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House of Lords

Wednesday, 15 December 2010.

3 pm

Prayers-read by the Lord Bishop of Bristol.

Olympic and Paralympic Games 2012: Olympic Truce


3.08 pm

Asked by Lord Bates

Baroness Garden of Frognal: The Government fully support the principles of tolerance and understanding, equal opportunities and fair play that underpin the Olympic Truce. As the host country, the UK will be promoting a fresh resolution calling for the continued observance of the Olympic Truce for the 2012 Games, as has every host nation since 1992.

Lord Bates: My Lords, I am very grateful to my noble friend for that positive response, but is she aware that the entire purpose of the ancient Olympic Games was peace? That was underwritten by a sacred truce. Those games ran for 1,200 years, and violations were extremely rare. By contrast, the modern Olympic Games have been running for 110 years. They have been cancelled due to war three times, the subject of terrorist attacks twice and of mass boycotts five times, and the truce has been violated on virtually every occasion. What steps can Her Majesty's Government take to ensure that next time, we do things differently?

Baroness Garden of Frognal: My Lords, I pay tribute to my noble friend for his enthusiasm and persistence in ensuring that the possibilities for an Olympic Truce are not overlooked. He will be aware that the UN resolution will not be drafted until January, and the Government will welcome proposals and ideas, including those along the lines that he suggested, which could be incorporated in the resolution. As for international peace proposals, we are of course dependent on other countries to help us to make any headway there.

Lord Addington: My Lords, have the Government thought about whether they might want to extend the idea of the Olympic Truce to all other major sporting events, or at least have some occasion when we might discuss things outside sport when we are having a sporting event?

Baroness Garden of Frognal: My noble friend makes a valid point. The core of the Olympic Truce was to promote the Olympic ideals, to use sport to help

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promote dialogue and reconciliation, especially between nations in conflict. We could perhaps look at future sporting events to see how that could be applied to, say, Rugby League, football and various other World Cups and world events.

Baroness Grey-Thompson: My Lords, has the noble Baroness considered applying the wider ideals of the Olympic Truce, such as good behaviour and citizenship, along with inclusive school sport and the inspirational nature of the Games as something that could be considered a true legacy of the Olympics?

Baroness Garden of Frognal: The noble Baroness makes a valid point. We are promoting a number of different ideas around the Olympics. They are not directly connected to the Olympic Truce but seek to involve today's youth in different sports programmes. There is the Get Set programme sponsored by LOCOG, for example, and a project involving young people making films around the theme of truce. A lot of ideas are floating around at the moment and, as we get closer to the Games, we will need to pull them all together so that we derive a concrete legacy from the Olympics.

Lord Jopling: My Lords, is it true-this story has appeared in the press-that the budget for security for the Olympic Games in London is being severely cut? If it is true, and bearing in mind that whether or not we have a truce this extremely expensive two or three-week circus in London will be an invitation for bombs, bullets, bloodshed, blackmail and boycott-to say nothing of bogus budgets-would it not be a major folly to cut the security budget?

Baroness Garden of Frognal: My noble friend makes some valid points but paints a rather depressing picture. Certainly matters of security around the Olympics are of high priority to the Government and will be dealt with in an appropriate way.

Lord Boyce: My Lords, I am interested in the Minister's answer to the original Question about whether the Government are looking for a continuance of previous UN resolutions on the Olympic Truce. What are the Government going to do to deliver some kind of tangible result rather than fine-sounding words, which is what has happened for the past 100 years?

Baroness Garden of Frognal: As the noble and gallant Lord says, there have been a lot of fine-sounding words. It is quite difficult to look back for examples of what has happened in countries which have previously declared their support for the Olympic Truce but have found it difficult to achieve particular outcomes to demonstrate it. It is early days at the moment and we welcome ideas on how something positive can come out of our Olympic Games in 2012.

Baroness Billingham: Can the Minister reassure the House about our future Olympians-the young people of today-because we are getting conflicting messages? Can she tell us about the £162 million which was

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ring-fenced for school sport and about which there was much discussion? We understood that the Prime Minister was to intervene, but now we are told that he is not going to do so. Today we hear that that £162 million has disappeared. Where has it gone? How are we going to produce sportsmen and women in the future without it?

Baroness Garden of Frognal: My Lords, the coalition Government are committed to reviving the culture of competitive sports in schools in ways that achieve real value for the sport. The Schools Olympics is one of the programmes designed to encourage every pupil in the country to get involved in competitive sport and to give them an opportunity to do so; and to harness the power of the Olympic and Paralympic Games to inspire a generation of young people to take part in sport. There are a number of other initiatives which we hope will also contribute to that aim.

Lord Christopher: My Lords-

Lord Mawhinney: My Lords-

Lord Christopher: My Lords, given the importance of the question of the noble Lord, Lord Jopling, would the Minister be kind enough to tell the House what "in an appropriate way" means?

Baroness Garden of Frognal: That was in reference to the security around the Olympics. Matters of security are best left to the people who have responsibility for them. The Question was about the Olympic Truce. Obviously matters of security will be relevant to that but are not directly relevant to this particular Question.

Lord Mawhinney: My Lords, my noble friend has said that she is open to at least considering suggestions. Would the Government be willing to consider the possibility of linking the observance of an Olympic Truce by a country with its participation in the following Olympics?

Baroness Garden of Frognal: My noble friend makes an extremely interesting proposal. Given that we are at the stage of welcoming suggestions and proposals, perhaps we could have that question in writing and begin to develop some ideas around it.



3.15 pm

Asked by Lord Elton

The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford): My Lords, Chinese investment in Burma is significant and growing. Major projects are under way in the oil, gas and mining

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sectors. We are concerned that such investment will not benefit the people of Burma due to the regime's economic mismanagement and the prevalence of corruption and human rights abuses, including forced labour. Increased competition in the region for influence and economic opportunities in Burma has reduced pressure for genuine political reform.

Lord Elton: My Lords, in view of China's overt economic and tacit political support for this tyrannical regime and that of North Korea, should we not now be looking with critical and anxious eyes at China's enormous economic effort in other places, such as Africa and South America?

Lord Howell of Guildford: I am particularly grateful to my noble friend for raising this issue because the answer is an emphatic yes. The extent of Chinese investment and trade in Latin America, Africa and south-east Asia is enormous and growing very fast indeed. We constantly urge the Beijing Government and the Chinese to match their actions and their activities with a responsible influence so that the vast sums that are poured in and the huge infrastructure that has developed can be of benefit to and not disrupt the economies in which they operate. But it is an uphill task and there is very rapid change going on in the balance of world power as a result of these developments.

Baroness Cox: My Lords, is the Minister aware that the Shan Women's Action Network has recently launched the report High and Dry documenting very serious problems affecting people in the Shan state of northern Burma arising from a dam being built on the Longjiang River in China's Yunnan Province? It highlights the need for an assessment of the impact of trans-boundary dams and shared water resource management. Could Her Majesty's Government encourage the Chinese Government to address these matters urgently because they are seriously affecting the lives and livelihoods of people inside Burma?

Lord Howell of Guildford: Yes, we are aware of the Shan Women's Action Network report which has just been published and the very worrying situation it outlines where the potential stoppage of water further up the river by Chinese activity would cause grave harm. We regularly discuss environmental concerns at official level with the Chinese Government; we are particularly focused on this matter and will certainly raise it further with them.

Lord Hylton: Can the Minister confirm that China has been buying up large quantities of the best tropical hardwoods from Burma only to convert them into low-grade plywood? Is that not a bad bargain for both countries?

Lord Howell of Guildford: I cannot confirm the detail but that kind of practice is clearly highly undesirable. In our constant dialogue with the Chinese on the need for environmental responsibility, that is a matter that we will certainly raise if we are not doing so already.

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Baroness Kinnock of Holyhead: My Lords, of course we all agree with the concerns which the noble Lord has expressed about the way that China behaves in Burma as well as in other parts of the world. However, as far as that region is concerned, is not the most important thing to ensure that China uses the influence that it has regionally on the Burmese regime?

Lord Howell of Guildford: I think I understood the noble Baroness. Clearly, we have to seek responsible dialogue with the Chinese to ensure that they do not undermine the effect of the sanctions that we are keeping in place and which are having some effect because the generals are complaining bitterly that the sanctions put in place by the US, Australia and the EU are damaging their lifestyle and plans. So we will continue with these sanctions but we must have better co-operation from China and other countries in this matter. If that is what the noble Baroness was arguing for, I am right with her.

Baroness Falkner of Margravine: My Lords, does my noble friend agree that the slight shift in the US position, whereby it wishes to have direct negotiations with Burma to build a better relationship in the longer term, will help shift the regional balance of power by making China less capable of making Burma a client state, particularly in terms of ports in the Indian Ocean and strategic shipping?

Lord Howell of Guildford: We are constantly looking at ways of bringing more effective global pressure to bear on this unpleasant regime and its practices. Any developments of this kind need to be measured and calibrated very carefully, but it is the direction in which we should go.

Baroness Symons of Vernham Dean: My Lords, do the Government believe that there is any truth in the suggestion that the Chinese are helping the authorities in Burma to develop a nuclear capability?

Lord Howell of Guildford: I have no evidence or proof of that, beyond media suggestions. There is no established evidence or clarity on that matter which I can share with the House today.

Lord Dubs: My Lords, does the Minister agree that there is a little difficulty with the sanctions regime against Burma, which instinctively we would all be inclined to support? If the sanctions are working, they will leave a gap for the Chinese; yet if western companies go into Burma, they are accused of conniving with the regime. There seems to be no answer to that.

Lord Howell of Guildford: The noble Lord puts his finger on an obvious dilemma. The answer to it is responsible action by the Chinese. If China's activity effectively undermines the impact of sanctions, then the noble Lord is absolutely right in his analysis. However, it does not seem to be working that way. The sanctions appear to be causing considerable difficulties, reflected in the continual, bitter complaints made by the generals and the authorities about them. They feel

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that they are both hostile and damaging to their nation and target those who are richer and more comfortably ensconced rather than the ordinary people of Burma.



3.22 pm

Asked by Lord Naseby

Lord Taylor of Holbeach: My Lords, the development of alternatives to the traditional census is being taken forward by the National Statistician. She has established the Beyond 2011 project to look at this issue and will make proposals in 2014.

Lord Naseby: My noble friend's Answer is interesting, but is he aware of the importance of consistency of census data during the past 200 years? The census is used by millions of our citizens to trace their ancestry, let alone by local and national government and other organisations which look at trends. Will he assure us that, whatever is looked at, we will get a census in 11 years' time and that the Government will not rely on databases, which are notoriously inaccurate, particularly when one is trying to establish who lives where?

Lord Taylor of Holbeach: The census results are used extensively by many public and private sector organisations and by many private citizens for a wide variety of purposes. Continuity from one census to another is very important for understanding changes in society. However, I cannot give my noble friend any reassurance because it would pre-empt the outcome of the independent work being taken forward by the National Statistician.

Lord Young of Norwood Green: My Lords, does the Minister recognise the huge interest taken in the information contained in the census? Genealogy is a fast growing hobby which has the added benefit of encouraging the more mature of our citizens to engage with computers. The USA has released census information after 72 years without any apparent deleterious effect. In the light of this, will the Minister examine the current government policy of not releasing census information for 100 years?

Lord Moser: My Lords-

Lord Taylor of Holbeach: The House is very enthusiastic on this subject.

I thank the noble Lord, Lord Young, for his question. I understand that the restriction is traditional. The new project to look beyond 2011 will include all these aspects. It is particularly important for many people that they have an opportunity to trace their ancestors. We have to understand that we live now in an IT age; indeed, where is the written letter and where are our written documents? It is going to be much more difficult for historians of the future to find the evidence of our lives today.

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Lord Moser: Perhaps I should declare an interest in that I used to be responsible for the census, I do not know how many years ago. There is no question but that the traditional census is of enormous importance for the country to understand our population, migration and much else. I am delighted that next year's census is going ahead, as planned. That is good news. As to the future, however, there are now serious alternatives which have been followed and adopted successfully in a number of other countries. Most Scandinavian countries and Germany now use alternatives, which is what is on the cards.

Noble Lords: Question!

Lord Moser: Will the Minister assure us that following those alternatives, which are very complicated, will have full support and collaboration from the Government?

Lord Taylor of Holbeach: I thank the noble Lord, Lord Moser, for his question and contribution. He speaks from a great deal of experience in this subject. The most important thing is to emphasise that proposals will come to Parliament before any developments are taken forward. One of the difficulties with the current census is that it is usually way out of date by the time it is actually published. We live in a very mobile society, as we all know, and to try to get a dynamic model would produce considerable advantages in the allocation of resources and the ability of government properly to address the issues of the day.

Lord Glenarthur: My Lords, can my noble friend say how much the last census cost, what his estimate is for the next census, and whether he would dare hazard a guess at the cost of the 2021 census?

Lord Taylor of Holbeach: I do not have the figure for the last census but I have the current estimate for the 2011 census. It is £482 million, which is a very large amount. It includes the extrapolation of the figures and the development of figures after the actual census has been taken. It is believed that it could cost as much as £1 billion in 2021.

The Lord Bishop of Bristol: Given that the British public are very well able to answer questions on the census form for themselves, does the Minister agree that any campaign, such as that which I gather is being undertaken by the British Humanist Association and is specifically aimed at telling people how to answer the question about religious affiliation, is at best inappropriate, and at worst likely to distort census-on-census comparisons?

Lord Taylor of Holbeach: I am sure the whole House will agree that the integrity of the process is important. I note the right reverend Prelate's observations.

Lord Campbell-Savours: My Lords, why cannot the census questions be amended in such a way whereby we can secure far higher levels of electoral registration, particularly when in the future we are going over to the new system of individual registration?

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Lord Taylor of Holbeach: There is no interrelationship between the electoral register and the census at the moment. I do not know whether the National Statistician has considered that possibility, but both act under totally different powers vested in them by Parliament. The confidentiality of one list, as opposed to the other, must be respected.

Lord Maclennan of Rogart: My Lords, since the budget for the forthcoming census is approximately twice that for the census conducted in 2001, and since 50 per cent of the present costs are to be met by outsourcing, will the Government not assume that handing over to other agencies is necessarily going to be the way to make substantial public savings? Will the Minister also recognise that it is important for Parliament and the public to know what the considerations are that will be borne in mind when the recommendations are made in 2014? Can he ask that that be a fully transparent process?

Lord Taylor of Holbeach: I assure the House that it will be a fully transparent process. It is accuracy that lies at the heart of any census programme, and connected to that is the response rate. For the last census, the response rate was 94 per cent, but in some parts of the country it was lower than that. For example, in the Royal Borough of Kensington and Chelsea, it was as low as 68 per cent, and adjustments had to be made to ensure that the figures accurately reflected the situation. Much of the effort this time is going into ensuring that we have a much more substantial response rate and that in no part of the country is it less than 80 per cent. The hope is that with a more dynamic model that might be improved.

EU: Financial Assistance


3.31 pm

Asked by Lord Willoughby de Broke

The Commercial Secretary to the Treasury (Lord Sassoon): My Lords, Article 125 of the treaty, on the so-called "no bailout" clause, states that a member state,

of another member state. Article 125 does not preclude member states from providing loans to one another. The European financial stability mechanism was established under Article 122.2, which allows the Union to lend to a member state that is in difficulties or,

Lord Willoughby de Broke: My Lords, I am grateful to the Minister for that slightly evasive Answer. The phrase about matters "beyond its control" simply cannot

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be the answer to the difficulties encountered by Greece, Ireland or other potential bailout candidates. Beyond that, could the Minister say whether it is right, when British taxpayers are facing cuts in services and higher taxes, that £7,000 million should be poured into the eurozone black hole in their name?

Lord Sassoon: My Lords, I did not intend to be evasive but to give a factually correct Answer in respect of Articles 125 and 122. I was not asked whether we thought it was proper to use Article 122 in this way. As to whether it is proper to extend loans, to answer a question that the noble Lord did ask, we have decided, in the exceptional case of Ireland, which is our fifth largest trading partner, that it is in the interests of the UK economy to extend a bilateral loan to it. That does not mean that we will participate in any other permanent arrangements that may be put in place for the eurozone.

Lord Lawson of Blaby: Can my noble friend confirm that, as our right honourable friend the Chancellor of the Exchequer told the Economic Affairs Committee of this House very recently, it is Her Majesty's Government's firm commitment to withdraw from the European Union's financial stability mechanism at the earliest opportunity-obviously while wishing the European Union every possible economic success?

Lord Sassoon: I am grateful to my noble friend, because his question enables me to say that Article 122.2, under which the financial stability mechanism was set up, was originally intended to provide support for member states following natural disasters. It was European Finance Ministers, before my right honourable friend the Chancellor took office, who decided in May to apply that article to deal with the eurozone crisis at that time. It is absolutely the position that my right honourable friend who is now the Chancellor opposed the use of the article at that time and in that way. It is the Government's position that this is a temporary solution and should absolutely not be the permanent way of doing things.

Lord Eatwell: My Lords, will the noble Lord confirm that the Government will themselves have to borrow the money to provide the loan to Ireland? Will he also acknowledge that the National Audit Office has now determined that any interest paid on such borrowing should be included in current expenditure? Will he therefore tell us how much this interest payment will increase the deficit, and whether any other expenditure cuts are to be made to pay for it?

Lord Sassoon: My Lords, first, there will be no hypothecated borrowing by the Government to back up-as far as I am aware-the loan to Ireland. Of course, the loan to Ireland-as and when it is drawn down-is subject to approval in legislation if and when it comes to your Lordships' House. We might return to it over the next few days. The loan has to be approved by Parliament. It is then drawn down. Of course funds have to come from somewhere, but there is no intention to back that up with a specific loan.

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It will not be for the Government to determine the accounting, but the intention is that the bilateral loan will carry an interest rate that is 2.29 per cent higher than the sterling seven and a half year swap rate that applies at the time. On this week's figures, that would be an interest rate of 5.9 per cent, which would be considerably in excess of the UK Government's borrowing rate. My understanding-as I say, it is not the Treasury's decision-is that the net interest margin, which would of course be a gain because the receipts from Ireland would exceed the costs to the Exchequer, would indeed be a positive contribution on the fiscal balance.

Lord Taverne: My Lords, is it not inevitable that to make the rescue operations effective, and at the same time to avoid a treaty amendment, the stability mechanism will increasingly become an intergovernmental eurozone mechanism? What plans do the Government have to avoid the United Kingdom being increasingly bypassed in key decisions in the European Union?

Lord Sassoon: My Lords, I do not think there is any question of us being bypassed on key decisions in the European Union, as our participation in recent debates about Ireland and the wider crisis have demonstrated. It will be up to Europe to decide how the permanent arrangements are put in place. The October European Council resolved that there should be a crisis resolution mechanism, and there has been a verbal commitment that the UK will not be asked to be part of it.

Lord Kinnock: My Lords-

Devolution (Time) Bill [HL]

First Reading

3.38 pm

A Bill to make provision for the devolution of timescales, time zones and the subject-matter of the Summer Time Act 1972.

The Bill was introduced by Lord Tanlaw, read a first time and ordered to be printed.

Draft Road Safety (Financial Penalty Deposit) (Appropriate Amount) (Amendment) Order 2010

Link to the Grand Committee Debate

Motion to Approve

3.39 pm

Moved by Earl Attlee

Motion agreed.

15 Dec 2010 : Column 615

Parliamentary Voting System and Constituencies Bill

Parliamentary Voting System and Constituencies Bill

Committee (5th Day)

3.40 pm

Clause 5 : Press comment etc not subject to spending controls

Amendment 39AA

Moved by Lord Falconer of Thoroton

39AA: Clause 5, page 3, line 42, after "a" insert "referendum campaign"

Lord Falconer of Thoroton: My Lords, perhaps I will wait for those people to leave who are, disappointingly, not staying for the vigorous scrutiny of this Bill.

Clause 5 ensures that media outlets-specifically, newspapers, periodicals, the BBC, S4C in Wales and other licensed broadcasters-are not caught by the spending restrictions in place for the referendum, as outlined in the Political Parties, Elections and Referendums Act 2000. As yet another case of the consequences that befall legislation that is brought forth in haste and without time for pre-legislative consultation, Clause 5 was added to the Bill as a government amendment in Committee in another place.

The problems with the Bill, as introduced, were highlighted in the report of the Political and Constitutional Reform Committee of the other place, which brought to the attention of Parliament the ambiguous position of the media under the funding rules, as drafted. Unlike the spending limits that apply to elections, the definition of referendum expenses includes any material which provides general information about the referendum or puts any argument for or against the referendum question. As a result, for example, a newspaper editorial would constitute referendum expenditure.

I think that noble Lords on all sides of the Committee would be in favour of seeing as well informed a referendum campaign as possible, and newspapers are likely to play a vital role in that process. We obviously cannot have a situation where they are restricted from writing about the referendum, so the inclusion of Clause 5-or something like it-was necessary, but we believe that it can be improved. We are concerned that as a consequence of the planned combination of the polls on 5 May, there is significant potential for confusion in the audit of expenditure on elections. These two amendments seek to enforce the distinction between any broadcast or press advertisement relating to the referendum campaign and those relating to the local or the devolved elections.

Clause 5 refers to exceptions to the 2000 Act's spending rules for the proposed referendum on the voting system for the House of Commons so Amendment 39AA, the first in this group, seeks to emphasise that the broadcasts which are exempted are "referendum campaign" broadcasts. Referendum-related materials and party election materials must be differentiated. Our second amendment, Amendment 39AB, picks up the same point. If political parties are allowed to use their election broadcasts to argue the merits of the referendum, that could lead to claims that the argument is being weighted more on

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one side than the other. Party election broadcasts should be about the elections for individual officeholders, not the referendum. If they are about the referendum, that leads to the possibility of the expenditure being distorted. The changes recommended by our amendments are important. It should be in the interests of all parties and none that clarity over the administration of press coverage and expenses during the election period is maximised.

3.45 pm

I am happy to say that the Electoral Commission has commented on the second of our two amendments. It says that Amendment 39AB has the effect that party election broadcasts during the referendum period will not be broadcast if they contain references to the merits of different electoral systems or to the referendum. In other aspects of the Political Parties, Elections and Referendums Act 2000, such as those relating to party spending, different electoral events are considered as distinct for regulatory purposes and the Electoral Commission says that, to be consistent with this, election broadcasts should not be permitted to encourage people to vote for a particular referendum result. It also goes on to say that it is worth noting that Section 127 of the Political Parties, Elections and Referendums Act 2000 currently prevents broadcasters transmitting any broadcast where its purpose, or main purpose, is, or can assumed to be, to further a referendum campaign for a particular outcome other than by the designated referendum campaign broadcasts.

I am not sure whether the effect of Section 127 in the context of combined elections-combined with the referendum, which is the position here-would prevent the broadcasting of a party-political broadcast that also includes material that relates to or for the arguments in relation to the referendum campaign. Therefore, our second amendment says that party election broadcasts should not be broadcast,

That appears, as a matter of principle, to be supported by the Electoral Commission. I would be interested to hear the Government's view both about this and about the effect, in this respect, of Section 127 of the Political Parties, Elections and Referendums Act 2000.

These are important matters because one political party is united; I say united, but that may be an overstatement. However, one political party has support for one electoral system, while two political parties-Labour and Conservative-are divided on the issue. Actually, I do not know if the Conservatives are divided on the issue as to whether they support AV or not. Having one political party that is supporting the change-even though it is described by their leader as a "miserable little compromise"-means that these issues of expenditure are important, because if the change is not made, or if the matter is not dealt with by the Bill, you can have one political party spending money on it and the others not being able so to do because they are divided, not because of the limits.

Lord Grocott: My noble and learned friend has more experience of reading these Electoral Commission reports than I have, but is it not unusual that the whole thrust of what the Electoral Commission is saying

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about his amendment seems to be almost entirely supportive of it but does not contain a recommendation? The Electoral Commission makes a clear recommendation for one or two of the other clauses that it is commenting on. Does he have any information that I do not have on the basis on which it makes an argument and then does not reach a conclusion, as opposed to the occasions when it makes an argument and does reach a conclusion?

Lord Falconer of Thoroton: First, I agree with the premise on which the question is based; when the Electoral Commission opposes an amendment-of anybody's; this is not just to do with party-it says so. It does not, however, appear to support amendments; even when it gets right to the point where logically it should support them, it does not say that it is supporting them. All I can do is say that I note the same approach as my noble friend Lord Grocott. I have no idea why it does that.

Lord Campbell-Savours: My Lords, I support the amendment because it is vital that we have a level playing field wherever possible during the referendum campaign. Section 127 in the 2000 Act contains some ambiguity which really needs to be clarified. The way the legislation has been framed worries me because, if the 2000 Act might be misunderstood in this area, there is the possibility of expenditure bleeding over from political campaigns for the Scottish Parliament, or whatever, into the referendum campaign. The Conservative element of the coalition-I will keep drawing a distinction between the Conservative and Liberal Democrat elements in the coalition-may well want to place a different emphasis in that campaign. The Conservatives might wish to block electoral reform wherever possible and use their party election broadcasts to do so unless there are adequate safeguards built into the legislation. Equally, the Liberal Democrats might take a converse view and argue that they support electoral reform. They may wish, despite their reference to it being a miserable little compromise, to advocate the use of Queensland AV and use their money available for election broadcasts to promote that issue.

Can we have a clear statement in the Minister's response today that he would not expect parties in the coalition to adopt that particular ruse, and that the legislation that will govern these matters is absolutely clear when the referendum campaigns take place?

Baroness Liddell of Coatdyke: My Lords, will the Minister cast his mind back to the 1979 referendum on the Scotland and Wales Bill, which was the first referendum on whether to establish a Scottish Parliament? He may recall that this issue was extremely significant during that campaign. It was then the position of the Labour Party in Scotland to support the yes campaign, although it was accepted that not every member of the party would take that position. Indeed, there was a Labour "vote no" campaign as well.

A party-political broadcast was made by the Labour Party at that time in support of party policy for a yes in the referendum, and was the subject of an interim interdict by the no campaign which resulted in it not being broadcast. I say this with some feeling because I produced and directed the said broadcast, and I thought

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it was rather good. The late Robin Cook and Mr Brian Wilson successfully secured an interim interdict. I see the noble and learned Lord, Lord Mackay of Clashfern, in his place; perhaps he would be able to elucidate for us whether or not that interim interdict still applies. I still think that that broadcast should be shown.

Lest your Lordships think that this is a fairly abstruse part of the legislation, I say that it is actually a quagmire. There will be differences, perhaps even in the Liberal Democrats, because there are those who do not accept that AV is proportional representation. Perhaps even the Deputy Prime Minister, who sees it as a miserable little compromise, might decide to seek to block any party-political broadcast.

I have two points. First, I say to the Minister that this is not about party-political differences, but about a point of real, practical differences that require attention. Secondly, I am not sure about the differences between English and Scottish law on these matters; I defer to my noble and learned friend Lord Falconer. I can remember some of my colleagues in the Labour Party in England being completely flummoxed by the fact that it was possible to get an interim interdict on a political party for this purpose.

It may be painful for the Minister to cast his mind back that far-as it is occasionally for me; I am just grateful that I can still do it.

Lord Foulkes of Cumnock: My noble friend has sent my mind even further back. Was it not the case that she, I and the late John P Mackintosh appeared on a party election broadcast in 1974, when we went rather further in that broadcast than Labour Party policy at the time and committed the party to Scottish devolution? Does that not indicate the power of party election broadcasts?

Baroness Liddell of Coatdyke: My noble friend brings back even more painful memories, because also taking part in that election broadcast was Mr Jim Sillars. In fact the late Professor John P Mackintosh, who by coincidence had been my professor at university, actually committed the Labour Party to full tax-raising powers for a Scottish Parliament as well and it took some years to finesse the policy afterwards.

While people probably go and switch on the kettle whenever there is an opportunity to watch a party-political broadcast, I urge your Lordships to take this matter particularly seriously. Seeking and opposing an interim interdict is an extensive and diversionary activity and I urge the coalition to take my noble and learned friend Lord Falconer of Thoroton's amendment very seriously.

Lord Soley: I think that my noble friend should arrange a special showing of that election broadcast in the House; I would like to see what I missed. On a more serious note, I support my noble and learned friend Lord Falconer. He has hit on an important point. It is worth remembering that there are different electoral systems within the UK for different elections, so it needs to be made clear that we are separating out the referendum from the party-political agenda. The second amendment is particularly important in this respect. I would have thought that there was a strong case for the Government simply to accept that amendment,

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although they may want to reword it. I hope that in due course they will say that the principle that my noble and learned friend on the Front Bench is putting forward is right and ought to be protected.

Lord Lipsey: I support my noble and learned friend Lord Falconer's amendment. The need for it reflects in part the baleful effects of the Government's plan to have the referendum on the same day as other elections, because inevitably there will be a cluster of party-political broadcasts as part of the campaigns. That means that a ban of this kind is all the more essential because there will be a temptation at times for various parties to include the referendum in those broadcasts. Of course, it is possible that the referendum will not take place on 5 May-we shall see-but the circumstances in which it took place later could mean that the ability to use a party-political broadcast to campaign for or against AV could considerably prejudice the result of that referendum.

Let us take a case whereby the referendum is held at a time when the coalition has broken up, which seems a more likely prospect today than it would have done about a fortnight ago. In that circumstance, the Conservatives would no longer have any inhibition about campaigning flat out for what they believe in, which is that AV is a bad thing, and they could well wish to devote a party-political broadcast-or party-political broadcasts, come to that-to smashing into AV, if only in the hope of defeating their erstwhile friends in the Liberal Democrats on something that they greatly want.

The idea of party-political broadcasts, although they are propagandist things, is that they are balanced; everyone gets a go at one, so they cancel each other out. Within a referendum campaign, however, to allow for party-political broadcasts arguing one side of the case where it is a matter of chance whether or not there is a party-political broadcast arguing the other seems to be an extremely unfair way to conduct the campaign. I therefore support my noble and learned friend's amendment.

Lord McAvoy: My Lords, I, too, support the amendment of my noble and learned friend on the Front Bench. I shall start with my usual obsession and say that, on reading the amendment and indeed the Bill, I was motivated by my usual and, I would say, well founded lack of trust in the behaviour of Liberals in these matters. My noble friend Lady Liddell has mentioned various referendums-or referenda-but, being parochial and from the Royal Burgh of Rutherglen, I shall bring it down to the Royal Burgh level.

As I have mentioned previously, we had a local council campaign regarding local government reform in 1994-95. It was an all-party campaign. Everybody behaved themselves, except guess who? We had the local Liberals trying to slip in leaflets and bits about themselves as if the campaign was somehow theirs. It caused great annoyance among the rest of the voluntary committee and they were reprimanded.

No doubt somewhere in the Chamber somebody will jump up to say, "How parochial and petty". I plead guilty to that. However, I am further reinforced in my position on this amendment by comments from

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my noble friend Lady Liddell. I have an awful guilty feeling that, as part of the Labour no campaign, I contributed to the finances to seek the interdict that she referred to. I am quite sure that she will have a word to say to me later about that.

As my noble friends Lady Liddell and Lord Foulkes pointed out, the election broadcast compounded or, even worse, took advantage of pushing the boundaries of what were the rules and what was policy. Though it is absolutely wrong, the temptation will always be there. This should be very well controlled in order to make sure that election broadcasts are not hijacked for narrow political purposes.

4 pm

Lord Grocott: The two amendments relate to an extremely important part of this Bill. The Government were obviously quite right to have a clause in the Bill that, as far as broadcasting is concerned, deals with fairness in a referendum. However, I am glad that we do not have a written constitution. I would be very concerned if someone tried to hand over the way in which we run our country from a constitutional point of view to the lawyers.

I can see that the issue of referendums and how we conduct them is important. I will certainly not go down memory lane, apart from remembering the debates about setting up the first referendum, on the Common Market, in 1975. There were long debates in Parliament about lots of these kinds of issues-about how to make sure that it was fair. I am absolutely certain that we did not get it right on that occasion; we certainly did not get it right from my point of view because I voted no. There is no doubt that each time these things are discussed, we refine and improve the rules relating to referendums.

I do not know what speaking notes the noble Lord, Lord McNally, has, but I hope that he recognises the significance of this, not least-and perhaps in particular-because, if there is any logic whatsoever in the constitutional changes that are proposed by this Government and if there is a referendum on the voting system in the House of Commons, there must surely be a referendum on any proposal to scrap the House of Lords, whichever way one considers the arguments, although the Committee will be relieved to know that I do not have the slightest intention of going into those arguments now. Presumably, if we get this clause right, when another Bill comes down the track that provides for a referendum on an even bigger part of our constitution, we will have rules about fairness that all of us can agree to. We are heading in a direction, whether we like it or not, where constitutional changes will be referred to referendums. I hope that the Government will look at these amendments sympathetically.

The Minister of State, Ministry of Justice (Lord McNally): My Lords, I am grateful to the noble and learned Lord, Lord Falconer, for bringing forward this amendment. I agree entirely with the last point that the noble Lord, Lord Grocott, made that the pattern of using referendums since the 1970s has been to learn, modify and improve. That will probably go on.

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The noble Baroness, Lady Liddell, gave a very good example of an injunction being brought against an election broadcast. I am always fascinated by the difference between English and Scottish law. When I ask, "What is the difference?", the answer that I get in the Ministry of Justice is often, "They do it much better in Scotland". That is just a passing observation. I am disappointed that the noble Lord, Lord McAvoy, still does not trust the Liberals. I really thought that we were beginning to bond. I will have to do more work on my charm offensive.

The noble and learned Lord, Lord Falconer, was quite right: this clause was brought in as a specific amendment suggested by the Political and Constitutional Reform Committee to address the guidelines for broadcasters. There is a principle to consider. Would it be right for party election broadcasts for the local and devolved Assembly elections, which will take place on 5 May, to refer to the referendum and/or make any comment on different voting systems? There is an argument that, as a final strap line, a broadcast could say, "Use both your votes on Thursday", or whatever. We recognise that there is an issue to be discussed. As the noble and learned Lord, Lord Falconer, said, the Electoral Commission has made some comments on this as well.

I am advised that there are defects in Amendment 39AA that would bring in ambiguity. We could perhaps test that. On the second amendment, I suggest again that the noble and learned Lord does not press it and that we have further discussions to see whether it can be improved and clarified. Before the noble Lord, Lord Campbell-Savours, breaks open the champagne, I should add that my speaking notes contain lines that I have not heard since "Beyond the Fringe". They say: "What I am saying does not mean that I agree with his amendment, but nor should it be assumed that I disagree with the amendment".

Lord Bach: I am sorry that the noble Lord has not seen that since "Beyond the Fringe"; I saw it many, many times.

Lord McNally: We all know that the final line of the "Beyond the Fringe" sketch was, "But neither should this be taken as an abstention". I suggest to the House, quite genuinely, that-as the noble Baroness, Lady Liddell, reminded us-getting this wrong could cause all kinds of trouble with the best of intentions.

Lord Foulkes of Cumnock: Could the noble Lord, Lord McNally, be doubly helpful? It occurred to me as the debate was taking place that we have not touched on the internet. That is now a far more powerful medium in elections and campaigns. I wonder whether the discussions that he is proposing could encompass the internet as well.

Lord McNally: I am sure that that intervention has been noted. Indeed, I am looking forward to an e-mail on Monday that says: "Sorry, can't get down today. Snowed in. G Foulkes". Perhaps I am hoping for too much. As I say, I hope that the noble and learned Lord, Lord Falconer, will take what I have said in the spirit in which it is intended. As the noble Lord, Lord

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Grocott, said, we refine these issues each time. The noble Baroness, Lady Liddell, rightly reminded us of how things can go badly wrong. We would like to talk further about this.

Lord Falconer of Thoroton: If the noble Lord is saying to me, "In principle I agree about the problem that you have identified, so let's talk about how we solve it"-the problem being that no political party should be allowed to use its political broadcast to promote or demote any of the electoral systems at issue-I am more than happy to wait until Report stage. The noble Lord read out parts of his brief in a jokey manner, but that gave him complete room to say, "No, we are not going to make any changes". Therefore, I need something a little more than what he said. I need an indication that in principle he accepts the broad problem that we have identified.

Lord McNally: I am afraid that I cannot do that. I am offering to talk very seriously about this. I say in a strictly non-jokey way that there are issues that we have to look at if we are not to fall into innocent traps, as the noble Baroness, Lady Liddell, reminded us. There would have to be discussions without preconditions on either side. If the noble and learned Lord wishes to press the amendment, I shall resist-and that would be a mistake for both of us.

Lord Mackay of Clashfern: My Lords, it is worth noting that the clause referred to by the noble and learned Lord, Lord Falconer of Thoroton, is from the general statute dealing with referendums. This is not a question for just this referendum; it may be a question of whether what has already been put into the general procedure is sufficiently accurate. I think that I am right in saying that at the moment a party-political broadcast in connection with a referendum is allowed, so long as that is not the principal or main purpose, or some such phrase, of the broadcast. It may be that what the noble and learned Lord, Lord Falconer, and others have identified is a question of whether or not that general provision is wise or whether it should be modified. The question may go somewhat further than just this referendum and that issue needs to be looked at.

Lord Davies of Coity: Perhaps I may ask a question. The Minister said that he would have to resist the amendment if it was pressed. Does he agree that that would not remove the problem and that the Government would still have to deal with it even if they won on a Division?

Lord McNally: That is quite right and we would deal with it. However, I am suggesting that we have discussions about it without preconditions. I am grateful for the intervention of my noble and learned friend. He raises another issue that we can take on board when we look at the matter. I am glad that the noble Lord, Lord Rooker, is not the only one who supplies lifeboats, although he is not here today.

Lord Wills: I am afraid that I am baffled by the Minister's position. Perhaps that is what he intends. Will he clarify exactly why he is resisting the proposition put forward by my noble and learned friend Lord Falconer?

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Lord McNally: It is because I want to be able to discuss this, look at its implications and try and get it right. I do not want to make these kinds of commitments over the Dispatch Box. After all the complaints of the Opposition on this, my good will wears thin. When a Minister makes a straightforward offer to look at a real problem and get it right, I can only say that one begins to despair-although perhaps not for a few hours yet. No, I will not really despair. The offer is there. I hope and I think that we can get this right.

Lord Swinfen: Can my noble friend confirm for me that, if this matter is decided on a Division, the noble and learned Lord, Lord Falconer of Thoroton, would be unable to bring it back at a later stage? It may help the noble and learned Lord when he is making up his mind what to do.

Lord McNally: That is perfectly right.

4.15 pm

Lord Falconer of Thoroton: My Lords, I am grateful for all the interventions. I am also grateful to the noble and learned Lord, Lord Mackay of Clashfern. I completely agree with what he says. Section 127 of the Political Parties, Elections and Referendums Act 2000 currently prevents broadcasters from transmitting,

a referendum campaign. I agree with him that there are wider ramifications than simply in relation to this. I completely trust the noble Lord, Lord McNally, so I am more than happy to accept his assurances and I am more than happy to discuss the matter in the spirit in which he has made the offer. I am absolutely sure that the two of us will be able to reach a solution that is acceptable to both of us. Furthermore, I am grateful to the noble Lord opposite. I should tell him-although I am sure that he will not believe it-that I was aware that, if I pressed the amendment to a vote, I would not be able to bring the matter back, but I think that the Committee is grateful to him for reminding us of that. Therefore, I beg leave to withdraw my amendment.

Amendment 39AA withdrawn.

Amendment 39AB not moved.

Debate on whether Clause 5 should stand part of the Bill.

The Chairman of Committees (Lord Brabazon of Tara): My Lords, the Question is that Clause 5 stand part of the Bill.

Lord Campbell-Savours: My Lords, I should like to ask the noble Lord, Lord McNally, a question. I am not seeking to delay. The noble Lord has agreed to consider the amendment, which is a generous concession. What is the process within the department? That has implications for the Bill more widely.

Lord Tordoff: Will the noble Lord forgive me? It seems to me that at the moment we do not have a Motion before the House to debate. Until we get to that stage, people should not be making speeches.

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Lord Campbell-Savours: I am sorry that I could not hear what the noble Lord said, but I am sure that I will be kept in order by the Lord Chairman.

The Chairman of Committees: My Lords, I did put the Question that Clause 5 stand part of the Bill.

Lord Campbell-Savours: I am sorry about that. What is the process within the department? The noble Lord will take back the proposal made by my noble and learned friend on the Front Bench. Are there additional consultations within each party and within each element of the coalition about an amendment that might be further considered; or is it simply dealt with in the private office? I am trying to understand to what extent each element within the coalition will be drawn into discussion on the acceptability of any amendment which the Minister might be prepared to consider.

Lord Snape: Perhaps I may detain the Minister and the House for just a couple of minutes on the clause stand part debate. I hope that we can continue in the spirit that the Minister extended in his response to my noble and learned friend on the Front Bench. Does he agree that this debate illustrates the problems of holding the referendum on the same day as the other elections? It is inevitable that one matter will spill over into another. As my noble friend Lord Grocott reminded your Lordships a few moments ago, those of us old enough to have participated in the 1975 referendum campaign well understand the bewilderment expressed by people, who were not necessarily politically involved or that concerned about the result of the referendum, at the way these arguments crossed party boundaries. Indeed, I hope that the noble Lord, Lord McNally, will accept that it would be impossible completely to restrict expenditure in the way that the previous amendment, so ably moved by my noble and learned friend, tried to do.

I hope that he will look carefully at that amendment. Again, in the spirit in which this debate has been conducted today, I hope that he will see the sheer difficulty, if not impossibility, of doing all these things on the same day. I hope that, even at this late stage, the Government will reflect on this. I am seeking to help out his party. I do not know how to support AV. I am firmly in the first past the post camp. However, from his own party's point of view, it is inevitable, given the economic situation and the actions of Her Majesty's Government-I will not go into them here-that there will be some degree of unpopularity for the Liberal Democrats. That will spread over into the whole debate about the electoral system that we are to adopt, and I am quite relaxed about that.

I have a great deal of affection for the noble Lord. After all, he used to represent my home town-with a different political interest, of course, but let us put that to one side. If we are to have a sensible referendum and a sensible debate about the matters that we should be discussing, rather than the ins and outs of economic or coalition policy, then the noble Lord should look carefully at the amendment. I know that he has promised to do so but perhaps he could go a little further and adopt the very sensible suggestion made by my noble and learned friend.

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Lord Lipsey: My Lords, I rise briefly to ask a further question to which I hope the Minister will address himself. The clause provides protection against something in a newspaper, other than an advertisement of course, or in a periodical or in the broadcasting media specified, being regarded as election expenses, but it does not say anything about expenses incurred via the internet. Does the protection extend to that medium?

Lord Lamont of Lerwick: The question about the internet is very important. Following on from the noble Lord's point, can the Minister comment on information about the referendum that may be made available by the Electoral Commission on the internet? The Electoral Commission is entitled to issue neutral educational material concerning the referendum question but, in practice, I think that it is extremely difficult to be absolutely sure of the neutrality of any such material in such a presentation. The materials put out by the authorities in the New Zealand referendum led to considerable controversy, as there was an argument that, in listing the pros and cons, they were not impartial. I do not want to go on about this but I should be grateful for the Minister's comments because the point about the internet and the Electoral Commission is very important.

Lord Maxton: My Lords, this is the first time that I have spoken in these debates. On the day on which we celebrate the fifth anniversary of the launch of YouTube, I think it is right that we raise the whole question of the internet and particularly that "channel", although that is not the right word. Anyone could place a video on YouTube expressing their views in the hope that many people would watch it, and that could change the nature of the way in which we voted if there were not some way of controlling it. To be honest, it is extremely difficult to control what goes on YouTube but there certainly has to be something in the legislation that at least tries to do so.

Lord Falconer of Thoroton: My Lords, I indicated in my remarks on the first group of amendments that I proposed to Clause 5 that the clause was introduced to deal with the problems identified by the Political and Constitutional Reform Committee in the other place. In principle, we think that it is a good thing, although other issues need to be dealt with, including the point about the internet made by the noble Lord, Lord Lamont.

I have one question for the noble Lord in relation to that. On the face of it, any expenses incurred in making a broadcast for a referendum-for example, if you got Steven Spielberg to produce it and my noble friend Lord Puttnam to direct it, or the other way round-would not count as expenses. Is that really the Government's intention?

On a general point, can the Minister say what principles underlie Clause 5 and, in the light of those principles, what is the answer not just to the questions that I have raised but to those raised by other noble Lords?

Lord McNally: My Lords, I thank noble Lords for their questions. The principle is that the clause was inserted in response to the committee in the other

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place asking for clarification. We have put Clause 5 into the Bill to ensure that media outlets are not caught by spending restrictions that are in place in terms of publishing information about the referendum. The media play a vital role in building public awareness and presenting facts and opinions on the matters raised by the poll. This amendment ensures that the media's ability to carry out that role and to exercise the usual freedom of the press and broadcast media is not restricted in any way. That was our intention.

On the point that the noble and learned Lord has just raised, I will have to check again with the Electoral Commission, but I believe that if in making a referendum broadcast, one or other of the campaigns was to indulge in the kind of expenditure to which he referred, that would be counted as expenses.

Lord Howarth of Newport: Does not this whole debate point up very clearly the absurdity of holding the referendum on the same day as other elections? It will be completely impossible to police the distinction which the Government seek to make between coverage that is referendum-related and coverage that is election-related. What if a programme or an article discusses both those topics together? It cannot conceivably work. My noble friend Lord Snape reminded us of how perplexing and confusing voters found it in 1975 when they found politicians of different parties on different sides of the argument. If I remember rightly, that referendum was not held on the same day as other elections; but it still caused people to scratch their heads. It will be completely impossible to sort this out if the two processes are carried forward on the same day. Will not the Government now accept that?

Lord McNally: I do not mind the constant argument about how people are going to be confused by this, but one lesson that we have learnt since 1975 is that a referendum and elections can be held on the same day, because we have done it. There is no reason why the two cannot be run together. To be absolutely clear, the extra expenses would come under Schedule 14.

Baroness Corston: Is the Minister right to say that the 1975 referendum on what was then the Common Market was held on the same day as the local elections?

Lord McNally: I did not say that, but that gives the opportunity for another intervention.

Lord Maxton: In that case, as the noble Lord agrees that it was not the 1975 referendum, which specific referendum was it? When was it held and what election was it? It was certainly not in Scotland, where there is a very important election on 5 May next year, even if he may consider the local elections down here not to be very important.

Lord McNally: I did not say that it was in Scotland. As my noble friend just reminded me, the London elections were held on the same day as a referendum. Come on, let us carry on.

If there were advertising on the internet, that would be caught. Again, I am quite willing to look at the issue of the internet. I do not accept the intervention by my noble friend Lord Lamont. I think that the

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Electoral Commission has acted impeccably, and I have every confidence in it. I was one of those who supported from the very beginning the idea of experienced politicians serving on the Electoral Commission. Happily, all three major parties plus Mr Reid from the SNP now serve on the Electoral Commission, and I think that it is all the better that there are people who have had direct experience.

As I said, I do not think that there is any problem about this. As was said during debate on the amendments, we will look at the specific points raised by the noble and learned Lord, Lord Falconer, in his second amendment. What happens in the coalition is a matter for my right honourable friend the Deputy Prime Minister, who is handling this from the Cabinet Office with my honourable friend Mr Mark Harper. I will, as always, report to them on the debates in this House. We will then discuss, on a governmental basis, our response to them. It must be to the great depression of the Opposition to know that we do this in a seamless fashion which produces none of the frictions alluded to by the noble Lord, Lord Campbell-Savours.

4.30 pm

Lord Campbell-Savours: I am not trying to delay matters; I really would like to know how this works. The noble Lord said that it is dealt with by the Deputy Prime Minister and Mr Harper, but is there consultation within the political parties about concessions that they might be considering making? This is very important. It is about political parties in many ways.

Lord McNally: I have every confidence that those in government know how to consult the political parties they come from. I see no problem here and I have certainly not encountered one. As will have been noticed throughout the debate, on my Benches my noble friends Lord Tyler and Lord Rennard are both plugged into and expert on these matters for the Liberal Democrats. The noble Lord's concern is touching, but I can assure him that it is not a problem.

Lord Howarth of Newport: When Ministers consult with political parties about the processes that it might be appropriate to incorporate into this legislation, can the noble Lord assure us that they seek to act in a spirit of disinterestedness? After all, it would not be appropriate for the Government to stack the system so that it would benefit what the parties perceive to be their particular interests. Can he assure us that the Government's hands are clean in this process?

Lord McNally: Absolutely clean. The problem about this, and the reason we are having such difficulty in convincing the Benches opposite, is that our whole aim is to get fair votes on the basis of fair constituencies, which obviously discomforts them.

Lord Snape: Can the Minister be more specific? He has called upon, so he says, the best brains in the Liberal Democrat Party to assist him in these matters-and I am sure that they will be joined by the best brains in the Conservative Party, the Civil Service and

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everyone else-but can he give an inkling as to how those best brains will be able to differentiate between the expenditure on local and regional elections and referendums? It is a simple question. Just give us a clue.

Lord McNally: I suggest that the noble Lord looks at the 2000 Act. The schedules are mostly based on existing law. Elections were conducted like this before so perhaps he should find some experts in the Labour Party to help him with his problem. I do not see the problem that he is raising-or the problem that I suspect the noble Lord, Lord Foulkes, is about to raise.

Lord Snape: Regrettably the Labour Party is not in government; he and his colleagues are. It is a simple question and it is no good referring back to the 2000 Act. As far as I am aware, elections have not been held on the same day as a referendum-ever-in the United Kingdom. The noble Lord referred to the London elections, the assembly and the mayoral elections, but this is a completely different situation, with regional and local elections and a national referendum about the voting system being held on the same day. Can he quote a precedent for this-or at least give us some idea of how the Government are going to tackle the problem of limiting expenditure in these circumstances? So far he has failed to do so.

Lord McNally: I may have failed to convince the noble Lord, but we are going to do so on the basis of existing legislation and the provisions of this Bill.

Lord Foulkes of Cumnock: I am slightly confused about the reply that the Minister gave to my noble friend Lord Campbell-Savours. Which is the lead department for this Bill? Is it his department, the MoJ, or is it the Cabinet Office?

Lord McNally: I am surprised. The Bill has been through the House of Commons and the noble Lord, Lord Foulkes, has intervened so many times. It is the Cabinet Office. I am here today in my capacity as Deputy Leader of the House of Lords, taking responsibility for Cabinet Office business.

Lord Foulkes of Cumnock: I asked the question because I knew the answer. My noble friend Lord Maxton said, "Don't ask a question if you don't know the answer to it". What I am not clear about is this: whenever we raise issues, the noble Lord, Lord McNally, has to go back to the Deputy Prime Minister to get agreement. What happens if he is taken ill or is abroad at some major conference or something like that?

Lord McNally: I do not know. That would really stump us. I would probably have to go and ask the noble Lord, Lord Foulkes, what happened when he was in Government.

Lord Elystan-Morgan: I am in no way seeking to be obstructive but what is the current view of the Scottish Parliament and the Welsh Assembly on holding both elections on the same day? I am aware that certain representations were made months ago but wonder whether they still represent the views of those two bodies.

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Lord McNally: This is a piece of legislation for this Parliament. We are in contact with both the Scottish Parliament and the Welsh Assembly but we are bringing this Bill before this Parliament and I suggest we get on and do that.

Baroness Liddell of Coatdyke: My Lords, I am not seeking to make this an even more protracted discussion but the intervention of the noble Lord, Lord Snape, took me on another saunter down memory lane. One of the issues that confronted the referendum in 1979 was that some non-political players became involved in it-business leaders and trade union leaders-some of whom put a considerable sum of money into their own personal campaigns, taking on media advisers, et cetera. I am going to ask a question to which I do not know the answer. How would this legislation unscramble that kind of expenditure? You may well have someone intervening in the referendum campaign and, as a side swipe, having a go at a political party that was standing in that election in Scotland. This is about the disentangling of non-political players from the referendum campaign in terms of their expenses and the impact that this might have on the outcome. Sorry, it sounds very convoluted, but I can see it being a nightmare, particularly when election agents have to submit their election expenses.

Lord McNally: The Electoral Commission has very clear rules. We have laws about electoral expenses. If there were those kinds of problems that the noble Baroness suggests, I am sure they would be challenged at the time. It might speed things up if people did not preface their interventions by assuring me that they were not trying to delay matters and just got straight into the question.

Baroness Liddell of Coatdyke: I am sorry to press the noble Lord further but I know of a scenario in 1979 where some business leaders became involved in the referendum campaign and put considerable sums of money towards it. I can see an actual situation emerging. I will not name the people here but I can think in my head who they would be and who would use it as an opportunity not to take a swipe at my party but to take a swipe at the noble Lord's party. It is not clear in electoral law how those expenses will be allocated.

Lord Mackay of Clashfern: Before the noble Lord seeks to answer that question, this debate has got to a stage where people seem to have forgotten that a statute dealing with referenda was passed by the previous Administration. It deals with all of these questions in considerable detail. There are some additional questions because as time has gone on more difficulties have emerged-for example, in relation to the internet-but there are already considerable provisions in the law about that. It is important to remember that this debate should be about this particular Bill and its particular circumstances.

Lord Howarth of Newport: Do we not need to learn the lesson from, for example, the referendum on a regional assembly in the north-east, where the no campaign was led by business interests? That campaign

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was relatively well-funded and was clearly against Labour Party policy. In effect, therefore, it was significantly in the interests of the Conservative Party. Does the Minister feel that the lessons of that experience have been adequately absorbed and that the existing legislation to which the noble and learned Lord, Lord Mackay of Clashfern, referred satisfactorily covers such circumstances? Or does he feel that the legislation governing referendum expenses needs to be brought up to date in the light of that example of how money can be spent in a political cause but not overtly by a political party?

Lord Maxton: The noble and learned Lord, Lord Mackay, mentioned the internet. Perhaps I may give an example to follow on from what my noble friend Lord Howarth said about business people. Sir Sean Connery is a major benefactor of the Scottish National Party, but he is not a taxpayer in this country. He is not therefore bound by rules on expenditure if he is spending that money on advertising via the internet rather than by other means. I presume that there will be other business people, some from the Conservative Benches, who may be in the same position; that is, they are non-taxpayers but can use their money to influence the referendum through the internet in a way that is uncontrollable by the Act.

Lord Lipsey: A little while ago, Members intervening from this side said quite reasonably that they were not trying to delay proceedings by more than they needed to and were being as succinct as they could. The Minister said that it would speed things up if noble Lords would stop saying that. Will he consider an offer whereby we stop saying that if he stops implying that this side is trying to filibuster on this Bill, when it is trying to subject it to correct and proper parliamentary scrutiny?

Noble Lords: Hear! Hear!

Lord McNally: I will leave it to the general public to read these debates and make their own judgment about that. Just as on the broad principle of the Bill, of fair votes in fair constituencies, we are eager and willing to take our case to the public. Let those who read Hansard be the judge.

I have explained why Clause 5 is in the Bill; I have listened to an amendment suggested by the noble and learned Lord, Lord Falconer, and, without commitments on either side, have offered to discuss it further; and I have listened to a number of other points, including the internet issue, which I think will be a subject of continuing discussion in the regulation of our parties. However, a point which has been accepted and which I made in responding the noble Baroness, Lady Liddell, and others is that we have continued since the 1970s to learn from our experiences and to refine and improve regulation. I pay tribute to the party opposite for taking, with our support, a great number of measures to implement controls on spending and regulate elections via the Electoral Commission. Many of these matters are of great interest, but I think that Clause 5 should stand part of the Bill.

Clause 5 agreed.

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4.45 pm

Clause 6: Control of loans etc to permitted participants

Amendment 39AC

Moved by Lord Falconer of Thoroton

39AC: Clause 6, page 4, line 3, after "15A" insert "and as if the Schedule set out in Schedule (Limits on referendum expenses by permitted participants) to this Act were inserted into that Act as Schedule 14A."

Lord Falconer of Thoroton: My Lords, I wish this was as simple as the noble and learned Lord, Lord Mackay of Clashfern, said. The difficulties in this area spring from the inappropriateness of parts of the Political Parties, Elections and Referendums Act 2000 and its rules on expenditure as applied to this particular circumstance. I referred in the first set of amendments to the effect of those rules, which would make editorial material in newspapers part of the expenditure and show how inappropriate they are.

This next set of amendments shows another inappropriateness. I am very glad that the noble Lord, Lord Lamont, is in his place, because the amendments that I propose in this group were prefaced in remarks made by the noble Lord in the debates on the PPERA-if I may call it that-in 2000, where he emphasised the inappropriateness of imposing limits on political party expenditures in referendums when the campaigns on referendums cut across political parties. I fear that these amendments are needed because of the inappropriateness of the rules to which the noble Lord referred.

Limits on spending by permitted participants in the planned referendum on this voting system will be guided by those rules. Clause 6 of the Bill under discussion today makes it clear that the rules will apply with some modifications. Clause 6, and the inclusion of Schedule 9 to this Bill as a supplementary Schedule 15A to the PPERA, explain these modifications and centre largely on providing detailed rules to control the funding of, and spending by, permitted participants who are not registered parties: in other words, individuals, organisations, companies, trade unions and so on.

Amendment 39AC paves the way for Amendment 126 and is presented to the House as a further modification of the PPERA 2000 rules. As debates on the PPERA back in 2000 exposed, the referendum campaign expenditure limits, which were put into law, are potentially misguided. The PPERA states that in the case of registered parties, spending will be limited according to the share of the vote received by an individual political party at the last general election. Schedule 14 of the PPERA, which our Amendment 126 seeks to replace, dictates that if a party received between 20 and 30 per cent of the vote, it can spend up to £5 million. Between 10 to 20 per cent of the vote, the limit is £4 million. The scale goes down to £500,000 for any party that polls below 5 per cent of the vote; £500,000 is a large amount for a single permitted participant to be able to spend, even if that participant is a party of many members.

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As the noble Lord, Lord Lamont, said in the debate on the PPERA on 3 April 2000:

"The key mistake the Government have made is to define the caps by reference to political parties".

He explained that by saying:

"One reason that we have referendums ... is to settle issues which cut across party lines. While parties are essential to general elections in order to simplify choice on many different issues, referendums are single issue campaigns".-[Official Report, 3/4/2000; col. 1133.]

The noble Lord is, as ever, wise. It is right that the designated yes and no campaigns are permitted to spend equal amounts of money in the referendum campaign. By being designated as the lead campaigners, they are the mouthpiece on each side of the yes/no campaign. However, political parties should not be able to spend this much. They should not dominate the campaign. If a political party has a particular view, as one political party has here, in practice it will spend all its money-which will be £5 million, if it is 20 to 30 per cent-in favour of the particular voting system that it supports. That allows much more money to be spent on one side of the campaign, because a political party supports it.

We therefore propose Amendment 126, which Amendment 39AC paves the way for. In Amendment 126, which is almost the last in the group and is on page 28 in the up-to-date Marshalled List, we reduce the amount that a registered political party can spend on the referendum from £5 million to a maximum of £500,000. Some people may think that that amount is too large, but it deals with the very point that the noble Lord, Lord Lamont, raised, which is a good point: namely, that we should look at these campaigns on the basis not of political parties but of whether there is going to be a level playing field. If we allow a political party to spend as much as £5 million, we give a huge advantage if any one of the political parties supports one or other of the particular voting systems.

Finally, there is a separate point in our schedule. The PPERA permits all other permitted participants designated by the Electoral Commission-those that are not designated as the lead yes or no campaign or political parties-to spend £500,000. Frugal times or not, that is a large amount of money. We are concerned that the rules as contained in the PPERA, which are due to apply by way of Clause 6 of the Bill to the planned referendum on the electoral system, would therefore allow a huge range of permitted participants to seek to get the limit of £500,000 and thereby allow one side or the other in effect to get around the limits.

Our amendment makes essentially two points: not to refer to limits by reference to political parties, because that fails to understand the point of the referendum; and not to have a system that has such a high limit-namely, £500,000-for permitted participants, as that allows for abuse. That is why we propose Amendment 39AC, which would pave the way for our proposed new Schedule14A, which would be inserted into the PPERA. That would ensure a level playing field. I am afraid that this problem is another indication of the unsuitability of the PPERA rules as they apply to referendums. I beg to move.

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Lord Lamont of Lerwick: Will the Minister comment, at least for my benefit, on one aspect of what the noble and learned Lord, Lord Falconer, said? How will the Electoral Commission distinguish between the designated lead organisation and other organisations and decide whether they are truly independent of it? My noble and learned friend Lord Mackay was quite right to remind us that the rules in the PPERA were set down for referenda. None the less, all sorts of problems come with these rules. That is the point that some people on the other side were genuinely making, and that I was making when I intervened earlier. In many ways, these rules are inappropriate.

I am particularly worried about how you identify the designated lead organisation. The very fact that there is a body in this country that actually decides that there is a permitted lead organisation in a campaign makes me quite nervous. It gets rather close to the situation recently when the United States Supreme Court overthrew many of the rules relating to campaign contributions because they were interfering with the freedom of individual citizens to spend their money and support causes they wanted. I can hardly remember what I said a decade ago, despite the noble and learned Lord, Lord Falconer, reminding me, but one of the points that I raised then was the interference, as I saw it, in certain basic freedoms: that a government organisation will decide who the lead organisation is, and that other organisations will be subject to this or that control.

These rules, frankly, made me very uneasy at the time, and I remain uneasy. Will my noble friend tell me how he envisages that the Electoral Commission will distinguish between expenditure of the lead organisation and whether another organisation is genuinely independent or not? Some of these organisations are very interconnected.

Lord Rennard: On a point of clarification, does the noble Lord accept that the Electoral Commission is absolutely not a government organisation, that it is independent from government and can therefore do something that perhaps a Government cannot do?

Lord Lamont of Lerwick: Of course it is independent. That is how it was set up. I intervened earlier with a comment about the Electoral Commission that I was rather nervous about making, and I hesitated to make the comments directly; in some of the evidence presented to the Constitution Committee by at least one academic, the independence of the Electoral Commission on this issue of electoral reform was brought up. I am not saying I agree with that, but it was brought up-it was mentioned in a submission to the Constitution Committee by a well respected academic. When bodies exist on a permanent basis, such as the Electoral Reform Society, what constitutes routine non-campaign expenditure for them and what has to count as an item of spending in the campaign? At what point does academic and educational activity become a form of campaigning covered by the PPERA? I am afraid that these rules are full of holes and really quite impractical.

Lord McNally: My Lords, on the question of how these rules are applied, I suspect that the noble Lord, Lord Lamont, and I have a philosophical difference.

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As I said earlier, I supported the 2000 legislation and the setting up of the Electoral Commission. I am not in favour of the untrammelled process of elections. You need rules and checks and balances if you are going to offer a level playing field in these matters. Much of what was done during the period of the previous Government was worthy of support in making our electoral systems fairer and more transparent in funding and process. What is clear about the process is that much of what is in the Bill, although it is a fairly thick Bill to look at, and certainly what is in this clause, rests on tried legislation that is already in place.

Lord Howarth of Newport: As my noble and learned friend Lord Falconer and the noble Lord, Lord Lamont, have rather compellingly pointed out to the Committee, there are real and practical problems with the existing rules. Does the noble Lord consider it to be the responsibility of the Government to iron out these difficulties and to put into place a more satisfactory set of arrangements, or is he saying that it is for the Electoral Commission to modify the rules as it thinks best? If the latter, is he satisfied that the Electoral Commission has the freedom and scope actually to do that?

5 pm

Lord McNally: The answer has to be yes, as if we did not have that confidence in the Electoral Commission we would be in a very odd place. As I said, we support the trusting of the commission, which will publish guidelines on how these rules will operate. It is for the designated organisations and the other parties campaigning to work within those rules.

Lord Howarth of Newport: No one is suggesting that the Electoral Commission is not to be trusted. The question is whether the commission has the scope under existing legislation to make the changes that may be necessary.

Lord McNally: Part of the debate is how much the changes need to be made. We believe that they do not and that the existing rules and regulations will stand. We see no reason to change the current legislation on spending limits for this referendum. Quite apart from seeing no compelling reason of principle, we should consider the practical effects. We are not far away from the start of the referendum period and changing the rules at this late stage could penalise permitted participants unfairly. In particular, we do not agree that there should be different spending regulations for this referendum compared with others, as the amendment suggests. We do not agree that there should be this distinction and we believe that the current spending regulation framework should apply to this referendum.

Lord Foulkes of Cumnock: My Lords, I had not intended to speak on this because I spoke rather a lot the other day, which resulted in the noble Lord, Lord McNally, wishing for snow in Scotland. I do not want him to create undue problems for the new Transport Minister up there but we have just heard, for the umpteenth time, that this has to be got through because if we do not pass it that will create problems for a referendum on 5 May. However, the reason that the

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problems are created is that the Government have decided on a timetable which is far too short so, again and again, proper scrutiny of this Bill is being denied us as it was denied the House of Commons. The Minister is now trying to deny us because an artificial date has been set for the referendum.

All sorts of anomalies can arise. We have had a number suggested-if I had had more time, I would have written down some that have come up during our past few days' debates-and each time we raise them, there is a general frisson around the Committee that there is a problem there. Then the Minister puts his head down, reads out a brief and gets on to the next business without really considering the problem.

Perhaps I might give an example, which is not relevant to this issue but is a parallel issue that can be used. In the Scottish Parliament elections, the SNP suddenly realised that if it put itself down on the list as "Scottish National Party", it would come low down the list. Everyone who has been involved in elections knows that if you are top of the list, you get an advantage from that; if your name is Arbuthnot, you get that built-in advantage. The SNP changed the designated name of its party to "Alex Salmond for First Minister". It put down the name of the candidate, then "Alex Salmond for First Minister" in brackets, and that came above Labour, Liberal and Conservative. It came right at the top and it got a lot of votes as a result.

Things have been changed now, because we realised that it was a mistake. That is how these anomalies arise. That is why it is very important that this kind of legislation is scrutinised carefully by us here. I have been involved in, I think, seven municipal elections as a candidate, and seven parliamentary elections as a candidate, most of them successful, and many people here have been involved in many more; my noble friend Lady Liddell has been organising them-she has been in charge of them-and many of my noble friends have been involved in them. That is why we should be scrutinising this and thinking of the practical difficulties that arise.

The Deputy Prime Minister is determined to push this through-because of his ego, says one of my noble friends, although I would hesitate to say that kind of thing. He is anxious to get it through and we are being forced into an artificial timetable. My noble friend Lord Rooker has managed to join us now. He provided the lifeboat for the Government. At some point, I hope that the noble Lord, Lord McNally, will undertake the kind of consultation in relation to the date of the referendum as he is going to undertake in relation to the previous amendment, as requested by my noble friend Lord Campbell-Savours. If the noble Lord, Lord McNally, came to this House within a week or two and said that the Government had accepted the import of my noble friend Lord Rooker's amendment, and that they were now going to have the referendum on, let us say, 31 October next year or whatever date, then I predict that the life of the noble Lord, Lord McNally, would be a great deal easier-and, even more important than a quiet life for him, our consideration of the detail of this Bill would be far better, and we would end up with a much better Bill at the end of it.

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Lord Campbell-Savours: I will ask a very simple question, to which I am sure there is a very simple answer. It is about limits on individuals. My noble friend referred to an industrialist in Scotland during the course of the campaign to which she was referring. What happens if a rich man or woman in the United Kingdom decides that they have got several million pounds to spend, and they do not want to spend it through a political party in influencing the outcome of this referendum, and they decide to split up their allocations whereby they fall within statutory limits? It may well be enshrined in legislation somewhere but I just think it should be on the record, during this debate, whether that is a permissible activity under either this law or the 2000 Act. That is my very simple question: what controls exist to ensure that private individuals do not seek to manipulate the result?

Lord McAvoy: My Lords, briefly, the very point that my noble friend Lord Campbell-Savours has mentioned is the one that has particularly worried me: the rich men and women who have made plenty of money-worked hard and earned the money-and decide to influence the political process with an influx of money into either individual constituencies, as sometimes seems to happen, or on a national campaign. I do not think that is right. I am seriously interested in the response of the noble Lord, Lord McNally, to that, because I am certainly interested in taking up his offer of widening and deepening the bonding that has taken place between the two of us.

I am also inspired to speak very briefly following the noble Lord, Lord Lamont, who mentioned that he really cannot remember what he said a few years ago. None of us can remember everything we said a few years ago, but sometimes there is relevance in what we say. The referendum is being driven by politics. The date is being driven by politics. We are told that we should not revise and scrutinise because 5 May is set in stone and that we should not do anything to put that in jeopardy. It is our job to revise and to scrutinise legislation and we should not be accused of spreading things out. This issue is political. I shall briefly give a quote:

"I think referendums are awful. The late and great Julian Critchley used to say that, not very surprisingly, they were the favourite form of plebiscitary democracy of Mussolini and Hitler. They undermine Westminster".

That is the bit that interests me.

"What they ensure, as we saw in the last election, is if you have a referendum on an issue, politicians during an election campaign say 'Oh, we're not going to talk about that, we don't need to talk about that, that's all for the referendum'".

This refers specifically to the euro campaign. The quote continues:

"So during the last election campaign the euro was hardly debated. I think referendums are fundamentally anti-democratic in our system and I wouldn't have anything to do with them. On the whole, Governments only concede them when Governments are weak".

That was Chris Patten, now the noble Lord, Lord Patten of Barnes.

Lord Lipsey: My Lords, this is proving to be a most illuminating debate. When the Minister replies, can he illuminate us further? I got rather confused between

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two arguments that he is putting, both of which are perfectly sustainable but which are simply impossible to run together.

One argument is that there is nothing wrong with the present law; it deals with absolutely everything. I do not think that that argument stands up because it has been destroyed by the arguments of my noble and learned friend Lord Falconer and my noble friend Lord Campbell-Savours, but it is a perfectly sustainable argument by its own logic. Another argument which the Minister came to later, however, says, "Well, the law may or may not be right, but it would be totally confusing to participants if we changed it now". That is a sustainable argument that leads to a clear conclusion: if it is going to confuse participants, we need to put the referendum date back, as my noble friend Lord Foulkes said, sort that bit of law out and then go ahead with the referendum.

The Minister can take either line as far as I am concerned, and the House will take its view on whether it supports it, but he really cannot run both lines simultaneously. I know that the late Jimmy Thomas said that if you cannot ride two horses at once you should not be in the circus, but it gets a trifle tricky if they are galloping in opposite directions.

Lord McNally: I know a little Labour Party history. It was Jimmy Maxton, not Jimmy Thomas, who said that. The noble Lord can have a large bet on that; I know that he is a betting man.

Lord Maxton: The second part was also credited to Jimmy Maxton at the time.

Lord McNally: However, I am not trying to ride two horses at once. We are saying that we are confident that the present regulations are robust enough for conducting this referendum. I have paid tribute before: the PPERA 2000 regulates these campaigns and parties; individuals and other organisations are controlled by that regulation. Donations above £7,500 have to be declared to the Electoral Commission and made public as another guarantee of transparency.

The Electoral Commission itself has welcomed this clause, and says that the provisions will provide transparency about the use of loans and similar arrangements on commercial or other terms to fund campaigning. Registered campaigners will be required to report certain information about such transactions in their referendum expenses return, along with the information on donations that the PPERA already requires them to report.

We have already referred, several times in this debate, to how referendums have influenced the development of law. There is no doubt that this referendum will provide an important test of the PPERA framework. The Government have said, in their response to the Lords Constitution Committee report on referendums, that we will review the effectiveness of the PPERA generally after the referendum. In addition, the Government note that the Committee on Standards in Public Life has said that it will examine whether any changes are necessary in the rules relating to the funding of referendums, as part of the wider review into party-political finance.

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Basically, we are tightening up the rules on finance in Clause 6. The amendments are not necessary. The Bill contains the necessary schedules to run this referendum fairly. We have confidence in the Electoral Commission and its powers to run it fairly. We hope that the House will not-

5.15 pm

Lord Campbell-Savours: Will the Minister reply to a specific question so that we have on the record exactly what will stop the abuse that I have referred to? It might come about that an individual with a large amount of money, surpassing any limits enshrined in legislation, wishes to influence the campaign. What is to stop an individual doing precisely that?

Lord McNally: For a start, each of those donations would have to be declared. There you have the conflict between my noble friend Lord Lamont's philosophy and what I suspect is that of the noble Lord, Lord Campbell-Savours, and myself. I do not want to see big money distorting elections or referendums. We have a set of rules and regulations and a degree of transparency that we believe gives sufficient protection.

Lord Campbell-Savours: Transparency does not deal with the problem that I am referring to. If I can exaggerate to make my point-and I will-suppose that someone said, "I've got £20 million. I want to spend it on this referendum, and I'm going to slot it through, by way of various systems, into the campaign". Transparency might well reveal that, but that does not deal with the problem. What is going to stop it?

Lord McNally: I strongly suspect at the moment-I shall come back and correct this if I am wrong-that nothing would stop it, any more than it would be stopped at a general election.

Lord Campbell-Savours: In other words, the Minister is conceding that money can influence this referendum campaign. He is saying not that it will but that it could in certain circumstances.

Lord McNally: Reductio ad absurdum, of course, wins many arguments, but many of the problems that have been raised from those Benches are not realistic. We can test the House on this. We have confidence in the rules and regulations, many of them laid down by the previous Administration. We are as interested as anyone else in ensuring that the referendum is conducted in a fair and transparent way, and we have confidence in both the legislation and the Electoral Commission.

Lord Campbell-Savours: But is it not astonishing that the Liberal Democrats are sitting in their places and not intervening? One would have thought that they had a particular interest during this campaign to ensure that big money could not influence the result in the way that I suggest? Why do they not get up and say something?

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Lord McNally: Because I think that they suspect bogus arguments when they see them.

Noble Lords: Oh!

Lord McNally: All right, we can spend a lot of time on this. I am not going anywhere. If the noble Lord wants to get up again then he can, but the argument about £20 million being spent on the campaign could have been used in any election in the past 100 years. It is not going to happen in this referendum.

Lord Howarth of Newport: We are not talking about an extreme and highly unlikely possibility; we are talking about the possibility that someone with perhaps £2 million to spend could parcel it out between different beneficiaries who would all then campaign on one side of the referendum argument.

The Minister just said two things that are in conflict. He said that he had confidence in the rules and regulations as they are now but, when he was asked by my noble friend Lord Campbell-Savours what there was to stop this kind of abuse, he said that he frankly suspected that there was nothing. Those two remarks are in conflict with each other. This is a very important issue. We need to know the answer to the question, and if that answer is not satisfactory then the legislation needs to be amended to ensure that such abuse cannot take place.

Lord Glentoran: I just wonder if the biggest lump of money that has interfered with elections over many years has been that of the large trade unions. They come together as a bulk with a huge amount of money, bigger than that of any individual.

Baroness Liddell of Coatdyke: Could the noble Lord address something very specific that I suspect will happen? If a wealthy person domiciled in Monaco buys up all the billboards in Scotland for example as part of his or her campaign for or against the question in the referendum, what means are there of accounting for it one way or another? Is there a transparent way that it can be accounted for as the noble Lords, Lord Howarth and Lord Campbell-Savours, have asked? It is not a mischievous question-it is an issue that could arise.

Lord McNally: Such expenditure would have to be reported to the Electoral Commission, and it would then be published. Actually, I will not bother with this advice. I have every confidence in my advisers but this would provoke another 10 interventions.

Lord Maxton: In relation to that very correct question, the Minister says that it is down to accountability and that they would have to make it public. The problem, however, is that the accountability and the public announcement come after the referendum, not before and not during. So what if the individual has spent the money? It will not matter.

Lord McNally: Those expenditures are reported on a regular basis. If there was an attempt at such an intervention, it would probably play quite a negative part.

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Lord Rennard: Does the Minister agree that the referendums for setting up the Scottish Parliament and the Welsh Assembly were conducted within five months of the general election in 1997 and that no such problems occurred during the course of those campaigns? Furthermore, since the Political Parties, Election and Referendums Act 2000 has been in place, we conducted the referendum for the north-east regional assembly, again without any of these problems occurring. Noble Lords in the party opposite introduced these rules in 2000. They have survived to 2010 without there being any attempt to change them. The evidence of the north-east regional assembly referendum campaign is that no such problems arose.

Baroness Liddell of Coatdyke: Will the noble Lord also take into account the fact that a general election was not held on the same day?

Lord McNally: I have taken all those points in. Fortunately-and to my great pride-I do not remember some of the minutiae of the various campaigns in the same detail as my noble friend Lord Rennard. The Opposition can raise all kinds of hobgoblins and things that keep them awake at night but the truth is, as my noble friend has just reminded us, that the PPERA has worked well. The provisions in this Bill are tried and tested. I do not object to this legislation having thorough examination. As I have said, we are willing to spend as long as the Opposition want on this matter. In fact, we might have a few late nights to see if we can focus our minds on it. For the moment we are confident that we have the legislation in place. I ask the noble Lord to withdraw his amendment and for Clause 6 to stand part of the Bill.

Lord Snape: Whether the noble Lord, Lord Lamont, is tempted to do so or not, I come to the assistance of the noble Lord, Lord McNally, on this matter. All three major parties have had difficulties over the years with donations. I am not talking about the trade unions, on which there was a rather irrelevant intervention. I do not know where the noble Lord who mentioned them has been for the past 30 years. Various pieces of legislation-still in force-were passed by Conservative Governments to stop trade unions passing any money on to any political party without the permission of the party membership, which is not something that applies anywhere else.

To return to the amendment, all the parties have had these problems, including the Liberal party. After all, their biggest donor at the last election subsequently went to prison. I do not make that point in any political sense; I know the Liberal party had no idea that the donation came from someone who turned out to be fraudster. The noble and learned Lord, Lord Mackay of Clashfern, said that legislation already exists to take care of political donations and it will do so as far as the referendum is concerned. However, I have just illustrated the weakness of that legislation. The reason for legislation being toughened up over the years is that it is apparent that people evade it. If I might speak for the noble Lord, Lord Lamont, his point-and one made in interventions by my noble friends-is that the present legislation is palpably inadequate and we should all concede that. If we are

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to have this referendum, particularly on the same day as other elections, that legislation ought at least to be looked at. I hope that is helpful to the noble Lord, Lord McNally. I am not sure what is on that piece of paper, which he looked at carefully, other than perhaps, "Maybe we don't agree with you either and you're on your own".

Lord Lamont of Lerwick: I apologise for intervening before my noble friend speaks; I do not want to encourage anything that would prolong this debate. However, he says that the laws governing referendums have worked very well and have been in existence for 10 years. Yes, they have been in existence for 10 years but, as the noble Lord, Lord Rennard, pointed out, there has been only one referendum-a very local referendum about whether there should be a north-east assembly. I do not know what the expenditure on that referendum was but I dare say that an upper cap of £5 million was not a great problem. When the Minister says that it is tried and tested, it absolutely is not. It was tried in the north-east and that is all.

There is the problem, which the noble and learned Lord, Lord Falconer, reminded me that I raised a decade ago and which I have alighted on again, of groups splitting up. How do you ensure that a so-called independent group is not related to the designated group? This is a real problem. As the Minister pointed out, my worry is not about rich people intervening. I always remember that it was the millionaire Engels who subsidised Karl Marx. I am surprised that the other side of the House is not more in favour of rich people. My fear is just that these limits will be completely meaningless because so many organisations will claim that they are independent. I do not wish to name the different organisations that favour changing the voting system but there are a lot of them.

I asked the Minister how you distinguish between the money that those organisations spend day by day now, before the campaign begins, and the money that they will spend during the campaign. What will be defined as a campaign contribution? The Minister can say that we have legislation to cover this but it has not been tried on any significant scale. If he cannot give some guidance today, perhaps he could answer these questions on another day of the Committee or at a different stage of the Bill. They are genuinely of concern, or they certainly are to me.

Lord McNally: I am sure they are of concern. How we govern referendums and finance political parties will rightly be of continuing interest to this Parliament, the political parties and the political process. We are confident that this legislation and the powers of the Electoral Commission are strong enough to ensure that this referendum is carried out fairly and transparently. Many of the concerns that have been raised will be tested. I have already said that, as with other referendums, we will learn from experience.

5.30 pm

Lord Grocott: I am sorry, but the Minister is proposing a referendum which will change the constitution. That is what the referendum is about and, as his leader

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reminded us, it is the most important constitutional change since 1832. I hope that the noble Lord does not think that the questions being asked-it is the first that I have asked-are trivial or "hobgoblins", or some other phrase. He has constantly repeated the mantra: "Fair votes in fair constituencies". I do not like tripping down that road by using that language, but I might as well. How about ensuring that it is a fair referendum? That is what these questions are all about, and it would be simply too late to consider them "after we have changed the constitution". That may be the result of the referendum, although I fervently hope not, and it would be too late to say, "Sorry we got the expenditure rules wrong; we will put them right next time". If the noble Lord cannot see that the issue needs to be addressed now, before the referendum, I suspect that not just those of us on both sides who have been asking questions, but a lot of noble Lords who have not felt it necessary to contribute to this debate may feel that a straightforward answer is required.

Lord McNally: The straightforward answer is that the question will be never ending. We will always be looking at how these things are regulated. We will always be looking at whether the rules can be tightened, improved or made more transparent. The question is whether you can conduct a referendum on a fair and transparent basis under the terms of the legislation proposed in the Bill. It is the opinion of this House and it was certainly the opinion of the other place that we could do that. The questions raised on the opposite side may be reasonable, including the question on the funding of political parties, which again will be an ongoing matter. That is why the Committee on Standards in Public Life is looking at that very issue, and this party and this coalition Government will legislate on the funding of political parties.

Lord Howarth of Newport: Of course the Minister is right to say that there will be continuing debate on this range of issues. However, on the specific issue of potential abuse to which the noble Lord, Lord Lamont, alerted us, and which my noble friend Lord Campbell-Savours and others agree should be taken seriously, the Minister said just now that in his view nothing in existing legislation would safeguard against that abuse. That is very worrying, and it will not do for the noble Lord to seek blandly to assure us that the legislation is probably good enough and that we should proceed with it. The Government have had plenty of time to think about these issues. This Bill was introduced months ago, and it is the responsibility of the Government to ensure that the rules governing the conduct of referendums are sufficiently rigorous to provide against such abuse occurring.

Lord McNally: But if the Opposition, or even my noble friend, are putting forward hypothetical threats to the fair conduct of the referendum, I am not sure that any piece of legislation on God's earth can meet every imagined threat.

Lord Howarth of Newport: Not every threat; but this is a specific abuse that was forensically identified by the noble Lord, Lord Lamont.

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Lord McNally: It was not forensically identified. It was suggested that there are ill-defined millionaires wandering around with ill-defined amounts of money. We believe that this legislation is robust and transparent enough to deal with those matters. If it helps, I will at some later stage-and I have already demonstrated that I have absolute faith in my advisers-take the-

Lord Snape: What did the advice say?

Lord McNally: It says, "Be rude to Snape, it always wins the House over".

Lord Snape: Then I can only congratulate the noble Lord on the quality of his advice.

Lord McNally: And this one says, "Have a go at Rooker, while you are at it". I will take away this issue of the roving multi-millionaire splitting up his money. If I was related to him, I would want him sectioned before he spent the family fortune. In the mean time, I again ask the noble and learned Lord to withdraw his amendment, and I ask the House to adopt Clause 6 in due course.

Lord Falconer of Thoroton: My Lords, it is important to identify what we are trying to achieve here. I think everybody in this House would agree that the right expenditure limits are those which create a level playing field. Both sides should be subject to the same limits. The difficulty about the rules that apply from PPERA is that that does not appear to be the case on the facts of this particular referendum. Perhaps I may identify two specific circumstances as to why that is. The way that PPERA deals with the limits is by setting three separate limits, which are cumulative. The first limit allows the designated lead organisation on each side-the leading campaign organisation for "yes" and the leading campaign organisation for "no"-to have a limit of £5 million. That plainly demonstrates equality there. The second limit allows each political party that got between 20 per cent and 30 per cent of the vote in the previous election to have a cumulative limit of £5 million. That is added to the £5 million for the designated lead organisation. In the current arrangements, we have two political parties that express no view on whether they support the change to AV and one political party that supports the change to AV. The effect on the facts of this case is that there is the designated lead organisation limit of £5 million, and in addition there is £5 million that the Liberal Democrats get to spend on the campaign. Therefore, there appears to be an uneven playing field right from the start.

Separately and in addition to that point is the point made by practically everybody around the Chamber that, if you are an authorised participant-either an individual or a corporation-you can donate up to £500,000. Therefore, there is very little difficulty for somebody who supports one of the campaigns-whether they are companies, individuals with families, or a group of people who have a particularly concerted view-to give, in effect, an unlimited amount of money to one or other of the campaigns.

Our proposition is that, first, you should reduce the amount of the limit for political parties, because otherwise you reach an unfair result. That is precisely the point

15 Dec 2010 : Column 644

that the noble Lord, Lord Lamont, made in 2000. It is obviously correct in relation to this because it obviously leads to a limit of £10 million for the "yes" campaign and a limit of only £5 million for the "no" campaign.

Regarding the rich individual, no answer of any sort was given by the noble Lord. I would have been prepared to accept some answer in relation to, first, the party-political point and, secondly, the point about rich individuals. However, not one answer came. The noble Lord merely said, "We are confident that the rules are okay". This is the same Minister who, in the debate on the previous group of amendments, agreed to go away and think about changing the rules, which he said were not adequate to deal with the position. He is shaking his head. He is right: he did not agree to that but he agreed that he would discuss it, which rather implied that he accepted that there might be something wrong.

Perhaps I may quote what the Electoral Commission says about the two amendments that we are putting forward:

"These are significant changes to the provisions for spending limits at UK-wide referendums set out in the Parliamentary Parties, Elections and Referendums Act. Parliament may wish to consider whether the change might affect the ability of campaigners to put their arguments effectively to voters and the potential implications of changing one aspect of the PPERA rules on campaign spending without further consideration of the overall regulatory structure".

Therefore, the commission is saying, "Don't change anything because that might lead to the whole thing falling apart in some way".

The noble Lord, Lord McNally, says, "If we have made a mistake in relation to these rules, we'll learn from this". I think that when we are scrutinising this Bill, our obligation as a House is to consider the merits of the changes that have been proposed. We should not treat the referendum-on a matter which Mr Nicholas Clegg has described as the most important electoral change since 1832-as an experiment but we should have the courage of our convictions and change the system if we think it is wrong. Surely the one thing that we have learnt from America is that money does buy elections, and all the rules that we introduced were intended to stop that happening. However, these rules do not contain fair limits that apply to both sides.

The noble Lord was so good on the first group of amendments and so bad on this one-in that he gave absolutely no explanation and did not really deal at all with the arguments-that I have no option but to test the opinion of the Committee.

5.41 pm

Division on Amendment 39AC

Contents 169; Not-Contents 194.

Amendment 39AC disagreed.

Division No. 1


Adams of Craigielea, B.
Adonis, L.
Ahmed, L.
Anderson of Swansea, L.

15 Dec 2010 : Column 645

Andrews, B.
Archer of Sandwell, L.
Bach, L.
Bassam of Brighton, L. [Teller]
Beecham, L.
Berkeley, L.
Best, L.
Bilston, L.
Birt, L.
Boateng, L.
Borrie, L.
Bradley, L.
Brett, L.
Bridges, L.
Brooke of Alverthorpe, L.
Brookman, L.
Browne of Ladyton, L.
Campbell-Savours, L.
Carter of Coles, L.
Christopher, L.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Corbett of Castle Vale, L.
Corston, B.
Crawley, B.
Currie of Marylebone, L.
Davies of Coity, L.
Davies of Oldham, L.
Davies of Stamford, L.
Desai, L.
Dixon, L.
Donaghy, B.
Drake, B.
D'Souza, B.
Dubs, L.
Elder, L.
Elystan-Morgan, L.
Evans of Parkside, L.
Falconer of Thoroton, L.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Ford, B.
Foster of Bishop Auckland, L.
Foulkes of Cumnock, L.
Gale, B.
Gibson of Market Rasen, B.
Giddens, L.
Gilbert, L.
Golding, B.
Gordon of Strathblane, L.
Goudie, B.
Gould of Potternewton, B.
Graham of Edmonton, L.
Grantchester, L.
Grenfell, L.
Grey-Thompson, B.
Griffiths of Burry Port, L.
Grocott, L.
Hameed, L.
Harries of Pentregarth, L.
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Haworth, L.
Hayter of Kentish Town, B.
Healy of Primrose Hill, B.
Henig, B.
Hilton of Eggardon, B.
Hollis of Heigham, B.
Howarth of Newport, L.
Howells of St Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Stretford, B.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L.
Janner of Braunstone, L.
Jones, L.
Jones of Whitchurch, B.
Judd, L.
Kennedy of The Shaws, B.
King of West Bromwich, L.
Kingsmill, B.
Knight of Weymouth, L.
Laird, L.
Layard, L.
Lea of Crondall, L.
Liddell of Coatdyke, B.
Liddle, L.
Lipsey, L.
Listowel, E.
McAvoy, L.
McDonagh, B.
Macdonald of Tradeston, L.
McFall of Alcluith, L.
McIntosh of Hudnall, B.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Mandelson, L.
Massey of Darwen, B.
Maxton, L.
Meacher, B.
Montgomery of Alamein, V.
Morgan of Drefelin, B.
Morgan of Huyton, B.
Morris of Aberavon, L.
Morris of Handsworth, L.
Nye, B.
O'Neill of Clackmannan, L.
Parekh, L.
Patel of Bradford, L.
Pendry, L.
Pitkeathley, B.
Ponsonby of Shulbrede, L.
Prashar, B.
Puttnam, L.
Quin, B.
Rea, L.
Reid of Cardowan, L.
Rendell of Babergh, B.
Richard, L.
Robertson of Port Ellen, L.
Rogan, L.
Rooker, L.
Rosser, L.
Rowe-Beddoe, L.
Rowlands, L.
Royall of Blaisdon, B.
Sandwich, E.
Sawyer, L.
Scotland of Asthal, B.
Sherlock, B.
Simon, V.
Smith of Basildon, B.
Snape, L.
Soley, L.
Stern, B.
Stevenson of Balmacara, L.
Stoddart of Swindon, L.
Stone of Blackheath, L.
Sutherland of Houndwood, L.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Tenby, V.
Thomas of Swynnerton, L.
Touhig, L.
Triesman, L.
Tunnicliffe, L. [Teller]
Turnberg, L.
Turner of Camden, B.
Wall of New Barnet, B.

15 Dec 2010 : Column 646

Warner, L.
Watson of Invergowrie, L.
Wedderburn of Charlton, L.
Wheeler, B.
Whitaker, B.
Wilkins, B.
Williams of Elvel, L.
Williamson of Horton, L.
Winston, L.
Woolmer of Leeds, L.
Young of Norwood Green, L.


Aberdare, L.
Addington, L.
Alderdice, L.
Alliance, L.
Alton of Liverpool, L.
Anelay of St Johns, B. [Teller]
Arran, E.
Ashdown of Norton-sub-Hamdon, L.
Astor of Hever, L.
Attlee, E.
Avebury, L.
Baker of Dorking, L.
Barker, B.
Bates, L.
Bell, L.
Benjamin, B.
Bew, L.
Black of Brentwood, L.
Bonham-Carter of Yarnbury, B.
Bowness, L.
Bradshaw, L.
Bridgeman, V.
Brittan of Spennithorne, L.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Browning, B.
Burnett, L.
Caithness, E.
Cameron of Dillington, L.
Cathcart, E.
Cavendish of Furness, L.
Chidgey, L.
Clement-Jones, L.
Colwyn, L.
Cope of Berkeley, L.
Cotter, L.
Craigavon, V.
Crathorne, L.
De Mauley, L.
Deech, B.
Denham, L.
Dholakia, L.
Dixon-Smith, L.
Dundee, E.
Dykes, L.
Eaton, B.
Eccles, V.
Eccles of Moulton, B.
Eden of Winton, L.
Elton, L.
Erroll, E.
Falkland, V.
Falkner of Margravine, B.
Faulks, L.
Finlay of Llandaff, B.
Fookes, B.
Fowler, L.
Freeman, L.
Freud, L.
Garden of Frognal, B.
Gardiner of Kimble, L.
Gardner of Parkes, B.
Geddes, L.
German, L.
Glenarthur, L.
Glentoran, L.
Goodhart, L.
Goodlad, L.
Greaves, L.
Greenway, L.
Hamwee, B.
Hanham, B.
Henley, L.
Hill of Oareford, L.
Hodgson of Astley Abbotts, L.
Hooper, B.
Howard of Lympne, L.
Howe, E.
Howe of Aberavon, L.
Howe of Idlicote, B.
Howell of Guildford, L.
Hunt of Wirral, L.
Hurd of Westwell, L.
Hussein-Ece, B.
Inglewood, L.
James of Blackheath, L.
Jay of Ewelme, L.
Jenkin of Roding, L.
Jones of Cheltenham, L.
Jopling, L.
Kilclooney, L.
King of Bridgwater, L.
Knight of Collingtree, B.
Lang of Monkton, L.
Lee of Trafford, L.
Lester of Herne Hill, L.
Lindsay, E.
Linklater of Butterstone, B.
Liverpool, E.
Lucas, L.
Luke, L.
Lyell, L.
McColl of Dulwich, L.
Macdonald of River Glaven, L.
MacGregor of Pulham Market, L.
Mackay of Clashfern, L.
Maclennan of Rogart, L.
McNally, L.
Mancroft, L.
Maples, L.
Mar, C.
Marland, L.
Marlesford, L.
Mawhinney, L.
Mayhew of Twysden, L.
Methuen, L.
Miller of Chilthorne Domer, B.
Montrose, D.
Morris of Bolton, B.
Naseby, L.
Neuberger, B.
Neville-Jones, B.
Newby, L.
Newton of Braintree, L.
Noakes, B.
Northbrook, L.
Northover, B.
Norton of Louth, L.
Oakeshott of Seagrove Bay, L.
O'Cathain, B.
Oppenheim-Barnes, B.

15 Dec 2010 : Column 647

Palmer, L.
Palumbo, L.
Parminter, B.
Patel, L.
Patten, L.
Patten of Barnes, L.
Phillips of Sudbury, L.
Plumb, L.
Ramsbotham, L.
Rawlings, B.
Razzall, L.
Reay, L.
Redesdale, L.
Rennard, L.
Ritchie of Brompton, B.
Roberts of Conwy, L.
Roberts of Llandudno, L.
Rodgers of Quarry Bank, L.
Rotherwick, L.
Ryder of Wensum, L.
Sanderson of Bowden, L.
Sassoon, L.
Scott of Needham Market, B.
Seccombe, B.
Selborne, E.
Selkirk of Douglas, L.
Selsdon, L.
Sharp of Guildford, B.
Sharples, B.
Shaw of Northstead, L.
Sheikh, L.
Shipley, L.
Shutt of Greetland, L. [Teller]
Skelmersdale, L.
Soulsby of Swaffham Prior, L.
Spicer, L.
Stedman-Scott, B.
Stewartby, L.
Taverne, L.
Taylor of Warwick, L.
Teverson, L.
Thomas of Gresford, L.
Thomas of Winchester, B.
Tonge, B.
Tope, L.
Tordoff, L.
Trefgarne, L.
Trumpington, B.
Tugendhat, L.
Tyler, L.
Ullswater, V.
Verma, B.
Waddington, L.
Wade of Chorlton, L.
Wakeham, L.
Wallace of Saltaire, L.
Wallace of Tankerness, L.
Walmsley, B.
Wei, L.
Wilcox, B.
Williams of Crosby, B.
Willis of Knaresborough, L.
Younger of Leckie, V.
5.54 pm

Amendment 39B

Moved by Lord McNally

39B: Clause 6, page 5, line 3, at end insert-

"( ) Schedule 19C to the 2000 Act (civil sanctions), and any order under Part 5 of that Schedule, have effect as if offences under paragraph 8(1) to (12) of the Schedule set out in Schedule 9 to this Act were offences prescribed in an order under that Part."

Lord McNally: My Lords, it is reassuring that the power of argument and eloquence still triumphs in this House.

Clause 6 and Schedule 9 to the Bill ensure that all permitted participants in the referendum that are not political parties are covered by the same regulations regarding loans as already apply to political parties that campaign in the referendum. The Bill does this by creating a new regime for the regulation of loans to permitted participants which closely reflects the rules that already govern loans made to political parties in Part 4A of the Political Parties, Elections and Referendums Act 2000. Part of this regime is the creation of 13 new offences applicable to those permitted participants in the referendum. Again, these offences replicate the offences that already apply to major political parties through Part 4A of the 2000 Act.

This amendment seeks to apply the Electoral Commission's new civil sanctions powers-they came into force by order on 1 December-so that they are available in relation to 12 of the 13 new offences created by the Bill. The civil sanctions regime was inserted into PPERA 2000 by the Political Parties and Elections Act 2009. It is intended to allow the Electoral Commission to apply sanctions that are appropriate

15 Dec 2010 : Column 648

to the nature of each contravention and to use new approaches to secure compliance with the law where appropriate rather than referring a case for criminal investigation. The civil sanctions include fixed monetary penalties, discretionary requirements, stop notices and enforcement undertakings.

It was not possible to prescribe the new loans offences that the Bill creates in the order so as to apply the civil sanctions regime to them on 1December. That is because the new loans offences have not yet been approved by Parliament and will not be approved until this Bill obtains Royal Assent. However, the order that came into force on 1December prescribes the existing offences regarding loans to political parties. This means that there would be a disparity between how political parties and other permitted participants who receive loans to fund their referendum campaigns could be sanctioned if we were not to apply the civil sanctions provisions to the new offences by making this amendment. Our amendment will ensure that civil sanctions powers are also available for the new loans offences and will close off this disparity. The result is that any permitted participant who commits a loans offence after Royal Assent could be subject to civil sanctions imposed by the Electoral Commission. I beg to move.

Lord Howarth of Newport: My Lords, I detect some inconsistency in the Minister. He is using this legislation to introduce new rules concerning loans but he has spent a considerable amount of time this afternoon telling the House that it is not appropriate to use this legislation to change rules in respect of other matters that may arise in the conduct of referenda-for example, expenditure on publicity or the rules governing the donations that authorised individuals may give. Why is it okay for the Government to change the rules here where it happens to suit them and not in those other respects?

Lord Soley: May I ask for clarity? I found the Minister's comments confusing. He seemed to be saying that, because the rules were not ready, we could not change this, but he was setting aside time or something-I did not understand that bit-so that we could change it at a later date. I think that he needs to explain that a bit better.

Lord McNally: These rules will come into force once the Bill becomes an Act. This amendment merely brings the legislation into line with the new civil sanctions that the Electoral Commission is bringing in for political party operations-civil sanctions that I greatly welcome, because they give the Electoral Commission a degree of flexibility in getting discipline into elections rather than the constant threat of criminal sanctions.

Lord Soley: I understood the Minister to say-maybe I got this wrong-that the civil sanctions were not ready because they had not gone through the other House in time. Is that what he is saying?

Lord McNally: The civil sanctions in relation to the referendum will not apply until this Act is passed. The civil sanctions that are being brought in apply to elections and the conduct of parties in elections. The

15 Dec 2010 : Column 649

amendment merely brings the Bill into line with what was done on 1 December, but the civil sanctions in relation to the referendum will not be in force until this Act is on the statute book.

6 pm

Lord Gilbert: The noble Lord, Lord McNally, is probably too young to remember the referendum of 1975, which was shamelessly rigged by the Government of the day-a Government of whom I was a member. The no voters were allowed to have a leaflet published and distributed at public expense, as were the yes voters. But the Government then brought out a third leaflet, which said yes; it was rather bigger, as I recall, than either of the other two leaflets. The referendum was therefore totally rigged. The rigging was done not by rich millionaires, as the noble Lord, Lord Lamont, seems to fear, but by the Government of the day. Can we have an assurance that there will be no repetition of that behaviour?

Lord McNally: I am sad to say that not only am I old enough to remember that referendum but I was adviser to the Foreign Secretary of the day. My memory of that referendum, which gives me real confidence about this one, is that the Labour Government had an agreement to differ, which allowed the various parts of the Labour Party to campaign vigorously on either side of the debate yet come together again after the decision of the people. That is why I have every confidence that the same will happen again next May. I have no doubt that individuals in the coalition will take different views. I think that my noble friend Lord Strathclyde has said that he hopes to campaign up in Scotland with the noble Lord, Lord Foulkes, which is a frightening thought for anybody.

Lord Maxton: Like my noble friend Lord McAvoy, I was part of the no campaign in the 1975 referendum. I remember that the government leaflet was not as balanced as everybody thought; in fact, it was very much in favour of the yes vote. Will the Minister answer the question that my noble friend Lord Gilbert put? Do the Government intend to produce a leaflet in favour?

Lord McNally: No, the Government do not intend to produce a leaflet. No, the Government do not intend to rig the referendum.

Lord Lamont of Lerwick: Does the Electoral Commission intend to produce a leaflet or anything on the internet?

Lord McNally: I think that the Electoral Commission will publish some guidance on the conduct of the referendum, but it certainly will not make any judgment on the question to be put before the people. The one thing that I do remember about the 1975 referendum is that it gave a resounding 2:1 yes vote.

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