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Baroness Gould of Potternewton: I shall not repeat all the points made by the noble Lord, Lord Mackay, but I agree with the principle of his comments. I am not entirely sure about the wording of the new clause because I have only recently had an opportunity to read it. However, I do know that the Labour Party has been concerned about this. This matter has been discussed at length at meetings. We have been talking about how it is going to be possible to identify whether people are permissible donors by checking on electoral registers.

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I hope that the Minister will be prepared to reconsider this, or at least to think again about how to handle it. Furthermore, as regards the point made about the new system not being in place until next October, although we may not have a general election before then, the system ought to be in place before the next general election is called, whenever that may be.

Lord McNally: I hope that Ministers, who are sometimes rather isolated and cocooned from the political world, have taken note of the unity expressed on this issue. I, too, shall not repeat the arguments put forward by the noble Lord, Lord Mackay. All I shall say is that I certainly believe that all the parties are receiving serious warning signals about the application of this provision from our administrators and organisers at the sharp end.

Although we on these Benches have supported the main thrust of the Bill--namely, to try to bring higher standards to bear as regards political financing--the noble Lord, Lord Mackay, and I have made the point before that all our political parties are dependent on volunteers. Those volunteers are people who have more urgent things to do than attempt to fulfil such complex rules. The implications of this measure as regards fundraising are truly horrific. My noble friend Lord Rennard has informed me that over 400 electoral registers are kept on 28 different computer systems.

The Minister has now heard the message from three party headquarters: real problems to be sorted out here. Whatever the Minister decides to do with the noble Lord's proposed new clause, I recommend that he should think hard about this matter once again.

Lord Bassam of Brighton: My briefing contains the headings "Resist" and "If pressed".

Lord McNally: May I recommend that the Minister reads the section headed "If surrounded"?

Lord Bassam of Brighton: The clause defines a permissible source. However, as we know, it also raises the question of access, both in order that political parties can check donors against the register--and the noble Lord, Lord Mackay, said that he felt political parties could easily check potential donors against the register, but I shall put that point to one side--and the commission can verify that those checks have been made.

Amendment No. 146B would require the electoral commission to maintain a national register of electors and to make the register available to registered parties. In principle, I have a great deal of sympathy with the proposal. Given the nature of the controls set out in the Bill, it would make sense for a national register to be compiled and maintained centrally, and the electoral commission would be the obvious body to do that.

But realism enters the debate. The present legislation places the duty of compiling and maintaining the register on local registration officers.

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The noble Lord, Lord McNally, after seeking advice from the noble Lord, Lord Rennard, confessed there were more than 400 registers and 28 different systems--perhaps even more.

The Representation of the People Act 1983 spells out the duties of those officers in detail. It cannot be pretended that shifting the burden of those duties to another body would be a small task--therein lies the rub-- and the legislative implications would be great. We do not feel that this is the Bill in which to do it. Against that background, it would not be appropriate to place the commission under the duties set out in subsection (1) of Amendment No. 146B.

We have some difficulty with the drafting of Amendment No. 146B. Subsection (1) of the amendment is perfectly to the point, but subsections (2) and (3) go on to address the question of when a donation may be deemed to have been received from a permissible donor. It seems to me that this matter would be better addressed by means of a consequential amendment to Clause 49.

However, it seems desirable that there should be easy access to the registers to enable parties to carry out the checks to assure themselves that a donor is permissible. The commission will also need to carry out some verification checks on the donation reports it receives--for example, checks will need to be made to see whether the donor was on the register when the donation was received. With rolling registration and the regular amending of the register as electors are added or subtracted, these checks are best carried out on registers maintained at a local level.

However, the Government are in discussion with the Improvement and Development Agency (IDA) for local government and with the Association of Electoral Administrators on how on-line access to the local registers--this is a point raised by the noble Lord, Lord Mackay--can be arranged for the commission and political parties. Ensuring the compatibility of locally-held registers is likely to assist in making those registers more accessible.

Amendment No. 321C seeks to amend Section 52 of the Representation of the People Act 1983 to enable the Secretary of State, on the recommendation of the commission, to give directions requiring registration officers to maintain the electronic forms of their registers in a common format. That would be very helpful. The putting in place of the infrastructure to allow on-line access will not be a trivial task and, as has been acknowledged--the noble Lord, Lord Mackay, made this point--it will not happen until next October.

To assist parties and the commission, from next February, when the donation controls come into force, the Home Office is examining with the IDA and the AEA an interim solution which will provide parties and the commission with information from the registers. This could involve consolidating the registers onto a CD ROM and issuing regular updates. It is a quite sensible interim measure and I hope that it will answer the point. I confess that I think the best solution is to have a centralised register--there is no doubt about that--but this and other options should be urgently explored.

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I accept that the Government's proposal is more modest. I think that the CD-Rom option is a viable interim option. I have listened carefully to the eloquent and persuasive contribution of the noble Lord, Lord Mackay. I shall study his remarks carefully with officials and see whether there is more that we can do. The CD-Rom solution is probably the best that we shall be able to do for the next election--depending, of course, on when that takes place.

9.30 p.m.

Lord Mackay of Ardbrecknish: I was not too worried about whether my amendment was right, wrong, well drafted or badly drafted. I was concerned with the principle behind it. By way of advice, I have always tried to avoid nit-picking amendments when it is clear that they are being used merely as vehicles in order to make an important point--and in this case one with which the Minister has some sympathy.

It is relatively easy for a constituency party receiving a donation to check because it has the registers there. But it will clearly not be easy for the national party to check the registers. The noble Lord accepts that. I had not thought about it, but the commission will also have to check, so the poor registration officer might receive two phone calls, one from the political party and one from the commissioner.

I hear what the noble Lord says, and I hear that he understands the point that we have made. He could not be deaf to it, as it has come from all three main parties. We have all been briefed by the people who run our parties.

My only slight worry is that the letter to Neil Bendle of the Labour Party dated 3rd October uses the words,

    "Or we try to consolidate the registers and issue parties with perhaps a CD Rom with the data on it and regular updates".

I can understand the difficulties, but there is a deal of uncertainty. I am sure that Mr Bendle, David Allworthy of the Liberal Democrats and Stephen Gilbert of my party were not greatly cheered by the limited commitment in the letter, with so many caveats.

However, the Minister has heard all that has been said. We shall probably return to the matter on Report, if only to see what progress has been made. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 50 [Payments etc. which are (or are not) to be treated as donations by permissible donors]:

[Amendments Nos. 147 to 150 not moved.]

Lord Rennard moved Amendment No. 151:

    Page 31, line 28, at end insert--

("( ) Any donation received by a registered party which exceeds £50,000 or makes the cumulative donations of an individual or organisation exceed £50,000 in a financial year shall be regarded as a donation received by the party from a person who is not a permissible donor.").

The noble Lord said: The amendment seeks to impose a maximum limit on donations to political parties of £50,000. It is a provision for which my party

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argued in evidence to the committee chaired by the noble Lord, Lord Neill. It is not an uncommon provision. Many countries have a maximum limit for donations to a candidate or party and insist also that the donations come from personal bank accounts. Indeed, in the United States the maximum that any one individual can donate directly to either, say, Al Gore or George W. Bush is just 1,000 dollars. Of course, there are many other problems with campaign finance in the United States connected with the so-called "soft money". But the principle that someone should not be able to buy influence with a particular candidate is a good one and I believe it should apply here.

There was a time when the existence of constituency spending limits and the requirement to list donations on an expense return would largely have dealt with the potential problem of buying undue influence. But 90 per cent of expenditure in elections is now at national level, not constituency level, and requirements to declare donations will not be sufficient to ensure that someone is not able to buy considerable influence over the party and potentially, therefore, over policy direction.

The prospect of having to raise and spend £20 million in a general election campaign will undoubtedly mean major parties having to go cap-in-hand to a few wealthy organisations and individuals. There is an old adage, which I believe to be true, that he who pays the piper calls the tune. There is a clear perception in this country that large donations to parties can buy influence over public policy.

Let us take as an example what I believe to be the pernicious influence of the tobacco industry. Smoking kills 300 people each day in Great Britain. Everyone knows, and the British Medical Association has long argued, that tobacco advertising should be prohibited. But the fact that the tobacco industry donated poster sites worth probably millions of pounds to John Major's government for their 1992 election campaign cannot have hastened that government's progress towards banning tobacco advertising; nor will many people believe that the "infamous"--if I may call it that--donation of £1 million to the Labour Party at the last general election by Mr Bernie Ecclestone did not change government policy in relation to tobacco advertising and Formula One racing.

The only way to prevent large donations buying influence, or appearing to buy influence, is to prevent those large donations. It simply cannot be right that millions of pounds can achieve more than millions of votes, as is sometimes the case at the moment.

The point has been made to me by members of the Neill committee that denying the parties access to these very large donations--and all parties, including my own, must seek them--will deprive them of sufficient resources to make their case to the country. That is exactly my point. Only in these circumstances will all the parties be forced to agree that a very small

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amount of government money will be required to allow greater democracy, free from the potentially tainted influence of very big donors. I beg to move.

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