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Viscount Cranborne: My Lords, I support my noble friend. I shall not repeat his arguments and propose to make one point. We are all aware that there is a powerful danger that the reputation for rectitude of our electoral arrangements is increasingly susceptible to attack. My noble friend Lord Mackay gave the example of the referendums on the Scottish and Welsh devolution proposals. I shall not venture into the arguments for and against pre-legislative and post-legislative referendums because they will not add to my point. However, in themselves they certainly open up any government who indulge in them to accusations of a kind that must undermine the reputation for neutrality of the administration of elections and referendums in this country.

As my noble friend made perfectly clear, the arrangements that the government propose in this Bill for the financing of referendums and the control of the way that they are financed will further undermine the reputation for fairness upon which consensus as to those rules must depend. When he responds, I earnestly beseech the Minister to consider whether what is now proposed will deliver yet another hammer blow to what is already a very dangerous tendency.

Because of their actions, those of us who believe that the Government effectively rigged the Welsh referendum--whether intentionally or not--are given an enormous amount of credibility when we make such an accusation. There is no doubt at all that those of us who will be fighting in referendums conducted under the rules proposed by the Government, if they are passed, will be able to say with absolute truth that the rules enabled one side to be given a huge financial advantage. For the reasons that my noble friend explained, that would apply especially in a referendum on the euro.

As the noble Lord, Lord Barnett, pointed out to the Minister in another context only yesterday, the results of elections are increasingly influenced by money. This is not a negligible affair. We are talking about the perceived probity and fairness of referendums, which, like it or lump it--I know that my noble friend Lord Mackay does not like it--are with us in some form or another for the foreseeable future. It would be doing an enormous service to the political life of this country if the Government were able to look us in the eye and say with reason, demonstrably with reason, that they are not passing a law which suggests that they are rigging the conduct of the most likely referendums within the next few years in their favour. If they do so, those of us on the receiving end of that action will be able to cry "Foul!". As we have seen from events in the United States, that does no one any good.

Lord Fraser of Carmyllie: My Lords, there was a time when I was young and slim and eager to advance in the law. There was no one's feet at which I would rather sit than those of the noble Lord, Lord Wedderburn. I note with interest that the noble Lord

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is present in the Chamber this evening. I am sure that he has been considering the argument advanced by my noble friend Lord Mackay. I shall have to determine which side of the argument to follow. However, if the noble Lord, Lord Wedderburn, were to say that my noble friend's argument did not meet with his approval, I suppose that I would retreat. But my deep suspicion is that he understands very well that what my noble friend has said is a serious and important aspect of the issue now under consideration.

If the noble Lord, Lord Wedderburn, wishes to rise to dispute what I say, I should be very much minded to depart from the position taken by my noble friend. However, I have been watching the noble Lord as this argument has developed and my deep suspicion is that the intellectual integrity for which he is famed is such that he will not find it easy to dispute the argument that my noble friend Lord Mackay has advanced.

Lord Wedderburn of Charlton: My Lords, the noble and learned Lord was once a devoted student at some of my lectures. However, he will have to do without one tonight.

Lord Bassam of Brighton: My Lords, that is a very good response.

We have long known that the Official Opposition were ill at ease with the provision that the Bill makes for spending limits in referendum campaigns, although I still do not fully understand the real reasons behind their objection. However, noble Lords opposite have clearly been in two minds up until now as to what to do about the situation, just as their colleagues were in another place: should they seek to remove spending limits altogether or should they seek to ensure that the limits are aggregate limits biting on each side as a whole in a referendum campaign?

The amendments now before the House answer that question in a curious way. They clearly appear to have come down in favour of removing the spending limits for "permitted participants". I am pleased that the noble Lord has now at least agreed that it would be impossible to impose a global limit on each side in a referendum. That seems to me to be a realistic point of view to have reached. When we debated the matter on earlier occasions there seemed to be a schizophrenia in the mind of the noble Lord and one that he appeared to share, in part, with the noble Lord, Lord Lamont. However, as I understand it, the amendments of the noble Lord, Lord Lamont, will not be discussed.

I suppose that the case I have to meet in respect of these amendments is as follows. If we cannot control what each side as a whole spends, what is the point of controlling what anyone spends? That is the essence of the argument behind these amendments. In a nutshell, we believe that it is just as useful--and we would say necessary--to control what each participant can spend in a referendum campaign as it is to control what each party can spend in an election campaign. The object served in both cases is to ensure that an organisation, or an individual, does not gain a preponderant voice simply by reason of the money at its, or his, disposal;

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that is to say, the amount of money in the war chest. That is a useful object and I cannot see why anyone should oppose it--

Viscount Cranborne: My Lords, I am extremely grateful to the noble Lord for giving way. He is always most courteous at Report stage.

Let us take, for example, the euro referendum. If, let us say, the Liberal Democrats supported a "Yes" vote in such a referendum--which I suppose is at least possible--and the Government did the same, their combined funding would, therefore, be greater than that of the only party that opposed the euro; namely, my party. To use the noble Lord's argument, would that not mean that there would be a disproportionate amount of support for a "Yes" vote compared to that for a "No" vote?

6.30 p.m.

Lord Bassam of Brighton: My Lords, certainly that scenario is a possibility; I do not deny that. I am saying that it is better to have some control and some ability to contain the level of expenditure in a referendum of the nature that the noble Viscount, Lord Cranborne, mentioned rather than none at all. Part of the problem is that the noble Lord's assertion has been predicated on the assumption that the only referendum that is ever likely to see the light of day is a referendum on the euro. That is not necessarily the case. Although the spending limit--

Lord Mackay of Ardbrecknish: My Lords, whatever the subject of the referendum, there are three major parties in this country. Unless one of them splits its money--I refer to the sums of £5 million and £5 million--to one of those fives will be attached the Liberal Democrats' £3 million. That makes £8 million as opposed to £5 million. That is not a level playing field; it is unbalanced. If the noble Lord wants it to be balanced, he is simply falling at the first fence.

Lord Bach: My Lords, I intervene briefly before we progress too far. Questions for elucidation should be asked at Report stage. Noble Lords know well how to do that. As has already been acknowledged, my noble friend is generous in giving way. However, we all have to adhere to the rules for Report stage.

Lord Bassam of Brighton: My Lords, I have not argued that we are trying to create a level playing field. What I am trying to argue is that we should try to keep a sense of balance and proportion in the way in which we view referendum campaigns. I do not argue that we can create a perfect balance. I have made that point.

Moreover, as I said, the spending limits in the Bill cannot ensure that each side spends the same amount. As I have argued, they will help to do so. They will ensure that the governing factor is the number of organisations ranged on each side and not the amount of money which any one of them, or some of them, have available.

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Having put the case positively in that way, I now feel entitled to put the negative case too. What is wrong with the spending limits in the Bill? Why are the Official Opposition so opposed to them? How would the Bill be improved if they were left out? I have not heard exactly how the Official Opposition envisage that that would improve the Bill. Here I draw, with due acknowledgement, on points made by the Liberal Democrat spokesman in another place, Mr Stunell. If it is a mischief that there is no overall control of aggregate spending on each side as a whole, one would make the position worse, not better, by removing the limits that the Bill provides.

Official Opposition spokesmen seem to talk as if the limits set by the Bill are in the nature of financial allowances, or perhaps even mandatory spending targets. As we have just heard, they then count up the organisations which they imagine will be ranged on one side and conclude that one side will necessarily have the edge. They may be right or wrong about that; no one can tell. However, the alternative is to allow a single individual or organisation on one side to outspend the totality of individuals or organisations on the other simply because they happen to have more money. We say that that cannot be right. That seems to be the dividing line between the Government and the Official Opposition on this issue.

I have no hesitation in advising the House that Clause 115 and Schedule 14 should stand part of the Bill and that Amendments Nos. 182 and 186 should be rejected. That is where the argument rests. That is the difference between the two sides in the argument. It appears to me that noble Lords opposite want to give up any system of control. I do not believe that that is right. I believe that we should have a system of control. We argue that that system should be the best that we can possibly achieve in the circumstances. That is the Government's case.

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