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Lord Mackay of Ardbrecknish moved Amendment No. 33:

("(2) A person may not be appointed--
(a) as chief executive of the Commission if he is a person who (by virtue of section 3(4)(a) to (d)) may not be appointed as an Electoral Commissioner; or
(b) as a member of the staff of the Commission if he is a person who (by virtue of section 3(4)(b) to (d)) may not be appointed as an Electoral Commissioner.").

The noble Lord said: My Lords, during the Committee and Report stages we had many debates about the staff of the electoral commission and how political they could be. The Government and I disagreed on a number of occasions but have now concluded that a chief executive should not be a member of a political party. I still have reservations about any of the staff being members of a political party and wonder whether the Government, having accepted my argument about the chief executive, believe that I am right about all the staff.

My amendment proposes that the chief executive cannot be a member of a political party and the Government's amendment does the same. By the nature of things, I am sure that the noble Lord, Lord Bach, will tell me that my amendment is not properly drafted and that his is. Whichever is the case, I am grateful that my argument has been heard in that regard. I beg to move.

Lord Bach: My Lords, the noble Lord's arguments have been heard. His amendment carried forward the debate we had in Committee and on Report about the qualification and disqualification for being a commissioner or a member of the staff of the commission. The effect of the amendment is that a person cannot be appointed as chief executive of the commission if he is a member of a political party.

We had our doubts about that because of the concern that the right to be a member of a party should not be abridged unless absolutely necessary. However, we now all agree because we believe that there is not sufficient reason to refuse the amendment. It seems right that the chief executive of the commission, like the commissioners, should not be associated with any party.

The noble Lord anticipated my reply. We tabled our Amendment No. 34 for simple technical drafting reasons. We believe that it has the same effect as that intended in the Opposition's amendment.

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The Government's Amendment No. 35 is a consequential amendment. If it is right to require the chief executive to resign any membership of a party upon appointment, it must also be right to require him or her not to resume or take up membership of a party after appointment. Amendment No. 35 is designed to plug that small gap. We believe that although views on both sides have ebbed and flowed during the long course of the Bill in this House, we have the double advantage of consensus and of getting the Bill right on this small issue. I invite the noble Lord to withdraw his amendment.

Lord Mackay of Ardbrecknish: My Lords, I am grateful to the noble Lord. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Lord Bach moved Amendments Nos. 34 and 35:

    Page 131, line 32, leave out ("as chief executive or") and insert--

("(a) as chief executive of the Commission if he is a person who (by virtue of section 3(4)(a) to (d)) may not be appointed as an Electoral Commissioner, or
(b) as any").

    Page 131, line 40, after ("terminate") insert--

("(a) if he is their chief executive, on the occurrence of such an event as is mentioned in any of paragraphs (a) to (d) of paragraph 3(3), and
(b) in any other case,").

On Question, amendments agreed to.

Schedule 7 [Control of donations to individuals and members associations]:

Lord Bach moved Amendments Nos. 36 to 38:

    Page 159, line 2, leave out ("less") and insert ("not more").

    Page 164, line 17, leave out ("not less") and insert ("more").

    Page 164, line 45, leave out ("less") and insert ("not more").

On Question, amendments agreed to.

Schedule 9 [Limits on campaign expenditure]:

Lord Hodgson of Astley Abbots moved Amendment No. 39:

    Page 169, line 17, leave out ("£30,000") and insert ("£20,000").

The noble Lord said: My Lords, we return to the discussion which we had in extenso during the Committee and Report stages. I am afraid that I and, I believe, other noble Lords did not find the Minister's reply convincing. As a result, I gave notice that I should raise the issue again at Third Reading.

At the heart of the Bill a number of balances are to be struck. There is the important balance between transparency and local democracy. There is the equally important balance between the funding needs of a party nationally and those of a local association. I do not believe that we yet have that aspect of the Bill entirely right.

First, even during "peacetime"--the period between elections--the burden of bureaucracy which we intend to apply to political parties and local associations is huge. I point out to those noble Lords who doubt that, that the Bill and its schedules which we received in Committee ran to 180 pages and it is now 243 pages. We have therefore increased it by one-third. That

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burden on local associations, some of which are weak, may well be the straw which breaks the camel's back. That in turn will mean that national headquarters must take a much closer interest in the operation of local associations, thus increasing the trend towards centralisation. That will not help to revive local democratic activity--quite the reverse.

Secondly, during election campaigns the trend towards a presidential style of campaigning will accelerate. As part of the reawakening of interest in our democracy, I should like national political parties to be forced to consider how to enthuse, involve and include their local activists, not merely to find further ways to reach past, or bypass, them by focusing on massive spending on the media, posters, direct mail and other forms of communication.

The amendment seeks to give an incentive for the development of local democracy by restricting the level of national spending that can be undertaken during general election campaigns. Under my amendment national spending will be restricted to £20,000 per constituency contested, not £30,000 as presently proposed. If every constituency was contested, total spending centrally would be about £13 million, not £19 million as proposed.

Some may believe that that figure is too restrictive to undertake an effective national election campaign. However, before one reaches that conclusion one should not overlook two additional sources of permissible finance. First, each constituency will in addition be able to spend its normal allowance, which is about £8,500. If every constituency is contested, that will amount to a further £5.6 million. Secondly, there is a further allowance for centralised expenditure under Part I of Schedule 8 which lists exempted items. It is not easy to calculate that amount of expenditure, but included in those items of permitted expenditure are the costs of staff and their accommodation. That expenditure may well amount to a further £3 million or £4 million. Even under my amendment, if a party contests each and every constituency it can spend £13 million, plus £5.6 million at constituency level, plus a further £4 million of exempted expenditure, making £22.6 million in all. Surely, that is enough; and it is a larger figure than Neill recommended.

There is disquiet about the level of expenditure at general elections. The noble Lord, Lord Rennard, has spoken eloquently about this, and I suspect that he will contribute to the debate later. One of the reasons for the whole Bill is the level of expenditure and the funding of general elections. I am concerned about the damage that we are probably doing, almost certainly inadvertently, to local democracy and our democratic institutions. My amendment seeks to revive local democracy by giving it more prominent ranking in the priorities of campaigning and campaign expenditure. Unamended, the Bill will permit a party to spend up to £29.6 million. Of that, only £5.6 million (less than one fifth) can be spent locally. If my amendment is accepted, total expenditure will be limited to £22.6 million, of which £5.6 million (one quarter) can be spent locally. Surely, that proportion which parties must spend locally is not unreasonable. I believe that

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£22.6 million is a perfectly adequate total for a national party to spend to run an election campaign. One quarter of that amount is the right balance for local expenditure, and by those means we shall significantly enhance local democracy. I beg to move.

Lord Rennard: My Lords, we consider again tonight one of the most important election rules that we can possibly introduce. For the first time there is to be a limit on spending by national party organisations. I believe that such reform is long overdue and essential if we are to clean up our political system, reduce the power of the millionaire interests and give power back to voters. We need to curb the trend for millions of pounds to count for more than millions of votes. But the question now is: what is the appropriate limit, and how should it be set before the electoral commission may examine the issue?

I believe that consensus is the best approach. In evidence to the Neill committee, the Labour Party said that,

    "those who compete for political office should have a fair opportunity of doing so and should not be placed at a disadvantage by inadequate financial resources relative to others".

In its document Transparency, Participation, Equality, the Labour Party argued for a national limit of £15 million. The Liberal Democrats have also consistently argued here and in another place for the same limit. In another place that limit was strongly supported by Mr Martin Linton who is a recognised expert in the field of party funding. He argued that 70 per cent of Members of another place belonged to parties which then supported a limit of £15 million.

In spite of that, in Committee in your Lordships' House the Government said that for the moment they would stand by the £20 million limit set out in the Bill. The noble Lord, Lord Bassam, said that he was,

    "in the peculiar position of barking against my own party on this occasion".--[Official Report, 18/10/00; col. 1098.]

More significantly perhaps, he also said at col. 1099:

    "If presented with a fresh consensus in favour of a lower figure, we would be prepared to reconsider the matter, but it is not one to be pursued on a unilateral still less a partisan basis".

There is now a fresh consensus on a lower figure and the Government should not pursue the £20 million limit on a purely unilateral basis. During consideration of the Bill we have removed from the calculation of total expenditure some important items, including utility bills, headquarters and staff costs and legal services. In part, that has led to a new Conservative position which has brought the Opposition into line with both the Labour Party and the Liberal Democrats.

At Committee stage the noble Lord, Lord Mackay of Ardbrecknish, proposed a national limit of exactly £15 million, while the noble Lord, Lord Hodgson of Astley Abbotts, argued for a very slightly lower limit. The Government would, therefore, be isolated if they sought to adhere to the limit of £20 million. I remind the Minister that he said that this matter should not be pursued on a unilateral still less a partisan basis. In

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future the electoral commission can review the limit and increase it if there is a new consensus, but for the moment the limit should be set at a lower level for which there is much greater consensus. It would be open to the Government to increase the limit on constituency spending, if they wished to do so, to make the total available nationally and locally consistent with the figure in the Neill report. That would help to address the imbalance between constituency and national spending. Let us have a national limit of about £15 million on which there is far greater consensus.

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