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Lord Bassam of Brighton: My Lords, I shall deal with all the amendments which have been regrouped. Amendments Nos. 151 and 160 are familiar to your Lordships' House, the noble Lord having spoken to them previously. They relate to the period during which the spending limits are to apply.

The noble Lord, Lord Mackay, expressed concern that in the absence of a fixed-term Parliament registered parties will not know when the 365-day period when spending limits are to apply will commence. I should not give him the date of the next general election, even if I knew it. It is a matter of considerable speculation, so let us leave it there. As I indicated previously, parties can comply with the law

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by working to the spending limit in each 365-day period. The noble Lord has taken me at my word in putting forward amendments which give effect to that.

It is one thing for parties to work to a rolling 365-day period on a voluntary basis but quite another to require that of parties. If the £20 million limit is to apply to any period of one year, it would have to be enforced for any such period. That would mean that a registered party would have to submit a return to the electoral commission on a daily basis, covering the most recent rolling 365-day period. We have heard a great deal about intolerable burdens and I submit that that would place a most intolerable burden on parties to no good purpose.

We are concerned with the 365-day period ending with the date of an election. Only in respect of that period do we need to require a return from each party. I therefore commend to the noble Lord the existing formula in the Bill and invite him to withdraw his amendment.

I turn to Amendment No. 159 tabled by the noble Lord, Lord Willoughby de Broke. As he said, it would reduce the period during which the controls on controlled expenditure would apply in relation to a parliamentary general election. As paragraph 3 of Schedule 10 stands, the relevant period is 365 days prior to the date of the poll. That mirrors the position for registered parties under Schedule 9. The amendment cuts the relevant period to one of just under 30 days beginning on the day an election is called. However, the noble Lord thought that we might want to bring forward some other number of days.

If adopted, the amendment would allow third parties to incur controlled expenditure in the weeks and months leading up to an election. Instead of being limited to a budget of £1 million in the year before an election, a third party would be free to spend up to that amount in the final six weeks of the campaign and on top of that spend a further £5 million, £10 million or more in the weeks and months which preceded a formal announcement of the date of poll.

The noble Lord suggested that because we do not have fixed-term Parliaments, a third party cannot know when the 365-day period will start, thus a third party may unwittingly be caught out by the provisions of Part VI. However, the fact that the precise date of a general election is not known well enough in advance is no hindrance to the operation of the scheme set out in the Bill. I believe that there is common agreement to that.

A third party can avoid committing any offence as a consequence of incurring expenditure above the lower limit on controlled expenditure by making the required notification to the electoral commission and by renewing it on an annual basis. In practice, a third party can ensure that its campaign expenditure remains within the prescribed upper limits on third-party expenditure by adhering to those limits during any 365-day period. In most cases, we are dealing with sophisticated organisations which can take an educated guess at the timing of an election and consequently tailor their expenditure accordingly.

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Most expenditure aimed at an election will in any event take place in the immediate run-up to the poll. While I recognise that there may be a theoretical concern about the possibility of incurring controlled expenditure in breach of the requirements of Part VI, I am not convinced that there is a real danger in practice. Applying restrictions over a 365-day period is, however, essential to the aim of bearing down on election expenditure. The noble Lord, Lord Willoughby de Broke, referred to campaign groups. Whether or not Business for Sterling or any other group falls within Clause 83(3) in Part VI of the Bill depends very much on the facts of the case.

As the debates have proceeded noble Lords opposite now appear to argue for a lower cap for general election campaigns. They also argue strenuously that that should apply for a shorter period. Do noble Lords opposite want a larger sum of money in a shorter period of time, with the ability to spend much more outside the period of control, or do they believe that there should be a proper system of regulation as set out in the Bill? Some of the important issues have been drawn out as the debate has proceeded. I shall be interested to hear from noble Lords opposite why they have decided to try to dismantle a system of control which I understood commanded a degree of consensus.

Lord Willoughby de Broke: My Lords, while I thank the Minister for that reply I do not believe that he has answered my concerns. The Minister simply repeated what he said at Second Reading and what was said in the other place. He left it to third parties to operate their expenditure limits for any 365-day period and invited them to take what he called an educated guess. The Minister has given noble Lords one or two hints but no more. If the Minister will not tell us when the election will take place, how can third parties possibly guess and operate accordingly? It is grossly unfair that they should have to operate on a rolling 365-day basis; otherwise, they will fall foul of the Bill as it stands. Having made that point, I should like to revisit the matter at Third Reading.

Lord Mackay of Ardbrecknish: My Lords, I have listened to the Minister, who does not convince me. The Minister is supposed to convince noble Lords of the merits of the Government's cause, not the other way round. I remind the Minister that when we debated the problem of the 365 days both his noble friend Lady Gould and I doubted its good sense and believed that it would be difficult to operate. That is especially so in parliaments with narrower majorities than the present where one can assume that it will run four years, if not longer. It can be very difficult to predict the position in parliaments with tighter majorities and each month must be assumed to be month one of the 12-month period, which adds to the problem. I would control the two or three months running up to the election, because that is the key period. Political parties which wanted to spend outside that period would be off their heads. The political climate can change. I remind noble Lords that that happened in September in connection with the price

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of petrol. I do not believe that the Minister would want an election within a week or two of that event. The world changes quite quickly. However, I shall not make any progress. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 78 [Returns as to campaign expenditure]:

Lord Mackay of Ardbrecknish moved Amendment No. 152:

    Page 59, line 21, leave out ("and") and insert ("or").

On Question, amendment agreed to.

Clause 89 [Restriction on payments in respect of controlled expenditure]:

Lord Mackay of Ardbrecknish moved Amendments Nos. 153 and 154:

    Page 67, line 14, leave out ("and") and insert ("or").

    Page 67, line 14, leave out ("£100") and insert ("£200").

On Question, amendments agreed to.

11.45 p.m.

Lord Bach moved Amendments Nos. 155 and 156:

    Page 67, line 19, at end insert ("or receipt").

    Page 67, line 20, leave out from ("payment") to end of line 22.

On Question, amendments agreed to.

Clause 90 [Restriction on making claims in respect of controlled expenditure]:

Lord Bach moved Amendment No. 157:

    Page 67, line 29, leave out (", together with the relevant invoice,").

On Question, amendment agreed to.

Clause 92 [Limits on controlled expenditure by third parties]:

Lord Bach moved Amendment No. 158:

    Page 69, line 37, at end insert--

("(5A) Where--
(a) during a regulated period any controlled expenditure is incurred in a particular part of the United Kingdom by or on behalf of a third party, and
(b) the expenditure is so incurred in pursuance of a plan or other arrangement whereby controlled expenditure is to be incurred by or on behalf of--
(i) that third party, and
(ii) one or more other third parties,
respectively in connection with the production or publication of election material which can reasonably be regarded as intended to achieve a common purpose falling within section 83(3),
the expenditure mentioned in paragraph (a) shall be treated for the purposes of this section and Schedule 10 as having also been incurred, during the period and in the part of the United Kingdom concerned, by or on behalf of the other third party (or, as the case may be, each of the other third parties) mentioned in paragraph (b)(ii).
(5B) Subsection (5A) applies whether or not any of the third parties in question is a recognised third party.").

The noble Lord said: The amendment responds to the concern expressed in Committee by the noble Lord, Lord Rennard, about third parties ganging up in order--as he put it--to hijack the agenda during an election campaign.

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The noble Lord will be aware that under Section 75 of the Representation of the People Act 1983 it is an offence for a third party in a constituency contest to incur expenditure in concert with others. We do not want to add to the list of offences created by the Bill. But I hope the noble Lord will agree that this amendment should have the same deterrent effect. The amendment provides that where a third party incurs control of expenditure in pursuance of a plan or other arrangement with one or more other third parties, the expenditure is deemed to have been incurred by each of the third parties concerned.

As a result, where, for example, four third parties were acting in concert in mounting a campaign throughout the United Kingdom, the buying power of their aggregate spending limit would be in round terms £1 million and not four times that amount. In short, third parties could not pool their resources in order to secure a bigger impact for their campaign. I beg to move.

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