rose to move, That the draft order laid before the House on 16 May be approved.

The noble Lord said: My Lords, the Electoral Administration Act 2006 (Regulation of Loans etc.: Northern Ireland) Order 2008 was the subject of a debate in this House on 12 May and has since been made. That order sets out the legislative framework for the regulation and verification of loans to political parties in Northern Ireland by the Electoral Commission and, among other things, provides for Irish citizens and bodies to make loans to Northern Ireland political parties. The order before us sets out the detail of those arrangements, including the conditions that Irish citizens and bodies must meet in order to make loans to Northern Ireland political parties and the steps to be taken by the Electoral Commission to verify such loans.

As my noble friend Lord Rooker explained during the debate in May, we consulted the Joint Committee on Statutory Instruments when drafting these orders and concluded that two separate orders would be required to legislate for the regulation of loans in Northern Ireland, and that these orders must be made in sequence. That is why we are discussing the regulation of loans again today. It is our intention that the controls on loans will mirror the scheme regulating political donations in Northern Ireland that began operating in November 2007 and which has been working effectively since then. Neither the Electoral Commission nor the Northern Ireland political parties have advised us of the existence of any significant difficulties with the donations regime. The order before us therefore mirrors the provisions regulating donations to Northern Ireland political parties contained in the Political Parties, Elections and Referendums Act 2000 (Northern Ireland Political Parties) Order 2007.

Part 2 of the order sets out the conditions that an Irish citizen must meet in order to enter into a loan agreement with a Northern Ireland political party; namely, eligibility to obtain specified documents evidencing their nationality. It also specifies those Irish bodies which may enter into a loan agreement with a Northern Ireland political party. Schedule 1 specifies the information that must be provided to the Electoral Commission in transaction reports relating to Irish lenders. Part 3 sets out the steps that the Electoral Commission must take to verify the information contained in the reports on loans that it receives. The order requires the commission to verify 50 per cent of the reported loans made by individuals and 100 per cent of the reported loans made by bodies. Information provided may be verified by, for example, contacting the bodies listed in Article 11 of the order. During the confidential reporting period, the commission is placed under a duty not to disclose information contained in transaction reports received from Northern Ireland participants during the confidential reporting period. However, under Article 7 the commission is required to publish certain information if it believes on reasonable grounds that a lender was an unauthorised participant. Again, this simply mirrors the provision for donations.

During the debate in May, concerns were expressed in relation to the position of British citizens living in Ireland who may wish to enter into regulated transactions with Northern Ireland political parties. I believe that my noble friend Lord Rooker promised to write to noble Lords, but it appears that the letter has not got through, so I will try to touch on the questions that were raised. In particular, the noble Lord, Lord Laird, asked about those who live in the border areas and consider themselves to be British and not Irish. I would not wish to presume to know the status or nationality of the individuals to whom he refers. Nevertheless, the legislation is clear: they can donate and take part in regulated transactions, which include loans, to a Northern Ireland political party if they are on a UK electoral register or if they are Irish citizens and can satisfy the conditions relating to verification. I reiterate that British citizens, whether they live in Ireland or elsewhere in the world, must be registered on a UK electoral register in order to enter into a regulated transaction with a political party in the United Kingdom, including in Northern Ireland. Broadly speaking, it is possible for those living abroad to register as an overseas elector for up to 15 years while living outside the UK. If registered as such, they can donate, enter into loans and vote as an overseas elector.

The noble Lord, Lord Laird, raised a similar point in relation to organisations based in Ireland. Again, I would not wish to presume on the status of these organisations, but would draw his attention to paragraph 4 of the order which, among other things, refers to an “authorised participant” as being a body,

“which keeps an office in Ireland or Northern Ireland, being an office from which the carrying on of one or more of its principal activities is directed”,

and is,

“any unincorporated association of two or more persons which does not fall within any of the preceding paragraphs, but which carries on business or other activities wholly or mainly in Ireland”.

That seems to be a fairly broad definition that it will be possible for the organisations to which he referred to fall under.

The broad principles regulating loans to Northern Ireland political parties were approved by the House last month. This order simply sets out the practical details required to give full effect to those principles, and as I mentioned earlier, the provisions contained in the order simply mirror those already in place for regulating donations to Northern Ireland political parties. This order will ensure the successful extension of the political donations scheme to cover loans, and in so doing, represents an important step forward in increasing accountability in the funding of political parties in Northern Ireland. I beg to move.

Moved, That the draft order laid before the House on 16 May be approved. 21st Report from the Joint Committee on Statutory Instruments.—(Lord Tunnicliffe.)

My Lords, I thank the noble Lord once again for bringing forward the order in a clear way, and in particular for paying attention to the loose ends, if I can put it like that, left over from our debate in May which the noble Lord, Lord Rooker, has not had time to answer in detail. I am sure that he would have done so tonight had he been here. We had a lengthy debate in May and a number of serious queries were raised, not because of the proposals but to make sure that the detail and the control mechanisms were in place.

I am by no means an expert in detailed administration, but having looked through the order before us, it is clear that the Government and the department have taken a lot of trouble to try to cover every possibility. It is one thing in England, Wales and Scotland to make this work, but when you have two countries with a border between them, something the other three countries of the United Kingdom do not have, it becomes more difficult. I am sure that, in principle, this will work. It will be positive in funding parties and getting them adequate access to each other across the border, which I believe is right. I hope that one day we will have an Irish party, Fianna Fáil perhaps, organised in Northern Ireland. The Conservative Party is already there. One day, perhaps even the Labour Party will venture its toe into the water of Northern Ireland. If that is going to happen, I believe that we have here as near to a fair playing field as one gets in legislation and I support the order.

My Lords, we on these Benches fully support the order and think it is absolutely right that loans be subject to the same protocols as donations.

My Lords, I rise now to ask the question which, carelessly and prematurely, I was on the point of asking a little while ago. The first line on page 3 of the order refers to bodies,

“(ii) incorporated within Ireland or another member State”.

I am a bear of very little brain, but I do not know what “or another member State” means.

My Lords, I thank the noble Lord, Lord Glentoran, for his warm welcome of this order. We have worked very hard at getting the right balance here. I thank the noble Lord, Lord Smith, for his support. “Another member State” is a member of the EEA, which is the European Union plus Switzerland and one other Scandinavian state. The crucial drafting, which is to stop brass-plate type institutions evading all these regulations, is the second part of Article 4, which refers to bodies,

“which keep an office in Ireland or Northern Ireland being an office from which the carrying on of one or more of its principal activities is directed”.

The prescribed bodies are, among others:

“A company—

appearing on the Register of Companies of Ireland; and

incorporated within Ireland or another member State”.

The order envisages a company that is properly registered in Northern Ireland. However, whatever the other subtleties of incorporation can mean within the EU situation, both conditions must be met, not one or the other. I withdraw my previous statement: “another member State” refers to members of the European Union, not the EEA. I hope that that covers the point.

My Lords, the momentary hesitation on the government Front Bench as to whether the phrase “or another member State” refers to the EU or the EU plus the EEA causes me to question again whether those words are by themselves enough. Unless it is a term of art, familiar to all constitutional lawyers, it seems curious that what “another” alludes to has not been described in the text.

My Lords, I am in between recovering from three years on the Merits Committee and trying to learn in two days about Northern Ireland. I apologise for my hesitancy. It is apparently defined in the Interpretation Act 1978. It is regularly used in statutory instruments. Its definition is crystal clear. I apologise for getting it slightly wrong.

On Question, Motion agreed to.