 18 consecutive months. The number of young NEETs is the lowest for a decade. We have 1.5 million apprenticeship places. The key measure that I have used in this House before is the number of young out of work and out of education, which rose under the previous Government, even though we had the biggest boom. We have now got it under control and it is beginning to fall. The number is now down by 100,000 since the election.

Lord Peston (Lab): My Lords, is the Minister aware that quite a few people in full-time employment are in jobs below their qualifications and abilities, so the figures need to be looked at more carefully? Much more to the point, is he aware that if we look at the present state of the British economy, to cite that great liberal economist John Maynard Keynes, it is nowhere near full employment and the Government’s policies will never get us there?

Lord Freud: My Lords, the leader of the Labour Party said in 2010 that we had a programme that would lead to the loss of 1 million jobs. In fact, we have had a programme that has led to an increase of 1.2 million jobs. We have the right policies to get this country back on the move.

Lord Kirkwood of Kirkhope (LD): My Lords, whereas it is quite clear that the headline unemployment figures are welcome, there is a problem about emerging underemployment and intermittent hours. While we are waiting, with more and more impatience, for the arrival of universal credit, which in due course will help, will the Minister do all he can to encourage people to take advantage of the existing in-work benefits, which can help employees get into full-time, sustainable jobs? While he is at it, will he do his best to try to tone down the Government’s anti-welfare rhetoric, which indiscriminately and unfairly seeks to caricature every social security claimant as either a scrounger or a cheat?

Lord Freud: My Lords, as my noble friend is fully aware, we are introducing a programme to blend the out-of-work benefits with the in-work tax credits. That is vital because it gets rid of that distinction and

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makes a smooth transition from being out of work to being in work. That is a vital reform which, as my noble friend knows, I am pursuing with all my energy.

Lord Low of Dalston (CB): Is the noble Lord able to say when the Government expect unemployment to fall to the level of 7% and we can expect to see interest rates rising again?

Lord Freud: My Lords, that is, of course, a reference to the Bank of England’s target of 7%. Unemployment has been falling pretty dramatically: it fell 0.3 percentage points to 7.4% in the latest three-month period. It is not the job of a government Minister to predict when unemployment will hit any particular rate; all I can say is that these trends are immensely encouraging. We should all look for them to continue to improve and I have no doubt that they will.

Lord Soley (Lab): Bearing in mind his first Answer, can the Minister tell us what discussions there are in government about the relative economic merits of raising the minimum wage?

Lord Freud: There are two distinct factors. The higher the minimum wage, the more people will not go into the market. Estimates show that if we were to go with the recommended living wage, we would lose 300,000 jobs, particularly among youngsters. On the other side of the argument, there are benefits in terms of pay, particularly for the Government, because—as my noble friend mentioned—the tax credit system boosts the pay of low-paid people. That is the balance of the debate.

The Lord Bishop of Newcastle: My Lords, the Minister will be aware that there are still significant regional differences in unemployment levels in the UK. Can he tell us what regional policies the Government may have in mind to help the situation in areas such as the one where I live, in the north-east of England, where unemployment levels are still in double figures?

Lord Freud: My Lords, I was encouraged, as other noble Lords will have been, to hear the very optimistic remarks about what is happening in the north; namely, that it is outpacing London at this particular time. Let us hope that that is and remains the case.

Taxation: Fuel Duty


3.22 pm

Asked by The Earl of Shrewsbury

To ask Her Majesty’s Government whether they plan to extend the freeze in fuel duty beyond 2014.

Lord Newby (LD): My Lords, the Government have taken substantial action to support motorists with the cost of living while reducing the budget deficit. As a result of this Government’s action, fuel duty will be frozen for the remainder of this Parliament, which will

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result in pump prices being 20p per litre lower than under previous government plans by 2015-16. The Government must exercise flexibility to target tax support where it is most needed. The Government will continue to review fuel duty in the context of all taxes and the public finances.

The Earl of Shrewsbury (Con): My Lords, I thank the Minister for that encouraging reply. Is he aware that in upland, moorland and less favoured areas, such as where I live in the Peak District, the ownership and use of a vehicle—let alone a four-wheel drive vehicle—is a necessity and not a luxury. That therefore causes those communities to have problems with fuel prices, which are a very significant component of their viability. Will Her Majesty’s Government make every possible effort in the future to assist those areas in terms of cost of fuel?

Lord Newby: My Lords, the policy that we have already adopted will assist people in those areas, as it will everywhere else. We are looking at the scope for extension of the rural fuel rebate scheme, which gives an additional 5p rebate in the most sparsely populated areas. We hope to be able to make an announcement of that in the relatively near future.

Lord Barnett (Lab): My Lords, the Question on the Order Paper asked the Minister a simple question. Should not his answer have been no?

Lord Newby: No, my Lords. The noble Lord knows better than anybody else that it would be foolish to set out at this point firm plans for individual taxes for the course of the next Parliament.

Lord Marlesford (Con): Has my noble friend noted that the price of petrol in the petrol stations varies up to 3p within a few miles, and sometimes more? Does he realise therefore that if people are able to pay the extra 3p rather than going to a cheaper place, that suggests what the economists call a bit of a consumer surplus since they are prepared to pay extra? What is the cost to the Exchequer of this reduction? First, I think that it was £400 million for this year but what will it be by the end of the Parliament? Secondly, is it really the best way of spending public money, given all the other demands on the Exchequer?

Lord Newby: My Lords, the Government will have eased the burden on motorists by £22.5 billion over the Parliament to 2015-16. The kind of differential that my noble friend describes in a small area is a classic example of a competitive market operating. I am told, although I do not have one myself, that if you have a certain kind of sat-nav it will automatically tell you the price of petrol at petrol stations in your vicinity at the time, which is a very good way of facilitating the market working.

Lord Davies of Oldham (Lab): My Lords, the Minister will however recognise that the Chancellor, through his VAT increase, increased the price of fuel by 3p. Why do the Government not go further and introduce a price freeze on domestic fuels?

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Lord Newby: My Lords, it is true that the effect of the VAT increase ate into the benefit but the price is still 10p less than it would have been, even taking the VAT increase into account. I am not sure whether the noble Lord supports that policy but that is a very considerable net increase. As far as domestic energy prices are concerned, the noble Lord knows that his party’s proposed policy is nothing more than a gimmick.

Lord Lea of Crondall (Lab): Arising from the question asked by the noble Lord, Lord Marlesford, about what economists call consumer surplus, is the Minister in agreement with the official data of the ONS that hydrocarbon taxes are the most regressive taxes in the country? In other words, they show that the lowest-paid pay—I think—four times more on petrol, as a percentage of their income, than the top decile. There is therefore a distinct impact on poverty, as was implicit in the original Question.

Lord Newby: My Lords, the noble Lord has made a powerful argument for the Government’s policy.

Education: Academy Chains


3.28 pm

Asked by Baroness Jones of Whitchurch

To ask Her Majesty’s Government what controls are in place on the disbursement of public funds by academy chains to their directors and trustees or private contractors linked to them.

The Parliamentary Under-Secretary of State for Schools (Lord Nash) (Con): My Lords, the relevant rules that academies must abide by are quite clear and have been considerably tightened under this Government. No individual or organisation with a governing relationship to an academy can make a profit; any goods or services delivered by these parties to these academies must be delivered transparently and at no more than cost; and proportionate and fair procurement processes must always be followed. As charities, academies are required to adhere to accounting standards. These require the full disclosure of related-party transactions, and independent auditors check those disclosures every year. Unlike local authority schools, academies produce and publish annual third-party audited accounts.

Baroness Jones of Whitchurch (Lab): My Lords, I thank the noble Lord for that reply and of course I accept that the accounts of these firms are audited. However, is the Minister concerned by reports of excessive sums of taxpayers’ money being paid to academy chain directors for travel, subsistence, consultancy and legal services? Is he also concerned that many of these businesses are employing members of their immediate family to provide services for the academies, and does he accept that academy chains lack the involvement of parents and the local community, which could provide a degree of independent scrutiny and governance for the academies? What more is his department planning to do to get a grip on the situation, which seems to be one of prioritising the expansion of the academies over the protection of public money?

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Lord Nash: I stand by my original Answer regarding the rigid regime that academies operate under, and resent any allegation that we do not have a grip of the situation. When we came into the Department for Education in May 2010, we found a department with, frankly, a very poor understanding of value for money. Since then, we have halved the cost of building schools under the previous Government; by 2015 we will have cut the cost of running the department by half in real terms; we have slashed the amount of money spent on sponsored academies from an average of more than £300,000 under the previous Government to under £100,000; and we have substantially tightened the rather loose arrangements that the previous Government had in force in relation to these arrangements. I stand by the results of the academies. Sponsored academies open for three years improve their results by 12% versus 5% at secondary level, and primary converter academies are far more likely than local authority schools to be rated outstanding at their next Ofsted when they have previously been rated good.

Lord Forsyth of Drumlean (Con): My Lords, did my noble friend have the opportunity over the Christmas Recess to read the interview in the Times given by our noble friend Lord Harris of Peckham about the huge success in transforming the lifetime chances of youngsters in this country? Would a responsible Opposition not be asking why we are not getting value for money like that from local authority schools, which are cheating a generation of those opportunities?

Lord Nash: I entirely share my noble friend’s sentiment. We should be praising philanthropists like my noble friend Lord Harris and encouraging more of them into the academies programme, as we are attempting to do. In 2013 the Audit Commission carried out a survey of annual detected fraud and corruption within local authorities and reported 191 cases of fraud in schools. My department is considering what we can do about improving procedures in local authorities in relation to this.

Lord Foulkes of Cumnock (Lab): My Lords, what are the arrangements for the trustees and directors of these companies declaring their interests?

Lord Nash: My Lords, it is absolutely clear that both trustees and directors of these companies must declare their interests in the accounts.

Baroness Perry of Southwark (Con): My Lords, does my noble friend agree that the most important form of accountability is the accountability of the school to its pupils, and their parents, to raise the standards of achievement? The huge success that my noble friend has already described is surely evidence of the success of the accountability that has left academies accountable to their pupils to raise standards.

Lord Nash: I agree entirely with my noble friend. The sixth largest economy in the world cannot tolerate a system whereby our schools are rated in the 20s for developed countries. That is what our reform programme is all about improving.

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Lord Whitty (Lab): In replying to the Question, the Minister was trying to be very reassuring. Does that reassurance extend to a circumstance where a charity or an academy chain, having taken over the running of a school, then decides to dispose of property attached to it? Do the proceeds from that property go back to the school or do they accrue to the academy chain or charity?

Lord Nash: The noble Lord asks a very good question. In just about every case—if I can find other cases that are relevant to this answer, I will identify them for him—the land stays with the local authority, with a 125-year lease to the academy, so the circumstances that the noble Lord refers to are unlikely to apply. Certainly, nothing like what he mentioned could possibly happen without the consent of the Secretary of State.

Lord Edmiston (Con): My Lords, I declare a personal interest as a sponsor of Grace Academy, which has featured in recent articles. Is the Minister aware that many sponsors have put multiple millions into the academy programme rather than taking funds out?

Lord Nash: I share my noble friend’s sentiment entirely. I am fully aware of that. I am extremely grateful to him for his support of the academy programme and, as I said earlier, we should encourage more philanthropists like him to come into the system, rather than trying to score cheap points against them.

Lord Griffiths of Burry Port (Lab): My Lords, does the Minister agree that, while there is a full-blooded debate to be had about the relative merits of academies and schools that have some local authority involvement—a debate that I suggest will have its full import when we have rather more evidence from the academies than we have at the moment—it does not do anybody any good to castigate those schools that are not yet academies and whose results are manifestly brilliant and would hold any academy’s results to shame? Can we have some assurance that the language we use is not polarised in a way that damages schools in the public sector?

Lord Nash: I agree entirely with the noble Lord. Many schools that are highly successful are not academies. The noble Baroness, Lady Jones, recently took me to visit Morpeth School in Tower Hamlets, which is an excellent example of a non-academy, highly successful school.

Baroness Hussein-Ece (LD): Who are some of these academy chains responsible or accountable to? For example, the Academies Enterprise Trust has grown to the size of a local authority. At least local authorities are accountable to the electorate. Who is AET accountable to when it has more than 60 company directors on more than £60,000 a year?

Lord Nash: All academy chains have a rigid financial reporting system. They have to publish their accounts and are actively and rigorously monitored by my department. I assure the noble Baroness that we keep a keen eye on all the academy chains.

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Lord Peston (Lab): My Lords, the noble Lord, Lord Forsyth, referred to raising standards for all children. If the schools that the Minister is talking about are so good, why do not any noble Lords opposite send their own children—or more likely, their grandchildren—to those schools, as many of us did, because we felt it was our responsibility to be supportive of local schools?

Lord Nash: I believe that a number of noble Lords do send their children to such schools, and I hope that in time, because of the success of the entire state programme, many more will.

Lord West of Spithead (Lab): My Lords, bearing in mind the history curriculum that is taught in academy schools, does the Minister agree with his Secretary of State, who wrote in a recent article that those on the left were unpatriotic?

Lord Nash: I applaud my right honourable friend the Secretary of State’s objectivity in all matters.

Draft Modern Slavery Bill Committee

Membership Motion

3.37 pm

Moved by The Chairman of Committees

That the Commons message of 9 January be considered and that a Committee of seven Lords be appointed to join with the Committee appointed by the Commons to consider and report on the draft Modern Slavery Bill presented to both Houses on 16 December 2013 (Cm 8770) and that the Committee should report on the draft Bill by 10 April;

That, as proposed by the Committee of Selection, the following members be appointed to the Committee:

B Butler-Sloss, Bp Derby, B Doocey, B Hanham, B Kennedy of Cradley, L McColl of Dulwich, L Warner.

That the Committee have power to agree with the Committee appointed by the Commons in the appointment of a Chairman;

That the Committee have power to send for persons, papers and records;

That the Committee have power to appoint specialist advisers;

That the Committee have leave to report from time to time;

That the Committee have power to adjourn from place to place within the United Kingdom;

That the reports of the Committee from time to time shall be printed, regardless of any adjournment of the House; and

That the evidence taken by the Committee shall, if the Committee so wishes, be published.

Motion agreed, and a message was sent to the Commons.

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Joint Human Rights Committee

Membership Motion

3.38 pm

Moved by The Chairman of Committees

That Baroness Buscombe be appointed a member of the Joint Committee in place of Lord Faulks, resigned.

Motion agreed.

Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Billl

Report (2nd Day)

3.39 pm

Relevant documents: 3rd Report from the Constitution Committee.

Clause 26: Meaning of “controlled expenditure”

Amendment 34

Moved by Lord Harries of Pentregarth

34: Clause 26, page 12, line 45, at end insert—

“unless the expenditure relates to legislation before Parliament during the regulated period”

Lord Harries of Pentregarth (CB): My Lords, before I focus on the first amendment—

Baroness Anelay of St Johns: May I assist the noble and right reverend Lord, Lord Harries? We allow some latitude, of course, at the beginning of any stage when Members are exiting the House in some large number, but may I advise any other Peer who leaves that they should not walk in front of the person who is moving the amendment? It was impossible for those on the Front Bench, who were listening to the noble and right reverend Lord, Lord Harries, even to hear the first word. I am sure that the noble and right reverend Lord, Lord Harries, may now wish to resume.

Lord Harries of Pentregarth: I thank the noble Baroness very much.

Before I focus on the first amendment in this group, I thank the Minister for responding to a good number of concerns raised by the commission which I have the privilege of chairing. He has responded to quite a lot of our concerns, in particular, I note, with government Amendments 41 to 44 in this group, which we are glad to see. All these issues were mentioned in the second report of the Commission on Civic Society and Democratic Engagement. The government amendments deal with issues of safety and security, particularly in Northern Ireland, extra expenses due to disability and travelling expenses, and they take out the time of volunteers. They also include translation from Welsh to English, although I note that the noble and learned Lord, Lord Morris

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of Aberavon, has his own amendment to include production costs as well as translation costs, and I hope that the Government will look sympathetically on that. I am very grateful on behalf of the commission to the Minister; he has taken a lot of trouble to listen.

However—and it is a big however—there remain a significant number of concerns, on which we are hoping to have a positive response from the Government. I have in my hands a petition which was started only last Thursday by the commission and, since then, has gained the support of more than 130 NGOs and 160,000 signatures from charities and campaigning groups that are still concerned about the effect of the Bill on the workings of our democratic society.

Briefly, the amendment of the noble Lord, Lord Tyler, is about the distinction between the general public and supporters. The commission put forward an amendment to try to widen out the definition of a supporter because, in a digital age, a supporter cannot simply be considered as somebody who gives money to a charity. As that petition indicates, with its 160,000 signatures, the term “supporters” now has a much wider character. Although the Government did not accept the amendment which we tabled earlier because they thought it was too wide, I hope that they will look sympathetically at that of the noble Lord, Lord Tyler.

To focus specifically on Amendment 34, my amendment concerns legislation before Parliament during an electoral period. It is absolutely fundamental to the healthy working of democratic society that people should be able to campaign quite freely, without being inhibited by too much regulation, against legislation that is going through Parliament during the electoral period. I was disappointed that the Electoral Commission, which has been helpful at a number of points in supporting our amendments, does not support this one in its latest briefing. I will examine its arguments as to why not.

The Electoral Commission says that, if the amendment were allowed, it would allow unlimited spending on what may promote or procure the election of any particular candidate or party. Secondly, it suggests that the range of topics is potentially wide, even if it is covered by primary legislation indicated by the Government. Let us take an example and test that out. In election year, the Government decide to start legislation for, let us say, a new town of 500,000 people not far from an area of outstanding natural beauty. This policy is strongly supported by the Government of the day, but is opposed by the two other parties; it is a highly political issue. Furthermore, the town will actually cover three constituencies where there is a narrow majority.

Surely people ought to be able to campaign either for or against that quite freely without an excessive regulatory burden, even during an electoral period. Otherwise, think what would happen. The Government could save their most controversial legislation until the beginning of the electoral period and bring it forward then, knowing that the opposition to it would be more muted than if it were outside the electoral period. We must remember that one year in five will be an electoral period. This will severely hamper and inhibit the proper workings of our democratic society.

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3.45 pm

I look to the Minister to see whether it might be possible to include on the face of the Bill the particular amendment in my name. I beg to move.

Lord Morris of Aberavon (Lab): My Lords, I am grateful to the noble Lord, Lord Gardiner of Kimble, for the unfailing courtesy in the discussion that we had on my amendment. When I moved a similar amendment in Committee, with the support of a number of my noble friends and no one dissenting, I said that I hoped that I and all of us concerned with the status of the use of the Welsh language had nothing to worry about. Now the Government have tabled Amendment 44, which includes such provision in new paragraph 1A(1)(b), and I welcome that as a very important step indeed.

Given the history of the success in ensuring equal validity for the language over the years, I presume the failure to include in the Bill a declaratory statement of the kind now in the Government’s amendment was an unintended omission. I was particularly encouraged by the considered statement of the noble Lord, Lord Gardiner, in his reply to the previous debate, where he stated that,

“the Government believe that the Welsh Language Act 1993 includes an obligation to treat Welsh and English on an equal basis and that there is a strong and compelling case for translation costs to be excluded”—

that is, excluded from the ceiling. He added, with regard to the references that had been made to the history of the language, that,

“the Government will consider how this exclusion would operate and will want to return to this important issue on Report”. —[

Official Report

, 16/12/13; col. 1093.]

That is what they have done, and I welcome that. Hence my noble friend and I tabled the original amendment, and I am grateful for the support of all who spoke in Committee.

The Minister said that there is “no legal obligation” to translate election material from English to Welsh and vice versa, and that is absolutely right. In reality, however, given the sea change in the use of the Welsh language in Wales, in some parts in practice it would not be possible to make any electoral headway without the use of both languages. All parties in Wales recognise this and implement the public expectation of the use of both languages. Indeed, in my time as a constituency Member of Parliament, this is what happened and many people made representations to me in both languages.

The Welsh Language Commissioner, Meri Huws, was concerned about this lacuna in the Bill and sought my support. The Bill defines “controlled expenditure” to include,

“the production … of material which is made available to the public at large”.

Since the cost of translation of electoral material falls within that definition, the commissioner was concerned that the reduced expenditure would adversely affect the provision of bilingual election material in Wales. Non-political organisations might well choose not to use bilingual election material. That was the issue. The mischief which concerned the Welsh Language Commissioner was the possible inhibition of third parties from issuing bilingual material.

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I would argue that the Government have sought to meet our need. You cannot translate anything unless you have an original document. Material produced for the public at large by definition includes the production cost. The bilingual production of the document for translation is a preliminary step towards its publication, so it is totally unreasonable to limit the exception to, for example, the actual payment to the translator, which could be quite small. Following my conversation with the noble Lord, Lord Gardiner, this morning, I hope that the noble and learned Lord, Lord Wallace, who I understand will reply, will give me the assurance I seek that “production” is basically a part of the process leading to the translation. Any other interpretation would put my noble friends, and indeed the Government, in an impossible situation.

Let me describe the situation where I was wrong and the expenditure was confined strictly to the actual costs of, for example, paying the translator. Whereas in England the NSPCC may issue material only in one language, the NSPCC in Wales would be obliged to prepare and translate a similar document in both languages. If the whole costs could not be excluded from the expenditure ceiling, that would certainly inhibit it from doing what it would like to do. If I am wrong—perhaps those advising the Minister will want to consider the reply, which I am sure will be helpful—the mischief of discouraging people from producing bilingual pamphlets and material would still be there.

I hope very much that I can have the assurance that I want. I refer again to what the noble Lord, Lord Gardiner, said in Committee, that the Government want to fulfil their obligations,

“to treat Welsh and English on an equal basis”.—[

Official Report

, 16/12/13; col. 1093.]

I hope and believe that the legislation should leave this House on as perfect a basis as possible.

Lord Wigley (PC): Before the noble and learned Lord sits down, can he emphasise that the cost of production includes additional paper and printing as well as the cost of translation? That is the point where his amendment, to which my name is attached, has merit over and above the Government’s amendment. There needs to be clarification that the cost of production includes the extra costs related to having the production in two languages.

Lord Morris of Aberavon: Given that the definition I have quoted refers to “production of material”, I assume that that material is included in the definition. You cannot usually translate anything unless you have something on paper to look at, which enables you to translate it. Therefore, this is an initial step in production. I emphasise, for the third time, that the definition refers to,

“the production … of material which is made available to the public”.

Lord Cormack (Con): My Lords, I very much hope that the comments made by the noble and learned Lord, Lord Morris, will be taken seriously by my noble and learned friend, as I am sure they will be. However, I will direct some very brief comments to Amendment 34, which was moved with commendable brevity by the noble and right reverend Lord, Lord Harries of Pentregarth.

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We live in a very different age from people who were active in politics even 20 or 30 years ago. I do not know whether the mass membership political party is a thing of the past or not, but it is certainly not a thing of the present. We live in an age in which single-issue groups and associations predominate and have a collective membership far in excess of the Conservative Party, the Labour Party and the Liberal Democrat party put together. One can illustrate that with one statistic: the National Trust now has over 4 million paid-up members. In this new age, we have to be very conscious of the fact that we should pass no legislation in this House that in any way inhibits the expression of legitimate opinion. The Bill endangers that expression of legitimate opinion.

If ever there was a Bill that cried out for pre-legislative scrutiny, it is this one, but it has not had it. In saying that, I level no criticism at my noble and learned friend Lord Wallace of Tankerness, who has been exemplary in the manner in which he personally has sought to meet and discuss with people who have legitimate concerns and interests. Therefore, I exonerate him from all blame, but I still say to him that this is a Bill that is far from perfect. It is a Bill that should never have been presented in this form to either House of Parliament.

Another thing that makes the present age different from very recent ones is the dynamics of the fixed-term Parliament. Until a future Parliament has the good sense to repeal that Act—which I hope will not be too long distant—the fact is that we know when the next election will be and the election after that and so on. So we have a year of purdah as far as interests groups, charities and others are concerned. The simple aim of Amendment 34 is to try to alleviate some of the problems that that creates.

I very much hope that when my noble friend responds to this brief debate—and I hope that it will be a brief debate because we have a long day before us and many important issues to discuss—he will acknowledge the powerful arguments put forward by the noble and right reverend Lord, Lord Harries, which are supported by many of us. If the Minister cannot give the assurances that we seek, I hope that he will at least give the assurance that he will reflect on this matter, have further discussions and come back at Third Reading, because we need to make this very, very imperfect—no, this very, very bad—Bill a little more palatable than it is currently.

Lord Tyler (LD): My Lords, I have two amendments in this group. In preparing my notes, I had intended to say precisely what the noble and learned Lord, Lord Morris, said just a few minutes ago. It is the responsibility of this House to try to make sure that anything that leaves us is as good as it can be and as perfect as we can achieve. Today, therefore, we are all together in seeking modest amendments in most cases, but important ones that make the Bill more workable, more acceptable and more democratic.

Before I come to the two specific amendments on which my name leads, I should very much like to support the noble and right reverend Lord, Lord Harries, in his Amendment 34. It is important for the sake of civic society that we enable people to get fully involved in the dialogue with Parliament about the legislation

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that goes through the two Houses. I hope that, in one way or another, my noble friend will be able to make that absolutely clear. It must surely be right that, when legislation is going through both Houses of Parliament, our fellow citizens are in a position to campaign without let or hindrance to improve that legislation. I very much hope that we will have reassurance on that point.

Amendment 40, which stands in my name and in the names of the noble and right reverend Lord, Lord Harries, my noble friend Lord Cormack and the noble Baroness, Lady Mallalieu, is quite simply about bringing the concept of supporter up to date. I echo here a point made by my noble friend Lord Cormack a few minutes ago. When I was first involved in politics, those of us who wanted to engage in the political process, in the main, joined a political party. I did so as a student and I suspect that many others in your Lordships’ House did the same. Some then drifted off into other occupations. I stayed with politics, to my obvious detriment in terms of income compared with the lawyers in your Lordships’ House. From that period to now there have been dramatic changes in society. Many then did join parties; others might have joined campaigning groups. Some of those groups are still with us and still have a mass membership. In those days, it was very much the culture of the age, particularly among young people, but people today support campaigns à la carte. They do not get involved in just one campaign and stick with it to the exclusion of all others. They are involved for a time but their priorities change, just as in the consumer world people expect now to pick and choose. You go to one supermarket for one purpose and to another for another, to one airline for an outward flight and another to come home again. You do not necessarily feel that you have to join up to one hospital even—you choose. It is part of the culture of our age.

4 pm

People do not sign up to any one view or any one provider of that view. They certainly do not join one group for fear that doing so would sub-contract their future views on future issues to that group concerned. Yet it is still important in electoral law to make way for groups that communicate with people and who have regular, committed supporters without that being counted as some sort of electioneering. The concept of a committed supporter is now familiar to the Electoral Commission and it incorporates that in its guidance. Amendment 40 seeks to tighten that up and put it into legislative form. In short, we are saying that someone who has given money to an organisation or has directly communicated with it in the past 12 months should be accepted and recognised as a committed supporter.

To be clear, I do not believe, as some have suggested, that everyone who has given Data Protection Act consent to be contacted in future—for ever and always—should be counted as a supporter of that group full time. That surely cannot be practical. I am sure that if Members of your Lordships’ House look at their e-mail inboxes, they will find messages there from all sorts of groups in relation to which at some time we have either ticked or not ticked a box to say that we do not mind if they communicate with us. However, that is not enough to say that we are committed supporters

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of a particular group. Therefore, I think that our amendment is much more practical. Surely that consent should not be allowed to imply active, ongoing support for the group concerned. However, active participation in a campaign in the past 12 months—not just receiving e-mails but acting on them—is surely a signal of active support. I think it should be recognised as such alongside, and on an equal basis with, financial contributions. As I have said, the existing Electoral Commission guidance is not sufficient because it concentrates too much on donations. Support for an organisation involves much more than simply giving money and we should take this opportunity in this Bill to say so firmly so that in future the guidance is absolutely explicit.

Finally, Amendment 45A in my name makes one very simple suggestion, which I hope will commend itself to my noble friends on the government Front Bench. I do not need to tell your Lordships that the Bill is controversial. It would be reassuring for all those concerned to know that any future alterations to Part 1 of Schedule 3, which is very controversial, cannot simply be made by ministerial fiat. On many occasions in your Lordships’ House we have had the familiar problem of what I think is usually referred to colloquially as the Henry VIII power. It is not appropriate here and I hope therefore that, on the basis of Amendment 45A, that power can in future be subject to an affirmative resolution of both Houses. That would give proper control over that exercise. I accept that that is not something for today but I hope that my noble friends on the government Front Bench will look at it in time for us to consider whether that might be a useful very small addition but one that would give real reassurance to those who are concerned about the future of this legislation. On that basis, I hope that when the Minister responds he can do so positively to these amendments.

Baroness Mallalieu (Lab): My Lords, my name is added to Amendments 34 and 40 in this group, which I support. To my mind, Clause 26 goes to the heart of the damage that the Bill as it stands has the ability to do to free speech, to the right to campaign and to the right to protest. It exposes what I believe was an unintended consequence of a Bill which, as we have already heard, was placed before Parliament in haste and without proper consideration.

Clause 26 has the capacity to prevent any campaigning organisation mounting a major campaign against a Bill before Parliament in the regulatory period proposed —in other words, from September this year to May 2015 and, as others have said, for one year in every five thereafter. If Clause 26, together with the rest of the provisions in the Bill currently proposed by the Government, including today’s government amendments, had been in force in 2005, because of the 60% spending limit reduction and the inclusion of staff costs in the expenditure that has to be accounted for, it would simply not have been possible, for example, to mount rallies and marches on the scale organised by the Countryside Alliance—of which, I remind the House, I am president—all of which took place in what would have been the regulatory period for the 2005 election. I suspect that other major protests, such as the Stop the War march, would also have been troubled by the spending limits.

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Although it is defective, PPERA was liveable with because the expenditure limits were set at a level which did not capture the activity of most campaigners and because staff costs did not have to be included in returns. Campaigners were therefore able to live with the legislation. However, this is not so with Clause 26 as it currently stands. As the noble and right reverend Lord, Lord Harries, said, it provides an opportunity for a Government to reserve the introduction of particularly contentious legislation to the year before an election—the regulatory period—knowing full well that opposition will be seriously restricted by the financial limits imposed under the Bill. While I accept that opposition would not be wholly silenced, it would, effectively, be seriously curtailed.

For those who have not followed it as closely as others, political campaigning under the Bill does not necessarily involve campaigning for or against a particular candidate or party. I prefer to call that “Political” campaigning with a capital “P”. Under the Charity Commission’s guidance, no charity is permitted to do that. The Bill goes further and restricts what I call political campaigning with a small “p”: in other words, campaigning on a policy, which is what many charities do. You do not have to make any mention of a particular party or candidate to be caught by the Bill, but you will be if your campaign can reasonably be regarded as intended to promote or secure electoral success, even if it can be regarded as intending to achieve some other purpose too. It does not matter that your campaign is long-standing if it fulfils those criteria. As the Minister has repeatedly said, the test is an objective one. So it is also irrelevant if your intentions, as the campaigner, were solely concerned with the issue and not with the election.

The current guidance of the Electoral Commission suggests that where, for example, one political party allies itself with the campaign of a particular organisation, it does not necessarily mean that the campaign and its material become regulated, but if there is a change in the scale and nature of the campaigning it may well do so. However, what if a party in government introduces a contentious Bill, during the regulatory period, which directly impacts adversely on your existing campaign? How can a campaigning organisation reasonably not draw attention to the fact and campaign vigorously against it? Indeed, why should it not?

Legislation before Parliament will, of course, reach a conclusion one way or another with Prorogation. The campaigning directed at legislation, albeit during the regulated period, is aimed not at the election but at something which will have concluded by election day—indeed six weeks beforehand—with Prorogation. A way must be found to enable the people of this country to express the strength of their feelings about proposed legislation at any time in the course of a Parliament. I hope that the Minister, who has repeatedly said that it is not the Government’s intention to stifle protest, will agree to take the amendment away for urgent discussion with the Electoral Commission and return next week, if not with an amendment to meet this real objection to Clause 26 then at least with an unequivocal indication of guidance to be given to permit legitimate campaigning in these circumstances. As the Minister will know, it is not enough for him to make some form of Pepper

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v Hart statement in this House because the courts, in due course, will not look at what is said in the debates of this House unless the legislation is itself unclear or ambiguous. The Bill is perfectly clear in what it says in that respect.

If the Minister cannot do either, I regret that we would be better off, for the 2015 election, to continue with PPERA until a proper Bill can be produced and Clause 26 should go completely.

Lord Elystan-Morgan (CB): My Lords, I support Amendment 35 in the names of my friend the noble and learned Lord, Lord Morris, my noble friend Lord Wigley and myself. The case has been put clearly and in very great detail by the noble and learned Lord. I am sure that on the only real issue, the Minister could dispel all doubts very easily, as the Government are showing obvious good will for the Welsh language. I was extremely appreciative of the words of the noble Lord, Lord Gardiner of Kimble, on 16 December when he reiterated the point that many of us have made; namely, that the Welsh language is one of the oldest living languages in Europe. It has been spoken for more than 1,500 years.

Would it not be churlish if the whole concession made by the Government were limited only to the fees paid to a translator—that is the issue—and did not include all other costs which are consequential or involved in translation? That clearly was the intention of the Government and, if there is any doubt whatever in the matter, I would like to see them make assurance doubly sure in that respect.

The noble and learned Lord, Lord Morris, speaks with the authority of a former Attorney-General. Indeed, he is clearly of the view that the words in Amendment 44 are wide enough to encompass exactly what is required in this case. However, if there should be any question of dubiety or it is necessary to remove any peradventure of doubt, it seems that it would be an easy matter to cure this small anomaly by Third Reading.

This is a small skirmish in relation to the Welsh language, which has suffered many attacks and anomalies in the 478 years since the Act of Union 1536. The field of endeavour still remains redolent with possibilities. One obvious campaign that will have to be fought some day is in relation to the right of a person in Wales to be tried by a jury in the Welsh language in an appropriate case, bearing in mind that a tribunal of fact such as a magistrates’ court, dealing with 98% of cases, is entitled to do that and does so under the 1967 Act. I hope that such an issue will be raised before too long in this place.

Lord Horam (Con): My Lords, first, I thank the noble and right reverend Lord, Lord Harries, for welcoming the amendments made by the Government. He was characteristically generous about that and he gave quite a long list. Secondly, I thank my noble friends for what they have done, despite being incapacitated for a period, in bringing amendments of the scope that there has been in this case. Certainly, I, as a supporter of the Government, have been surprised by the extent to which the Government have agreed to the amendments originally put down.

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I take the point made by my noble friend Lord Cormack that the Government were deficient in the way in which they failed to do pre-legislative scrutiny. One has to agree that post that situation, with the pause and with the extent of the amendments that the Government have put down in the past few days, they have responded generously to the points fairly made by Members on all sides of the House.

In his short remarks, the noble and right reverend Lord, Lord Harries, mentioned Amendment 34 in particular. He said that, for instance, if a new Bill came before Parliament during the regulatory period from September 2014 to the general election in 2015, it would be a big issue in any particular constituency and that therefore the Bill would inhibit discussion of the new town in that constituency, which would be wrong.

4.15 pm

The point is really not that. Obviously there would be a huge outcry in any constituency if a new town was proposed; there is no doubt about it. Vigorous discussion would take place between the parliamentary candidates during the regulated period and with outside bodies that may be set up to campaign on this issue. Clearly, that would happen. The question is to what extent they would be allowed to finance a campaign about a new town by comparison with what the local political parties could spend in that constituency. Under the Bill they are allowed to spend, in round figures, more or less £10,000 on a campaign over a new town in a constituency during the regulated period. That is roughly the amount.

Frankly, any local party that can raise £10,000 to fight in a local constituency is doing well. I do not think that I ever got as far as that in my constituency of Orpington; it is a lot of money. Local parties are not very affluent these days and do not have many people in them. Many are collapsing from inside. They have few members and great difficulty in raising money. Therefore, £10,000 is a lot of money to inject into a constituency. If it was only that constituency and nowhere else in the country that party members were campaigning, they could inject £300,000.

We are not talking about any restriction on discussion of an issue that is before Parliament in the regulated period; it will be discussed. We are talking about the balance between what a campaign could spend on promoting a particular interest—whether it is for or against the new town—and what the local political candidates could spend. The Bill is about a balance between what local parties can spend, in a constituency and generally, and what lobbying interest groups of this kind can spend—whether they are charities, trade unions or whatever.

I am a member of the Electoral Commission, but I speak for myself on this occasion. The commission is against the amendment in the name of the noble and right reverend Lord, Lord Harries. It said clearly in its briefing to the House before Committee that more proportionate thresholds and spending limits would reduce the need for exemptions of the kind for which he is calling. In effect, the thresholds for regulation—which, I accept, as I said in previous debates on the Bill, were too low—and the spending limits, have been raised by the Government: for example, to £10,000 and to £20,000

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for the registration threshold. That gives room for people to campaign on these issues, but not to swamp local political parties, as they are swamped in America, where you get super-PACs swamping the official Republican and Democratic candidates. That is what this Bill is about—a balance between what an interest group can do in a constituency, and what the political parties that are fighting and standing in a general election can do. The Government’s sensible lifting of these limits to meet the fair and correct opposition to the lower limits —which were too low—has done this. The Government’s balance is right.

There is a further point. The amendments to which the noble Lord referred at some length form a package; as he acknowledged several times during our debates, these things are linked. If you make one concession, it has an effect somewhere else. I hope that those who are concerned about the effect of the Bill will realise that this is a complete package, and that by raising the thresholds, the Government have dealt with the points that noble Lords made and therefore that the exemptions they seek are unnecessary. While acknowledging the understandable opposition, in particular of Members on the Cross Benches and in the Labour Party, I hope that they will see that this is a genuine attempt to reach consensus on how elections are conducted in this country. This is now a well balanced set of proposals. Therefore, any further attempt to carry on and unpick them would be disastrous for elections in this country.

Baroness Hayter of Kentish Town (Lab): My Lords, I join the noble and right reverend Lord, Lord Harries, in thanking the Government for the sensible and welcome amendments that they have tabled. We have just heard from the noble Lord, Lord Horam. I wonder if when he used the word “harried” he meant someone who had been harried by the noble and right reverend Lord, Lord Harries, but I will leave that to one side.

However, we feel that more changes are needed to the Bill, which we have opposed from the start, for the very cogent reason spelt out by the noble Lord, Lord Cormack: it inhibits the expression of legitimate opinion. Amendment 34 goes to the heart of that. The noble Lord, Lord Horam, spoke about constituencies, which I think is a different issue, but we might be talking about something like the bedroom tax, which the National Housing Federation campaigned against, worried about the rents coming to it. Anyone who followed the Welfare Bill will know all the detail of that, so I will not go through it. Unless we can get rid of staff costs—which I hope we will within the next hour—had the bedroom tax been in the past 12 months, it is very unlikely that the National Housing Federation, which is not a charity, would have been able to campaign in the way that it is telling us its members wanted. That was not in the past 12 months but something like that could have been.

This is legitimate campaigning. Although we have heard statements from Ministers that it was never the intention of the Government that that type of activity would be within the scope of the Bill, I think all of us feel that despite good—or bad—intentions, that is not a sufficient safeguard and clarity should be provided in the Bill along the lines spelt out in Amendment 34.

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The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD): My Lords, first, I thank those who have contributed to this debate, in particular those who have welcomed the government amendments. We certainly sought to listen and take on board comments from a wide range of those engaged in campaigning. I pay tribute to my noble friend Lord Wallace of Saltaire, who met far more groups than I did. These meetings and deliberations, and indeed the contributions made in Committee in your Lordships’ House, have very much informed the proposals that we have come forward with today. Again, I thank the noble and right reverend Lord, Lord Harries of Pentregarth, and the other members of the Commission on Civil Society and Democratic Engagement for their contribution to this debate.

The purpose of Schedule 3 is to extend the range of activities for which a third party incurs controlled expenditure. It takes forward a recommendation from the independent Electoral Commission to align the range of activities for which third parties incur controlled expenditure with that for political parties. The Electoral Commission has highlighted that there is no clear reason why controlled expenditure for third parties applies only to election material. This difference means that a potential gap arises in the rules governing elections in our country.

The Government and the Electoral Commission believe it is important that this potential gap in the regulatory regime is addressed. However, the Government also acknowledge some important issues that have been raised, not only by noble Lords but a number of campaigning groups. As such, we have tabled a number of amendments to Clause 26 and Schedule 3. I will take the opportunity to explain what they do.

Currently, the regime under the Political Parties, Elections and Referendums Act 2000 outlines specific activities that do not incur controlled expenditure. These include volunteers, publications which are not advertisements in newspapers, broadcasts on certain channels such as the BBC or S4C, and certain reasonable personal expenses. Government Amendment 37 removes these exclusions from Section 87 of PPERA and Amendment 44 inserts them into new Schedule 8A and expands the types of expenses that are excluded from incurring controlled expenditure.

The full range of exclusions that the Government have brought forward includes amendments to expenses in respect of the translation of materials from English to Welsh or Welsh to English. I shall say something about the important points made by the noble and learned Lord, Lord Morris, and the noble Lords, Lord Wigley and Lord Elystan-Morgan. At present, controlled expenditure is incurred on the production and publication of election materials, such as leaflets. The Bill retains this, but costs associated with translating these materials from English to Welsh or vice versa will be excluded. The noble and learned Lord, Lord Morris, said he hoped that this was an oversight and that it was not there in the first place. If there was an oversight, and I think there probably was, it was probably also an oversight in the 2000 Act, because election materials are covered by the provisions in that Act. I hope, albeit belatedly, that there is considerable cross-party and non-party consensus that it is something we should be doing.

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The Government believe that this highlights the importance of the Welsh Language Act 1993, which treats the Welsh and English languages as equal. It follows the practice of producing election material and ballot papers in Welsh. We are grateful to the noble and learned Lord for raising this issue in Committee. He asked about production costs. When we are giving something it is easy to say that it is not as much as you thought we were giving, but we believe that extending the exemption further than the cost of translation would go too far. It would allow campaigns to print different material for different addresses without being regulated. For example, if a campaigner prints 100 leaflets in English, he can then print 100 leaflets in Welsh for an entirely different purpose. Therefore, we thought it important that this amendment should relate to the cost of translation, rather than the production of material.

Indeed, that is what we thought was intended by the noble and learned Lord’s amendment, when it says that production,

“shall not include costs incurred by the translation of those materials from English into Welsh or from Welsh into English”.

Indeed, the Government’s amendment refers to,

“expenses incurred in respect of the translation of anything from English into Welsh or from Welsh into English”,

which may even go further—there may be expenses other than translation expenses. I want to make it clear that we think, having considered this, that to relate it to the publication costs—to the printing of the leaflets—goes further than is needed to address the important point about Welsh translation.

Lord Wigley: Surely the Minister accepts that if an organisation—say, the NSPCC—requires a leaflet to be put out in England and in Wales, in England it might be in other languages but it need be only in English to meet the law. In Wales, it would be in Welsh bilingually with English. Sometimes that can mean double the size of the leaflet. Sometimes it might be constrained to six instead of eight pages in the way that bilingualism can be laid out, but the cost of producing something in a bilingual format for the customers is significant because of the print and the paper, not just the time taken to translate a leaflet. That is relative peanuts in the operation. If the Minister is excluding the other parts, there is a very serious implication.

Lord Wallace of Tankerness: My Lords, as I have indicated, we thought that the amendment that the noble Lord, Lord Wigley, has signed did not actually go further than we were going. I think there has been a proper debate on this. I do not want to mislead the House into thinking that we are willing to countenance in the Bill an opportunity to exploit it and to double up on the number of leaflets. I hear what the noble Lord says and, subject to what I have already said about not wanting to incur a loophole, I am prepared to consider whether the wording reflects what might be called a marginal cost of translation but not costs that might allow more leaflets to be published. The noble Lord is nodding his head; perhaps he agrees that that is not an unreasonable position.

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I hope that the noble and learned Lord, Lord Morris, will agree that it is not entirely clear that these additional production costs were covered by his amendment either. Certainly, we did not think they were.

Lord Morris of Aberavon: I thank the noble and learned Lord. It is obvious to me that, in accordance with the definition of “controlled expenditure”, production is specifically referred to. You cannot have anything to translate unless you have something produced: that means a piece of paper. I was certainly not encouraging a vast increase in the whole gamut of informational literature, but rather the specific translation and the costs incurred in preparing for the translation, particularly the paper. It may be that I was not ambitious enough. That is entirely my fault and that of those who were advising me—they were not ambitious enough in putting forward that the provision should include specifically the preparation of a document for the purpose of translating. That is all that I am asking.

4.30 pm

Lord Wallace of Tankerness: My Lords, I do not think that there is really all that much between our position and what has been said both by the noble and learned Lord and the noble Lord, Lord Wigley. I hope that we can look at it and get the right wording to capture the consensus among us without creating loopholes for having much more material produced. On that basis, I hope that the noble and learned Lord will not press his amendment and, all being well, we will get our amendment on to the Order Paper.

Lord Morris of Aberavon: I am encouraged by that. I hope that, if I do not press my amendment, we will return to the matter at Third Reading after further consideration.

Lord Wallace of Tankerness: That is indeed what I had in mind. Time may be short, but I think that we can have some useful engagement on that.

Government Amendment 43 excludes the costs associated with providing protection of persons or property in relation to a public rally or event. While the Government believe that it is important that third parties who organise public rallies or events which seek to influence voting intentions incur controlled expenditure, it is only right that third parties do not incur controlled expenditure ensuring that such events are run safely.

Government Amendment 44 excludes expenses that are reasonably attributable to a person’s disability. This would mean that costs associated with, for example, providing materials in Braille, or ensuring that any person with a disability could attend a public event or meeting, would not count towards the third party’s controlled expenditure.

Government Amendment 42 provides that parades notified under the Public Processions (Northern Ireland) Act 1998 are excluded from the provisions of PPERA. Your Lordships will recall that we had a debate in Committee on Northern Ireland. Although the particular issue of parades was not raised, we were aware that it

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was a concern that some people had expressed. The noble Lord, Lord Rooker, led an important and helpful debate on Northern Ireland, and we seek to address it here.

Government Amendment 38 amends the defence, currently in the Bill, for a person or third party charged with an offence of incurring controlled expenditure in excess of the spending limit—that is, above the limit in a part of the UK or the constituency limit—to show that they complied with the relevant code of practice so that it covers both recognised and non-recognised third parties. The amendment is needed to reflect the changes to the reporting requirements in a later government amendment which provides for no spending return if the threshold is not reached. We have since identified a couple of points not properly dealt with in the amendment. The first is that the defence does not adequately cover the case where an offence might be committed by virtue of expenditure incurred on behalf of the third party. Secondly, the defence should also cover the offence in relation to targeted expenditure. We think that it is important in both these cases that those subject to regulation should have the benefit of the defence and we will therefore bring forward amendments at Third Reading to deal with these outstanding anomalies.

Government Amendment 41 clarifies the drafting on public rallies, so that it is “public rallies or events” to be inserted by Amendment 42. The reference to “public meetings” is removed, as it was unnecessary and potentially confusing because “other public events” includes public meetings.

I turn to the amendment moved by the noble and reverend Lord, Lord Harries of Pentregarth, and a number of other amendments that have been spoken to in this group. Amendment 34 would amend Clause 26 so that any campaign which could reasonably be regarded as intended to promote or procure electoral success, involving legislation going through Parliament during the regulated period, would not count as controlled expenditure. I listened carefully to the speech made by my noble friend and agree with him that we should not pass legislation which inhibits expression of legitimate opinion.

To incur controlled expenditure and be included in the regulatory regime, it is important to remind ourselves that the third party must be carrying out activity which could reasonably be regarded as intended to promote or procure the electoral success of a party or a group of candidates. We have heard concerns that campaigns against specific policies or pieces of legislation will be caught by the regulation. It might assist the House if I set out how, generally, this will not be the case and the circumstances in which it might be. The noble Baroness, Lady Mallalieu, asked whether we would meet the Electoral Commission. I can tell her that this issue has been raised with us. We have been in discussion with the Electoral Commission and I can confirm that it agrees with this interpretation.

If a campaign group wished to lobby parliamentarians over legislation going through the House, this would not be subject to regulation under Part 2. It is only where the expenditure by a campaign group can reasonably—that is, objectively—be regarded as intended

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to promote or procure the electoral success of a party or candidates that such activity will be subject to regulation. For example, encouraging constituents not to vote for MPs in the general election if they had voted a certain way on the legislation before Parliament should and would be included as activity leading to controlled expenditure. If a group so closely aligns itself with a policy of a particular party that its campaigning on behalf of that policy can only reasonably be seen as encouraging support for that party, that would also count. That is campaign activity, and where it takes place the Government believe that spending on it should be transparent to the public.

The noble and right reverend Lord, Lord Harries, gave a good example when he talked about new towns. We believe that under his example, people will be able to support or oppose such a proposition freely. It would be caught only if they promoted electoral success, for example, by distributing leaflets reading, “Don’t vote for candidate X”—or X party—“at the next election”, because he or she had supported or opposed the new town. The amendment states,

“unless the expenditure relates to legislation before Parliament during the regulated period”.

If Parliament were to accept that definition, it would really open the door to any amount of expenditure. My noble friend Lord Horam suggested a limit of £300,000; in fact, it would not be controlled expenditure, it would be unlimited expenditure in the run-up to an election which could be directed against or for a particular party. Given that there are restrictions on what the political parties can spend during that period, it is not reasonable that there should be such a wide gap in the provisions that an unlimited amount of expenditure could be related to a particular campaign.

I reiterate that the general position is that if a campaign group wishes to lobby Parliament and parliamentarians over legislation, that is primarily directed at trying to change legislation and would not be subject to regulation under Part 2. As my noble friend Lord Horam said, we are seeking a balance, allowing proper room to campaign but not to swamp.

I also highlight that the Electoral Commission does not support this amendment. It states that such an exemption would allow unlimited spending on a potentially wide range of topics. It believes that it could produce significant and unintended gaps in the coverage of the rules. The issue of the year up to the campaign was raised generally in the debate. Of course, a later amendment will mean that this is actually only a seven-and-a-half-month period. Clearly, if, as a result of experience, people feel that the guidance has not been sufficiently helpful, as we have provided in later amendments, there will be a review post the 2015 election. The amendment as it stands opens up a considerable gap and would lead to an imbalance whereas, as my noble friend said, we should be seeking a balance.

On Amendment 40, my noble friend Lord Tyler seeks to amend Schedule 3 so that costs associated with sending materials to committed supporters who have been actively involved in the activity of the third party would be excluded from the calculation of costs for controlled expenditure. Costs of sending material to members or certain supporters are already excluded,

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as PPERA and the Bill make clear. The material or activity must be available or open to the “public”, which for these purposes would not include those members or supporters.

As the existing Electoral Commission guidance makes clear, the exact nature of a committed supporter will vary between organisations, but could include regular donors by direct debit, people with an annual subscription or people who are actively involved in the third party. The amendment goes much further than that. Amendment 40 defines those actively involved as those who have made a donation to the recognised third party, or those who have made a direct communication to the recognised third party in the past 12 months.

Consequently, an individual who writes to a campaign organisation with a general inquiry about their activities, or even one who lives next to an animal sanctuary who writes to them complaining about the noise, might possibly be regarded as being actively involved. I do not believe that that is my noble friend’s intention, but I fear that using that definition allows the provision to become ineffective, particularly in an age of instant electronic communication.

The Electoral Commission does not consider people to be committed supporters if they have simply signed up to social networking sites or tools, or appear on mailing lists that may have been compiled for general commercial, campaigning or other purposes. An exclusion of costs, based on direct communications with third parties—whatever the nature of that communication—creates a wide exemption.

I know that my noble friend has worked hard and has met officials to try to resolve this; I regret, however, that we fear the definition he has come up with is too wide. We believe that the better way is that the Government and the Electoral Commission believe that the Electoral Commission’s guidance is the proper place to outline who counts as a committed supporter. In its briefing the commission outlined that it does not support this amendment due to the fact that it is unclear what scale of campaigning would be exempted from the regime or how the test would apply in practice.

Finally, my noble friend referred to Amendment 45A to ensure that any changes to the range of activities outlined in new Schedule 8A would be made through an affirmative resolution procedure. That is already the case in the Bill as drafted. I draw noble Lords’ attention to Clause 26(12), which amends Section 156 of PPERA so that any order under new Schedule 8A, as inserted by Schedule 3 to the Bill, is by affirmative resolution. It does so by amending the existing section of PPERA, setting out what parliamentary procedure applies to orders and regulations. The Government agree that it is important that any changes to the list of activities that incur controlled expenditure should be subject to the affirmative resolution procedure.

I hope that that reassures my noble friend. In the light of the explanations given, I hope that the noble and right reverend Lord, Lord Harries, is prepared to withdraw his amendment.

Lord Rooker (Lab): I have thought of a question while the Minister has been speaking, which is not in any way diversionary. It ties in with the comments made

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earlier about what would happen if, in this period of a year, a Government sought quite deliberately to save legislation. The Minister answered the point about legislation in Parliament, but there are highly controversial matters outside Parliament; people do newspaper adverts and all kinds of things. I have been thinking about this question, having gone through paperwork recently. When we get close to an election, the Cabinet Secretary and the head of the Civil Service will issue an edict around Government to Ministers and departments about what you can do and what you cannot do in that period. Is that going to change now that we have a fixed-term Parliament, with this window and this picture of a much larger window?

This is not purdah, but an extended period in which other people are constrained about what they can say and do. Will the advice that normally comes out close to an election from the Civil Service to Ministers actually change and take account of what is being done in this legislation?

Lord Wallace of Tankerness: My Lords, I always know it to be dangerous when the noble Lord stands up and says he has been thinking about something—and so it was.

I took the fixed-term Parliament legislation through your Lordships’ House and I do not recall—nor, indeed, have I seen at the present time—anything that suggests there is going to be any change. Of course, that means that there still will be a period during which Governments are not allowed to do this; but I have not seen any proposal to reflect the fact that there is a fixed-term Parliament. When that period will arise will become more apparent, or more foreseeable. If I have got that wrong, although I do not think I have, I will inform the noble Lord.

Lord Harries of Pentregarth: I thank all noble Lords who spoke in favour of my amendments and the other amendments to which my name has been attached and I thank the Minister for his response.

The noble Lord, Lord Horam, drew attention to some of the unfortunate consequences, as he understands it, of this legislation at constituency level. However, what I had in mind was primarily what happens at the national level. He suggested that political parties would be limited in what they can campaign; but the Government, in pursuing their legislation, are not limited in the amount of money they can spend in order to get legislation through Parliament, and nor are the Opposition.

Suppose you have two third parties: one, the Countryside Alliance, which wants to campaign against a new town, and the other the National Housing Federation, which wants to campaign in favour of more housing. Why should they be inhibited by the Bill in a way that the political parties would not be inhibited? As the noble Baroness, Lady Mallalieu, pointed out, we are not talking about the post-Dissolution period, so a lot of the ill effects that the noble Lord suggested might happen at constituency level would not be allowed by this amendment, because we are talking about only legislation going through Parliament and that ends when Parliament is prorogued. Therefore I believe that this is a crucial issue that goes to the heart of our democracy.

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4.45 pm

Lord Wallace of Tankerness: The noble and right reverend Lord indicated, when referring to what my noble friend Lord Horam had said, that it had not been his intention to engage in constituency expenditure. Does he accept that if this is not controlled expenditure, it could lead to expenditure in a constituency up until the time when the Representation of the People Act kicks in?

Lord Harries of Pentregarth: I accept that there are certainly implications for what might happen at local level. However, I ask the noble and learned Lord to continue to think about it because this issue goes to the very heart of the democratic process. I very much hope that, having talked to the Electoral Commission to see whether there might be a way forward, he might give the very clearest statement at Third Reading, which would then be translated into advice for the Electoral Commission. We need something here to safeguard the fundamental rights of campaigners to campaign during this period. With that, I beg leave to withdraw the amendment.

Amendment 34 withdrawn.

Amendment 35

Tabled by Lord Morris of Aberavon

35: Clause 26, page 13, line 19, at end insert—

“(5A) Before subsection (5) insert—

“( ) Any limit applying to campaign expenditure under this Act where that expenditure is incurred by or on behalf of third parties in connection with the production or publication of election material which is made available to the public at large, or any section of the public in Wales, shall not include costs incurred by the translation of those materials from English into Welsh or from Welsh into English.””

Lord Morris of Aberavon: My Lords, I welcome the promise of a discussion with Ministers before Third Reading and if a satisfactory formula is not found, I would wish to return to the matter then. The Government might seek the advice and elicit the views of the Electoral Commission in the short period we have, so perhaps we could make progress on that basis.

Amendment 35 not moved.

Amendment 36

Moved by Lord Phillips of Sudbury

36: Clause 26, page 13, line 19, at end insert—

“( ) In subsection 8(a) after “body” insert “(except a body which is a charity)”.”

Lord Phillips of Sudbury (LD): My Lords, first, I should like to say how good it is to see the other Lord Wallace—my noble friend Lord Wallace of Saltaire—back in his place on the Front Bench having, I hope, had restorative attention.

In Committee, there was a long debate on this amendment, which has a simple purpose: to remove charities altogether from both the Bill and PPERA 2000. I am bound to say that in the intervening period there has been a great deal of discussion, meetings and lobbying. It is fair to say that the dear old charity sector

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—which must be one of the slowest of any sector in our society to get the hang of things, while being a most invaluable element in our society—is now showing its support, late in the day, for the proposal that charities are taken right out of the Bill. It is a pity that this movement did not show itself a good deal earlier.

I must also explain that in Committee there were three different supporting names on this amendment: my noble friends Lady Williams, Lord Tyler and Lord Greaves. They—how shall I put it?—stood back at this stage of the Bill to enable Peers from other parts of the House to put their names to an amendment which is felt strongly about. It is a great resource and support to have the names of the noble and learned Lord, Lord Mackay of Clashfern, and the noble Lords, Lord Best and Lord Low of Dalston, on the amendment. They are, respectively, an ex-Lord Chancellor, an ex-chief executive of the Joseph Rowntree Foundation and an ex-chief executive of the Royal National Institute of the Blind.

We have put this amendment forward today and continue to feel really strongly about it because we are convinced that to draw charities into this net is counterproductive, legally illogical, because they are the subject of a completely separate and rigorous branch of law in a way that no other NGOs are, and wasteful of scarce and valuable volunteer time and philanthropic resources if we persist in so doing. I shall address only a few points. I am very mindful of the time and my colleagues will deal with different points relating to the amendment and its consequences.

The one word that keeps coming back to me in relation to all this is “practical”—or, in this case, “impractical”. It seems a thoroughly impractical proposal to lump charities in with NGOs, which can range right across the board from being relatively public-spirited—as, for example, most of the supporters of the Harris commission certainly are—to completely self-interested NGOs, some of them acting as fronts for commercial organisations and others with political aspirations. The one thing you know for certain and beyond peradventure about a charity is that it exists exclusively for the public benefit. Private benefit and charity are wholly incompatible dimensions.

This branch of our law is not some Johnny-come-lately or some rather weak branch of law, if I may put it that way; it is about as fiercely and strongly embedded in our culture as any aspect of law. What is more, the Charity Commission, which has been doing its job for more than 150 years, is a committed body with vast experience, though admittedly with inadequate resources, which is there to try to police this extraordinary sector. Extraordinary it is because it actually needs wonderfully little policing. The amount of fraud and—how shall I put it?—manipulation in the charity sector is a tribute to the best in British society and culture.

The duty on us as legislators, when touching on this sector in particular, is to act with extreme caution because one can so easily damage that which one hopes to assist. Above all, we need to avoid confusion in the legislation that we shower on the British public. There is one way of avoiding confusion in the issue of the regulation of NGOs: to avoid shackling charities of all organisations with duplicatory regulation and

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thus the responsibility for two sets of regulations and indeed regulators. Of all the groups in our society that surely do not need that, above all others by far are charities. Although of course the Bill is vital and it is good that amendments have been introduced—we thank the Government for being so receptive—it is important that we retain our civic vitality, which, let us be honest, is languishing somewhat. However, in the process, we must not damage that which we seek to uphold.

The confusion surrounding charities in relation to the Bill is quite extraordinary. I can illustrate that by referring the House to the letter written last night by the Charity Commission to a number of us now in the Chamber. It deals in particular with this amendment because the Charity Commission considers it of such importance. I confess that many of us have been trying for some considerable while to get the Charity Commission to come out of its shell and be clear about what it thinks of the arguments advanced on each side of this debate. At least now we have a letter, written by the public affairs manager of the Charity Commission at 6.30 pm last night. Pretty early this morning, as one might guess, I was on the telephone to seek clarification.

The letter has four paragraphs. Can one ask Peers to put up their hands if they have had this letter? It is probably unprecedented, but I have seen one, anyhow. I suspect that a minority of those here have seen this letter and that it will be helpful to quote from it. It is important given that the Charity Commission is the kingpin in this field. The first point that it makes in relation to this amendment is under the heading “Charity law and electoral law—the current situation”. It states:

“Charities must never support political parties or candidates for election”.

That is the basic premise. It continues:

“A charity can engage in campaigning to influence public policy but only in the context of supporting the delivery of its charitable purposes. We recognise that there are some circumstances where a charity’s activities can adhere to charity law but may still require them to register with the Electoral Commission during an election period”.

I have to be honest. I was slightly crestfallen when I saw that because my proposition hitherto has been that charity law and election law in this bit of the landscape are so similar as to be no different from each other. I argued this with the senior member of the commission who is fielding calls in relation to this letter and after a while, she said, “Well, perhaps we did not put this as we intended”. It then became apparent that when the Charity Commission made this statement it was talking about the law as it stands now, not the law as it will be after the Bill is enacted.

Lord Tyler: I am grateful to my noble friend because I shared his confusion about that missive last night. I too quite separately raised a question with the same person at the Charity Commission and was sent back this very explicit statement:

“We are by no means suggesting that CC9 is not fit for purpose. Instead we believe that CC9 provides clear and concise guidance on what is and is not acceptable for charities when campaigning. This is an issue that we regulate firmly and take action where necessary”.

In other words, far from saying as seemed to be the first impression that I had from the previous letter that the Charity Commission was not up to this job, it thinks

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it is up to the job and does not think it is necessary to change the situation so that another commission is so actively involved, as the Bill would suggest.

Lord Phillips of Sudbury: I am grateful for that. My noble friend is lucky in having had a letter. When I finished the conversation, the Charity Commission said to me that it would send a new communication forthwith to everybody who received the first one to make clear that this statement did not relate to the law as it will be after the passing of this Bill. That is just one small example of—

Lord Harries of Pentregarth: I am fortunate enough to have the original letter before me. I wonder what the noble Lord makes of the statement:

“We do not believe that in the best interests of public trust and confidence in charities an exemption for charities is the most appropriate method for the regulation of charities during an election period”.

There cannot be anything clearer than that. I know it is very disappointing for the noble Lord, but the Charity Commission has come out unequivocally in opposition to his amendment and I think he will have to face that.

Lord Phillips of Sudbury: My Lords, the noble and right reverend Lord, Lord Harries, is actually addressing a different issue in this letter. I was dealing with paragraph one. He is dealing with paragraph two, about public trust and confidence in charities, which I was about to come on to and which, if I may, I will deal with in a second.

I emphasise the fact that the Charity Commission has delivered to those in this House who are particularly involved with this issue some guidance in relation to the law—comparing electoral law with charity law—that leaves us at best in a state of some confusion. I think, as I will say in a minute, that the approximation of charity law and electoral law is now so close that to all intents and purposes it is in practical terms the same. However, as we know better than anybody on earth, the capacity of lawyers—and not only lawyers—to argue about that is infinite. When you get a letter such as this from the Charity Commission, you can see why.

5 pm

Coming to the point of the noble and right reverend Lord, Lord Harries, the second point here is headed:

“The effect of an exemption on public trust and confidence in charities”.

It starts by saying that the Charity Commission believes in keeping the burden on trustees and charities to the minimum that is consistent with an effective regime. That, in itself, supports my case, because for charities to have two sets of regulators is plainly not keeping their burden to a minimum. Secondly, it rather argues against its own competence to then go on to say that you need two sets of regulators.

I will also add the point that the commission makes here, when it advances the proposition, which has been heard in debate in Committee, that some organisations will seek to exploit the differences between charity law and electoral law by registering as a charity if they are a non-charity, in the expectation that that will give them more latitude in terms of what they can do during election periods.

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Lord Rooker: I was minded to vote for the amendment, but, having read the letter twice now, does the noble Lord not accept that the Charity Commission does not agree with Amendment 36? That is crystal clear. There is incompetence of a very high order by the Charity Commission, by the way, because it does not do a very good job. However, it does not agree with Amendment 36, so do we have to spend a lot of time on this?

Noble Lords: No.

Lord Phillips of Sudbury: My Lords, that is, on the face of it, a compelling argument. However, I am trying to put it to the House that the Charity Commission’s own advice here is faulty. It admitted as much in our conversation this morning and said that it would circulate a letter forthwith.

Baroness Royall of Blaisdon (Lab): Which it has not done.

Lord Phillips of Sudbury: Which, of course, it has not done. I suspect the reason is that when the person I was speaking to went back to the chief commissioner and the chief executive, they said, “My goodness, we can’t go into print admitting that we’ve made a mistake”.

Lord Cormack: I am very grateful. Of course, I was also minded to support my noble friend. However, time is at a premium. There is clearly a problem here. Would it not be better to have discussions with the Charity Commission and the Minister between now and Third Reading, and then, perhaps, to table an amendment that does have their support? We can waste an awful lot of time on this. I am not being critical of my noble friend, for whom I have very real regard, but he has been speaking for a quarter of an hour or more and we have very important issues that we must determine today.

Lord Phillips of Sudbury: My Lords, I am in a cleft stick; I have indeed got 15 minutes on the Clock, but my noble friend will accept that I have been interrupted five times now, which takes a wee bit out of one’s available argument time. I will keep this as short as I can. It is unfortunate—let us put it that way—that we have a letter at the 59th minute of the 11th hour which is, at best, unclear.

I know that a number of my colleagues have different points to make. It has been said, time and again, that there should be a level playing field between non-charitable NGOs and charitable NGOs. Well, yes and no. First, we have a whole lot of improvements for the non-charity NGOs. Secondly, however, the reason we persist in seeking this important change is precisely because charities are basically different in kind, not just because they have a separate branch of law and a separate regulator.

The bureaucratic consequences for charities having to meet the demands of two regulators will be significant. Although the thresholds have been raised, which is important, the number of charities that will still be swept up by this legislation is far greater than many Members of this House may think. It will be many

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thousands. It does not take a great deal to rack up £20,000 if you are a charity with a few branches around the country.

Secondly, given that the vast majority of charities have no paid staff, the people who will have to implement this complex bureaucratic stuff are not professionals but volunteers. Simply tooling up a charity that is wholly run by volunteers to cope with this new regime and all that it means will be a massive and demoralising task for so many of them. Frankly, volunteers do not want to spend their precious hours getting to understand the legislation that we are in the process of putting on the statute book and then trying to get to grips with it in practical terms, filling in the forms and all the rest of it. The consequences, I put it to the House, will still be huge, despite the number of charities that are, on the face of it, taken out of the purview of these provisions by the raising of thresholds and the rest of it. I cannot emphasise that too strongly.

Let us suppose that you are a trustee of a charity. You will not have a paid chief executive, so it may be a senior volunteer who comes to you and says, “Look, Mr Phillips, we have this new legislation. We do not think we are touched by it because we do not think we will reach the threshold, but what do you want us to do?”. I am afraid an awful lot of trustees will say—

Lord Hodgson of Astley Abbotts (Con): Not only the Charity Commission opposes this amendment; the Electoral Commission does, too. Also, we have a situation where the Government have given way on the review period. We argue there is going to be a review of this piece of legislation, so if the matters that the noble Lord is so concerned about come to pass, the review will pick them up. We are now in supposition territory. I hope that the noble Lord will reflect on that before deciding what to do with his amendment.

Lord Phillips of Sudbury: I certainly will. I am grateful for that point, because I was going to say that a review of this will be essential in light of what happens at the next general election. Indeed, the noble Lord, Lord Hodgson, tabled an amendment that I think—

Lord Hodgson of Astley Abbotts: It is a government amendment.

Lord Phillips of Sudbury: It is now a government amendment, so we are going to get it—and that is vital because we will learn a great deal after that. I will just finish the point that volunteer trustees, perfectly understandably, are going to be cautious about this new legislation. The last thing in the world they will take a risk with is the prospect that things may get a bit out of hand or may not be perfectly understood, and that they, the trustees, will end up being personally liable. As I am sure everybody hearing this debate knows, they are personally liable. It does not matter if they are a limited-liability charity.

All in all, therefore, these are some of the reasons—I think other contributors to the debate will add others—that we should avoid the huge confusion that will follow if we subject charities to both charity law and electoral law. For good reason, I will not detain the

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House now beyond saying that this is still a very important issue that touches a hugely important part of our civic society—the very part of our civic society that does so much to uphold and vivify election campaigns. I beg to move.

Lord Mackay of Clashfern (Con): My Lords, I am extremely well aware that the Charity Commission has given us a document to say that it is against this amendment, but the charity commissioners do not actually do legislation; that is our responsibility. They have set out in this missive that we got about 6.30 pm yesterday some of the reasons for their opposition.

Charities are, as I understand it, very fully regulated by law. Charities are those bodies that are established for charitable purposes only, and charitable purposes are defined as falling into certain classes, with the general provision that a charitable purpose is one that must be for public benefit. When I got this missive and had a chance to look at it, I e-mailed back the writer of the document asking, “Are you saying that a charity can lawfully, under existing charity law, engage in activities regulated by this Bill?”. I got an e-mail back to say that he was out of the office today and that, if it was urgent, I should ring a number. So I rang the number, and no one answered—although these things happen, even in the best regulated circles.

This is an extremely important point, as I see it. Charity law is sufficiently robust to require charities to obey the rules, which state that they can use their expenditure and efforts only in support of or in pursuance of their charitable purposes. As the missive says:

“Charities must never support political parties or candidates for election”.

At the moment, I cannot see why it is necessary that the Bill applies to charities. However, the Charity Commission, in the missive we got last night, goes on to explain that if the charities were exempted, its task of making sure that the charities obeyed the law in this regard would be too much for it, particularly in an election period. The Government have cut its budget so much that it cannot support this or do it properly. If that is the reason for passing the responsibility for seeing to this from a government organisation, the Charity Commission—which has a very long history of 150 years or so—on to charities, which depend on voluntary contributions for their financial support and to a great extent for their personnel support, it is an extremely bad one. Why should the government organisation pass on its responsibility to ensure that this is happening to the charities themselves and have them registered for that purpose?

This is an extremely serious matter that the Charities Commission has raised in this missive to us. So far as I am concerned, it requires the Government to look into the matter. I would like to see the Government undertake to look into this between now and Third Reading. I do not wish to pursue the matter further today. I originally raised this matter with the noble Lord, Lord Wallace of Saltaire, before he was away, and I am extremely glad to see that he is able to be back with us again. This is an important matter that I feel strongly about, and one that your Lordships’ House should not just pass over. We do not need to spend long on it, because it is a short but very important point.

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Baroness Lister of Burtersett (Lab): Before the noble and learned Lord sits down, I have a question about the e-mail from the Charity Commission, which I have here. My reading of it is that the question about resource implications is a subsidiary argument, and that the key argument is:

“We do not believe that, in the best interests of public trust and confidence in charities, an exemption for charities is the most appropriate method for the regulation of charities during an election period”.

Surely that is the argument that the Charity Commission is putting forward against this amendment. The question about resources is just supporting that.

Lord Mackay of Clashfern: The reason that that is a difficulty is because it cannot be relied upon to enforce the law. There is no question of trust in charities being damaged by propaganda and that kind of thing. If it were shown that charities were not obeying charitable law, that would damage trust and confidence. If the commission does not have enough resources to pursue that properly—as paragraph 4, I think, says—that is a problem. I can see that if that is justified, it is a problem, but it is a very serious problem if organisations set up to ensure that the law is observed in a particular area say that they do not have sufficient resources to do it properly.

5.15 pm.

Lord Harries of Pentregarth: Does the noble and learned Lord not accept that the Electoral Commission has come out exceedingly strongly against this amendment? It is not just the Charity Commission but the Electoral Commission, which has a specific statutory duty.

Lord Mackay of Clashfern: I understand that, but I do not understand why they have come out against it, because it must be based on an understanding that charities could in fact engage in activities that are regulated by this Bill.

Lord Low of Dalston (CB): My Lords, my name is added to this amendment and I do support it, but I think that we have been somewhat blown off course by the reference to this letter that we have had from the Charity Commission, which we have not had very long to consider, and also by the briefing that we have received from the Electoral Commission.

On the Charity Commission’s letter, I honestly think that this faces both ways: at one point the commission says that it is not in favour of an exemption but elsewhere it says that it believes in keeping the burden of regulations on trustees and charities to the minimum that is consistent with effective regulation. If that is what the commission is saying, then why on earth impose another burdensome layer of regulation on charities? Or is the commission saying that the regulation that it provides is not effective? I honestly think that the letter that we have received from the Charity Commission is not robust enough to sustain any argument and I do not think that we should be further diverted by it, certainly not today.

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I agree that this has rather blown the debate off course and I think that the suggestion made by the noble and learned Lord, Lord Mackay of Clashfern, that this be taken away, that discussions take place and that we ask the Government to review the situation and come back with something at Third Reading, would honestly be the best way of proceeding.

Lord Best (CB): My Lords, I think that I shall go with the suggestion that we defer debate on this until Third Reading. I will just throw one or two thoughts into the pot that have not yet been fully explored.

Charity law is currently very much under review. The noble Lord, Lord Hodgson of Astley Abbotts, has reported on the workings of the Charities Act 2006 and the Select Committee on Public Administration has looked into the operations of the Charity Commission. Both the noble Lord, Lord Hodgson, and the Select Committee on Public Administration issued reports last year recommending changes, and the Government have accepted many of those recommendations. In addition, the National Audit Office recently issued a report calling for a reform of the Charity Commission, and the Law Commission is looking at charity law and will report this year.

It is almost certain, therefore, that there will be significant reforms to charity law in the near future, so if charities are taken out of the lobbying Bill, which is the proposition here, there will be an opportunity, if necessary, to amend charity law and to see changes of this kind in a broader and wider context at a later date. The many arguments on why charities should be taken out of this particular Bill stand on their own, I think, and although we are giving great deference to the quangos, I find the comments of the noble and learned Lord, Lord Mackay of Clashfern, and others to be compelling. Possibly we should not be debating all those details if legislation that is specifically about the future of charities, charity law and the Charity Commission is in the pipeline. It would be better to defer our debate until then, but I would be very happy to see this brought back at Third Reading.

Lord Harries of Pentregarth: Perhaps the House will allow me just a couple of minutes to put the opposing point of view to the noble Lords who have spoken so far. Their proposal is superficially very attractive and would be possible if the definition in Clause 26 were different. If the definition of “controlled expenditure” in the Bill said that it was expenditure whose prime purpose was the promotion, or procuring the election, of a particular candidate or party, it would be possible to take out charities. They should be taken out because, as the noble and learned Lord, Lord Mackay, rightly said, charities are not allowed to have as their prime purpose the support of political parties.

However, that is not what the Bill says. Clause 26—and we have heard it thousands of times—includes two important points, which are that you do not have to mention the name of the party and it does not have to be your prime intention. Therefore, you can campaign on an issue and still be caught by the regulation of the Bill. That is why—

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Lord Low of Dalston: I thank the noble and right reverend Lord for giving way. Does he not agree that to be caught by the legislation the expenditure has to be “intended” to procure that effect?

Lord Harries of Pentregarth: The whole point of those provisions, which is where the sting is, is that you can campaign on and focus on an issue and that can be reasonably regarded as indirectly supporting a particular candidate or party, or you can even do so inadvertently. Let us be quite clear: charities are able to campaign on issues.

Lord Phillips of Sudbury: I am grateful to the noble and right reverend Lord for giving way, but he really cannot get away with that. You cannot inadvertently satisfy the requirements of Clause 26 when it says that you “intend” to promote or procure electoral success. Intention is not the same as inadvertence at all, and it is a very strong test. The fact that there are other matters that you are trying to advance at the same time does not get away from that test.

Lord Harries of Pentregarth: Then why does the Charity Commission guidance—and I have read carefully both its main guidance and its guidance in relation to the Electoral Commission—include a series of examples, just like the Electoral Commission, where charities may or may not be caught? This is a borderline area. Charities are able to campaign and to campaign vigorously, and many trustees encourage them to do so. Therefore, it is always possible for them to come within the scope of this provision.

If you take out charities, only two courses are open to you. Either you have an unlevel playing field so that you have a charity campaigning against a campaigning group which is not a charity, and the charity, if it were taken out, would be able to spend an unlimited amount of money, whereas the non-charitable campaigning group would have very strict limits on what it was allowed to spend, or the Charity Commission could set up a much stronger policing body than it has at the moment—one which would match that of the Electoral Commission.

Lord Low of Dalston: I am grateful to the noble and right reverend Lord and I apologise for intervening again, but does he not agree that we are continuing to get bogged down in technicalities about the interpretation of very detailed points in this clause? If the point is taken that there will be discussions before Third Reading and we can look for something more fully considered to come back then, it will make a lot of sense to put into that review the points that the noble and right reverend Lord, Lord Harries, is dealing with at the moment.

Lord Harries of Pentregarth: My Lords, I take the point but it was important to state the argument because some people are understandably initially very attracted to this idea. It would lift the regulatory burden, and people are attracted to the idea of taking out charities. However, there are very strong, compelling and rational reasons why this should not be done, and

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that is why it is opposed by the Electoral Commission, the Charity Commission, the commission that I chair, the NCVO, ACEVO and all the others.

Lord Phillips of Sudbury: The NCVO has taken up—

Noble Lords: Order!

Lord Gardiner of Kimble (Con): My Lords, with the greatest respect, we are really getting beyond the guidance in the Companion regarding Report stage. I think that in a sense the House would like to make some progress.

Lord Rooker: My Lords, I will take three minutes; I am not going into technicalities and I freely admit I am going to introduce a bit of partisanship.

The Charity Commission states:

“Charities must never support political parties”.

If that was the case—if that was the norm—we would not have a problem. I would like to vote for this but charities have got to be regulated, even during the electoral period. I make no apology: I raised this before, at Second Reading.

Page 14 of the Conservative manifesto for the 2010 election shows a full-page portrait of the chief executive of a large national charity, extolling the virtues of the policies set out on the subsequent pages. This was the Conservative Party manifesto using a charity for party-political purposes. I was appalled when I saw it and could not understand why there was not a row about it. That chief executive, whom I later recognised, turned up in this House a few months later. I am not going to mention her name because I have not given notice, but the charity is Tomorrow’s People. This was a thundering disgrace and I would like, in the discussions that are about to take place, an assurance that political parties will submit their manifestos to the Charity Commission and the Electoral Commission to make sure that this kind of abuse of the system and of charities does not happen again, either by the Conservative Party or, inadvertently, by any other political party.

I apologise for introducing a note of partisanship, but I have been waiting a long time to say this.

Baroness Howarth of Breckland (CB): My Lords, with due respect to the House, as I have not spoken on this, a number of the noble Lords who are proposing the amendment are suggesting that they will not take it forward but that there will be other debates. There are amendments later which are extremely important and vital to the sector if it is to carry out its work. I would be grateful if the House could move on.

Baroness Hayter of Kentish Town: My Lords, that being said, I will speak quickly and shortly to say that, while we absolutely understand the desire to stop the bureaucracy being placed on charities, we do not want that for other bits of the third sector either. This is why we want a much more fundamental change which takes them out too. They also use volunteers and have all these problems. We do not think the rest of the voluntary sector should be caught by something which other campaigners will not be. We are, obviously, interested in the Government’s response, but if the

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issue is simply about dual regulation then there may be a way for the Electoral Commission to devolve its responsibilities in this area to the Charity Commission. However, if it could not answer its phone to the noble and learned Lord, Lord Mackay, last night, I am not sure I would devolve much to it at the moment.

There is a difference: there is an area of activity which is completely legitimate for charities but which will not be covered by the Charity Commission, which only polices charitable law. Even at the moment, under PPERA, there are a whole lot of things which charities are covered by but which are not policed by the Charity Commission, so extra work would be going to them. As the noble Lord, Lord Horam, said, this clause covers work which is completely within their charitable aims and, therefore, eligible under charitable law. To take out one part of the voluntary sector and leave the other in is something we cannot understand. The charities themselves did not ask for this when they gave evidence—oral and written—to the commission chaired by the noble and right reverend Lord, Lord Harries. The Electoral Commission is against it, as are the NCVO and the Charity Commission. There may be a good reason for this: the overwhelming majority of charities that have contacted me are not in favour of it.

As I think the last speaker said, we are very interested in the important issue of staff costs. That is what the charities really want taking out, so I hope we can move quickly to it and the House can have a decision.

5.30 pm

Lord Wallace of Tankerness: My Lords, I thank my noble friend Lord Phillips for raising the important issue of charities and seeking to exclude them from the regulatory regime governed by controlled expenditure for third parties. In Committee, we had a useful debate during which I indicated that some very important points had been made and undertook to give consideration to them. To those who ask the Government to take this issue away and to think about it, I say to your Lordships’ House that we have given this very serious thought. I probably spent more of my time on it than I had necessarily expected over Christmas and the new year in Orkney. I will not overegg it but I think my wife thought that it probably was more than was healthy.

With other Ministers, the Government have seriously thought about this matter and looked into it. Under present charity law, charities are organisations which must be established for charitable purposes only which are for the public benefit. An organisation will not be charitable if its purposes are political. Campaigning and political activity are legitimate and valuable activities for charities to undertake. However, this must be undertaken by a charity only in the context of supporting the delivery of its charitable purposes.

The Charity Commission and the Electoral Commission produce guidance for charities on campaigning and political activity. Both regulators acknowledge that there may be a narrow range of circumstances—noble Lords who took part in Committee will remember that the word given to me by officials was “sliver”, which I did not particularly like but was meant to show that it was a very narrow range of activities—in which charities

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may be compliant with charity law and also operate within the regulatory regime established by the Political Parties, Elections and Referendums Act 2000. I listened carefully to the speech of my noble and learned friend Lord Mackay of Clashfern. The Charity Commission guidance updated in January 2011 on charities, elections and referendum states:

“A charity may publish the views of candidates in local and national elections where these views relate to the charity’s purposes and publishing them will raise public interest and debate about the underlying issues. The charity must not encourage support for any particular parties or candidates”.

It goes on to say that “even if” a charity is,

“following the guidelines set out in this document and in

Speaking Out: Guidance on campaigning and political activities by charities

(CC9), if you use material that could be seen as indicating to the public that particular candidates or parties support or oppose your policies, it is possible that you may need to register as a third party with the Electoral Commission”.

Indeed, that has been the position following PPERA 2000. My understanding is that two charities registered in 2010 .

I admit that the circumstances may be very narrow but the important point to remember is that we are using an objective test. It is not a subjective intention of the charities: it is how a reasonable person might perceive what the charities have done. As the noble and right reverend Lord, Lord Harries of Pentregarth, pointed out, Clause 26(4)(c) states that,

“a course of conduct may constitute the doing of one of those things even though it does not involve any express mention being made of the name of any party or candidate”.

Applying that consideration and the objective test is the considered view of the Electoral Commission and the Charities Commission that there could be circumstances in which PPERA should apply.

Lord Low of Dalston: I am sorry to intervene on the noble and learned Lord, but does he not agree that the test is only partly objective because the test is not what a reasonable person would make of what the charity has done but what a reasonable person would make of the charity’s intention?

Lord Wallace of Tankerness: My Lords, I can do no better than remind your Lordships of Clause 26, which states that,

“the expenditure can reasonably be regarded as intended to promote or procure electoral success at any relevant election for—”.

The point is that there is a distinction between an objective and a subjective test. It may be that if the charity was complying it was not intending, but if objectively it was thought to have done so it would fall into that narrow range of activity. The important point was made by the commission chaired by the noble and right reverend Lord, Lord Harries; namely, that it is the activity that is important rather than who is undertaking the activity.

I know that the House wants to move on, but the e-mail issued yesterday evening by Mr Rowley has been referred to by a number of noble Lords. He says:

“We recognise that there are some circumstances where a charity’s activities can adhere to charity law but may still require them to register with the Electoral Commission during an election period. Indeed, during the last General Election a small number of charities did register with the Electoral Commission. Due to

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the increased awareness and scrutiny of this area we believe that this number may increase, regardless of the change in the scope of activities and limits that this Bill proposes”.

My noble friend Lord Phillips was suggesting that somehow or other the information on this coming from the Charities Commission was out of date. It is important to recall that it does set out the current position, but it is a situation in which PPERA is not changing with regard to the definition. It will not change as a result of this Bill, so the case remains that a narrow scope of activities could be covered. The Electoral Commission is clear that charities should not be exempt from the PPERA regime. It highlights that such an exemption would undermine the effectiveness of the PPERA regime and create incentives for campaigners to carry out as much campaigning activity as possible via charitable channels. Potentially that could have implications for the reputations of the charities.

I repeat what the commission said:

“It is the Commission’s view that it is right that charities are not excluded from within this legislation, and we believe the Government’s approach to distinguish by activity rather than by type of organisations is correct”.

The Government’s view, however, is that the nature of the PPERA test, to which I have referred, and the constraints of charity law will mean that the circumstances in which charities are brought within the scope of PPERA rules will be very rare. First, they must meet the PPERA test where their activities can reasonably be regarded as intended to promote or procure the electoral success of a party or candidate. Secondly, if they meet this test they must incur controlled expenditure over the registration threshold. The amendments that we will debate later and that are being brought forward by the Government to raise the registration threshold in essence will ensure that smaller or even medium-size charities will not have to register with the Electoral Commission.

I heard comments in Committee and in the meetings that I have had about the importance of trying to keep the administrative burden to a minimum. I accept that there was force in the concerns expressed when I first became engaged in this Bill and attended meetings with my noble friend Lord Wallace of Saltaire, in which charities said that there was a possibility that they could do something that took them into PPERA-controlled expenditure, with the limit at £5,000—£2,500 in Scotland, Wales and Northern Ireland. That might happen, without their knowing that there could be a freeze on their activity. But limits of £20,000 for registration are now proposed; in Scotland, Wales and Northern Ireland it is £10,000.

If charities are undertaking that level of expenditure this is neither unreasonable nor the sort of thing that will get lost in the loose change. It is significant expenditure. Therefore many charities will be removed from any concern by the thresholds that we are setting. Those approaching that level of expenditure may wish to consider whether it is appropriate. In terms of the general core principles of accountability and transparency in the Bill, it is important that if a body is undertaking the kind of activity that falls within this scope it should be accountable and transparent. In some of my discussions with the chief executive of OSCR,

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the Scottish charities regulator, he said that he thought that the transparency argument was important: if two organisations were doing exactly the same thing that brought them within the scope of the Bill or PPERA, it was wrong that one should have to be accountable and transparent, and the other, because it was a registered charity, should not. In transparency and accountability terms, this departed from an objective of the Bill.

Charities have raised concerns as to what happens if a party or a candidate adopts one of their policies. The Electoral Commission guidance is clear on this point. If a party or a candidate adopts a charity’s policy this will not automatically result in the charity incurring controlled expenditure. A charity will incur controlled expenditure only if it subsequently highlights the fact that party A or candidate B supports its policy, or ramps up its campaign. As such, the Government are not persuaded that there is a compelling case to take such a significant step as to exempt charities from the regulatory regime. It is the activities of the third party and not the type of organisation that should be subject to regulation. I can assure my noble friend, who raised the matter, as did other contributors to the debate, that the regulatory regime on charities will be explored during the review of third-party campaigning that we have indicated, as laid out in later amendments, will take place after the 2015 election.

We have had a good debate. I am not sure that I can elaborate these points much further. The noble and learned Lord, Lord Mackay of Clashfern, very properly made the point that the shape of the Bill will not be determined by the Charity Commission or the Electoral Commission; it will be done by Parliament, by your Lordships’ House and the other place. But, in doing so, it is important that we have some regard to those who have dealt with these issues in elections past, and to the Charity Commission and the Electoral Commission, which agree that the amendment proposed by my noble friend would not be appropriate in these circumstances. I therefore invite my noble friend to withdraw it.

Lord Mackay of Clashfern: Is my noble and learned friend saying, as a law officer of the Crown, that it is lawful for a charity in pursuance of its charitable purpose to do something that can,

“reasonably be regarded as intended to promote”,

the interests of a particular party or candidate?

Lord Wallace of Tankerness: My Lords, that has been the legal position since 2000. It is very rare that it would happen but, conceivably, there is a very limited range of activities that could fall within that. It would not be the intention of the charity but it might be reasonably seen by others to be the intention of the charity. It is because of that very limited possibility that it is important to maintain the provision as it is rather than implement the exemption proposed by my noble friend.

Lord Phillips of Sudbury: My Lords, I am grateful to my noble and learned friend the Minister for the way in which he summed up the debate. I am grateful to all those who have participated in discussing this important amendment. Given that Third Reading is

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on Tuesday, realistically there is not time to have the sorts of discussions that some noble Lords have looked for, particularly in terms of the speed at which the Charity Commission will move in relation to these sensitive matters. One has to look to the review of the workings of this legislation in the wake of the 2015 election. That will be vital. Having said that, I beg leave to withdraw the amendment.

Amendment 36 withdrawn.

Amendments 37 and 38

Moved by Lord Wallace of Tankerness

37: Clause 26, page 13, line 20, at end insert—

“( ) In section 87 of that Act (expenditure by third parties which is not controlled expenditure)—

(a) in subsection (1), omit paragraph (a) and the “or” at the end of it;

(b) omit subsection (2).”

38: Clause 26, page 13, line 23, leave out subsection (8) and insert—

“( ) After subsection (4) insert—

“(4A) It is a defence for any person or third party charged with an offence under subsection (2) or (4) to show—

(a) that any code of practice for the time being issued under paragraph 2 of Schedule 8A was complied with in determining whether any expenditure is controlled expenditure for the purposes of this Part, and

(b) that the person or third party’s acts or omissions would not have amounted to an offence on the basis of the controlled expenditure as determined in accordance with the code.””

Amendments 37 and 38 agreed.

Amendment 38A not moved.

Amendment 39

Moved by Lord Wallace of Tankerness

39: After Clause 26, insert the following new Clause—

“Arrangements between third parties notified to the Electoral Commission

(1) Part 6 of the Political Parties, Elections and Referendums Act 2000 (controls relating to third party national election campaigns) is amended as follows.

(2) In section 94 (limits on controlled expenditure by third parties)—

(a) after subsection (3) insert—

“(3A) For provision requiring certain controlled expenditure to be disregarded in determining for the purposes of subsection (3)(a) whether a limit is exceeded, see section 94A(5) (arrangements between third parties notified to the Commission).”;

(b) in subsection (4), for “such a case” substitute “the case mentioned in subsection (3)”;

(c) in subsection (5A)—

(i) after “Subsections (3) to (5)” insert “and section 94A”;

(ii) for “those subsections” substitute “those provisions”;

(d) in subsections (8) and (10), after “the purposes of this section” insert “, section 94A”;

(e) in subsection (11)(a), after “this section” insert “and section 94A”.

(3) After section 94 insert—

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“94A Arrangements between third parties notified to the Commission

(1) A recognised third party (“a lead campaigner”) may, at any time before the end of a regulated period, send a notice to the Commission—

(a) stating that the lead campaigner is party to an arrangement of the kind mentioned in section 94(6), and

(b) identifying one or more third parties that—

(i) are parties to the arrangement, and

(ii) have agreed to be minor campaigners in relation to the arrangement.

(2) A notice under subsection (1)—

(a) may not identify a third party as a minor campaigner if the third party is a lead campaigner in relation to the same arrangement, and

(b) may not be sent by a recognised Gibraltar third party.

(3) On receipt of a notice under subsection (1) by the Commission, a third party identified in the notice becomes “a minor campaigner” in relation to the arrangement in question.

(4) Controlled expenditure that is incurred during the regulated period in a part of the United Kingdom by or on behalf of a minor campaigner in pursuance of the arrangement is to be treated for the purposes of section 96 (returns as to controlled expenditure) as having also been incurred during the period and in the part of the United Kingdom concerned by or on behalf of the lead campaigner.

(5) In determining for the purposes of section 94(3)(a) whether a limit is exceeded by a third party in relation to a regulated period, controlled expenditure incurred in a part of the United Kingdom is to be disregarded if conditions A to C are met in relation to the expenditure.

(6) Condition A is that the expenditure—

(a) is incurred in pursuance of an arrangement that has been notified to the Commission under subsection (1), and

(b) is, by virtue of section 94(6), treated for the purposes of section 94 and Schedule 10 as incurred by or on behalf of the third party.

(7) Condition B is that the third party is, at the time the expenditure is incurred, a minor campaigner in relation to the arrangement.

(8) Condition C is that the total of the controlled expenditure incurred during the regulated period in the part of the United Kingdom by or on behalf of the third party (disregarding any expenditure in relation to which conditions A and B are met) does not exceed the limit for that part mentioned in section 94(5).

(9) Section 94(6) applies for the purposes of subsection (8).””

Lord Wallace of Tankerness: My Lords, Amendment 39 relates to arrangements between third parties notified to the Electoral Commission. In our earlier debates, this was referred to as the coalition issue—not be confused with the coalition—and in the meetings I attended with charities and campaign groups it was probably the issue that was raised more often than any other. My noble friend Lord Wallace of Saltaire agrees.