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Viscount Astor: I welcome the Minister's intention to write. This is a government amendment. The noble Lord has considered the amendment carefully before tabling it. Amendment No. 191C states that a candidate can stand for different parties at the same time. It is not a detail but an important point of principle. How can someone stand for more than one party at the same time?

How will expenditure be defined? Will the provision lead us down strange roads, mixing up campaign expenditure?

Lord Bassam of Brighton: The explanation is simple. The provision reflects the fact that, certainly with regard to this side of the Chamber, candidates stand often as Labour and Co-operative Party candidates.

Viscount Astor: It is an interesting answer.

Lord Bassam of Brighton: As a further example, in the general election of 1992 Plaid Cymru candidates stood as Plaid Cymru and Green Party candidates.

Lord Goodhart: I was going to refer to the fact that there used to be Conservative and National Liberal candidates.

Viscount Astor: I am grateful to the noble Lord. I am not aware of any intention for such candidates at the next election; but who knows?

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I have no great knowledge of the internal workings of the Labour Party. I had always assumed that a Labour Party and Co-operative Party candidate was a candidate within the Labour Party, which was, in effect, sponsored by the Co-operative Party. Perhaps I am wrong.

Lord Bassam of Brighton: The noble Viscount will understand that the Co-operative Party is a separate party in its own right.

Viscount Astor: I am grateful to the Minister for that explanation. I shall have to mug up on my knowledge of the details of the Labour Party.

Strange alliances could arise. I am not sure how such alliances could affect campaign contributions. For example, if there were a Lib/Lab pact and a candidate stands jointly or separately, there may be some pooling or separation of resources.

Lord Bassam of Brighton: The noble Viscount is somewhat obsessed by the concept of this Lib/Lab pact. He reads too much into the amendment.

Viscount Astor: The only reason that I am obsessed by it is because every time we on these Benches believe that we have a good point the Liberal Members march firmly through the Government Lobbies. Sometimes that is because of the strength of the argument the noble Lord puts forward. Occasionally they follow the Official Opposition into the Lobby. However, sometimes one feels that they act almost for reasons of duty.

It has been an interesting debate. I shall re-read the provision to ascertain whether it has any effects on campaign expenditure. I accept the Minister's points about the Co-operative Society.

Lord Bassam of Brighton: It is not the Co-operative Society but the Co-operative Party. There is a great difference.

Viscount Astor: I am grateful to the noble Lord for correcting me. As he rightly says, the Co-operative Party is a quite different body.

I am grateful for the noble Lord's explanation. I shall consider what he says.

On Question, amendment agreed to.

Lord Bach moved Amendments Nos. 191D to 192:


    Page 43, leave out lines 7 to 12 and insert ("included in a return as to election expenses in respect of a candidate or candidates at a particular election.").


    Page 43, line 13, leave out subsection (8).


    Page 43, line 19, leave out subsection (9) and insert--


("(9) Where a registered party is a party with accounting units--
(a) expenses incurred or to be incurred by or on behalf of any accounting unit of the party shall be regarded as expenses incurred or to be incurred by or on behalf of the party, and

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(b) references to campaign expenditure incurred or to be incurred by or on behalf of a registered party accordingly extend, in relation to the party, to expenses which constitute such expenditure by virtue of paragraph (a).").


    Page 43, line 21, at end insert--


("( ) In this section "candidates" includes future candidates, whether identifiable or not.").


    Page 43, line 21, at end insert--


("( ) Nothing in this Part applies in relation to expenses incurred or to be incurred by or on behalf of a minor party.").

On Question, amendments agreed to.

Clause 67, as amended, agreed to.

Schedule 7 [Campaign expenditure: qualifying expenses]:

The Deputy Chairman of Committees (Baroness Turner of Camden): Before I call Amendment No. 192A, I remind the Committee that if Amendment No. 192B is agreed to, I cannot call Amendments Nos. 192C and 193.

[Amendments Nos. 192C to 193 not moved.]

Lord Bach moved Amendments Nos. 192A and 192B:


    Page 123, leave out lines 32 to 42.


    Page 123, line 43, leave out from beginning to end of line 3 on page 124 and insert--


("(11) Transport (by any means) of persons to any place or places with a view to obtaining publicity in connection with an election campaign.
Expenses in respect of the transport of such persons include the costs of hiring a particular means of transport for the whole or part of the period during which the election campaign is being conducted.").

On Question, amendments agreed to.

Lord Bach moved Amendments Nos. 193A to 193G:


    Page 124, line 5, leave out ("attract national publicity") and insert ("obtain publicity in connection with an election campaign").


    Page 124, line 8, leave out ("prominent").


    Page 124, line 8, after ("events") insert (", the hire of premises for the purposes of such events").


    Page 124, line 10, leave out sub-paragraphs (13) and (14).


    Page 124, line 27, leave out ("permanent staff") and insert ("staff (whether permanent or otherwise)").


    Page 124, line 28, leave out ("reasonable").


    Page 124, line 30, at end insert ("to the extent that the expenses are paid by the individual from his own resources and are not reimbursed to him").

On Question, amendments agreed to.

[Amendments Nos. 194 and 195 not moved.]

Lord Bach moved Amendments Nos. 195A to 195C:


    Page 124, line 31, leave out from beginning to end of line 28 on page 125.


    Page 125, leave out lines 34 to 39 and insert ("as to the kinds of expenses which do, or do not, fall within Part I of this Schedule").


    Page 126, line 27, leave out ("or II").

On Question, amendments agreed to.

Schedule 7, as amended, agreed to.

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Clause 68 [Notional campaign expenditure]:

Lord Bach moved Amendment No. 195D:


    Page 43, line 22, leave out subsections (1) and (2) and insert--


("(1) This section applies where, in the case of a registered party--
(a) either--
(i) property is transferred to the party free of charge or at a discount of more than 10 per cent. of its market value, or
(ii) property, services or facilities is or are provided for the use or benefit of the party free of charge or at a discount of more than 10 per cent. of the commercial rate for the use of the property or for the provision of the services or facilities, and
(b) the property, services or facilities is or are made use of by or on behalf of the party in circumstances such that, if any expenses were to be (or are) actually incurred by or on behalf of the party in respect of that use, they would be (or are) campaign expenditure incurred by or on behalf of the party.
(1A) Where this section applies, an amount of campaign expenditure determined in accordance with this section ("the appropriate amount") shall be treated, for the purposes of this Part, as incurred by the party during the period for which the property, services or facilities is or are made use of as mentioned in subsection (1)(b).
This subsection has effect subject to subsection (6).
(1B) Where subsection (1)(a)(i) applies, the appropriate amount is such proportion of either--
(a) the market value of the property (where the property is transferred free of charge), or
(b) the difference between the market value of the property and the amount of expenses actually incurred by or on behalf of the party in respect of the property (where the property is transferred at a discount),
as is reasonably attributable to the use made of the property as mentioned in subsection (1)(b).
(1C) Where subsection (1)(a)(ii) applies, the appropriate amount is such proportion of either--
(a) the commercial rate for the use of the property or the provision of the services or facilities (where the property, services or facilities is or are provided free of charge), or
(b) the difference between that commercial rate and the amount of expenses actually incurred by or on behalf of the party in respect of the use of the property or the provision of the services or facilities (where the property, services or facilities is or are provided at a discount),
as is reasonably attributable to the use made of the property, services or facilities as mentioned in subsection (1)(b).").

The noble Lord said: I shall speak also to Amendments Nos. 197A to 197C, 202A, 208S, 208U, 208YC to 208YF, 209A, 210V, 210W, 214D, 217A, 218C, 218F, 218G, 221C, 234YD to 234YG, 235A, 235J, 238D, 239C, 239F, 242D, 242E, 252E, 253A to 253F and 259Q. I apologise for the number of government amendments in the group, which also contains four opposition amendments. It seemed sensible to group together a number of minor technical and drafting changes--not necessarily easy ones--to the expenditure controls in relation to political parties, third parties, referendum campaigners and candidates. The Committee may be pleased to hear that on the government amendments I shall confine my remarks to the main changes.

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Amendments Nos. 202A, 208S, 210V, 214D, 235A and 235J relate to expenses incurred before the beginning of a relevant election or referendum period but used during that time. Noble Lords will recall that Parts V, VI and VII place limits on election or referendum expenditure by reference to what are referred to "relevant periods", ending with the date of a particular poll. One means of circumventing the limits is to incur expenditure in advance of the period during which restrictions apply. To combat that, Schedule 8(12) and Schedule 9(12) provide that any expenditure on property, services or facilities, such as billboard advertisements, purchased before the relevant period but for use during that period will count towards the limit on campaign expenditure for that period.

The current provisions in the Bill will not work satisfactorily and no equivalent provision is included in Part VII, which relates to referendums. Schedule 8(12) and Schedule 9(12) do not focus sufficiently on the use made of the property, service or facilities procured. In Parts V to VII, we want to control expenditure incurred for election or referendum purposes. If property, goods or services are procured before a campaign period with electoral purposes in mind but end up being used for separate purposes, it would be unreasonable to expect the party to bring that expenditure to account. The first set of amendments clarifies the position.

The amendments to Clauses 68, 81, 107 and 127 address the issue of notional expenditure--that is, benefits in kind provided by a third party. Again, the key issue is the purpose for which property, services or facilities provided by a third party are to be used. For example, if a printing company printed 200,000 election leaflets for a party and another 200,000 newsletters to be sent to party members only, it would be appropriate to account for only the cost of the 200,000 election leaflets as notional expenditure. The amendments provide for such apportionment.

Finally, Amendments Nos. 253F and 259Q modify the application of new Sections 90A to 90C of the Representation of the People Act 1983, as inserted by Clause 127, to fit the circumstances of the election of the London members of the Greater London Assembly. Expenses in such elections are incurred to promote the election not of an individual candidate, but of a slate of candidates on a party list. The language in new Sections 90A to 90C needs to be adapted to reflect that new state of affairs.

The four opposition amendments in the group are also concerned with notional campaign expenditure. Clause 68 provides that if a party is provided with the use or benefit of property, services and facilities free of charge or at a discount of more than 10 per cent, it is to be regarded as having incurred an amount of election expenses equivalent to the value of those free services or the value of the discount. Amendment No. 196 would specify that those requirements applied in respect of benefits in kind provided by a permissible donor. The amendment is misconceived. The purpose of Clause 68 is to ensure that benefits in kind are

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counted against a party's expenditure limit. If a wealthy supporter pays for an advertisement in a national newspaper, taken out in the name of a party, the cost should be accounted for by the party.

The question of whether a particular benefit in kind constitutes a donation and consequently may be accepted only from a permissible donor is a separate matter regulated by Part IV, which we have already debated. In the example that I have given, the party would need to establish that the wealthy supporter was a registered voter and would then need to report the donation in the normal way. Although it is not a key point, the amendment would exclude benefits in kind provided by an impermissible donor from the ambit of the clause, so they would not count against the party's expenditure limit.

Amendment No. 197 would specify that the requirements of Clause 68 applied to benefits in kind in relation only to a relevant election, not to the party's ongoing use. That is already provided for in Clause 68(1)(b), as substituted by Amendment No. 195D, which we are debating. Under this provision, donated property, services or facilities are to be accounted for as notional expenditure only if, in the event that the party itself had incurred the expenditure, it constituted "campaign expenditure". I take the example of a printing company which offers its services to a party at no charge. If those services took the form of producing a newsletter to go to party members only, the cost of that newsletter would not constitute campaign expenditure and, therefore, would not fall to be accounted for under Clause 68.

The third opposition amendment, Amendment No. 209, would delete Clause 82(1)(b)(i). Again, it may be helpful to explain the purpose of this provision by way of an example. Let us imagine that company X decides to provide assistance to party Y during an election campaign by loaning it printing equipment free of charge. The market value of the use of that equipment over the period in question is £30,000. Under the provisions of Part V of the Bill, and Clause 6 in particular, the loan of the equipment must be treated as campaign expenditure incurred by the party and must be included in its election expenditure return.

However, without Clause 82(1)(b)(i) the same loan of equipment might at the same time also, under Clause 80, fall to be regarded as controlled expenditure on the part of company X--in other words, the donor. Indeed, given the value of the loan, company X would need to be a recognised third party and comply with all the relevant requirements of Part VI. The loan would count against the company's own expenditure limit and the company would also be required to submit a return as to the controlled expenditure which it had incurred in making the loan. In other words, the effect of Amendment No. 209 would be that the provision of a benefit in kind might count against the expenditure limit of both the beneficiary and the provider and require both to include it in a return to the electoral commission. We believe that that would be unjust and over-bureaucratic. In the example that I have given,

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the company is not campaigning in its own name. Accordingly, no useful purpose would be served by treating the company as a third party.

Finally, and perhaps rather more simply, Amendment No. 253 would increase the de minimis threshold at which a candidate would have to account for notional expenditure. The noble Lord's amendment would raise the threshold from £50 to £100. We believed that this matter had been disposed of to the satisfaction of the Official Opposition in another place. The Bill as introduced in another place contained a de minimis threshold of £20. In response to concerns that that was too low, on Report we increased it to £50. That step was welcomed by the honourable Member for Beaconsfield, Mr Dominic Grieve. We are not inclined to increase the limit a second time. A candidate would have to declare a donation of £50 or more and, therefore, it makes sense that the notional expenditure threshold is set at the same level.

Moreover, I put it to the Committee that, set against an expenditure limit of the order of £8,000, a donation in kind of £50 to £100 is not an insignificant sum and, on balance, should be recorded. I beg to move.

6 p.m.

The Deputy Chairman of Committees: For the convenience of the Committee I should say that if Amendment No. 195D is agreed to, I cannot call Amendments Nos. 196 and 197.


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