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After paragraph 2(2) of Schedule 14 to the Political Parties, Elections and Referendums Act 2000 (c. 41) there is inserted—
"(2A) In the case of a referendum held under the Regional Assemblies (Preparations) Act 2003 an overall limit shall be placed on the total permitted spending by all permitted participants campaigning for and against the proposition, and that limit shall be equal in respect of each side and subject to an overall ceiling of no more than 1 million.""

The noble Baroness said: I freely admit that this is not a perfectly framed amendment. I am sure that the Minister will tell me so when he replies, so I shall put my shot in first. Also, the figure of 1 million in the amendment is there only for probing purposes.

We hope to hear an answer to this point: what do the Government believe to be an appropriate cost for the referendum campaigns in a region? Do they intend, as in other elections, to limit the expenditure which can lawfully be spent and have that amount accounted for by election referendum agents? Presumably the Government have thought carefully about this, particularly since campaigning for regional referendums will be a cost on the taxpayer, or on those contributing to campaigns in what will be a hotly contested competitive environment. If 1 million, that is, 2 million overall, is not of the right order, will the Minister indicate what he believes is the appropriate sum?

Turning to the main burden of the amendment, the House will know that referendum legislation already allows for unequal spending on each side in the referendum campaign. That unfairness is what the Government intended, and what it enacted during the passage of the Political Parties, Elections and Referendums Act 2000. Unequal funding for national referendums is enshrined in Schedule 14 to that Act. Although the Secretary of State is required under the schedule to have regard to the advice of the Electoral Commission, he is not bound by that advice, although he does have to explain his reasons for not following it. There are no clear guidelines on the funding rules given in the schedule. Instead, the Secretary of State may by order set whatever limits he wishes. He may, under paragraph 2(3), set different amounts for different referendums. He may also prescribe different amounts for different participants. So the Government can do pretty well anything they like when it comes to setting the referendum spending rules.

We would like to see that unfairness revisited and corrected, but this is not the Bill for correcting the problems of nationwide referendums. However, we must address the possible risk of unfairness in local

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referendums. Strikingly, there is nothing in the Bill to clarify the position. This is a fair referendum amendment. It seeks to establish a position where the limit on the spending of those campaigning on one side of the argument is equal to the limit of those campaigning on the other side. It may be technically difficult, as the noble Lord, Lord Neill, said in his report on funding. However, it would be fair and achievable, certainly regarding spending by political parties. That is why the amendment promotes equal spending limits for the yes and no campaigns. If the Minister cannot accept the amendment, will he give an undertaking to publish before Report his intended guidelines on funding so that the House can consider them?

The Minister should also address a number of related questions that may lead to unequal funding. What controls will there be on funding of pro-campaigns by EU institutions or by EU companies that are keen to advance the ideology of a Europe of the regions? What limits will there be on publicity from the European Union that directly or indirectly promote regional government or regional organisations in the run-up to a referendum? Will there be restrictions on national spending on publicity that may influence regional referendums? Would a company, incorporated in Europe, and carrying out business in the UK, be able to give donations without seeking shareholder agreement? The Minister may not be able to answer those questions now. He may also start saying that I am seeing EU reds under the bed. However it is possible that we may find other money being put in, which the Government had not intended. It would be helpful if the Minister could at least to answer all those points—although I see by his face that he may not. Will he either write to me, or respond in some other way, before we reach the next stage? I beg to move.

Lord Shutt of Greetland: I am sure that the amendment is an appropriate issue to raise, however I cannot believe that it alone is sufficient or proper as an amendment. One simply has to look at the numbers—2.5 million in the North East and 8 million in the South East. Therefore, if a million is right for one, it is not right for the other. I do not know what the figure is. It is right that it is looked at, and that there is a proper playing field. It cannot be right to pick a figure at random and suggest that that is the same for each region.

Lord Evans of Temple Guiting: It is a fair and reasonable amendment, because it will elicit a reply which I hope will satisfy the noble Baroness, Lady Hanham. I cannot answer the detailed questions she asked, but I will write to her.

The amendment is unworkable. It is at odds with the approach taken by PPERA. Paragraph 2 of Schedule 14 allows for an order to be made setting limits on expenditure incurred by individual permitted participants—either by themselves or on their behalf. It envisages that this might be done by setting different

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levels for different categories of permitted participants, as has already been done in UK-wide referendums.

First, the timing would be unworkable. We would want to make any order setting limits on spending in good time before referendums so that organisations and individuals know what expenses they would be able to incur before deciding whether to declare themselves as permitted participants. We would need to know the number of permitted participants in each yes and no campaign in order to set individual limits that do not exceed the proposed 1 million overall limit. We cannot set expenditure limits until we know the number of participants. However, we will not know that until well after we have set the limits.

Lord Waddington: I thank the Minister for giving way. Does what he has said mean that he favours some sort of limit on expenditure?

Lord Evans of Temple Guiting: When I rose, I said that I hoped that I would be able to meet the criticism of the amendment, implied by the noble Baroness, Lady Hanham. That is what I am leading up to. I am just setting the scene, which is important.

Secondly, the amendment would result in an unworkable situation because it would be extremely difficult, if not impossible, to enforce an overall limit. The amendment would, in effect, expect permitted participants to co-ordinate continuously how much each had spent out of the total ceiling. I am not sure what sanction the noble Baroness intends if the limit were breached. Would someone be criminally liable because someone else, unconnected with them, overspent? That is neither fair nor palatable. I hope noble Lords accept that the amendment will not work in practice. However, I shall be positive and explain how the Government intend to proceed.

As I have said, paragraph 2 of Schedule 14 to the Political Parties, Elections and Referendums Act already contains provision to set different limits in relation to referendums held in particular parts of the UK. My right honourable friend the Minister for Local Government has written to Sam Younger, the chair of the commission, to seek its views about whether different limits should apply for regional referendums and, if so, what they should be and why. That is a crucial point.

The commission has not yet done any detailed work on what might be appropriate levels for a regional referendum but has suggested that its officials work with those of the Office of the Deputy Prime Minister. That seems a sensible way ahead. We would envisage putting out proposals for public consultation before making any order and Parliament would have an opportunity to scrutinise any order made under paragraph 2 of Schedule 14 to the PPERA in due course.

I hope that in the light of the explanation the noble Baroness will withdraw her amendment. I can assure Members of the Committee that we are looking

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carefully at the whole issue and working closely with the Electoral Commission. We have not made up our minds; there is no hidden agenda. We agree with the view of the noble Baroness, Lady Hanham, that there should be a high degree of transparency in this matter and we will keep the House informed as deliberations continue.

Baroness Hanham: I thank the Minister for that helpful reply. It is useful to know that discussions are being held with the Electoral Commission. I am mindful of the fact that in every other election there is a limit per head per candidate, so there is no question of overstepping any links. I cannot therefore see that that is not a possible way of dealing with the matter.

I said at the outset that 1 million was tabled as part of a probing amendment in order to establish the principle that there should be a limit. It should not be the case that some participants can overwhelm the rest of the participants with the glory of their advertising material, set against the glossy background of huge sums of money.

I should be pleased to know when the Electoral Commission is to make a decision. Is it within the timescale of the Bill? If not, how will the Minister inform Parliament of that situation? I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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